T he Hon. W i l l i am W S chwar z er , U ni t ed St at es Di st r i ct Judg e f or t he Nor t her n Di st r i ct of C al i f or ni a, * s i tti n g b y d e s i g n a ti o n .

NO T RE CO MM EN DE D FO R FU LL -T EXTPU BL IC A TI ON Fi le N ame: 07a0635n .06 Fi led : A ug ust29, 2007 No s. 06 -1 695/169 6 UNITED STA

TES COURT OF A PPE A LS FO R TH E SI XTH C IR CU IT
DOUGLAS MILLER, Pl a i n t i ff-Appe ll ee/C ro ss -A ppel lan t,
v. LANZO H OLDING C OMPANY; L ANZO CONST RUCTION COMPANY; LANZO CO NS TRU CTIO N CO MP AN Y, FL OR IDA; L ANZO LINING COMPANY, MICH IGAN; LAN ZO LIN IN G C OM PAN Y , F LOR ID A; and M OON ROOF C OR PORATION OF AM ER IC A, Def end ant s - Ap pe l l ant s/CrossApp ellees. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ON APP EAL F RO M THE UN ITED ST AT ES DIST RICT COURT F O R THE EASTER N DI STRIC T OF MI CH IGAN

Before: MARTI N and DAUGHT REY, C ircuit Judges, a nd SCHW ARZER, Distri ct * Judg e.
PER CURIAM. In this action for brea ch of contract , plaint if

f Douglas Mi ller appe als fr o m t h e d is tr ict c our

t’ s o rd ers o f summary

j udg ment i n fav or

of the d efendants, a g ro up of fami l y - ow ne d bu s i ne s s es c ol l ec ti v el y refe r red to i n th i s op i ni on as La nz o. In Janua ry 200 0, Miller w as em ployed by Lanzo as c h ie f f in a ncial of

f icer at a time w hen Lan z o’s f inan ces w ere in a stat e of some disarray . His com pen sation and ben ef its w ere set o ut inNos. 06-1695/1696

Miller v. Lanzo Holding Co.

- 2 - an empl oy ment c ontractand, sh ortl y thereafter, the par

ti es to t hat c ontractneg oti ated a severance agreem ent . Th e expecta tion was that Mill er would reorganize all the econ om ic and t ax as pect s o f the Lanz o compani es and put t he bus ine ss es back on a so und finan ci al track

. After about si x

months , how ev er , i t bec ame ap p a re n t to the ow ners t hat u nder Mill er’s g uidance, the com pan ies’ f inan cial af fairs w ere con tinuin g to de teriorate , and w ithin tw o y ears Mill er ’s empl oy ment w as ter minat ed for “p oor per formance. ” W hen t he de fen da nt s refu s ed t o pa y M i l l er t he a mo un ts tha t he bel i ev ed w ere du e un de r the t er ms of his empl oy ment and se v erance ag re emen ts, he broug ht t his ac ti on for breach of cont ra ct. The de fendants count er cl aimed for fraud and si len t f ra ud, cl aimi ng that M il ler had mis re present ed hi msel f on hi s resume and i n hi s i nter v iews a t t he ti me he w as hired. The procedu ra l his tor

y of l it ig ati on in thi s cas e is l eng thy , al thoug h the l eg al is sues on appea l a re re l a t i v e l y s t ra i g h tfo r

w a rd

. P r i o r

t o t r i a l , t h e p l a i n t i ff fi l e d a m o t i o n for
summar y jud g ment on the count er cl aims and a moti on for par ti al summar

y j udg ment for
cer tai n benefit s u nder

the ag re ements , i ncl udi ng a 25 percent b onus pay ment for 2001, deferre d co mpensat ion , pay ment for unuse d v acat ion day s, and s ev erance pay . The distri ct co urt g ra nted summar y j udg ment t o the pl ain ti ff on t he c ountercl aims but deni ed
summar y j udg ment on the o ther

i ss ues and, in fact, lat er g ra nted summar y j udg ment t o the d e fe n d a n t s o n t h e c l a i ms for pa y me n tof t h e bo n u s an d un u s e d v a c a t i o n da y s . Th a tl e ft onl y tw o i ss ues as the c ase proceed ed to tr ial : t he pl ain ti ff ’s cl aims for b re a ch of the
em ploymen t agreem entw ith regard to unp aid def erred com pen sation a nd u npa id salary and the plaint if

f ’s claim for breach of

the severance agreeme nt w ith regard to severanceNos. 06-1695/1696

Miller v. Lanzo Holding Co.

- 3 - benefits i n “ an amounteq ual to [hi s] ear nin g s d ur ing the tw elv e m o n th p e riod” pr ior to ter minat ion

. After the c los e of ev ide nce, the pla int iff made a moti on for a par ti al “d irect ed v erdict”
w it h respect t o the defendant’ s li abi li ty on the sev erance ag re ement ( but n ot t he c alc ula ti on of the amountdue)

. After arg ument, the co u rt g ra nted the mot ion , r uli ng thatthe defendants had fail ed to es tabl is h the oc cur re nce of any of t he sev erance ag re ement’ s four forfeiture events tha t w ould have prevente d the plaintif f f rom co llecting sev eran ce be nef its. T he jury w as the refore cha rg ed wi th de term ining, f irst, w het her the def end ant s w ere liable for breach of the empl oy ment ag re ement re g ardin g deferred c ompensat ion pay ments and unpai d s ala ry

and, i f so, i n w hat amounts and, sec ond, the a mount du e to Mi ll er under the
sev erance ag re ement. The j ur y found that t h e d e f endants had not b re ached the employ ment ag re ement i n ei ther respect and aw arded t he pl ain ti ff $242, 680 pl us int erest , as the a mount du e under the sev erance ag re ement.
After the v erdict, the pla int iff broug ht a par ti al moti on for jud g ment notw it hst andi ng the v erdict and an a lt er nati v e motion for a ne w tr ial , arg uin g thata v erdict s houl d be directe d in his favor regarding liability on the emp loyment c ont ract. Th e district court deni e d t h i s mo t i o n , r u l i n g t h a t t h e p l a i n t i ff h a d fa i l e d t o ma k e a R u l e 5 0 ( a ) mo ti on atthe cl ose of e v ide nce and, therefore, had w aiv ed th is arg ument an d, i n any ev ent, that the moti on w oul d fail on i ts meri ts.Nos. 06-1695/1696

Miller v. Lanzo Holding Co.

- 4 - The pl ain ti ff

ap peal ed, c ontendi ng that( 1) the dis tr ict c our t er re d i n g ra nti ng the defendants summar

y j udg ment on thei r li abi li ty for u nused v acat ion ti me pursuant to t he
em ploymen t agreem ent ; (2) the district court erred i n g rantin g the defend ant s summ ary ju dg ment on the i ss ue of the 25 percenty ear-e nd bonu s for 2001, pursuantto the employ ment ag re ement; and (3 ) the dis tr ict cour t er re d in deny ing the pla int iff’s mot ion for par ti al jud g ment notw it hst andi ng the v erdict and hi s a lt er nativ e moti on for new tr ial
re g ardin g l iab il ity

for u npai d s ala ry

an d d e fe r re d c o mp ensat ion pursuantto the e mploy ment ag re ement.
The defendants cross -a ppeal ed, a rg uin g that( 1) the dis tr ict c our t erred i n g ra nti ng summar y j udg ment t o the pl ain ti ff on t he defendants ’ count er cl aims for fra u d a nd s il ent fraud; (2 ) the d is tr ict c our t er re d i n l im it in g tes ti mony co ncer nin g the all eg ed fraud ule nt mis re present ati ons in the p lai nti ff ’s resume and athi s i nter v iews; (3 ) the dis tr ict c our t er re d in excl udin g testim ony of the pla intif

f ‘s job performa nce a s irrelevant; a nd (4) the district
cour t er re d i n di re cti ng a v erdict for the p lai nti ff w it h reg ard to li abi li ty

for b re ach of the
sev erance ag re ement.
Hav ing had the b enefit of oral arg ument, and hav ing st udi ed th e record on appeal and t he bri efs of

the par ti es, w e are notpersuade d tha t t he di str ict c our t er re d i n di smi ss ing t h e d e fe n d a n t s ’ c o u n t e rc la im s a n d in e n t e ri n g j u d gm e n to n t h e ju ry’ s ve rd ic t

. No r d o we find any bas is for rev ersi ng the dis tr ict c our t’ s deter minat ion that the pay ment of a bonus
w as enti re ly

disc re ti onar

y on the p art of the employ er , and w e dec li ne to di stu rb the g ra ntNos. 06-1695/1696

Miller v. Lanzo Holding Co.

- 5 - of summ aryjudgmen t on th is issue. Becau se the reason s for tho se rulings have bee n f ully and c or re ctl y

ar ti cula te d by

the dis tr ict c our

t i n i ts orders d ated Apr il 29, 2005, June 16, 20 0 5 , a n d M a r c h 2 3 , 2 0 0 6 , w e c o n c l u d e t h a t a d e t a i l e d re - a n a l y s i s i s u n n e ces saryand af f irm on th e ba sis of

the rea sonin g set ou t by the district court on ea ch of those issues.
W e find fault w it h the di str ict c our t’ s d eci si on onl y

as to th e o ne remaini ng i ss ue. On ap peal , M il ler

co ntends thatthe dis tr ict c our t er re d whe n i t deni ed hi s mot ion for
summar y j udg ment w it h reg ard to compens ati on for 17 unus ed v acat ion day s. W e ag re e.
Unde r paragraph 11 of

Mil ler’s emp loymentagreeme nt, h e w as en titled to “4 w eeks of v acat ion per

y ear ,” at lea st some o f w hic h, he al leg ed, w as unuse d i n hi s s econd and las t y ear at Lan zo. In addi ti on, p arag ra ph 10 of the c ontractprov ide s t hat M il ler w as ent itled to “participat[ e ] i n a ll com pan y ben ef it programs.” Th ose b ene f it programs are listed in the Lan z o com pan ies’ emp loyee han dbo ok, sect ion 3.1 5 of w hich includ es a “paid ti me off” pol icy

thatprov ide s a s fol lows: “ In t he ev ent t hat av ail abl e [v acat ion day s are] no t used by the end of

the benefit y ear , employ ees w il l be paid for the unuse d time br ing ing t h e b e n e f itb a la n c e t o z e ro . ” T h e d is t ri c tco u rtn o n e t h e le s s fo u n d t h a t“t h e L a n zo Compan ies ’ busi ness pol ic ies and Employ ee Handbook

. . . do n ot prov ide co mpensat ion for unus ed v acat ion day s.” Thi s r uli ng , how ev er , c ontradi ct s th e p la in lan g uag e of the
re lev ant d ocument s a nd i s, therefore, inc or re ct.
Th e d e fe n d a n t s d o no tco n t e n d th a tth e em p l o y e e ha n d b o o kan d i t s p a i d
- t i me - o ff pol icy are i nappl ic abl e to Mi ll er and, i n fact , do not address Mil ler ’s arg ument on this is sueNos. 06-1695/1696

Miller v. Lanzo Holding Co.

- 6 - d ir e c t ly. In s t e a d , t h e y ci t e ca s e la w fo r t h e ge n e ra l p ro p o s it io n t h a tu n d e r M ic h i ga n la w, unuse d v acat ion day s are not inc lud ed in a deter minat ion of an at -w il l employ ee’ s “ annual compens ati on.” W e c oncl ude t hat t his arg ument s impl y mis ses the m a rk. The employ ment ag re ement g ov er ned t he par ti es’ rela ti onshi p and g av e M il ler the ri g ht t o a cer tai n amount

of v acat ion ti me. I n addi ti on, t he pl ain l ang uag e of parag ra phs 10 and 11
o f h is e m p lo ym e n tco n t ra c t , wh ic h in c o rp o ra t e d t h e co m p a n ie s ’ p a id -t im e -o f f p o li c y, enti tl ed M il ler

to compens ati on for

his unused va cat ion day s. In the a bsenc e of a g enui ne is sue of materi al fact reg ardin g the appl ic abi li ty of that pol icy

to Mi ll er , w e c oncl ude t hat h e is enti tl ed to recov er

on t his cl aim.
F or th e rea s on s s et ou t ab ov e, w e R EV ER SE th at po rti on of th e di s tr i c t court’s jud g ment g ra nti ng su mmary j udg ment t o the defendants on the pl ain ti ff ’s cl aim re g ardin g compens ati on for unuse d v acat ion day s a nd RE MA ND t he c ase to t he di str ict c our t for cal cul ati on of the amount d ue th e pl ain ti ff on t hat cl aim. W e AF FI RM the re mainde r of the dis tr ict c our

t’ s j udg ment.