Opinion
107073/08.
Decided January 7, 2011.
Plaintiff, formerly employed by the defendant construction firm (the Company) as a project manager, seeks damages from the Company for its alleged breach of an employment agreement (Employment Agreement or Agreement).
The Company moves for summary judgment, pursuant to CPLR 3212, dismissing the complaint, on the ground that plaintiff's behavior justified his termination, for cause, under the Employment Agreement. Plaintiff cross-moves for summary judgment, in his favor, seeking to enforce the Agreement's severance provision, which provides for compensation to be paid to him in the event that the Company unilaterally terminated the Agreement, without cause (Pl. Mov. Aff., Exh. F, ¶ 4.3 [Employment Agreement]).
It is undisputed that on May 20, 2007, the parties entered into the written two-year Employment Agreement. It is also undisputed that the Company's counsel handed plaintiff a letter, dated February 15, 2008 (the Letter) and signed by the Company's president, which states:
"This letter serves as written notice of the termination of your employment with [the Company]. You are being terminated for your willful misconduct on November 24, 2007. Enclosed is a memorandum dated December 5, 2007 detailing the events of November 24, 2007.
Your behavior on November 24, 2007 is unacceptable. Specifically, insubordination, screaming at executives, using expletives when addressing executives, threatening physical violence upon executives, attacking an executive's integrity, age, and experiences, and throwing items at an executive can not and will not be tolerated" (Def. Mov. Aff., Exh. O). In the next paragraph of the Letter, the president states that, in addition to plaintiff's unacceptable behavior towards the Company's employees, his attitude and behavior towards the owner, construction manager, other contractors and the Company's scheduler for a particular project (the Owls Head Project), were appalling. The letter then notes that plaintiff's behavior during a project meeting was so unprofessional that plaintiff wrote an apology letter. The Letter also discusses an e-mail exchange, between plaintiff and another person associated with the Company, who was working on the Owls Head Project, which defendant describes as incendiary, and as including profanity. The Letter references other e-mail messages, describing them as embarrassing. Copies of the e-mails are appended to the Letter.
This meeting was not associated with the events of November 24, 2007.
In the next paragraph, the Letter states that plaintiff was insubordinate in failing to follow three described directives of his direct supervisor. It continues on that the Company recently received a letter from a client that highlighted plaintiff's failure to properly manage the Owls Head Project. The Letter ends by stating that "[b]ased on the above, your employment with [the Company] is terminated effective immediately" ( id.).
In opposition to defendant's motion, plaintiff disputes whether or not defendant complied with the notice provision of the Employment Agreement. This provision provides that notice should be in writing, addressed to plaintiff and "deemed given and effective on the earlier of five (5) days after the deposit in the U.S. mail of a writing addressed as above and sent first class mail, certified, return receipt requested, or when actually received" (Employment Agreement, § 10.1). The parties' expressions, through the notice provision, indicate that they intended that plaintiff be charged with receipt of the notice when he received it or, even if he did not actually receive it, upon the mailing of the notice in the manner specified in the letter. There is no dispute that the plaintiff received the letter, on or about February 15, 2008, when it was handed to him. Accordingly the notice requirements were met, and this issue is resolved, as a matter of law, in defendant's favor.
The parties dispute whether or not the Company terminated the Employment Agreement pursuant to section 4.2 (D) which states:
"4.2 Termination By The Company. This Agreement and Employee's employment hereunder may be terminated by the Company for any of the following reasons:
. . .
D. Immediately, by the Company at any time for cause, by written notice to the Employee specifying the nature of the cause. For purposes of this Agreement, "cause" shall include, without limitation, uncorrected violation of Company policies, as amended from time to time, fraud, misappropriation, dishonesty, embezzlement, the failure of the Employee to follow the reasonable directions of the WDF Board of Directors, President or Chief Executive Officer of the Company, or such person designated by the WDF Board, continued material failure or inability to achieve required performance results or perform in a competent manner following written notice and opportunity to improve performance, or any willful misconduct, criminal conviction, unexcused absence or similar conduct or activities on the part of the Employee"
(Employment Agreement, § 4.2 [D]).
While the term "willful misconduct," is not defined in the Agreement, and the parties do not argue that it is ambiguous, the case law to which the parties, respectively, cite suggests that they may not agree on the definition of the term. The parties also dispute whether or not plaintiff's conduct, much of the nature of which is also disputed, constitutes "willful misconduct" under the Agreement. Drawing inferences from the cases presented by the parties, plaintiff contends that the definition includes misbehavior that is not trivial and rises to such a level that it is harmful to the employer's interests. Defendant presents cases from which it may be inferred that it deems a broad range of behavior to constitute "willful misconduct" including an employee's rude, disruptive or disrespectful behavior, insubordination and the use of profanity.
Plaintiff argues that in determining whether or not he was fired for cause, the court should disregard those portions of the Letter describing his conduct, other than his conduct on November 24, 2007. Plaintiff also argues that the Agreement did not permit his termination for poor work performance without both notice and an opportunity to improve. Defendant argues that plaintiff was not terminated for performance issues, but for "willful misconduct" and therefore, that he was not entitled to notice.
Plaintiff is correct in arguing that the court must disregard those portions of the Letter describing his conduct, other than that conduct on November 24, 2007. The Agreement provides, in relevant part, that plaintiff could be terminated by the Company "[i]mmediately . . . at any time for cause, by written notice to the Employee specifying the nature of the cause (Employment Agreement, § 4.2 [D] [emphasis added]). Plaintiff, who was terminated immediately, received such notice when he was informed "You are being terminated for your willful misconduct on November 24, 2007" and which described the offending conduct on that date. He was not informed that he was being terminated for any other reason. Although the Letter goes on to complain about other conduct and concludes that "[b]ased on the above, your employment with [the Company] is terminated effective immediately" this other conduct cannot be grounds for termination as it does not satisfy the notice requirements of the Agreement. It could not have been defendant's intent to terminate plaintiff for conduct other than his conduct on November 24, 2007, because some of the "above" referenced objectionable conduct included the failure to properly manage the Owls Head project, for which defendant concedes requires "written notice and opportunity to improve performance" prior to termination. Neither does the Company state in the Letter that other behavior with which is was displeased, occurring outside of November 24, 2007, constituted "willful misconduct" or another for cause category or term enumerated in section 4.2 (D). Further, to the extent that the Letter complains of plaintiff's failure to follow the directives of his supervisor Mr. Stacom, it does not state that it terminated the Agreement for plaintiff's failure to follow the reasonable directions of the "WDF Board of Directors, President or Chief Executive Officer (CEO) of the Company, or such person designated by the [Company's] Board" (Employment Agreement § 4.29 [D]). Here, the Company does not state that Mr. Stacom was designated by the Company's board of directors, or that he was the Company's president or CEO. Accordingly, court can only consider plaintiff's conduct on November 24, 2007 in deciding the motions.
As to plaintiff's conduct on November 24, 2007, the deposition testimony submitted by the parties demonstrates a sharp dispute. Defendant has submitted testimony that, at a meeting held on November 24, 2007, plaintiff yelled, stood over and pointed at, berated and threw paper at defendant's chief operating officer (COO). Defendant characterizes plaintiff's behavior at the meeting as threatening and/or menacing. Plaintiff, through sworn deposition testimony, disputes that he conducted himself in such a manner. Indeed, plaintiff testified that he was hit in the chest/neck area, with a rubber-band-bound three-pound stack of paper flung at him by the Company's COO hard enough to cause bruising (Pl. Mov. Aff., Exh. C, at 225-231). Defendant argues that plaintiff admitted that he threw the papers, because he testified "not that I recall" when questioned as to whether or not he threw papers in the direction of the COO. This ignores plaintiff's testimony immediately prior that he had not thrown paper, but had crumbled a piece of paper up and threw it down on the floor after some papers had fallen off of his lap ( id. at 238-239). On defendant's summary judgment motion, plaintiff's testimony must be accorded the benefit of reasonable inferences and a court may not decide credibility issues ( Dauman Displays v Masturzo, 168 AD2d 204 [1st Dept 1990]; see also Forrest v Jewish Guild for the Blind , 3 NY3d 295 , 315 [concurring opinion, Smith, J.], quoting Anderson v Liberty Lobby, Inc., 477 US 242, 255 ["[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . on a motion for summary judgment . . ."]). Reviewing plaintiff's testimony, in context, for purposes of this motion he will be deemed to have denied having thrown paper at the COO. While the defendant implies that plaintiff's testimony should be discounted because it is inconsistent with that of other Company employees, again, credibility determinations are for the trier of fact ( Forrest, 3 NY3d at 315).
In reply, defendant asserts that plaintiff does not deny that he yelled at a superior, and argues that this constitutes "willful misconduct." Also, in reply, the Company argues that plaintiff does not deny that he lied about an important Company matter at the November 24, 2007 meeting, by stating that he was 100% certain that the parapet construction on a past job was 100% complete, when it was not. Defendant notes that dishonestly is one of the "for cause" reasons for termination enumerated in the section 4.2 (D) of Agreement.
Despite the fact that the Agreement specifically enumerates dishonesty as cause for the Company's termination of plaintiff, and that plaintiff was entitled to notice of the nature of the cause for termination, the Letter does not explicitly state that plaintiff was fired for dishonesty. Leaving that aside, the Company cites to its employee's testimony about a labor foreman's out-of-court statement that the work was only about 80% complete to prove the truth of its contention that plaintiff lied when he stated that the work was 100% complete. It is well established that a movant must meet its summary judgment burden through the tender of evidentiary proof in admissible form sufficient to warrant the court, as a matter of law, in directing judgment in its favor (CPLR 3212 [b]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851). Absent such a showing, a court should deny the motion ( id.). The Company offers only a hearsay statement to support the truth of its contention that the work was not complete, and that plaintiff therefore lied when he said that it was. Hearsay is not admissible evidence, and thus may not support summary judgment.
In addition, the court has reviewed the testimony of the Company executive cited by defendant (Def. Mov. Aff., Exh. D, at 47) and it does not indicate that the foreman's statements were definitive as to the completion of the work.
Furthermore, whether plaintiff's having yelled on November 24, 2007 constitutes "willful misconduct" under the Employment Agreement depends on the parties' intentions as to the meaning of the term "willful misconduct" when they entered into the Agreement ( Evans v Famous Music Corp. , 1 NY3d 452 , 458 [pivotal is ascertaining intentions of parties at time they entered into contract]). Indeed, in interpreting a contract, primary attention must be given to the purpose of the parties in making the contract ( Madison Ave. Leasehold, LLC v Madison Bentley Assoc. LLC , 30 AD3d 1 , 8 [1st Dept], affd 8 NY3d 59 [advising that courts should be guided by "the reasonable expectations of the parties and the business purpose to be served by their contract"]; see generally Greenfield v Philles Records, 98 NY2d 562). However, the parties have provided no extrinsic evidence as to their intentions, at the time that they entered into the Employment Agreement, concerning the proper interpretation of "willful misconduct" even though they cannot agree on the meaning. Where "words used in a written contact are susceptible of more than one interpretation, the courts will look at the surrounding circumstances existing when the contract was entered into, the situation of the parties and the subject matter of the instrument and parol evidence may be admissible" ( see Korff v Corbett , 18 AD3d 248 [1st Dept 2005] [internal citations omitted]). Therefore, because the court must examine such evidence, even where the parties do not address those issues, summary judgment must be denied ( see Nina Penina, Inc. v Chief I.O. Njoku , 30 AD3d 193 [1st Dept 2006] [to determine the meaning of "best efforts" the motion court "should have resorted to parole evidence to determine the intent of the parties and examined the circumstances existing when the contract was entered into, the situation of the parties and the subject matter of the instrument" even though the parties did not address those issues]).
Willful has been defined as "[s]aid or done on purpose; deliberate" (American Heritage Dictionary 1968 [4th ed. 2006]). Misconduct has several definitions applicable here such as "behavior not conforming to prevailing standards or laws; impropriety [and] [d]ishonest or bad management, especially by persons entrusted or engaged to act on another's behalf" ( id., at 1123).
In support of its contention that plaintiff's conduct at the November 24, 2007 meeting constituted cause for termination, defendant cites to CPLR Article 78 proceedings. In these decisions, however, the reviewing court's role was, by law, limited to determining whether or not the underlying agency determination was irrational, or supported by record evidence, or whether the penalty imposed by the agency shocked the Court's sense of fairness ( see e.g. Matter of Patel v New York City Hous. Auth. , 26 AD3d 172 , 173 [1st Dept 2006]). As discussed above, this is not the standard for determining the intent of parties as expressed through a written agreement.
Plaintiff cites to Boyle v Petrie Stores Corp. ( 136 Misc 2d 380 [Sup Ct, NY County 1985]), stating that the court did not find that an executive had engaged in willful misconduct despite that he was rude. In Boyle, the court found that the plaintiff-executive was not terminated for cause because he failed to follow the directive of an individual, where the parties' agreement provided that the plaintiff could be terminated only for disregard of a directive of the board of directors, which, under New York Law, acts as a collective body. Accordingly, Boyle's application here is limited.
Plaintiff also cites to Rudman v Cowles Communications ( 35 AD2d 213, 216, mod 30 NY2d 1), in which the Court states that the continuous refusal to comply with lawful and reasonable directions of an employer is a breach of duty entitling the employer to rescind an employment agreement ( id.). The Court of Appeals modified the decision, determining that the Referee's findings of wrongful discharge and the absence of inexcusable insubordination were supported by the weight of the evidence and that the executive's conduct in defense of his contract rights was not insubordination ( Rudman v Cowles Communications, 30 NY2d 1, 5, 10-12). Plaintiff, however, does not assert that his conduct on November 24, 2007 was in furtherance of enforcing his rights under the Agreement and Rudman does not define willful misconduct.
As defendant contends, plaintiff testified that, having being hit with a stack of paper, he raised his voice, or yelled, that the COO had gone over the line. He also testified that he left the room several times to call his direct supervisor upon, among other things, being cursed at and called a liar ( see Pl. Mov. Aff., Exh. C, 231-232, 234-236, 238-243). Aside from the fact that summary judgment cannot be granted because the court has not examined the circumstances existing when the contract was entered into, the situation of the parties and the subject matter of the instrument, taking as true plaintiff's version of events, as this Court must on defendant's motion, it would be inappropriate to determine, as a matter of law, that plaintiff's behavior at the meeting constituted "willful misconduct." In light of plaintiff's undisputed description of the work environment at the November 24, 2007 meeting as rough and tumble ( id.; see also id. at 70, 227-230), reasonable minds may differ as to whether plaintiff's "yelling" was misconduct, or was trivial, under the circumstances. Also, it is not possible to discern the severity of yelling that day from this record. A decision as to whose version of what occurred at the meeting on November 24, 2007 is true is one of credibility for the trier of fact, making summary judgment inappropriate.
While defendant argues about feigned issues of fact, internal contradictions in the deposition testimony, and contradiction by documentary evidence, these arguments primarily concern matters other than the November 24, 2007 meeting. Furthermore, concerning documentary evidence, defendant has not laid an adequate foundation for the admission of the Company's file memorandum as a business record.
Accordingly, it is
ORDERED that the defendant's motion for summary judgment is denied; and it is further
ORDERED that the plaintiff's cross motion for summary judgment is denied.
This Constitutes the Decision and Order of the Court.