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Geodesic Consulting LLC v. Compass Bank

United States District Court, N.D. Alabama, Southern Division

October 30, 2017

COMPASS BANK, Defendant.



         Plaintiff Geodesic Consulting, LLC (“Geodesic”) brings this action under the Court's diversity jurisdiction and alleges various state law claims against Defendant Compass Bank (“Compass”). Before the Court is Compass' Fed.R.Civ.P. 56 renewed motion for summary judgment (doc. 84) on all claims asserted in Geodesic's second amended complaint (doc. 76). Also pending is Compass' motion to strike. (Doc. 92.) The issues here have been fully briefed by the parties and are now ripe for review. For the reasons stated below, Defendant's renewed motion for summary judgment is due to be denied as to all claims except Count III, and their motion to strike is due to be terminated as moot.

         I. Background[1]

         a. Factual Background[2]

         Geodesic Consulting, LLC, the U.S. affiliate of a Spanish entity Geodesic Consulting, SL, an IT consulting service provider, had agreements for provision of IT services with Compass Bank. Geodesic was required to accomplish the relocation of a key employee from Spain to Birmingham, Alabama for work on a project. The suit arises out of disputes surrounding that employee's relocation as well as the agreements between the parties and payment for services rendered.

         i. Syncada

         Compass Bank was one of a number of banks in discussions with Syncada, LLC regarding participation in “Syncada” a global financial supply chain processing network. In February 2013, Basava Kore (“Kore”), an IT Director at Compass, corresponded with David Baeza-Rojano (“Rojano”), a Spanish national, about providing consulting services for Compass on the Syncada Project. Rojano had previously done work for Compass through one of his former employers. Kore, on behalf of Compass, entered into discussions via telephone and email with Estella Luna de Maria (“Luna”) about procuring her company's services. Luna is CEO of Geodesic. The substance of those discussions revolved around whether Geodesic would relocate Rojano to the United States to work on the Syncada Project. In conformance with typical consulting employment arrangements in the IT field, Rojano was not employed by Compass-but was instead employed by Geodesic, who would in turn contract with Compass for the IT services Rojano would provide through Geodesic. Rojano and Geodesic entered into an employment agreement in April of 2013 in which Geodesic agreed to pay certain expenses and provide compensation to Rojano for his work at Compass as an employee of Geodesic.

         Meanwhile, negotiations between Compass and Syncada were ongoing even though Compass had been encountering delays in securing a contract with Syncada since December 2012. On March 15, 2013, Kore was included as part of a series of internal emails which disclosed news signaling that the Syncada Project would not be going forward. The email read in pertinent part: “Syncada not providing financials prior to signing a contract with them is a show stopper.” (Doc. 47-3, Ex. B-37[3].) The emails also expressed concerns over Syncada's general lack of profitability and funding. This news was not disclosed to Luna or Rojano.

         The Syncada Project had an expected launch date of May 1, 2013. Kore and Luna exchanged many e-mails in the months preceding the kickoff. In an e-mail dated April 11, 2013, Kore told Luna the contract with Syncada had not yet been signed and the “[e]xpectation [was] it could take another 2 weeks before they close the agreement. The date has not been adjusted. 1st May is still the target for kick-off. Will update as I know more.” (Doc. 47-5, Ex. C-9.) In response, Luna acknowledged her awareness that the contract had not yet been signed. Id. On April 18, 2013, Luna inquired as to the status of the project. Kore responded that there was no confirmation of a signed contract, funding was not yet available, and that it might be best to put off the date for Rojano traveling to the U.S. The email concluded with, “Syncada contract and funding anticipated for end of next week” which was both emphasized in bold and in a larger font. (Doc. 47-5, Ex. C-13.) Another email exchange between Rojano and Kore seems to have indicated a confirmed start date. On April 4, 2013, Rojano sent an email to Kore which began with, “I'm delighted in hearing from Estella [Luna] that the kick off date is finally confirmed as on May 1st.” (Doc. 47-5, Ex. C-11.) Kore did not respond until April 16, he stated, “Sorry David I thought I had responded. I agree. Will organize meeting with key people in the first week and get a good understanding of the scope.” Id.

         On April 23, 2013, more emails were exchanged between Kore and Luna regarding the status of Syncada. Luna asked Kore to keep her updated with any relevant news from his side. Kore's response told Luna the contract was still unsigned; while the expectation of project cancelation was very low, the probability of a start date of May 1 was also very low; he would not be able to sign any agreements with Geodesic until Compass completed the contract with Syncada; and funding would not be released until the official kick off. (Doc. 47-5, Ex. C-14.) Kore then listed two options: “1. David to start May 1 .. orientation until official start; 2. David to arrive 2 weeks into May.. after Syncada contract is signed.” Id. Neither option indicated that the contract was in jeopardy. The email concluded with a quoted portion presumably from another email stating,

I do not think that there is any significant risk that we will not be going forward with the Syncada Project, the issue at this point is timing. We should finalize the contract soon (hopefully this week), but the timing may be extended . . . May 1st is possible, but probably not realistic. The following week is probably a safer estimate, although not 100% firm for the reasons previously detailed.

Id. (emphasis in original). At this point, Geodesic had already incurred expenses in connection with Rojano's upcoming relocation from Spain to the U.S.-including plane tickets and visas for Rojano and his family, as well as apartment and automobile rentals. After consideration, a decision was made to relocate Rojano to the United States so he would be in place on the projected launch date, May 1st. Geodesic made this decision so as to not expend more resources on the relocation than had already been expended, and out of prudence should Rojano be required for work on the project if it kicked off on the expected date. He arrived in Birmingham, AL, on April 30, 2013, and began work with Compass.

         On May 10, 2013, Compass learned VISA was likely pulling out of the joint venture, negotiations had come to a complete halt, and the Syncada Project would not be going forward. Two weeks later, on May 28, 2013, Kore informed Luna via email that negotiations had halted. The Syncada Project was cancelled; consequently, no agreement between Geodesic and Compass was finalized regarding Syncada.

         ii. The ARP Project & the Basel III Project

         After cancellation of the Syncada Project, in late May 2013, Kore offered Geodesic the opportunity for Rojano to work on a different project known as the ARP Project. On July 16, 2013, Compass and Geodesic entered into a Master Services Agreement (“MSA”) and a Mutual Nondisclosure Agreement (“NDA”) in connection with its approval as vendor on the ARP Project which was slated to receive funding on June 14, 2013. The MSA included a “Non-Solicitation” paragraph providing:

During the term of this agreement and for a period of one year following any termination of this Agreement, neither Party will directly or indirectly through third parties solicit or hire for employment any of the other party's current or previous employees (unless a period of twelve months had elapsed from the last date that the employee was employed by the other Party). This provision will not apply to, and will not prevent the hiring of any person responding to, general advertisements of employment opportunities.

(Doc. 52-2 at 16.) It also included provisions requiring Compass to provide payment to Geodesic within 45 days of services being rendered. (Doc. 47-3, Ex. B-24 ¶ 8.c.) Paragraph 16 of the NSA provides as follows:

Neither party shall hire or solicit, for itself or any other person or entity, directly or indirectly, any person who was employed or engaged as a consultant of the other party within one (1) year of the date of this Agreement.

(Doc. 52-3 at 4, ¶ 16.)

         On June 7, 2013, Luna sent an email to Kore regarding payment for services Rojano provided to Compass prior to the once anticipated kickoff of Syncada. She concluded with, “I know you said there is no available budget to pay this effort, but I would like you to kindly consider a way to get this work reimbursed as it was relevant work for the project and not only occasional help.” (Doc. 47 at 279, Ex. C-22.) Kore rejected this request and stated that the date to start charging for the hours of Rojano was June 17th. However, on September 23, 2013, a purchase order numbered 181329 (“PO181329”) was issued by Compass for work done by Rojano from May 1, 2013 until September 23, 2013. In response, Geodesic issued seven invoices to Compass specifically requesting payment by wire transfer. However, Compass tendered payment via official Compass checks which were subsequently dishonored. After several months of repeated requests for payment, including a follow-up trip by Luna to the U.S., and after being required to sign lost instrument indemnity documents for Compass, Geodesic received a wire transfer from Compass in the amount of $122, 040.00 on February 4, 2014, for payment of six out of the seven invoices. Invoice No. 6, which was issued in response to PO181329, in the amount of $35, 840.00 remains outstanding and unpaid.

         On September 4, 2013, after months of work on the ARP Project with Geodesic, Rojano informed Kore of his intent to resign from his employment with Geodesic effective September 6, 2013, because of disagreements over expenses- some of which were connected to family health insurance coverage. When Luna learned of Rojano's intentions, she flew to the U.S. for a meeting with Rojano and Kore in which they negotiated a delay of his separation date and for Geodesic to provide family health insurance effective October 1, 2013. As to not interrupt his work on the ARP Project, Rojano continued working for Geodesic until November 30, 2013, at which point he separated from his employment with Geodesic. During the time frame before his official separation from Geodesic, Compass employees assisted Rojano in the process of having NFQ Advisory Services U.S., LLC, an affiliate of Nfoque Advisory Services (“Nfoque”), which is Geodesic's competitor, approved as a vendor in Compass' procurement system. Compass did this after being informed of Rojano's intention to quit Geodesic and begin work with Nfoque on another project for Compass called Basel III. Throughout September, Luna made representations to Compass that she would not involve them in litigation regarding the breakdown of the employee-employer relationship ...

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