Food Fair Stores, Inc. v. Greeley

• Decision Date: 12 January 1972
• Docket Number: No. 169,169
• Citation: 285 A.2d 632,264 Md. 105
• Parties: , 54 A.L.R.3d 177 FOOD FAIR STORES, INC., et al. v. Carl E. GREELEY.
• Court: Maryland Court of Appeals

Page 105

264 Md. 105

285 A.2d 632, 54 A.L.R.3d 177

FOOD FAIR STORES, INC., et al. v. Carl E. GREELEY.

No. 169.

Court of Appeals of Maryland.

Jan. 12, 1972.

Marvin I. Singer, Baltimore (Sullivan, Wiesand & Singer, Baltimore, on the brief), for appellants.

Lawrence F. Weslock, Hillcrest Heights, for appellee.

Argued before HAMMOND, C. J., and BARNES, McWILLIAMS, FINAN, SMITH and DIGGES, JJ.

FINAN, Judge.

Carl E. Greeley (Greeley), the appellee, a former employee of Food Fair Stores, Inc. (Food Fair), appellant, and a beneficiary under its corporate Pension Plan (Plan), originated these proceedings. He terminated his employment to accept a position in a competitive field and when the funds which he felt were due him under the Plan were not forthcoming, sued both Food Fair and the Trustee of the pension fund. We must now determine what his rights may be under the Plan which imposes upon former employees certain restrictive conditions, regarding activity in competition with Food Fair or inimical to its interest, the breach of which is to be determined by an Advisory Committee (Committee).

On January 26, 1970, Greeley voluntarily terminated nearly 16 years of employment with Food Fair, a retail grocery store chain based in the State of Pennsylvania, to accept a position of 'retail counselor' with the Fox Grocery Company, a wholesale grocery firm. During the course of his employment with Food Fair, the appellee held the position of manager-trainee and eventually store manager, working in the Baltimore metropolitan area. As a 'retail counselor' with the Fox Grocery Company, the appellee's duties included selling a line of groceries similar to that sold by Food Fair to independent retail grocers in the Baltimore area and advising the independent grocers in ways to increase their sales.

After 5 years of employment with Food Fair, the appellee became a participant in the company's non-contributory Incentive Bonus and Retirement Plan (Plan) which is maintained for the executive, administrative, and supervisory personnel of the company and for which the other appellant in this case, The First Pennsylvania Banking and Trust Company (First Pennsylvania), acts Trustee. The Plan is funded entirely from the profits of Food Fair, and in addition to providing retirement benefits, it supplies insurance protection in the event of the death of an employee. The Plan provides that upon the voluntary resignation of a participant, distribution is not to be made until the employee reaches the age of 65 or dies, whichever is the first to occur, and it further stipulates that distribution is subject to the conditions imposed upon post-employment conduct which are contained in Section 7.1, which states:

'If the Committee (the advisory body established to administer the Plan) determines in its sole and absolute discretion that a Participant has engaged in fraud or dishonesty towards the Company, or has intentionally damaged the Company's property, or has wrongfully disclosed any secret process or imparted any confidential information, or has done any act inimical to the interest of the Company during his employment or thereafter, such as engaging in a competing business or entering the employ of a competitor of the Company, the Committee shall have the full right and power to suspend, reduce, terminate or forfeit the benefits or interest of such Participant (or his Beneficiary) in the Plan, whether or not vested.'

After Greeley left the employ of Food Fair to accept the position with the Fox Company, he made claim for the monies allegedly due him pursuant to the terms of the Plan. The Plan's Advisory Committee responded to the claim by citing Section 7.1, presumably taking the position that by working for the Fox Company as a 'retail counselor,' Greeley had forfeited the Plan's benefits. Greeley thereafter instituted suit against Food Fair and First Pennsylvania (as Trustee of the Plan's funds) in the Circuit Court for Prince George's County seeking the proceeds of the Plan's benefits and additionally seeking from Food Fair a bonus and accrued vacation pay allegedly due him.

First Pennsylvania, which is chartered under the laws of Pennsylvania, filed a motion raising a preliminary objection in the lower court which questioned the presence of jurisdiction over it by the Maryland Courts. The motion was overruled after a hearing before Judge DeBlasis, and a subsequent demurrer questioning the sufficiency of the allegations made against First Pennsylvania was also overruled by Judge DeBlasis.

The case was heard on its merits, Meloy, J. presiding, on April 13, 1971, at which time the appellants strenuously argued that the action of the appellee in working for a 'competing business,' combined with the fact that the appellee had played some part in leading another Food Fair employee, Gordon Lee Malone, away from his Food Fair position to one with the Fox Company, constituted a violation of Section 7.1 of the Plan and therefore made Greeley ineligible to receive the Plan's benefits. At the conclusion of arguments however, the court awarded a judgment against both Food Fair and First Pennsylvania in the amount of $8,514.10 representing the sum of money to which Greeley was entitled under the Plan. The court found in favor of Food Fair as to Greeley's claim for a bonus and accrued vacation pay. Food Fair and First Pennsylvania now appeal the judgment entered against them.

In limine, there is the jurisdictional question which must be disposed of regarding the appellant, First Pennsylvania. It contends that as a foreign corporation it is not amendable to the jurisdiction of the Maryland Courts because it is not doing business in Maryland, nor do any of its general activities or those in relation to the plaintiff Greeley constitute a presence within the State or sufficient contacts within this State, to bring it within the purview of Maryland Code (1969 Repl. Vol.), Art. 75, § 96, commonly referred to as our 'Long Arm' statute. While recognizing the liberal construction we have given to this statute in the recent cases of Harris v. Arlen Properties Inc., 256 Md. 185, 195, 196, 260 A.2d 22 (1969), and Novack v. National Hot Road Assn., 247 Md. 350, 354, 231 A.2d 22 (1967), we find nothing in the record in the instant case which would bring First Pennsylvania's activities or its duties as Trustee under the Plan within the scope of the 'Long Arm' statute as interpreted by our decisions.

The record contains no suggestion that the Plan was negotiated, executed, or implemented within this State. Communications regarding the Plan and the statements of Greeley's account came through the mail from Food Fair. Upon the termination of his employment Greeley wrote to the 'retirement committee' inquiring as to his status under the Plan and in reply he received a letter from the employees' representative for the Advisory Committee, but there is no evidence that the Trustee was involved in the denial of the claim. In short, we are unable to find any minimal contacts within the due process requirements, on the part of First Pennsylvania, found to be a requisite for jurisdiction in International Shoe Company v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945), or acts of the Trustee of a purposeful nature in this State or a persistent course of Business activity in this State. Vitro Electronics, Division of Vitro Corporation of America v. Milgray, 255 Md. 498, 505, 258 A.2d 749 (1969). Were we to hold the Trustee amendable to jurisdiction we think it would violate the 'traditional notions of fair play and substantial justice,' articulated in International Shoe, supra, 326 U.S. at 316, 66 S.Ct. at 158. See also Auerbach, The Long Arm Comes to Maryland, 26 Md.L.Rev. 13, 25 (1966). Accordingly, we are of the opinion that the lower court erred in rendering a judgment against First Pennsylvania and reverse the judgment below as to that defendant. We would further add that we do not view the lack of a judgment against First Pennsylvania as any real detriment to Greeley's obtaining his just rights, as we are of the belief that Food Fair is in a position to legitimately instruct the Advisory Committee to direct the Trustee to comply with any judgment entered against Food Fair, the satisfaction of which lies in a payment from the pension fund.

Turing to the judgment against Food Fair we must first examine the structure of the Advisory Committee, and next, its actions in applying the provisions of Section 7.1 of the Plan to the conduct of Greeley. In this latter connection we must also examine the language of Section 7.1 itself. Section 2.1 provides that the Committee shall be composed of five members, three to be appointed by the board of directors of Food Fair and two to be elected from the participants in the Plan. Section 2.1 further provides that, 'No Advisor shall be liable to any person whatsoever by his having acted as Advisor.' Section 2.2 provides that the board of directors of Food Fair, 'shall have the right to discharge any Advisor appointed by it, without assigning any reason therefore.' Section 3.9 states that the Committee may discontinue the Plan, should the board of directors of Food Fair deem it advisable. Section 7.6 again reiterates that the board of directors of Food Fair may discontinue the Plan at any time. Section 7.9 provides that Food Fair 'may, before making any distributions hereunder to the Participant or his Beneficiaries, set off against such distribution the amount of any indebtedness of the Participant to the Company.'

It should be noted at this point, that Greeley did not join the Committee as a party defendant. What may have been the legal implications of his failure to do this was not argued below nor on appeal. Nor did Food Fair in denying its liability contend that the wrong party had been sued or that it was not a proper party, so in that sense, the question of Food Fair's insulation from...