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Fetter v. North American Alcohols

December 10, 2008

JOHN B. FETTER
v.
NORTH AMERICAN ALCOHOLS, INC., ET AL.



The opinion of the court was delivered by: Mary A. McLAUGHLIN, J.

MEMORANDUM AND ORDER

McLaughlin, J.

John B. Fetter claims that he had an employment contract with North American Alcohols, Inc. ("NAA") to act as chief operating officer of the company, which was formed in 2003 to build and operate an ethanol manufacturing plant in Pennsylvania. Fetter asserts three claims against NAA and its president and CEO, Stephen C. Reiser: (1) breach of contract; (2) violation of the Pennsylvania Wage Payment and Collection Law ("WPCL"); and (3) unjust enrichment.

The defendants have moved for summary judgment, arguing that the parties never executed a formal contract, and that neither Reiser nor NAA received any benefit from Fetter's activities. The Court will grant the defendants' motion with respect to the breach of contract and WPCL claims, but will deny the motion with respect to the unjust enrichment claim.

I. Background*fn1

NAA is a Florida corporation formed by Stephen C. Reiser, the company's president and CEO. The corporation was founded in November 2003 for the purpose of building and operating an ethanol manufacturing plant. NAA's plan was for the plant to produce fuel-grade ethanol and certain bi-products on a site in the Keystone Industrial Port Complex in Bucks County, Pennsylvania. See NAA Business Plan at 4, 7, attached as Ex. 2 to Pl.'s Mot. to Remand.

In January 2006, John B. Fetter attended meetings with Reiser and other representatives of NAA in Philadelphia, Pennsylvania. At that time, NAA was seeking funding to develop the ethanol plant. At these meetings, the parties talked about how Fetter could assist in raising capital and in implementing NAA's business plan. See Fetter Dep. 60-65, Dec. 4, 2007; Reiser Dep. 32-35, Dec. 4, 2007.

In February 2006, Fetter and Reiser discussed the possibility of Fetter's full-time employment with NAA. On February 27, 2006, Fetter received an email from Reiser.

Attached to this email was a letter with the subject line, "Employment With North American Alcohols, Inc." Between February 27, 2006 and March 16, 2006, Reiser and Fetter exchanged various drafts of this document. See Letters and emails attached as Ex. C to Pl.'s Resp. to Defs.' Mot. for Summ. J. ("Pl.'s Resp."); Fetter Dep. 83-84; Reiser Dep. 47.

On March 16, 2006, Fetter and Reiser met in Philadelphia. At this meeting, Reiser and Fetter both signed a document entitled "Confidentiality & Non-Circumvention Agreement." Reiser also signed the most recent draft of the letter entitled "Employment With North American Alcohols, Inc.," dated March 6, 2006 (the "March 6 letter"). Fetter's signature does not appear on the March 6 letter. See Confidentiality & Non-Circumvention Agreement, Am. Compl. Ex. B; Letter from Stephen C. Reiser, Mar. 6, 2006, attached as Ex. A to Defs.' Mot. for Summ. J. ("Defs.' Mot."); Fetter Dep. 115; Reiser Dep. 46-48.

The first paragraph of the March 6 letter states:

After discussions with the [NAA] BOD, we are pleased to offer the following, for your consideration. Please consider this letter an outline of the terms and conditions we discussed, which must be formalized in a contract between NAA and yourself.

Defs.' Mot. Ex. A. The letter also provides:

* "NAA will employ you as the Chief Operating Officer" (Paragraph 1);

* "The term of the employment agreement will be for a period of five (5) years" (Paragraph 2);

* "Your starting, base salary, will be Three Hundred Thousand ($250,000.) [sic] dollars per annum . . . . Some portion of this salary, to be agreed between NAA and JBF may be deferred until the close of financing" (Paragraph 3);

* "A seat on the BOD will be considered, at a later time" (Paragraph 4)

* "You shall be eligible to receive bonus and stock options, and any other benefits, as directed by the BOD" (Paragraph 5);

* "You shall receive corporate benefits as directed by the BOD" (Paragraph 6); and

* "Prior to the finalization of the employment agreement, not concurrently with, you will be required to sign the latest version of the NonCircumvention & Non-Disclosure Agreement"*fn2 (Paragraph 11).

The March 6 letter also discusses equity compensation. Specifically, paragraph 7 of the letter states: "At the signing of your employment contract you shall be entitled to purchase 500,000 Class A Common shares of NAA at $0.01 per share. This must be exercised within a 60-day period from date when full salary is being paid to you by NAA." Paragraph 8 further provides: "At any time during your employment agreement you are entitled to purchase an additional 500,000 shares of NAA Class A Common shares, at $0.01 per share."

The record does not contain evidence of any communications between Fetter and Reiser about Fetter's employment for approximately two months after Reiser signed the March 6 letter. At some point after March 16, 2006, however, Fetter had his then-attorney prepare a draft of a document, entitled "Executive Employment Agreement" (the "EEA").*fn3 This nine-page document, which the parties never signed, states that "this agreement is ...


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