United States District Court, D. Kansas
MEMORANDUM AND ORDER
JULIE A. ROBINSON, District Judge.
Plaintiff Carlos Teran brings this lawsuit against GB International, S.P.A. ("GB International") and GB Miami, S.R.L. ("GB Miami"), and American Crane & Tractor Parts, Inc. ("ACTP") (collectively "Defendants"), asserting derivative tort claims and individual capacity claims for declaratory relief and breach of contract. Defendant GB Miami also asserts a counterclaim for declaratory relief. This matter is before the Court on Defendants' Motion for Summary Judgment (Doc. 124). For the reasons explained below, the Court directs further briefing under Fed.R.Civ.P. 56(f)(2).
The following facts are either uncontroverted, stipulated to, or viewed in the light most favorable to Plaintiff, the non-moving party. On November 9, 2006, Teran signed the Second Amended and Restated Shareholders Agreement (the "Shareholders Agreement"), an agreement among ACTP, GB International, GB Miami, and three individuals, including Teran. The Shareholders Agreement states in Section 2.9(B)(d):
If the Company [ACTP] terminates the employment of Carlos [Teran] within ten (10) years of April 29, 2005 with cause' (as defined in Section 5(d) of the Carlos Employment Agreement) or if Carlos terminates the Carlos Employment Agreement under paragraph 5(a) of such agreement within ten (10) years of April 29, 2005, then, in each case, GB Miami shall have a call right, exercisable immediately, and continuing thereafter, for a total purchase price of One Dollar ($1.00) for all of Carlos' ownership in the Company....
On November 9, 2006, Teran signed and initialed each page of the "Carlos Employment Agreement" referenced in the Shareholders Agreement. Paragraph 5(a) of the Carlos Employment Agreement states:
Termination. Employee's employment by the Company under this Agreement shall be terminated upon the earliest to occur in the following events:
(a) Termination by Employee. Employee's resignation or other voluntary departure, in which case, he will no longer serve as an employee' or represent the Company from the date of such resignation or ceasing of services....
In a letter dated July 25, 2010, from Teran to ACTP, he stated that it was his "intention to sever [his] employment relationship with the Company effective at the end of the business day on October 29, 2010." At the time Teran wrote the letter, the only employment he had with ACTP was under the Carlos Employment Agreement.
In response to Teran's letter, ACTP sent a letter dated August 5, 2010, in which it told Teran that his "resignation effective as of the end of the business day on October 29, 2010 is accepted by the Company." ACTP further explained that Teran's resignation triggered rights under the Shareholder Agreement, including GB Miami's right to purchase all of Teran's ownership in ACTP for the price of $1.00. Teran testified that he did not pay attention to the part of the letter where ACTP explained that his resignation under the Carlos Employment Agreement effectuated the trigger of the $1.00 call right, and that he thought it was "just a formality."
By letter agreement dated October 29, 2010, ACTP extended an offer of employment to Teran, which stated that his employment would begin on November 1, 2010. The letter further stated that Section 9 of the former [Carlos] Employment Agreement, the non-compete provision, will apply and continue in full force and effect. The employment was to be "at will, " and ended by stating that Teran had until the end of the business day on October 29, 2010 to accept the offer. Teran accepted the offer and signed the letter agreement that date, and began the effective date of a new term of employment with ACTP on November 1, 2010.
By letter dated December 1, 2010, ACTP informed Teran that GB Miami had exercised its call right under Section 2.9(B)(d) of the Shareholders Agreement and ACTP requested that Teran complete the closing of the sale by returning Teran's ACTP stock certificates. Along with the December 1 letter, ACTP tendered to Teran the $1.00 payment amount called for in the Shareholders Agreement. Teran refused to deliver the stock certificates, and on or about December 10, 2010, ACTP cancelled Teran's stock certificates and recorded the shares as transferred to GB Miami on ACTP's books. Teran subsequently terminated the new employment agreement with ACTP effective December 23, 2010.
Plaintiff asserts five counts in his Second Amended Complaint. Counts I and II are tort claims that are asserted derivatively on behalf of ACTP, and stem from allegations that Defendants GB International and GB Miami, as majority shareholders of ACTP, harmed the company through their alleged control of ACTP's decision making. Counts III and IV, which Plaintiff asserts in his individual capacity, both relate to GB Miami's exercise of its right to purchase all of Plaintiff's ACTP stock pursuant to its call right in Section 2.9(B)(d) of the Shareholder Agreement. Count V is a breach of contract claim asserted in Plaintiff's individual capacity. Defendants move for summary judgment on all five counts. Defendant GB Miami also moves for summary judgment on its counterclaim for declaratory relief, seeking a declaration that GB Miami properly exercised its call right ...