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Pegler v. NRG Residential Solar Solutions LLC

United States District Court, S.D. New York

February 20, 2018

CHARLES KELCY PEGLER SR., et al., Plaintiffs,



         Plaintiffs Charles Kelcy Pegler Sr. and Kelcy Charles Pegler Jr. (the “Peglers”) brought this action against Defendants NRG Residential Solutions, LLC (“NRG Solar”) and NRG Energy Inc. (“NRG Energy”), alleging breach of contract under their Purchase and Sale Agreement (the “Agreement”). Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), and Plaintiffs cross-moved for summary judgment.

         The critical facts for purposes of this motion are undisputed. The sole issue on both pending motions is whether a single provision in the Agreement is unambiguous, as all parties assert. Defendants proffer one interpretation, which would result in dismissal of the Complaint. Plaintiffs proffer a contrary interpretation, which would result in the grant of summary judgment in their favor. The Court finds that the Agreement is ambiguous and raises a question of fact. Consequently, both motions are denied.

         I. BACKGROUND

         The facts below are undisputed and taken from the Complaint and the parties' submissions on the summary judgment motion.

         On March 25, 2014, Plaintiffs and Defendant NRG Solar, a limited liability company, entered into the Agreement, by which NRG Solar agreed to purchase Plaintiffs' company, Roof Diagnostics Solar Holdings, LLC (“RDS”), for $63 million. The purchase price was to be paid in four installments, the last of which was $5 million, due on March 25, 2017.

         The Agreement states in relevant part that “the Final Post-Closing Payment shall not be due and owing by Purchaser to Sellers unless on the Outside Payment Date [agreed by the parties to be March 25, 2017] Pegler Jr. remains a Good Standing Employee of Purchaser.”[1] The Agreement further states, “‘Good Standing Employee' means that Pegler Jr. has not been terminated for cause and is not otherwise subject to disciplinary actions or proceedings.” The Agreement contains a New York choice of law provision.

         Defendant NRG Solar is the wholly owned, indirect subsidiary of Defendant NRG Energy. NRG Energy executed a “Purchaser Parent Guaranty” as of March 25, 2014, in favor of Plaintiffs, which guarantees “the full and timely performance when due, [and] the payment of all amounts when due and owing” by NRG Solar under the Agreement. NRG Energy also agreed that if “at any time [NRG Solar] defaults in the payment or performance when due of any of its Obligations, [NRG Energy] shall, promptly upon written notice by [the Peglers] . . . pay or perform, or cause the payment or performance of, such Obligations.”

         After NRG Solar purchased RDS, NRG Solar employed Pegler Jr. as its President. On April 8, 2016, Pegler Jr. submitted a letter of resignation, which was accepted, and his resignation became effective April 11, 2016.

         As of March 25, 2017, though Pegler Jr. was no longer an employee of NRG Solar, he had not been terminated for cause and had not been, and was not, subject to disciplinary action or proceedings.[2] NRG Solar did not make the last payment of $5 million due that day. On April 28, 2017, Plaintiffs wrote to NRG Energy, in accordance with the Guaranty, providing notice that NRG Solar was in default of its obligation to make the final payment and demanding payment from NRG Energy. Neither NRG Energy nor NRG Solar has made this payment.

         The Complaint asserts two causes of action: Count One alleges breach of the Agreement for NRG Solar's failure to make the final payment of $5 million. Count Two alleges breach of the Guaranty for NRG Energy's failure to make good on its guarantee obligation.


         A. Motion to Dismiss Standard

         To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl Corp. v. Twombly,550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). It is not enough for a plaintiff to allege facts that are consistent with liability; the complaint must “nudge[]” claims “across the line from conceivable to plausible.” Twombly, 550 U.S. at 570. “To survive dismissal, the plaintiff must ...

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