Michigan Appeals Court Upholds $3 Million Employment Contract Award

Q: Why did a court favor a $3M cash award over the actual company equity owed to an executive?

The court favored the $3 million cash award because it found money was enough to fully compensate the executive for the value of the equity CIG Capital Advisors failed to deliver. In *Hai v. CIG Capital Advisors, Inc.*, the Michigan Court of Appeals said contract damages should put the injured party “in as good a position as if the contract had been fully performed.” The judges held that paying Hai the monetary value of the promised equity achieved that result. In the court’s view, receiving the cash value of the shares was economically equivalent to receiving the shares themselves, just in a different form. That mattered because specific performance — ordering the company to hand over the actual equity — is an equitable remedy used only when money is not an adequate fix. The appeals panel said that was not the case here. Since the equity could be valued and the jury awarded that value, a cash judgment was sufficient. The court also rejected the company’s argument that a money award would overcompensate Hai. It said the award did not give him more than the contract promised; it simply converted the promised ownership interest into dollars. The ruling also had a procedural effect. Because Hai was seeking legal damages rather than purely equitable relief, he was entitled to pursue the claim before a jury. The appeals court affirmed that approach and left intact the more than $3 million verdict.

1 articles · Updated · Michigan Lawyers Weekly · Jul 7

$3 million-plus in jury damages for a breached employment contract was affirmed, leaving intact the plaintiff’s win against CIG Capital Advisors in Hai v. CIG Capital Advisors, Inc.
The appeals panel said cash damages did not overcompensate the plaintiff because the monetary value of the owed equity matched the value he would have received through performance.
Judges also rejected the defendant’s push for specific performance, ruling money damages were enough to put the plaintiff in the same position as full contract performance.
That conclusion also undercut the defendant’s jury-trial challenge, with the court holding the plaintiff was entitled to seek legal relief rather than only an equitable remedy.