Eric Pulier v. Computer Sciences Corp: He Had Vice President’s Title And Company Identified Him As “Management”, But He Was No Officer
Tuesday, June 7, 2016

Francis Pileggi recently wrote about a ruling in the Court of Chancery concerning Nevada’s private corporation law.  The case, Eric Pulier v. Computer Sciences Corp., et al., C.A. No. 12005-CB, hearing (Del. Ch. May 12, 2016), arose from Computer Science Corporation’s acquisition in 2013 of Agility Platform, Inc., which was formerly known as ServiceMesh, Inc. After the closing, CSC sued Mr. Pulier, who was ServiceMesh’s founder.  Mr. Pulier then asked CSC to advance the costs of defense pursuant to CSC’s certificate of incorporation and bylaws, which provided for indemnification of directors and officers.

Because CSC is a Nevada corporation, Vice Chancellor Andre G. Bouchard, applied Nevada law to the question of whether Mr. Pulier was an officer. The evidence regarding Mr. Pulier’s status was mixed.  He held the title of “vice president” and CSC’s website listed him under “management” and as a member of its executive leadership.

Mr. Pulier argued that “anyone who is a vice president necessarily must be an officer and that because he carried the title of vice president and general manager of CSC after the closing, he necessarily must have been an officer of CSC during that period”.  The Vice Chancellor disagreed, pointing out that pursuant to NRS 78.130(3) officers must be chosen in such manner as may be prescribed by the bylaws or determined by the board of directors.  CSC’s bylaws provided that officers “shall be elected by the Board of Directors” and Mr. Pulier had not been elected as an officer by CSC’s Board.

Mr. Pulier’s action for advancement expenses was not entirely in vain, however, because the Vice Chancellor ruled that he was entitled to advancement from ServiceMesh with respect to some of the causes alleged against him by CSC.  Consequently, the Court determined that Mr. Pulier was entitled to 80% of his reasonable expenses to defend the underlying litigation and was entitled to 80% of his expenses incurred in prosecuting his claim for advancement after he perfected is demand for advancement.

What vice is that, good Troilus?

The term “vice president” may puzzle some readers.  After all, a vice president isn’t someone presiding over vice.  It turns out that there are two entirely different etymons for “vice”.  When referring to a bad habit or a sin, the word is derived from the Latin noun vitium, meaning a fault or crime.  The “vice” in “vice president” is derived from a different Latin word – vicis, meaning a change or succession.  The phrase, vice versa, is also derived from vicis.  Technically, the phrase is a an ablative absolute (vice being the ablative case of vicis and versa being the singular, perfect passive, feminine participle form of versus, meaning having been turned around).  For the origin of “president”, see this post.

 

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