United States District Court, W.D. Pennsylvania
Barry Fischer United States District Judge.
Eric Daimler (“Plaintiff” or
“Daimler”) brought this action alleging that
Defendants Chris Moehle (“Moehle”), Robotics Hub
Fund 1 LLC (“Robotics Hub”), and Coal Hill
Ventures LLC (“Coal Hill”) (Robotics Hub and Coal
Hill, together, the “Companies”) made intentional
misrepresentations to Daimler intended to induce him into
entering a business partnership with Moehle, which included
merging their existing companies and creating new ones.
(First Amended Complaint, Docket No. 4 at ¶ 1). He
further alleges that the Defendants then forced Daimler out
of these companies by preventing him from satisfying
conditions precedent to a common unit vesting schedule,
resulting in the forfeiture of all of his common units in the
Companies. (Id. at ¶ 2). In short, Daimler
claims that Defendants wrongly forced Daimler out of
companies that he helped to create and build. Defendants now
move to dismiss Daimler's complaint on the grounds that
it fails to state a claim upon which relief may be granted.
Court has reviewed the Brief in Support of Defendants'
Motion to Dismiss Under Federal Rule of Civil Procedure
12(b)(6) (Docket No. 17), the Memorandum of Law in Opposition
to Defendants' Motion to Dismiss the First Amended
Complaint (Docket No. 19), and the Reply Brief in Support of
Defendants' Motion to Dismiss Under FRCP 12(b)(6) (Docket
No. 20). For the reasons set forth below, Defendants'
motion to dismiss (Docket No. ) is GRANTED IN PART AND
DENIED IN PART.
STATEMENT OF FACTS
in 2015, Daimler and Moehle, each of whom operated his own
robotics and/or venture finance company, formed a partnership
in order to invest in high-growth-potential, early-stage
robotics companies. (Docket No. 4 at ¶¶ 10-11). The
two agreed to create an equal partnership by combining
Moehle's company, Skilled Science, with Daimler's
company, Coal Hill; they also created two new entities,
Robotics Hub and Robotics Hub Fund 1 LP (the
“Fund”). (Id. at ¶¶ at 11-12).
Daimler and Moehle amended and restated Coal Hill's
operating agreement to reflect Daimler's and Moehle's
equal partnership, began working together on marketing
strategies, and merged “expenses accrued through the
funding of Skilled Science into the fundraising expenses of
Robotics Hub.” (Id. at ¶ 14).
beginning the partnership, Moehle told Daimer that General
Electric (“GE”) would invest $20 million in the
Fund and that he had strong relationships with the National
Robotics Engineering Center (“NREC”) and the
Robotics Institute (“RI”), both of which would
create investment opportunities for their venture. (Docket
No. 4 at ¶¶ 15-16). By early 2016, however, Daimler
learned that Moehle had misrepresented his relationships with
NREC and RI. (Id. at ¶ 18). Nevertheless,
throughout 2016, Moehle continued to represent that GE would
be investing $20 million. (Id. at ¶ 19).
January 2016, the Obama White House appointed Daimler as a
Presidential Innovation fellow. (Docket No. 4 at ¶ 29).
Daimler, with Moehle's encouragement, accepted the
year-long fellowship. (Id. at ¶¶ 30-31).
During the fellowship, Daimler advised the White House on
robotics and artificial intelligence, and the fellowship
generated positive press coverage for Daimler and Robotics
Hub. (Id. at ¶¶ 32-33). During the course
of the fellowship, Daimler provided unspecified services to
the Companies but did not receive any compensation.
(Id. at ¶ 34). Daimler and Moehle agreed that
Daimler would be paid at a later date. (Id.)
public relations and fundraising efforts, as well as joint
presentations to potential investors, the Companies and the
Fund promoted Daimler and Moehle as equal partners. (Docket
No. 4 at ¶¶ 25-26). Both were also designated as
“key persons” in the Fund's Limited
Partnership Agreement. (Id. at ¶ 24).
spring of 2016, Daimler and Moehle retained Reed Smith LLP to
prepare the formation and governing documents, including the
Companies' Amended and Restated Operating Agreements and
Common Unit Award Agreements. (Docket No. 4 at ¶ 36).
Moehle was the main point of contact for the law firm.
(Id. at ¶ 37). The Companies' Amended and
Restated Operating Agreements and Coal Hill's and
Robotics Hub's Common Unit Award Agreements with both
Moehle and Daimler are attached to the complaint as exhibits,
(Docket Nos. 4-1 through 4-6), and the Court has considered
and relied upon each in deciding this motion. See,
e.g., Lum v. Bank of America, 361 F.3d 217, 222
(3d Cir. 2004) (in resolving Rule 12(b)(6) motions,
“courts generally consider only the allegations in the
complaint, exhibits attached to the complaint, matters of
public record, and documents that form the basis of a
claim”) (citing In re Burlington Coat Factory Sec.
Litig., 114 F.3d 1410, 1426 (3d Cir. 1997)).
as relevant here, the Amended and Restated Operating
Agreements, both dated March 23, 2016,  noted that
Daimler and Moehle were members of the Companies, and they
appointed the two as managers and board members. (Docket Nos.
4-5 and 4-6 at ¶¶ 5.2). The boards of each company
were authorized to manage, control and operate each company
the full and complete power, authority, and discretion for,
on behalf of and in the name of the Company, to take such
action as it may in its sole discretion deem necessary or
advisable to carry out any and all of the objectives and
purposes of the Company, subject only to [the Operating
Agreement and applicable law.]
(Docket Nos. 4-5 and 4-6 at ¶ 5.1). Each Manager on the
board had one vote on matters submitted to the board, and, in
the event of a tie vote, the board would refer the matter to
a Deadlock Arbitrator whose decision would be “final
and binding on the Company, the board and the Members.”
(Docket Nos. 4-5 and 4-6 at ¶ 5.5(c)). Managers were not
entitled to receive compensation for their duties as a
manager, nor did the Operating Agreements “confer upon
any Manager any rights with respect to continued employment
by the Company.” (Docket Nos. 4-5 and 4-6 at ¶
5.7). The Agreements specifically provided, “[N]othing
herein should be construed to have created any employment
agreement with any Manager.” (Id.) Officers,
however, were entitled to compensation as determined by the
board. (Id. at ¶ 6.10). The Agreements noted
that neither Moehle nor Daimler had made any capital
contributions, and the Agreements provided that neither would
be required to make additional capital contributions.
(Id. at ¶ 7.2). If additional capital
contributions were made, those contributions could be made
only “with the consent of the Board and in connection
with an issuance of Units.” (Id. at ¶
7.2). Loans by any member were not to be considered capital
contributions under the Agreements. (Id. at ¶
7.6). The holders of a the members serving the boards.
(Docket Nos. 4-5 and 4-6 at ¶¶ 5.2, 5.3). Exhibit A
to the Operating Agreements noted that both Daimler and
Moehle each had 42 common units in each of the Companies,
“which may be subject to vesting, pursuant to a
restricted unit award agreement.” (Docket No. 4-5 at
39; Docket No. 4-6 at 40).
same day that the Operating Agreements were signed, each
Company granted each of Daimler and Moehle the 42 common
units referenced above. (Docket Nos. 4-1, 4-2. 4-3, and 4-4).
The units vested over time. Moehle's units vested as
▪ 20% vests on the first anniversary of the Date of the
▪ 1.6666% vests ratably on the last day of each month
thereafter until the fifth anniversary of the Date of the
(Docket No. 4 at ¶ 38; Docket Nos. 4-1 and 4-2 at 2). In
addition, Moehle's units vested only if Moehle was
providing Full Time Services to a combination of the
Companies, the Fund and the investment manager of the Fund on
the Vesting Date. (Docket Nos. 4-1 at 3, ¶ 2(a); 4-2 at
3, ¶ 2(a)). If Moehle stopped working full time, he
would forfeit any unvested units. (Docket Nos. 4-1 and 4-2 at
4, ¶ 2(b)).
units, however, vested pursuant to a different schedule.
According to the Summaries contained on the first page of the
Daimler Awards, 20% of Daimler's units would vest on the
date that he had provided twelve consecutive and
uninterrupted months of Full Time Services, provided that
those services began within one year of the Award. (Docket
Nos. 4-3 and 4-4 at 2). If Daimler met those conditions, the
remaining 80% of the units would vest on a pro-rata
basis on the last day of each month thereafter until the
fifth anniversary of the award. (Id.) Like the
Moehle Awards, the Daimler Awards stated that, if he stopped
providing Full Time Services, he would forfeit any unvested
units. (Docket No. 4-3 at ¶ 2(b) Docket No. 4-4 at
the four award agreements otherwise appear to contain
identical language, which includes a paragraph addressing
employment rights. Of note, paragraph 10 of each award,
entitled “No Employment
Rights, ” provides:
The grant of this Award shall not confer upon the Grantee any
right to be retained by or in the employ or service of the
Company and shall not interfere in any way with the right of
the Company to terminate the Grantee's employment or
service at any time. The right of the Company, as applicable,
to terminate at will the Grantee's employment or service
at any time for any reason is specifically reserved.
(Docket Nos. 4-1, 4-2, 4-3, and 4-4 at ¶ 10) (underline
and bold in original).
the course of the partnership, Daimler provided the Companies
with financial support. For example, he loaned $125, 000 to
the Companies pursuant to a promissory note, which has since
been repaid with interest. (Docket No. 4 at ¶¶
27-28). He advanced personal funds to cover unspecified
corporate expenses - including $30, 000 between May and
August 2016 - and has been reimbursed $35, 000. (Id.
at ¶ 27, 28, 65, and 68). He also provided $100, 000
capital contributions to Robotics Hub and Coal Hill but did
not receive units in return, even though he and Moehle (the
only two members of the board) had agreed that he
would. (Id. at ¶¶ 67, 135,