MEMORANDUM OPINION AND ORDER
MADELINE HUGHES HAIKALA, District Judge.
This case is before the Court on the Alabama Space Science Exhibit Commission's motion for summary judgment. (Doc. 89).
In its complaint, ASSEC asks the Court to declare that its "Offer to Enter into License Agreement" with Odysseia expired and to enjoin Odysseia from claiming rights under the draft licensing agreement attached to the Offer document. (Doc. 1-1, p. 5). In its answer, Odysseia asserts state law counterclaims for breach of contract, unjust enrichment, promissory estoppel, and promissory fraud. (Doc. 32, pp. 13-18). ASSEC has asked the Court to enter judgment in its favor on Odysseia's counterclaims. (Doc. 89). This opinion resolves ASSEC's summary judgment motion.
The opinion is organized in three sections. First, the Court outlines the standard for a Rule 56 motion for summary judgment. Then, the Court discusses the evidence concerning the ASSEC-Odysseia relationship. Finally, the Court identifies the legal standards that govern Odysseia's state law claims and examines the summary judgment evidence under those standards.
A district court "shall grant summary judgment if the movant shows that 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). To demonstrate a genuine dispute as to a material fact, a party must cite "to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." FED. R. CIV. P. 56(c)(1)(A). "The court need consider only the cited materials, but it may consider other materials in the record." FED. R. CIV. P. 56(c)(3).
"A litigant's self-serving statements based on personal knowledge or observation can defeat summary judgment." United States v. Stein, 881 F.3d 853, 857 (11th Cir. 2018). Even if a district court doubts the veracity of the evidence, the court cannot make credibility determinations. Feliciano v. City of Miami Beach, 707 F.3d 1244, 1252 (11th Cir. 2013) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)). Conclusory statements in a declaration cannot by themselves create a genuine issue of material fact. See Stein, 881 F.3d at 857 (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).
When considering a motion for summary judgment, a district court views the evidence in the record in the light most favorable to the non-moving party and draws reasonable inferences in the non-movant's favor. Asalde v. First Class Parking Sys. LLC, 898 F.3d 1136, 1138 (11th Cir. 2018). Accordingly, for ASSEC's summary judgment motion, the Court views the evidence in the light most favorable to Odysseia and draws all reasonable inferences in Odysseia's favor.
ASSEC owns and operates "Space Camp®" and licenses the program and related products internationally. (Doc. 1-1, p. 3, ¶¶ 6, 8). On March 20, 2006, Odysseia agreed in writing to pay ASSEC "a nonrefundable payment in the amount of U.S. $1,750,000 for a Space Camp® license . . . ." (Doc. 1-3, p. 2, ¶ 2). The writing consists of a four-page signed "Offer to Enter into License Agreement" which contains the license fee provision quoted in the previous sentence and a 24-page unsigned Draft License Agreement attached as an appendix to the Offer document. (Doc. 1-3, pp. 2-5; Doc. 1-3, pp. 6-29). The Draft License Agreement contains the following provision concerning a license fee:
(Doc. 1-3, p. 10, ¶ V(A)).
The Offer document established a timetable for Odysseia to pay the nonrefundable $1.75 million license fee in three installments.
(Doc. 1-3, p. 3, ¶ 2). The fee provision in the Offer document expressly links the nonrefundable $1.75 million consideration for ASSEC's offer to the fee provision in the Draft License Agreement. The fee provision in the Offer states:
(Doc. 1-3, p. 3, ¶ 2).
The Offer contains an option for extending the "offer termination date" for up to one year. The Offer states:
(Doc. 1-3, pp. 2-3, ¶¶ 1, 2). The four extensions were exercisable on or before July 1, 2007; October 1, 2007; January 1, 2008; and April 1, 2008. (Doc. 1-3, p. 2). If Odysseia exercised all four extensions, the Offer would expire on August 1, 2008. (Doc. 1-3, p. 2).
Regarding the expiration of the Offer, the agreement states:
(Doc. 1-3, p. 4, ¶¶ 9-10).
The Offer obligated Odysseia "[p]rior to execution of the Licensing Agreement" to "promptly" give ASSEC information ASSEC requested "pertaining to the status of development of the facility to be licensed pursuant to the Licensing Agreement (the `Facility'), and any other specified information such as, without limitation, investment information, ownership information, and financial information." (Doc. 1-3, p. 4, ¶ 4). The Offer indicates that the Offer Agreement "and the attachments hereto shall constitute the full and complete agreement" between the parties. (Doc. 1-3, p. 4, ¶ 5). The Offer states that it "may only be amended by a writing duly executed pursuant to all corporate or other authority by the parties hereto," (Doc. 1-3, p. 4, ¶ 6), and provides that the agreement must be interpreted and construed according to Alabama law, (Doc. 1-3, p. 5, ¶ 12). The Offer is signed by U.S. Space & Rocket Center CEO General Larry R. Capps and by Odysseia CEO Dr. Byung-Rok Song. (Doc. 1-3, p. 5).
The "Draft Agreement Copy" of the "U.S. Space & Rocket Center® License Agreement" between ASSEC and Odysseia, for a "date to be determined," states that ASSEC, "within one hundred twenty (120) days of the final payment of the license fee," "shall make available" to Odysseia "prototype building design concepts of the training center, dormitory, cafeteria, and gift shop, including interior and exterior designs, signs, and such descriptions or specifications for equipment for the Facility" and "shall give" Odysseia "reasonable opportunities to question" ASSEC about those documents. (Doc. 1-3, p. 6 (emphasis in Draft Agreement); Doc. 1-3, p. 11, ¶ VI.A).
Under the draft license agreement, during the term of the agreement, "except as otherwise provided," ASSEC could not "establish, directly or indirectly nor license another to establish, any part of the Space Camp Business" in South Korea "or elsewhere, without [Odysseia's] prior written consent." (Doc. 1-3, p. 8, ¶ II.C).
Each page of the draft license agreement contains the notation "Draft Agreement Copy" in the upper right-hand corner, (Doc. 1-3, pp. 6-29), and the notation "DRAFT AGREEMENT DO NOT SIGN" appears to the left of the signature lines for General Capps and Dr. Song on the final page of the draft license agreement, (Doc. 1-3, p. 29).
Notations on the fee provision in the Offer document in English and in Korean reflect dates on which Odysseia made payments toward the $1.75 million license fee. Odysseia made a $500,000 license fee payment on April 13, 2007. (Doc. 1-3, p. 3). Odysseia made another $250,000 payment at some point before June 4, 2007. (Doc. 1-3, p. 3; Doc. 1-5, p. 6).
On June 4, 2007, less than one month before the final $1 million license payment was due, Odysseia asked ASSEC to extend the Offer Termination Date per paragraph 2 of the Offer document. (Doc. 1-3, p. 3; Doc. 87-25, p. 2). In a letter to General Capps, Dr. Song stated:
(Doc. 87-25, p. 2).
On June 28, 2007, ASSEC agreed to extend the Offer Termination Date. (Doc. 1-5, p. 6). In a letter to Dr. Song, General Capps wrote:
(Doc. 1-5, p. 6). On June 29, 2007, Dr. Song signed General Capps's letter, indicating his acceptance of the payment schedule for Odysseia's final $1 million obligation. (Doc. 1-5, p. 6).
Odysseia made a payment of $250,000 on July 26, 2007; a payment of $250,000 on September 21, 2007; a payment of $150,000 on June 30, 2008; and a payment of $350,000 on July 31, 2008. (Doc. 1-3, p. 3; Doc. 1-5, p. 6; Doc. 88-22, pp. 14-15, tpp. 152-53). In a letter dated September 2, 2008, Mike Kelly, ASSEC's Vice President of Licensing, acknowledged that Odysseia had "completed the payment plan, in full, to purchase a Space Camp license." (Doc. 88-4, p. 17). Mr. Kelly stated that Odysseia's completed payment "completes the `offer to Enter a License Agreement[`] and opens the process for signing a final license agreement." (Doc. 88-4, p. 17). Mr. Kelly concluded: "Please inform me when you intend to sign the final license agreement. Congratulations on becoming the Space Camp licensee for Korea." (Doc. 88-4, p. 17).
Despite Mr. Kelly's acknowledgment that Odysseia had become the Space Camp licensee for South Korea, ASSEC did not sign a license agreement with Odysseia. (Doc. 88-22, p. 9, tp. 130). There is no evidence that ASSEC ever provided to Odysseia a final, dated license agreement for Odysseia's signature. Through Un Seop Song, a South Korean advisor who ASSEC retained to help identify a Space Camp licensee for Korea, ASSEC communicated to Dr. Song that it would not sign a license agreement with Odysseia until Odysseia "identified a location for the [Space Camp] acceptable to ASSEC and demonstrated the proof of funds to start the Projects." (Doc. 96-1, p. 2, ¶ 6).
On June 9, 2010, ASSEC sent Odysseia a letter "to notify and confirm the expiration of the `Offer' agreement dated March 20, 2006." (Doc. 88-4, p. 19). In the letter, Mr. Kelly stated that the Offer:
(Doc. 88-4, p. 19).
Odysseia responded on June 18, 2010. Dr. Song wrote that Odysseia was performing its duties, but ASSEC was not fulfilling its obligations. (Doc. 88-4, pp. 20-22). Dr. Song stated:
(Doc. 88-4, pp. 20-21). Dr. Song quoted the license agreement provisions that required ASSEC to make available to Odysseia within 120 days of the full payment of the license fee the Space Manual and prototype design concepts. (Doc. 88-4, pp. 21-22). Dr. Song concluded: "I officially request for a written signature in the `USSRC License Agreement' which is attached to the contract between Odysseia and USSRC." (Doc. 88-4, p. 22). Dr. Song offered to travel to Huntsville to sign the license agreement. (Doc. 88-4, p. 22).
In a July 1, 2010 email to Dr. Song, ASSEC reasserted its right to terminate the Offer but indicated that it might reconsider its decision to terminate if Odysseia produced a detailed plan for the Space Camp® project. (Doc. 88-4, p. 23). In the email, Mr. Kelly wrote:
(Doc. 88-4, p. 23).
Odysseia responded the same day. (Doc. 88-4, p. 40). Odysseia stated that it was preparing to enter an agreement with a local government to select a project site and was proceeding with investor discussions. (Doc. 88-4, p. 40). Dr. Song wrote:
(Doc. 88-4, p. 40).
In July 2010, Odysseia sent ASSEC a document labeled "Space Camp Korea Development Plan." (Doc. 88-4, pp. 25-39).
In an October 12, 2010 email, Odysseia informed ASSEC of project developments and informed ASSEC that the project was stuck with "no further progress" because Dr. Song did not have a Space Camp Manual and could not share details about the project with potential investors. (Doc. 88-5, p. 4). Dr. Song asked ASSEC to provide a project manual and other information. (Doc. 88-5, p. 4). He wrote:
(Doc. 88-5, p. 4).
An internal ASSEC file containing details of the Odysseia licensing agreement bore a sticky note on which Mr. Kelly wrote "Korea — Paid in Full; Option Expired; Not Open; No Government Approval; Need License Agreement." (Doc.
Dr. Deborah Barnhart, who replaced General Capps as ASSEC's CEO and Executive Director in December 2010, testified that in January 2011, Mr. Kelly brought this file and others related to licensing opportunities to her for review. Each folder had a sticky note describing the status of the relevant licensing agreement. (Doc. 88-17, pp. 17-18, 21-22, tpp. 64-65, 80-81). Dr. Barnhart testified that she "had no reason to ask questions about the development of Space Camp Korea because the option in this folder had expired." (Doc. 88-17, p. 24, tp. 89). Dr. Barnhart did not ask Mr. Kelly why his note indicated "paid in full" or "need license agreement." (Doc. 88-17, p. 24, tp. 90).
On July 2, 2012, Odysseia sent a letter to ASSEC describing the status of the Space Camp® project and noting concerns. Dr. Song explained he had made progress with the project's budget and site selection. (Doc. 88-5, pp. 38-40). Dr. Song indicated that the South Korean local government entity with which Odysseia hoped to work had questions for ASSEC and that he needed ASSEC's assistance in promoting the project with investors. (Doc. 88-5, pp. 38-40). Dr. Song wrote:
(Doc. 88-5, pp. 39-40).
On July 10, 2012, Wookjin Hyun, the manager of the Park and Recreation Department of Yong-In, a city in South Korea, sent an email to Jennifer Crozier, the Executive Director of the U.S. Space & Rocket Center Foundation, asking questions about Odysseia's Space Camp® project. (Doc. 88-5, pp. 47-48; Doc. 88-1, p. 7, tp. 23). Ms. Crozier responded by typing her replies into the original email. (Doc. 88-5, pp. 47-48). The email with Ms. Crozier's responses states:
(Doc. 88-5, pp. 47-48).
Minutes from a July 18, 2012 joint meeting of ASSEC's Business and Executive Committees state under the topic "Licensing": "Initial Korea contract was terminated in June 2010; however, interest remains and the Center has been paid $1.75 million to date." (Doc. 88-5, p. 45).
Though ASSEC had not issued a license to another party in South Korea in the summer of 2012, ASSEC was exploring its options. On July 26, 2012, Mr. Song notified Ms. Crozier that he had located a new company that he believed was a promising candidate for a Space Camp® licensee in South Korea. (Doc. 88-2, pp. 28-29). Between August of 2012 and December of 2012, ASSEC eliminated Odysseia from a comprehensive list of ASSEC contracts. In its August 2012 contract report, ASSEC indicated that the expiration date of Odysseia's Offer was "TBD" — to be determined. (Doc. 88-5, pp. 5, 15). By December 31, 2012, Odysseia had disappeared from ASSEC's contract list, (Doc. 88-5, pp. 22-38), and Mirinae Development Co., Ltd. had replaced Odysseia as ASSEC's potential licensee in South Korea, (Doc. 88-5, p. 31). In its December 31, 2012 contract report, ASSEC indicated that it had agreed to an "Option to Enter Licensing Agreement" with Mirinae on October 25, 2012. (Doc. 88-5, p. 31).
The Option itself is dated October 23, 2012. (Doc. 88-3, p. 30). The Option between Mirinae and ASSEC calls for a $150,000 nonrefundable option fee which "is 10% of the total License Fee of $1,500,000" and payable toward the full $1,500,000 license fee that was due at the signing of the license agreement. (Doc. 88-3, p. 31). Mirinae's Option with ASSEC obligated ASSEC to "fully cooperate" with government officials in South Korea who would be responsible for permitting a Space Camp facility in the country and obligated ASSEC to supply to Mirinae all "information and documents" that Mirinae would need to obtain permits and approvals for the "Space Camp Business." (Doc. 88-3, p. 33). The Option states:
(Doc. 88-3, pp. 33, 34, ¶¶ 8, 12).
On November 8, 2013, ASSEC signed a licensing agreement with Mirinae. (Doc. 88-3, pp. 36-63; Doc. 88-3, p. 58 (date of contract)). ASSEC representatives visited Mirinae representatives in South Korea once before ASSEC representatives signed the option agreement with Mirinae in October of 2012 during a second visit to South Korea. (Doc. 88-1, pp. 42-43, tpp. 165-66). ASSEC representatives traveled to South Korea at least three times in connection with the Mirinae project. (Doc. 88-17, p. 29, tp. 111).
In a November 26, 2013 letter to ASSEC, Dr. Song requested information about ASSEC's relationship with Mirinae and asserted that a licensing relationship between ASSEC and Mirinae would breach ASSEC's contract with Odysseia. (Doc. 1-5, pp. 3-5). Dr. Song asked ASSEC again to sign a license agreement with Odysseia. (Doc. 1-5, pp. 3-5). Dr. Song wrote:
(Doc. 1-5, pp. 3-5).
On December 20, 2013, ASSEC's lawyers told Odysseia that ASSEC had entered into a license agreement with Mirinae. The lawyers asked Odysseia to stop alleging it had entered into a licensing agreement with ASSEC. (Doc. 1-6, pp. 2-3). The lawyers stated in part:
(Doc. 1-6, pp. 2-3).
On February 6, 2014, ASSEC sued Odysseia in the Circuit Court of Madison County, Alabama. (Doc. 1-1, p. 8). ASSEC sought to enjoin Odysseia "from claiming any right" under the Offer "to enter into a license agreement with ASSEC for Space Camp® program in South Korea . . . ." (Doc. 1-1, p. 5). ASSEC also requested an order declaring that Odysseia's Offer "expired prior to the execution of a final license agreement and that [Odysseia] does not have an option to enter into a license agreement . . . ." (Doc. 1-1, p. 5). Odysseia removed the case to federal court and, in its answer, asserted counterclaims against ASSEC for breach of contract, promissory fraud, unjust enrichment/quantum meruit, and promissory estoppel. (Doc. 1; Doc. 32, pp. 13-18).
To evaluate Odysseia's state law claims, the Court begins with a fundamental question — what is the nature of the Offer document that ASSEC and Odysseia executed?
To answer the question, the Court must examine the Offer and the attached draft license agreement "to determine from an examination of the entire contract the intention of the parties under the terms of the contract." McGuire v. Andre, 65 So.2d 185, 189 (Ala. 1953). The "nature of a contract is to be determined by the terms and conditions of the contract itself and not by the name given to it. It is not a question of what the parties call a contract, but what they put in the contract, because the law regards substance and not form." McGuire, 65 So. 2d at 190. "Whether a contract is ambiguous is a question of law for the trial court, Mass Appraisal Services, Inc. v. Carmichael, 404 So.2d 666 (Ala.1981), and when a court determines that a contract is ambiguous, then ascertainment of its meaning is a question for the factfinder . . . . Miles College, Inc. v. Oliver, 382 So.2d 510 (Ala. 1980)," Franklin v. Jones, 466 So.2d 96, 98 (Ala. 1985). An ambiguity may appear on the face of a contract, or an ambiguity may be latent such that it "is shown to exist for the first time by matter outside of the writing." Carmichael, 404 So. 2d at 672 (citations omitted). In either instance, extrinsic evidence is admissible to clarify the ambiguity. Carmichael, 404 So. 2d at 672.
An ordinary contract has four elements: "an offer and an acceptance, consideration, and mutual assent to the essential terms of the agreement." Stacey v. Peed, 142 So.3d 529, 531 (Ala. 2013) (quoting Hargrove v. Tree of Life Christian Day Care Ctr., 699 So.2d 1242, 1247 (Ala. 1997)). An option contract has only two elements: "the offer to sell which does not become a contract until accepted and, second, the completed contract to leave the offer open for a specified time." McGuire, 65 So. 2d at 189-90. Option agreements often relate to real estate. In that context, an option is:
Holk v. Snider, 316 So.2d 675, 677 (Ala. 1975).
Frequently, an option agreement is signed only by the offeror. The mere execution of an instrument by both parties does not "make the instrument a bilateral contract, but it is certainly an indication that both parties intended to be bound by the terms and conditions of the instrument." McGuire, 65 So. 2d at 190 (citing Gutierrez del Arroyo v. Graham, 227 U.S. 181 (1913) for the proposition that an agreement for the sale of property appeared to be a contract rather than an option because the instrument was signed by both parties).
The fact that an offer instrument does not bind the offeree to pay the full contract price "undoubtedly creates a difficulty," but "the fact that the contract does not formally bind the party to make payment is not regarded as conclusive of its character." McGuire, 65 So. 2d at 190. "In other words there need be no express agreement that the purchaser has agreed to buy, but where it appears from the contract that the intent was to consummate a sale, the absence of an express agreement to purchase does not limit the contract merely to one of option, but it will be held to be a contract of purchase and sale." McGuire, 65 So. 2d at 190.
"An option must be supported by some consideration to render it more than an offer revocable before acceptance. The amount of the consideration is generally immaterial, but if an option is not supported by consideration, the offer is a mere gratuity which may be withdrawn at any time before acceptance." Crowley v. Bass, 445 So.2d 902, 903 (Ala. 1984). Ordinarily, the consideration for an option agreement is not the full contract price. McGuire, 65 So. 2d at 190; Bethea v. McCullough, 70 So. 680, 683 (Ala. 1915). But an optionor may require tender of the contract price as a condition of acceptance of an option. McMillan, Ltd. v. Warrior Drilling & Eng'g Co., 512 So.2d 14, 23 (Ala. 1986) (discussing a stock purchase option).
Ordinarily, "`the contemplated mode of acceptance by an option holder is the giving of a notice [within the stated period] resulting in a bilateral contract.'" McMillan, 512 So. 2d at 22 (quoting 1A Corbin on Contracts, "Option Contracts," § 264, at 518 (1950)). "Any restrictions or conditions on the mode of acceptance, must, therefore, be expressly stated by the optionor in the option contract." McMillan, 512 So. 2d at 22. An optionor "may require that notice of acceptance be given in writing (Smith v. Cleveland, 289 Ala. 401, 268 So.2d 14 (1972)), or that the option be exercised by paying the purchase price within the stated time (Nashville Trust Co. v. Cleage, 246 Ala. 513, 21 So.2d 441 (1945))." McMillan, 512 So. 2d at 22. "[T]he acceptance of an option must be substantially as required by its terms and all conditions complied with." McMillan, 512 So. 2d at 22 (quoting Madison Limestone Co. v. McDonald, 87 So.2d 539, 544 (Ala. 1956)). Absent a provision in an option contract dictating "`the manner by which an option can be exercised, it is the general rule that any manifestation, either oral or written, indicating an acceptance on the part of the optionee is sufficient.'" McMillan, 512 So. 2d at 22 (quoting Duprey v. Donahoe, 323 P.2d 903, 905 (Wash. 1958), in turn citing 55 Am. Jur. 507, § 38; 1 Corbin on Contracts 872, § 264).
Frequently, after an offeree provides notice of acceptance of an option, the parties, as part of their mutual obligations upon acceptance, must finalize various instruments to complete the transaction. McMillan, 512 So. 2d at 23 (quoting Duprey, 323 P.2d at 906). For example, when a party exercises an option for the purchase of real property, to complete the sale, the parties must execute documents conveying title to the property. When the date for completion of all steps required to finalize the underlying contract — here a license agreement — "`is not definitely fixed in the [option] contract, a reasonable time after acceptance [of the option] must be allowed to perform'" the underlying contract. McMillan, 512 So. 2d at 23 (quoting Duprey, 323 P.2d at 906) (italics added in McMillan). When an option agreement is silent as to the method of conveyance, "usage or custom becomes a part of the contract," and "the `manner of performance as well as the terms of performance of a contract may be implied from the facts.'" Brown v. Butts, 214 So.3d 1181, 1188 (Ala. Civ. App. 2016) (quoting first Green Tree Fin. Corp. of Ala. v. Wampler, 749 So.2d 409, 415 (Ala. 1999), and then Watts Homes, Inc. v. Alonzo, 452 So.2d 1331, 1332 (Ala. Civ. App. 1984)).
"The existence vel non of a contract is determined by reference to the reasonable meaning of the parties' external and objective manifestations of mutual assent." Deeco, Inc. v. 3-M Co., 435 So.2d 1260, 1262 (Ala. 1983). "Conduct of one party from which the other may reasonably draw the inference of assent to an agreement is effective as acceptance." Deeco, 435 So. 2d at 1262 (citing Mayo v. Andress, 373 So.2d 620, 624 (Ala. 1979)). By way of example, the Alabama Supreme Court has explained that where a draft agreement expressly provides that it must be signed to become effective but the offeror writes letters to the offeree acknowledging the contract, the offeror's conduct raises a question of fact as to the existence of a contract, despite the fact that the formal agreement between the parties is not fully executed. Deeco, 435 So. 2d at 1262 (citing Empire Machinery Co. v. Litton Business Telephone Systems, 566 P.2d 1044, 1050 (Ariz. 1977)).
Applying these principles, the Offer document bears several characteristics of a contract. The Offer is like a contract in that both ASSEC and Odysseia signed the Offer; Odysseia had to pay the full license fee as consideration for the Offer; and Odysseia had an obligation to perform under the Offer in that, until the parties signed the license agreement, Odysseia had to "promptly" respond to requests from ASSEC regarding "the status of the development of the facility to be licensed" as well as "investment information, ownership information, and financial information." (Doc. 1-3, p. 4, ¶ 4).
But the Offer also contains language associated with option agreements. For example, the Offer contains an introductory "WHEREAS" clause that provides: "WHEREAS, Licensee has requested Licensor to leave its offer to enter into the License Agreement with Licensee open until . . . August 1, 2017 (unless extended per paragraph 2)." (Doc. 1-3, p. 2). The Offer also states: "During the period of effectively [sic] of this agreement the Licensor agrees to negotiate exclusively with the Licensee to enter into a license agreement for the territory of South Korea." (Doc. 1-3, p. 4, ¶ 9).
Still, the Offer states that it and the attachments to it — meaning the draft license agreement — "shall constitute the full and complete agreement between Licensor and Licensee with respect to the subject matter hereof. . . ." (Doc. 1-3, p. 4, ¶ 5). The Offer also states: "In consideration of Licensor's offer, Licensee agrees to pay Licensor a nonrefundable payment in the amount of U.S. $1,750,000 for a Space Camp® license . . .," (Doc. 1-3, p. 2, ¶ 2) (emphasis added), not for the option for a Space Camp® license. And the license fee provision in the draft license agreement states that ASSEC must receive the entire $1.75 million license fee on or before the effective date of the license agreement. (Doc. 1-3, p. 10, ¶ V(A)). Viewing the evidence in the light most favorable to Odysseia, full payment of the license fee was acceptance of ASSEC's offer of a Space Camp® license.
To further confuse matters, full payment of the license fee triggered several obligations for ASSEC under the draft license agreement. For example, the draft license agreement provides that ASSEC, "within one hundred twenty (120) days of the final payment of the license fee," "shall make available" to Odysseia "prototype building design concepts of the training center, dormitory, cafeteria, and gift shop, including interior and exterior designs, signs, and such descriptions or specifications for equipment for the Facility" and "shall give" Odysseia "reasonable opportunities to question" ASSEC about those documents. (Doc. 1-3, p. 11, ¶ VI.A; see also Doc. 1-3, p. 12, ¶ VI.G). ASSEC's obligation is tethered to payment of the $1.75 million license fee, not the execution of the draft license agreement.
Having examined the entire Offer document and the attached draft license agreement, the Court finds that the Offer is ambiguous, and "there remain genuine issues of material fact as to the true intentions of the parties to the contract at issue." J.I.T. Services, Inc. v. Temic Telefunken-RF, Eng'g, L.L.C., 903 So.2d 852, 858 (Ala. Civ. App. 2004). A factfinder must sort through the evidence and determine whether the Offer is an option contract or an ordinary contract for a license agreement. In weighing the evidence to make this determination, jurors will be able to consider extrinsic evidence such as the September 2, 2008 letter in which Mike Kelly, ASSEC's Vice President of Licensing, congratulated Dr. Song "on becoming the Space Camp licensee for Korea." (Doc. 88-4, p. 17). Jurors also will be able to consider ASSEC's efforts to enlist Mirinae as a Space Camp licensee in South Korea. Unlike the "Offer to Enter into Licensing Agreement" that ASSEC signed with Odysseia, ASSEC entered an "Option to Enter Licensing Agreement" with Mirinae. (Doc. 88-5, p. 31). The Option instrument between ASSEC and Mirinae states: "In consideration of Licensor's offer, Licensee agrees to pay Licensor a nonrefundable option fee (`Option Fee') in the amount of $150,000 USD for a Space Camp® License. The option fee payment of $150,000 USD is due within 7 business days upon signing the Option Agreement . . . The Option Fee is 10% of the total License Fee of $1,500,000 (`Total License Fee')." (Doc. 88-3, p. 31, ¶ 2). Mirinae's Option required payment of the total $1.5 million license fee "upon signing of the Licensing Agreement." (Doc. 88-3, p. 31, ¶ 2).
Breach of Contract
Odysseia contends that ASSEC breached the Offer in several ways: ASSEC "refus[ed] to move forward and execute the formal license agreement with Odysseia;" ASSEC "fail[ed] to provide the prototype building design concepts and the Manual in English;" and ASSEC "breached its exclusivity obligations . . . by engaging with another Korean developer regarding the development of Space Camp® Korea." (Doc. 32, pp. 13-14, ¶¶ 28-30). Odysseia alleges that these breaches "prevented [it] from developing the Space Camp® program (and related programs) in South Korea—after having spent millions of dollars on the process." (Doc. 32, p. 14, ¶ 31).
ASSEC contends that the Offer expired because Odysseia did not sign the license agreement before the Offer Termination Date, relieving ASSEC of its obligations under the Offer. (Doc. 90, p. 28; Doc. 98, p. 10). ASSEC argues: "The Option provided that, if Odysseia did not accept ASSEC's offer by executing a licensing agreement before the Option's expiration date, ASSEC would retain the $1,750,000, and the parties would have no future obligation." (Doc. 90, p. 25). ASSEC acknowledges that it provided only a draft license agreement to Odysseia but contends that it had no obligation to provide a final license agreement for Odysseia to sign before the Offer Termination Date because "Odysseia could not provide site or financing information before the Option termination date . . . ." (Doc. 90, p. 29). ASSEC concludes: "Because no license agreement was signed by the Option termination date of August 1, 2008, ASSEC had no obligations to Odysseia after that point." (Doc. 90, p. 28).
Not counting the fact that the Offer agreement is ambiguous, several disputed questions of fact stand in the way of ASSEC's summary judgment arguments. First, as noted, under Alabama law, even though the language of the Offer and draft license agreement required the parties' signatures, the parties could indicate their mutual assent to the license agreement through their conduct. Deeco, 435 So. 2d at 1262. Jurors could find that Odysseia manifested its intent to accept ASSEC's Space Camp® license offer by paying the $1.75 million Space Camp® license fee, and ASSEC manifested its intent to issue a Space Camp license by accepting the $1.75 million fee. That finding of fact would rest comfortably on the September 2, 2008 letter in which Mike Kelly, ASSEC's Vice President of Licensing, wrote to Dr. Song:
(Doc. 88-4, p. 17).
Additionally, as noted, under Alabama law, absent a contractual deadline for the parties to execute a final license agreement, the parties had a reasonable time after Odysseia accepted ASSEC's Offer to finalize the license agreement. McMillan, 512 So. 2d at 23. Where, as here, the drafter of the final agreement erects hurdles to execution of the agreement, the optionee or offeree is excused from timely fulfilling its obligation to finalize the contract documents. Ex parte Keelboat Concepts, Inc., 938 So.2d 922, 926 (Ala. 2005) ("This Court has  held that an optionee is excused from timely performance under an option contract when the optionee's failure to exercise the option within the time required by the contract was a direct result of the optionor's conduct."); Jackson v. L.D. McReynolds, Inc., 430 So.2d 873, 876 (Ala. 1983) (a lessee did not fail to exercise his option to purchase property on time because the "reason for [the lessee's] failure to make the necessary tender within the prescribed time rest[ed] with the [lessor] and not upon himself."). The evidence, viewed in the light most favorable to Odysseia, indicates that ASSEC created prerequisites to the execution of a final license agreement that did not appear in the Offer. For example, as Dr. Song reminded ASSEC, the Offer did not require Odysseia to secure a site for Space Camp Korea before signing a license agreement, (Doc. 88-4, p. 21), but ASSEC refused to send Odysseia a final license agreement until Odysseia secured a site, (Doc. 96-1, p. 2, ¶ 6).
ASSEC contends that it did not have to provide a license agreement to Odysseia for signature because the Offer states:
(Doc. 1-3, p. 4, ¶ 4). True, this provision enabled ASSEC to request documents from
Odysseia before the parties signed a license agreement, but the provision does not say that ASSEC could withhold a license agreement once Odysseia accepted ASSEC's offer, even if Odysseia had not produced every document that ASSEC requested.
Jurors reasonably could conclude that ASSEC created a Catch-22 for Odysseia by using paragraph 4 as an excuse for withholding a final license agreement. The draft license agreement contemplates that a Space Camp® facility modeled after the facility in Huntsville, Alabama would be opened within three years of the execution of a license agreement "subject, however, to Licensor's fulfillment of its duties" under the parties' license agreement. (Doc. 1-3, p. 7, ¶ I.B (defining "Facility"); Doc. 1-3, p. 9, ¶ IV). ASSEC's duties under the draft license agreement included providing Odysseia "reasonable assistance relating to . . . [m]arketing and promotion." (Doc. 1-3, p. 11, ¶ VI.B(3)). Dr. Song repeatedly explained that he needed a copy of a signed license agreement to prove to investors and others with whom he was negotiating for property for a Space Camp® facility that Odysseia was the Space Camp licensee for South Korea. (See Doc. 96-1, pp. 2-3, ¶¶ 6-8). ASSEC also was required to give Odysseia certain documents, including prototype building design concepts and a "Copy of the Manual in English" within 120 days of Odysseia's final payment of the license fee on July 30, 2008. (Doc. 1-3, pp. 11-12, ¶¶ VI.A, VI.G). Odysseia could not engage in productive negotiations for a facility site without these materials. Jurors could find that, by insisting that Odysseia provide site information before it would sign a license agreement, ASSEC erected insurmountable hurdles to the execution of a license agreement, excusing Odysseia's failure to sign an agreement. Jackson, 430 So. 2d at 876.
The evidence demonstrates that finalizing a license agreement was a simple task. Mirinae and ASSEC simply made a few handwritten edits to the draft license agreement attached to Mirinae's Option, initialed each page, and signed the draft agreement. (Doc. 88-3, pp. 36-63). ASSEC, the drafter of the license agreement forms, did not even revise the "date to be determined" language in the Mirinae license agreement, (Doc. 88-3, p. 36) (italics in license agreement), or provide a signature line for Col. Lewis, (Doc. 88-3, p. 58). Jurors could conclude that even if the parties opted to make formal revisions to the draft license agreement attached to Odysseia's Offer, ASSEC was the party most capable of revising the draft agreement to remove the "draft" language and provide Odysseia a clean agreement ready for signature. ASSEC did not begin a conversation with Odysseia about potential revisions to the draft license agreement because ASSEC insisted upon new conditions for a formal license agreement after Odysseia paid the $1.75 license fee.
Thus, questions of fact preclude summary judgment on Odysseia's claim that ASSEC breached the Offer by "refusing to move forward with and execute the formal license agreement with Odysseia regarding the development of the Space Camp® program (and related programs) in South Korea pursuant to the parties' [Offer] agreement." (Doc. 32, p. 13, ¶ 28). Therefore, the Court denies ASSEC's motion for summary judgment on Odysseia's breach of contract claim.
Under Alabama law, to prove its promissory fraud claim, Odysseia must show that it reasonably relied on a false representation of material fact that ASSEC made and that ASSEC knew when it made the representation that it did not intend to perform the promised act. See Target Media Partners Operating Co., LLC v. Specialty Mktg. Corp., 177 So.3d 843, 866-67 (Ala. 2013). With respect to the intent element, the Alabama Supreme Court has explained:
Heisz v. Galt Indus., 93 So.3d 918, 925-26 (Ala. 2012) (brackets in original). The Alabama Supreme Court also has explained that:
Southland Bank v. A & A Drywall Supply Co., Inc., 21 So.3d 1196, 1212 (Ala. 2008) (last bracket in original). "Although circumstantial evidence may be used to prove fraudulent intent, it must be of such quality that `the jury, as reasonable persons, may fairly and reasonably infer the ultimate fact to be proved.'" Pinyan v. Cmty. Bank, 644 So.2d 919, 924 (Ala. 1994) (quoting Marshall Durbin Farms, Inc. v. Landers, 470 So.2d 1098, 1101 (Ala. 1985)).
Odysseia contends that ASSEC fraudulently promised that it would "execute and honor the formal license agreement granting to Odysseia the exclusive, licensed right to develop the [sic] Space Camp Korea (and related programs) upon Odysseia's payment of the $1.75 million in licensing fees;" that it would "provide the  written assurances that were required by Odysseia for moving the project forward (such as the prototype building design concepts and `Manual in English') to Odysseia in a timely manner;" and that Odysseia had become "the Space Camp licensee in Korea." (Doc. 32, p. 17, ¶¶ 45-47). Odysseia alleges that ASSEC "had an undisclosed practice and view that its obligations to foreign licensees were subject to change without notice, approval, or agreement by the counter-party to the contract." (Doc. 32, p. 18, ¶ 52).
To survive ASSEC's summary judgment motion, Odysseia must point to circumstantial evidence that shows that when ASSEC signed the Offer in March of 2006, ASSEC did not intend to enter a license agreement with Odysseia for a Space Camp® program in South Korea. Evidence relating to the Space Camp manual bears on ASSEC's intent. The evidence, viewed in the light most favorable to Odysseia, shows that the only Space Camp® manual that ASSEC could offer licensees as of 2010 was "very outdated" — so much so that it was prepared with a typewriter. (Doc. 88-1, pp. 29-31, tpp. 112-17). The manual contained some information that was "still valid and appropriate and accurate as far as how to run a Space Camp," but other information in the manual would have to have been updated if Odysseia were to use it. (Doc. 88-1, pp. 30-31, tpp. 115-17). ASSEC had so few licensees that it had not updated its manual since at least the 1990s. (Doc. 88-1, pp. 29-30, tpp. 112, 114). Because Odysseia could have paid the entire $1.75 million license fee any time after the parties signed the Offer on March 20, 2006, ASSEC should have had an updated manual ready or close to ready when it signed the Offer, but it did not. That is compelling evidence that in 2006, ASSEC did not intend to finalize a license agreement with Odysseia.
The contrast between Odysseia's Offer from ASSEC and Mirinae's Option agreement with ASSEC also sheds light on ASSEC's intent when it signed the Offer with Odysseia. Under the Offer and the attached draft license agreement, ASSEC's obligation to provide Space Camp information and marketing support to Odysseia appears only in the draft license agreement. The arrangement allowed ASSEC to take the position that it had no obligation to provide support to Odysseia until the parties signed a license agreement while insisting that Odysseia provide a project site and evidence of investment in the project as a prerequisite to the execution of the license agreement. The evidence shows that ASSEC understood that Odysseia could not meet its demand for a site and for investors without a signed license agreement.
ASSEC did not hamstring Mirinae in the same way. Mirinae's Option with ASSEC obligated ASSEC to "fully cooperate" with government officials in South Korea to enable Mirinae to obtain permits for a Space Camp facility in the country and obligated ASSEC to provide to Mirinae all "information and documents" that Mirinae would need to obtain permits and approvals for the "Space Camp Business." (Doc. 88-3, pp. 33-34). Mirinae did not have to sign a license agreement with ASSEC to get these materials, so Mirinae had the ability to demonstrate to ASSEC that it was able to secure a site for its Space Camp project.
Jurors also may consider evidence that indicates that ASSEC has a pattern of collecting license fees but refusing to authorize licensees to operate Space Camps. The record demonstrates that ASSEC collected more than $6.4 million from foreign corporations interested in pursuing Space Camp® licenses, including $4.2 million from a Dubai-based corporation, $1.75 million from Odysseia, and $300,000 from a Singapore entity. None of those potential licensees operated a Space Camp.
ASSEC executed a final license agreement with the Dubai-based Space Investments, but that license expired because the Dubai company did not open a Space Camp in time. (Doc. 88-1, p. 10, tpp. 35-36). Space Investments had paid more than $4.2 million to ASSEC as of May 2010. (Doc. 88-1, p. 15, tp. 53; Doc. 88-2, p. 20). Ms. Crozier testified that the Dubai group bought "all the Space Camp equipment, all the simulators" and that the last she knew the equipment "was in a warehouse in India." (Doc. 88-1, p. 63, tpp. 247-48).
A Singapore entity wanted to create a Southeast Asia Space Camp®. It paid ASSEC $300,000, never received a final license agreement from ASSEC, and never received a refund. (Doc. 88-1, p. 14, tp. 49). In fact, the only operational international Space Camp® programs are in Canada and Turkey. (Doc. 88-1, p. 11, tpp. 37-38).
When Dr. Barnhart assumed control of ASSEC in January 2011, "many previous contracts . . . had expired." (Doc. 88-17, p. 21, tp. 77). ASSEC was struggling with debt of more than $15 million. (Doc. 88-17, p. 23, tp. 85).
Lastly, ASSEC hired Mr. Song, a South Korean lawyer, to help it negotiate with a Korean licensee, but ASSEC's written agreement with Mr. Song expired when ASSEC received Odysseia's $1.75 million license fee. (Doc. 96-1, p. 7, ¶ 1.3). Jurors could conclude from the terms of Mr. Song's contract that ASSEC had no plans to continue to work with Odysseia after it received its $1.75 million license fee, and those plans existed when ASSEC signed its agreement with Mr. Song on March 1, 2006. (Doc. 96-1, p. 7).
Odysseia relied on ASSEC's representation that it would execute a license agreement if Odysseia paid a $1.75 million license fee, and Odysseia invested not only $1.75 million for the license fee but also another $800,000 to develop Space Camp South Korea. (See Doc. 56, p. 29; Doc. 96-2, p. 4, ¶ 7; Doc. 32, p. 12, ¶ 25). Thus, Odysseia has evidence of injury and damages.
Accordingly, the Court denies ASSEC's motion for summary judgment on Odysseia's promissory fraud claim.
Unjust Enrichment and Promissory Estoppel
To prove ASSEC was unjustly enriched, Odysseia must show ASSEC "holds money which, in equity and good conscience, belongs to [Odysseia] or holds money which was improperly paid to [ASSEC] because of mistake or fraud." Avis Rent A Car Sys., Inc. v. Heilman, 876 So.2d 1111, 1122 (Ala. 2003) (internal quotation marks and citation omitted) (emphasis in Heilman). "The doctrine of unjust enrichment is an old equitable remedy permitting the court in equity and good conscience to disallow one to be unjustly enriched at the expense of another." Heilman, 876 So. 2d at 1122 (internal quotation marks and citation omitted) (emphasis in Heilman). "The purpose of . . . promissory estoppel is to promote equity and justice in an individual case by preventing a party from asserting rights under a general technical rule of law when his own conduct renders the assertion of such rights contrary to equity and good conscience." Mazer v. Jackson Ins. Agency, 340 So.2d 770, 772 (Ala. 1976) (citing First Nat'l Bank of Opp v. Boles, 165 So. 586, 592 (Ala. 1936)). Under Alabama law, equitable remedies are not available where parties have an enforceable contract, and the party seeking relief may seek damages for breach of contract. Aldridge v. DaimlerChrysler Corp., 809 So.2d 785, 794 (Ala. 2001) ("When one seeks to impose liability under the doctrine of promissory estoppel, we look to the facts to determine whether that doctrine can be used to create liability, once we have determined that no binding contract existed.").
If Odysseia is able to prove that it had an enforceable contract with ASSEC, then Odysseia's remedy will lie in contract, not equity. If Odysseia cannot prove that it had an enforceable contract with ASSEC, then it may pursue its equitable claims because the evidence, viewed in the light most favorable to Odysseia, demonstrates that ASSEC holds money that in equity and good conscience belongs to Odysseia and that ASSEC obtained through mistake or fraud.
Therefore, the Court denies ASSEC's motion for summary judgment on Odysseia's equitable claims.
For the reasons discussed above, the Court denies ASSEC's motion for summary judgment.
In cases like this in which a federal court exercises diversity jurisdiction, "a federal district court . . . must apply the choice of law rules of the forum state" in determining which law applies. Clanton v. Inter.Net Global, L.L.C., 435 F.3d 1319, 1323 (11th Cir. 2006) (quoting Trumpet Vine Invs., N.V. v. Union Capital Partners I, Inc., 92 F.3d 1110, 1115 (11th Cir. 1996)) (citation omitted). Here, Alabama is the forum state, and in contract disputes, "Alabama courts `first look to the contract to determine whether the parties have specified a particular sovereign's law to govern.'" Clanton, 435 F.3d at 1323 (quoting Stovall v. Universal Const. Co., Inc., 893 So.2d 1090, 1102 (Ala. 2004)) (citation omitted). Because the Offer includes a choice-of-law clause mandating that Alabama law will govern, the Court applies Alabama substantive law.