United States District Court, D. New Jersey
KEVIN McNULTY, District Judge.
The plaintiff, Asta Funding, Inc. ("Asta"), entered into a tentative agreement to fund the launch of defendant Your Wellbeing, LLC ("YWB"), whose founders and principals were defendants Charles Ronald Green, Jr., and Melinda Green. YWB, formed in 2010, developed an employee wellness program. The program was sold to employers as an employee benefit and as a means to improve health while reducing healthcare and insurance outlays. In late 2010, YWB worked with Asta to fund its fledgling operations; simultaneously, it solicited large employers as customers. At the heart of this action is a dispute about what factual representations YWB made to Asta concerning the status of its dealings with those third party employers. Asta contends that it advanced an initial $404, 500 because YWB falsely represented that it had commitments from prospective customers. By early 2011 the parties broke off their dealings, and began disputing whether Asta was entitled to the return of the funds it advanced.
Asta filed this action on March 18, 2011, in New Jersey Superior Court, Bergen County. On April 18, 2011, Defendants removed the action to this Court. On May 26, 2011, they answered and filed counterclaims. The parties have proceeded through discovery, and have filed the pending motions: (a) Asta's motion for partial summary judgment finding Defendants liable on its breach of contract, unjust enrichment, and fraud counts; and (b) Defendants' motion for summary judgment. I have reviewed the briefs, exhibits, and other pleadings. Based on that review, I will deny both sides' motions, finding numerous unresolved issues of fact.
I. FACTUAL BACKGROUND
This action centers around negotiations and representations surrounding the parties' signing of a Letter of Intent ("LOT") dated December 17, 2011.
Charles and Melinda Green, the principals of YWB, are husband and wife. They formed YWB in 2010 to operate an online weilness program for employers, which would offer their employees preventive health care services. Those services would include online diet, exercise, and smoking cessation programs, as well as an online portal for charting progress, finding doctors, and making doctor's appointments. (Pltf's 56.1 Statement at ¶¶ 1-3; Dfds' Resp. Statement at ¶¶ 1-3).
YWB promoted its wellness program as a way to improve employee health and decrease health care costs. YWB's revenue would come from contracts with employers who would agree to pay YWB a monthly fee for each employee enrolled in the program. (Pltf's Statement at ¶¶ 4-5; Dfds' Resp. at ¶¶ 4-5).
Events Preceding the Signing of the Letter of Intent
In the fall of 2010, the Greens approached Asta about a capital investment in YWB. On December 7, 2010, the Greens provided Asta with YWB's business plan and profit projections. (Pltf's Statement at ¶¶ 6-7; Dfds' Resp. at ¶¶ 6-7). YWB's prospectus projected $6.286 million in net profits from February 2011 through April 2011. (See Pltf's Statement at ¶ 8; Dfds' Resp. at ¶ 8).
On December 14, 2010, Ron Green sent Asta's Lorri Smith an email regarding a "YWB Action Plan." Attached was an "action plan with executed contracts and the monies needed to move those contracted groups forward." (Pltf's Statement at ¶ 9; Dfds' Resp. at ¶ 9). The parties agree that the attachments were two single-page "Schedules." The first Schedule was called "Action Plan for monies needed for week ending 12-17-10, For executed contracts by 12/17." The second Schedule was called "Executed contracts by 12/24." (Pltf's Statement at ¶¶ 10-11, 13; Dfds' Resp. at ¶¶ 10-11, 13). The parties agree that the first schedule listed eight employers, and the second listed seven additional employers. (Pltf's Statement at ¶¶ 11, 13; Dfds' Resp. at ¶¶ 11, 13). They differ, however, in their interpretations of those schedules.
Asta asserts that the schedules signified that YWB had executed contracts with all of the listed employers. (Pltf's Statement at ¶¶ 10, 11, 13). The Greens "deny that such schedules can be reasonably interpreted as assertions that all of the companies listed thereon had executed contracts at the time the schedules were sent... The schedules contained the names of companies YWB had signed, expected or hope to sign by the dates shown therein, not companies that had necessarily already entered into contracts with YWB." (Dfds' Resp. at ¶¶ 10, 11, 13). Indeed, the Greens say, Asta required them to list prospective employer-clients on the schedules, and Asta's on-site representative, Lorri Smith, participated in the drafting. ( Id. at ¶¶ 10, 16). According to the Greens, the numbers to the right of each employer's name on the schedules represent an estimated number of employees who would be signed up for the program. According to Asta, the numbers (falsely) represent employees actually committed to the program. ( Compare id. at ¶¶ 12, 14 (citing Melinda Green's Deposition) with Pltf's Statement at ¶¶ 12, 14).
Lorri Smith, an Asta employee, was sent to YWB's office "to become familiar with YWB's operations and help Asta to determine whether it should sign the LOT [Letter of Intent] and invest money in YWB's operations." (Dfds' 56.1 Statement at ¶ 7; Pltf's Resp. at ¶ 7). The Greens state that she was there for several days before the signing of the LOT, and that she was present while YWB representatives were soliciting prospective clients. (Dfds' Statement at ¶¶ 6, 8). Asta admits as much but denies any inference that Smith was aware of details or contingencies associated with prospective clients. (Pltf's Resp. at ¶¶ 6, 8). According to Asta, Ms. Green lied to Smith: she said "that eight of the prospective contracts listed in the schedules were finalized, those customers were eager, willing, and able to sign contracts with YWB, that Melinda had declined to accept their signatures until YWB had Asta's money, that those eight customers would sign within days of YWB's receipt of Asta's money, and that the other seven contracts were almost finalized and would be procured within one week of the LOT." (Dfds' Resp. at ¶ 9).
The Letter of Intent
On December 16, 2010, Asta and YWB, through the Greens, executed the LOT, which was dated December 17, 2010. (Pltf's Statement at ¶ 18; Dfds' Resp. at ¶ 18; Dfds' Statement at ¶ 1). Asta claims that it was only "[b]ased on the Schedules, [that it] decided to enter into [the] letter of intent with YWB." The Greens deny this. (Compare Pltf's Statement at ¶ 17 with Dfds' Resp. at ¶ 17). Asta contends that the Greens intended for it to rely on the Schedules in signing the LOT; the Greens deny any such intent. (Compare Pltf's SUF at ¶ 16 with Dfds' Resp. at ¶ 16).
The LOT provided that Asta would advance $146, 500 to YWB by December 17, 2010, and another $258, 000 by December 24, 2010. (Pltf's Statement at 19). The pertinent text is as follows:
Initial Cash Advances: On or before December 17, 2010, Asta intends to advance $146, 500 to YWB in accordance with a schedule to be agreed upon by the parties, for the purpose of funding certain agreements that YWB has executed with certain clients, as indicated on a schedule to be provided by YWB and amended as necessary to reflect the agreements executed as of that date. On or before December 24, 2010, Asta intends to advance $258, 000 to YWB in accordance with a schedule to be agreed upon by the parties, for the purpose of funding certain other agreements that YWB has executed with certain clients; as indicated on a schedule to be provided by YWB, and amended as necessary to reflect the agreements executed as of that date.
(Pltf's Statement at ¶ 21; Dfds' Resp. at ¶ 21; Letter of Intent (Deci. of Eric Goldberg at Ex. 2)). Plaintiff contends, and Defendants deny, that the LOT signifies that the first advance was "to fund eight executed contracts between YWB and third-party clients, " and that the second advance was to "fund seven other executed ...