McCray v. OmniSpeech, LLC

CourtDistrict Court, N.D. Illinois
DecidedSeptember 30, 2021
Docket1:19-cv-06597
StatusUnknown

This text of McCray v. OmniSpeech, LLC (McCray v. OmniSpeech, LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCray v. OmniSpeech, LLC, (N.D. Ill. 2021).

Opinion

THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION GREGORY McCRAY, ) ) Plaintiff, ) ) No. 19 C 6597 v. ) ) Judge Virginia M. Kendall OMNISPEECH, LLC, ) ) Defendant. )

MEMORANDUM OPINION & ORDER Plaintiff Gregory McCray (“Plaintiff”) sued Defendant OmniSpeech, LLC (“Defendant” or “OmniSpeech”) for breach of contract and account stated. Specifically, McCray alleges that OmniSpeech breached its contract with McCray for the provision of consultancy services, in that OmniSpeech failed to fully pay invoices for services rendered between October 2015 and December 2016. McCray moves for summary judgment on the breach of contract claim, on grounds that no genuine issue of material fact exists regarding OmniSpeech’s breach of the contract’s terms. For the following reasons, McCray’s motion [46] is granted. BACKGROUND A. Parties and Contract for Services Plaintiff McCray is a “professional Chief Executive Officer.” (Dkt. 52 ¶¶ 3, 21). Defendant OmniSpeech is a software technology company that develops noise reduction and suppression technology for speech-enabled applications and other devices. (Id. ¶ 5; Dkt. 55 ¶ 1). The company depends on investment from outside sources. (Dkt. 52 ¶ 9). OmniSpeech is led by its founder, Carol Espy-Wilson. (Dkt. 55 ¶ 2). Espy-Wilson is a professor of electrical engineering at the University of Maryland, College Park. (Id.). She operates OmniSpeech out of offices on the premises of the University’s College Park location. (Dkt. 52 ¶ 8). Espy-Wilson and McCray first met in October 2015 through a recruiter. (Dkt. 55 ¶ 4). At that time, they discussed the possibility of McCray providing consulting services for OmniSpeech.

(Id.). McCray told Espy-Wilson that he had a network of fundraising contacts and thought he could assist her in fundraising for OmniSpeech. (Dkt. 55 ¶ 6). Espy-Wilson thereafter decided to hire McCray as a consultant. (Dkt. 52 ¶ 12). She sought his assistance in raising funds, obtaining customers for OmniSpeech’s software products, and general management of the company. (Id.). McCray prepared a draft employment contract, referred to as the Consultancy Agreement (“Agreement”), and provided it to Espy-Wilson for review. (Dkt. 52 ¶ 16). Espy-Wilson reviewed the draft agreement and revised it. (Dkt. 52 ¶ 17). Specifically, she clarified the kinds of funds that could be used to pay McCray for his services. (Dkt. 55-1 at 2–3). Espy-Wilson made no further edits to the Agreement. (Dkt. 52 ¶ 18; see also Dkt. 55-1 at 2–3 (showing the edits Espy- Wilson made and her reasoning)). All parties signed the contract on October 15, 2015. (Dkt. 52

¶ 19). The executed Agreement set forth, among other things, that McCray would serve as a consultant to OmniSpeech from October 12, 2015 through December 31, 2015, and that the time frame of the Agreement “may be extended beyond December 31, 2015” by “mutual agreement.” (Dkt. 48-1). The draft Agreement also stated: “OmniSpeech agrees that McCray will charge [OmniSpeech] a rate of $1,500 per day” and that McCray will work two days a week unless the parties agree to increase or decrease this number. (Id.). It further required McCray to “provide invoices to OmniSpeech at the end of each month.” (Id.). Finally, the contract required OmniSpeech to “fully pay [McCray] once the Company has received funding of more than $100,000” from specific funding streams. (Id.). McCray began his work for OmniSpeech in October of 2015 pursuant to the Agreement. (Dkt. 52 ¶ 20). Throughout his time at OmniSpeech, McCray worked to obtain investors for the company and to market its product, which sometimes required him to travel. (Id. ¶¶ 21–22). McCray also drafted and modified contracts; prepared presentations; prepared and modified

market and product analysis models; and participated in – and often ran – investor and customer meetings, “many of which were in Asia such that he would have to do this work at odd hours of the night.” (Id. ¶ 23; see also Dkt. 55-2 (showing McCray’s invoices submitted to OmniSpeech with brief descriptions of his daily work, from October 2015 through December 2016)). B. Dispute Concerning McCray’s Billing Practices McCray provided monthly invoices to OmniSpeech as required by the Agreement. (Dkt. 52 ¶ 25, 28). The invoices also contained a short description of the work he performed on a given day. (Id.¶ 29). McCray claims that “every single day billed to OmniSpeech as an OmniSpeech designated day included more than 10 hours of work by McCray for OmniSpeech on that day, and many days were considerably longer.” (Id. ¶ 26). Although McCray sometimes worked more than

two days a week for OmniSpeech, he billed OmniSpeech for only two days per week according to the parties’ agreement. (Id. ¶¶ 25, 27, 30). The record shows that OmniSpeech accepted McCray’s invoices without complaint or comment from October 2015 to March 2016. (Id. ¶¶ 33–34). On March 14, 2016, Espy-Wilson sent McCray an email with respect to the December invoice. (Id. ¶ 36). Espy-Wilson explained that she “looked over [McCray’s] invoices since we hope to be in a place where we can start paying some more of our bills.” (Dkt. 55-4 at 1). She stated that she was “surprised that [McCray] charged the full $1500 for so many days” and expressed doubt that McCray worked “anywhere close to 8 hours” on certain dates (specifically pointing out only one date, December 8, 2015). (Dkt. 52 ¶ 36; Dkt. 55-4 at 1). Espy-Wilson also stated, “I need you to prorate your time.” (Dkt. 52 ¶ 36). Plaintiff responded to Espy-Wilson’s email within two hours. (Dkt. 55-4 at 1). McCray asserted in his reply email that he was “following the Agreement that we signed that was set to a day rate as opposed to an hourly rate.” (Id.). He also noted that he “usually spent more time on

OmniSpeech than [he] recorded,” in any event, and confirmed that he “spent the day” working for OmniSpeech on the date in question. (Id.). However, he agreed to “significantly” reduce his February invoice to something “very minimal.” (Id.). McCray did not prorate his time following this exchange. (Dkt. 52 ¶ 40). His invoices for the rest of 2016, from March through December, reflected that he was still billing by the day. (Id.; see also Dkt. 55-2). OmniSpeech points to no further evidence that it ever again complained about McCray’s billing practices (or that it did so prior to Espy-Wilson’s March 14, 2016 email, for that matter). (See, e.g., Dkt. 51-2 at 110:12– 124:7 (Espy-Wilson admitting in deposition testimony that she has no recollection of disputing any particular invoice aside from when she sent her March 14, 2016 email)). C. Dispute Concerning Payment of Fees

The Agreement required OmniSpeech to commence payments for McCray’s services once OmniSpeech brought in $100,000. (Dkt. 52 ¶ 32). OmniSpeech reached that milestone by March of 2016, (id.), and so was required to begin payments thereafter per the Agreement. OmniSpeech began providing payments to McCray in April of 2016, and by August of 2016 the company had made 10 payments totaling $22,500. (Id. ¶ 47). After August, OmniSpeech ceased paying McCray for his services. (Id. ¶ 47). Between October of 2015 and December of 2016, McCray billed a total of 133 days to OmniSpeech and provided monthly invoices totaling $199,500. (Id. ¶ 45). McCray has made demands for payment by OmniSpeech. (Id. ¶ 50). McCray seeks a judgment for the outstanding amount of his invoices, which amounts to $177,000, plus pre- and post-judgment interest. (Id. ¶ 54; see also Dkt. 55-2 at 1). ARGUMENT A. Breach of Contract

“The elements of a claim for breach of contract are (1) the existence of a valid and enforceable contract; (2) substantial performance by the plaintiff; (3) breach of contract by the defendant; and (4) resultant injury to the plaintiff.” Avila v.

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McCray v. OmniSpeech, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mccray-v-omnispeech-llc-ilnd-2021.