Thieriot v. Laggner

Background

Under a May 16, 2019 settlement agreement, William Laggner received 4,843,390 shares of Bitreserve, Ltd., now called Uphold Ltd., from Halsey Minor. The agreement gave Minor the right to half of the first $750,000 in proceeds from any sale of those shares by Laggner. Minor later assigned that right to Juan Pablo Thieriot, who brought this case as the assignee.

Laggner signed a document consenting to Minor’s assignment to Thieriot, although another party to the settlement agreement did not sign that document and Laggner did not sign a separate assignment agreement. The settlement agreement included a provision requiring prior written consent from the other parties for an assignment, but it did not expressly say that an unauthorized assignment would be void or invalid.

In January 2022, Laggner agreed to sell 40,000 Uphold shares for $280,000. The buyer paid Laggner that amount, which he kept. Uphold later issued a digital share certificate showing the buyer as owner of the 40,000 shares, and an Uphold record listed Laggner as holding the remaining 4,803,890 shares and the buyer as holding 40,000 shares. Laggner did not pay Thieriot or Minor half of the sale proceeds.

Assignment

The court applied New York law. It held that Thieriot was a valid assignee of Minor’s right to receive proceeds from the sale. Under New York law, an anti-assignment provision generally does not invalidate an assignment unless it expressly makes the assignment void, invalid, or otherwise ineffective. The settlement agreement’s consent requirement did not contain that type of language. The court treated it as a personal promise not to assign without consent, rather than as a provision voiding the assignment.

The court also rejected Laggner’s reliance on a separate provision concerning the transfer of the shares themselves. Thieriot claimed only the proceeds from a sale, not ownership or other rights in the shares. The court therefore held that Thieriot had standing—the legal ability to bring the claim—and had stepped into Minor’s position regarding the sale proceeds.

Whether the Sale Was Completed

The court held that the sale of the 40,000 shares was “consummated,” meaning completed, under the settlement agreement. Laggner had signed an agreement to sell shares, received and kept the $280,000 purchase price, and the buyer received the shares. The court rejected arguments questioning the buyer’s identity and the validity of the sale because Laggner had admitted that he entered the sale agreement and because the claim concerned Laggner’s obligations under the settlement agreement, not the buyer’s obligations under the sale agreement.

The court also rejected Laggner’s argument that the sale involved shares other than the shares covered by the settlement agreement. The sale agreement referred to shares Laggner owned at the time, and the parties agreed that those were the only Uphold shares Laggner had individually held since January 1, 2022.

The court further held that Laggner could not rely on his own failure to complete certain transfer steps to argue that the sale remained incomplete. Under New York contract law, a party generally cannot rely on the failure of a condition when that party caused or contributed to the condition’s nonoccurrence. The possibility that a Cayman Islands court might later invalidate the sale also did not change the court’s conclusion that the sale had occurred or eliminate Laggner’s obligation to pay Thieriot half of the proceeds.

Joinder of Other Settlement Parties

The court rejected Laggner’s argument that the case had to be dismissed because the other parties to the settlement agreement were not joined. The court explained that there is no automatic rule requiring every party to a contract to participate in every contract dispute. It could grant relief between Thieriot and Laggner without deciding the rights or obligations of the non-parties, and the ruling would not practically disturb those non-parties’ rights. The court also noted that no non-party had appeared to claim an interest in the litigation.

Attorney’s Fees and Disposition

The settlement agreement provided that the prevailing party in an action concerning the agreement could recover reasonable attorney’s fees and costs. The court held that Minor’s assignment of the attorney’s-fee right to Thieriot was valid for the same reasons as the assignment of the sale-proceeds right. As the prevailing party, Thieriot was therefore entitled to reasonable attorney’s fees incurred in the litigation.

The court granted Thieriot’s motion for summary judgment and denied Laggner’s motion for summary judgment. It held that Thieriot was entitled to $140,000 in damages. The court directed Thieriot to submit a later motion for attorney’s fees and costs and directed the parties to address the date from which any prejudgment interest should be calculated.