Zusy v. International Medical Group, Inc.

• Decision Date: 12 June 2007
• Docket Number: No. 1:05-cv-1455-DFH-TAB.,1:05-cv-1455-DFH-TAB.
• Parties: F. Jonathan ZUSY, Plaintiff, v. INTERNATIONAL MEDICAL GROUP, INC., Defendant.
• Court: U.S. District Court — Southern District of Indiana

500 F.Supp.2d 1087

F. Jonathan ZUSY, Plaintiff, v. INTERNATIONAL MEDICAL GROUP, INC., Defendant.

No. 1:05-cv-1455-DFH-TAB.

United States District Court, S.D. Indiana, Indianapolis Division.

June 12, 2007.

Bruce D. Brattain, Brattain & Minnix, Indianapolis, IN, for Plaintiff.

Christopher C. Murray, David A. Given, Baker & Daniels, Indianapolis, IN, for Defendant.

ENTRY ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

HAMILTON, District Judge.

As plaintiff F. Jonathan Zusy neared the end of his initial term of employment as general counsel for defendant International Medical Group, Inc. (IMG), he fulfilled one of his long-held goals by moving from Indianapolis, Indiana to Durango, Colorado. His job, contrary to his expectations, did not make the trip.

Zusy claims that IMG president Joseph Brougher breached Zusy's orally modified employment contract by terminating him after he moved to Colorado. Invoking this court's diversity jurisdiction, Zusy has sued for (1) wrongful termination and breach of his employment contract; (2) promissory estoppel; (3) constructive fraud; and (4) wrongful repudiation of the contract. IMG has moved for summary judgment. The undisputed facts show that the alleged oral modification is not enforceable and that Brougher and IMG owed Zusy no fiduciary duty in the course of their dealings. IMG is entitled to summary judgment on all claims.

Summary Judgment Standard

The purpose of summary judgment is to "pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment is appropriate when there are no genuine issues of material fact, leaving the moving parties entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The moving parties must show there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A factual issue is material only if resolving the factual issue might change the suit's outcome under the governing law. Clifton v. Schafer, 969 F.2d 278, 281 (7th Cir.1992). A factual issue is genuine only if there is sufficient evidence for a reasonable jury to return a verdict in favor of the non-moving party on the evidence presented. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In deciding a motion for summary judgment, a court may not assess the credibility of witnesses, choose between competing inferences, or balance the relative weight of conflicting evidence; it must view all the evidence in the record in the light most favorable to the nonmoving party and resolve all factual disputes in favor of the non-moving party. See Fed.R.Civ.P. 56(c); Anderson, 477 U.S. at 255, 106 S.Ct. 2505.

Facts for Summary Judgment

I. Zusy's Employment and Plans to Move to Colorado

In light of the applicable standard for summary judgment, the court treats the following facts as true for purposes of IMG's motion. Plaintiff F. Jonathan Zusy is an attorney who has been a citizen of Colorado since June 2005. Prior to moving to Colorado, Zusy spent decades working in Indianapolis, Indiana. In the late 1990s, Zusy practiced law with the Indianapolis firm of Ancel & Dunlap. As part of Zusy's practice, he served as outside counsel to IMG, an Indiana corporation that maintains its principal place of business in Indiana. IMG is in the business of developing, marketing, placing, and administering various international medical, health and travel insurance products and services.

In 1999, Joseph Brougher, IMG's president, CEO, and board member, approached Zusy and asked if he would come to work for IMG. Zusy Dep. 22. By July 1999, Zusy and IMG entered into a written contract for Zusy's employment. Zusy drafted the contract. Id. at 24. He agreed to serve as IMG's general counsel, vice president, and secretary for "a period of approximately five (5) years, beginning effective July 19, 1999, and ending June 30, 2004." Zusy Dep. Ex. 6.

During the course of these initial negotiations, Zusy mentioned his intention to move eventually to Colorado. Zusy Dep. at 33. This reflected a long-standing desire on his part. In the early 1970s, Zusy attended the University of Colorado and worked in the state for several years before relocating to California to attend law school. After graduating from law school, he moved to Indiana to begin practicing, but always intended to make his way back to Colorado. In 1997, Zusy bought land in Pagosa Springs, Colorado. In 2003, Zusy took further steps to fulfill his ambition when he purchased two parcels of land in Montezuma County, Colorado. Zusy Dep. 12. Zusy intended to make one of these the site of his future home. Even before working for IMG, Zusy already envisioned moving to Colorado around April 2005 — around the time his wife's son would graduate from high school. Zusy Dep. 34; Zusy Aff. ¶ 23.

II. Second Employment Contract

While working under the terms of his original employment contract, Zusy approached Brougher about amending this contract to reflect his intention to move eventually to Colorado, among other things. The terms of the original employment contract extended through June 30, 2004, but Zusy and IMG signed a new employment contract superseding and replacing the prior contract, effective January 1, 2003. Section III of this new contract is at the heart of the current dispute:

This Agreement will be effective as of the 1st day of January, 2003, and will remain in effect for approximately two and one-half (2 ½) years thereafter until the end of the Initial Term, subject to the termination and extension provisions hereof. The parties agree this Agreement will be automatically extended, without the need for any written notice, acknowledgment, acceptance, or other affirmative action by the parties, for additional one-year terms ("Extended Term[s]") after the Initial Term, unless either party hereto affirmatively terminates this Agreement in writing no less than sixty (60) days prior to the end of the Initial Term or any Extended Term; provided, however, that Employer may so terminate on thirty (30) days notice with respect to the Initial Term. An election to terminate solely in accordance with the foregoing, and not as a result of any of the circumstances described in Sections VIII(A)(1) or (2), below, will constitute a termination "without cause" under Section VIII(B), below, and will be subject to the provisions thereof. The parties contemplate that Employee will move to Durango, Colorado, in or about April of 2005, and that the parties thereafter will attempt to maintain the employment relationship under this Agreement through a "virtual office" arrangement, subject to the termination provisions hereof.

Zusy Employment Contract, § III. Section VIII(B) provided that "if Employer elects to terminate this Agreement without cause pursuant to Section III as of the end of the Initial Term or any Extended Term, Employee will be entitled to receive and will be paid a severance payment by Employer, in cash, as of the effective date of termination, in the amount of $100,000." If IMG chose to terminate the employment contract without cause at any other time, Zusy was entitled to a severance payment of three times his annual salary. Id. In 2005, Zusy was compensated at an annual salary rate of $250,000. § V(A)(3). The parties also agreed: "This Agreement may not be amended, modified or supplemented except in writing, duly signed by both parties hereto." § X(G).

Zusy continued working for IMG under the terms of this new contract. At the same time, he laid more groundwork for his planned move to Colorado. In February 2003, he purchased 70 acres of real estate near Durango, Colorado. Zusy Aff. ¶ 26. In August 2004, he signed a contract giving a Colorado architect permission to proceed with a preliminary design of his future home. Id., ¶ 28(i). In October 2004, he listed his Indianapolis home for sale with a real estate broker. Id., ¶ 28(iv).

III. Oral Modification

Between August 2004 and March 2005, Zusy has testified that he and Brougher had a series of conversations about Zusy's employment with IMG. Zusy told Brougher that his plans for moving back to Colorado were progressing and that he anticipated moving in late-spring or early-summer 2005. IMG did not have any offices in Colorado. Zusy claims the two sides expressed their continued interest in having Zusy continue working for IMG through a "virtual office" in Zusy's Colorado home. Most important, Zusy alleges that he and Brougher orally modified his employment contract "by specifically agreeing and promising one another that neither IMG nor [Zusy] would invoke or exercise the pre-Initial Term termination clauses of the Contract." Zusy Aff. ¶ 27. The effect of such a modification would be to allow the automatic one-year extension clause in Section III to take effect once the initial term lapsed without a termination notice. Id.

In the following months, Zusy confirmed his oral modification with Brougher on a number of occasions. At IMG's Christmas party in December 2004, Zusy and Brougher discussed the move and confirmed the oral modification. Zusy Aff. ¶ 28(v). Before Zusy accepted an offer on his Indianapolis home in March 2005, he again confirmed with Brougher that a deal was in place. Zusy Dep. 43-44; Zusy Aff. ¶ 28(vii). In June 2005, Zusy met again with Brougher to discuss issues relating to his employment while in Colorado. Zusy Aff. ¶ 29. At no point during the course of these meetings did the parties ever reduce their oral modification to writing. Nor did Zusy keep notes, journals, or records to document these conversations. Id.

Zusy and Brougher sent each other at least one e-mail during this period touching on Zusy's relocation. Zusy had been complaining about the size and layout of his Indianapolis office. Responding to Zusy's...