Alantra LLC v. Apex Industrial Technologies LLC

UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS

__________________________________________

)

ALANTRA LLC, )

)

Plaintiff and )

Counterclaim-Defendant, ) Civil Action No.

) 20-10852-FDS

v. )

)

APEX INDUSTRIAL TECHNOLOGIES LLC, )

)

Defendant and )

Counterclaim-Plaintiff. )

__________________________________________)

MEMORANDUM AND ORDER ON PARTIES’

CROSS-MOTIONS FOR SUMMARY JUDGMENT

SAYLOR, C.J.

This is an action arising out of a contract dispute. Plaintiff Alantra LLC entered into a

contract with defendant Apex Industrial Technologies LLC to serve as Apex’s exclusive

financial advisor in connection with its efforts to raise capital and attract outside investment.

The terms of that agreement were executed in an Engagement Letter, signed by both parties.

The Engagement Letter contained contingent-compensation provisions whereby Alantra

was to be paid a transaction fee for debt-financing or equity-capital transactions that involved

Apex. According to the complaint, during the course of the agreement, Alantra identified a

company, Fastenal, as a potential strategic investor for Apex; however, Apex instructed Alantra

not to pursue Fastenal as an investor. Not long thereafter, Apex entered into an asset-purchase

agreement with Fastenal for $125 million. Alantra then sought a transaction fee in connection

with that sale, but Apex declined to pay the fee, asserting that the transaction was not one for

which Alantra was entitled to compensation under the terms of the agreement.

Alantra then sued Apex for breach of contract and unjust enrichment. In its answer,

Apex asserted counterclaims for breach of contract and breach of fiduciary duty, alleging that

Alantra disclosed confidential information by publicly filing the complaint and attaching the

Engagement Letter as an exhibit.

The parties have cross-moved for summary judgment. Alantra has moved for summary

judgment on its breach of contract claim as well as Apex’s counterclaims, and Apex has moved

for summary judgment as to liability on all claims and counterclaims.

There are two principal issues before the Court. The first is whether the Engagement

Letter requires Apex to pay Alantra a contingent fee for a transaction involving the sale of assets,

as opposed to a debt-financing or equity-capital transaction. The Court concludes that the

unambiguous terms of the Engagement Letter, read as a whole, demonstrate that it does not. The

second is whether there is a genuine dispute of material fact concerning the existence of damages

resulting from the alleged disclosure of confidential information by Apex. The Court concludes

that there is.

Accordingly, and for the following reasons, the motions will be granted in part and

denied in part.

I. Background

A. Factual Background

Alantra LLC is a Massachusetts investment-banking firm that provides business advice to

clients by identifying potential sources of funding and investment. (Emery Dep. at 24-25). Apex

Industrial Technologies LLC is an Ohio company that provides supply-chain products and

technologies. (Savage Decl. ¶ 1).

In 2019, Apex began seeking outside investment to raise capital for the company.

(Savage Dep. at 41-42; Emery Dep. at 39-40). To that end, it enlisted the services of Alantra to

identify and attract outside investors. (Savage Dep. at 40-42, 46).

In June 2019, the parties executed a nondisclosure agreement and began to negotiate the

terms of an agreement. (Savage Decl. ¶ 4; Savage Dep. at 50-51, 122-23). On August 13, the

parties finalized the agreement in an engagement letter (the “Engagement Letter”).

1. The Engagement Letter

a. Alantra’s Obligations Under the Letter

According to the Engagement Letter, Apex appointed Alantra to act as its “exclusive

financial advisor in connection with its contemplated debt and/or equity capital raising (the

“Assignment”).” (Engagement Letter at 1). Alantra was to assist Apex by providing advice as to

market conditions, identifying potential sources of investment, conducting due diligence, and

evaluating proposed transactions. (Id. ¶ 1.1). For example, the letter states that Alantra was

expected to assist in “[e]xamining the market for potential lenders and investors and identifying a

universe of parties who should be contacted in relation to the proposed transaction (the

“Investors”).” (Id.). Similarly, the letter states that Alantra was expected to assist in

“[g]athering and analyzing information relevant to the market and the proposed transaction.”

(Id.).

The Engagement Letter limited Alantra’s duties to those expressly stated in the letter:

The only duties or obligations Alantra owes [Apex] in relation to the Assignment

are those set out expressly in this letter[.] Alantra does not owe [Apex] any other

or further duties or obligations (whether arising from the fact that Alantra is

acting as your adviser or otherwise) in relation to the Assignment.

(Id. ¶ 8.1).

b. Fee Provisions

The Engagement Letter required that Apex pay an initial $20,000 retainer to Alantra,

followed by up to four monthly payments of $15,000. (Id. ¶ 2.1). Those fees were labeled

“Professional Fees” and were “non-cancelable and payable in full” regardless of whether the

agreement was terminated. (Id.). However, the Professional Fees could be credited against any

obligation to pay a “Transaction Fee,” as long as that fee exceeded $750,000. (Id. ¶¶ 2.1, 2.3).

The Engagement Letter defined “Transaction Fee” and “Transaction” as follows:

The contingent portion of Apex’s obligation under this Assignment is the

“Transaction Fee” which is paid in connection with any debt financing or equity

capital raise (except by or from Kent Savage [Apex’s President and CEO], or one

o[r] more of his affiliates) (a “Transaction”) that involves Apex including current

vendors and customers of [Apex] provided that any credit accommodations,

account adjustments, payment arrangements, forbearances, waivers, or other

allowances of any kind by any such vendors or customers shall not be deemed to

be a Transaction.

(Id. ¶ 2.2).

The letter then set forth two methods for calculating a “Transaction Fee,” depending on

the circumstances of the transaction at issue. The first was as follows:

The Transaction Fee is computed upon the closing (the “Closing”) and, for all

Transactions for which Alantra is entitled to a Transaction Fee pursuant to this

engagement letter, the Transaction Fee(s), in the aggregate, will be equal to the

greater of $750,000 (the “Minimum Fee”) or the following:

• 2.75% of the first $20 million of 1st lien debt and 2.5% thereafter; plus

• 5% of the amount raised in equity, subordinated debt or mezzanine from

Investors on the first $10 million; 4.5% on the next $10 million and 4%

thereafter.

Alantra’s Transaction Fee shall be payable with respect to all Investors (other than

Kent Savage and any of his affiliates), provided that with respect to any Investor

designated by [Apex] on the attached Annex A (the “Designated Investors”), the

Transaction Fee(s) payable by Apex with respect to a debt or equity capital raise

by or from any Designated Investors will be reduced by 50% provided the term

sheet is fully executed 45 days from the execution of this engagement letter

further provided that in no event will the discounted Transaction Fee(s) for all

such loans or capital raises by or from any Designated Investors be less than

$600,000. . . . Further, [Apex] shall not have the right to include any additional

Designated Investors during the term of the engagement beyond those identified

in Annex A upon execution of the engagement letter.

(Id. ¶ 2.3).

The second calculation method concerned larger transactions:

In the event that [Apex] elects to raise capital or sell shares that results in a

transfer of greater than 50% of the current fully diluted shares, then in lieu of, and

not in addition to, the Transaction Fees provided for in Paragraph 2.3, Alantra

shall be entitled at the Closing to the Transaction Fees as outlined below:

• 2.0% of the Transaction Value up to $100 million, plus

• 2.5% of the Transaction Value above $100 million.

For the purpose of this letter, the term “Transaction Value” shall mean the

Enterprise Value on a cash free and debt free basis. For the avoidance of doubt,

Enterprise Value shall mean the aggregate of any amounts paid or committed for

stock or assets plus the value of all net interest bearing debt, including the value

of any debt like items, assumed by the buyer, plus any current assets retained by

the seller on or after the date hereof as part of the consideration. The Transaction

Value for any Transaction (including a recapitalization) that involves more than

50% of the equity voting rights or results in a change of control will be equal to

the implied Enterprise Value for 100% of the stock or assets.

(Id. ¶ 2.4).

The Engagement Letter also contained two “tail” provisions that required payment of a

contingent fee, under certain circumstances, after a transaction closed, or even after the

expiration of the Engagement Letter. The first of those provisions concerned subsequent

investments to transactions executed during the agreement period:

Provided there is a Closing and additional debt or equity is raised or invested, as

the case may be, in the 12 months from Closing by an Investor or Designated

Investor which participated in a debt financing or equity capital raise for which

Alantra is entitled to a Transaction Fee pursuant to the terms of this engagement

letter, Alantra would be entitled to an additional Transaction Fee as outlined in

Paragraph 2.3 or 2.4, as the case may be, on the additional debt financing or

capital raise by or from such Investor or Designated Investor (the Minimum Fee

shall not apply).

(Id. ¶ 2.5).

The second provision concerned transaction fees incurred after the expiration of the

agreement:

Alantra shall be entitled to receive a Transaction Fee(s) in the event that any time

prior to the expiration of twelve (12) months from the expiration or earlier

termination of this engagement letter a Transaction as to which Alantra otherwise

would be entitled to a Transaction Fee but for the expiration or earlier termination

of this engagement letter is consummated by Apex with any party: (a) contacted

by Alantra or Apex pursuant to this engagement letter; (b) was in contact with

Apex prior to or during the term of this engagement letter and signs a non-

disclosure agreement; (c) that is included on Annex B of previously contacted

investors or (d) that Alantra identified as a potential investor, but was instructed

by Apex not to contact.

(Id. at ¶ 2.9).

c. Confidentiality Provisions

The Engagement Letter also contained terms obligating Alantra to preserve the

confidentiality of sensitive information provided by Apex. (Id. ¶¶ 3.1-3.2). Under those terms,

Alantra was required not to disclose any confidential information concerning Apex without prior

written consent. (Id. ¶ 3.2). The letter stated that such confidential information included “the

existence and terms of [the] engagement letter, the Assignment, and any and all negotiations with

prospective investors.” (Id.). That obligation continued even after the expiration or termination

of the agreement. (Id. ¶ 6.2).

2. Sale to Fastenal

In September 2019, Alantra Vice President Christopher Dubyak e-mailed Apex CEO

Kent Savage a list of potential investors to “add to the outreach process.” (Docket No. 74, Ex.

22 (“September 2019 E-mails”) at 3). Listed among Dubyak’s list of “Tier I” new strategic

investors was Fastenal Company. (Id. at 4). The e-mail acknowledged that Apex had earlier

instructed Alantra to not contact specific companies previously identified as potential investors;

with respect to the new list of investors, Dubyak asked, “Can you please confirm and let us know

if there is sensitivity with any of the other names [on the list]?” (Id. at 3). Savage responded,

We SHOULD DEFER all of the prospective strategic players. We currently have

commercial relationships with a number of companies on this list (both tier 1 and

tier 2). It will be more likely to engage this type of player when we are a few

quarters further down our success track.

(Id. at 2). Alantra did not further pursue Fastenal as a potential investor in Apex.

On December 31, 2019, according to the terms of the Engagement Letter, the agreement

between Alantra and Apex expired. However, both companies appeared to have continued a

working relationship, albeit in a limited capacity. For example, on February 20, 2020, Kent

Savage sent an e-mail to Alantra asking for a review of its updated “CIM”—ostensibly a

Confidential Information Memorandum used to attract new investors. (Docket No. 74, Ex. 7

(“February 2020 E-mail”)). There is no evidence, though, that Apex asked for Alantra’s

assistance with, or that Alantra assisted in, any negotiations with Fastenal.

On March 30, 2020, Apex and Fastenal executed an Asset Purchase Agreement (the

“Fastenal APA”), whereby Apex sold certain assets related to its maintenance, repair, and

operations business in return for $125 million. (Docket No. 70, Ex. 8 (“Asset Purchase

Agreement”) at 6-7). According to the Form 10-Q Fastenal filed with the Securities and

Exchange Commission, Fastenal purchased $123.8 million in intangible assets and $1.2 million

in tangible assets. (Docket No. 74, Ex. 14 at 3).

Alantra learned of the proposed deal and requested payment of a transaction fee

according to the terms of the Engagement Letter. (Docket No. 70, Ex. 10 (“March 2020 E-

mail”)). Apex concluded that the asset sale to Fastenal was not a qualifying transaction under

the Engagement Letter and declined to pay the requested transaction fee. (Savage Dep. at 268-

69).

3. Alleged Disclosure of Confidential Information

On May 5, 2020, Alantra sued Apex to recover the transaction fee that it contends is

owed for the Fastenal APA. (Compl.). In its filings, Alantra attached to its complaint a copy of

the Engagement Letter and its associated annexes. Apex then filed counterclaims, alleging that

the public filing of the Engagement Letter and the inclusion of certain allegations in the

complaint breached its confidentiality provisions. According to Savage, “Apex already has been,

and will continue to be, damaged by Alantra’s disclosure of Apex’s confidential information,

including damage to its industry reputation, its competitive advantage in connection with the

pursuit of new business, and its current and future investment campaigns.” (Savage Decl. ¶ 10).

Apex has not otherwise provided proof of lost business opportunities resulting from the

disclosure of information in this suit.

B. Procedural Background

The complaint alleges two causes of action: Count 1 alleges a breach of contract for

Apex’s failure to pay a transaction fee for the Fastenal APA, and Count 2 alleges unjust

enrichment for uncompensated services rendered by Alantra.

Apex answered with two counterclaims: Counterclaim 1 alleges a breach of contract for

the disclosure of confidential information, and Counterclaim 2 alleges a breach of fiduciary duty

for the same.

Both parties have moved for summary judgment. Alantra has moved for summary

judgment on its breach-of-contract claim, as well as Apex’s counterclaims. Apex has moved for

summary judgment as to liability on all claims and counterclaims.

For the following reasons, summary judgment will be granted in favor of Apex as to

Alantra’s claims for breach of contract and unjust enrichment (to the extent it concerns services

provided in furtherance of the Fastenal APA); granted in favor of Alantra as to Apex’s

counterclaim for breach of fiduciary duty; and denied as to Apex’s counterclaim for breach of

contract.

II. Legal Standard

The role of summary judgment is “to pierce the pleadings and to assess the proof in order

to see whether there is a genuine need for trial.” Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822

(1st Cir. 1991) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir. 1990)). Summary

judgment shall be granted when “there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine issue is

“one that must be decided at trial because the evidence, viewed in the light most flattering to the

nonmovant, would permit a rational factfinder to resolve the issue in favor of either party.”

Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) (citation omitted). In

evaluating a summary judgment motion, the court indulges all reasonable inferences in favor of

the nonmoving party. See O’Connor v. Steeves, 994 F.2d 905, 907 (1st Cir. 1993). When “a

properly supported motion for summary judgment is made, the adverse party must set forth

specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 250 (1986) (quotations omitted). The nonmoving party may not simply “rest upon

mere allegation or denials of his pleading,” but instead must “present affirmative evidence.” Id.

at 256-57.

III. Analysis

A. Count 1: Breach of Contract—Transaction Fee

The Engagement Letter provides that it is “governed by and is to be construed in

accordance with the laws of the State of New York.” (Engagement Letter ¶ 8.2).1 Under New

1 Federal courts sitting in diversity are obliged to apply the conflict-of-laws rules of the state where the

court resides. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941). “Where, as here, the parties have

expressed a specific intent as to the governing law, Massachusetts courts will uphold the parties’ choice as long as

the result is not contrary to public policy.” Oxford Global Resources, LLC v. Hernandez, 480 Mass. 462, 468 (2018)

(internal quotation marks omitted). The parties have not objected to the application of New York law.

York law, to prove a claim for breach of contract, a plaintiff must show (1) the formation of a

contract, (2) performance under that contract by plaintiff, (3) breach of that contract by

defendant, and (4) resulting damage. See McCormick v. Favreau, 919 N.Y.S.2d 572, 577 (App.

Div. 2011). When interpreting a contract, a court endeavors to “give effect to the intent of the

parties as revealed by the language of their agreement.” Chesapeake Energy Corp. v. Bank of

N.Y. Mellon Trust Co., N.A., 773 F.3d 110, 113-14 (2d Cir. 2014) (quoting Compagnie

Financiere de CIC et de L’Union Europeene v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 232

F.3d 153, 157 (2d Cir. 2000)). “The words and phrases in a contract should be given their plain

meaning, and the contract should be construed so as to give full meaning and effect to all of its

provisions.” Id. (internal alterations omitted) (quoting Olin Corp. v. American Home Assurance

Co., 704 F.3d 89, 99 (2d Cir. 2012)).

Summary judgment is appropriate on a breach-of-contract claim if “the terms of the

contract are unambiguous.” Fisher & Mandell, LLP v. Citibank, N.A., 632 F.3d 793, 799 (2d

Cir. 2011). The terms of a contract are unambiguous “where the contract language has a definite

and precise meaning, unattended by danger of misconception in the purport of the contract itself,

and concerning which there is no reasonable basis for a difference of opinion.” Chesapeake

Energy Corp., 773 F.3d at 114 (internal alterations and quotation marks omitted) (quoting Law

Debenture Tr. Co. of N.Y. v. Maverick Tube Corp., 595 F.3d 458, 467 (2d Cir. 2010)). When the

contract language is unambiguous, “the intent of the parties must be found within the four

corners of the contract.” Id. (internal alterations omitted) (quoting Howard v. Howard, 292

A.D.2d 345, 345 (App. Div. 2002)). By contrast, a contract is ambiguous if its terms “could

suggest more than one meaning when viewed objectively by a reasonably intelligent person who

has examined the context of the entire integrated agreement and who is cognizant of the customs,

practices, usages, and terminology as generally understood in the particular trade or business.”

Id. (quoting Law Debenture Tr. Co. of N.Y., 595 F.3d at 466).

The parties do not dispute, for purposes of summary judgment, that the Engagement

Letter constituted a contract between the parties; that the Fastenal APA was executed within the

twelve-month period in which the tail provision of Paragraph 2.9 applied; and that Alantra

identified Fastenal as a potential strategic investor during the period covered by the Engagement

Letter. The dispositive issue, then, is whether the Fastenal APA was the type of transaction

contemplated by the Engagement Letter such that Alantra was entitled to a transaction fee upon

the closing of that agreement.

Alantra contends that the asset sale to Fastenal was a compensable transaction under

Paragraph 2.4, notwithstanding the Engagement Letter’s primary focus on debt-financing and

equity-capital transactions. According to Alantra, Paragraph 2.4 is a broad provision that

expands the universe of compensable transactions contemplated by the agreement.

Whether Alantra was entitled to a transaction fee depends, of course, upon whether the

Fastenal APA was a transaction within the meaning of the Engagement Letter. According to the

terms of that letter, it was not.

To begin, the terms “Transaction” and “Transaction Fee” are defined in Paragraph 2.2,

which states that “[t]he contingent portion of Apex’s obligation under this Assignment is the

‘Transaction Fee,’ which is paid in connection with any debt financing or equity capital raise

(except by or from Kent Savage, or one o[r] more of his affiliates) . . . that involves Apex . . . .”

(Engagement Letter ¶ 2.2). The parties do not dispute that the Fastenal APA was not a “debt

financing” or an “equity capital raise.” That alone appears dispositive.

Alantra contends that while Paragraph 2.3 governs payment of a fee in connection with

“debt financing” or “equity capital raise” transactions, Paragraph 2.4 is a broader provision that

encompasses transactions not otherwise contemplated in the Engagement Letter. Again, that

paragraph provides that “[i]n the event that [Apex] elects to raise capital or sell shares that results

in a transfer of greater than 50% of the current fully diluted shares, then in lieu of, and not in

addition to, the Transaction Fees provided for in Paragraph 2.3, Alantra shall be entitled” to

certain additional fees based on the “Transaction Value.”

It goes on to define “Transaction Value” as follows:

For the purposes of this letter “Transaction Value” shall mean the Enterprise

Value on a cash free and debt free basis. For the avoidance of doubt, Enterprise

Value shall mean the aggregate of any amounts paid or committed for stock or

assets plus the value of all net interest bearing debt, including the value of any

debt like items, assumed by the buyer, plus any current assets retained by the

seller on or after the date hereof as part of the consideration. The Transaction

Value for any Transaction (including a recapitalization) that involves more than

50% of the equity voting rights or results in a change of control will be equal to

the implied Enterprise Value for 100% of the stock or assets.

(Id. ¶ 2.4).

Alantra’s interpretation of Paragraph 2.4 rests upon two premises. The first is that the

limiting phrase, “that results in a transfer of greater than 50% of the current fully diluted shares,”

applies to only the selling of shares and not the raising of capital. Thus, according to Alantra’s

interpretation, all transactions that “raise capital,” no matter the amount raised, fall within the

ambit of Paragraph 2.4.

The second premise is that an asset sale is a transaction that “raise[s] capital.” Alantra

reasons that the definition of “Enterprise Value” includes “any amounts paid or committed for

stock or assets”; that “Transaction Value” is defined as being largely synonymous with

“Enterprise Value”; that a “Transaction Value” serves as the basis for determining the

“Transaction Fee” under Paragraph 2.4; that the value of the transaction thus corresponds to the

nature of the transaction; and, therefore, if the “Transaction Value” is in some way affected by

funds “paid or committed for stock or assets,” then a sale of assets must be one of the

transactions contemplated by the fee provision of Paragraph 2.4.

There are several problems with that proposed interpretation. The first is that it conflicts

with the definition of “Transaction” set forth in Paragraph 2.2, which limits the payment of fees

to transactions involving “debt financing” or an “equity capital raise.” Generally, “a word used

by the parties in one sense will be given the same meaning throughout the contract in the absence

of countervailing reasons.” Two Farms, Inc. v. Greenwich Ins. Co., 993 F. Supp. 2d 353, 362

(S.D.N.Y. 2014) (quoting Iroquois Master Fund, Ltd. v. Quantum Fuel Sys. Techs. Worldwide

Inc., 2013 WL 4931649, at *2 (S.D.N.Y. Sept. 12, 2013)). Alantra’s intricate and attenuated

interpretation is unreasonable when the term at issue is clearly defined and is otherwise used

consistently throughout the contract.

Alantra’s proposed interpretation also fails because it attempts to locate the meaning of

“Transaction” in an exegesis of the terms “Transaction Value” and “Enterprise Value.”

However, those terms define a method for determining the value of a transaction, not the nature

of the transaction itself. In other words, simply because the Engagement Letter calls for

assessing the assets involved in a transaction to calculate the transaction fee does not mean that

asset sales are qualifying transactions. The Engagement Letter was a business contract executed

by sophisticated parties; had the parties intended for it to include asset sales as a kind of

compensable transaction, the Engagement Letter could have stated as much. The terms of the

agreement, at least to the extent that they define the term “transaction,” are simple and

unambiguous.

Moreover, Alantra’s interpretation of the first sentence of Paragraph 2.4 would produce

absurd results. If the limiting phrase (“that results in a transfer of greater than 50% of fully

diluted shares”) does not apply to both of the parallel predicates (“raise capital” and “sell

shares”), that means that there is no limitation on the term “raise capital”—even though the

remainder of the paragraph describes transactions where company control is at stake. Alantra

reads the limiting phrase to apply only to the sale of stock, making any asset sale, no matter its

size, the basis of a transaction fee. Thus, under Alantra’s interpretation of the contract, if Apex

had sold Fastenal some office furniture for $5,000, Alantra would be owed a $100 fee. (Apex’s

Opp’n at 16). That and other similarly quotidian transactions would be governed by the same

provision that governed transactions that alter ownership and control of the entire company.

Such an interpretation, in context, is unreasonable.2

The Engagement Letter, when read as a whole, sets forth an agreement whereby Apex

enlists Alantra’s advice on debt financing and equity-capital raising. The Engagement Letter

preamble and Paragraph 1.1 limit Alantra’s role as advisor to those transactions and evince a

general focus on investment; they do not suggest that Alantra would facilitate an asset-sale

agreement. The transaction fee provisions in Paragraphs 2.2 and 2.3 reemphasize that focus.

Indeed, nowhere in the Engagement Letter is there any mention of asset-purchase agreements or

raising capital through means other than debt financing or the raising of equity capital.

“[I]t is important for the court to read the integrated agreement ‘as a whole.’” Global

Reinsurance Corp. of Am. v. Century Indemnity Co., 22 F.4th 83, 95 (2d Cir. 2021) (quoting

Lockheed Martin Corp. v. Retail Holdings, N.V., 639 F.3d 63, 69 (2d Cir. 2011)). “If the

document as a whole ‘makes clear the parties’ over-all intention, courts examining isolated

2 Alantra argues that Apex conflates the meaning of “raise capital” and “sell shares” when it applies the

limiting phrase “that results in a transfer of greater than 50% of fully diluted shares” to both predicates. According

to Alantra, “raise capital” and “sell shares” would then be redundant, as both would entail the transfer of shares.

However, selling shares is but one way to “transfer” them to another party. And given the complexity of financial

arrangements that “raise capital” without the express, or at least the immediate, selling of shares (for example, the

issuance of warrants), applying the limiting phrase to each predicate does not render them redundant.

provisions should then choose that construction which will carry out the plain purpose and object

of the agreement.’” Id. (quoting Lockheed Martin, 639 F.3d at 69)). Here, the contract makes

clear that Apex engaged Alantra to serve as a financial advisor to help generate outside

investment in the company. It also provides for the payment to Alantra of fees for securing debt

servicing and raising equity capital. It does not, however, provide for transaction fees for asset-

purchase agreements executed by Apex.

Finally, Alantra contends that an interpretation of the Engagement Letter that forecloses

the possibility of payment of a transaction fee for an asset sale is contradicted by extrinsic

evidence. Alantra points to testimony from its representatives stating that Paragraph 2.4 was

crafted to cover transactions that were “not [the] primary focus” of the agreement, but for which

Alantra wanted to be compensated. (Emery Dep. at 66). It contends that the inclusion of

Paragraph 2.4 was “a requirement” for Alantra to agree to the terms of the Engagement Letter.

(Hadfield Dep. at 69). Alantra does not, however, identify any actual ambiguity in the contract,

which is the necessary predicate for considering extrinsic evidence. “[W]hile ‘interpretation’

evidence is not barred by the parol evidence rule if an ambiguity is shown, merely labeling

evidence as being offered to ‘interpret’ a contract does not relieve a party from showing that the

contract is ambiguous.” Wilder v. World of Boxing LLC, 220 F. Supp. 3d 473, 481 (S.D.N.Y.

2016).

Accordingly, summary judgment will be granted for defendant as to Count 1.

B. Count 2: Unjust Enrichment

To prove a claim for unjust enrichment, a plaintiff must show “(1) a benefit conferred

upon the defendant by the plaintiff; (2) an appreciation or knowledge by the defendant of the

benefit; and (3) acceptance or retention by the defendant of the benefit under the circumstances

would be inequitable without payment for its value.” Tomasella v. Nestle USA, Inc., 962 F.3d

60, 82 (1st Cir. 2020) (quoting Massachusetts Eye & Ear Infirmary v. QLT Phototherapeutics,

Inc., 552 F.3d 47, 57 (1st Cir. 2009)).3 Unjust enrichment is “an equitable remedy, and it is a

basic doctrine of equity jurisprudence that courts of equity should not act . . . when the moving

party has an adequate remedy at law.” Foley v. Yacht Mgmt. Grp., 2011 WL 4020835, at *8 (D.

Mass. Sept. 9, 2011) (internal quotation marks and citation omitted) (quoting Massachusetts v.

Mylan Laboratories, 357 F.Supp.2d 314, 324 (D. Mass. 2005)). “[T]he existence of a

contractual relationship between the parties typically precludes an unjust enrichment claim

arising out of that contract.” Biltcliffe v. CitiMortgage, Inc., 772 F.3d 925, 931 (1st Cir. 2014).

However, a party can plead alternative causes of action for breach of contract and unjust

enrichment “where there is a dispute over the existence, scope, or enforceability of the putative

contract.” Grossman v. Geico Cas. Co., 2022 WL 1656593, at *3 (2d Cir. May 25, 2022)

(quoting Reilly v. Natwest Mkts. Grp. Inc., 181 F.3d 253, 263 (2d Cir. 1999)).

Under the circumstances, the unjust-enrichment claim based upon services provided in

furtherance of the Fastenal APA is precluded by the existence of the contract. The parties do not

dispute that the Engagement Letter is an enforceable contract. “Massachusetts law does not

allow litigants to override an express contract by arguing unjust enrichment.” Plastic Surgery

Assocs., S.C. v. Cynosure, Inc., 407 F. Supp. 3d 59, 83 (D. Mass. 2019) (quoting Platten v. HG

Bermuda Exempted Ltd., 437 F.3d 118, 130 (1st Cir. 2006)). “It is the availability of a remedy at

3 It is not entirely clear (and the parties do not raise the issue) whether the choice-of-law provision in the

Engagement Letter would apply to plaintiff’s equitable claim for unjust enrichment—particularly given that the

choice-of-law provision applies only to the contract itself. See Dinan v. Alpha Networks, Inc., 764 F.3d 64, 69 (1st

Cir. 2014) (holding that choice-of-law provision in contract did not apply to quasi-contract claim). Nevertheless,

“[t]he first step in a choice of law analysis is to determine whether an actual conflict exists between the substantive

laws of the interested jurisdictions . . . .” Reicher v. Berkshire Life Ins. Co. of Am., 360 F.3d 1, 4 (1st Cir. 2004). In

this case, “the elements of unjust enrichment are substantially similar in New York and Massachusetts.” Fine v.

Guardian Life Ins. Co. of Am. & Park Ave Sec., LLC, 450 F. Supp. 3d 20, 34 (D. Mass. 2020). Therefore, the Court

“need not make a finding regarding which state’s law is to be applied where the case’s resolution would be identical

under either state’s law.” Id. at 34-35 (quoting Fratus v. Republic W. Ins. Co., 147 F.3d 25, 28 (1st Cir. 1998)).

law, not the viability of that remedy, that prohibits a claim for unjust enrichment.” Id. (quoting

Shaulis v. Nordstrom, Inc., 865 F.3d 1, 16 (1st Cir. 2017)).

The complaint alleges that Alantra is owed a transaction fee for the Fastenal APA.

(Compl. ¶¶ 30-31). But, as discussed, the Fastenal APA was not a transaction covered by the

Engagement Letter such that Apex was contractually obligated to pay Alantra a transaction fee.

The issue, then, is whether the services Alantra provided to Apex concerning the Fastenal APA

were contemplated by the contract (and therefore subject to the contract’s compensation

provisions) or were services provided aside from Alantra’s contractual obligations that resulted

in Apex being unjustly enriched.

Alantra identified Fastenal to Apex as a potential strategic investor as part of its duties

under the Engagement Letter. (See September 2019 E-mails at 4). Thus, any compensation

Alantra should have received for providing that information was governed by the terms of the

Engagement Letter, and any relief Alantra seeks for those services must be pursued through a

claim for breach of contract.

Accordingly, to the extent that plaintiff seeks compensation for services provided in

furtherance of the Fastenal APA, summary judgment will be granted for defendant as to Count 2.

There appears to be evidence that Alantra provided services to Apex after the expiration

of the contract that did not involve the Fastenal transaction. It is therefore possible that Alantra

may be entitled to compensation for those services to avoid unjust enrichment. To the extent that

plaintiff is seeking damages arising out of the provision of those services, summary judgment

will be denied.

C. Counterclaims 1 and 2—Disclosure of Confidential Information

Apex asserts two counterclaims, both of which concern the alleged disclosure of

confidential information—specifically, the disclosure of certain of Apex’s business dealings in

the complaint and the attachment of the Engagement Letter as an exhibit to the complaint.

Counterclaim 1 alleges a breach of contract. Counterclaim 2 alleges a breach of fiduciary duty.

Apex requests both damages and preliminary and permanent injunctive relief.

Again, to prove a claim for breach of contract, a plaintiff must show (1) the formation of

a contract, (2) performance under that contract by plaintiff, (3) breach of that contract by

defendant, and (4) resulting damage. See McCormick, 919 N.Y.S.2d at 577.

To prove a claim for breach of fiduciary duty, a plaintiff must show (1) the existence of a

fiduciary relationship, (2) misconduct by the fiduciary, and (3) damages that were directly

caused by the fiduciary’s misconduct. See Kurtzman v. Bergstol, 835 N.Y.S.2d 644, 646 (App.

Div. 2007).

Apex contends that it is entitled to summary judgment as to liability on its counterclaims

because there is no dispute over any of the elements of those claims other than damages, which it

contends should be submitted to a jury. Alantra has moved for summary judgment on both

claims on the ground that Apex has failed to allege damages, an essential element of each claim.

For the purposes of the cross-motions, parties do not dispute any of the elements of either

claim other than damages. And they do not dispute that Apex has not produced evidence of

damages other than a declaration from its CEO stating, “Apex already has been, and will

continue to be, damaged by Alantra’s disclosure of Apex’s confidential information, including

damage to its industry reputation, its competitive advantage in connection with the pursuit of

new business, and its current and future investment campaigns.” (Savage Decl. ¶ 10).4 Whether

4 Apex has submitted an interrogatory response stating that a representative working with one of Apex’s

competitors “informed Kent Savage that he had seen Apex’s ‘book,’” which Apex took to mean a document

containing confidential information prepared by Alantra. Apex has not identified any further damages resulting

from this potential disclosure. (Apex’s Suppl. Resps. to Alantra’s First Interrogs. No. 15).

Apex can proceed on its counterclaims therefore depends on whether there is a triable issue of

fact as to the existence of damages.

1. Breach of Contract Claim

“Proof of damages is an essential element of a claim for breach of contract under New

York law.” Process Am. Inc. v. Cynergy Holdings, LLC, 839 F.3d 125, 141 (2d Cir. 2016). “To

establish actual damages, plaintiffs must come forward with evidence to establish the existence

of actual damages that they suffered that were directly and proximately caused by [the] breach.”

Zurich Am. Life Ins. Co. v. Nagel, 2022 WL 759375, at *9 (S.D.N.Y. Mar. 14, 2022). The

damages “must be not merely speculative, possible, and imaginary, but they must be reasonably

certain . . . .” Tractebel Energy Mktg. Inc. v. AEP Power MKTG., Inc., 487 F.3d 89, 110 (2d Cir.

2007) (internal quotation marks, emphasis, and citation omitted). Whether damages are certain

concerns “the fact of damage, not the amount.” Id. Thus, for purposes of summary judgment,

plaintiffs need not prove the exact amount of damages. Id.

In addition, “nominal damages are always available in a breach of contract action even if

a party cannot prove general or consequential damages.” Compania Embotelladora Del

Pacifico, S.A. v. Pepsi Cola Co., 976 F.3d 239, 247 n.10 (2d Cir. 2020) (collecting cases). For

example, the Southern District of New York concluded that summary judgment was

inappropriate where a defendant failed to return confidential information upon termination of his

employment. Zurich, 2022 WL 759375, at *11 (applying New York law). That was true despite

the fact that “plaintiffs’ evidence regarding actual damages [wa]s fairly nonspecific,” at least

“where plaintiffs ask[ed] for specific performance and injunctive relief as a remedy, and where

nominal damages may [have been] available.” Id.

Assuming for present purposes that the filing of the complaint and its appendices was a

breach of Alantra’s contractual obligations, and that Apex performed its obligations under the

contract, whether Apex has incurred actual damages as a result of the breach is a disputed issue

of material fact. Apex has attested that its reputation and business prospects have been and

continue to be damaged by the disclosure of confidential information. (See Savage Decl. ¶ 10).

The fact that it has not produced any evidence concerning the extent of damages at issue is not a

sufficient basis for granting summary judgment in favor of Alantra, particularly where nominal

damages and injunctive relief are available. Because Apex has failed to identify a particular

transaction or business opportunity it has lost as a result of the disclosure of its confidential

information, however, summary judgment in favor of Apex is also not appropriate. Damages is

an essential element of a claim for breach of contract, and Apex has yet to offer sufficient proof

as to that element.

Accordingly, the parties’ cross-motions for summary judgment on the breach of contract

counterclaim will be denied.

2. Breach of Fiduciary Duty Claim

Under New York law, a “cause of action for breach of fiduciary duty which is merely

duplicative of a breach of contract claim cannot stand.” William Kaufman Org., Ltd. v. Graham

& James LLP, 703 N.Y.S.2d 439, 442 (App. Div. 2000). See also Catalyst Advisors, L.P. v.

Catalyst Advisors Invs. Glob. Inc., 2022 WL 1471033, at *13 (S.D.N.Y May 10, 2022)

(dismissing breach of fiduciary duty claim based upon improper utilization of confidential

information where it was “identical in substance to [plaintiff’s] breach of contract claim”).

Claims are duplicative where they “are premised upon the same facts and seek the same damages

for the alleged conduct.” Northern Shipping Funds I, LLC v. Icon Cap. Corp., 921 F. Supp. 2d

94, 106 (S.D.N.Y. 2013) (dismissing claim for breach of fiduciary duty where alleged fiduciary

relationship arose from the language of the contract).5

Here, the substance of both claims is identical. The same actions—disclosing

confidential information in a publicly-filed complaint and attaching the Engagement Letter—

form the basis of both the breach-of-contract and breach-of-fiduciary-duty claims. (See Apex

Countercls. ¶¶ 36-38, 45-47). And Apex does not identify separate harms resulting from each

claim. (Id.; Apex’s Mem. at 18, 20 (citing “damage to its industry reputation, its competitive

advantage, and its current and future investment campaigns”). The claims are therefore

duplicative, and the claim for breach of fiduciary duty will be dismissed.

Accordingly, Alantra’s motion for summary judgment will be granted and Apex’s motion

for summary judgment will be denied as to Count 2 of the counterclaim.

III. Conclusion

For the foregoing reasons, the motion of plaintiff Alantra LLC for summary judgment is

GRANTED as to the counterclaim for breach of fiduciary duty, and otherwise DENIED. The

motion of defendant Apex Industrial Technologies LLC for summary judgment is GRANTED as

to the breach of contract claim, GRANTED in part to the extent that plaintiff is asserting a claim

for unjust enrichment based on services provided in connection with the sale of assets by

defendant to Fastenal Company, and otherwise DENIED.

5 The District of Massachusetts has held that “a choice of law provision should apply to non-contract claims

where the basic source of any duty owed by defendants to the plaintiff is derived from the contractual relationship,”

including claims for breach of fiduciary duty. McAdams v. Massachusetts Mut. Life Ins. Co., 2002 WL 1067449, at

*12 (D. Mass. May 15, 2002), aff'd, 391 F.3d 287 (1st Cir. 2004); cf. Lambert v. Kysar, 983 F.2d 1110, 1121–22 (1st

Cir. 1993) (“[C]ontract-related tort claims involving the same operative facts as a parallel claim for breach of

contract should be heard in the forum selected by the contracting parties.”). Because the claims for breach of

contract and breach of fiduciary duty derive from the confidentiality provisions in the Engagement Letter, and

because the Engagement Letter provides for the application of New York law, the Court will apply New York law to

both claims.

So Ordered.

/s/ F. Dennis Saylor IV ____________

F. Dennis Saylor IV

Dated: October 19, 2022 Chief Judge, United States District Court