JOHN W. NOBLE, Vice Chancellor
Dear Counsel:
Plaintiff Richard W. Vague ("Vague") was granted options to acquire common stock in his employer, First USA, Inc. ("FUSA"). FUSA was acquired by Defendant Bank One Corporation (the "Bank") and Vague's FUSA options were converted into options to acquire common stock of the Bank. Vague left the employ of the Bank and, more than a year later, sought to exercise the options. The Bank rejected this effort by asserting that Vague had failed to exercise his options timely. This action ensued.
Vague claims, first, that, as a matter of contract, his efforts to exercise his options were timely and, second, that any delay was caused by the Bank's misrepresentations regarding the period in which he could exercise the options. Vague has moved for summary judgment on his contract claim. In response, the Bank has filed a cross-motion for summary judgment attacking both Vague's contract claim and his misrepresentation claim. For the reasons set forth below, I deny Vague's motion for summary judgment and grant the Bank's motion for summary judgment.
BACKGROUND
This summary does not describe the events fully; instead, it is intended only to set forth those facts necessary for a decision of the pending motions.
FUSA, pursuant to its 1991 Stock Option Plan (the "Plan"), granted options (the "Disputed Options") to Vague through the Stock Option Agreements, dated July 19, 1995, and July 17, 1996 (the "Agreements"). The Bank acquired FUSA in 1997 On October 19, 1999, Vague left his position with the Bank. Under the terms of his separation, he was entitled to continue drawing salary for the next year unless certain events, such as commencing to work for a competitor, occurred.
Pl. Vague's Opening Br. in Supp. of his Mot. for Summ. J. Ex. A.
Id.Ex. B.
Id. Ex. C.
The pertinent terms of the Agreements are identical.
At that time, Vague's FUSA options vested and became convertible into common stock of the Bank in accordance with a specified conversion ratio. His fights under the FUSA options would continue to be governed by the Plan and not by the comparable plan established by the Bank.
This departure would eventually be treated as a "retirement," effective February 21, 2000, for purposes of the Plan and the Agreements. See infra notes 9, 12 15. It was "treated as a resignation in the best interest of the [Bank]." Letter of Timothy P. Moen, dated Oct. 25, 1999, Verified Amended Compl. ("Compl") Ex. K at 1.
Vague promptly inquired about his option rights. He first contacted Third-Party Defendant Clinton W. Walker ("Walker"), who at that time was general counsel of the Bank's First USA unit. Walker called and left a voice mail message with Timothy P. Moen ("Moen"), the Bank's Human Resources Manager. That call was returned by Nancy J. Lindsay ("Lindsay"), an attorney employed by (and corporate officer of) the Bank,
whose scope of responsibility included human resources issues. Lindsay left a non-substantive voice mail message for Walker.
On October 21, 1999, the Bank prepared a summary of Vague's options that reflected a six-month limitation on exercise. Walker and Lindsay finally spoke on October 25, 1999. Lindsay did not inform Walker of the contents of the October 21 summary. Lindsay told Walker (and Moen sent Vague a letter confirming) that the Bank would provide Vague "with a package within the next several days that summarizes [Vague's] entitlements under the various stock and benefit plans." That package, however, was never sent.
Compl. Ex. K at 2.
Walker and Lindsay spoke again a few days later. Although Walker's notes indicate that Vague's options from the Bank (not to be confused with his converted and surviving FUSA options) had an exercise period of three years following termination, Walker reported to Vague's accountant that Vague would have three-five years to exercise them:
[Vague] has been given the option of electing to take a lump sum payment or do salary continuation for one year. Either when he takes the lump sum or at the end of the year should he elect salary continuation, he will be treated as if he retired.
All his options will vest and he will have 3-5 [years] to exercise them (depending on the specific grant).
The Bank, through its option administrator, forwarded to Vague an option and award summary (the "December Option Summary") as of December 30, 1999, that showed the expiration dates of the Disputed Options as occurring in 2005 and 2006.
Id. Ex. Q.
That transmittal did carry a disclaimer as to the accuracy of the information and "specifically noted that if employment termination ha[d] occurred recently and prior to the date set forth [in the December Option Summary], certain Awards may have been terminated or the periods of exercise modified, which matters may not be reflected [in the December Option Summary]." Id. Ex. Q at 3. The expiration dates set forth in the summary sent at the end of December 2000 would have been accurate ( i.e., they were consistent with the terms of grant) if Vague had not elected to depart from his employment with the Bank.
On February 21, 2000, Vague's employment with the Bank, under the salary continuation program, terminated as the result of his taking other employment.
Thus, the effective date of his "retirement" became February 21, 2000. Vague's employment relationship had not been fully severed in the fall of 1999. Vague, in accordance with the Bank's "salary continuation program," continued to receive his salary and other benefits. His stock options continued to vest and there was no acceleration of any exercise period. His "termination" would not formally occur until the earlier of the expiration of one year under the salary continuation program or his taking another job.
The Bank, again through its option administrator, forwarded to Vague option and award summaries, at the end of March 2000 (the "March Option Summary") and at the end of June 2000 (the "June Option Summary"), which showed that the exercise period of the Disputed Options expired on August 21, 2000, six months after his "retirement." Vague did not exercise the Disputed Options before the deadline. In June 2001, Vague attempted to exercise the Disputed Options, but the Bank refused to comply with his request because it concluded that the Disputed Options had expired on August 21, 2000, six months after the date of his "retirement" and, thus, could not be exercised.
Id.Ex.R.
App. to Bank One Corp.'s Consolidated (i) Opening Br. in Supp. of its Mot. for Summ. J. and (ii) Answering Br. in Opp'n to Richard W. Vague's Mot. for Summ. J., Tab C, Ex. 19.
These summaries set forth an employment termination date or retirement date of February 21, 2000. Although Vague transmitted these summaries to his accountant, the expiration date did not, for whatever reason, register with the accountant.
ANALYSIS
1. Summary Judgment Standard
The Court may grant summary judgment if the moving party can show the absence of a genuine issue of material fact and an entitlement to judgment as a matter of law. "If a rational trier of fact could find any material fact that would favor the non-moving party in a determinative way . . . , summary judgment is inappropriate."
Ch. Ct. R. 56(c); Newtowne Village Serv. Corp. v. Newtowne Rd. Dev. Co., 772 A.2d 172, 175 (Del. 2001).
Cerberus Int'l, Ltd. v. Apollo Management L.P., 794 A.2d 1141, 1150 (Del. 2002).
2. The Contract Claim
The Disputed Options, as granted, carried exercise dates in 2005 and 2006, ten years after the grant. Vague argues that, as a matter of contract, he has the full ten years following their award to exercise the Disputed Options. The Bank, on the other hand, contends that his departure from the Bank triggered a new and shorter exercise period — six months from his "retirement," or August 21, 2000.
The parties agree that Vague's right to exercise the Disputed Options is governed by the Plan and the Agreements. They also agree that resolution of Vague's claim under the Plan and the Agreements is appropriate for summary judgment. They disagree, however, as to the proper interpretation of those documents. I turn first to the Agreements.
"Summary judgment is properly employed for the enforcement of unambiguous contracts." Cantera v. Marriott Senior Living Servs., Inc., 1999 WL 118823, at *3 (Del.Ch. Feb. 18, 1999).
That the parties disagree over the interpretation of a contract does not render the contract ambiguous. Rhone-Poulenc Basic Chems. Co. v. American Motorists Ins. Co., 616 A.2d 1192, 1996 (Del. 1992). The Court's function in construing an unambiguous contract, such as the complementary contractual documents in play here, is to seek that meaning, reflective of the parties' expressed intentions, "so that a reasonable person in the position of either party would have no expectations inconsistent with the contract language." Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 1997).
"In its effort to resolve contract disputes, the Court looks first to the contract itself" Continental Ins. Co. v. Rutledge Co., 750 A.2d 1219, 1228 (Del.Ch. 2000). Here, several documents collectively define the contractual relationship between Vague and the Bank.
The parties agree that the Agreements, which granted Vague the Disputed Options, provided Vague a period of six months following his "retirement" to exercise the options. Paragraph 2.C provides in pertinent part:
TERMINATION OF EMPLOYMENT
* * *
(ii)
Death, Disability or Retirement of Optionee. If . . . the Optionee's employment shall terminate by reason of . . . retirement, all Options theretofore granted to such Optionee . . . may, unless earlier terminated in accordance with their terms, be exercised by the Optionee . . . at any time within six (6) months (or such longer period as the Committee may determine) after the . . . Retirement of the Optionee.
Vague, however, relies upon the Plan. The Plan, as in effect when the Disputed Options were granted, allowed the employee six months following his retirement to exercise his options. The provision in the Plan expressly allowing the retiree a six-month exercise period was deleted and replaced with a provision that provides no express guidance as to a retiree's exercise period. Vague argues that that amendment to the Plan had the collateral consequence of extending the time within which he could exercise the Disputed Options.
In order to understand Vague's argument, it is necessary to trace through several provisions of the Plan. The Plan addressed the terms and expiration of options primarily through three subparagraphs of Section 4:
4. Terms and Conditions of Options. Each Option granted pursuant to the Plan shall be evidenced by a written agreement (the "Option Agreement") between the Company and the person to whom such Option is awarded (the "Optionee"), which Option Agreement shall comply with and be subject to the following terms and conditions:
* * *
(d) Term and Exercise of Options. Options shall be exercisable over the exercise period as and at the times [a]nd upon the conditions that the Committee may determine, as reflected in the Option Agreement; . . . further provided, however, that such exercise period shall not exceed ten (10) years from the date of grant of such Option. The exercise period shall be subject to earlier termination as provided in Sections 4(e) and 4(f) hereof . . .
(e) Termination. Except as provided in this Section 4(e) and in Section 4(f) hereof, an option may not be exercised unless the Optionee is then in the employ of the Company or its direct or indirect subsidiaries, and unless the Optionee has remained continuously so employed since the date of grant of the option. [I]n the event that the employment of an Optionee shall terminate (other than by reason of death, disability or retirement), all options of such Optionee that are exercisable at the time of such termination may, unless earlier terminated in accordance with their terms, be exercised within three (3) months after such termination; provided, however, that if the employment of an Optionee shall terminate for cause, all Options theretofore granted to such Optionee shall, to the, [sic] extent not theretofore exercised, terminated forthwith . . .
(f) Death, Disability or Retirement of Optionee. If . . . the Optionee's employment shall terminate by reason of. retirement, all Options theretofore granted to such Optionee (to the extent otherwise exercisable at the time of death or termination of employment) may, unless earlier terminated in accordance with their terms, be exercised by the Optionee . . . at any time within six months (or such longer period as may be determined by the Committee in its sole discretion) after the date of death, disability or retirement of the Optionee.
Thus, Subparagraph 4(d) provides that the exercise period is to be established in the corresponding option agreement with the employee, but that the maximum length of any exercise period is ten years. It also informs that the exercise period may be subject to earlier termination in accordance with Subparagraph 4(e) or 4(f).
Subparagraph 4(e) provides that the option can be exercised only when the optionee is employed by the company unless the exercise of the option is authorized under other terms of that subparagraph or under Subparagraph 4(f). None of the other provisions of Subparagraph 4(e) is applicable to this matter. Under Subparagraph 4(f), the "retired" option holder has six months after the date of his retirement to exercise his options (unless the committee should choose to extend the period of exercise). Thus, the Agreements, as of the dates when the Agreements were executed, were consistent with the Plan in affording the optionee who "retires" a period of six months in which to exercise his options.
FUSA's board of directors, however, on October 16, 1996, amended the Plan through the so-called "Fourth Amendment." The board, under Section 7 of the Plan, reserved the power to amend the Plan but, without the consent of those persons holding options in accordance with the Plan, it could not adopt any amendments that would "affect adversely any of the rights or obligations of any Optionee . . . under any Option theretofore granted under the Plan." Although Vague does not contend that the Fourth Amendment adversely affected his interests, his contract claim depends upon a favorable analysis of it.
Id.Ex.D.
Id.Ex.A at 6.
The Fourth Amendment deleted Subparagraph 4(f) of the Plan, as described above, and created a new Subparagraph 4(f). The new Subparagraph 4(f) does not expressly confer upon an optionee a six-month period for the exercise of options following retirement. Although the new Subparagraph 4(f) continues to carry the heading of "Death, Disability or Retirement of Optionee," it deals primarily with death and disability. Indeed, its only reference to retirement is as follows:
If Optionee terminates employment with the Company or one of its subsidiaries, by reason of Retirement (as defined below), then the Committee, in its discretion, may determine whether or not the option will vest in part or whole, and any additional terms applicable to such vesting. "Retirement" shall mean such circumstances determined as retirement in the sole discretion of the Committee.
Vague argues that the absence of a six-month period for exercise in the new Subparagraph 4(f) leads back to what he, in substance, characterizes as the default provision of Subparagraph 4(d): an exercise period of ten years from the date of the grant of the option. A Plan-prescribed exercise period of ten years is, according to Vague, inconsistent with the shorter six-month exercise period established in the Agreements and, because the Plan prevails when inconsistent with the Agreements, Vague has ten years from the grant of the options to exercise them. However, I reject this reading of the Plan and the Agreements.
First, Subparagraph 4(d) does not establish a ten-year exercise period. Instead, Subparagraph 4(d) incorporates the exercise period set forth in the Option Agreement, but imposes a maximum limit of ten years from the date of the grant.
Second, Subparagraph 4(e) requires that the optionee, in order to be able to exercise his options, must be employed at the time of exercise unless Subparagraph 4(f) authorizes the exercise. Vague, at the time he sought to exercise (or when the Bank asserts that he should have exercised) the Disputed Options, was no longer an employee.
Subparagraph 4(e) contains no other provision that would allow Vague to exercise the Disputed Options.
Third, the new Subparagraph 4(f) does not confer a six-month period for exercise. However, the absence of that grant cannot be held against Vague because the deletion of the six-month exercise period would have "adversely affected" his rights as optionee and, thus, would have been ineffective if it were an effort to shorten the period otherwise available to him. Thus, because the deletion of the six-month exercise period would have, in fact, adversely affected Vague, its application to Vague was barred by Section 7 of the Plan as it was adopted without his consent. In short, the amended Subparagraph 4(f), with its absence of a provision regarding exercise by optionees who retire should not be read as allowing retired optionees a period often years to exercise their options.
This analysis, according to Vague, would lead to a result (not in his case but for some hypothetical optionee) that he characterizes as "absurd." Vague argues that this view would preclude any retiree from exercising his options (even if they did not vest until the moment of retirement or thereafter). Vague's argument, while perhaps appealing as to those in different circumstances, fails to assist him in the predicament in which he finds himself. First, I note that the scenario about which he complains does not reflect his circumstances. Even Vague does not argue that a six-month period following retirement to exercise options is inherently unfair or unreasonable. Second, the hypothetical situation postulated by Vague is not before the Court and the Court need not, and perhaps should not, address it. Third, Vague's that such result is "absurd" does automatically lead to a different construction of a document, one that is inconsistent with the plain language chosen by the drafters. Moreover, one can rationally, although perhaps not persuasively, argue that pre-retirement (or as of retirement) exercise of options is simply part of a coherent, thought-out retirement process and that the Plan accommodates those whose termination cannot be controlled by the individuals involved, whether through death, disability, or termination other than as the result of a voluntary act.
Pl. Vague's Consolidated Reply Br. in Supp. of his Mot. for Summ. J. and his Answering Br. in Opp'n to Def. Bank One's Mot. for Summ. J. at 23.
It may be, for example, that Subparagraph 4(d)'s deference to conditions which the committee may include in the option agreements would allow the terms of those agreements to control.
In conclusion, the unambiguous language of the Plan and the Agreements, as applicable to Vague, required him to exercise the Disputed Options by August 21, 2000, six months following his "retirement," when they would otherwise expire. He failed to exercise the Disputed Options timely and, thus, they did expire. Accordingly, because there are no material facts in dispute and because it is entitled to judgment as a matter of law, summary judgment will be entered in the Bank's favor on Vague's contract claim, and Vague's motion for summary judgment will be denied.
3.
The Misrepresentation Claim
The Bank also seeks dismissal of Vague's misrepresentation claim through summary judgment. Vague's effort to articulate his claim has not been precise. It meanders from fraud to negligent misrepresentation to something akin to innocent misrepresentation to a concept of wrongful concealment.
I use the term misrepresentation" to encompass the various non-contractual theories advanced by Vague.
I start with negligent misrepresentation because it is functionally a subset of fraud or intentional misrepresentation and perhaps because it best reflects Vague's claim. In order to prevail under his theory of negligent misrepresentation, Vague must demonstrate that:
See VGS, Inc. v. Castiel, 2003 WL 723285, at *9 n. 44 (Del.Ch. Feb. 28, 2003), rearg. granted. 2003 WL 1794210 (Del.Ch. Mar. 27, 2003).
This claim is also the source of this Court's subject matter jurisdiction over the controversy. See Mark Fox Group, Inc. v. E. I. duPont de Nemours Co., 2003 WL 21524886, at *5 (Del.Ch. July 2, 2003); DONALD J. WOLFE, JR. AND MICHAEL A. PITTENGER, CORPORATE AND COMMERCIAL PRACTICE IN THE DELAWARE COURT OF CHANCERY § 2-3[b] (2003).
(1) the [Bank] had a pecuniary duty to provide accurate information, (2) the [Bank] supplied false information, (3) the [Bank] failed to exercise reasonable care in obtaining or communicating the information, and (4) [Vague] suffered a pecuniary loss caused by justifiable reliance upon the false information.
The Bank made several misrepresentations to Vague (or to his accountant) regarding the Disputed Options, including:
1. Walker, responding to an inquiry by Vague about his severance package and his options, informed Vague's accountant, on November 2, 1999, that "[a]ll [Vague's] options will vest and he will have 3-5 [years] to exercise them (depending on the specific grant)." This was the product of an exchange between Lindsay and Walker. It may be that Lindsay was referring (or intended to refer) to options issued directly by the Bank (and not by FUSA). In any event, by then, the Disputed Options, regardless of precisely how the period for their exercise commenced to run, would have had to have been exercised within a period of no more than eighteen months from October 1999 and, certainly, in the absence of some significant change in the option program, would not have been available for exercise three years in the future.
For purposes of the Bank's motion for summary judgment, which requires that all reasonable inferences be drawn in Vague's favor, Walker was acting as a representative of the Bank and, despite Vague's friendship with Walker and despite the Bank's argument that Walker was simply doing Vague's bidding, the interface between Vague and the Bank was between Walker and Vague (or his accountant) and not between Walker and any other Bank official.
Compl. Ex. N.
The eighteen-month period is the sum of the maximum of twelve months under the salary continuation program and the six-month period for exercise following retirement.
2. Moen, on October 25, 1999, advised Vague that he would receive "a package within the next several days that [would] summarize [Vague's] entitlements under the various stock and benefit plans." Lindsay similarly informed Walker. Although the Bank routinely assisted departing executives by providing them with this type of information packet, the Bank never provided one to Vague.
Compl.Ex.K at 2.
Walker Dep. at 147.
By the time Moen sent the October 25, 1999, letter to Vague, the Bank had developed internally a summary of Vague's option rights and that summary, in contrast to the information which the Bank provided to Vague, was accurate.
3. In late December 1999 or early January 2000, Vague received from the Bank's agent the December Option Summary, which reported that the Disputed Options had exercise dates in 2005 and 2006. This information, contrary to the information which the Bank had developed as of late October 1999, was consistent with Walker's report to Vague's accountant based upon his understanding of his conversation with Lindsay.
As set forth previously, the December Option Summary did carry a disclaimer warning that the information might be subject to change in the event that the option holder's employment status had recently changed. of course, Vague's employment status had changed two months earlier and would change again within the next two months.
The Bank contends that neither the Walker/Lindsay report of 3-5 years to exercise the options nor the December Option Summary setting forth exercise dates of 2005 and 2006 was a misrepresentation because, as of that time, the precise date for the end of the exercise period could not have been determined. As a factual matter, the Bank is correct that the exercise date could not be determined until the end of Vague's status as an employee of the Bank. During this period, Vague was still receiving salary and other benefits under the "salary continuation" plan. Until Vague's employee status terminated, which occurred in February 2000, the exercise period for the options would not commence. The Bank, however, fails to acknowledge that under no circumstances, other than a modification of the option terms, could the exercise period extend into 2005 or 2006 (or extend to at least three years after the October 1999 conversation between Lindsay and Walker). The salary continuation program would not extend beyond October 2000 — because its maximum duration was one year; thus, the latest possible date for exercise, based on the current record, would be roughly April 2001. It is a misrepresentation to set forth as a fact that which at the time is unknown and where that "fact," under no reasonably foreseeable circumstances, could ever be true.
Thus, on two specific and separate occasions, the Bank inaccurately informed Vague of dates, several years in the future, by which he would have to exercise the Disputed Options. In fact, at that time, the exercise dates were not knowable because his "retirement" had not become effective, but under no circumstances could they have been accurate (at least in the absence of a change in the terms of the disputed options or some other event that was not readily foreseeable). Accordingly, the Bank misrepresented to Vague the exercise dates of the Disputed Options.
I next turn to the question of whether Vague justifiably relied upon the Bank's misrepresentations in his decision not (or failure to make a decision) to exercise the Disputed Options in a timely fashion. The Bank did misrepresent the exercise date to him. The Bank, however, in two instances after the exercise date was established, once his actual "retirement" date was known, did provide him with accurate information regarding the exercise date. On March 31, 2000, and June 30, 2000, the Bank's option administrator transmitted to Vague the March Option Summary and the June Option Summary, respectively. Each accurately and readily disclosed the exercise date of the Disputed Options. These documents were easy to review and clearly set forth the exercise date; no special effort was required to interpret or analyze the summaries. The pertinent date was not, for example, buried in a small print footnote on page 56. Moreover, the accurate information was provided to Vague well in advance of the exercise date.
The Bank argues that Vague did not rely upon these misrepresentations. For present purposes, I assume reliance.
Yet Vague took no action to exercise the Disputed Options. This was in part because he did not read the March and June Option Summaries. Instead of reading them, he gave them to his accountant. How the accountant failed to access and deal with the expiration date from not one, but both, transmittals is not clear from the record. In any event, the sorry consequences of Vague's decision to rely on his accountant cannot be attributed to the Bank. Thus, for purposes of this motion, Vague is charged with knowledge of the information provided in the March and June 2000 Option Summaries.
Vague does not contend that the timing of either of the accurate information statements left him without a reasonable opportunity to protect his interests.
See, e.g., Eppes Dep. at 138 ("because the person who prepared this schedule did not see the change in the expiration date").
Accordingly, the question narrows to one of whether a person may justifiably rely upon past misrepresentations after the party has been provided with accurate, open and timely information that both clearly corrects the previous misrepresentations and affords the party more than ample opportunity to take the appropriate steps that should (or would) have been taken with the benefit of accurate information or, perhaps more accurately, to refrain no longer from taking the appropriate action as induced by the misrepresentations.
Under [a theory of] negligent misrepresentation, plaintiffs must demonstrate that they justifiably or reasonably relied upon the defendant's statements. Thus, the recipient of a fraudulent misrepresentation is not justified in relying upon its truth if he knows that it is false or if its falsity is obvious to him. A party is chargeable with the knowledge of what may be reasonably found if they make an investigation.
Here, the truth, that the exercise date was August 21, 2000, was available to Vague no later than early April 2000. An investigation was not necessary. All he had to do was read his mail from the Bank's option administrator — mail which he did not throw away but, instead, forwarded to his accountant. His conscious decision not to read and his accountant's inexplicable failure to read accurately the March and June Option Summaries showing the correct option exercise date cannot negate those facts readily available to him.
I do not reach (1) the question of whether Vague may be charged with knowledge of the terms of the option program, all authorized in accordance with resolutions most likely, given his corporate status, adopted with his participation, or (2) the consequences of such knowledge.
See, e.g., Darnell v. Myers, 1998 WL 294012, at *6 (Del.Ch. May 27, 1998) ("considering the totality of the information plaintiffs had available to them").
Vague's argument, however, has another layer. He argues that the Bank's misrepresentations "lulled" him into an understanding that he had a significant (i.e., substantially later than August 2000) period in which to exercise the Disputed Options. Vague's initial reliance on the Bank's misrepresentations may have been reasonable. The information (or misinformation) came from Bank officials who, because of their high positions, could reasonably have been expected to know the facts and to have conveyed them accurately to Vague or his representative.
Ultimately, Vague's argument reduces to this: once the Bank provided him with inaccurate information, it had an affirmative duty to inform him that it had made a mistake and that he should not rely upon the previously communicated misrepresentation; merely supplying accurate information in a clear fashion is not enough. See Compl. ¶ 53.
The last of the Bank's misrepresentations occurred in late December 1999 or early January 2000. At that time, it would be almost two months before the exact date for exercise of the Disputed Options would be fixed (as the result of Vague's "retirement") and more than seven months before the exercise date. If the misrepresentations induced Vague to forego the timely exercise of the Disputed Options, those misrepresentations did not cause damage to Vague until the exercise date passed or, more accurately, until a time when he would no longer have been able to exercise them timely. Regardless of how long it would have taken Vague to obtain the funds to enable him to exercise the Disputed Options and to accomplish the other necessary ministerial steps, Vague received proper information from the Bank's option administrator with more than sufficient time in which to protect his interests. Thus, at the time when Vague should have acted and could have acted to exercise the Disputed Options, he was in possession of accurate information on which to base his decision to exercise the Disputed Options. It is at this time, when Vague had the necessary information and could have acted on it, that the consequences of the Bank's misrepresentations must be measured. In addition, it was obvious (or should have been obvious) to Vague — all he or his accountant had to do was read with some minimal care a simple option and summary statement — that the Disputed Options would expire on August 21, 2000. Because the falsity of the Bank's earlier misrepresentations was (or should have been) obvious to him at that time based on the information in his possession or information which he had transmitted to his accountant, his continued reliance on those earlier misrepresentations was neither reasonable nor justifiable. Thus, on the undisputed facts of this record, the Bank is entitled to summary judgment, as a matter of law, on Vague's negligent misrepresentation claim because any reliance by Vague on the Bank's misrepresentations was not reasonable. Similarly, all of Vague's claims sounding in misrepresentation fail for that reason. In addition, his claim under a theory of "concealment" fails because the accurate and necessary information was provided to him through both the March Option Summary and the June Option Summary.
Whether a party is justified in relying upon a misrepresentation is frequently a question that can only be properly answered by a factfinder, see Wilmington Trust Co. v. Aetna Cas. Sur. Co., 690 A.2d 914, 916-17 (Del. 1996), particularly because the inquiry involves reasonableness and a reasonableness determination often necessitates a balancing of facts, also necessarily left to the factfinder. See Cerberbus Int'l, Ltd., 794 A.2d at 1150 ("If a trial court must weigh the evidence to a greater degree than to determine that it is hopelessly inadequate ultimately to sustain the substantive burden, summary judgment is inappropriate.") Here, it is uncontroverted that Vague had received from the Bank's agent information specifying the exercise date that was accurate, readily understood and timely (in the sense of affording ample opportunity to exercise the Disputed Options). Thus, as a matter of law, his reliance was not justified.
Vague relies upon Collins v. American Int'l Group, Inc., 1998 WL 227889 (Del.Ch. Apr. 29, 1998), aff'd, 719 A.2d 947 (Del. 1998) (TABLE), a superficially similar action in which the employer was found to be bound by promises, inconsistent with the controlling documents, regarding the vesting and exercise of its options. Collins prevailed under the theory of promissory estoppel, a concept not advanced by Vague. Moreover, in Collins, the employer never provided the accurate information after the incorrect information had been supplied and, accordingly, Collins' reliance was found to have been reasonable. In contrast, Vague had received the accurate information in a timely manner. Thus, I need not consider the question of whether, for these purposes, there is a consequential difference between the "promise" in Collins and the "misrepresentations" here.
CONCLUSION
For the foregoing reasons, Vague's motion for summary judgment is denied, and the Bank's motion for summary judgment is granted.
IT IS SO ORDERED.