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Zamora v. Morphix Co. Ltd

United States District Court, S.D. New York

February 21, 2018

MELANIE ZAMORA, Counterclaim Defendant, v MORPHIX COMPANY, LTD., Defendant, Counterclaim Plaintiff, and Third-Party Plaintiff, MGZ CONSULTING, LLC, Third-Party Defendant.

          OPINION & ORDER


         From February 6, 2012 to December 31, 2014, Melanie Zamora (“Zamora”) performed consulting work for BP Exploration Operating Company (“BP”) pursuant to a series of work orders issued by Morphix Company, Ltd. (“Morphix” or “plaintiff”[1]). This action, as it currently stands, concerns whether Zamora (and by extension, MGZ Consulting, LLC (“MGZ”) (collectively, “defendants”)), committed a breach of contract when she applied for and accepted a job with BP in September 2014.

         The Court held a two-day jury trial in this action from October 10-11, 2017. At the close of evidence, defendants renewed their motion for judgment as a matter of law (originally made at the close of plaintiff's case) pursuant to Fed.R.Civ.P. 50(a) (“Rule 50(a)”). (See Trial Tr. at 353-354, ECF Nos. 147-148.[2]) Defendants argued, in sum, that Morphix failed to establish any damages resulting from Zamora's decision to accept BP's job offer, and therefore they were entitled to judgment as a matter of law. The Court reserved judgment on that motion and elected to “see what the jury does” before ruling. (Trial Tr. at 355.)

         Later that day, the jury returned a verdict in favor of Morphix, finding: (1) that Zamora and MGZ committed a breach of contract; and (2) Morphix was entitled to recover $33, 000 in damages as a result of that breach. (ECF No. 144.) After the jury was discharged, the Court directed the parties to meet and confer regarding resolution of the outstanding attorneys' fees issue (because of a fee shifting provision in the contract at issue, liability for attorneys' fees is significantly larger than any actual verdict) and whether any post-trial motions would be filed. (Trial Tr. at 359-64.) Currently pending before the Court is defendants' motion for judgment as a matter of law pursuant to Fed.R.Civ.P. 50(b) (“Rule 50(b)”). (ECF No. 153.) Plaintiff opposed that motion on November 15, 2017 (ECF No. 157), and defendants replied on November 20, 2017 (ECF No. 158.)

         For the reasons stated below, the Court concludes that no reasonable juror could have found that Morphix suffered any damage resulting from defendants' conduct, and therefore, there was no breach of contract as a matter of law. Accordingly, defendants' motion at ECF No. 153 is hereby GRANTED in full, and the jury's verdict in favor of Morphix is VACATED.


         A. The Governing Agreements

         Morphix is a consulting and technical services firm that relies at least in part on subcontractors to perform work for clients. In February 2011, Morphix began consulting on the BP Well Advisor Project (“BPWA Project”), the ultimate goal of which was to improve the performance and safety of BP's drilling operations.

         In January 2012, Morphix hired MGZ to perform certain work on the BPWA Project. At all times relevant to this action, Zamora was MGZ's president and managing member. During the course of their collaboration on the BPWA Project, Morphix and MGZ entered into two distinct types of agreements, both which are described below.

         1. The Consulting Agreement

         On January 17, 2012, Morphix and MGZ executed a Consulting Agreement (“CA”). (DX5 (“CA”).) The CA provides, inter alia, that Morphix can “make use of knowledge, resources or skills of [MGZ] for the marketing of its products and services, or for undertaking of work, ” (CA at 1), and that MGZ will “act[] as an independent contractor of Morphix” in performing services under the agreement (CA § 7.1). Zamora executed the CA on behalf of MGZ, and Mark Newman (“Newman”)-Morphix's managing director-signed on behalf of Morphix. (CA at 8.)

         As Newman described during trial, the CA was effectively a “framework agreement” designed to “set[] up the general terms and conditions between the two companies.” (Trial Tr. at 75.) Rather than outlining specific work to be performed by MGZ, the CA contemplates that Morphix will place independent “Work Orders, ” which must be “documented in writing an incorporated by reference into [the CA].” (CA §§ 1.1.4, 1.1.5, 5.1; see also Trial Tr. at 75 (Newman testified that a separate work order is necessary to “actually trigger the piece of work being done”).) The CA makes clear that Morphix was “not obligated to place any Work Orders” (CA § 2.4), and neither MGZ nor Zamora were obligated to accept a Work Order that had been placed (see Trial Tr. at 125 (“Q. And Ms. Zamora was under no obligation to accept a subsequent work order once she finished the first one? A. That is correct, yes.”)).

         As relevant here, Sections 2.3, 4.2, and 16.1 of the CA relate to the protection of Morphix's business interests. The Court sets forth those provisions in full:

• Section 2.3: “Consultant warrants that it will not accept work from any third party; i) using Intellectual Property owned by Morphix or; ii) relating to products or services owned by Morphix.” (CA § 2.3.)
• Section 4.2: “In the performance of its duties hereunder, Consultant shall act so as to safeguard the Intellectual Property, commercial and contractual interests of Morphix and shall comply with all reasonable requests and directions of Morphix or its nominee.” (CA § 4.2.)
• Section 16.1: “Consultant undertakes that it shall not, without the prior written consent of Morphix, either during or within twelve months after completion of this Agreement or termination of this Agreement, which ever is the later, either directly or indirectly offer its services to, or accept work from, companies, individuals or organizations which were partners, associates, competitors or active prospects of Morphix during the period of twelve months immediately prior to the completion or termination of this Agreement. An active prospect is a company, individual or organization with whom Morphix was negotiating at the time of completion or termination of this Agreement or had held negotiations at any time during a period of twelve months prior to the completion or termination of this Agreement and where any such negotiations were known to Consultant.” (CA § 16.1.)

         2. The BP Work Orders

         Morphix and MGZ entered into twelve separate Work Orders relating to the BPWA Project between February 6, 2012 and December 31, 2014. (See generally DX6 (“Work Orders”).) The individual Work Orders are virtually identical, except for the dates identifying the period they governed and the description of the work to be performed. Each Work Order lists Zamora as the “Named Individual”-or the person tasked with supplying services to Morphix-and each is explicitly incorporated into the CA and thus governed by its terms and conditions. (See, e.g., Work Orders at 1; see also CA § 1.1.4 (“Each and every Work Order placed shall be expressly governed by this Agreement and shall be deemed incorporated herein.”).) Zamora signed each Work Order. It is undisputed that the last Work Order expired on December 31, 2014, and that Morphix did not place and the parties did not execute any Work Orders subsequent to that date.

         B. Zamora Applies for a Job with BP

         In early September 2014, Zamora applied for a job with BP. BP subsequently offered Zamora a job on November 12, 2014, and Zamora accepted that same day.[4]Morphix objected to Zamora accepting employment with BP based on certain purported restrictions in the Consulting Agreement.

         On November 25, 2014, Newman sent an e-mail informing BP that its job offer to Zamora was “in direct conflict with the proposal we have made to settle historic issues, ” including a proposed agreement not to “solicit or employ the other's staff going forward.” (Trial Tr. at 93-94; PX24.) Newman further informed BP that its job offer exposed Zamora to “legal action with regard to breaches of her own service contract with Morphix.” (Id.) BP ultimately revoked Zamora's employment offer on January 13, 2015. (See DX19 (notifying Zamora that BP was ‚Äúrescinding our ...

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