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Thompson v. Combined Systems, Inc.

United States District Court, W.D. New York

June 13, 2017

DAWN THOMPSON, Plaintiff,
v.
COMBINED SYSTEMS, INC., Defendant.

          DECISION AND ORDER

          HONORABLE MICHAEL A. TELESCA United States District Judge.

         INTRODUCTION

         Represented by counsel, Dawn Thompson (“Plaintiff”), a resident of Florida, instituted this proceeding alleging causes of action for breach of contract and promissory estoppel against Combined Systems, Inc. (“CSI” or “Defendant”), a registered New York corporation with a principal place of business in Pennsylvania. The Court has diversity jurisdiction over this matter pursuant to 28 U.S.C. § 1332.

         FACTUAL BACKGROUND

         Thompson Handcuffs Corporation (“Thompson Handcuffs” or “THC”) was founded by Charles Thompson in the 1980s. In July of 2010, CSI, CSI-Penn Arms, LLC, a wholly-owned subsidiary of CSI; Charles Thompson; and Plaintiff entered into an Asset Purchase Agreement (“the Purchase Agreement”), whereby certain assets of Thompson Handcuffs were sold to CSI. As of the date the Purchase Agreement was executed, Plaintiff owned all of THC's issued and outstanding capital stock, and was responsible for the day-to-day operations of the business.

         The purchase price is reflected in Paragraph 1.3 of the Purchase Agreement which states in relevant part as follows:

1.3. Purchase Price. The total purchase price (the “Purchase Price”) which the Buyer shall pay for the Assets and in consideration of the covenants of the Sellers contained herein is:
(a) 300, 000.00 in cash, of which (x) $200, 000.00 is payable at the Closing (the “Initial Payment”) and (y) the remainder is payable in installments as follows:
(i) For each pair of handcuffs sold by the Buyer after the Closing the Buyer will pay the Company $0.25 until the aggregate amount of all such payments as to pairs of handcuffs sold by the Buyer after the Closing equals $100, 000.00 (each such payment, an “Installment Payment”), it being recognized that
(A) in no event shall the total amount of installment Payments exceed $100, 000.00 (the “Installment Cap”) . . . .

         Purchase Agreement, ¶ 1.3, Exhibit (“Ex.”) A to First Amended Complaint (“FAC”) [#10-1][1]. CSI paid Thompson Handcuffs the sum of $200, 000 at the closing and continued to make annual Installment Payments to Thompson Handcuffs. As of January 1, 2017, CSI had paid Plaintiff a total of $22, 892.26 toward the remaining $100, 000 Installment Cap.

         In the Purchase Agreement's “Recitals” section, the parties included language regarding CSI's continued employment of Plaintiff. Specifically, one of the “whereas” clauses states that “the Buyer wishes to employ [Plaintiff] from and after the Closing (as hereinafter defined) at CSI's facility in Jamestown, Pennsylvania, in a sales and marketing capacity on an at-will basis[.]” Purchase Agreement, p. 1.

         In July of 2010, CSI sent Plaintiff a letter offering her a position of employment. The letter is referenced in Plaintiff's first amended complaint, see FAC, ¶¶ 26-37, and states in pertinent part as follows:

In order to support the sales efforts of THC into the future, we are pleased to offer you a position as a Sales Manager of the THC brand for CSI. . . .
As the Sales Manager of the THC product line, you will be responsible for the development of sales for the domestic and international markets, as determined by CSI management. You will work closely with the other members of the CSI sales team and you will participate in weekly sales conference calls and other designated meetings, reporting on your prospects and sales activities to CSI senior management.

         Plaintiff accepted the employment offer and agreed that she would be based out of CSI's headquarters, which required her to relocate from Illinois to Jamestown, Pennsylvania.

         Plaintiff was employed by CSI as the sales manager of the Thompson Handcuffs brand beginning August 1, 2010. She held this position until her termination by CSI on or about July 17, 2013.

         PROCEDURAL STATUS OF THIS ACTION

         On January 1, 2017, Plaintiff filed the instant complaint [#1] asserting that CSI breached its obligations under the Purchase Agreement, wrongfully terminated her employment prior to the expiration of their oral employment agreement, and failed to reimburse her for the costs she incurred in relocating to Pennsylvania.

         On February 14, 2017, CSI filed a pre-answer motion to dismiss pursuant to Rule[2] 12(b)(6) or, in the alternative, for summary judgment pursuant to Rule 56.

         On March 8, 2017, Plaintiff filed a first amended complaint [#10]. CSI then moved to dismiss the first amended complaint or, in the alternative, for summary judgment [#11]. Plaintiff filed a motion for extension of time to file an amended complaint or, in the alternative, for leave to amend [#12]. CSI filed a memorandum in opposition [#13], and Plaintiff filed a reply brief [#14].

         Plaintiff subsequently filed a memorandum of law in opposition to CSI's first motion to dismiss or, in the alternative, for summary judgment [#16], and a memorandum of law in opposition to CSI's second motion to dismiss or, in the alternative, for summary judgment [#17]. CSI filed a reply brief. [#18].

         For the reasons discussed below, the Court grants Plaintiff's request for leave to amend, and replaces the complaint with the first amended complaint. The Court grants CSI's motions to dismiss or, in the alternative for summary judgment, and dismisses the first amended complaint.

         DISCUSSION

         I. Plaintiff's Motion for Extension of Time to File Amended Complaint or, in ...


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