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Miller v. Flegenheimer

Vermont Supreme Court
161 A.3d 524 (2016)


Kenneth Miller (plaintiff) and Eric Flegenheimer (defendant) each owned half of the stock of a document-shredding company that they cofounded. In 2011, Miller and Flegenheimer began negotiating a buy-sell agreement that set forth how one partner could buy out the other partner’s interest in the company. Miller and Flegenheimer exchanged multiple drafts of the agreement, but negotiations broke down on December 9, 2013, when Miller would not sign the final draft. On December 26, Flegenheimer emailed Miller and offered to sell Miller his stock in the company. Many terms in Flegenheimer’s email were similar to terms in the buy-sell-agreement drafts exchanged by the parties. One similar term was a claw-back provision, which provided that if the buying partner sold the company within two years, the partners would equally split all sale proceeds in excess of a specified amount. On December 31, Miller emailed Flegenheimer and accepted the offer to purchase Flegenheimer’s shares at the requested price. Miller said that he would send “definitive documents” by January 10, 2014. On January 9, Miller sent Flegenheimer a lengthy stock-purchase agreement and a noncompete agreement that prohibited Flegenheimer from competing with the company or soliciting its employees or customers for three years. Miller’s documents also reduced the proposed sale price by $50,000. On January 14, Flegenheimer told Miller that he would not proceed with the sale. Miller sued Flegenheimer, seeking specific performance. The trial court entered judgment for Miller, holding that the parties’ December emails had created an enforceable preliminary agreement that required them to negotiate the remaining terms of their agreement in good faith. Both parties appealed to the Vermont Supreme Court.

Rule of Law


Holding and Reasoning (Reiber, C.J.)

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