Brazeal v. Newpoint Media Grp., LLC.

• Decision Date: 10 March 2015
• Docket Number: No. A14A2007.,A14A2007.
• Citation: 769 S.E.2d 763,331 Ga.App. 49
• Parties: BRAZEAL v. NEWPOINT MEDIA GROUP, LLC.
• Court: Georgia Court of Appeals

331 Ga.App. 49

769 S.E.2d 763

BRAZEAL

v.NEWPOINT MEDIA GROUP, LLC.

No. A14A2007.

Court of Appeals of Georgia.

March 10, 2015.

Bodker Ramsey Andrews Winograd & Wildstein, Robert Ernest Rigrish, Atlanta, for Appellant.

Weinberg Wheeler Hudgins Gunn & Dial, Nicholas P. Panayotopoulos, Atlanta, for Appellee.

Opinion

BARNES, Presiding Judge.

This case involves a contractual dispute between Plaintiff David Brazeal and his former employer, Defendant NewPoint Media Group, LLC, regarding whether Brazeal was owed severance pay after NewPoint declined to renew his employment contract for an additional one-year term. The trial court denied Brazeal's motion for summary judgment, and granted NewPoint's cross-motion for summary judgment, concluding that NewPoint was not required to pay severance to Brazeal as a matter of law. In reaching this conclusion, the trial court reviewed Brazeal's employment contract and determined that it plainly and unambiguously distinguished between the non-renewal of his contract at the end of a term and the termination of his employment without cause, requiring severance pay only in the latter circumstance. Brazeal now appeals. For the reasons discussed below, we affirm.¹

Summary judgment is appropriate if the pleadings and evidence “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” OCGA § 9–11–56(c). “Contract disputes are particularly well suited for adjudication by summary judgment because construction of contracts is ordinarily a matter of law for the court.” (Citation and punctuation omitted.) Grot v. Capital One Bank (USA), N.A., 317 Ga.App. 786, 793(6), 732 S.E.2d 305 (2012). On appeal from a trial court's grant or denial of summary judgment, we “conduct a de novo review, construing all reasonable inferences in the light most favorable to the nonmoving party.” Bank of North Ga. v. Windermere Dev., 316 Ga.App. 33, 34, 728 S.E.2d 714 (2012). So viewed, the record shows as follows.

Brazeal was hired as chief financial officer (“CFO”) of NewPoint pursuant to an employment agreement dated June 28, 2012 (the “Agreement”). Section 1 of the Agreement provided that Brazeal's initial term of employment would be for one year and would automatically renew for additional one-year periods unless Brazeal or NewPoint provided to the other party written notice of “non-renewal”:

1. Term. The term of Employee's employment will commence (the “Start Date ”) on the later of (a) the date of this Agreement and (b) the date on which the Company acquires substantially all of the assets of Network Communications, Inc. (the “Seller ”), and continue for a period of one year (the “Initial Term ”) and shall thereafter automatically renew for additional twelve (12) month periods (each, a “Renewal Term ”) unless written notice of non-renewal is given by one party to the other at least ninety (90) days prior to the expiration of the Initial Term or any Renewal Term, as applicable. Employee's actual term of employment by the Company under this Agreement is referred to as the “Term. ” The provisions of Sections 8 through 11 hereof shall survive the termination of Employee's employment with the Company in accordance with their respective terms.

(Emphasis in original.)

“Notwithstanding Section 1,” Section 6 of the Agreement provided NewPoint with the ability to terminate Brazeal's employment at any time “for any reason or for no reason whatsoever, with or without Cause,” and Brazeal with the ability to resign his employment at any time “for any reason or for no reason whatsoever,” if certain notice requirements were met:

6. Ability to Terminate. Notwithstanding Section 1, Employee understands and agrees that the Company reserves the right upon thirty (30) days prior written notice (which notice will not be required in the event of termination for Cause, in which case termination shall be effective on the date of the notice) to terminate Employee's employment with the Company at any time for any reason or for no reason whatsoever, with or without Cause. Likewise, Employee may Resign his employment with the Company at any time (upon thirty (30) days prior written notice) for any reason or for no reason whatsoever. Employee's employment by the Company will automatically terminate upon Employee's death or Permanent Disability.

Section 7 of the Agreement then addressed the obligations of the parties upon “termination” of Brazeal's employment, including a subsection addressing NewPoint's obligation to pay severance to Brazeal in the event of his “termination ... without Cause”:

7. Termination Obligations.

...

(b) Following the Company's termination of Employee's employment without Cause, ...

(i) the Company will continue to pay Employee, in accordance with the Company's usual payroll practices and subject to all applicable withholding and deductions, Employee's then current Base Salary for a period of nine (9) months (the “Severance Period ”).

(Emphasis in original.)

Additionally, Section 8 of the Agreement addressed Brazeal's obligation to refrain from disclosing and using certain confidential and proprietary information belonging to NewPoint, and Section 9 gave NewPoint certain rights, title, and interest in Brazeal's works of authorship created for the benefit of the company during the term of his employment. Section 10 contained restrictive covenants agreed to by Brazeal, including non-compete and non-solicitation clauses, and Section 11 contained a “non-disparagement” clause whereby Brazeal agreed not to engage in any conduct or make any statements disparaging to NewPoint.

Lastly, Section 14 of the Agreement contained a list of definitions. “Cause” was defined to include dishonesty in business dealings with the NewPoint, diversion of corporate opportunities, certain criminal arrests and convictions, neglect of duties, failure to comply with directives from NewPoint's board of directors, intentional misrepresentations or omissions, and the material breach of any provision of the Agreement. Section 14 did not define “ termination.”

Brazeal began serving as CFO at NewPoint in June 2012, but in a March 2013 letter, NewPoint's board of directors notified him that the company would not be renewing his initial one-year term of employment for an additional term “in accordance with Section 1 of the Agreement.” The letter complied with the 90–day notice requirement imposed by Section 1 of the Agreement. Brazeal's last day as CFO was in late June 2013.

After NewPoint refused to pay him any severance, Brazeal sued the company for, among other things, breach of contract. Brazeal's complaint alleged that NewPoint owed Brazeal nine months of severance pay under Section 7 of the Agreement because it declined to renew his initial term of employment without “Cause,” as that term was defined in the Agreement. NewPoint answered, denying that it owed Brazeal any severance pay based on its decision not to renew his initial term of employment under Section 1 of the Agreement.

Brazeal moved for summary judgment on his contract claim, and NewPoint filed a cross-motion for summary judgment. The parties presented competing interpretations of when severance pay was owed under the Agreement. According to Brazeal, the Agreement was ambiguous as to whether NewPoint had to pay severance to him under Section 7 if it chose to end his employment “without Cause” through a “non-renewal” of his term of employment under Section 1. In light of this ambiguity, Brazeal contended that the rules of contract construction and parol evidence ought to be consulted and would lead to the resolution of any ambiguity in his favor so as to require the payment of severance.

In contrast, NewPoint contended that by its plain and unambiguous terms, the Agreement drew a distinction between the “non-renewal” of Brazeal's initial term of employment under Section 1 and the “termination” of his employment “without Cause” under Section 6, and that the requirement of paying severance in Section 7 arose only if NewPoint terminated Brazeal's employment “without Cause” under Section 6. According to NewPoint, because Brazeal's initial term of employment was not renewed, and because severance was required in the event of “termination ... without Cause” but not in the event of a “non-renewal,” Brazeal was not entitled to severance pay as a matter of law.

The trial court agreed with NewPoint's interpretation of the Agreement, resulting in the court denying Brazeal's motion for summary judgment and granting NewPoint's cross-motion for summary judgment.² In its order, the trial court concluded that the Agreement drew a distinction between a decision by either party not to renew Brazeal's initial term of employment for another one-year term (Section 1), and a decision to terminate Brazeal “without Cause” during his term of his employment (Section 6), with severance pay being owed only in the latter circumstance (Section 7). Because the undisputed record showed that NewPoint, through its March 2013 letter, had exercised its right not to renew Brazeal's initial term of employment in accordance with the notice requirements of Section 1, the trial court determined that Brazeal was not entitled to severance pay as a matter of law. This appeal followed in which Brazeal challenges the trial court's construction of the Agreement.

We conclude that the trial court properly construed the Agreement to not require the payment of severance to Brazeal. Construing the language of a contract “presents a question of law for the court, unless the language presents an ambiguity that cannot be resolved by the rules of construction.” Mun. Elec. Auth. of Ga. v. Gold–Arrow Farms, 276 Ga.App. 862, 866(1), 625 S.E.2d 57 (2005). The “cardinal rule” of construction is to ascertain the contracting parties' intent, OCGA § 13–2–3, and “where the terms of a written contract are clear and unambiguous, the court will look to the contract alone to find the intention of the...