United States District Court, S.D. New York
OPINION AND ORDER
G. SCHOFIELD UNITED STATES DISTRICT JUDGE.
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.
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.
facts below are undisputed and taken from the Complaint and
the parties' submissions on the summary judgment motion.
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
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.” 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.
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.”
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.
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. 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.
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
Motion to Dismiss Standard
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