Opinion ID: 198328
Heading Depth: 2
Heading Rank: 2

Heading: The District Court's Grant of Summary Judgment Against Michelson's Claims

Text: 17 Michelson argues that the district court erred in entering summary judgment against his five claims. Summary judgment is proper where the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The moving party bears the initial burden, which may be discharged by pointing to the absence of adequate evidence supporting the nonmoving party's case. See Hinchey v. NYNEX Corp., 144 F.3d 134, 140 (1st Cir.1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Once the moving party has carried this burden, the onus is on the nonmoving party to present facts that show a genuine issue for trial. See Serrano-Cruz v. DFI Puerto Rico, Inc., 109 F.3d 23, 25 (1st Cir.1997); LeBlanc v. Great American Ins. Co., 6 F.3d 836, 841-42 (1st Cir.1993), cert. denied, 511 U.S. 1018, 114 S.Ct. 1398, 128 L.Ed.2d 72 (1994). [A] party opposing a properly supported motion for summary judgment may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)(citing Fed.R.Civ.P. 56(e)). [P]laintiff ... [must] offer[ ] ... 'significant probative evidence tending to support the complaint.'  Id. at 256, 106 S.Ct. 2505 (quoting from First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)). We review the district court's grant of summary judgment de novo. See Serrano-Cruz, 109 F.3d at 25. 18
19 Michelson's first cause of action alleges that DFS breached an employment contract with Michelson under which Michelson was to receive variable incentive compensation for the years 1994 and 1995. To succeed on his breach of contract action, Michelson must demonstrate: (1) that the parties reached a valid and binding agreement with regard to variable incentive compensation; (2) that DFS breached the terms of the VIC aspect of the agreement; and (3) that Michelson suffered damages from the breach. See Coll v. PB Diagnostic Systems, Inc., 50 F.3d 1115, 1122 (1st Cir.1995). The district court found that Michelson failed to raise a genuine issue with regard to the first element. 20 Michelson makes several arguments that summary judgment was inappropriate against this cause of action. Michelson first claims that DFS did not meet its burden of proof because it failed to submit any evidence to support its allegations that Michelson was not entitled to any commissions and benefits. What this argument ignores is that DFS can carry its summary judgment burden by pointing to an absence of evidence supporting Michelson's claim that he was entitled to those commissions. See Hinchey, 144 F.3d at 140. The district court entered summary judgment against Michelson because it found that Michelson offered no evidentiary support for his claim that he was entitled to VIC awards for 1994 and 1995. Even assuming that DFS did not offer sufficient evidence to show that Michelson was owed no commissions, DFS did not need to do so in order to prevail at the summary judgment stage. 21 The rest of Michelson's arguments regarding this cause of action fit into two categories: (1) arguments that a contract existed that entitled Michelson to participate in the 1994 VIC Plan; and (2) arguments that Michelson satisfied the prerequisites for a VIC award under that contract for the last quarter of 1994. 2 22
Compensation for the Last Quarter of 1994 23 In its December 23, 1997 Memorandum and Order, the district court found that DFS made a preliminary showing that no contract existed that entitled Michelson to receive incentive compensation for the years 1994 or 1995. In its February 27, 1998 Memorandum and Order, the district court found that Michelson failed to raise a genuine issue as to whether he was offered (and subsequently accepted) definite or certain VIC payments as part of his employment contract. Because the formation of a contract with such a term is a legal element of Michelson's breach of contract claim, the district court entered summary judgment against Michelson's claim. Michelson argues that a contract existed that entitled him to receive variable incentive compensation for the last quarter of 1994. 24 Michelson argues that he would never have left his previous position in which he earned more than $225,000 if he had not been assured that he would be earning a great deal more with DFS. This argument fails because, as appellees point out, Michelson admits that he was not guaranteed a higher salary. In fact, the offer letter itself states that Michelson's targeted compensation would be $150,000, which is substantially less than the $225,000 that Michelson made at his previous position. Michelson may well have left his position because he had the opportunity to earn more than this, even without guarantees that he would earn more. In any event, this argument is merely an unsupported inference and does not constitute evidence that Michelson was contractually entitled to VIC compensation. Therefore, this argument does not create a genuine issue that precludes summary judgment. 25 However, our rejection of this argument does not mean that no contract existed that included VIC Plan participation. The August 19, 1994 offer letter from DFS stated that he would be eligible to participate in the variable incentive compensation plan for the remainder of 1994. The letter also stated that Michelson's compensation would consist of a fixed salary, an MBO Bonus Plan, and variable incentive compensation. DFS argues that the letter only indicates that Michelson was eligible to participate in the 1994 VIC Plan, not that any benefits or provisions of the Plan were binding. DFS argues that Michelson has failed to propound any evidence indicating that, in his case, the VIC Plan was a binding contractual provision. 26 The district court agreed with DFS and found that the offer letter could only be reasonably understood to have offered the opportunity to earn VIC compensation. We agree with the district court to the extent that it found that Michelson had to reach a minimum sales threshold before he was entitled to receive VIC awards under the Plan, but we do not agree with the district court to the extent that it found that Michelson's participation in the 1994 VIC Plan was not part of the contract. 27 The offer letter expressly stated that Michelson would be eligible to participate in the 1994 VIC Plan. In that letter, Michelson was offered the position and was informed that his compensation for the remainder of 1994 would consist of three components: (1) a fixed base salary of $85,000; (2) an MBO bonus of $15,000; and (3) participation in the 1994 VIC Plan, with a targeted VIC award of $50,000. Michelson accepted this offer by letter dated August 22, 1994. Once the offer was accepted, Michelson's participation in the 1994 VIC Plan was as much a part of his at-will employment contract as was his base salary. We agree with the district court that Michelson has not demonstrated that the contract bound DFS to make certain payments of VIC to Michelson, in the sense that DFS was bound to pay Michelson a VIC award regardless of whether he met his minimum thresholds. The letter expressly states that Michelson had to reach minimum thresholds to receive VIC compensation. However, the opportunity to reach those thresholds and the right to be compensated with VIC if he reached them were clearly a part of the offer that Michelson accepted. Therefore, we find that Michelson has offered sufficient evidence to raise a genuine issue on the question of whether his employment contract included, as a compensation term, his participation in the VIC Plan for 1994. 3 28
29 Even if Michelson's contract with DFS included a provision for participation in the VIC Plan, Michelson was not entitled to receive a VIC award until he satisfied the Plan's prerequisite of reaching the minimum sales volume threshold for the last quarter of 1994. Michelson first argues that he was entitled to a VIC award for 1994 because he was assured after meetings with Kelley that there was no minimum volume threshold for the 1994 VIC Plan. However, we cannot accept Michelson's argument that no minimum threshold existed. The August 19, 1994 offer letter specifically stated that Michelson would be eligible to participate in the VIC plan for the remainder of 1994 and that his VIC would be $50,000 after reaching minimum volume thresholds. The 1994 VIC Plan itself provides that only the amount of volume over the minimum threshold will qualify for VIC payment. Additionally, Michelson repeatedly admits elsewhere that there was a minimum volume threshold for the Plan. See, e.g., Michelson Deposition, at page 115, lines 6-13 (Q. What was your minimum threshold? A. Ten million to 12 million.... Mike had given me a number of $48 million on an annual basis, and when you divide it by 4[it] comes out to 12 million, but in conversations I had one on one with Mike, he talked about 10 million.); Proposed Special Verdict Questions and Memorandum, at 2 (Kelley agreed with Michelson to a minimum threshold of 10-12 million dollars annually.); Appellant's Brief, at 15 (arguing that Michelson met his minimum volume thresholds); Plaintiff's Memorandum in Opposition to Defendant's Motion For Summary Judgment, at 13 (The offer to Mr. Michelson included a commission or variable incentive component which included ... attainable minimum thresholds....). Thus, Michelson was only entitled to receive a VIC award under the employment contract and the VIC Plan if he surpassed his minimum volume threshold. 30 Michelson next claims that the evidence shows that he was entitled to a VIC award because he met his minimum volume threshold. He states that he was responsible for over $100 million in sales, more than doubling the expected sales. However, he offers no evidence in support of this bald assertion. Also, Michelson's brief states that he initiated this $100 million in sales contracts between January 1, 1995 and March 14, 1995. Thus, even if Michelson's asserted volume is accurate, it would have no impact on the question of whether he earned commissions for 1994. 31 Michelson also argues that because other sales people for whom he was responsible received commissions, he was also entitled to a commission. Michelson argues that if those sales people reached their respective thresholds, then he must have reached his threshold as well, because he was to be credited with their sales. In support of this argument, Michelson offers a table that purports to list the 1994 compensation, including VIC awards and thresholds, of 28 DFS employees. There are several problems with this argument. First, while the table lists the thresholds of 28 employees, neither Michelson nor DFS informs the Court of what Michelson's minimum threshold for the last quarter of 1994 was. A review of the record reveals that Michelson apparently believed that the minimum threshold was approximately $10-12 million. See Michelson Deposition, at page 115, lines 6-13. The 1994 VIC Plan states that the minimum threshold is the booked volume target for the measurement period, but neither party quantifies this value for the last quarter of 1994. Without knowing Michelson's threshold, it is impossible to determine if he must have reached it simply because his subordinates reached their thresholds. 32 Second, Michelson does not name the individuals whose sales he was responsible for or the amounts of their respective sales. Michelson merely submits an unlabeled and undated table indicating that 28 individuals received VIC awards for 1994, meaning that those 28 individuals must have reached their thresholds for that period. Michelson does not inform the Court of which of the listed individuals were on his team and which were not. Our own review of the record reveals that, as part of a special year-end program, Michelson was responsible for eight of the 28 employees listed on the table. See Kelley Deposition, at 36-37. However, neither the table nor Michelson cites any sales figures for those eight individuals. Nor does Michelson offer evidence that his subordinates met their minimum thresholds for the fourth quarter of 1994. At best, the table indicates that the listed individuals met their annual threshold for 1994, but Michelson was only employed for the final quarter of 1994. As a result of all of these deficiencies, this table provides little help to Michelson in proving that he or his subordinates met their sales volume thresholds for the fourth quarter of 1994. 33 Third, Michelson's argument is dependent upon the idea that, in calculating his sales for VIC purposes, DFS must attribute to Michelson the sales of his subordinates. Under a practice called shadowbooking, a supervisor is attributed the sales of his or her subordinates for purposes of determining the supervisor's own sales volume. However, as noted by DFS, Michelson offers no evidence to support the conclusion that he was contractually entitled to avail himself of the shadowbooking practice. The 1994 VIC Plan makes no mention of such a practice and states that the interpretation of the VIC Plan rests entirely with DFS management. In his deposition, Kelley notes that the shadowbooking practice was considered for the year-end program, but that Amsler, consistent with his role in interpreting the VIC Plan, decided that the financial results were insufficient to justify shadowbooking any of the National Account Managers. In Michelson's deposition, he claims that his understanding was that he would be shadowbooked by the sales people for the east territory, but he points to no contract or DFS policy that entitled him to such a practice. Michelson does not even allege that anyone at DFS told him that his sales would be calculated using the shadowbooking procedure. Nor does he offer any evidence or argument that Amsler did not have the authority to exercise the discretion that he did. Therefore, we do not find that Michelson's shadowbooking argument raises a genuine issue of fact regarding whether Michelson was entitled to commissions for the fourth quarter of 1994. 34 Michelson next offers an undated, handwritten letter from Kelley to Amsler in which Kelley allegedly recommended that Michelson receive a commission. However, in the letter, Kelley did not recommend Michelson for a VIC award; he recommended him for an MBO bonus, which has no bearing on the VIC calculations. Moreover, even if Kelley had recommended that Michelson receive a VIC award, Kelley's recommendation would not provide Michelson with any contractual rights. Michelson next argues that Kelley confirmed in the letter that Michelson had participated in $9 million in fundings in one particular program. However, the letter does not limit this number to one particular program; what the letter actually states is that Michelson participated in $9 million worth of fundings for the fourth quarter of 1994. Since the only evidence of the amount of Michelson's threshold is his own testimony that it was $10-$12 million, this statement that Michelson participated in only $9 million does not help him. Michelson claims that this number represents only a portion of his responsibility, but he does not quantify the sales or fundings from any of his other alleged responsibilities. Additionally, if Michelson is correct that this represents only a portion of his responsibilities, the context of the statement in the letter indicates that the portion to which Kelley refers is the supervision of his team of sales people. As noted above, Amsler was not contractually obligated to credit Michelson with sales resulting from his supervision of the team. Thus, this letter offers little assistance to Michelson. 35 In sum, while Michelson has raised a genuine issue regarding whether his contract included participation in the 1994 VIC Plan as part of his compensation, Michelson has not raised a genuine issue regarding whether he had actually satisfied the eligibility prerequisites for any VIC payments under the Plan. Therefore, summary judgment was properly entered against Michelson's breach of contract cause of action claiming that DFS failed to pay him VIC compensation.
36 Under Massachusetts law, [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. Hinchey, 144 F.3d at 143 (quoting Veranda Beach Club Ltd. Partnership v. Western Sur. Co., 936 F.2d 1364, 1380 (1st Cir.1991)). 37 Michelson makes only a short reference to his promissory estoppel cause of action in his brief. Citing Hall v. Horizon House Microwave, Inc., 24 Mass.App.Ct. 84, 506 N.E.2d 178, 184 (1987), Michelson argues that an element of promissory estoppel is that the party invoking it must have reasonably relied on the alleged promise to his detriment. Michelson claims that he reasonably relied to his detriment on his managers' promises, by leaving his previous position and by using all of his skills, talents, and knowledge in order to accumulate large amounts of sales. 38 The district court found that Michelson's promissory estoppel claim failed as a matter of law for the same reasons the breach of contract action failed: there was no definite offer for payment of a certain amount of VIC. See February 27, 1998 Memorandum and Order, at 9. As noted in our discussion above, we find that there was a definite offer to make VIC compensation part of Michelson's employment, and we find that this offer was accepted, but we do not find that DFS breached the resulting employment contract. Participation in the 1994 VIC Plan was part of Michelson's employment; Michelson just could not take advantage of this participation because he did not meet his thresholds. Therefore, unless Michelson can demonstrate a promise other than participation in the 1994 VIC Plan that he reasonably relied on to his detriment, his promissory estoppel claim fails. 39 It is possible that Michelson based his promissory estoppel cause of action on a promise other than the promise of VIC Plan participation. Besides the contractual promise of participation in the 1994 VIC Plan, there are four alleged promises or sets of promises from DFS management that Michelson refers to in his brief. First, he claims that he was assured that there was no minimum threshold for the incentive compensation plan and that he was entitled to compensation for all volumes of sales. Second, Michelson claims that he was told by Pucciarelli that he would be pleased with his compensation package, which included the VIC Plan participation. Third, Michelson claims that he was promised a[n] $85,000.00 base salary, a $15,000 payment in February ... under the Management by Objective (MBO) plan, plus commission based upon sales under the VIC program, a company car, medical benefits, vacation, and other benefits. Finally, Michelson claims that he was promised that there was no cap on the amount of commission Michelson could earn. 40 The first alleged promise does not raise a genuine issue of material fact for two reasons: (1) Michelson admits that he was told his threshold would be between $10 million and $12 million, and (2) the 1994 VIC Plan itself, which Michelson reviewed prior to accepting the position, indicates that minimum threshold requirements applied to the calculation of VIC awards. The former reason negates any genuine issue regarding whether the promise was actually made. See Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4-5 (1st Cir.1994) (When an interested witness has given clear answers to unambiguous questions [in his deposition testimony 4 ], he cannot create a conflict and resist summary judgment with an affidavit that is clearly contradictory, but does not give a satisfactory explanation of why the testimony is changed.). The latter reason makes it clear that any reliance on such a promise would not have been reasonable without further inquiry and assurances from DFS. See McMahon v. Digital Equipment Corp., 162 F.3d 28, 39 (1st Cir.1998) (finding reliance to be unreasonable as a matter of law where a written statement conflicts with an oral statement, because Massachusetts law assumes that a reasonable person will investigate further); Coll, 50 F.3d at 1124 (Where a written statement conflicts with a prior oral representation, reliance on the oral representation is generally held to be unreasonable.). 41 The second alleged promise--Pucciarelli's promise that Michelson would be pleased with his compensation package, which included the VIC participation--fares no better. As noted above, the promise of VIC participation was not breached, and the promise that Michelson would be pleased with his compensation package can hardly be described as a binding promise. A promissory estoppel cause of action demands a promise involving commitment, or the manifestation of an intention to act or refrain from acting in a specified way. Rhode Island Hosp. Trust Nat. Bank v. Varadian, 419 Mass. 841, 647 N.E.2d 1174, 1179 (1995). The type of promise attributed to Pucciarelli evidences no intent to be bound and consists of no more than the type of inconclusive and inchoate negotiations that Massachusetts courts have found to be insufficient. See Hall, 506 N.E.2d at 184; see also Santoni v. Federal Deposit Ins. Corp., 677 F.2d 174, 179 (1st Cir.1982) (stating that the promise must be definite and certain so that the promisor should foresee that it would induce reliance by the promisee). Additionally, any reliance on this vague representation that Michelson would be pleased is certainly not reasonable. 42 With regard to the third set of promises, Michelson does not allege that he was denied any of the benefits promised, other than a VIC award. The record does not reflect any evidence that Michelson was deprived of his base salary, his MBO bonus, his company car, medical benefits, or vacation. The same is true of the fourth alleged promise that there was no cap on the amount of commissions Michelson could earn. Michelson does not allege that he was hampered by the imposition of a cap on VIC awards. Thus, even if he had a claim that this promise should be enforced on estoppel grounds, he has not alleged that DFS breached that promise. 43 In sum, none of the promises alleged by Michelson can support a promissory estoppel cause of action. Therefore, the district court properly entered summary judgment against this claim.
44 Michelson's wrongful discharge claim alleges that his employment was terminated without cause in order to deprive him of earned and future income, in the form of incentive compensation. Michelson cites Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251, 1257 (1977), for the proposition that an employer may not terminate an at-will employee for the purpose of depriving the employee of compensation that the employee had already earned and which, with the mere passage of time, would have become payable. The court in Fortune held that the implied covenant of good faith and fair dealing is breached where an employer terminates an at-will employee in order to deprive the employee of any portion of a commission already earned but not yet payable. See id.; see also Coll, 50 F.3d at 1125 (citing Fortune and stating that [u]nder Massachusetts law, the implied covenant of good faith and fair dealing prohibits an employer from terminating an employee in order to deprive him of a benefit to which he is entitled). In Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 429 N.E.2d 21, 29 (1981), the Supreme Judicial Court of Massachusetts extended this obligation to impose liability on an employer who terminated an employee without good cause and for the purpose of appropriating the employee's commissions that were reasonably ascertainable future compensation based on his past services. The Gram court stated that the employer's obligation of good faith and fair dealing requires that the employer be liable for a loss of compensation that is so clearly related to an employee's past service, when the employee is discharged without good cause. Id.; see also Coll, 50 F.3d at 1125 (citing Gram, 429 N.E.2d at 27-29). Thus, in order to succeed on this claim, Michelson must prove that DFS terminated him without good cause and in bad faith in order to deprive him of commissions that have already been earned or were reasonably ascertainable based on past services. 45 The district court found that Michelson failed to raise a genuine issue on the question of whether DFS acted in bad faith. See February 27, 1998 Memorandum and Order, at 12-13. The court held that Michelson merely proposed verdict questions that called for a black-box finding of bad faith without pointing to specific admissible evidence to support such a determination. See id. at 13. 46 Michelson argues that he was terminated without good cause in order to deprive him of the commissions owed to him under his employment contract. As we have already stated, Michelson had not earned any commissions under the 1994 VIC Plan, and Michelson has not demonstrated that he had earned any commissions for 1995. Thus, even if, as Michelson alleges, he was terminated without good cause, he has not raised a genuine issue with regard to whether DFS did so in order to deprive him of such commissions. Therefore, the district court did not err in entering summary judgment against Michelson's wrongful discharge cause of action. 5 D. Fraudulent Misappropriation and Fraudulent Misrepresentation 47 In addition to the three causes of action discussed above, Michelson's complaint contained two other causes of action: (1) misappropriation and (2) fraudulent misrepresentation. The district court entered summary judgment against Michelson's misappropriation cause of action because he failed to raise a genuine issue as to whether the GE Capital Employee Proprietary Information Agreement conferred proprietary rights to the roll-the-base sales strategy on DFS. See February 28, 1998 Memorandum and Order, at 10-11. The district court entered summary judgment against Michelson's fraudulent misrepresentation cause of action because he failed to raise a genuine issue as to whether his reliance on DFS' alleged misrepresentation that Michelson was going to earn more with DFS than with his previous employer was reasonable. See id. at 11-12. Michelson does not discuss either of these grounds for summary judgment or even these causes of action in his brief, so any claim of error is waived. See King, 116 F.3d at 970.