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Urban Green Technologies, LLC v. Sustainable Strategies 2050 LLC

Superior Court of Delaware

February 8, 2017

URBAN GREEN TECHNOLOGIES, LLC, a Delaware limited liability company, Plaintiff/Counterclaim Defendant,
v.
SUSTAINABLE STRATEGIES 2050 LLC, a Delaware limited liability company, and RAYOMAND BHUMGARA, Defendants/Counterclaim Plaintiffs.

         Decision After Bench Trial Verdict for Defendants/Counterclaim Plaintiffs

          David G. Holmes, Esquire, Joseph Grey, Esquire, Cross & Simon, LLC, Wilmington, Delaware, Attorneys for Plaintiff/Counterclaim Defendant.

          Brian T. N. Jordan, Esquire, Jordan Law, LLC, Wilmington, Delaware, Attorney for Defendants/Counterclaim Plaintiffs.

          MEMORANDUM OPINION

          CALVIN L. SCOTT Judge.

         I. Introduction

         This is the Court's decision following a three-day bench trial relating to certain disputes arising from a contractual relationship between Urban Green Technologies, LLC, ("UGT"), on the one hand, and Sustainable Strategies 2050 LLC ("SS2050") and its President and sole and managing member, Rayomand Bhumgara ("Bhumgara") (collectively, "Defendants" or "Mr. Bhumgara"), on the other.

         II. Findings of Fact

         UGT is a Delaware Limited Liability Company in the business of dealing solar energy projects located in Chicago, Illinois. UGT looks for suitable areas to build solar energy facilities and negotiates leases for the properties where these solar energy facilities are built. UGT uses consultants and contractors to develop the projects until the facility can be sold to a third party. Defendant, Sustainable Strategies 2050 is also a Delaware Limited Liability Company located in Wellesley, Massachusetts. The sole managing member and President of Sustainable Strategies is Defendant, Raymond Bhumgara. The current CEO of UGT is Nikola Krneta, and the former CEO, Bob Berman, stepped down in 2015 when Mr. Krneta became the CEO. Mr. Berman no longer has an active role in the company. Mr. Bhumgara established Sustainable Strategies 2050 and began working primarily with solar energy in 2010.

         While Mr. Bhumgara was in the real estate development business he met Palmer Cameron (hereinafter "Mr. Cameron"). In September 2010 Mr. Cameron called Mr. Bhumgara regarding UGT's interest in starting projects in Massachusetts. Specifically, UGT's interest was solar energy development, and UGT did not have ties to Massachusetts. Mr. Bhumgara met with Goran Rajsic, the CEO of Urban Green at the time, and Mr. Cameron in Chicago during October 2010. UGT agreed to pay him a retainer of $3, 000.00 per month, plus expenses. His duties included identifying sites, doing site visits, attending board hearings, proposals, permit projects, and finding off-takers. Mr. Bhumgara testified that he initially asked UGT to pay him $5, 000.00 per month given his involvement in the projects, but UGT was unable to meet this amount. The parties agreed he would start work on November 1, 2010, and Mr. Bhumgara sent a follow up e-mail on November 1 asking for a written agreement.

         Mr. Berman was in Boston in June 2011. Mr. Bhumgara and Mr. Berman communicated about the initial three part agreement from 2010: retainer, expenses, and commission. On June 27, 2011 Mr. Bhumgara sent Mr. Berman a draft agreement. Pursuant to this draft, UGT would pay him a $3, 000.00 per month retainer, reimbursement for reasonable expenses, and commissions within 30 days following the closing of a commercial financing of each potential project. The amount of commission was left blank, as Mr. Bhumgara testified, it was the start of negotiations and he wanted UGT to make an offer. Mr. Berman acknowledged he received the e-mail with the attached agreement the same day. On July 8, 2011, Mr. Bhumgara contacted Mr. Berman via e-mail and requested Mr. Berman take time to look over the proposed agreement and compensation structure. Mr. Berman responded "Sure to all." Again on July 24, 2011 Mr. Bhumgara sent an e-mail to Mr. Berman asking him to find time to review the draft agreement Mr. Bhumgara sent on June 27. Mr. Berman responded on July 25, 2011 stating that he and Mr. Rajsic "discussed a plan that added $7, 500.00 per megawatt of installed capacity not the properties you develop. Payable upon closing and financing." Mr. Bhumgara followed up with an e-mail on July 25, 2011 asking Mr. Berman to clarify the $7, 500.00 per megawatt proposal. Specifically, Mr. Bhumgara asked whether the $7, 500.00 per megawatt applied to properties he was involved in developing, properties he was not involved in developing, or only properties he identified and helped develop. Mr. Berman responded, "Yes to both." On July 26, 2011, Mr. Bhumgara stated that he was not clear on Mr. Berman's prior response, and asked Mr. Berman to be more specific in regard to his $7, 500.00 per megawatt proposal. Mr. Berman responded that he was in Memphis and they would "clarify tomorrow."

         Subsequently, Mr. Bhumgara sent an e-mail to Mr. Berman on July 27, 2011. Mr. Bhumgara explained that his market value based on other negotiated agreements similar to UGT's project was between $50, 000.00 and $75, 000.00 per megawatt for every opportunity he identified. On September 1, 2011 Mr. Bhumgara sent an e-mail to Mr. Berman indicating that he would reach out to some of his contacts and identify new properties in Massachusetts. He indicated that he would be "more motivated" if the Parties "could reach an agreement on a results oriented fee structure (which would only be payable upon closing of the financing)." Mr. Bhumgara also indicated that UGT's July 25 proposed commission of $7, 500.00 per megwatt was too low for his services. In October 2011 Mr. Bhumgara reached out to UGT again. This time he asked UGT to consider increasing his monthly retainer from $3, 000.00 to $5, 000.00. UGT continued to pay Mr. Bhumgara the $3, 000.00 per month and the expenses owed to him. He also indicated that they could "discuss the performance based fee later."

         Mr. Berman was in Boston in December of 2011 for a Planning Board meeting. Mr. Berman and Mr. Bhumgara discussed putting an agreement together, and Mr. Bhumgara testified that it focused on his commission. Mr. Bhumgara followed up with an e-mail on December 30, 2011. He stated, "as we discussed a few days ago, I need an agreement very soon as we continue our partnership into 2012 and beyond. Please discuss with Goran and send me your offer." Mr. Bhumgara acknowledged that the parties could either use the agreement he sent to UGT on June 27, 2011, or use an agreement UGT developed. Consequently, Mr. Bhumgara sent Mr. Berman another e-mail on January 7, 2012 asking Mr. Berman to prioritize their compensation agreement, and that he was willing to negotiate a multi-tiered compensation agreement. Mr. Berman responded that he and Mr. Rajsic reached a preliminary agreement. On February 14, 2012 Mr. Rajsic sent Mr. Bhumgara an e-mail with a draft consulting agreement. Mr. Bhumgara replied on February 15, 2012 stating that he did not agree with the fee, and he would send a counter offer. Similarly, on February 17, 2012 Mr. Bhumgara sent an email to UGT stating that he would send a new draft agreement, and the gap between what he was paid on other projects ($50, 000 to $75.000 per megawatt), compared to the amount UGT proposed, was too high. Mr. Bhumgara sent a markup of the agreement with his comments on February 27, 2012.

         As of March 2012, the Parties had not signed an agreement, and Mr. Bhumgara did not receive his monthly retainer and expenses from UGT. Mr. Bhumgara notified Mr. Berman via e-mail. Mr. Bhumgara and Mr. Berman met between March 19, 2012 and March 20, 2012 in Boston. Mr. Berman and Mr. Bhumgara discussed the compensation agreement. Mr. Bhumgara testified that he ultimately told Mr. Berman that he could agree to $35, 000.00 per megawatt for all projects he worked on that sold. Mr. Bhumgara received a call on March 22, 2012 from Mr. Berman who agreed to pay $35, 000.00 per megawatt. Mr. Bhumgara sent Mr. Berman an e-mail on March 26, 2012 stating that he would revise an agreement based on the terms they agreed to, and clarify his role and responsibilities.

         Mr. Bhumgara sent a revised agreement to Mr. Berman on March 27, 2012. This revised agreement stated that UGT would pay Mr. Bhumgara a $3, 000.00 monthly retainer, expenses, and $35, 000.00 per megawatt for projects identified by him and/or projects he provided active development support in. Mr. Berman received this document, and no agreement was signed, nor were there any further communications about this agreement. In March 2013, a full year later, Mr. Bhumgara testified that the projects were advancing and he was putting a lot of time into the UGT projects. Mr. Berman came back to Boston, and he expressed concerns to Mr. Bhumgara about the projects. Mr. Berman was unsure if they would get buyers for the project, and he told Mr. Bhumgara that he wanted to modify the agreement. Mr. Berman wanted to modify the agreement because the $35, 000.00 per megawatt commission was not tied to the sale price of the project. On March 18, 2013 Mr. Bhumgara sent Mr. Berman an e-mail to follow up with their conversation about a fee agreement, and attached a new agreement. Mr. Bhumgara sent more follow up e-mails regarding his compensation, which ultimately led to this litigation.

         The parties stipulated at trial that Defendant was paid a total of $138, 664.48, which consisted of $3, 000.00 per month for 39 months beginning on November 23, 2010 and ending December 3, 2013, and $21, 664.48 in total expenses.[1] Although Mr. Bhumgara worked on other projects with UGT, there are three specific projects subject to this litigation: Billerica, Lancaster, and Oxford. All three project sites are located in Massachusetts, and each project sold.

         III. Parties' Contentions

         UGT argues that although it had an oral contract with Defendants to pay a monthly retainer and expenses, UGT is not contractually bound to pay Defendants commission on the Projects because the agreements did not produce a signed writing. Specifically, UGT argues that Defendants cannot prove that a contract was formed between the parties in March 2012. Defendants counterclaim is for breach of contract based on the March 27, 2012 document Mr. Bhumgara sent to UGT. Defendants argue that this agreement is an enforceable contract because there was a meeting of the minds between the Parties. UGT argues that the March 27 agreement is not an enforceable contract; rather it was a counteroffer to UGT's February 14 ...


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