Pfizer Inc. v. Uprichard

• Decision Date: 30 August 2005
• Docket Number: No. 04-2527.,04-2527.
• Citation: 422 F.3d 124
• Parties: PFIZER INC., a Delaware corporation v. Margaret UPRICHARD, an individual, Appellant.
• Court: U.S. Court of Appeals — Third Circuit

422 F.3d 124

PFIZER INC., a Delaware corporation v. Margaret UPRICHARD, an individual, Appellant.

No. 04-2527.

United States Court of Appeals, Third Circuit.

Argued May 10, 2005.

Filed August 30, 2005.

COPYRIGHT MATERIAL OMITTED

Joseph F. Hardcastle (Argued), Cintra S. Shober, Hardcastle & Shober, Boston, MA, for Appellant.

James P. Flynn (Argued), Sheila A. Woolson, On the Brief, Epstein Becker & Green, P.C., Newark, New Jersey, for Appellee, of counsel.

Before SLOVITER and FISHER, Circuit Judges, and POLLAK,^* District Judge.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Dr. Margaret Uprichard, who received an arbitration award of $244,636.25 plus prejudgment interest to be paid by her former employer appellee Pfizer, Inc., appeals from the portion of the District Court's order requiring that she sign Pfizer's Settlement and Release Agreement as a condition to enforcement of the Arbitration Award. At issue is whether a District Court can impose such a requirement in the context of a Fed.R.Civ.P. 60(a) proceeding.

I.

In the late 1990s, Dr. Uprichard was employed by the Warner-Lambert Company as Director of Clinical Research. Warner-Lambert merged with Pfizer Inc. in the Spring of 2000, and Uprichard's title was changed from Director of Clinical Research to "Local Clinical Leader." Dissatisfied with her new position, Uprichard submitted a Constructive Termination Eligibility Form, claiming a substantive change in job duties, and a request for severance benefits pursuant to Warner-Lambert's Enhanced Severance Plan ("ESP").

A panel of three arbitrators of the American Arbitration Association found that Uprichard had suffered constructive termination and directed Pfizer to pay her severance benefits in the amount of $244,636.25. The arbitration award imposed no restrictions or conditions on the payment of the award, nor did it discuss the requirement of any settlement or waiver agreement. Although the arbitration panel retained jurisdiction for forty-five days "for purposes of resolving any dispute ... regarding ESP benefits due under this Award," App. at 366, neither party sought to have the award modified in any respect.

In March of 2003, Pfizer filed suit in the United States District Court for the District of New Jersey seeking to have the Arbitration Award vacated, claiming that the arbitration panel awarded relief that "exceeded the ... authority afforded to it by the ESP and the parties," and that such relief reflected "manifest disregard for the law, the evidence and the intent of the ESP's drafters." App. at 19-20. Pfizer did not include in its complaint a request to modify the arbitration award to include a requirement that Uprichard sign a settlement or waiver agreement.

By Order dated September 26, 2003, the District Court (I) denied Pfizer's motion to vacate arbitration award, (ii) allowed Uprichard's cross-motion to confirm arbitration award, (iii) denied Uprichard's cross-motion for award of attorneys' fees, (iv) dismissed Pfizer's verified complaint with prejudice, and (v) ordered that judgment be entered in favor of Uprichard in the amount of $244,636.25 plus pre-judgment interest from December 16, 2002. The District Court did not discuss or require any settlement or waiver agreement as a condition of payment.

Following the September 26, 2003 Order, the parties stipulated that the amount of prejudgment interest to be paid to Uprichard was $11,353.80. In a letter dated October 3, 2003, Uprichard informed Pfizer that she would not proceed with an appeal of the denial of her request for attorneys' fees and would, upon receipt of payment of the arbitration award and prejudgment interest, sign and deliver an agreement that judgment had been satisfied.

By letter dated October 7, 2003, Pfizer sent Uprichard a prepared copy of its Settlement and Release Agreement, which included confidentiality and non-disparagement requirements. Moreover, the Agreement provided that should Uprichard violate either of these provisions, she would be required to repay to Pfizer, as "liquidated damages," all the money paid to her pursuant to the arbitration award (the "disputed provisions").¹ Pfizer demanded that Uprichard sign the Settlement and Release Agreement, prepared by Pfizer, as a condition to receiving her arbitrated award. Following several telephone conversations between the parties discussing the disputed provisions, counsel for Uprichard sent a letter to Pfizer dated November 4, 2003, stating that although Uprichard was willing to "execute a release of any and all remaining claims she may have against Pfizer in order to expedite payment of the Judgment she obtained," App. at 481, she was not willing to sign the specific release proposed by Pfizer because she claimed that it contained a number of provisions that went well beyond a general release.² Id. Uprichard attached to the November 4, 2003 letter, a signed and notarized general release, containing none of the disputed provisions. In subsequent correspondence, Pfizer refused to accept the release offered by Uprichard.

When it became clear that no agreement would be reached on the voluntary payment of the severance award, on March 19, 2004, Uprichard filed a motion pursuant to Federal Rule of Civil Procedure 60(a)³ to correct judgment with the District Court to include the pre-judgment interest previously agreed upon. The docket entry accompanying the September 26, 2003 Order inadvertently failed to reflect the District Court's grant of pre-judgment interest in Uprichard's favor, stating only "judgment entered in the sum of $244,636.25 in favor of deft Margaret Uprichard and agst pltf Pfizer, Inc." App. at 6. Although Pfizer did not dispute Uprichard's entitlement to pre-judgment interest, it did claim in response that Uprichard was required by the ESP to sign a standard release form acceptable to Pfizer as a condition to receiving her arbitrated award.

Both parties consented to have a Magistrate Judge hear the matter.⁴ Pursuant to 28 U.S.C. § 636(c)(1), a hearing was held on April 26, 2004. By Order dated April 28, 2004, the Magistrate Judge corrected the docket sheet to include $11,353.80 in prejudgment interest, and imposed the requirement that Uprichard sign Pfizer's Settlement and Release Agreement as a condition to receiving her money judgment. The second paragraph of that Order states:

The Court finds the release form required by the Plaintiff prior to the payout of monies to the Defendant is objectively reasonable. Plaintiff shall not be required to pay over any monies to the Defendant until such time as that release has been signed.

App. at 1.

Uprichard filed a timely notice of appeal from the Magistrate Judge's Order, arguing that because the Settlement Agreement requirement was addressed in the context of a Fed.R.Civ.P. 60(a) motion to correct judgment, the Magistrate Judge exceeded his authority by substantively amending the September 26, 2003 Order of the District Court.

II.

A. Jurisdiction

The District Court had diversity jurisdiction under 28 U.S.C. § 1332.⁵ Pfizer argues that we lack jurisdiction to hear this appeal because the notice of appeal was untimely. Specifically, Pfizer claims that Uprichard's obligation to sign Pfizer's Settlement and Release Agreement was "inherent" in the District Court's September 26, 2003 Order confirming the Arbitration Award, and therefore, that the thirty-day period to appeal this obligation, under Fed. R.App. P. 4, began to run as of September 26, 2003. Thus, according to Pfizer, Uprichard's May 26, 2004 notice of appeal, although styled as an appeal from the Magistrate Judge's April 28, 2004 Order, was actually an appeal from the District Court's September 26, 2003 Order, and therefore untimely. We reject this argument.

Pfizer's claim that the Settlement Agreement requirement was "inherent" in the District Court's September 26 Order finds no basis in the record or relevant case law. Neither the December 16, 2002 arbitration award nor the September 26, 2003 Order of the District Court, confirming the arbitration award, contained any reference to a settlement and release agreement, much less required that one be signed as a condition to obtaining the award. Pfizer cites no case law even suggesting that a finding of substantive right (namely the requirement of a settlement agreement) is made implicit or "inherent" in a court's holding when the court neither addresses the issue or was even aware of its existence.

Furthermore, Uprichard was provided a copy Pfizer's Settlement Agreement for the first time, by letter dated October 7, 2003 (two weeks after the District Court's September 26 Order), and it is undisputed that the Settlement Agreement issue was adjudicated for the first time in connection with Uprichard's Rule 60(a) motion to correct judgment.⁶

Therefore, we hold that Uprichard's notice of appeal is from the Magistrate Judge's April 28, 2004 Order, and not from the District Court's September 26, 2003 Order.⁷ Because this notice of appeal was filed within thirty days of the Magistrate Judge's Order, it was timely and we have jurisdiction under 28 U.S.C. § 636(c)(3).⁸

B. Did the Magistrate Judge's April 28, 2003 Order Exceed his Authority?

Ordinarily, we review a district court's decision to grant or deny a Fed.R.Civ.P. 60(a) motion for an abuse of discretion. Perez v. Cucci, 932 F.2d 1058, 1061 (3d Cir.1991) ("We review the denial of the City's Rule 60(a) motion to determine whether the trial court's action was arbitrary, fanciful or clearly unreasonable. Otherwise stated [the City] must show that no reasonable person would concur in the trial court's assessment of the issue under consideration.") (internal citations and quotations omitted). However, the issue of whether a District Court has authority, in the context of a Fed.R.Civ.P. 60(a) motion, to impose additional substantive requirements not earlier contemplated by the District Court presents a question of law...