Qwinstar Corporation v. Anthony

Qwinstar Corporation (plaintiff) and Pro Logistics, L.L.C. (defendant) were in the business of repairing and selling old IBM check-processing systems. Qwinstar negotiated to purchase Pro Logistics and all of its equipment and parts. In January 2013, the owner of Pro Logistics, Curtis Anthony (defendant), completed an inventory of Pro Logistics’ equipment and parts. During negotiations, Pro Logistics continued to sell equipment, and Qwinstar never verified Pro Logistics’ inventory list. Several months later, Qwinstar and Pro Logistics entered into a purchase agreement in which Pro Logistics agreed to sell Qwinstar all of its assets as of the date of the agreement. The purchase agreement did not incorporate the January 2013 inventory list, nor did it list specific items that Qwinstar would receive in the transaction. The purchase agreement contained a merger clause that stated that the purchase agreement constituted the entire agreement between the parties. Anthony also entered into an employment agreement with Qwinstar in which Qwinstar agreed to employ Anthony for five years. After one year, Qwinstar discovered that Pro Logistics did not have all of the assets listed in the January 2013 inventory. Qwinstar fired Anthony and sued Anthony and Pro Logistics for breach of the purchase agreement, asserting that Pro Logistics had failed to deliver all of the assets it agreed to sell under the purchase agreement. Anthony counterclaimed, arguing that Qwinstar had breached the employment agreement by terminating him. The parties both filed motions for summary judgment, and the district court entered judgment for Anthony. Qwinstar appealed.