Plaintiff Jay Furman ("Furman"), a New York resident, brings this diversity action against defendant Robert Enslein, Jr. ("Enslein"), a Connecticut resident, to recover sums owed to him under an agreement between the parties and third party Erik Ekstein ("Ekstein").
Plaintiff now moves for summary judgment on his sole claim for breach of contract. Defendant opposes that motion and cross-moves to dismiss the complaint for failure to join an indispensable party.
Plaintiff's motion for summary judgment is granted, and defendant's cross-motion is denied.
The following facts are not in dispute unless otherwise stated.
In November 2006, Furman, Enslein, and Ekstein signed an Operating Agreement making them the sole members of Pinnacle Wine Vault LLC ("Pinnacle"), a Delaware company with its principal place of business in New York. By virtue of the agreement and in recognition of their capital contributions to the entity, the members received equity interests in Pinnacle. Furman received a 31.333% membership interest, while Enslein and Ekstein each received at 34.333% interest.
By 2009, Pinnacle needed more capital to fund its operations. On May 1, 2009, Furman sent a proposed Letter Agreement to Enslein and Ekstein, wherein Furman offered to infuse Pinnacle with $400,000 in exchange for certain promises by Enslein and Ekstein. The Letter Agreement provides:
Reference is made to that certain Amended and restated Operating Agreement of the Company dated as of November 21, 2006 (as amended and/or supplemented through the date hereof, collectively, the "Agreement"). Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Agreement.
I intend on contributing Four Hundred Thousand and 00/100 Dollars ($400,000) (the "Contribution") to the capital of the Company in the form of an additional capital contribution and/or a loan to the Company. In connection therewith and notwithstanding anything to the contrary set forth in the Agreement, each of you hereby agree to be personally liable for and to re-pay your proportionate share of the Contribution in its entirety, together with accrued and unpaid Preferred Return thereon (or interest, as the case may be) (such principal together with Preferred Return and/or interest, collectively, the "Total Contribution"), within fifteen (15) days following my demand. Notwithstanding the foregoing and anything to the contrary set forth in the Agreement, your proportionate share of the Contribution shall not be due until the earlier of (x) one year from the date first set forth above or (y) the date upon which the Company shall be deemed by me to be illiquid. Unless I elect otherwise, the Total Contribution may not be repaid except out of profits which are generated by the Company after the date hereof.
This letter agreement (i) shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, (ii) shall be governed by, and construed in accordance with, the laws of the State of Delaware, (iii) together with the Agreement, represents the entire and integrated agreement among the parties hereto with respect to the subject matter covered hereby, (iv) may not be changed, waived, discharged or terminated orally, but only by a writing signed by the party against whom enforcement is sought, (v) shall not be strictly construed against any party hereto, all parties agreeing that they have participated fully and equally in the preparation of this agreement, (vi) may be executed in two or more counterparts, each of which shall be deemed an original, and all such counterparts shall together constitute one and the same instrument and (vii) may be executed in facsimile signatures (or by copies of physically signed documents exchanged via email attachments in PDF format or equivalent).
Please indicate your agreement to the above by executing this letter agreement below. Should you have any questions, please do not hesitate to call me.
Ekstein and Enslein duly executed the Letter Agreement upon receiving it, and Furman contributed the $400,000.
Subsequently, Furman determined that Pinnacle was illiquid and that the contribution would not be repaid out of Pinnacle's profits. On September 28, 2010, Furman made a demand for repayment in a letter addressed to Enslein and Ekstein. That letter stated:
Reference is made to that certain letter agreement, dated as of May 1, 2009, by and among the parties hereto (the "Agreement") made in connection with the Company. Capitalized terms used but not otherwise defined herein shall have the ...