Sedghi v. Patchlink Corp.

823 F. Supp. 2d 298, 2011 U.S. Dist. LEXIS 119454, 2011 WL 4916685
CourtDistrict Court, D. Maryland
DecidedOctober 17, 2011
DocketCivil Action No. ELH-07-01636
StatusPublished

This text of 823 F. Supp. 2d 298 (Sedghi v. Patchlink Corp.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sedghi v. Patchlink Corp., 823 F. Supp. 2d 298, 2011 U.S. Dist. LEXIS 119454, 2011 WL 4916685 (D. Md. 2011).

Opinion

MEMORANDUM OPINION

ELLEN LIPTON HOLLANDER, District Judge.

Vahid Sedghi, plaintiff, brought suit against his former employer, PatchLink Corporation (“PatchLink”),1 defendant, an [299]*299Arizona software company, claiming PatchLink failed to honor an oral promise made in 2004 to pay Sedghi a commission of 1% on all of PatchLink’s sales.2 Seeking damages in excess of $600,000, Sedghi brought claims for breach of contract, loss of commission under the Maryland Wage Payment and Collection Law, loss of commission under the Wholesale Sales Representatives Statute, unjust enrichment, fraud/intentional misrepresentation, negligent misrepresentation, and promissory estoppel.3

On September 30, 2010, the Honorable Judge J. Frederick Motz, to whom this case was previously assigned, considered the parties’ cross-motions for summary judgment, and granted defendant’s motion for summary judgment as to all claims (ECF 107). Sedghi v. PatchLink Corp., No. JFM-07-1636, 2010 WL 3895472 (D.Md. Sept. 30, 2010). On appeal, the Court of Appeals for the Fourth Circuit upheld Judge Motz’s rulings, with the exception of his disposition of the promissory estoppel claim. With regard to that claim, the Fourth Circuit reversed and remanded for further proceedings (ECF 119). Sedghi v. PatchLink Corp., No. 10-2229, 440 Fed.Appx. 165, 2011 WL 2938069 (4th Cir. July 22, 2011). Subsequently, the case was transferred to me.

On remand, defendant filed a “Motion To Strike Jury Demand And Supporting Memorandum” (“Motion,” ECF 128), as to the promissory estoppel claim. Plaintiff opposes the Motion, insisting that he is entitled to a jury trial on that claim. See “Plaintiffs Response In Opposition To Defendant’s ‘Motion To Strike Request For Jury Trial’” (“Opposition,” ECF 131); “Memorandum Of Grounds And Authorities In Support Of Plaintiffs Response In Opposition To Defendant’s ‘Motion To Strike Request For Jury Trial’ ” (“Opposition Memo,” ECF 131 — l).4 In response to plaintiffs Opposition, defendant submitted a “Reply In Support Of PatchLink’s Motion To Strike Jury Demand” (“Reply,” ECF 132).

The issues have been fully briefed and the Court rules now pursuant to Local Rule 105.6, no hearing being necessary.

Factual and Procedural Background5

PatchLink was founded in 1999 by Sean Moshir (“Sean”) and managed by Sean and his brother, Kourosh Moshir (“Kourosh”).6 In 2004, after a venture capital investment in PatchLink of about $35 million, Sean asked plaintiff, a college friend, to join the company as Director of Sales Engineering. See “Memorandum Of Law In Support Of Defendant PatchLink Corporation’s Motion For Summary Judgment” (“MSJ Memo,” ECF 77) at 1-2. On September 3, 2004, Plaintiff signed the company’s standard employment agreement. MSJ Memo, at Exh. 5. The compensation portion of the contract states, id.:

a. As compensation for the services provided by employee under this AGREEMENT, EMPLOYER will pay EMPLOYEE an initial annual salary of $135,000 dollars....
[300]*300b. Employer will provide N/A stock option to the employee....
c. Commission is paid according to PatchLink sales policy.
d. There are no other compensation, incentive, bonuses, payments, stocks, deferred payments, deferred salary, stock options or any other payment due to the employee other than what is set forth in this agreement unless otherwise added as amendment to this contact [sic] and signed by both the EMPLOYEE and the president of the company.

The language about commissions, set forth in H“c,” was used in employment contracts for a range of employees, many of whom were not eligible for commissions. MSJ Memo at 4. At least some employees who qualified for commissions had clearly defined commission plans in writing. Id.

According to plaintiff, defendant was to pay commissions pursuant to the Patch-Link Sales Policy, referenced in ¶ “c.” “Second Amended Complaint” (“Complaint,” ECF 27) ¶ 11. Therefore, in January 2006, plaintiff asked Senior Vice President Richard Halavka and Sean for a copy of the policy. Id. ¶ 12. Plaintiff claims that Mr. Halavka and Sean advised him “that the company would get back to [him] regarding payment for the commissions,” id. ¶¶ 14, 16, and that Sean “advised Plaintiff that accounting is doing the paperwork for the financing of the commissions.” Id. ¶ 15.

During plaintiffs employment, several changes in his compensation were memorialized in documents placed in his personnel file, pursuant to ¶ “d” of his contract, including eligibility for a bonus, a pay increase, and stock options. MSJ Memo at 2-3. Plaintiff alleges, however, that in September 2004 Sean also agreed to pay plaintiff a commission of one percent of “all sales.” Id. at 4-5. Plaintiff was to be paid this commission upon completion of his first year of work for the company, at which point they would “hammer out a new compensation package.” Id. at 5. Although no writings memorialized this alleged change to plaintiffs employment contract, id., both Sean and Kourosh corroborated plaintiffs claim in their deposition testimony. Plaintiff contends that, “[a]t the close of the Second Quarter of 2005, [Sean] advised Plaintiff that ... [Sean would] take care of the commissions owed to date in October, 2005.” Complaint ¶ 18.

According to plaintiff, Sean was terminated by PatchLink in September 2005. Id. ¶ 19. Around that time, plaintiff wrote to PatchLink’s new CEO, Corey Smith, requesting payment for overtime work, reimbursement of unpaid expenses, and the immediate vesting of his stock options. MSJ Memo at 6. Although plaintiff did not mention sales commissions in that initial request, id., plaintiff avers that he repeatedly asked Smith about his commissions. Complaint ¶ 21. Smith initially declined to pay plaintiff overtime or vest his stock options, but did request that Sedghi promptly submit his expenses for payment. MSJ Memo at 6. When plaintiff pressed the issues of overtime and the stock options, Smith instructed the company to pay plaintiff a corporate management bonus of $5,000. Id.

On October 31, 2005, plaintiff began working under Carl Lytikainen, Patch-Link’s new Vice President of Technical Services. Id. at 7. Just three days after Lytikainen began working at PatchLink, plaintiff asked to speak with him about compensation. Id. Plaintiff did not mention commissions in his emails to Lytikainen, but Lytikainen confirmed in his deposition testimony that they were discussed. Id.; see also MSJ Memo, Exh. 26. Plaintiffs version accords with defendant’s. He states: “Plaintiff ... approached Mr. Lytikainen and advised him that [Sean] told [301]*301Plaintiff [PatchLink would] pay Plaintiffs sales commissions and upscale his compensation package in October of 2005.” Complaint ¶ 25. Lytikainen stated that he “asked [Sedghi] to ... show some documentation” to substantiate Sedghi’s claim that he was owed commissions. MSJ Memo, Exh. 26, at 19:3-4. However, as plaintiff was unable to produce such documentation, he was not paid commissions at that time. Id. Plaintiff asserts that he reiterated his request for commissions to Lytikainen, “as well as others within PatchLink.” Complaint ¶ 27.

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Bluebook (online)
823 F. Supp. 2d 298, 2011 U.S. Dist. LEXIS 119454, 2011 WL 4916685, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sedghi-v-patchlink-corp-mdd-2011.