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Maguire v. Eco Science Solutions, Inc

United States District Court, W.D. Washington, Seattle

August 22, 2019

ECO SCIENCE SOLUTIONS, INC., et al., Defendants.



         This matter comes before the Court on “Plaintiff Wendy Maguire's Motion for Partial Summary Judgment” (Dkt. # 13) and defendants' cross-motion for partial summary judgment (Dkt. # 16). Plaintiff seeks a summary determination that she is entitled to unpaid wages as specified in her employment contract, an award of exemplary damages and attorney's fees under RCW 49.52.070, and prejudgment interest on the unpaid wages. Defendants seek a declaration that plaintiff is not entitled to relief under the contract or RCW 49.52.070 or, in the alternative, a continuance under Fed.R.Civ.P. 56(d).

         Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, there is no genuine issue of material fact that would preclude the entry of judgment as a matter of law. The party seeking summary dismissal of the case “bears the initial responsibility of informing the district court of the basis for its motion” (Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)) and “citing to particular parts of materials in the record” that show the absence of a genuine issue of material fact (Fed. R. Civ. P. 56(c)). Once the moving party has satisfied its burden, it is entitled to summary judgment if the non-moving party fails to designate “specific facts showing that there is a genuine issue for trial.” Celotex Corp., 477 U.S. at 324. The Court will “view the evidence in the light most favorable to the nonmoving party . . . and draw all reasonable inferences in that party's favor.” Colony Cove Props., LLC v. City of Carson, 888 F.3d 445, 450 (9th Cir. 2018). Although the Court must reserve for the trier of fact genuine issues regarding credibility, the weight of the evidence, and legitimate inferences, the “mere existence of a scintilla of evidence in support of the non-moving party's position will be insufficient” to avoid judgment. City of Pomona v. SQM N. Am. Corp., 750 F.3d 1036, 1049 (9th Cir. 2014); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Factual disputes whose resolution would not affect the outcome of the suit are irrelevant to the consideration of a motion for summary judgment. S. Cal. Darts Ass'n v. Zaffina, 762 F.3d 921, 925 (9th Cir. 2014). In other words, summary judgment should be granted where the nonmoving party fails to offer evidence from which a reasonable fact finder could return a verdict in its favor. Singh v. Am. Honda Fin. Corp., 925 F.3d 1053, 1071 (9th Cir. 2019).

         Having reviewed the memoranda, declarations, and exhibits submitted by the parties, having heard the arguments of counsel, and taking the evidence in the light most favorable to defendants, the Court finds as follows:


         On June 21, 2017, plaintiff and Ga-Du Corporation, a wholly-owned subsidiary of defendant Eco Science Solutions, Inc. (“ESSI”), entered into an Employment Agreement as part of ESSI's acquisition of Ga-Du. Plaintiff assumed the role of Vice President of Business Development and promised to “devote full business time during ordinary business hours and such additional time as is required for an executive position, attention, skill and efforts . . . to the performance of the duties required by or appropriate for her Position.” Dkt. # 15-1 at ¶¶ 1-2. In exchange, ESSI agreed to pay her a base salary of $120, 000 per year, plus stock options and benefits. Id. at ¶ 3. Either party could terminate the agreement, with or without cause, by giving thirty days' written notice. Id. at ¶ 9. If the employment terminated without cause, ESSI agreed to pay all “accrued and unpaid Salary” plus a “lump sum in cash equal to the total remaining Salary of the full Employment Term due under this agreement.” Id. The “Term” of plaintiff's employment was to be two years. Id. at ¶ 1. “Cause” was defined to include such things as termination for “a substantial and repeated failure to perform, ” “gross negligence or willful misconduct with respect to the Company, and/or “failure to achieve mutually agreed upon performance metrics.” Id. at ¶ 9. The Employment Agreement contained an integration clause merging and superseding “all prior and contemporaneous discussions, agreements and understandings” and designated Nevada law to govern the construction and enforcement of its terms. Id. at ¶¶ 14 and 16(a). Changes or modifications to the Employment Agreement had to be made in a writing signed by both parties. Id. at ¶ 14. A written modification dated July 30, 2017, amended the stock option provision of the agreement. Dkt. # 15-4 at 2.

         On June 22, 2017, ESSI made clear that neither it nor Ga-Du had the money to pay the promised salaries and that those who had been given contracts would have to agree to defer receipt of compensation until ESSI was able to resume public trading and/or the company was otherwise generating revenues sufficient to satisfy the wage obligations. Dkt. # 19 at ¶ 6. ESSI indicated that Ga-Du managers and consultants would be free to pursue other opportunities and activities to help offset the shortfall while their compensation was deferred. Dkt. # 18 at ¶ 11. Plaintiff agreed to this arrangement. Id.

         Plaintiff has produced various email strings between July 2017 and April 2018 indicating that she was performing work for ESSI throughout this period. The tasks reflected in these strings include setting up an ESSI email account, participating in various meetings, pitching client development opportunities, coordinating job descriptions and business pipelines, and designing a trade show booth. Dkt. # 15-5 to 15-9. The exchanges are sporadic, however, and the Court assumes for purposes of this motion that they did not require plaintiff's full-time attention. In January 2018, the Chief Executive Officer of ESSI, defendant Rountree, questioned plaintiff's role within the organization, openly wondering whether she was an employee or an outside consultant and requesting that whatever role she filled be communicated to all of the relevant personnel. Dkt. # 15-8 at 2. It is not clear if or how these questions were answered, but the following month Rountree gave plaintiff the lead in coordinating ESSI's efforts toward developing “an attractive and professional forward face to the cannabis business community” at an upcoming industry expo event. Dkt. # 15-9 at 2. In early April 2018, plaintiff was working on establishing an affiliated Colorado entity that could handle new hemp accounts in that state.

         On April 29, 2018, plaintiff emailed ESSI requesting payment of the compensation accrued to date and $10, 000 per month going forward. Dkt. # 15-10 at 2. No. payments were made.

         In June 2018, Rountree and plaintiff discussed the process by which new Colorado accounts could be opened. Dkt. # 15-11 at 2.

         In August 2018, plaintiff had her lawyers deliver a demand letter to Rountree, attaching a proposed complaint for breach of contract and statutory wage violations. Dkt. # 18-1 at 4-7. That letter prompted a response from defendant Lewis, wherein he asserted that plaintiff had failed to devote adequate time and effort to ESSI's business interests, had engaged in competing activities, had disparaged the company, and had agreed that her salary could be accrued and deferred. Dkt. # 18-1 at 9-10. Lewis offered to settle the dispute by paying “the accrued sums to your client at such time as [ESSI] receives money to enable it to pay the accruals to all employees” and threatened to assert counterclaims if the matter were not settled. Dkt. # 18-1 at 10. In a subsequent letter, Lewis asserted that plaintiff had indicated that she was working for someone else, thereby terminating her employment with ESSI. Dkt. # 18-1 at 15. Plaintiff filed her complaint on August 31, 2019.

         In September, Rountree and plaintiff were again discussing business development opportunities for Ga-Du and ESSI. On September 25, 2018, plaintiff wrote:

Thank you for the call today. It's great to have a focus and get to work on the Washington, Oregon opportunities. I'll prepare and provide an outline of project parameters. Is fundraising an option? We had a PPM at play at one point. I'd like to get things moving here. It's been sitting too long without clear action.
As the VP of Business Development[] representing[] Ga-Du Financial Services, I'd like to get your approval on my proposal before I get things ...

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