DiMartino v. De Lage Landen Fin. Servs., Inc.

209 F.Supp.3d 783

Rita F. DIMARTINO Plaintiff,

v.DE LAGE LANDEN FINANCIAL SERVICES, INC., Defendant.

CIVIL ACTION NO. 14-7247

United States District Court, E.D. Pennsylvania.

Signed September 19, 2016

Margaret A. McCausland, Patricia A. McCausland, McCausland & McCausland LLC, Conshohocken, PA, for Plaintiff.

Michael L. Banks, Keri L. Engelman, Morgan Lewis & Bockius LLP, Philadelphia, PA, for Defendant.

MEMORANDUM OPINION

Rufe, Judge.

In this contract and wage dispute, the parties have filed cross-motions for summary judgment on the sole issue remaining in this case: whether Plaintiff, Rita DiMartino, was entitled to receive from Defendant De Lage Landen Financial Services, Inc. ("DLL"), a long-term incentive payment of $182,927.88 in 2013 based on performance in 2012. Although the parties agree as to many of the facts, they disagree as to the meaning of the relevant agreements.

I. FACTS

The parties have stipulated to the following facts. Ms. DiMartino became employed with DLL as its Chief Operating Officer pursuant to a written offer dated August 19, 2002, and served in that capacity from February 3, 2003 until December 2006. In July 2007, the parties entered into a written employment agreement memorializing Ms. DiMartino's promotion to Deputy Chief Operating Officer (Global) on January 1, 2007, a role she held until June 2010, when Ms. DiMartino became Chief Innovation Officer. In all of these roles, Ms. DiMartino reported to DLL's Chief Executive Officer ("CEO"), Ronald Slaats.

Through 2011, Ms. DiMartino was eligible to receive an annual short-term incentive ("STI")¹ of up to 100% of her base salary, and pursuant to a Long Term Incentive Plan ("LTIP"), up to 35% of her base salary. In 2011, new European regulations required DLL to make changes to its executive compensation program. DLL created a new executive remuneration policy (the "ERP") on April 1, 2012, effective as of January 1, 2012. Ms. DiMartino was notified that "[t]he Long Term Incentive Policy is as of January 2012 integrated in the new incentive plan for Executives and has become an integral part of the [ERP]."² As a result, Ms. DiMartino was eligible for a total incentive of 100% of her base salary, with 64% as a short-term incentive and 36% as a long-term incentive. Because the potential bonus was reduced, executive salaries increased, and Ms. DiMartino's base salary rose from $412,000 to $508,133, effective January 1, 2012.³ To align Plaintiff's compensation with the new program, the parties entered into an amendment to the 2007 agreement. The amendment ("Amendment No. 1") also took effect as of January 1, 2012, although it was executed in April 2012.⁴

Anticipating a change in Plaintiff's role with DLL, the parties then entered into a second amendment to the 2007 agreement, effective October 15, 2012 ("Amendment No. 2"). Amendment No. 2 provided that effective January 1, 2013, Ms. DiMartino would become an internal consultant under the direction of Mr. Slaats. Ms. DiMartino's title became Global Chief Information Officer. Paragraph 5 of Amendment No. 2, which forms the crux of the parties' dispute, provides that "[e]ffective January 1, 2013, [Ms. DiMartino] shall no longer be eligible for any new long term incentive grants or awards."⁵ On March 14, 2013, Dick Hendriks, Senior Vice President of Global Compensation & Benefits, sent Ms. DiMartino an email, copied to Mr. Slaats, with the subject "bonus 2012," setting forth a schedule for payments of both short-term and long-term incentive pay-out for performance years 2012 and for the previously-awarded 2011.⁶ On March 15, 2013, DLL paid Ms. DiMartino $124,924.50 in short-term incentive compensation. On March 27, 2013, Rob Pierik, Executive Vice President for Human Resources, sent Ms. DiMartino a letter, stating that Plaintiff's short-term incentive for performance year 2012 was determined at 49.17% of her base salary, or $249,849. The letter stated that "[y]ou are informed about the LTI 2010-2012 in a separate letter," and directing questions to Mr. Hendriks.⁷

About this same time, the parties amended the 2007 agreement once more ("Amendment No. 3"). Amendment No. 3, which was effective April 2013, provided that on June 30, 2013, Plaintiff would become a global strategic adviser at DLL, still reporting to Mr. Slaats.⁸ On September 13, 2013, DLL announced Mr. Slaats's resignation as CEO. Jan Kusters then became Ms. DiMartino's supervisor, and he directed her to stop performing any work for DLL but to remain available in accordance with her agreement.

On November 12, 2013, Mr. Hendriks sent an email to Ms. DiMartino with the subject "deferral of incentve [sic ]" stating that "something has gone wrong with deferral of your incentive 2012 in relationship with the LTIP 2013 grant."⁹ DLL recalculated Ms. DiMartino's 2012 bonus to consist of an STI pay-out only, in the amount of $249,849. This was followed months later by a letter from Mr. Hendriks to Ms. DiMartino dated May 2, 2014, which stated DLL's position (which Plaintiff disputes in this litigation) that under Amendment No. 2, Ms. DiMartino was ineligible for long-term incentive compensation linked to the 2012 performance year and therefore some of her short-term incentive compensation would need to be deferred.¹⁰ Ms. DiMartino's employment with DLL ended on July 31, 2014.

II. LEGAL STANDARD

A court will award summary judgment on a claim or part of a claim where there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."¹¹ A fact is "material" if resolving the dispute over the fact "might affect the outcome of the suit under the governing [substantive] law."¹² A dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party."¹³

In evaluating a summary judgment motion, a court "must view the facts in the light most favorable to the non-moving party," and make every reasonable inference in that party's favor.¹⁴ Further, a court may not weigh the evidence or make credibility determinations.¹⁵ Nevertheless, the party opposing summary judgment must support each essential element of the opposition with concrete evidence in the record.¹⁶ "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted."¹⁷ This requirement upholds the "underlying purpose of summary judgment [which] is to avoid a pointless trial in cases where it is unnecessary and would only cause delay and expense."¹⁸ Therefore, if, after making all reasonable inferences in favor of the non-moving party, the court determines that there is no genuine dispute as to any material fact, summary judgment is appropriate.¹⁹

The rule is no different where there are cross-motions for summary judgment.²⁰ As stated by the Third Circuit, "[c]ross-motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist."²¹

III. DISCUSSION

A. Breach of Contract Claim

Under Pennsylvania law, which the parties agree governs here, a cause of action for breach of contract requires "(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract and (3) resultant damages."²² "Issues of contractual interpretation are questions of law."²³ Contracts are to be interpreted according to the parties' intent, and where "a written contract is clear and unambiguous, the parties' intent is contained in the writing itself."²⁴ "Unless otherwise specified, a contract's language shall be given its plain and ordinary meaning."²⁵ "To determine whether ambiguity exists in a contract, the court may consider ‘the words of the contract, the alternative meaning suggested by counsel, and the nature of the objective evidence to be offered in support of that meaning.’ "²⁶ "A court must then ‘decide whether there are objective indications that the terms of the contract are subject to differing meanings.’ "²⁷ When an ambiguity exists, "parol evidence is admissible to explain or clarify or resolve the ambiguity, irrespective of whether the ambiguity is patent, created by the language of the instrument, or latent, created by extrinsic or collateral circumstances."²⁸

In ruling on the motions for summary judgment, the Court is guided by the following points:

(1) mere disagreement between the parties over the meaning of a term is insufficient to establish that term as ambiguous: (2) each party's proffered interpretation must be reasonable, in that there must be evidence in the contract to support the interpretation beyond the party's mere claim of ambiguity; and (3) the proffered interpretation cannot contradict the common understanding of the disputed term or phrase when there is another term that the parties could easily have used to convey this contradictory meaning.²⁹

Defendant argues that Paragraph 5 of Amendment No. 2, which provides that "[e]ffective January 1, 2013, [Ms. DiMartino] shall no longer be eligible for any new long term incentive grants or awards" means that Plaintiff waived her eligibility to receive long-term incentive compensation for her performance in 2012. To support this interpretation, Defendant points to Paragraph 8 of Amendment No. 2, which refers to 2010 and 2011 long-term incentive grants, but is silent as to 2012, and Paragraph 4 of Amendment No. 3, which provides that Ms. DiMartino "shall no longer be eligible for any long term incentive programs as of the effective date hereof [April 2013], but...shall be eligible to receive any 2011 LTIP awards paid out prior to December 31, 2014," and which also sets out all of the compensation Plaintiff was due upon the end of her employment on July 31, 2014, without mentioning a long-term incentive...