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November 19, 2013
The Georgia Court of Appeals has upheld an oral agreement that the plaintiff refused to sign. Bedsole v. Action Outdoor Advertising JV, LLC et al., 2013 WL 5951958 (Ga. Ct. App. Case No. A13A1195, dec’d Nov. 8, 2013).
In Bedsole, the plaintiff became an independent contractor to the defendant outdoor advertising company. The parties agreed that the plaintiff would be entitled to an equity percentage in certain of defendant’s billboard assets. The plaintiff refused, however, to execute the written agreement prepared by the defendant because it provided that his equity interest would terminate with his employment. Nevertheless, the plaintiff began working for the defendant and the defendant made several equity distributions to the plaintiff as provided in the unsigned contract. The defendant terminated the plaintiff in September 2010 and then refused to compensate him for an asset sale that closed in 2011. The court allowed plaintiff’s breach of contract, promissory estoppel, and breach of fiduciary duty claims to go forward, reasoning that a jury could find that since the parties conducted themselves as if the written contract was in effect, the plaintiff had a reasonable expectation that his equity compensation would be consistent with the formula set forth in the unsigned agreement. The court’s reasoning seems to have ignored the fact that the unsigned agreement that it enforced at the plaintiff’s request – even though it was the plaintiff who refused to sign it – did not entitle plaintiff to an equity distribution following his termination.