Schoch v. First Fidelity Bancorporation

• Decision Date: 27 August 1990
• Docket Number: No. 90-1044,90-1044
• Parties: , 116 Lab.Cas. P 56,363, 5 Indiv.Empl.Rts.Cas. 1107 Leroy D. SCHOCH, Appellant, v. FIRST FIDELITY BANCORPORATION and Industrial Valley Title Insurance Company, Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 654

912 F.2d 654

59 USLW 2199, 116 Lab.Cas. P 56,363,

5 Indiv.Empl.Rts.Cas. 1107

Leroy D. SCHOCH, Appellant, v. FIRST FIDELITY BANCORPORATION and Industrial Valley Title Insurance Company, Appellees.

No. 90-1044.

United States Court of Appeals, Third Circuit.

Argued June 19, 1990.

Decided Aug. 27, 1990.

Barry A. Brown (argued), Barnett & Brown, Philadelphia, Pa., for appellant.

John H. Leddy, (argued) and Eric Hoffman, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., for appellees.

Before GREENBERG, ALITO and WEIS, Circuit Judges.

OPINION OF THE COURT

WEIS, Circuit Judge.

In this litigation, which shuttled from the district court to the state court and back again to the federal forum, a former corporate officer seeks recovery for wrongful discharge, as well as additional incentive compensation and pension benefits. The district judge entered summary judgment in favor of defendants on all claims. Concluding that plaintiff was an employee at-will and that he failed to establish the existence of material disputed facts, we will affirm.

Plaintiff LeRoy Schoch was for many years an employee of defendant Industrial Valley Title Insurance Company, a subsidiary by merger of First Fidelity Bancorporation. He became president and chief operating officer of the title company in 1979, and served in that capacity until late 1983. At that time, the company replaced Schoch with a new executive and told plaintiff to report to his successor. Friction developed between the two men, and in June 1984 Schoch was asked to resign. When he refused, the company decided to terminate his employment effective December 31, 1984. Schoch performed no further duties after July 1, but continued to receive his salary until the end of that year.

Thereafter, plaintiff lodged with the Equal Employment Opportunity Commission an age discrimination claim that proved to be unsuccessful. In 1986 he filed a complaint in the district court alleging discrimination on the basis of age, improper reduction of bonus payments, and wrongful discharge.

On February 23, 1988, the district court granted summary judgment in favor of defendants on the age discrimination count, and dismissed the remaining two counts "without prejudice to plaintiff transferring those claims to an appropriate Court of the Commonwealth of Pennsylvania pursuant to 42 Pa.Cons.Stat.Ann. Sec. 5103(b) (Purdon Supp.1987)." That statute provides that a party may transfer litigation by filing in the state court a certified transcript of the district court's final judgment and related pleadings.

Plaintiff, however, failed to submit the certified federal judgment, and instead presented to the Prothonotary of the Court of Common Pleas of Philadelphia County a document labeled "Amended Complaint," verified in accordance with Pennsylvania procedure. The Prothonotary balked and did not accept the pleading until after counsel deleted the word "Amended."

This complaint dated August 5, 1988 contained five counts, the first two restating the bonus and wrongful discharge claims, respectively, of the 1986 federal suit. Count III asserted a claim for payment from a deferred compensation fund; Count IV sought an increase in pension benefits based on salary allocations made to the deferred compensation fund; Count V asked for increased pension benefits resulting from an anticipated recovery of bonus payments under Count I.

Through the removal process defendants brought the case back once again to the district court. They invoked federal question jurisdiction on the ground that the claims seeking pension benefits fell within the ambit of the Employee Retirement Income Security Act, 29 U.S.C. Secs. 1001-1461.

In due course, the district court granted summary judgment to defendants on all counts: on the bonus claim because plaintiff had failed to produce sufficient evidence that he was entitled to payments; on the wrongful discharge count because it was not supported by state law; on the deferred compensation claim because the parol evidence rule excluded the evidence necessary for recovery; and on the counts relating to pension benefits because the statute of limitations barred those claims.

I.

On appeals from the grant of summary judgment, our standard of review is plenary, Equimark Commercial Fin. Co. v. C.I.T. Fin. Servs. Corp., 812 F.2d 141, 142 (3d Cir.1987), and we review the record in the same light as a district court, see Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977). Our task is to determine whether the record, viewed in the light most favorable to the non-moving party, reveals a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 255, 106 S.Ct. 2505, 2510, 2513, 91 L.Ed.2d 202 (1986). With respect to summary judgment on a matter of contract interpretation, this Court has stated that "to affirm ... we must determine that the contract is so clear that it can be read only one way." Tigg Corp. v. Dow Corning Corp., 822 F.2d 358, 361 (3d Cir.1987). If the opposing party asserts a reasonable reading differing from that of the district court, then the meaning of the contract must be resolved at trial.

Because the relevant facts and law differ as to the various counts, we will discuss them individually.

II. COUNT I--THE BONUS PAYMENTS

In addition to his annual base salary, plaintiff was entitled to receive incentive compensation based on the title company's performance. The parties have referred to this increment as a "bonus," as shall we. The bonus payments were not discretionary with the employer, but stemmed from a contractual undertaking. To that extent the parties are on common ground. The disagreement arises over the method of calculation.

Plaintiff had received bonus payments in the years preceding 1983, but in that year the parties agreed to change the formula. In a July 13, 1983 memorandum to the company's treasurer, the chairman of the board elaborated on the specific terms:

"This will confirm the change in Roy Schoch's incentive compensation program which I communicated verbally to him earlier in the year. "Under the change in plan, he is entitled to 5% of the net operating income of IVT [Industrial Valley Title] up to $100,000 and 10% of the excess. Net operating income is determined in the same manner as it is for all others entitled to incentive compensation; namely, under generally accepted accounting principles with an adjustment to include the marginal earnings on an amount equal to the average claims reserve for the year."

It is uncontested on this record that the bonuses for plaintiff and other eligible executives were calculated on the same basis, with adjustments in the agreed percentages reflecting differences in rank and seniority. Plaintiff, therefore, was not discriminatorily or arbitrarily subjected to a formula that varied among similarly situated employees.

Plaintiff contends that the company erred in its application of the formula outlined in the memorandum in computing his bonus for 1983 and 1984. In calculating its net operating income, Schoch complains, the company: (1) did not take into account both the earnings of the title company plus a percentage of premiums received by the company's sister corporation, Continental Title Insurance Company; (2) failed to include interest earned on a reserve for losses; (3) arbitrarily reduced the earned premiums by 15%, in setting aside funds to cover claims; and (4) improperly subtracted the bonuses of other executives.

The court found no merit to the first and third points, commenting that the memorandum mentioned neither profits of the sister corporation nor inclusion of claim reserves. Plaintiff had not produced any document, affidavit, or deposition testimony "that suggests a contractual right to this asserted method of calculation." As to (2), the district judge determined that the defendant's worksheet for 1983 earnings presented "unrebutted evidence" that the bonus calculation had indeed included interest on the loss reserves. The court also rejected the contention that the company acted improperly in subtracting bonus amounts due other executives from net earnings before computing the amount due plaintiff. The uncontradicted evidence submitted showed that defendant used this same procedure for all other executives.

On appeal, plaintiff also argues that the method of determining company earnings for 1983 and 1984 differs from that used in 1982. This argument carries no weight because the memorandum of July 13, 1983 explicitly states that it changes the bonus payment plan.

We have reviewed the memorandum plaintiff filed in the district court opposing the defendant's motion for summary judgment, and see there only contentions not supported by verified or documented materials. As the non-moving party bearing the burden of proof, plaintiff had the obligation to establish the existence of a genuine issue of a material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). That burden plaintiff failed to meet because his unsupported allegations in his memorandum and pleadings are insufficient to repel summary judgment. See Fed.R.Civ.P. 56(e) (requiring non-moving party to "set forth specific facts showing that there is a genuine issue for trial").

The Supreme Court has made clear that the object of Rule 56(e) "is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit." Lujan v. National Wildlife Fed'n, --- U.S. ----, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Rather, Rule 56 enables a party contending that there is no genuine dispute as to a specific, essential fact "to demand at least one sworn averment of that fact before the lengthy process of litigation continues." Id. at ----, 110 S.Ct. at 3189. It is clear enough that unsworn statements of counsel in memoranda submitted to ...