Mason v. Amtrust Fin. Servs., Inc.

EUGENE MASON, Plaintiff, v. AMTRUST FINANCIAL SERVICES, INC. and DAVIS LEWIS, Defendants.

19 Civ. 8364 (DLC)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

October 29, 2020

OPINION AND ORDER

APPEARANCES:

For Plaintiff:

Richard Seth Meisner

Jardin Meisner & Susser, P.C.

30B Vreeland Rd., Ste. 201

Florham Park, NJ 07932

(973) 845-7640

For Defendant:

William Edward Vita

Westerman, Ball, Ederer, Miller & Sharfstein, LLP

1201 RXR Plaza

Uniondale, NY 11556

(516) 622-9200

DENISE COTE, District Judge:

On September 11, 2020, defendant AmTrust Financial Services ("AmTrust") moved for summary judgment on plaintiff Eugene Mason's claims concerning his bonuses for the years 2014 through 2017. AmTrust contends that these claims must be dismissed as untimely. For the following reasons, AmTrust's motion is granted. Background

The following facts are undisputed or taken in the light most favorable to Mason. AmTrust hired Mason as the Senior Vice President, Professional Liability, in September 2013. Mason signed an "offer of employment" letter dated September 26, 2013 ("Letter"). The Letter provided that Mason would be eligible for two bonuses: an annual bonus equal to three percent of new underwriting income and a discretionary bonus. The Letter specified that both bonuses "shall be paid in the year following the year in which the bonus is earned, provided that [Mason's] employment with the Company has not been terminated prior thereto." (Emphasis supplied.) The Letter also stated that Mason's employment at AmTrust was "at-will and neither this letter nor any other oral or written representations may be considered a contract for any specific time period."

On July 6, 2016, Mason signed an AmTrust "Agreement to Bring Claims in Shortened Time Period and Waive Right to Jury Trial" ("Agreement"). AmTrust required all of its employees to sign this Agreement. The Agreement states,

I agree that in exchange for my continued at-will employment at AmTrust North America, Inc. ("the Company") and eligibility for a base pay increase, I shall file any lawsuit (and all claims that could be included in that lawsuit) against the Company or any of its managers, agents, or other employees, relating to my application for employment, employment, or separation of employment, within six (6) months after the date of the action or event thatis the subject of my lawsuit or the date I sign this Agreement, whichever is longer.

(Emphasis supplied.) The Agreement further states, "I understand that if I do not agree to this provision I should not continue my employment with the company as this is a required term of employment for all employees." AmTrust terminated Mason's employment three years later, on July 17, 2019.

On September 9, 2019, Mason filed a complaint against AmTrust and his manager David Lewis. In response to a motion to dismiss, Mason filed an amended complaint on October 18. After a renewed motion to dismiss was addressed, the only remaining claim was a claim for breach of contract against AmTrust. Mason v. AmTrust Fin. Servs., Inc., No. 19CV8364 (DLC), 2020 WL 1330688 (S.D.N.Y. Mar. 23, 2020). Mason's breach of contract claim alleges that AmTrust breached its employment agreement with Mason by failing to pay Mason underwriting and discretionary bonuses pursuant to the terms of the agreement for the years 2014 through 2018.

On September 11, 2020, AmTrust filed a motion for summary judgment seeking to dismiss Mason's claims for bonuses for the years 2014 through 2017 as time-barred by the Agreement. The motion became fully submitted on October 2. If this motion is granted, the sole remaining claim is for a breach of contractfor the year 2018 bonuses. That claim is due to be tried in December.

Discussion

Summary judgment may not be granted unless all of the submissions taken together "show[] that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A genuine issue of material fact exists if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Nick's Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 113 (2d Cir. 2017) (citation omitted). "Where, as here, the party opposing summary judgment bears the burden of proof at trial, summary judgment should be granted if the moving party can point to an absence of evidence to support an essential element of the nonmoving party's claim." Gemmink v. Jay Peak Inc., 807 F.3d 46, 48 (2d Cir. 2015) (citation omitted). In making this determination, the court "draws all inferences in favor of the nonmoving party." Id.

Once the moving party has asserted facts demonstrating that the non-movant's claims cannot be sustained, the opposing party "must come forward with specific evidence demonstrating the existence of a genuine dispute of material fact." Id. (citation omitted). "[C]onclusory statements, conjecture, and inadmissible evidence are insufficient to defeat summaryjudgment." Ridinger v. Dow Jones & Co. Inc., 651 F.3d 309, 317 (2d Cir. 2011) (citation omitted). Only disputes over material facts preclude the entry of summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). "An issue of fact is genuine and material if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Cross Commerce Media, Inc. v. Collective, Inc., 841 F.3d 155, 162 (2d Cir. 2016).

AmTrust contends that Mason's claim for bonuses is time-barred for four of the five years at issue here. New York law governs this breach of contract claim.¹

New York's Civil Practice Law and Rule states that "[a]n action . . . must be commenced within the time specified in this article unless a different time is prescribed by law or a shorter time is prescribed by written agreement." N.Y. C.P.L.R. 201. "The parties to a contract may agree to limit the period of time within which an action must be commenced to a period shorter than that provided by the applicable statute of limitations." Hunt v. Raymour & Flanigan, 963 N.Y.S.2d 722, 724 (2^d Dept. 2013) (citation omitted). "Absent proof that thecontract is one of adhesion or the product of overreaching, or that the altered period is unreasonably short, the abbreviated period of limitation will be enforced." Stonewall Contracting Corp. v. Long Island Rail Rd. Co., 129 N.Y.S.3d 433, 436 (2^d Dept. 2020) (citation omitted). "Where the party against which an abbreviated Statute of Limitations is sought to be enforced does not demonstrate duress, fraud, or misrepresentations in regard to its agreement to the shortened period, it is assumed that the term was voluntarily agreed to." State of Narrow Fabric, Inc. v. Unifi, Inc., 5 N.Y.S.3d 512, 514 (2^d Dept. 2015) (citation omitted). New York courts have held that a six-month period to bring a lawsuit is reasonable. See Hunt, 963 N.Y.S.2d at 723-24; Ortegas v. G4S Secure Sols. (USA) Inc., 65 N.Y.S.3d 693 (1^st Dept. 2017). See also Stonewall, 129 N.Y.S.3d at 437 (90-day contractual limitations period enforceable).

The Agreement required Mason to file any lawsuit against AmTrust related to his employment within the longer of six months after the date of the event that is the subject of the lawsuit or the date Mason signed the Agreement. Mason filed this lawsuit on September 9, 2019. As a result, he may only bring claims against AmTrust related to his employment based on events taking place on or after March 9, 2019. The Letter required AmTrust pay Mason his bonuses for each year of his employment no later than "the year following the year in whichthe bonus [was] earned." For the years 2014 through 2017, AmTrust paid bonuses to Mason by May of the following year. As a consequence, any claims regarding bonuses for the years 2014 through 2017 fall well outside the six-month limitations period established by the Agreement. AmTrust has shown that it is entitled to summary judgment for Mason's claims for bonuses for the years 2014, 2015, 2016, and 2017.

Mason opposes this motion for summary judgment with several arguments. First, Mason argues that there are still genuine issues of material fact, including whether Mason received his entire discretionary bonus and whether AmTrust committed fraudulent accounting practices and concealed those practices from Mason. These issues do not prevent the enforcement of the statute of limitations in this case. Any suit regarding the asserted underpayment of a bonus had to be brought within six months of the date on which the bonus was paid or due to be paid.²

Mason next contends that he did not voluntarily sign the Agreement. "In general, repudiation of an agreement on the ground that it was procured by duress requires a showing of both [1] a wrongful threat and [2] the effect of precluding the exercise of free will." United States v. Twenty Miljam-350 IED Jammers, 669 F.3d 78, 88 (2d Cir. 2011) (citation and emphasis omitted). In addition, because duress renders contracts voidable, rather than void, "the person claiming duress must act promptly to repudiate the contract or release or he will be deemed to have waived his right to do so." Id. at 89 (citation omitted).

Mason asserts that he could not have voluntarily signed the Agreement because he was threatened with the loss of his job and no negotiations regarding the terms of the Agreement took place between parties. Mason's assertion is insufficient to set aside the Agreement. Mason signed the Agreement three years before AmTrust terminated his employment. Through his continued employment with AmTrust he waived his right to repudiate the Agreement. A company's requirement that an at-will employee execute an employment agreement to avoid termination does not constitute a wrongful threat. Ellison v. Chartis Claims, Inc., 115 N.Y.S.3d 53, 59-60 (2^d Dept. 2019).

Mason also argues that the terms of the Agreement are vague and ambiguous. Under New York law, an

ambiguity exists where the terms of the contract could

...