Court Opinion

ID: 621300
Source: CourtListenerOpinion
Date Created: 2012-01-23 15:22:59+00
Date Added: 2024-06-11T17:50:56.002353
License: Public Domain

10-3753-cv(L)
Cappiello v. ICD Publications, Inc.

                                UNITED STATES COURT OF APPEALS
                                    FOR THE SECOND CIRCUIT

                                       SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO
A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS
GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S
LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH
THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING
A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY
COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at the
Daniel Patrick Moynihan Courthouse, 500 Pearl Street, in the City of New York, on the 23rd day
of January, two thousand twelve.

Present:
         ROBERT A. KATZMANN,
         GERARD E. LYNCH,
                     Circuit Judges,
         LEWIS A. KAPLAN,
                     District Judge.*
________________________________________________

ROBERT N. CAPPIELLO,

             Plaintiff-Appellee-Cross-Appellant,

                      v.                                               Nos. 10-3753-cv(L)
                                                                            10-3802-cv(XAP)
ICD PUBLICATIONS, INC.,

             Defendant-Appellant-Cross-Appellee,

DAVID PALCEK,

         Defendant-Appellee.
_______________________________________________

*
 The Honorable J. Lewis A. Kaplan, of the United States District Court for the Southern District
of New York, sitting by designation.
For Plaintiff-Appellee-Cross-Appellant: DANIELÉ D. DE VOE, Weinstein, Kaplan & Cohen,
                                        P.C., Garden City, N.Y.

For Defendants:                          DON R. SAMPEN (Edward M. Tobin, Edward M. Kay,
                                         on the brief), Clausen Miller, P.C., New York, N.Y.

       Appeal from the United States District Court for the Eastern District of New York (Spatt,
J.).

       ON CONSIDERATION WHEREOF, it is hereby ORDERED, ADJUDGED, and

DECREED that the judgment of the district court is AFFIRMED.

       Plaintiff-Appellee-Cross-Appellant       Robert    N.    Cappiello    (“Cappiello”)     and

Defendant-Appellant-Cross-Appellee ICD Publications, Inc. (“ICD”) appeal from a final judgment

entered on August 20, 2010 by the United States District Court for the Eastern District of New York

(Spatt, J.). The underlying lawsuit principally concerns a June 11, 2007 employment contract (the

“Agreement”) between Cappiello and ICD that specified, inter alia, that the term of Cappiello’s

employment would extend from June 11, 2007 to June 1, 2010. Notwithstanding this provision,

however, Cappiello was fired on January 31, 2008. Following his termination, Cappiello filed a

complaint in the Supreme Court of New York pleading: (1) breach of contract against ICD; and (2)

tortious inducement of breach of contract against Defendant-Cross-Appellee David Palcek, the

President and CEO of ICD. Cappiello’s complaint was timely removed to the Eastern District of

New York pursuant to 28 U.S.C. § 1332.

          On August 19, 2010, following a five-day bench trial, the district court issued a

Memorandum of Decision and Order concluding, among other things, that: (1) ICD had breached

the Agreement by terminating Cappiello without “cause,” as that term was defined in the

Agreement;(2) Cappiello was entitled to compensation for lost salary and reimbursement for health

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insurance premiums; and (3) Cappiello was not entitled to compensation for lost commissions. In

its appeal of the district court’s decision, ICD principally argues that: (1) the district court erred by

misinterpreting the Agreement to provide that Cappiello could be fired solely for “cause” as that

term was narrowly defined therein; (2) insufficient evidence supported the district court’s finding

that Cappiello attempted to mitigate his damages; and (3) Cappiello failed to introduce sufficient

evidence to support his claim for damages for health insurance premiums. In his cross appeal,

Cappiello argues that the district court erred by not awarding him damages for lost commissions.

We assume the parties’ familiarity with the remaining facts and procedural history of this case,

which we discuss below only as necessary to explain our decision.

        We first consider ICD’s claim that the district court erred by misinterpreting the Agreement

to provide that Cappiello could be fired solely for “cause” as that term was defined in the

Agreement. The interpretation of an umambiguous contract is a question of law subject to de novo

review. See, e.g., Omega Engineering, Inc. v. Omega, S.A., 432 F.3d 437, 443 (2d Cir. 2005). In

this case, the Agreement provides that ICD may terminate Cappiello’s employment prior to the end

of its specified term “upon written notice by the Company that it is terminating the Employment

Period for Cause.” App. 109. As relevant here, the Agreement defines “Cause” as “the commission

of a felony or crime involving moral turpitude or the commission of any other act involving

dishonesty, disloyalty or fraud with respect to the Company.” App. 111. Reading these provisions

together, the district court concluded that the Agreement unambiguously provided that Cappiello

could be terminated prior to June 1, 2010 on one of the bases specified in the Agreement. We agree.

We find no ambiguity in the language of the contract, Hillenbrand v. Meyer Medical Group, S.C.,

682 N.E.2d 101, 104 (Ill. App. Ct. 1997) (“[T]he threshold issue is whether the contract is

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ambiguous.”), which clearly specifies the grounds on which Cappiello may be terminated.

Accordingly, the district court did not err in concluding that Cappiello’s employment could be

terminated only for the reasons delineated in the Agreement. To the extent that ICD argues that

either Cappiello’s job performance or his expressions of discontent constituted “disloyalty,” we

cannot fault the district court’s finding that his conduct did not constitute disloyalty within the

meaning of the contract provision. To the extent it argues that under Illinois law, an employee may

be fired for poor performance regardless of the existence of a term contract specifically defining the

grounds for termination, we conclude that none of the cases cited by ICD support that proposition.

        We turn next to ICD’s contention that insufficient evidence supported the district court’s

finding that Cappiello attempted to mitigate his damages. It is well established that a “party injured

by a breach of contract is required to use all reasonable means to mitigate his damages.” Pokora

v. Warehouse Direct, Inc., 751 N.E.2d 1204, 1213 (Ill. App. Ct. 2001). “In breach-of-employment-

contract-cases, the discharged employee must act to mitigate his damages by seeking similar

employment.” Id. “The burden of proof that the injured party has failed to mitigate damages is on

the party who has breached the contract.” Pioneer Bank & Trust Co. v. Seiko Sporting Goods,

U.S.A. Co., 540 N.E.2d 808, 813 (1989). Whether Cappiello used all reasonable means to mitigate

his damages is a question of fact, and “[t]he district court’s findings of fact after a bench trial are not

to be overturned unless they are clearly erroneous.” Ceraso v. Motiva Enters., LLC, 326 F.3d 303,

316 (2d Cir. 2003). Under the clear error standard, “[t]here is a strong presumption in favor of a

trial court’s findings of fact if supported by substantial evidence,” and a reviewing court will not

upset a factual finding “unless [it is] left with the definite and firm conviction that a mistake has

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been made.” Travellers Int’l A.G. v. Trans World Airlines, Inc., 41 F.3d 1570, 1579 (2d Cir. 1994)

(internal quotation marks omitted).

        In this case, substantial evidence supported the district court’s determination that Cappiello

used all reasonable means to mitigate his damages. Indeed, as the district court found, it is

undisputed that Cappiello “contacted and consulted with recruiters in new York, Massachusetts,

Ohio and Toronto; . . . conducted searches on a number of online job search databases; . . . contacted

his preexisting contacts in the trade show and publishing fields; . . . sent out many resumes; . . . and

went on a number of job interviews in a continuous effort to obtain other employment in a similar

field.” App. 53. Accordingly, we perceive no clear error in the district court’s determination that

Cappiello attempted to mitigate his damages.

        ICD’s last argument on appeal is that Cappiello failed to introduce sufficient evidence to

sustain his claim for damages with respect to his health insurance premiums. See Perfection Corp.

v. Lochinvar Corp., 812 N.E.2d 465, 470 (Ill. App. Ct. 2004) (“The party who seeks damages has

the burden not only to establish that he sustained damages, but also to establish a reasonable basis

for computation of those damages.”). During the bench trial below, Cappiello attempted to offer a

letter from his insurance provider to corroborate his health insurance expenditures, but defendants

successfully challenged the letter’s admission on the ground that it constituted unauthenticated

hearsay. Accordingly, the district court instead “credit[ed] the plaintiff’s detailed testimony as to

the monies expended and to be expended for medical and dental insurance premiums.” Cappiello

v. ICD Publs., Inc., No. CV 08-02417 (ADS), 2010 WL 3310718, at *26 (E.D.N.Y. Aug. 19, 2010).

Cappiello’s testimony in this regard was undisputed. Id. See, e.g., Naeem v. McKesson Drug Co.,

444 F.3d 593, 611 (7th Cir. 2006) (“Under Illinois law, the evidence need only tend to show a basis

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for the computation of damages with a fair degree of probability.”); Draiman v. Multiut Corp., No.

2008 U.S. Dist. LEXIS 32357, at *22 (N.D. Ill. Mar. 31, 2008) (“Oral testimony and rough estimates

generally provide valid bases for calculating damages . . . .); Woltman v. Am. States Ins. Co., No.

05-2198, 2006 U.S. Dist. LEXIS 77214, at *8 (C.D. Ill. Oct. 20, 2006) (allowing breach of contract

claim to go forward without expert testimony as to damages because damages were within the

plaintiff’s personal knowledge); accord Fakhoury v. Vapor Corp., 507 N.E.2d 50, 55 (Ill. App. Ct.

1987) (“It is true that an award of future loss of earnings cannot be sustained wherein the foundation

is speculative or conjectural testimony; however, where such awards find their basis in testimony

delivered with reasonable certainty, they must be upheld.”).

       Finally, we consider Cappiello’s claim on his cross-appeal that the district court erred “by

(1) not awarding plaintiff an additional $60,000.00 per year in minimum commissions in his role as

Vice President of Conferences and Special Events and (2) by not also awarding plaintiff override

commissions for his role as Interim Group Publisher in 2007.” Pl.’s Br. 48. We disagree. With

respect to the $60,0000 in commissions, Cappiello notes that the Agreement provides that he “shall

be entitled to commissions” and that those commissions “will reach $60,000 annually.” App. 108

(emphasis added). Cappiello, however, quotes these provisions out of context. The full paragraph

of the Agreement states:

       Employee shall be entitled to commissions (the “Commissions”) based on performance, at
       a schedule to be determined upon the starting date (above). However, it is the intent of the
       Employer to design a commission program which will reach $60,000 annually, based on
       performance of the Employee in achieving additional net sales for the Company.

Id. at 108 (emphasis added). Both sentences quoted by Cappiello, therefore, contain conditional

language clearly indicating that Cappiello’s commissions would be based on his performance and

his success in achieving additional net sales for ICD. Because Cappiello introduced no evidence

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indicating he achieved additional net sales for ICD, the district court correctly concluded that he was

not entitled to $60,000 in commissions. This conclusion is further supported by the fact that

payment of commissions was conditioned upon “a schedule to be determined upon the starting date,”

id., but no evidence was introduced showing that such a schedule was ever implemented. See PFT

Roberson, Inc. v. Volvo Trucks North America, Inc., 420 F.3d 728, 731 (7th Cir. 2005) (“When

negotiators say that agreement is subject to a more definitive document, Illinois treats this as

demonstrating intent not to be bound until that document has been prepared and signed. Illinois is

averse to enforcing tentative agreements that are expressly contingent on the signing of formal or

final documents.”) (internal citation omitted).

       Cappiello’s argument with respect to the so-called “override” commissions is similarly

without merit. Cappiello bases this argument solely on the testimony of David Palcek, not on any

language in the Agreement itself, and “where a contract purports on its face to be a complete

expression of the entire agreement, courts will not add another term about which the agreement is

silent.” Gallagher v. Lenart, 854 N.E.2d 800, 807 (Ill. App. Ct. 2006).

       We have considered the parties’ remaining arguments and find them to be without merit.

For the reasons stated herein, the judgment of the district court is AFFIRMED.

                                                   FOR THE COURT:
                                                   CATHERINE O’HAGAN WOLFE, CLERK

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