Gaibi-Rodriguez v. Emergent

USCA1 Opinion [NOT FOR PUBLICATION--NOT TO BE CITED AS PRECEDENT] United States Court of Appeals For the First Circuit No. 98-1328 IKBAL GAIBI-RODR GUEZ, Plaintiff, Appellant, v. EMERGENT GROUP, INC., ET AL. Defendants, Appellees. APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO [Hon. Juan M. P‚rez-Gim‚nez, U.S. District Judge] Before Boudin, Circuit Judge, Bownes, Senior Circuit Judge, and Reavley*, Senior Circuit Judge. Fernando L. Gallardo, with whom Woods & Woods was on brief for appellant. Jaime E. Toro-Monserrate, with whom Ra£l M. Arias, and McConnell Valdes were on brief for appellees. October 16, 1998 ___________________ *Of the Fifth Circuit, sitting by designation. BOWNES, Senior Circuit Judge. The sole issue in this case is whether the trial court erred when it dismissed this action for breach of contract and fraud. We affirm the district court opinion, which we have reviewed de novo. I. In the latter part of 1995, plaintiff-appellant Ikbal Gaibi Rodr¡guez ("Gaibi") and defendant-appellees Emergent Group, Inc., Emergent Mortgage Corp., and Carolina Investors, Inc. (collectively, "Emergent"), entered into negotiations to establish a strategic alliance to provide one another with certain financial services. On December 5, 1995, the parties executed a Confidentiality Agreement to govern their discussions. That agreement provided, inter alia, that "[n]one of the Parties shall have any duty of obligation whatsoever to proceed with any transaction unless and until a definite, written agreement has been mutually approved, executed, and delivered to both parties." Negotiations over the details of the venture continued. At some point, the negotiations centered on the possible creation of a corporation preliminarily called the "Emergent Lending Puerto Rican Company" or the "Puerto Rico Lending Institution" that would then employ Gaibi. On June 1, 1996, Gaibi allegedly discontinued other business endeavors and attended training sessions at Emergent's offices for three weeks and continued to work on aspects of the venture. On June 20, 1996, Emergent informed Gaibi that it had decided to withdraw from its dealings with him. The corporation was never created. Gaibi was reimbursed $2,132.24 "for the expenses [he] incurred while visiting [Emergent]." (7/9/96 letter from Donald L. Batts to Gaibi). In addition, he was paid "three months salary ($25,000) for the time and effort [he] extended working on developing the Emergent Lending Puerto Rican company." This was to "help cover [his] expenses and provide for the transition into [his] new employment." II. This lawsuit followed. In his complaint, Gaibi alleged: (1) breach of the Confidentiality Agreement because defendants failed to develop the Puerto Rican Lending Institution and misused their relatively more substantial "economic wealth"; (2) breach of an alleged Development Agreement; (3) breach of good faith and fair dealing by fraudulently refusing to develop the corporation; and (4) breach of an alleged Employment Agreement. Defendants moved to dismiss for failure to state a claim or, in the alternative, to transfer the case to the District of South Carolina. The trial court granted the motion to dismiss. It dismissed the Confidentiality Agreement claim because Gaibi did not allege any facts suggesting that defendants misused the information they gained during negotiations or otherwise failed to negotiate in good faith; and dismissed the remaining claims because it found no written Development or Employment Agreements. The court dismissed the fraud claim on the ground that the complaint contained only conclusory assertions but no facts upon which a finding of fraud could be based. III. On appeal, Gaibi contends that: (1) there had to have been an Agreement because he attended training sessions, was paid three months' salary, and had begun working for the Emergent Lending Puerto Rican Company, which was "developed, at least de facto"; (2) the parties did "proceed with [a] transaction," thereby rendering the Confidentiality Agreement's requirement for a written agreement inapplicable; and (3) the court erred by failing to convert the motion to dismiss to one for summary judgment. As to his breach of contract claims, although Gaibi submitted several letters which he contends represent codified agreements, none of them are. See K-Mart v. Davis, 756 F. Supp. 62, 68-69 (D.P.R. 1991). For example, the letter dated April 8, 1998 from Keith B. Giddens of Emergent to Gaibi does not contain the "terms and conditions of [his] Employment Contract," as Gaibi contends, but is simply evidence of ongoing negotiations: the letter employs conditional language such as, "If I am correct, you will own . . ." and "Other provisions will have to include . . . ." Similarly, the document Gaibi calls evidence of his acceptance of the purported Employment Agreement (4/16/96 letter from Gaibi to Giddens) is no more than his agreement to the "basic concept" of the current proposal and includes further suggestions by Gaibi. In short, Gaibi simply cobbles together various circumstances that may or may not be consistent with the existence of a contract, but which in light of the Confidentiality Agreement's demand for a written agreement are clearly insufficient to form a contractual meeting of the minds. That Gaibi voluntarily forewent other business opportunities, and that Emergent compensated him for the time spent on the project and trained him in the hope that the project would materialize, does not satisfy this contractual requirement. Likewise, we find no merit to Gaibi's argument that the parties had explicitly waived or modified the terms of the Confidentiality Agreement. The court's dismissal of the fraud claim is also unassailable. None of the alleged facts suggest any intent to defraud Gaibi or negotiate in bad faith. See Fed. R. Civ. P. 9(b). And Gaibi's own complaint suggests that negotiations simply did not pan out. Gaibi's claim that the court should have converted the motion to dismiss to one for summary judgment requires only brief comment. He never asked for such a conversion and the court considered only documentary evidence that was crucial to his claims, i.e., the Confidentiality Agreement and all documents submitted by plaintiff which purportedly represented Development or Employment Agreements but which were clearly correspondence exchanged during and as part of the negotiations. There was no reason for the court to sua sponte convert the motion for dismissal to one for summary judgment. See Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993); Fed. R. Civ. P. 12(b). Affirmed. Costs on appeal awarded to appellee.