Peters v. Armstrong

Background

Jennifer Peters and Juniper Ventures, LLC sued Nathaniel R. Armstrong to collect on two allegedly defaulted promissory notes. One note was issued to Juniper for $130,000, and the other was issued to Peters for $63,000. Each note listed “Nate Armstrong” as the borrower and added the words “For” followed by the name of one of two limited liability companies: US Props, LLC, or Black Box Equities, LLC. Armstrong argued that he signed only on behalf of those companies and was not personally obligated.

The complaint asserted breach of contract, promissory estoppel, and unjust enrichment. Armstrong moved to dismiss under Rule 12(b)(6), which tests whether a complaint states a legally sufficient claim. Alternatively, he moved for summary judgment, which asks the court to decide a claim when the undisputed evidence shows that one side is entitled to judgment. The court declined to convert the dismissal motion into a summary-judgment motion because additional discovery was needed to determine the parties’ intent.

Contract claims

The court held that the notes were ambiguous because they were reasonably open to more than one interpretation about who the borrower was. Although Armstrong was identified as the borrower, the court found it unclear whether the notation referring to each limited liability company changed his personal obligation to repay the note. The court therefore denied Armstrong’s motion to dismiss both breach-of-contract claims.

Equitable claims

The plaintiffs also pleaded promissory-estoppel and unjust-enrichment claims in the alternative. The court explained that these remedies could not be used to change the notes by making Armstrong personally liable if the companies were the borrowers. If Armstrong himself was the borrower, the contract would govern the parties’ rights. The complaint did not allege a separate promise by Armstrong to guarantee the notes personally. The court therefore granted Armstrong’s motion to dismiss the promissory-estoppel and unjust-enrichment claims and dismissed Counts III through VI without prejudice.

Disposition

The court ordered that Armstrong’s motion to dismiss or, alternatively, for summary judgment was granted in part and denied in part. Specifically, the motions to dismiss Count I, breach of contract on the Juniper note, and Count II, breach of contract on the Peters note, were denied. The motions to dismiss Counts III and IV, promissory estoppel on the Juniper and Peters notes, and Counts V and VI, unjust enrichment on those notes, were granted. Armstrong’s motion for summary judgment was denied in its entirety. Judge Donovan W. Frank also declined to convert the motion to dismiss into a motion for summary judgment.