Albanese v. Wci Communities, Inc.

• Decision Date: 07 December 2007
• Docket Number: No. 1:07cv280 (GBL).,1:07cv280 (GBL).
• Citation: Albanese v. Wci Communities, Inc., 530 F.Supp.2d 752 (E.D. Va. 2007)
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Anthony F. ALBANESE, Plaintiff, v. WCI COMMUNITIES, INC., and WCI Mid-Atlantic U.S. Region, Inc., Defendants.

530 F.Supp.2d 752

Anthony F. ALBANESE, Plaintiff, v. WCI COMMUNITIES, INC., and WCI Mid-Atlantic U.S. Region, Inc., Defendants.

No. 1:07cv280 (GBL).

United States District Court, E.D. Virginia, Alexandria Division.

December 7, 2007.

COPYRIGHT MATERIAL OMITTED

Elaine C. Bredehoft, Charlson Bredehoft & Cohen, PC, Reston, VA, for Plaintiff.

Alexander Tevis Marshall, David Edward Constine, III, Troutman Sanders, Richmond, VA, for Defendants.

AMENDED MEMORANDUM ORDER

GERALD BRUCE LEE, District Judge.

THIS MATTER is before the Court on Defendants WCI Communities Inc. and WCI Mid-Atlantic U.S. Region, Inc's (hereinafter collectively referred to as "WCI") Motion for Summary Judgment. This case concerns certain promises made to Plaintiff Anthony F. Albanese by WCI during the course of his employment with WCI and relocation to the Washington, D.C. metropolitan area. There are three issues before the Court. First, whether Defendants breached their employment contract with Plaintiff when Defendants promised to potentially relocate Plaintiff, provide Plaintiff a specific bonus structure, and reimburse Plaintiff for certain relocation expenses. Second, whether Defendants committed actual fraud and fraud in the inducement when representing to Plaintiff that he could potentially relocate back to Florida. Third, whether Defendants committed constructive fraud when they failed to perform on promises made to Plaintiff during the course of employment. The Court grants Defendants' Motion for Summary Judgment on Count I (breach of contract) as it relates to Plaintiffs potential relocation claim because the parties did not form a valid contract and on Plaintiffs claim that Defendants promised a certain bonus structure because this oral statement fell within the statute of frauds. The Court denies Defendants' Motion for Summary Judgment on Count I (breach of contract) as it relates to Plaintiff's claim that Defendants promised to reimburse certain relocation expenses because a material fact exists about what the parties intended when Defendants agreed to pay Plaintiffs "reasonable closing costs." The Court grants Defendants' Motion for Summary Judgment on Count II (actual fraud and fraud in the inducement) because Defendants' statement referred to future events and Plaintiff has not demonstrated that Plaintiff's supervisor knew that certain information was false when he communicated it to Plaintiff The Court grants Defendants' Motion for Summary Judgment on Count III (constructive, fraud) because all three of Plaintiffs allegations concern future events or unfulfilled promises and no evidence exists to show that Plaintiffs supervisor did not believe the information when he communicated it to Plaintiff.

I. Background

Initial Employment with WCI

Defendant WCI Communities, Inc. operates a tower development organization and functions as the parent company of Defendant WCI Mid-Atlantic Region, Inc., a wholly-owned subsidiary of WCI focused on building single-family homes and townhouses in the Mid-Atlantic region. (Pl.'s Ex. 6, Albanese Dep. 64:15-65:13, Aug. 15, 2007 (hereinafter "Albanese Dep.").) On May 5, 2004, WCI sent Plaintiff, Anthony Albanese, a letter to offer him a position as the Vice President and Senior Project Manager for one of WCI's tower divisions in Sunrise, Florida. (Pl.'s Ex. 1.) In this position, Mr. Albanese would receive a base compensation rate of $200,000.00 per year and was eligible to participate in WCI's Management Incentive Compensation Plan (hereinafter "MICP") for the 2004 calendar year.¹ Id. The May 5, 2004 offer letter advised Mr. Albanese that he was eligible for a bonus equivalent to 60% of his base salary under, the MICP program to be calculated under the terms and conditions of this program. Id. This same letter further provided that Mr. Albanese would report directly to Paul Drummond, WCI Division President of the East Coast region. Id.; (Pl.'s Ex. 17). The offer letter also indicated that Mr. Albanese would serve as an "at-will" employee. (Pl.'s Ex. 1.) Mr. Albanese signed the May 5, 2004 offer letter on May 9, 2004, and began working for WCI on May 14, 2004. Id.; (Pl.'s Mem. 1).

Promotion to Division President — Mid-Atlantic Tower Division

In the summer of 2004, Christopher Hanlon, Senior Vice President and Chief Operating Officer of WCI's Tower Home Building Division, approached Mr. Albanese about a promotion involving the opportunity to relocate to the Washington, DC. metropolitan area. (Pl.'s Ex. 2, Hanlon Dep. 6:15-17, 10:22, 14:24-15:17, Sep. 12, 2007 (hereinafter "Hanlon Dep.").) Mr. Hanlon subsequently sent Mr. Albanese a formal offer letter on August 19, 2004, offering Mr. Albanese the position of Division President — Mid-Atlantic USA Tower Operations for WCI, reporting directly to Mr. Hanlon. (Pl.'s Ex. 3.) The position required that Mr. Albanese relocate to the Washington, D.C. area. Id. Mr. Albanese proposed changes to the terms of the offer (Pl.'s Ex. 4), and Mr. Hanlon then sent Mr. Albanese a revised copy of the offer letter on August 25, 2004. (PL's Ex. 5).²

The August 25, 2004, revised offer letter increased Mr. Albanese's base salary to $325,000.00 per year, a $25,000.00 increase from the original offer of $300,000.00 per year.³ Id.; (PL's Ex. 3). The revised offer also set Mr. Albanese's target bonus under the MICP program to 65% of his base annual salary, an increase from the original offer of 60% of his base salary. Id. The offer letter further stated:

Of course, as you know, there are both upside and downside [sic] based on achievement of financial objectives, but I believe it is noteworthy that the top end [sic] (160% of bonus) you could earn $663,000 salary and bonus under our current compensation program, compared to your current maximum compensation level of $320,000 [sic].

Id. The offer also indicated that Mr. Albanese's MICP bonus for 2004 would be prorated. Id.

In the August 25, 2004 offer letter to Mr. Albanese, Mr. Hanlon further agreed to pay certain costs related to Mr. Albanese's relocation to the Washington, D.C. area, specifically:

◂ Payment of costs related to the movement of your household goods and items as well as your personal vehicles.

◂ Up to nine months of temporary housing or dual residence expense as you identify your place of [primary] residence in the Maryland area.

◂ A cash miscellaneous relocation allowance of $5,000 payable at the time you would move to Maryland.

◂ Payment of all reasonable closing costs related to both the sale and purchase of primary residence. The major part of this being sales commission.

◂ All relocation items incurred would be grossed up for personal tax purposes leaving you with no out of pocket expenses related to your move.

(Pl.'s Ex. 5.) The letter then stated: "[r]egardless of your decision, you know you have a home here at WCI and your career will not be impeded either way."⁴ Id. Mr. Albanese signed the letter accepting the terms, and began his new position in early September 2004.⁵ (Albanese Dep. 54:10-17.)

Mr. Hanlon's statements about Mr. Albanese's potential to return to Florida

As part of the discussions surrounding the terms of the August 25, 2004 offer letter promoting Mr. Albanese to Division President, Mr. Hanlon told Mr. Albanese that an opportunity existed for Mr. Albanese to return to Florida if WCI ceased business in the Mid-Atlantic region. (Albanese Dep. 104:14-21.) According to Mr. Hanlon, he told Mr. Albanese that:

If while we're up there[, pursuing the Mid-Atlantic region,] we determine that we are not going to continue with tower operations or pursue tower opportunities in the Mid-Atlantic, that I would bring [Mr. Albanese] back to Florida with the same position he had when he left.

(Hanlon Dep. 62:20-63:2.) Mr. Albanese interpreted Mr. Hanlon's comments to mean that if "things did not work out for one reason or the other" and Mr. Albanese decided that he wanted to return to Florida, Mr. Hanlon would bring him back in a comparable position. (Albanese Dep. 104:1-2, 104:22-105:5.) This understanding influenced Mr. Albanese's ultimate decision to accept the promotion and move to the Washington, D.C. area. (Albanese Dep. 204:7-11.)

On February 14, 2005, WCI acquired Renaissance Housing. (Albanese Dep. 64:11-12.) Renaissance Housing's owner, Sonny Small, became President of Mid-Atlantic Towers, an entity focused on building single-family homes and townhouses for WCI. (Albanese Dep. 64:9-11, 64:15-16, 65:11-13.) About thirty days after the acquisition, Mr. Albanese began reporting to Mr. Small instead of Mr. Hanlon. (Albanese Dep. 65:1-4.) Mr. Albanese subsequently expressed concerns to Mr. Hanlon about the acquisition of Renaissance Housing, because he believed that the change in management may not have a positive outcome. (Albanese Dep. 152:3-5; Pl.'s Mem. Opp. Summ. J. 15 (hereinafter "Pl.'s Mem.").) Mr. Hanlon reiterated that if "things did not work out," Mr. Albanese could return to Florida. (Albanese Dep. 152:19-153:5.) According to Mr. Albanese, he decided to stay with WCI and work underneath Mr. Small after the Renaissance Housing acquisition based on Mr. Hanlon's statements. (Albanese Dep. 204:21-205:2.)

Mr. Albanese's 2005 MICP bonus

The 2005 MICP indicates that the bonus allocation for operating personnel would be derived from corporate financial objectives (20%) and division/project objectives and/or personal objectives (80%). (Pl.'s Ex. 14.) The 2005 MICP bonus plan provided for the award of a discretionary bonus with the prior approval of Jerry Starkey, the President and CEO of WCI in 2005. (Pl.'s Ex. 15; Pl.'s Mem. 2.)

The August 25, 2004, offer letter referenced Mr. Albanese's eligibility to receive a bonus in 2004 pursuant to WCI's MICP program. (Pl.'s Ex. 5.) During the discussions regarding Mr. Albanese's promotion to Division President, Mr. Albanese testified that Mr. Hanlon told him that his 2004 and 2005 MICP would be based on the success of the overall...