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Manning v. Mercatanti

United States District Court, Fourth Circuit

December 23, 2013

EUGENE J. MANNING, et al, Plaintiffs,
v.
LOUIS F. MERCATANTI, JR., Defendant.

MEMORANDUM OPINION

Ellen Lipton Hollander United States District Judge

Eugene J. Manning and J. Frederick Manning (the "Mannings") brought suit against Louis F. Mercatanti, Jr., complaining that Mercatanti failed to pay them sums due pursuant to a guaranty that he executed on April 13, 2005 (the "Guaranty", ECF 1-1), as "security for the repayment" of obligations due to plaintiffs under employment agreements that the Mannings concurrently executed with Nassau Broadcasting L LLC and Nassau Broadcasting Partners, LP. See Complaint (ECF 1).[1] Copies of the Guaranty, and each employment agreement, are appended to the Complaint as plaintiffs' Exhibits A, B, and D, respectively. In particular, plaintiffs seek to recover $1, 472, 000 under the Guaranty, plus interest and attorneys' fees. Id.

The Mannings have filed a motion for partial summary judgment ("Motion, " ECF 37), which has been fully briefed.[2] No hearing is necessary to resolve it.[3] See Local Rule 105.6. For the reasons stated below, I will grant the Motion.

Factual Background[4]

On December 17, 2004, pursuant to an Asset Purchase Agreement, Manning Broadcasting, Inc. agreed to sell and'or assign to Nassau Broadcasting I, LLC and Nassau Broadcasting III, LLC, "the assets and property used in the operation of two radio stations" in Hagerstown, Maryland. See Guaranty at 1. Thereafter, on April 13, 2005, the Mannings each entered into identical employment agreements (the "Employment Agreements") with Nassau Broadcasting I, LLC and its parent, Nassau Broadcasting Partners, L.P. (collectively, "Nassau").[5]

The Employment Agreements provide for the Mannings' employment for ten years, commencing in 2005, upon the closing for the transfer of die radio stations. E.g., Complaint Ex. B ¶ 1. Paragraph 5 of the Employment Agreements, titled "Termination." states: "This contract shall terminate at the Termination Date, unless earlier terminated by written agreement of [Nassau] or [the Mannings]."

Under the Employment Agreements, the Mannings are obligated to provide "advisory services" with respect to both radio stations, although they are not "required to devote any minimum number of hours, " nor are they required to be "physically located at any office of [Nassau] or at the [radio stations." Id. ¶ 2. In exchange for these services, the Mannings are to receive two million dollars each, payable over ten years, ending in July 2015. Id. ¶ 3; id. at Attachment 1. And, under Paragraph 3 of the Employment Agreements, their compensation is due "regardless of whether [the Mannings have] resigned" or been "fired, with or without cause."

Initially, plaintiffs were to be paid in sixteen increments of $50, 000 every three months, followed by a lump sum installment of $1, 080, 000, and then twenty-four incremental payments of $5, 000 every three months. Id.; see also Id . at Attachment 1. However, by amendments to the Employment Agreements on August 27, 2009 (the "Amendments"), the compensation schedule was modified; beginning on May 15, 2009, the Mannings were to receive monthly payments of $16, 000 for the remainder of the ten year term. See Complaint Ex. C ¶ 1; see also Id . at Attachment A. The Amendments are appended to the Complaint as plaintiffs' Exhibits C and E.

Nassau did not pay the Mannings the $16, 000 payments due on October 15, 2011. See Memorandum Opinion (ECF 31) at 3. The Employment Agreements state that, if Nassau "fails to render payment of any amount due hereunder when said payment is due and payable, " it "constitute[s] an event of default." Complaint Exs. B and D, ¶ 14. And, the Amendments provide that, in the event of default, the balance due under the Employment Agreements "shall immediately and automatically become due and payable in full . . .." Complaint Exs. C and E, ¶ 2(b)(v).

As of October 15, 2011, each plaintiff was owed $736, 000 under the Employment Agreements. See Complaint Exs. C and E at Attachment A. Nassau has not paid the Mannings the remaining sums due under the Employment Agreements. Memorandum Opinion at 3-4.

Concurrent with the Employment Agreements, Mercatanti executed the Guaranty on April 13, 2005, as security for the repayment of Nassau's obligations under the Employment Agreements. The Guaranty identifies Mercatanti as guarantor and the Mannings as beneficiaries. See Guaranty at 1. By its terms, it guarantees to the Mannings the "full and prompt payment" of Nassau's obligations under the Employment Agreements. Id.

It is undisputed that "'Mercatanti has not paid the Mannings any amounts under the Guaranty." Memorandum Opinion at 4. As a result, the Mannings assert: "Mercatanti's failure to pay the Mannings in full all sums due under the Guaranty, including the amounts due (as accelerated) under the Employment Agreements and the amounts representing the Mannings' costs and expenses, constitutes a breach of the Guaranty . . . ." Complaint ¶ 22. The Mannings each seek $736, 000, for a total of $1, 472, 000. Id. at 5.[6]

In my prior Memorandum Opinion, docketed on August 24, 2012 (ECF 31), I ruled that the Employment Agreements are enforceable and that, regardless, Mercatanti waived his right to contest the legal enforceability of the Employment Agreements. Accordingly, I denied Mercatanti's motion to dismiss. However, I also denied plaintiffs' motion for summary judgment. I explained, ECF 31 at 26-27 (citations and quotation marks omitted):

A breach of contract is a failure, without legal excuse, to perform any promise that forms the whole or part of a contract. Mercatanti has asserted that "if this case moves forward, " he "will assert a second line of defenses, " separate and apart from the matter of enforceability, and that asserting the "second line of defenses" will "require significant factual development in discovery."
To be sure, defendant has not elucidated the basis of the defenses he intends to raise. Although several seem either irrelevant or specious, he has included a factual claim as to plaintiffs' performance [i.e. that the Plaintiffs did not perform any services under the Employment Agreements]. Summary judgment is ordinarily inappropriate when the parties have not had an opportunity for reasonable discovery. In the current posture of the case, it is not appropriate for the Court to presuppose the outcome of discovery and dismiss defendant's contentions as "irrelevant, " as plaintiffs urge.

Notwithstanding Mercatanti's assertion that discovery was needed to elucidate his defenses, the parties did not conduct any discovery. And, the discovery period closed on December 22, 2012. See ECF 28. See ...


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