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Yee v. Anji Technologies, LLC

Court of Appeals of Texas, Fifth District, Dallas

May 15, 2019

WENDY YEE, Appellant
v.
ANJI TECHNOLOGIES, LLC, Appellee

          On Appeal from the 401st Judicial District Court Collin County, Texas, Trial Court Cause No. 401-03706-2017

          Before Justices Myers, Molberg, and Carlyle.

          MEMORANDUM OPINION

          KEN MOLBERG JUSTICE.

         Wendy Yee was employed by Anji Technologies, LLC (Anji) as a senior vice president. After Anji terminated her employment, Yee sued, claiming she was entitled to (1) fifty percent of Anji's profits from 2012 through 2015 under an oral partnership agreement (the partnership agreement) and (2) fifty percent of Anji's profits from a specific contract under an oral agreement made when her employment was terminated (the Alcara agreement). Yee asserted claims for breach of contract, promissory estoppel, breach of fiduciary duty, and quantum meruit.

         Anji moved for summary judgment on all of Yee's claims on the ground the partnership agreement did not comply with the statute of frauds. The trial court granted summary judgment on all of Yee's claims.

         In her first two issues, Yee argues the trial court erred by granting summary judgment in favor of Anji because Anji failed to conclusively establish the statute of frauds applies to the oral agreements and there was a genuine issue of material fact regarding the applicability of the partial performance exception to the statute of frauds. In a third issue, Yee contends the trial court erred by granting summary judgment on her quantum meruit claim because the statute of frauds is not a defense to that claim.

         We conclude Anji conclusively established the statute of frauds bars Yee's claims based on the partnership agreement and that Yee failed to raise a genuine issue of material fact on the applicability of the partial performance exception to the statute of frauds. Accordingly, we affirm the trial court's summary judgment on Yee's claims for breach of fiduciary duty and breach of contract to the extent that claim is based on breach of the partnership agreement.

         However, because the statute of frauds does not bar either Yee's quantum meruit or promissory estoppel claims and Anji did not conclusively establish the Alcara agreement is subject to the statute of frauds, we reverse the trial court's summary judgment on Yee's quantum meruit and promissory claims and on Yee's breach of contract claim to the extent that claim is based on breach of the Alcara agreement.

         Background

         Anji was formed in 2007 by Rajesh Tiwari and his wife, Madhu Tiwari. Madhu owns sixty percent of Anji and Rajesh owns the remaining forty percent of the company. Anji is a management and technology consulting firm and provides information technology solutions, application development, and total project management consulting services to its clients.

         Yee is a senior information technology management professional with extensive experience in the telecommunications, logistic-warehousing, and financial industries. According to Yee, Rajesh approached her in January 2012 about forming a partnership with Anji to provide technology consulting services in software development and testing. Pursuant to the partnership agreement, Yee and Rajesh would split the responsibilities of the partnership "50/50." Specifically, Yee would manage the daily operations, provide onsite client software testing services, and present Anji's services to potential clients, while Rajesh would handle all aspects of software development and technical support. Both Anji and Yee would receive fifty percent of the partnership's profits

         The partnership agreement was not in writing and, according to Yee, did not set an end date. In Yee's opinion, the partnership agreement "could have been performed and terminated within the first year."

         In March 2012, Rajesh, Yee, and Yee's husband, Evon Mattison, had at least two meetings to discuss a potential partnership between Anji and Epsilon Service Delivery (Epsilon), a company owned by Mattison. Yee prepared notes from the meetings which indicated she was responsible for developing business strategies for the proposed partnership. Yee emailed the meeting notes to both Rajesh and Mattison. Rajesh did not request that Yee make any changes to the notes.

         Anji and Epsilon did not reach an agreement on the proposed partnership, and Mattison "disengaged from all discussion" with Anji. Yee and Mattison then "made the decision for [Yee] to move forward with the partnership with Anji." According to Yee, beginning in March 2012, she "began working 100% on developing" Anji's business.

         On October 15, 2012, Yee agreed to "be added to [Anji's] payroll" as a senior vice president with an annual salary of $90, 000. It was Yee's understanding that Rajesh and Madhu were also being paid $90, 000 a year by Anji. According to Yee, her salary at Anji was significantly less than what she had been making as an independent consultant, but she agreed to a "below-market salary" because Anji represented it would help the company if she was added to the payroll register. Rajesh indicated to Yee that the difference between her "client billed amount" and her salary would be her "financial equity contribution" to the partnership. Based on the additional compensation that she believed she would receive under the partnership agreement, Yee refused offers to continue working as an independent contractor.

         Yee understood that any profits of the partnership would initially be reinvested in order to grow Anji's business and to show a strong bank balance to potential new clients. She, therefore, made an "initial 5-year commitment" to the business. She described this commitment as a "unilateral personal guideline" and not part of the partnership terms. Based on this five-year commitment, Yee did not request any distribution of the partnership's profits, but relied on Anji's representation that she would be paid.

         On February 23, 2016, Rajesh terminated Yee's employment with Anji. Yee then requested payment under the partnership agreement. Anji did not make the requested payment. However, according to Yee, when Rajesh terminated her employment, he orally agreed to pay her fifty percent of the profits on the Alcara project which had just "closed out."

         Yee sued Anji, asserting claims for breach of contract, promissory estoppel, breach of fiduciary duty, and quantum meruit. Yee alleged that "in reliance on the partnership agreement," she had performed work for Anji for which she was not compensated and had used her personal funds to pay for Anji's office expenses and certain client non-billable client expenses. Yee sought to recover approximately $3, 500, 000, consisting of fifty percent of Anji's profits between 2012 and 2015 and fifty percent of Anji's profits on the Alcara project, and approximately $41, 000 in unreimbursed expenses and costs.

         Anji filed a motion for summary judgment based on the affirmative defense of the statute of frauds. Anji specifically argued there was no written agreement and the partnership agreement could not have been performed within one year. The trial court granted summary judgment for Anji on all of Yee's claims.

         Standard of Review

         We review a trial court's grant of summary judgment de novo. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). To be entitled to a traditional summary judgment, the movant must show no genuine issue of material fact exists and the movant is entitled ...


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