Systems Material Handling Company v. Greenstein

• Citation: 84 F.Supp.2d 1203
• Decision Date: 08 February 2000
• Docket Number: No. Civ.A. 99-2150-KHV.,No. Civ.A. 98-2578-KHV.,Civ.A. 98-2578-KHV.,Civ.A. 99-2150-KHV.
• Parties: SYSTEMS MATERIAL HANDLING COMPANY, a Kansas Corporation, Plaintiff, v. Steven L. GREENSTEIN, Defendant. Steven L. Greenstein, Plaintiff, v. Systems Material Handling Company, a Kansas Corporation, Defendant.
• Court: U.S. District Court — District of Kansas

84 F.Supp.2d 1203

SYSTEMS MATERIAL HANDLING COMPANY, a Kansas Corporation, Plaintiff, v. Steven L. GREENSTEIN, Defendant.

Steven L. Greenstein, Plaintiff, v. Systems Material Handling Company, a Kansas Corporation, Defendant.

No. Civ.A. 98-2578-KHV.

No. Civ.A. 99-2150-KHV.

United States District Court, D. Kansas.

February 8, 2000.

COPYRIGHT MATERIAL OMITTED

MEMORANDUM AND ORDER

VRATIL, District Judge.

Steven L. Greenstein filed this action in state court in Massachusetts, asserting claims arising from an alleged contract with Systems Material Handling Company (SMH), his former employer. SMH removed the case to the United States District Court for the District of Massachusetts, which transferred it to this Court. This Court then consolidated it with Systems Material Handling Company v. Steven L. Greenstein, Case No. 98-2578-KHV, in which SMH sought to prevent Greenstein from competing or disclosing confidential information in violation of his Employment Agreement, and to clarify its rights and duties under the Employment Agreement.

Greenstein seeks damages for breach of an oral agreement, breach of an implied covenant of good faith and fair dealing, wrongful termination in violation of public policy, and violation of Massachusetts statutory law regarding payment of salary, wages and commissions.

This matter comes before the Court on Greenstein's Motion For Partial Summary Judgment (Doc. # 41) and the Motion of Systems Material Handling Company for Summary Judgment (Doc. # 43), both filed December 17, 1999. The motions address only the claims of Greenstein, and the Court shall refer to him throughout this order as "plaintiff" or Greenstein. For the reasons set forth below, the Court finds that defendant's motion should be sustained in part and overruled in part, and that Greenstein's motion for partial summary judgment should be overruled. Greenstein's claim in Count IV under Massachusetts statutory law (Case No. 99-2150) as well as all of SMH's claims in Case No. 98-2570 remain for trial.

Summary Judgment Standards

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); accord Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party bears the initial burden of showing that there is an absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party meets its burden, the burden shifts to the nonmoving party to "set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 256, 106 S.Ct. 2505. A "genuine" factual dispute requires more than a mere scintilla of evidence. Id. at 252, 106 S.Ct. 2505.

In considering a summary judgment motion the Court must view the evidence in the light most favorable to the nonmoving party. Tom v. First Am. Credit Union, 151 F.3d 1289, 1291 (10th Cir.1998). Summary judgment may be granted, however, if the nonmoving party's evidence is merely colorable or is not significantly probative. Anderson, 477 U.S. at 250-51, 106 S.Ct. 2505. Thus, "`[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party,' summary judgment in favor of the moving party is proper." Thomas v. IBM, 48 F.3d 478, 484 (10th Cir.1995) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).

Facts

The following facts are undisputed or, where controverted, are set forth alternately in the light most favorable to each party.

SMH, a Kansas corporation, manufactures and distributes parts, components and products for equipment, battery and telecommunications industries. In early 1996, Robert F. Gawlik, SMH president, interviewed Steven Greenstein in Kansas for a position as Eastern Regional Sales Manager. SMH hired Greenstein for the position on March 11, 1996. The parties entered into an Employment Agreement which provided a term of employment from March 11, 1996, through March 28, 1998, unless extended or terminated by mutual agreement of the parties prior to the termination date. See Memorandum In Support Of Systems Material Handling Company's Motion For Summary Judgment, (Doc. # 44) Ex. C. Greenstein points to evidence that the parties later extended the Employment Agreement to April of 1998. The Employment Agreement contained a Confidentiality Agreement and Non-Competition Agreement. It provided a weekly base salary of $1,250 plus benefits, and a quarterly cash bonus of $2,375. It also obligated SMH to pay Greenstein a monthly commission of 1.5 per cent of gross sales over $54,000 per month, which the parties agreed to renegotiate after Greenstein's first year of employment. The agreement provided that it would be governed and construed by the laws of Kansas. See Doc. # 47 Ex. G, ¶ 10. Greenstein was the only SMH salesperson with a written employment agreement.

In April 1997, Greenstein traveled to Kansas for meetings at SMH, and the parties modified the Employment Agreement to provide a monthly commission base of $120,000 effective May 1997. The modification provided that this new commission would be enforceable through April 30, 1998.

Greenstein is a citizen and resident of Massachusetts. As Eastern Regional Sales Manager for SMH, he sold SMH products to customers in several eastern states, including Massachusetts. He sold products to SMH's largest customer, Manage, Inc., a Massachusetts corporation.

In the spring of 1998, Greenstein met with Gawlik in Kansas to discuss a new employment agreement. The parties present different versions of the facts which concern the ultimate result of these negotiations. SMH points to evidence that in mid-April of 1998, the parties came to an oral understanding on some terms of a potential new employment agreement which would continue Greenstein's employment through March 31, 2000. SMH provides further evidence that the parties specifically understood that their oral understanding was not enforceable until reduced to writing. See SMH Memorandum In Support, (Doc. # 44) Ex. A at 119-20. Although the parties exchanged several proposals for a new contract, they never agreed on several material provisions. Id., Ex. A at 121-22. Specifically, after the negotiations on April 15, SMH forwarded a proposed agreement to Greenstein. See Gawlik Affidavit, Ex. 1. Greenstein rejected the draft and on April 22, 1998, he sent Gawlik a memorandum. In the memorandum, Greenstein took issue with two items in the proposed agreement, including territory adjustments and the fact that house accounts were exempted from gross sales, and a provision that "SMH may terminate this Agreement upon written notice." Greenstein then sent his own proposed employment agreement to SMH. See Doc. # 47, Ex. E. The parties continued to negotiate, and Greenstein and Gawlik spoke on the phone several times. At his deposition, Greenstein testified that he understood that both parties contemplated that they would reach a written contract signed by both parties.

Greenstein contends that the parties reached an oral agreement. His summary judgment materials cite evidence that the parties did not agree that the oral agreement had to be reduced to writing before it became enforceable. See id., Ex. A. at 75, Ex. 7; Greenstein's Memorandum In Opposition to Systems Material Handling Company's Motion For Summary Judgment (Doc. # 7), Greenstein Affidavit; Greenstein Motion For Partial Summary Judgment, Greenstein Affidavit. Greenstein also provides evidence that by its terms the new oral agreement terminated on March 31, 2000, or sooner as provided in the employment agreement. He contends that SMH agreed that if it terminated his employment before March 31, 2000, it would pay him six months compensation and benefits. See Greenstein's Memorandum In Opposition To System Materials Handling Company's Motion For Summary Judgment (Doc. # 45), filed January 7, 2000, Greenstein affidavit (January 5, 2000) ¶ 6. He also asserts that a "proposed" version of the agreement provided that SMH could terminate the agreement before March 2000 if Greenstein committed a felony or was incarcerated. Gawlik testified that SMH sent an agreement to Greenstein based on their "understanding." See SMH Memorandum In Support (Doc. # 44), Ex. 7, 21. Greenstein contends that the new employment agreement provided for a weekly salary of $1,336.55, and points to uncontroverted evidence that beginning with the April 24, 1998 payroll, SMH paid him that higher salary.

The parties agree that they never signed a written contract which extended Greenstein's employment. Greenstein asserts, however, that the terms of a new Employment Agreement are evidence in two unsigned written drafts of an Employment Agreement. See id. Exs. 7, 21.

The original employment agreement expired either on March 28, 1998 (as alleged by SMH) or at the end of April of 1998 (as alleged by Greenstein), but Greenstein continued to work as Eastern Regional Sales Manager, without a written contract, after that date. On June 15, 1998, SMH notified Greenstein in Massachusetts that it was terminating his employment.

During the last three months on the job, Greenstein's sales were increasing. From March through June of 1998, his sales exceeded $200,000 a month. In May, Greenstein had his highest monthly sales figure. Gawlik testified that before SMH terminated his employment, Greenstein was a good salesman, had good relationships with SMH accounts, and increased SMH sales.

Before his termination, Greenstein secured two "blanket purchase orders" for Manage, Inc., one of SMH's largest customers, for a sales extending through December, 1998. Greenstein asserts that...