Himc Corporation v. Prem Ramchandani

MEMORANDUM *** Because summary judgment as to the existence of a contract is proper under Washington law only where reasonable minds could not disagree that the parties intended a binding agreement, see Scott Galvanizing, Inc. v. Nw. EnviroServices, Inc., 120 Wash.2d 573, 844 P.2d 428, 433 (1993) (en banc); Swanson v. Liquid Air Corp., 118 Wash.2d 512, 826 P.2d 664, 670-71 (1992) (en banc), the district court erred by granting summary judgment based on its sua sponte finding that no enforceable agreement existed between HIMC Corp. (“HIMC”) and either Veripay, Inc. (“Veripay”) or Pasa, Inc. (“Pasa”). Assuming without deciding that the appellants here stand in the shoes of either Veripay or Pasa for purposes of enforcing the alleged agreements, there are genuine issues of material fact as to whether the parties intended the Letter of Intent or Memorandum of Understanding (or both) to constitute binding agreements. Additionally, there are genuine issues of material fact as to whether the HIMC Board of Directors’ resolution setting a higher price for the shares was binding on the parties. Contrary to the district court’s finding, a document labeled as a “letter of intent” may constitute an enforceable contract under Washington law, see Loewi v. Long, 76 Wash. 480, 136 P. 673, 674 (1913), and a stock agreement may be enforceable even if it lacks a price term, see Zalud v. Boltz, No. 45377-7-1, 2000 WL 1346678, at *2-3 (Wash.Ct.App. Sept.18, 2000). Moreover, there are genuine issues of material fact as to whether the appellants are entitled to the release of restrictive conditions on HIMC securities issued to appellants. Although Rule 144 of the Securities Act, 17 C.F.R. § 230.144(d)(l)(iii), allows holders to sell restricted stocks that are fully paid for and held for the required period, testimony before the district court was in sharp conflict regarding whether the stock at issue here had been fully paid for. Thus, summary judgment on these claims was inappropriate. Appellants’ contentions regarding possible ratification and waiver likewise present issues of fact inappropriate for summary judgment. See Poweroil Mfg. Co. v. Carstensen, 69 Wash.2d 673, 419 P.2d 793, 796 (1966); Hoke v. Stevens-Norton, Inc., 60 Wash.2d 775, 375 P.2d 743, 745 (1962). REVERSED and REMANDED. Footnotes [***] This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.