Opinion ID: 179261
Heading Depth: 2
Heading Rank: 1

Heading: Money had and received / unjust enrichment

Text: An action for money had and received is founded on the equitable principle that no one ought to unjustly enrich himself at the expense of another. Gulf Life Ins. Co. v. Folsom, 349 S.E.2d 368, 370-71 (Ga. 1986). Recovery in such an action is authorized against one who holds the money of another that he ought in equity and good conscience refund. Time Ins. Co. v. Fulton-DeKalb Hosp. Auth., 438 S.E.2d 149, 150-51 (Ga. Ct. App. 1993) (quotations and citations omitted). A plaintiff prevails on an action for money had and received where (1) a payment was mistakenly made as a result of the plaintiff’s lack of diligence and (2) the party receiving payment would not be prejudiced by refunding the payment–subject to a weighing of the equities between the parties. Folsom, 349 S.E.2d at 373. Claims for unjust enrichment brought in an attempt to recover a mistaken overpayment are analyzed by Georgia courts under the same framework as a claim for money had and received. See D & H Constr. Co. v. City of Woodstock, 643 S.E.2d 826, 830 (Ga. Ct. App. 2007). The district court denied summary judgment to Graphic Packaging and granted summary judgment to Humphrey on Graphic Packaging’s claims for money had and received and unjust enrichment because it found that Graphic Packaging could not 11 show that it made a mistake by valuing the RSUs as of the date of Humphrey’s retirement. Graphic Packaging contends that the district court erred in reaching this conclusion in the following ways: (1) by failing to defer to the determination of the Compensation Committee regarding the appropriate valuation date; (2) by rejecting and misconstruing Kevin Wolff’s undisputed testimony regarding the events leading to the alleged overpayment; and (3) by misinterpreting Graphic Packaging’s past practice regarding RSU valuation. We address each contention in turn. Graphic Packaging first argues that the district court erred by failing to give proper deference to the Compensation Committee’s determination that Humphrey’s RSUs should have been valued as of the date they became payable (June 30, 2008). According to Graphic Packaging, this deference is mandated by the language of the Stock Plan and Award Agreements and by Delaware law.3 The Stock Plan and Award Agreements do not address the appropriate valuation date in the event RSUs vest and are paid out on different dates, as in Humphrey’s case. The documents do, however, give the Compensation Committee “full and exclusive discretionary authority” to interpret the Stock Plan and Award 3 The Stock Plan and the Award Agreements provide that they are to be interpreted in accordance with Delaware law. Graphic Packaging claims that Delaware law governs the interpretation of the Stock Plan and Award Agreements, and Humphrey does not dispute this contention. We therefore assume without deciding that Delaware law is the proper choice of law in interpreting the relevant documents. 12 Agreements, and provide that the determinations of the Committee are “final and binding.” (R.2-40, Ex. 5 at 17.) Delaware law, moreover, requires courts to give deference to a committee that is granted interpretive and decision-making authority under a corporate compensation plan. See, e.g., JPMorgan Chase & Co. v. Pierce, 517 F. Supp. 2d 954, 958 (E.D. Mich 2007) (quoting Schwartz v. Century Circuit, Inc., 163 A.2d 793, 796 (Del. Ch. 1960)) (applying Delaware law and explaining that “[w]here a contract vests a corporate administrative committee with the authority to make ‘binding, final and conclusive’ decisions regarding an employee’s eligibility under a corporate compensation plan, a court should accept the committee’s decision as ‘conclusive in the absence of fraud, bad faith and the like.’”); Lieberman v. Becker, 155 A.2d 596, 600 (Del. 1959) (“We must assume that the committee of directors charged with the administration of this plan will do so in the good faith exercise of their considered business judgment. . . . A decision by responsible businessmen reached after careful consideration . . . , without bad faith or fraud, is entitled to weighty consideration by the courts.”). Based on the Compensation Committee’s authority to interpret the Stock Plan and Award Agreements and the deference afforded to corporate compensation committees under Delaware law, Graphic Packaging contends that analysis of the Committee’s decision should be limited to assessing whether it was tainted by bad 13 faith or fraud, and, in the absence of both, Delaware law requires deferring to the Committee’s determination that Humphrey was overpaid. We cannot agree. In this case, Graphic Packaging has the burden to produce evidence showing that it made a mistake when it valued and paid Humphrey’s RSUs based on the date of his retirement. Graphic Packaging cannot meet this burden by simply pointing to the Compensation Committee’s ultimate conclusion that Humphrey’s RSUs should be valued on the date they became payable. Rather, Graphic Packaging must produce evidence showing why one valuation date is correct and the other date is incorrect. Further, the Delaware cases do not support Graphic Packaging’s argument because those cases did not concern mistaken payments whereby the corporate employer has the burden of proving that a payment was mistaken in order to be entitled to equitable relief. Thus, the district court was correct in analyzing the basis for the Compensation Committee’s conclusion in order to determine whether Graphic Packaging met its burden of submitting evidence of a mistaken payment. Graphic Packaging also argues that the evidence supporting the Compensation Committee’s determination shows that a mistaken payment was made. We disagree. Graphic Packaging has pointed to no specific document or testimony that shows why valuing the RSUs on the date they became payable is correct and valuing the RSUs 14 on the date of retirement is incorrect. While one committee member testified that past practice supported valuing the RSUs on the date they became payable, there was no past practice of valuing RSUs in the context of a § 409A key employee, like Humphrey. Graphic Packaging next argues that the testimony of Director of Compensation Kevin Wolff provides sufficient evidence that the company’s valuation of Humphrey’s RSUs as of the date of his retirement was mistaken. Graphic Packaging contends that the district court refused to credit Wolff’s testimony, and this refusal amounted to an impermissible credibility determination. We disagree. The district court correctly concluded that Wolff’s testimony did not establish that Graphic Packaging over-valued Humphrey’s RSUs by valuing them as of the date of Humphrey’s retirement (December 31, 2007). While Wolff testified that valuing the RSUs as of the date of retirement was a “mistake,” he did not explain the basis for this conclusion. While Wolff testified that valuing the RSUs as of the date of retirement was not in line with the company’s understanding of its past practice in interpreting the Stock Plan, Graphic Packaging had never previously addressed how RSUs should be valued in the context of a § 409A key employee, like Humphrey. We agree with the district court’s conclusion that valuing Humphrey’s RSUs as of the date of his retirement was a reasonable interpretation of the relevant agreements that 15 was confirmed repeatedly through numerous letters and, ultimately, by paying Humphrey accordingly. Graphic Packaging also argues that the district court erred in its assessment of the Company’s past practice regarding the valuation of RSUs. According to Graphic Packaging, prior to Humphrey’s retirement all RSUs paid out under the Stock Plan were valued on the date the RSUs became payable regardless of vesting date. We agree with the district court that Graphic Packaging’s past practice does not show that a mistake was made in valuing Humphrey’s RSUs. As the district court correctly noted, in every instance prior to Humphrey’s retirement, the date of retirement was the same date as the date the RSUs became payable under the Award Agreements because the only reason the dates would differ is if the § 409A holding period was imposed. Since there is no indication in the record that a § 409A holding period had ever been imposed prior to Humphrey’s retirement, there is no historical practice that could show that Humphrey’s RSU valuation was miscalculated. We conclude by noting, as the district court did, that Graphic Packaging’s arguments are notable for what they do not say. First, neither the Stock Plan nor the Award Agreements provide that Humphrey’s RSUs should have been valued on the date the § 409A holding period expired. Although the § 409A holding period may postpone the distribution of the payment, there is no indication in the Award 16 Agreements that it operates to alter the value of Humphrey’s vested RSUs. Second, nothing in § 409A suggests that the proper valuation date should be at the end of the six-month holding period. Since it is clear that if § 409A had not been applied to delay Humphrey’s RSU distribution the valuation date under the relevant agreements would have been the date of Humphrey’s retirement, there is no basis for the conclusion that § 409A somehow operates to change the valuation date. Accordingly, the district court correctly determined that Graphic Packaging failed to submit evidence showing that its valuation of Humphrey’s RSUs on the date of his retirement was a mistake.