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REPORTED IN THE COURT OF SPECIAL APPEALS OF MARYLAND No. 151 SEPTEMBER TERM, 1995 ___________________________________

FRIEDMAN & FULLER, P.C.

v. GREGG N. FUNKHOUSER et al.

___________________________________

Wenner, Fischer, Cathell, JJ. ___________________________________ Opinion by Cathell, J. ___________________________________

Filed:

November 6, 1995

Appellant, Friedman & Fuller, P.C. (F&F), appeals entry in the Circuit Court for Montgomery County of summary judgment in favor of the appellees, Gregg Funkhouser (Funkhouser), and Hollrah &

Bernstein, P.C., and its principals, Jeffrey Bernstein and Glenn Hollrah (collectively, H&B). Appellant brought suit, alleging, inter

alia, breach of an employment contract with Funkhouser, to which appellees asserted a Statute of Frauds defense. On appeal,

appellant poses the following questions for our review: 1. Did the summary judgment of Frauds where existence of an testimony? trial court err by granting based on the Maryland Statute Funkhouser acknowledged the agreement in his deposition

2. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where Funkhouser signed [] one of several connected writings constituting the entire memorandum? 3. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where F&F's performance removed the Employment Agreement from within the Statute of Frauds? 4. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where Funkhouser's promises to prepare and sign a writing estopped him from raising the Statute of Frauds as a defense to the Employment Agreement?

- 2 5. Did the trial court err by granting summary judgment based on the Maryland Statute of Frauds where the parties intended to save provisions performable within a year even if other provisions were unenforceable under the Statute of Frauds? 6. Did the trial court err by granting summary judgment on F&F's interference with contract and p[ro]spective business advantage claims solely because the Employment Agreement was not enforceable under the Statute of Frauds? THE FACTS Funkhouser was hired by F&F in July of 1990 to market the firm's accounting services to government contractors. 1992, Funkhouser and F&F's president, Barry In July of began

Friedman,

negotiating a new employment relationship, under which Funkhouser would be placed on a track leading him toward an ownership interest in the firm. In drafting the agreement, Funkhouser and F&F worked

from a sample contract normally used by F&F, on which Funkhouser noted modifications in accord with the negotiations. Funkhouser

agreed to draft and present for signature a memorial of the agreedupon terms and modifications of the sample contract. The proposed

terms allegedly included, inter alia, the noncompetition and trade secrets provisions at issue in the instant case. within the contemplated agreement were Also incorporated respecting Specifi-

provisions

Funkhouser's acquisition of an ownership interest in F&F.

cally, Funkhouser was to receive a retroactive salary increase of

- 3 $5,000 and "career path incentive" bonuses upon the achievement of differing levels of total sales revenues. It is undisputed that Funkhouser began drafting the agreement, utilizing F&F's computers and that, on August 3, 1992, consonant with the as yet unmemorialized employment agreement, he applied for and received a specified bonus and increase in salary for achieving $250,000 in total sales, benefits he would not otherwise have been entitled to receive previously. As of the receipt of the benefits,

a written rendering of the agreement had not been completed. In the fall of 1992, Funkhouser requested and was granted a change in the noncompetition provision. Again, Funkhouser agreed

to memorialize the agreement to conform with the negotiations. Indeed, Funkhouser had prepared several revisions of the agreement as the negotiations progressed and terms were refined and finalized. In his affidavit, Friedman avers that, between January and

May of 1993, his repeated requests for a copy of the completed agreement went unheeded; Funkhouser assured him that the draft, encompassing all agreed-upon terms and modifications, was completed and affirmed his commitment thereto but failed to produce one bearing his signature. Although the precise date is not clear, by the middle of 1993, Funkhouser had begun discussions regarding employment with H&B. It

was also around that time that F&F began detecting a "deterioration" in Funkhouser's work product. On August 9, 1993, Funkhouser F&F

tendered his resignation from F&F and began working at H&B.

- 4 alleges that Funkhouser then "immediately" began soliciting its clients. On December 23, 1993, F&F filed a Complaint, naming

Funkhouser as a defendant, seeking injunctive relief and damages for Funkhouser's alleged violation of the noncompetition and trade secrets provisions of the employment agreement. As discovery

progressed, F&F verified H&B's involvement in the matter and, on May 2, 1994, amended its Complaint to include H&B. In addition to

seeking permanent injunctive relief against appellees for breach of the covenant and misappropriation of trade secrets (Count 1) and damages therefor (Counts 2, 3, and 6), F&F also sought damages for fraud and negligent misrepresentation (Count 4), tortious interference with prospective business advantage and unfair competition (Count 5), civil conspiracy (Count 7), and conversion (Count 8). On May 16, 1994, appellees filed their Answer, along with a Motion to Dismiss Amended Complaint. In the motion, appellees

sought dismissal of Counts 1, 2, 4, 5, and 7 on Statute of Frauds grounds, supporting same with Funkhouser's affidavit attesting to his failure to sign the agreement.
1

Pursuant to Rule 2-322(c),1

That Rule reads, in pertinent part: (c) Disposition. -- . . . If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 2-501, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 2-501.

- 5 appellees' judgment. Friedman's motion was considered to be a motion for summary

Appellant opposed the motion, relying on, inter alia, Barry affidavit. The trial court ordered that summary

judgment be entered in favor of all appellees on counts 1, 2, 4, and 7 on September 28, 1994. to a voluntary dismissal the Appellant agreed, per Rule 2-506(a), of the remaining 28, 1994 claims, without Order final for

prejudice,

rendering

September

purposes of appeal. Order.

Appellant then noted this appeal from that

THE STANDARD OF REVIEW In reviewing the grant of a summary judgment motion, we are concerned with whether a dispute of material fact exists. Bankerd, 303 Md. 98, 110-11 (1985). King v.

See also Hartford Ins. Co. v. Manor Inn of

Bethesda, Inc., 335 Md. 135, 144 (1994); Arnold Developer, Inc. v. Collins, 318 Md. 259, 261-62 (1990); Bachmann v. Glazer & Glazer, Inc., 316 Md. 405, 408 (1989); Nationwide Mut. Ins. Co. v. Scherr, 101 Md. App. 690, 694, cert. denied, 337 Md. 214 (1994); Markey v. Wolf, 92 Md. App. 137, 170 (1992). "A

material fact is a fact the resolution of which will somehow affect the outcome of the case." King, 303 Md. at 111 (citing Lynx, Inc. v. "A dispute as to a fact

Ordnance Prods., Inc., 273 Md. 1, 8 (1974)).

See also Hrehorovich v. Harbor Hosp. Ctr., Inc., 93 Md. App. 772 (1992), cert. denied, 330 Md. 319 (1993).

- 6 `relating to grounds upon which the decision is not rested is not a dispute with respect to a material fact and such dispute does not prevent the entry of summary judgment.'" Seaboard Sur. Co. v. Richard F. Kline, Inc., 91 Md. App. 236, 242-43 (1992) (quoting Salisbury Beauty Schs. v. State Bd. of Cosmetologists, 268 Md. 32, 40 (1973)). In order for there to be

disputed facts sufficient to render summary judgment inappropriate, "there must be evidence on which the jury could reasonably find for the plaintiff." Seaboard, 91 Md. App. at 244. If the motion and

response thereto demonstrate that there is no genuine dispute as to any material fact, the moving party is entitled to judgment as a matter of law. See Lowman v. Consolidated Rail Corp., 68 Md. App. 64, 70,

cert. denied, 307 Md. 406 (1986) (Once the moving party has provided the trial court with sufficient grounds for summary judgment, "[i]t is . . . incumbent upon the other party to demonstrate that there is indeed a genuine dispute as to a material fact."). See also King,

303 Md. at 112; Hurt v. Stillman & Dolan, Inc., 35 Md. App. 644, 647 (1977).

DISCUSSION A. Appellant avers that there existed a genuine issue of material fact as to the existence of a memorandum sufficient to satisfy the Statute of Frauds or sufficient to except it from the Statute's requirement of a writing, so as to preclude entry of summary

- 7 judgment in favor of Funkhouser. We agree and reverse the judgment We explain.

of the trial court in that respect.

In approaching any matter potentially involving the Statute of Frauds, we first determine whether the case is one that falls within its provisions, as set forth in Maryland Code (1957, 1993 Repl. Vol.), Art. 39C

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