Mason v. Telefunken Semiconductors Am., LLC

• Decision Date: 29 July 2015
• Docket Number: No. 14–1962.,14–1962.
• Citation: 797 F.3d 33
• Parties: Thomas R. MASON, Plaintiff, Appellant, v. TELEFUNKEN SEMICONDUCTORS AMERICA, LLC, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

797 F.3d 33

Thomas R. MASON, Plaintiff, Appellant

v.TELEFUNKEN SEMICONDUCTORS AMERICA, LLC, Defendant, Appellee.

No. 14–1962.

United States Court of Appeals, First Circuit.

July 29, 2015.

Kenneth J. Barnes, with whom Law Office of Kenneth J. Barnes, Anne M. Rice, and Rice Law Office PLLC were on brief, for appellant.

Irvin D. Gordon, with whom Sulloway & Hollis, P.L.L.C. was on brief, for appellee.

Before HOWARD, Chief Judge, SELYA and LYNCH, Circuit Judges.

Opinion

SELYA, Circuit Judge.

This case involves a series of shifting employment arrangements. Plaintiff-appellant Thomas R. Mason asserts that defendant-appellee TSI Semiconductors America, LLC (TSA), formerly known as Telefunken Semiconductors America, LLC, abridged his contractual rights with respect to no fewer than three of these arrangements. At the summary judgment stage, the district court concluded that Mason had failed to make out a genuine issue of material fact sufficient to sustain any of his claims. After careful consideration, we reverse in part, affirm in part, and remand for further proceedings.

I. BACKGROUND

In 2009, Mason began work in a senior engineering position for Tejas Silicon, Inc. (Tejas), a California-based corporation with an office in New Hampshire. The terms of Mason's employment were delineated in a written agreement (the Agreement) that took effect on April 1, 2009. The Agreement contained a section entitled “Consequences of Termination of Employment.” Part of this section permitted Tejas to terminate Mason's employment without cause upon 60 days' written notice, in which event Mason would be entitled to continued salary payments and benefits for one year. If, however, the termination was “due to the acquisition, merger, or buyout by another entity,” then Mason's severance pay and benefits would continue for two years.¹

The Agreement stipulated that Mason's employment was for a fixed term (one year), which would renew automatically on each anniversary of the Agreement's effective date unless either party elected not to renew. An election not to renew could be made by providing written notice no fewer than 30 days prior to the anniversary date.

Mason's employment with Tejas continued uneventfully for two years, and the Agreement renewed automatically on April 1, 2010 and April 1, 2011. The landscape changed, though, in December of 2011 when Mason learned of an impending corporate restructuring.² As Mason understood it, Tejas would terminate his employment and TSA would offer him new employment. Soon thereafter, TSA wrote to Mason and offered him employment in his then-current position at his then-current salary, beginning January 1, 2012 (the Offer Letter).

Mason decided to accept employment with TSA and, in December of 2011, signed four documents: a document entitled “Amendment to Employment Agreement” (the Amendment); the Offer Letter; a document entitled “Employment, Confidential Information and Invention Assignment Agreement” (the New Agreement); and a document entitled “Employee Transfer Agreement and General Release” (the Release). By its terms, the Amendment was to take effect on January 1, 2012. Mason, Tejas, and TSA all signed it, thus memorializing their mutual intent to amend the Agreement.

The Amendment went on to state that, “effective as of January 1, 2012,” each reference to Tejas in the Agreement would be replaced by a reference to TSA; that Tejas would “transfer and assign to [TSA] the Agreement and all of its rights, duties and obligations thereunder”; and that TSA would assume those rights, duties, and obligations. It also provided that “the Agreement shall continue under [Mason's] employment relationship with [TSA].”

The Offer Letter, though, provided that Mason's employment with TSA would be “for no specified period of time” and would be “an at-will employment relationship,” under which either Mason or TSA could “terminate the relationship at any time, for any reason, with or without cause.” Apparently in response to this language, Mason wrote (in the signature block of the Offer Letter) the words “As Amended (Attached)” and annexed a copy of the Amendment.

The New Agreement contained, in capital letters, Mason's acknowledgment “that, except as set forth in any other written agreement between me and the company, my employment with the company constitutes ‘at-will’ employment.” Mason executed this document without any qualification.

To complete the picture, the Release provided that, in exchange for $1000 and the offer of new employment by TSA, Mason would “ABSOLUTELY AND IRREVOCABLY AND UNCONDITIONALLY” release TSA from “any and all claims” against TSA or its “[r]elated [p]arties,” including claims arising “as a result of [his] employment with and separation from employment” as of December 31, 2011. Here again, Mason added a holographic coda, stating cryptically “EXCEPT AS AMENDED IN ‘AMENDMENT TO EMPLOYMENT AGREEMENT.’ ”

In January of 2012, Mason began toiling for TSA. Two months later—on February 29—TSA sent him an e-mail announcing that the Agreement “will not be extended for an additional one-year period and will automatically expire April 1, 2012.” The email proposed that, should the parties “agree to continue the employment relationship on and after April 1, 2012, then the employment relationship shall be in accordance with” the Offer Letter and the New Agreement.

Mason sought to clarify whether his employment with TSA was being terminated as of April 1. In an e-mail sent on March 31, TSA responded that it was not terminating Mason's employment but, rather, was simply declining to renew the Agreement. It went on to state that Mason's subsequent employment would be governed by the documents signed in December of 2011 (including specifically the Offer Letter and the New Agreement). Mason continued to work for TSA until May 17, 2012, when TSA furloughed him as part of a company-wide reduction in force.

Mason did not go quietly into this bleak night. He repaired to a California state court and sued TSA for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of section 203 of the California Labor Code. Citing diversity of citizenship and the existence of a controversy in the requisite amount, TSA removed the case to federal district court. See 28 U.S.C. §§ 1332(a), 1441. It thereafter successfully moved to transfer venue to the District of New Hampshire. See id. § 1404(a).

After the close of discovery, the parties cross-moved for summary judgment. Mason resisted summary judgment on his breach of contract claims, asserting that there were genuine issues of material fact as to whether any of three separate events—the December 2011 reorganization, the February 2012 non-renewal, and the May 2012 layoff—constituted a termination without cause that triggered the duty to pay severance. The district court entered summary judgment in favor of TSA upon concluding that on a plain reading of the relevant contractual provisions, none of these events constituted a termination under the Agreement. See Mason v. Telefunken Semiconductors Am., LLC, No. 12–507, 2014 WL 3962470, at *8 (D.N.H. Aug. 13, 2014). This timely appeal followed.

II. ANALYSIS

We review a decision to grant or deny summary judgment de novo. See Bisbano v. Strine Printing Co., 737 F.3d 104, 107 (1st Cir.2013) ; Avery v. Hughes, 661 F.3d 690, 693 (1st Cir.2011). In this instance, Mason appeals only the district court's entry of summary judgment in favor of TSA, not the court's denial of his own motion for summary judgment. Hence, we take the facts and the reasonable inferences extractable therefrom in the light most favorable to Mason. See Torres Vargas v. Santiago Cummings, 149 F.3d 29, 30 (1st Cir.1998). We will affirm only if we are satisfied that there is no genuine issue of material fact and TSA is entitled to judgment as a matter of law. See Vineberg v. Bissonnette, 548 F.3d 50, 55 (1st Cir.2008). Such an affirmance may rest on any ground made manifest by the record. See Houlton Citizens' Coal. v. Town of Houlton, 175 F.3d 178, 184 (1st Cir.1999).

Since this is a diversity case, we look to federal law for the summary judgment framework and to state law for the substantive rules of decision. See Hanna v. Plumer, 380 U.S. 460, 473, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) ; Artuso v. Vertex Pharm., Inc., 637 F.3d 1, 5 (1st Cir.2011). The parties have stipulated that California is the wellspring of the relevant state law, and that stipulation jibes with the choice-of-law provisions contained in the Agreement and the Amendment. Consequently, we accept this stipulation at face value without performing a full-blown choice-of-law analysis. See Butler v. Balolia, 736 F.3d 609, 612 (1st Cir.2013) ; Artuso, 637 F.3d at 5.

This appeal necessarily rises or falls with the breach of contract claims. In contract disputes, the court may construe clear and unambiguous contract terms as a matter of law. See Torres Vargas, 149 F.3d at 33. If, however, ambiguity lurks, an examination of extrinsic evidence “becomes essential.” Id.

California follows the familiar rule that an ambiguity arises if, when viewed in context, a contract term is equally susceptible to more than one reasonable meaning. See Dore v. Arnold Worldwide, Inc., 39 Cal.4th 384, 46 Cal.Rptr.3d 668, 139 P.3d 56, 60 (2006) ; Transamerica Ins. Co. v. Superior Court, 29 Cal.App.4th 1705, 35 Cal.Rptr.2d 259, 264 (1994). Whether a contract term is ambiguous is itself a question of law. See Blackie v. Maine, 75 F.3d 716, 721 (1st Cir.1996) ; Allen v. Adage, Inc., 967 F.2d 695, 698 (1st Cir.1992).

Against this backdrop, a series of questions must be asked concerning each of Mason's breach of contract claims. To begin, an inquiring court must ask whether the dispositive contract language is susceptible to more than one reasonable interpretation. See Torres Vargas, 149 F.3d at 33. If not, the court may proceed to construe the language and dispose of the summary judgment motion accordingly....