## Facts

- Dr. Sergey Kantsevoy, a gastroenterologist, performed consulting and product-development work for LumenR LLC, a medical-device company developing an endoscopic tissue retractor system.
- After meeting LumenR’s founder at a conference, the founder emailed Kantsevoy offering consulting work at “$500 per hour or $2,500 per day” for meetings, labs, and clinical studies.
- The email also stated that if Kantsevoy became “excited about the technology’s future,” LumenR “could create an equity-ownership package” that “might” yield substantial compensation upon an exit.
- Kantsevoy responded that he was interested and later performed services; a dispute arose over alleged unpaid consulting compensation and an alleged promise of equity.
- Kantsevoy sued under multiple contract and tort theories; LumenR denied any enforceable obligation to provide equity and asserted counterclaims tied to Kantsevoy’s alleged misstatements to third parties about having no financial interest in LumenR.
- The parties filed cross-motions for judgment on the pleadings under Rule 12(c), and LumenR moved to amend its pleadings after the scheduling-order deadline to add an additional counterclaim.

## Issues

1. Whether the alleged promise to provide an equity-ownership package was sufficiently definite to be enforceable as a contract term under Maryland law.
2. Whether the pleadings stated viable claims and counterclaims, including deceit and negligent misrepresentation theories tied to compensation and equity discussions and alleged financial-interest disclosures.
3. Whether LumenR showed “good cause” under Fed. R. Civ. P. 16(b)(4) to amend its pleadings after the scheduling-order deadline.

## Decision

- The court held that the equity-ownership language (“could create” and “might provide”) lacked material terms and was too indefinite to be enforced as a contractual obligation.
- The court concluded the consulting-rate terms ($500/hour or $2,500/day), coupled with assent and subsequent performance, were sufficiently definite to support a contract claim for consulting fees.
- The court dismissed Kantsevoy’s deceit claim regarding consulting fees for insufficient allegations of a specific, knowingly false payment-related representation.
- The court permitted Kantsevoy’s equity-related negligent misrepresentation claim to proceed at the pleadings stage.
- The court denied Kantsevoy’s request to dispose of LumenR’s deceit counterclaim at the pleadings stage, finding the counterclaim sufficiently pleaded.
- The court denied LumenR’s motion to amend because LumenR failed to show diligence and therefore did not establish Rule 16(b)(4) good cause to modify the scheduling order.

## Legal Principles

- A contract requires reasonably definite material terms; conditional or aspirational statements about possible future equity arrangements, without essential terms (e.g., amount, timing, conditions), are not enforceable.
- Clear pay-rate terms, accepted and followed by performance, can establish an enforceable agreement for services.
- Deceit (fraud) claims require specific allegations identifying the misrepresentation and the circumstances showing knowledge and intent; conclusory assertions are inadequate.
- Negligent misrepresentation may proceed where the plaintiff plausibly alleges a false statement, reasonable reliance, and resulting harm, even if the statement does not create an enforceable contract term.
- After a scheduling order, a party seeking to amend pleadings must first satisfy Rule 16(b)(4) by showing diligence and good cause; prior knowledge of the core operative facts weighs against late amendment.

## Conclusion

The court treated the consulting-rate email exchange as capable of creating an enforceable fee agreement, rejected the alleged equity promise as too indefinite to form a contract, allowed certain misrepresentation and counterclaim theories to proceed under pleading standards, and enforced the scheduling order by denying a late amendment for lack of Rule 16 good cause.


Kantsevoy v. LumenR LLC, 301 F. Supp. 3d 577 (D. Md. 2018)