Serricchio v. Wachovia Securities, LLC

• Decision Date: 14 March 2008
• Docket Number: No. 05-cv-1761 (JBA).,05-cv-1761 (JBA).
• Citation: 556 F.Supp.2d 99
• Court: U.S. District Court — District of Connecticut
• Parties: Michael SERRICCHIO, Plaintiff, v. WACHOVIA SECURITIES, LLC. and Prudential Securities, Inc., Defendants.

556 F.Supp.2d 99

Michael SERRICCHIO, Plaintiff, v. WACHOVIA SECURITIES, LLC. and Prudential Securities, Inc., Defendants.

No. 05-cv-1761 (JBA).

United States District Court, D. Connecticut.

March 14, 2008.

COPYRIGHT MATERIAL OMITTED

Craig Yankwitt, David S. Golub, Jonathan M. Levine, Marilyn J. Ramos, Silver, Golub & Teitell, Stamford, CT, for Plaintiff.

Devjani Mishra, New York, NY, Douglas John Varga, Zeldes, Needle & Cooper, Bridgeport, CT, Jacquelyn G. White, IBM Corp, Armonk, NY, for Defendants.

RULING ON DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

JANET BOND ARTERTON, District Judge.

Michael Serricchio brought this action for what he alleges to be the defendants' failure to reinstate him to the financial advisor position which he held prior to being called to active duty in the United States Air Force in 2001, in contravention of the Uniformed Services Employment and Reemployment Act (USERRA), 38 U.S.C. § 4301 et seq. The defendants now move for summary judgment on his claims and their counterclaims; for the reasons set forth below the defendants' motion will be denied in part and granted in part.

I. Facts and procedural background

In the autumn of 2001, when he was called to active duty, Michael Serricchio was employed by defendant Prudential Securities, Inc. as a financial advisor in its Stamford, Connecticut office. Serricchio had moved to Prudential in 2000 from Morgan Stanley Dean Witter, where he had built up a book of business as a commission-based broker advising on, and executing securities transactions for, retail clients. He brought these accounts with him when he joined Prudential, and signed an employment agreement which set forth, among other things, that Prudential would pay him $229,582 of "transitional compensation." A promissory note executed by the parties provides that Serricchio was to repay the amount over the course of fifty-five months.

During his employment with Prudential, Serricchio was also a member of the United States Air Force reserve, and, following the events of September 11, 2001, was called to active duty. At the time of his activation, Serricchio managed approximately 237 accounts totaling $4.1 million in assets,¹ which plaintiff asserts generated $75,687 in commission income for him between September 2000 and September 2001² He received his activation orders in late September 2001, notified his employer on September 29, 2001,³ and reported for duty the next day. In the notification letter he faxed to his supervisor, Serricchio noted that he hoped to "be able to work for Prudential in whatever city I'll be in," and that his "biggest concern" was that "Pru w[ill] cut me loose," Defs.' Ex. E.

Prior to reporting for duty, Serricchio made arrangements for the maintenance of his client accounts by having a Prudential colleague with whom he closely worked, Joseph Zinacola, put in charge of the accounts.⁴ Serricchio also executed an agreement with Prudential which specified that he would be paid his regular salary for ninety days, in exchange for which he would remit to Prudential the amount of money which the United States paid him for his service.⁵ Serricchio was eventually paid for twelve months rather than the three months which the agreement called for.⁶ He remitted no military salary in return.

Serricchio was honorably discharged from the Air Force in October 2003.⁷ In the interim, his workplace had undergone major changes. Prudential had sold its brokerage business to Wachovia Corporation, which formed a new subsidiary, Wachovia Securities, LLC ("Wachovia"), the co-defendant and counterclaimant here.⁸ Wachovia had moved the Stamford operations to Westport, Connecticut, trusted co-worker Zinacola had been terminated, and the defendants had changed their business model to deal with less-wealthy and lower-volume clients via a national telephone customer service center rather than through individual brokers.⁹ Serricchio was upset to learn that as a result of a combination of factors, many of his former clients had either been assigned to the national call center, or had ceased to be clients of Wachovia. Moreover, Serricchio discovered that on January 2, 2003, Prudential settled a dispute with one of Serricchio's clients in his absence, paying $33,177.16 to resolve a customer complaint involving Serricchio, his sales assistant, and his manager.¹⁰ Prudential amended Serricchio's broker's license to reflect the settlement and the client's allegation that his signature had been forged and trades had been executed without authorization.¹¹

On December 1, 2003, Serricchio, through counsel, dispatched a letter to Wachovia requesting that he be reinstated in accordance with USERRA.¹² Following negotiations, Serricchio met with branch officials at Wachovia's Westport office, and was offered reinstatement to a financial advisor position which included the return of any of his remaining accounts, a $2,000 and the opportunity to cold-call for new client accounts.¹³ Mr. Serricchio left the office that day and did not return;¹⁴ Wachovia terminated Mr. Serricchio on June 2, 2004 for job abandonment.¹⁵

II. The summary judgment standard

Summary judgment is appropriate under Fed.R.Civ.P. 56(c) when the moving party establishes that there is no genuine issue of material fact to be resolved at trial and that the moving party is entitled to judgment as a matter of law, Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), where the materiality of a fact is determined by the substantive law that governs the case, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In this inquiry, "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment," id. "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In making this determination, the Court draws all reasonable inferences in the light most favorable to the party opposing the motion, id. at 587, 106 S.Ct. 1348.

III. Mr. Serricchio's claims

In Count One of his amended complaint, Mr. Serricchio alleges that the defendants violated USERRA by failing to promptly reinstate him to an appropriate position, failing to manage his book of business in his absence, and constructively discharging him without cause.¹⁶ Mr. Serricchio also asserts a breach of contract claim for the defendants' failure to pay his transitional compensation (Count 2), a negligence claim for the manner in which the defendants handled his book of business in his absence (Count 4), and an unjust enrichment claim asserting that Wachovia improperly profited from his book of business after constructively discharging him (Count 6). The defendants now move for summary judgment on all remaining counts.

A. USERRA Violation (Count One)

1. Defendants' alleged failure to promptly reinstate Serricchio

The defendants' first ground for summary judgment on Count 1 posits that Serricchio failed to apply for reemployment as required by USERRA. While the defendants acknowledge receipt of Serricchio's counsel's letter dated December 1, 2003, requesting "reinstatement to his Financial Advisor position," Defs.' Local R. 56 Stmnt. (Doc. # 59-3) at ¶¶ 126-129, and admit that Wachovia "determined" that "Serricchio should be offered reinstatement," id. at ¶ 129, the defendants contend that Serricchio never applied for reinstatement because (1) the letter contained what the defendants viewed as a conditional request, and (2) Mr. Serricchio withdrew his application by "abandoning" his job at Wachovia.

Under USERRA, servicemembers called away to military service "shall be promptly reemployed" by their former employers upon discharge, 38 U.S.C. § 4313(a), provided that a servicemember whose period of service lasted for more than 180 days "notif[ies] the employer ... of [his] intent to return to a position of employment with such employer ... by submitting an application for reemployment with the employer not later than 90 days after the completion of the period of service," 38 U.S.C. § 4312(e)(1)(D). Heeding the Supreme Court's admonition that employment protections afforded servicemembers are "to be liberally construed for the benefit of those who left private life to serve their country," Fishgold v. Sullivan Drydock & Repair Corp., 328 U.S. 275, 285, 66 S.Ct. 1105, 90 L.Ed. 1230 (1946) (construing USERRA's predecessor statute, the Selective Service and Training Act of 1940¹⁷), the Second Circuit has held that where a returning servicemember's application for reemployment puts the employer "on ample notice of his claim" to reemployment "technical failure[s]" in the form of the application which do not prejudice the employer will not prevent USERRA's rehiring mandate from binding the employer, Martin v. Roosevelt Hospital, 426 F.2d 155, 159 (2d Cir.1970). Moreover, the Martin court adopted the First Circuit's holding that a veteran does not fail to invoke USERRA's reemployment provision "`merely because in applying for reemployment he couples such application with a demand for something he erroneously believes to be his due,'" id. (quoting Trusteed Funds, Inc. v. Dacey, 160 F.2d 413, 422 (1st Cir.1947)). However, there are limits to the liberality with which USERRA is to be applied when determining whether a plaintiff has properly applied for reinstatement. In McGuire v. United Parcel Service, the Seventh Circuit affirmed a grant of summary judgment to a defendant employer where the employee had only casually inquired about reemployment by asking his former supervisor, and then sued instead of contacting the human resources department as directed by the supervisor, 152 F.3d 673, 677-678 (7th Cir. 1998). In Baron v. United States Steel Corp., the...