PAQUET v. LIFE TECHNOLOGIES CORPORATION (2019)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

Yanick Paquet appeals from a summary judgment in favor of Life Technologies Corporation (Life Technologies) on his claims for breach of contract and breach of the implied covenant of good faith and fair dealing.³ The case arises from a competition that Paquet entered (and invested much effort into) and that Life Technologies canceled without conducting the final “Grand Challenge Event” or making the $ 1 million payout. The amended complaint asserts that (1) Paquet entered into a unilateral contract with Life Technologies or, in the alternative, that he entered into an option contract with Life Technologies, (2) Paquet fully performed his obligations under the contract, (3) Life Technologies breached the contract by failing to score his submission, post his name on the leaderboard, give him access to a “Torrent Server,” provide additional data sets, hold the “Evaluation Event,” and by failing to recognize him as the winner or to award him the $ 1 million payment. The amended complaint also alleges that Life Technologies breached the implied covenant of good faith and fair dealing by failing to score his submission, post his name on the leaderboard, provide him with access to a “Torrent Server,” provide him with additional data sets, and by failing to hold the “Evaluation Event.” The amended complaint does not seek injunctive or equitable relief. Instead, Paquet seeks as damages the $ 1 million he contends Life Technologies was required to award him because he made a qualifying submission. Like the motion judge in his thoughtful decision, we conclude that the contract documents reserved to Life Technologies the discretion not to award the prize -- even to qualifying submissions -- and, as a result, summary judgment was properly entered in favor of Life Technologies.

We review a decision on summary judgment de novo, based on the record presented to the motion judge, Kiribati Seafood Co. v. Dechert LLP, 478 Mass. 111, 116 (2017), viewing the evidence in the light most favorable to the nonmoving party, and drawing all reasonable inferences in its favor, Howcroft v. Peabody, 51 Mass. App. Ct. 573, 576 (2001). “Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.” Boazova v. Safety Ins. Co., 462 Mass. 346, 350 (2012). Where, as here, the plaintiff has the burden of proof on his claims, the defendant must establish that the plaintiff “has no reasonable expectation of proving an essential element of [his] case,” Ravnikar v. Bogojavlensky, 438 Mass. 627, 629 (2003), and that there is “no triable issue of fact.” Ng Bros. Constr., Inc. v. Cranney, 436 Mass. 638, 644 (2002).

Discussion. 1. Breach of contract. “The interpretation of a contract is a question of law, which we review de novo.” James B. Nutter & Co. v. Estate of Murphy, 478 Mass. 664, 667 (2018). “To prevail on a claim for breach of contract, a plaintiff must demonstrate that there was an agreement between the parties; the agreement was supported by consideration; the plaintiff was ready, willing, and able to perform his or her part of the contract; the defendant committed a breach of the contract; and the plaintiff suffered harm as a result.” Bulwer v. Mount Auburn Hosp., 473 Mass. 672, 690 (2016), citing Singarella v. Boston, 342 Mass. 385, 387 (1961).

For our purposes here, we accept the plaintiff's contention that five documents together formed an enforceable contract between him and Life Technologies, see, e.g., Tzitzon Realty Co. v. Mustonen, 352 Mass. 648, 653 (1967) (“two or more papers [may be] so connected in the minds of the parties that they adopted all of them as indicating their purpose”), and that his submission was sufficient to satisfy the competition criteria to qualify for the $ 1 million payment. The question, therefore, is whether the contract documents required Life Technologies to award the $ 1 million to a qualifying entrant, or whether they reserved discretion to Life Technologies not to make the payment, even where there was (as Paquet contends) only a single qualifying submission.

To begin, we note that although the documents are written in terms of a competition, they also make clear that the end result was not so much a “prize” as the granting of an exclusive license to the entrant's intellectual property rights in his or her submission. Thus, the “Challenge Specific Agreement,” which Paquet signed, specifies that the $ 1 million would be paid only if Life Technologies exercised its option to purchase the exclusive rights to his intellectual property. Paragraph 1 provides that “the sale of your rights to [Life Technologies] ․ is the only way that you can receive the Award.” In addition, even if a particular proposed solution were “[a]ccepted” (an undefined term whose meaning we need not here decide),⁴ Life Technologies nonetheless had a ninety-day “exclusive option ․ to acquire exclusive rights to the” entrant's proposed solution (the “Exclusivity Period”) before payment need be made. Paquet does not argue, let alone demonstrate, that exercise of the option was anything other than discretionary. Indeed, the language of the agreement would foreclose that argument. For example, the Challenge Specific Agreement states that entrants in the competition would be notified “whether [Life Technologies] accepts your Proposed Solution and wishes to exercise an Option,” and distinguishes Life Technologies' “wish[ ] to exercise an Option relating to the ․ Challenge” from a solution's “selection ․ as the winner” (emphasis added).

Because the $ 1 million payment was not required unless Life Technologies exercised its option,⁵ and the contract documents did not limit Life Technologies' discretion over whether to exercise the option, the motion judge properly concluded that Paquet failed to show that he had a contractual entitlement to the $ 1 million award.

Paquet argues in the alternative that Life Technologies waived its right not to exercise the option or to pay him the $ 1 million. “Conditions and clauses of a contract may be waived, either expressly or by words and conduct.” Owen v. Kessler, 56 Mass. App. Ct. 466, 470 (2002), citing McCarthy v. Tobin, 429 Mass. 84, 88-89 (1999). While the issue of waiver is ordinarily for the fact finder, McCarthy, supra. at 88 n.5, the three encouraging and optimistic comments to which Paquet points in this case were not “consistent with and indicative of an intent to relinquish voluntarily [the discretion to exercise the option and pay the award, such] that no other reasonable explanation of [the] conduct is possible” (quotation omitted). KACT, Inc. v. Rubin, 62 Mass. App. Ct. 689, 695 (2004). See McCarthy, supra, citing Linda Coal & Supply Co. v. Tasa Coal Co., 416 Pa. 97, 101 (1964) (“If the facts are undisputed ․ waiver is a question of law”).

Paquet further argues that, if construed to give Life Technologies absolute discretion, the contract is unconscionable and unenforceable. “The determination that a contract or term is or is not unconscionable is made in the light of its setting, purpose and effect․ [A] plaintiff must show both substantive unconscionability (that the terms are oppressive to one party) and procedural unconscionability (that the circumstances surrounding the formation of the contract show that the aggrieved party had no meaningful choice and was subject to unfair surprise)” (citation and quotation omitted). Machado v. System4 LLC, 471 Mass. 204, 218 (2015).

The summary judgment record does not support a conclusion that the contract was substantively or procedurally unconscionable. Here, although we accept that Paquet took a considerable risk in working approximately 3,000 hours on his submission, he was not forced to do so, nor was he compelled to enter the competition. It was his choice to accept the competition's terms and to participate accordingly. Contrast Joule, Inc. v. Simmons, 459 Mass. 88, 100 n.16 (2011). Even characterizing the contract as one of adhesion, “there is no reason to deny [its] enforcement. In a business context such as this, there is far less reason to designate such [a contract] as unconscionable than in the typical consumer transaction.” Minassian v. Ogden Suffolk Downs, Inc., 400 Mass. 490, 492 (1987). Life Technologies' discretion was spelled out in the documents, there was no promise to award the $ 1 million absent an exercise of the option, and “[n]othing was concealed in small print or otherwise.” Id. We note also that Paquet is highly-educated, and was warned to read the documents carefully.

For these reasons, Paquet's breach of contract claim was properly decided for Life Technologies on summary judgment.

2. Breach of the implied covenant of good faith and fair dealing. The implied covenant of good faith and fair dealing, which exists in every contract, provides “that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract” (quotation omitted). Anthony's Pier Four, Inc. v. HBC Assocs., 411 Mass. 451, 471-472 (1991). The fruit of the contract here was a $ 1 million payment in exchange for Life Technologies' discretionary decision to exercise an option for exclusive rights to Paquet's intellectual property. As we have discussed above, the option to acquire those rights lay wholly in Life Technologies' discretion -- even if a particular submission met the competition criteria.

Even assuming that Life Technologies in various ways thwarted Paquet's ability to participate in the Grand Challenge Event as he alleges, ultimately, his covenant of good faith and fair dealing claim fails for the same reason as his contract claim. At the end of the day, Life Technologies retained absolute discretion not to exercise its option -- regardless of whether Paquet participated in the final event or satisfied the competition criteria. The implied covenant “may not ․ be invoked to create rights and duties not otherwise provided for in the existing contractual relationship.” Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004). “The scope of the covenant is only as broad as the contract that governs the particular relationship.” Ayash v. Dana-Farber Cancer Inst., 443 Mass. 367, 385 (2005).⁶

Judgment affirmed.

Order denying motion for reconsideration and to alter grant of summary judgment affirmed.

FOOTNOTES

3.   Although Paquet filed a general notice of appeal as to summary judgment in favor of Life Technologies, in his brief he failed to make any argument regarding the disposition of the remaining claims listed in his amended complaint. Paquet has therefore waived any argument as to those claims.

4.   Paragraph 5 of the Challenge Specific Agreement provides that Life Technologies “may, in its sole and absolute discretion, decide whether to Accept your Proposed Solution or any Proposed Solution” and that “meeting ․ the Solution Acceptance Criteria, does not mean that the Proposed Solution will be Accepted by [Life Technologies].”

5.   “[T]ermination of the Option for any reason” -- including Life Technologies' decision not to exercise it -- results in “no further obligations between you and [Life Technologies] ․ with respect to the Proposed Solution, the Solution IP, or the ․ Challenge, except for the limitations on use and disclosure”

6.   Resting our decision on the bases we do, we need not reach Paquet's arguments concerning the striking of certain of his responses and statements made pursuant to Rule 9A of the Rules of the Superior Court.