United States District Court, E.D. Virginia, Alexandria Division
CURTIS A. EVANS AND WHIPGOLF, LLC., Plaintiffs,
PLUSONE SPORTS, LCC AND ALEX VAN ALEN, Defendants.
M. HILTON UNITED STATES DISTRICT JUDGE.
MATTER comes before the Court on Cross Motions for Summary
Judgment by the Plaintiffs and the Defendants.
and Defendants are in the business of producing and selling
sports gear for the game known as "FlingGolf" or
"ThrowGolf." The game is played on traditional golf
courses, and many of the basics of golf still apply, but
players play each hole with a single "stick"
designed to both throw and putt a golf ball instead of using
up to thirteen traditional golf clubs. This case arises out
of an alleged breach of contract of a "Term Sheet"
signed by the parties regarding the throwing apparatus used
in the sport, also known as the "FlingStick."
July, 2014, when the Defendants became aware of the
Plaintiffs' Utility Application with the U.S. Patent and
Trademark Office ("USPTO"), the Defendants reached
out to Plaintiffs to discuss a potential license agreement.
Negotiations commenced shortly thereafter, and on November 2,
2014, the parties signed a Term Sheet. Further negotiations
took place over the next several months, but did not result
in a final license agreement. On May 29, 2015, Plaintiffs
filed a two-count Complaint alleging 1) breach of contract
via the Term Sheet; and 2) breach of the Term Sheet Guaranty
by Mr. Van Alen in his individual capacity.
Rule 56 of the Federal Rules of Civil Procedure, summary
judgment is appropriate if the pleadings and evidence before
the Court show no genuine dispute as to any material fact and
that the moving party is entitled to a judgment as a matter
of law. Fed.R.Civ.P. 56(a); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). Summary judgment is
not a "disfavored procedural shortcut, but rather [an]
integral part of the Federal Rules ... which are designed to
'secure the just, speedy, and inexpensive determination
of every action.'" Id. While the Court will
view the facts and inferences drawn in the light most
favorable to the nonmoving party, the party opposing the
motion for summary judgment must put forth specific facts
showing a genuine issue for trial. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
"[I]t is ultimately the nonmovant's burden to
persuade us that there is indeed a dispute of material fact.
It must provide more than a scintilla of evidence-and not
merely conclusory allegations or speculation- upon which a
jury could properly find in its favor." Design Res.,
Inc. v. Leather Indus. Of Am., 789 F.3d 495, 500 (4th
Cir. 2015) (citations and quotations omitted).
parties do not dispute the material facts in this case. The
issues disputed are 1) which state's law applies; 2)
whether the Term Sheet is an enforceable contract; and 3)
whether Mr. Van Alen signed the Term Sheet in his individual
or representative capacity.
action arises under the Court's diversity jurisdiction,
"the Court must apply the choice of law rules of the
state where the Court sits." Thomaz v. It's My
Party, Inc., 2013 WL 1450803, at *5 (E.D. Va. 2013),
aff'd, 548 F.App'x 893 (4th Cir. 2013).
Under generally applicable Virginia choice of law rules, the
nature, validity, and interpretation of a contract may be
governed by "the law of the place where made."
Id. at *5. Arguably, this would be Massachusetts
where the Defendants signed the Term Sheet after it had been
signed by the Plaintiffs. However, "Virginia adheres to
the principle that the law of the place of performance
governs questions arising in connection with the performance
of a contract." Equitable Trust Co. v.
Bratwursthaus Mgmt. Corp., 514 F.2d 565, 567 (4th Cir.
1975). The Plaintiffs argue that Massachusetts law applies
here because the Defendants, who are based in Massachusetts,
were to go ahead with the development, manufacture, and sale
of a licensed product. However, the Term Sheet contemplates a
later negotiation of a license agreement, where the payment
of the license fees would be made to Plaintiffs, who are in
Virginia. The delivery of sample products, certain business
information, and the prior art identification would take
place in Virginia. The performance of the alleged Term Sheet
is predominately in Virginia, and as such, Virginia law
the "the parties do intend a formal contract to be drawn
up is strong evidence to show that they did not intend the
previous negotiations to amount to an agreement which is
binding." Cyberlock Consulting, Inc. v. Info.
Experts, Inc., 939 F.Supp.2d 572, 580 (E.D. Va. 2013),
aff'd 549 Fed.App'x 211 (4th Cir. 2014);
see also Va. Power Energy Mktg., Inc. v. EQT Energy,
LLC, 2012 WL 2905110, at *4 (E.D. 2012) (holding "a
letter of intent or any other writing in which the terms of a
future transaction or later, more formal agreement[, ] are
set out is presumed to be an agreement to agree rather than a
binding contract"). Further, the Fourth Circuit has held
that "...bare-boned agreements to agree' are not
binding..." Burbach Broadcasting Co. of
Delaware v. Elkins Radio Corp., 278 F.3d 401, 407 (4th
Court finds that the Term Sheet is an "agreement to
agree" and not a binding contract. The last sentence of
the Term Sheet provided that "[t]he undersigned parties
agree to work in good faith to record the terms of the Term
Sheet in a binding Non-Exclusive License Agreement." The
informality, imprecision, and provisional nature of the Term
Sheet's language further evidence the fact that the Term
Sheet does not incorporate all the material terms of a
binding agreement. In finding that Virginia law applies to
this analysis, it is important to note that the Term Sheet
itself contains a provision stating Delaware law applies.
However, because this Court finds that the Term Sheet is an
"agreement to agree" rather than a binding
contract, the provision is without merit.
the Term Sheet is not an enforceable contract, there can be
no breach of the alleged personal guaranty by Mr. Van Alen
alleged in Count II. Even if the Term Sheet was found to be
enforceable, Mr. Van Alen still could not be held personally
liable because the Term Sheet was executed by "Curtis A.
Evans, " and by "Alex Van Alen, for PlusOne
Sports/FlingGolf." It is hornbook law that where a
person signs a contract as a representative of a corporation
and not in his or her personal capacity, that individual is
not a party to the contract. See Restatement (Third)
of Agency § 6.01 (2006) ("when an agent acting with
actual or apparent authority makes a contract on behalf of a
disclosed principal, (1) the principal and the third party
are parties to the contract; and (2) the agent is not a party
to the contract unless the agent and third party agree
otherwise"). The provision the Plaintiffs rely on states
"[d]elinquent payments ... to be personally guaranteed
by Alex Van Alen, or other substitute guarantee or
collateralization acceptable to PlusOne and Licensor."
The plain language clearly contemplates further negotiations
about a future guarantee possibly by Mr. Van Alen or another
individual or entity - all of which would need to be mutually
agreed upon by both parties. This further bolsters the
argument that the Term Sheet is an "agreement to agree,
" and not a binding contract.
filed seven counterclaims in this action: 1) declaratory
judgment of enforceability of the term sheet; 2) declaratory
judgment that Van Alen is not a party to, and therefore has
not breached, the term sheet; 3) declaratory judgment that
Defendant did not breach the term sheet; 4) breach of
contract; 5) slander of title; 6) declaratory judgment that
Defendant did not intentionally abandon its FlingGolf and
FlingStick marks; and 7) unfair competition in violation of
M. G. L. A. Chapter 93A §§ 2 & 11.
1-4 are moot in light of the Court's ruling that the Term
Sheet is not an enforceable contract, and should be
5 concerns statements that Plaintiffs made to the USPTO in
filing "intent to use" trademark applications. The
contention is that Plaintiffs misled the USPTO by claiming
that no other person or entity had the right to use the FLING
marks in commerce and that Plaintiffs had a bona fide intent
to use each mark.
elements of the tort of slander of title are: 1) a false
statement; 2) published by the defendant; 3) without
justification or privilege; 4) made with malice; and 5)
causing special damages to the plaintiff. See Poindexter
v. Mercedes-Benz Credit Corp., 2014 WL 3827366 at *2
(E.D. Va. July 25, 2014) . Special damages are "proof of
a special loss or unusual ...