Soleimani v. White Oak Global Advisors LLC

Background

Isaac Soleimani brought a breach-of-contract action against White Oak Global Advisors LLC (WOGA), relying on a term sheet involving Soleimani, WOGA, and White Oak Health Care Finance LLC (WOHCF). The term sheet provided for payment of the calculated fair market value of certain revenue-sharing interests after specified events, including certain forms of termination. The term sheet was amended in 2020, after the initial period during which WOGA had employed Soleimani had ended.

Soleimani alleged that WOGA and a WOGA-controlled committee terminated him on September 18, 2023. He later sought arbitration against WOHCF and WOGA. The arbitration tribunal dismissed WOGA from the arbitration because it concluded that WOGA was not a party to the arbitration provision, although it noted that WOGA might potentially be liable for damages. Soleimani then filed this federal action against WOGA seeking the value of his revenue-sharing interests.

Motion to Dismiss and Materials Considered

WOGA moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint states a legally sufficient claim. WOGA argued that only WOHCF was contractually obligated to pay Soleimani’s revenue-sharing interests. Soleimani argued that the term sheet’s use of the wording “Employee shall receive” and California’s presumption of joint and several liability made both WOGA and WOHCF responsible.

The court considered the original and amended term sheets, the original and amended WOHCF limited-liability-company agreements, and filings from the related Delaware litigation and arbitration. The court held that these materials were incorporated into the complaint, integral to it, or subject to judicial notice. It therefore declined to convert the motion to dismiss into a motion for summary judgment.

Contract Interpretation

The term sheet was governed by California law. The court explained that California courts interpret contracts to give effect to the parties’ mutual intent and read the contract as a whole. Although California law can presume that a promise made by multiple parties creates joint and several liability, that presumption can be rebutted by other contract language.

The court found that the contract language rebutted the presumption here. The original term sheet connected Soleimani’s revenue-sharing interests to his employment with WOHCF and stated that the term sheet became a binding agreement between WOHCF and Soleimani. WOGA had been Soleimani’s employer only during an initial transition period, and its signature on the original term sheet was limited to that period.

The court also relied on provisions assigning the appraisal process to Soleimani and WOHCF, and provisions requiring arbitration between Soleimani and WOHCF. The amended term sheet retained those provisions. In addition, the amended WOHCF limited-liability-company agreement described the payment provisions as obligations of WOHCF, identified there as “the Company.” Reading the agreements together, the court concluded that the payment obligation belonged to WOHCF, not WOGA.

The court determined that the relevant contract language was not reasonably open to Soleimani’s proposed interpretation. It therefore concluded that extrinsic evidence—evidence outside the written contracts—was unnecessary.

Disposition

The court held that WOGA was not contractually liable to pay Soleimani’s revenue-sharing interests under the term sheet. Judge Dale E. Ho granted WOGA’s motion to dismiss. The court directed the Clerk of Court to enter judgment in WOGA’s favor and close the case. The opinion does not state that the dismissal was with or without prejudice.