The opinion of the court was delivered by: Seybert, District Judge
MEMORANDUM, DECISION & ORDER AFTER BENCH TRIAL
Plaintiff Alan Andrus ("Plaintiff" or "Andrus") commenced this diversity action against Defendants Juniper Group, Inc. ("Group"), Juniper Internet Communications, Inc. ("Communications"), and Vlado P. Hreljanovic ("Hreljanovic," collectively, "Defendants") seeking recovery of unpaid wages and stock grants. Defendant Communications defaulted, and a bench trial was held on March 2 and 3, 2011 with respect to Defendants Group and Hreljanovic. The Court now issues its findings of fact and conclusions of law, as required by Federal Rule of Civil Procedure 52(a), and after carefully considering the evidence introduced at trial, the arguments of counsel, and the controlling law on the issues presented, finds in favor of Defendants Group and Hreljanovic and enters default judgment against Defendant Communications.
On May 9, 2008, Plaintiff filed the Complaint in this action seeking to collect from Defendants $105,077.85 in past-due wages and unreimbursed expenses and $90,000 for the value of stock grants that he alleges should have been issued pursuant to his employment agreement but never were. Specifically, Plaintiff asserts: (1) that Group and/or Communications breached Plaintiff's employment contract by failing to pay $105,077.85 in past-due wages and unreimbursed expenses; (2) that Plaintiff is entitled to recover the $105,077.85 from Group and Communications under a quantum meruit theory; (3) that Plaintiff is entitled to recover the $105,077.85 from Group and Communications under an unjust enrichment theory; (4) that Hreljanovic, the Chief Executive Officer of both Group and Communications, breached an oral agreement to pay Plaintiff $90,000 out of his own pocket to compensate him for stock grants that should have been issued by Group and/or Communications; and (5) fraud against all Defendants for falsely representing to Plaintiff that he would eventually be paid. Both Group and Hreljanovic appeared in this action. Communications defaulted. On September 11, 2009, Plaintiff moved for a default judgment against Communications. The Court denied Plaintiff's motion without prejudice to renewal after the trial against the non-defaulting Defendants. On March 2 and 3, 2011, the Court presided over the two-day bench trial, after which Plaintiff renewed his application for a default judgment against Defendant Communications.
Based on the evidence and arguments presented, the Court makes the following findings of fact pursuant to Federal Rule of Civil Procedure 52(a).*fn1 These findings of fact are drawn from witness testimony at trial ("Tr."), the parties' trial exhibits ("Ex."), and undisputed facts submitted by the parties in the Joint Pre-Trial Order ("PTO").
I. Plaintiff's Employment Agreement
In or about January 2001, Plaintiff was hired by Hreljanovic to serve as the President of Communications. (Pl. Ex. 1 at 17; Tr. 160-61.) Communications, a company specializing in providing technology and internet services to leading internet-broadband service providers, is a wholly-owned subsidiary of Group, which is a publicly owned corporation. (Pl. Ex. 1 at 4; Tr. 68, 161-62.) At all relevant times, Hreljanovic was CEO and sole Board Member of Communications and the CEO and Chairman of the Board of Group. (Tr. 156, 163-64, 202-04.)
The Court finds that Plaintiff was employed at all relevant times by Communications, and never directly by Group. Plaintiff submitted all time records and reimbursement requests to Communications, not Group (Def. Ex. C), and he received Form W-2s from Communications in 2003 and 2004 (Def. Ex. E, F). Plaintiff asserts that in early 2005 he became the Chief Technology Officer of Group, but the Court finds that the facts do not support such an assertion: The Form 10-KSB that Plaintiff relies on in support actually indicates otherwise--that he remained at Group but his title changed to Chief Technology Officer (Pl. Ex. 2 at 12)*fn2 --and he received a Form 1099 from Communications reporting non-employment income in 2005 (Def. Ex. D).
No formal employment agreement was ever prepared or signed during the course of Plaintiff's employment with Communications; however, the Court finds that the terms of Plaintiff's employment with Communications originally included a salary of $200,000 per year and options to purchase 100,000 shares of Group common stock "to be earned as certain benchmarks [were] achieved over a two-year period." (Pl. Ex. 1 at 19; Tr. 72.)
Plaintiff, however, asserts that his original employment agreement included stock grants, rather than warrants or options (Tr. 69, 78, 124), but the evidence overwhelmingly disproves this assertion. Group's 10-K form filed with the Securities and Exchange Commission in 2004, which Plaintiff stated that he helped prepare (Tr. 73), indicates that he was offered stock options, not grants (Pl. Ex. 1 at 19). This is confirmed by Hreljanovic's testimony: "The only stock grant that I was aware of was the initial stock grant that we provided, we indicated to him at the inception of the--our relationship [that] we were going to give [Plaintiff] 100,000 warrants at a dollar 20." (Tr. 184 (emphasis added).) And Plaintiff's own testimony about the alleged stock grants is inconsistent and confused. (Tr. 69 ("I was offered 90,000 shares of stock grants . . . ." (emphasis added)); id. 124 ("Q. So the deal was for you to come to work at the Juniper Group of companies, $200,000 a year. Correct? A. Correct. Q. And $90,000 of stock incentive, correct? A. Stock grant." (emphasis added)); Pl. Ex. 6 (2003 email from Plaintiff to Hreljanovic summarizing a discussion they had regarding his compensation: "Andrus will be granted 100,000 shares of common stock of Juniper Group, Inc. Stocks will be unrestricted and issued without cost to me." (emphasis added)).) Thus, the Court finds that Plaintiff was promised options to buy 100,000 shares of common stock, not a grant of 90,000 shares or stock valued at $90,000. Additionally, these options were not guaranteed, but were "to be earned as certain benchmarks are achieved over a two-year period." (Pl. Ex. 1 at 19; see also Tr. 165 ("Q. Was it understood that [Plaintiff's] compensation, in terms of equity incentives, was going to be tied to anything? A. Oh, absolutely.").) There was no testimony or evidence indicating that Plaintiff ever exercised his stock options.
In or around February 2002, Plaintiff's salary was temporarily reduced to $150,000 per year, and in or around February 2005, Plaintiff's salary was again reduced to $90,000 per year when he went part-time. (Tr. 78; Pl. Ex. 4.) In addition, as part of his employment agreement, Plaintiff was to be reimbursed for all out-of-pocket expenses incurred in the performance of his duties. (Tr. 87; Pl. Ex. 10.)
II. Hreljanovic's Personal Guarantee
In addition to asserting that his employment agreement
included a grant of 90,000 shares of Group stock, Plaintiff alleges that Hreljanovic personally guaranteed that Plaintiff would receive $90,000 for the value of the stock. (Tr. 125 ("He committed to me that from the corporation, or from his own personal holdings of stock, he would insure that I received $90,000 in value from that stock that ...