Bentivoglio v. Event Cardio Group Inc.

Background

John Bentivoglio brought the action against Event Cardio Group, Inc. (ECGI) and EFIL Sub of ECG, Inc. The court had previously dismissed all claims against EFIL Sub and all claims against ECGI except Bentivoglio’s breach-of-contract claim. After discovery ended, Bentivoglio moved for summary judgment on that remaining claim.

Bentivoglio founded ECGI in 2014 and was its sole director and officer from June 2014 through November 2016. In connection with his departure, he and ECGI entered into a Consulting and Special Projects Agreement covering November 1, 2016, through October 31, 2020. The agreement required ECGI to pay him $125,000 per year in monthly installments, plus an additional $1,000 per month.

ECGI made the required payments for three months. It sent Bentivoglio a dispute-resolution notice in January 2017 and later stopped making payments in June 2017. The unpaid amounts were stated to total $427,083.47 in consulting fees and $41,000 in additional payments.

Summary-judgment ruling

Summary judgment is appropriate when the evidence shows no genuine dispute over a fact that could affect the outcome and the moving party is entitled to judgment under the law. The court held that Bentivoglio established the elements of breach of contract: a contract existed, he performed his obligations, ECGI breached the contract by stopping payment, and damages resulted.

The court found the agreement’s payment terms unambiguous. It specifically required ECGI’s payment obligation to remain “unconditional and absolute,” including in the event of Bentivoglio’s alleged or actual breach, death, or disability. Thus, even if Bentivoglio failed to perform some required services, that failure did not authorize ECGI to suspend the contract payments. The court noted that ECGI could potentially seek money damages or injunctive relief for a proven breach by Bentivoglio, but ECGI had not asserted a counterclaim.

ECGI’s defenses

The court rejected ECGI’s argument that Bentivoglio’s alleged failure to provide expense documents or meet with management constituted a prior material breach. The consulting agreement did not require him to perform those acts, and its integration clause meant that obligations in a separate separation agreement did not establish a breach of the consulting agreement.

The court also rejected ECGI’s argument that the consulting agreement lacked consideration. Bentivoglio’s promises included consulting services, non-compete and non-solicitation obligations, confidentiality and non-disparagement obligations, and intellectual-property duties. The court concluded that these provisions gave ECGI substantial benefits and supported the agreement.

The court rejected the unconscionability defense because ECGI did not provide evidence showing that the agreement was procedurally or substantively unconscionable. The court emphasized that the agreement was negotiated by sophisticated parties represented by lawyers and that ECGI received valuable contractual protections in exchange for its payment obligation.

Finally, the court rejected ECGI’s fraudulent-inducement defense. ECGI claimed that Bentivoglio failed to disclose the company’s insolvency and his alleged misappropriation of corporate funds during negotiations. The court found that ECGI had not shown that Bentivoglio had a duty to disclose those matters, that the information was material to the consulting agreement, or that ECGI reasonably relied on his silence. The court also noted that ECGI could have investigated the company’s finances or requested representations and warranties before signing.

Disposition

Judge Castel granted Bentivoglio’s motion for summary judgment on the remaining breach-of-contract claim. The court directed Bentivoglio to submit a proposed judgment within 14 days and permitted him to submit an application for attorney’s fees and expenses within 14 days after judgment was entered. The Clerk was directed to terminate the motion.