Haller v. Usman

Background

Bradley Haller sued Sulman Usman, Jamison Hinder, and Adaptive Green, Inc., asserting New York common-law claims for breach of contract, declaratory judgment, unjust enrichment and quantum meruit, equitable accounting, constructive trust, and fraud. The defendants moved to dismiss the First Amended Complaint under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. At this stage, the court generally accepts well-pleaded factual allegations as true and asks whether they plausibly support relief.

Haller alleged that he began working for Adaptive in April 2016 and entered an employment agreement on February 1, 2017. The agreement provided for a biweekly salary and a one-time stock award equivalent to 10% of Adaptive as of that date, but it did not state the salary amount or when the stock award offer would be made. Haller also relied on a 2021 Profit Participation Agreement and a 2021 Sub Agreement. He alleged that Adaptive terminated his employment in December 2021 without providing the ownership interest or other benefits he expected.

Rulings

The court granted in part and denied in part the motion to dismiss and dismissed all claims except the combined unjust-enrichment and quantum-meruit claim.

Breach of contract, Count II. The court dismissed Haller’s claims concerning the Employment Agreement, Profit Participation Agreement, and Sub Agreement. As to the Employment Agreement, the court held that the salary provision was not necessarily too indefinite because the alleged regular biweekly payments could provide an external standard for determining compensation. But the stock-award provision lacked a critical term: when Adaptive was required to make the one-time stock award offer. Because timing was an essential compensation term, Haller had not plausibly alleged that a valid, enforceable contract was formed.

The court also held that Haller had not plausibly alleged formation of the Profit Participation Agreement. Haller changed the offered agreement before signing it, including replacing language concerning annual employment with language referring to the sale of stock or shares. That response rejected the original offer and operated as an unanswered counteroffer. The court likewise held that the Sub Agreement was not plausibly formed because restructuring and refiling for certifications were conditions precedent to formation, meaning no contract would arise unless those events occurred. Haller’s allegation that Adaptive restructured when his employment ended was contradicted by documents incorporated into his complaint, and he did not otherwise plausibly allege that restructuring occurred.

Declaratory judgment, Count I. The court granted dismissal of Haller’s standalone declaratory-judgment claim. Although the court construed the claim under the federal Declaratory Judgment Act rather than New York’s procedural statute, it held that a declaratory judgment is a remedy, not an independent cause of action. The court stated that this ruling did not prevent Haller from seeking declaratory relief as a remedy for a surviving claim.

Unjust enrichment and quantum meruit, Count III. The court denied dismissal of this combined quasi-contract claim. Quasi-contract claims are obligations imposed by law when no enforceable agreement governs. The court found that Haller plausibly alleged that he provided financial, sales, operational, and marketing services; expected compensation that included a stock award; and was not compensated in the manner he expected. The court also found that Haller plausibly alleged that Usman and Hinder benefited from his services as alleged owners of Adaptive. The claim therefore remained pending against the defendants at the pleading stage.

Equitable accounting, Count V. The court dismissed Haller’s accounting claim because he did not plausibly allege a fiduciary or confidential relationship with the defendants. The court held that his alleged employment relationship did not create a fiduciary duty and that the documents did not support his contention that he was a shareholder rather than an at-will employee.

Constructive trust, Count VI. The court dismissed the constructive-trust claim because Haller did not plausibly allege the required confidential or fiduciary relationship. The court noted that Haller could potentially seek a constructive trust later as an equitable remedy if he prevailed on the unjust-enrichment claim.

Fraud, Count IV. The court dismissed the fraud claim. To the extent the alleged misrepresentations were contained in the Employment Agreement, they were not sufficiently separate from the alleged contractual obligations. To the extent Haller relied on statements outside the agreement, he did not identify those statements with the particularity required for fraud claims, including when they were made.

Disposition

Judge Katherine Polk Failla ordered the parties to submit a joint letter about proposed next steps and a proposed case-management plan by March 14, 2025. The court directed the clerk to terminate the pending motion.