Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_02-cv-01413/USCOURTS-azd-2_02-cv-01413-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Susan Stone, ) No. CIV 02-1413 PHX RCB 

)

Plaintiff, ) 

)

vs. ) O R D E R

)

GAB Robins North America, )

Inc., )

)

Defendant. ) )

On June 27, 2002, Plaintiff Susan Stone ("Stone") filed a

Complaint against her former employer GAB Robins North America,

Inc. ("GAB") in the Superior Court of Arizona in Maricopa County. 

Notice of Removal (doc. 1). The matter was removed to this Court

on the basis of diversity on July 26, 2002. Id. The Complaint

alleged five causes of action: (1) breach of contract; (2) breach

of the covenant of good faith and fair dealing; (3) violation of

the Arizona Wage Act, ARIZ. REV. STAT. § 23-350, et. seq; (4) fraud;

and (5) negligent misrepresentation. Id. at Exbt. A. All five

causes of action relate to two specific allegations made by Stone. 

First, Stone claims that GAB improperly calculated her 2001 bonus. 

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Second, Stone claims that GAB improperly withheld 30% of her bonus.

On March 18, 2005, the Court granted partial summary judgment

in favor of GAB on one of Stone's claims. Order (doc. 48) at 13. 

The trial on the remaining claims against GAB is scheduled to begin

on March 7, 2006. Order (doc. 66). 

Both parties have filed motions in limine seeking the

exclusion of certain testimony and a limitation on the manner in

which a particular document may be referred. P. Mot. (doc. 57); D.

Mot. Language (doc. 55); D. Mot. Discretionary Bonus (doc. 56). 

The Court has considered the arguments presented and is now

prepared to rule.

I. Stone's Motion in Limine

 In her motion, Stone requests that the Court (1) preclude GAB

from testifying, asserting, or arguing that any bonus plans or

agreements that were not presented to Stone in the course of her

employment constitute binding contracts or agreements; and (2) that

if such plans or agreements are offered by GAB, that the jury be

instructed that plans or agreements that were not provided to Stone

cannot constitute binding contracts or agreements, and cannot

modify an existing plan or agreement that has been provided. P.

Mot. (doc. 57) at 1.

GAB is an independent insurance adjusting company providing

claims adjusting and claims management services to insurance

companies and self-insured entities. DSOF (doc. 34) at ¶ 9. The

majority of GAB's business arises out of two divisions within the

organization: Risk Management Services ("RMS") and Insurance

Company Services ("ICS"). Id. at ¶ 10. Stone was employed with

GAB from 1994 to 2002, as a Regional Account Executive. PSOF (doc.

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39) at ¶¶ 1-2. 

Prior to March 12, 2001, GAB had an ICS bonus plan and a

separate RMS bonus plan. DSOF (doc. 34) at ¶ 21-24. However, on

March 12, 2001, GAB issued a new plan that was explained in writing

to each ICS salesperson by way of a form letter ("Plan Letter"). 

Exbt 8 (doc. 34). The Plan Letter did not specifically indicate

that the new plan would apply to only ICS sales, and not RMS sales. 

Id. Thereafter, Stone landed a large RMS sale and expected to

receive a bonus pursuant to the new incentive plan. However, GAB

refused to pay her a bonus under the new plan, asserting that

another plan existed for RMS sales. 

Stone asserts that the Plan Letter was the only written

incentive compensation plan for 2001 ever provided to her. P. Mot.

(doc. 57) at 2. Thus, her motion in limine seeks to preclude GAB

from arguing at trial that the alleged separate RMS plan

constituted a contract or agreement with Stone. In support of her

motion, Stone cites case law discussing what is required to effect

a unilateral modification to an employment contract. Id. at 2-4

(citing DeMasse v. ITT Corp., 194 Ariz. 500 (1999)).

In response, GAB argues that Stone's motion should be denied

because GAB disputes that its compensation plans constitute

"contracts." Resp. to P. Mot. (doc. 60) at 2. GAB asserts that

the Plan Letter was "merely a statement of [its] bonus policy[.]" 

Id. at 3. In addition, GAB notes that Stone, in her application

for employment, expressly agreed that GAB could modify its policies

and procedures at any time without notice, thus allowing GAB the

right to determine its pay policies. Id. at 3.

In its order of March 18, 2005, the Court determined that the

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issue of whether the Plan Letter distributed by GAB became a part

of Stone's at-will employment contract is a factual question that

must be decided by a jury. The Court did not decide whether or not

the Plan Letter was a contract. Thus, the preclusion of testimony

related to the status of the alleged RMS bonus plan and how it

affected Stone's employment or bonus contract with GAB assumes that

such a contract existed in the first place. Such a conclusion by

the Court would be inappropriate. Accordingly, the Court shall

deny Stone's motion. 

II. GAB's Motion in Limine Regarding Language Use

In relation to the issues discussed above, GAB seeks to

preclude Stone, her counsel and witnesses, from referring to the

Plan Letter as a "contract," "understanding," "agreement" or any

similar term at trial. D. Mot. Language (doc. 55) at 1. GAB notes

that the Court, in its order of March 18, 2005, concluded that the

issue of whether the Plan Letter was a contract or became a part of

Stone's at-will employment contract is a factual question that must

be decided by a jury. Id. at 2. Consequently, GAB argues that

allowing such references at trial, other than during opening and

closing statements, would unduly prejudice GAB and could mislead

the jury, unfairly swaying them in deciding an ultimate fact issue. 

Id. at 2-3. Thus, under Federal Rule of Evidence 403, GAB contends

that such references should be precluded. Id. at 3.

In contrast, Stone argues that such references are not

prejudicial and are, in fact, critical to the crux of this case. 

Resp. to D. Mot. Language (doc. 59) at 2. Stone asserts that both

parties' understandings of the intent of the Plan Letter, as well

as the interpretation of the plan, are critical to the claims in

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this case. Id. at 4. Accordingly, Stone argues that any and all

witnesses and attorneys should be able to provide evidence and

argument as to what their understandings were of the plan, and that

counsel should be entitled to argue that the Plan Letter was a

contract or agreement. Id. "Defendant's counsel will be able to

cross-examine Plaintiff or any other witness as to their

understanding or belief." Id.

In the case at bar, a jury will be asked to decide whether a

contract or agreement existed between the parties. Thus, the need

to explore the parties' understandings of the Plan Letter makes

improper the complete preclusion of the use of such language.

However, because of legitimate Rule 403 problems of prejudice, the

Court shall allow counsel for both Stone and GAB to argue that the

Plan Letter was a "contract," "understanding," "agreement" or any

similar term, in opening statements and, depending on the evidence,

closing arguments, but will preclude counsel, in their questioning,

from characterizing the document as a "contract," "understanding,"

"agreement" or any similar term. This does not preclude any witness

from characterizing the document as such if he or she does so in a

legitimate response to an appropriate question. Furthermore, should

the state of the evidence justify the reconsideration of this

matter at trial, the Court will not preclude either party from

raising the issue again. Therefore, the Court shall grant in part

and deny in part GAB's motion.

III. GAB's Motion in Limine Regarding Discretionary Bonus

GAB also seeks to preclude Stone, her counsel and witnesses,

from referring to, testifying about, or questioning witnesses

regarding her previously dismissed claim relating to her unpaid 30%

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discretionary bonus and its underlying facts. D. Mot.

Discretionary Bonus (doc. 56) at 4. In this case, Stone alleged

two claims based on the Arizona Wage Act, A.R.S. § 23-350, one of

which sought treble damages for a 30% discretionary bonus she did

not receive for 2001. In its order dated March 18, 2005, the Court

dismissed this claim, finding that "the 30% of the bonus monies at

issue were discretionary, and consequently, not covered by the

Arizona Wage Act." Order (doc. 48) at 13. Accordingly, GAB argues

that all evidence and allegations relating to this claim should be

precluded because it would be irrelevant, unduly prejudicial to

GAB, mislead the jury and cause an undue waste of the Court's time. 

D. Mot. Discretionary Bonus (doc. 56) at 2. Specifically, GAB

argues that the probative value of such testimony is substantially

outweighed by its prejudicial effect, as it could cause the jury to

base its decision on sympathy for Stone. Id. at 3.

In opposition to GAB's motion, Stone argues that the

preclusion of such testimony would inhibit her from seeking relief

for the unpaid bonus monies under other legal theories set forth in

her Complaint. Resp. to D. Mot. Discretionary Bonus (doc. 58) at

2. Stone notes that the Court, in its order of March 18, 2005,

granted summary judgment in favor of GAB on the narrow issue of

whether she could claim treble damages under the Arizona Wage Act. 

Id. Despite the dismissal of this one claim, Stone asserts that

she still seeks relief in regard to the unpaid discretionary bonus

under her claims of breach of contract, breach of the covenant of

good faith and fair dealing, fraud and misrepresentation. Id.

In light of Stone's active claims for the discretionary bonus

under the above listed legal theories, the Court concludes that the

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preclusion of testimony related to the contested bonus monies would

be inappropriate. Consequently, the Court shall deny GAB's motion. 

Therefore,

IT IS ORDERED that Stone's Motion in Limine (doc. 57) is

DENIED.

IT IS FURTHER ORDERED the GAB's Motion in Limine Regarding Use

of Contract, Understanding, Agreement or the Like (doc. 55) is

GRANTED in part and DENIED in part in accordance with this order. 

IT IS FURTHER ORDERED the GAB's Motion in Limine Regarding

Plaintiff's Dismissed Claims (doc. 56) is DENIED.

DATED this 6th day of February, 2006.

Copies to counsel of record

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