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Nisbett v. Reconart, Inc.

United States District Court, E.D. Virginia, Alexandria Division

May 3, 2017

NICOLO NISBETT, Plaintiffs,
v.
RECONART, INC., Defendants.

          MEMORANDUM OPINION

          Liam O'Grady United States District Judge.

         Plaintiff Nicolo Nisbett has brought a five-count Complaint against Defendants Reconart, Inc. and Hristo Marintchev. Defendants have moved to dismiss. (Dkt. No. 12). The matter has been fully briefed, and the Court found that a hearing was not necessary to resolve the issues presented by the parties. Nisbett brings five claims against Defendants. These claims fall into two categories. First, Counts I, II, and V allege breach of contract and quantum meruit claims based on Plaintiffs 5.5 years of work for Reconart. Second. Counts III and IV allege wrongful termination and related claims arising from Plaintiffs termination. For the following reasons, the Court DENIES the motion to dismiss for the breach of contract/quantum meruit claims, but GRANTS the motion for the wrongful termination claims. Because only the wrongful termination claim is alleged against Defendant Marintchev, he is hereby DISMISSED from the case entirely.

         I. BACKGROUND

         Plaintiff Nisbett is a software sales and marketing professional. Nisbett met Marintchev, the majority owner of Reconart, while Nisbett was working with a company called Fiserv in 2005. In 2010, Marintchev convinced Nisbett to join Reconart and manage the sales and marketing department of the software startup. At the time, Nisbett had a job offer with Fiserv in his home country of England, but he decided to join Reconart, in part, because Marintchev could sponsor his permanent residence application in the U.S.

         Nisbett began working full-time and exclusively for Reconart in October 2010. His duties were significant. See Compl. ¶ 7. In exchange for his work, "Marintchev promised Nisbett 10 percent commission on all sales made by the company." Id. ¶ 8. Marintchev also promised Nisbett a 24.5% ownership stake in Reconart (Marintchev would keep his 51% stake and a third party, Ivan Popov, would also have a 24.5% stake). In spite of these promises, Nisbett "willingly deferred such compensation while the company was starting, but always expected that Marintchev would keep his word to pay commissions or to otherwise reasonably compensate him for his significant services." Id. Reconart paid salaries to Marintchev, Popov, and its other employees.

         Reconart launched its software product in 2011, and Nisbett's duties increased accordingly. He began working 60-80 hour weeks and staying up late and on weekends so he could speak with international clients in Australia and other parts of the world. Due in part to these efforts, Reconart experienced steady growth from 2011 to 2014. Sales dipped in 2015, [1] but they saw an uptick again in Ql of 2016.

         During his entire 5.5 years at Reconart, Nisbett received only $74, 583 in actual compensation, all of which came in 2012 and 2013. Throughout his tenure at the company, Reconart reimbursed Nisbett for expenses. Prior to March 1, 2016, Marintchev had never questioned Nisbett's expenses.

         On November 3, 2015, [2] Marintchev, Popov, and Nisbett executed a Corporate Shareholders' Agreement (the "Agreement") that is central to the parties' dispute in this case.Generally, the Agreement sets forth the ownership structure of Popov and Nisbett owning 24.5% of the company and Marintchev owning 51%. The Agreement also sets forth the owners' capital investment in the company and contemplates their appointment as officers of the corporation.

         There are a few key provisions that are worth summarizing here:

§ 1.1.6. "Canital Contribution"
This term is defined as "the cash and services provided by each Shareholder for shares of common stock of the Corporation as listed in Exhibit A."
§ 1.1.16. "Starting Assets and Liabilities"
This term is defined as the "tangible and intangible property owned or owed by the Corporation and listed in Exhibit A."
§ 3.1. Capital Contributions
This Section states that Marintchev has made a contribution of $510 while Nisbett and Popov have each contributed $245.
§ 4.1. Board of Directors.
This Section states that Marintchev, Popov, and Nisbett shall make up the original Board of Directors. They shall continue until: (a) they are no longer employed; (b) death, resignation, or disability; or (c) they are ...

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