Andersen v. The Governor and Company of the Bank of Ireland

Filing 49

ORDER granting in part and denying in part 11 Motion to Dismiss. See attached memorandum of decision. Signed by Judge Vanessa L. Bryant on 11/30/2011. (Fernandez, Melissa)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
ROY C. ANDERSEN,
PLAINTIFF,

v.
GOVERNOR AND COMPANY OF
THE BANK OF IRELAND,
DEFENDANTS.

:
:
: CIVIL ACTION NO. 3:11cv355(VLB)
:
: NOVEMBER 30, 2011
:
:
:
:

MEMORANDUM OF DECISION DENYING IN PART AND GRANTING IN PART
DEFENDANT’s [DKT. #11] MOTION TO DISMISS
The Plaintiff, Roy C. Andersen (“Andersen”), brings this action against
Defendant the Governor and Company of the Bank of Ireland (the “Bank”)
alleging in Count One breach of contract, in Count Two breach of implied
covenant of good faith and fair dealing, and in Count Three of the Complaint
violation of Conn. Gen. Stat. §31-71e, the Connecticut Wage Statute. Defendants
have moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss Andersen’s breach of
contract claim and breach of the implied covenant of good faith and fair dealing
on the basis that the Bank is not in breach of an Employment Agreement between
Andersen and the Bank. Defendants have also moved to dismiss Andersen’s
Connecticut Wage Statute claim on the basis that Plaintiff does not have a cause
of action under the statute. For the foregoing reasons, Defendants’ motion to
dismiss is denied in part and granted in part.

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Factual Allegations
The following facts are taken from Plaintiff’s complaint. Andersen was
employed by the Bank from July 16, 2007 until September 4, 2010. [Dkt. #29,
Amended Compl. at ¶4]. Plaintiff alleges that pursuant to an automatic renewal
clause in Andersen’s Employment Agreement with the Bank at Section 3(a) the
term of the agreement was automatically renewed for an additional two-year
period from July 16, 2011 to July 15, 2013 because neither party gave the other
written notice of its intention not to renew his employment agreement by July 16,
2010. [Dkt. #29, Amended Compl. at ¶12 and Dkt. #29, Ex. A, Employment
Agreement].
By letter dated August 5, 2010, the Bank notified Andersen that he was
terminated without cause pursuant to Section 3(d) of the Employment Agreement
effective September 4, 2010. [Dkt. #29, Amended Compl. at ¶13]. Section 3(d)
provided that upon termination without cause the Bank is obligated to pay
Andersen “the unpaid portion of his Base Salary, Bonus (if any), earned up to and
prorated to, the end of the Term, as it existed without regard to this termination,
or twelve (12) months, whichever is longer.” [Id. at ¶14].
In order to qualify for the post-termination payments due under Section
3(d), Andersen had agreed to “execute a waiver and release of claims in a form
proposed by the Bank, but which release shall not limit [his] ability to make
claims or bring actions arising under the terms of the [Agreement].” [Id. at ¶16].
Upon his termination, the Bank delivered to Andersen a proposed waiver and

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release. Andersen alleges that he communicated to the Bank he would not sign
the proposed release because it contained an unrestricted waiver that, contrary
to the terms of the Agreement, would have limited his ability to make claims or
bring actions arising under the terms of the Agreement. [Id. at ¶¶17-18].
In response, Andersen requested that the Bank deliver him a waiver and
release that complied with the Agreement. The Bank delivered to Andersen a
second proposed waiver and release. [Id. at ¶19]. Andersen alleges the second
proposed waiver and release still limited his ability to make claims or bring
actions arising under the Agreement. Andersen then executed and delivered to
the Bank a version of the proposed waiver and release which he modified to make
clear that the waiver and release did not limit his ability to make claims or bring
actions arising under the Agreement. [Id. at ¶¶20-22].
Thereafter, the Bank refused to pay the amounts due to Andersen pursuant
to Section 3(d) of the Employment Agreement. Andersen alleges that the
amounts due to him under Section 3(d) are his continued base salary, amounts
for reimbursement for health care coverage, and amounts due for any bonus he
would have been entitled to receive had his employment been continued through
the conclusion of the Term of the Agreement. [Id. at ¶¶23-24].
In May 2010, Andersen received a “BOI International Retention Award.”
Andersen contends that to the extent the financial benchmark set forth in the
award has been met or to the extent that the Bank made payment for similarly

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awarded bonuses to its employees, Andersen is due payment for that award. [Id.
at ¶25].

Legal Standard
“Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a
‘short and plain statement of the claim showing that the pleader is entitled to
relief.’” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). While Rule 8 does not
require detailed factual allegations, “[a] pleading that offers ‘labels and
conclusions’ or ‘formulaic recitation of the elements of a cause of action will not
do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of
‘further factual enhancement.’” Id. (internal quotations omitted). “To survive a
motion to dismiss, a complaint must contain sufficient factual matter, accepted
as true, to ‘state a claim to relief that is plausible on its face.’ A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.”
Id. (internal citations omitted).
In considering a motion to dismiss for failure to state a claim, the Court
should follow a “two-pronged approach” to evaluate the sufficiency of the
complaint. Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010). “A court ‘can
choose to begin by identifying pleadings that, because they are no more than
conclusions, are not entitled to the assumption of truth.’” Id. (quoting Iqbal, 129
S.Ct. at 1949-50). “At the second step, a court should determine whether the
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‘well-pleaded factual allegations,’ assumed to be true, ‘plausibly give rise to an
entitlement to relief.’” Id. (quoting Iqbal, 129 S.Ct. at 1950). “The plausibility
standard is not akin to a probability requirement, but it asks for more than a sheer
possibility that a defendant has acted unlawfully.” Iqbal, 129 S.Ct. at 1949
(internal quotation marks omitted).
The Court’s review on a motion to dismiss pursuant to Rule 12(b)(6) is
generally limited to “the facts as asserted within the four corners of the
complaint, the documents attached to the complaint as exhibits, and any
documents incorporated in the complaint by reference.” McCarthy v. Dun &
Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007). In addition, the Court may also
consider “matters of which judicial notice may be taken” and “documents either
in plaintiffs’ possession or of which plaintiffs had knowledge and relied on in
bringing suit.” Brass v. Am. Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir.
1993). Here, Plaintiff has attached the Employment Agreement, the various
proposed waiver and release agreements as well as the BOI International
Retention Award to its complaint and therefore the Court may consider these
documents on Defendants’ motions to dismiss.
Analysis of Breach of Contract Claim
Under Connecticut law, the elements of a breach of contract action are (1)
the formation of an agreement; (2) performance by one party; (3) breach of the
agreement by the other party; and (4) damages.

Empower Health LLC v.

Providence Health Solutions LLC, No. 3:10-cv-1163, 2011 WL 2194071, at *4 (D.
Conn. June 3, 2011) (citation omitted). “It is a fundamental principle of contract
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law that the existence and terms of a contract are to be determined from the
intent of the parties. The parties' intentions manifested by their acts and words
are essential to the court's determination of whether a contract was entered into
and what its terms were.” Auto Glass Express, Inc. v. Hanover Ins. Co., 293
Conn. 218, 225 (2009) (internal quotation marks and citation omitted).

“[T]he

interpretation and construction of a written contract present only questions of
law, within the province of the court ... so long as the contract is unambiguous
and the intent of the parties can be determined from the agreement's face.”
Tallmadge Bros., Inc. v. Iroquois Gas Transmission Sys., L.P., 252 Conn. 479, 495
(2000) (quoting 11 S. Williston, Contracts § 30.6 (4th ed. 1999)). “Contract
language is unambiguous when it has a definite and precise meaning ...
concerning which there is no reasonable basis for a difference of opinion.”
Levine v. Advest, Inc., 244 Conn. 732, 746 (1998) (internal citations and quotations
omitted).
“[T]he intent of the parties is to be ascertained by a fair and reasonable
construction of the written words and the language used must be accorded its
common, natural, and ordinary meaning and usage where it can be sensibly
applied to the subject matter of the [writing] ... Where the language of the [writing]
is clear and unambiguous, the [writing] is to be given effect according to its
terms. A court will not torture words to import ambiguity where the ordinary
meaning leaves no room for ambiguity.” Auto Glass Express, 293 Conn. At 225-26
(internal quotation marks and citation omitted).

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“The individual clauses of a contract, however, cannot be construed by
taking them out of context and giving them an interpretation apart from the
contract of which they are a part.

A contract should be construed so as to give

full meaning and effect to all of its provisions ...” Id. at 753 (internal quotation
marks and citation omitted).

“[E]very provision of the contract must be given

effect if it can reasonably be done, because parties ordinarily do not insert
meaningless provisions in their agreements.” Connecticut Co. v. Division, 147
Conn. 608, 617 (1960).
i.

Analysis of whether Andersen failed to satisfy a condition precedent
under the Employment Agreement

Defendants argue that Andersen has failed to plead sufficient facts to show
that he fulfilled the condition precedent to the Bank’s duty to perform under the
Employment Agreement when he failed to execute the Bank’s proposed waiver
and release and therefore contend that the Bank’s duty to perform never arose.
[Dkt. #12, Defs. Mem. at 5]. In particular, Defendants argue that since Andersen
only signed and executed a waiver and release that he modified and therefore did
not execute a form of waiver and release as proposed by the Bank as required
under Section 3(d) of the Employment Agreement that he failed to satisfy the
condition precedent under Section 3(d). Defendants further argue that the Bank
never countersigned the modified waiver and release that Andersen submitted
and therefore the Bank never entered into a binding agreement requiring it to
make any payments to Andersen. [Id. at 6].

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In response, Andersen argues that Defendants themselves breached the
terms of the Agreement by refusing to accept Andersen’s tendered waiver and
release and by refusing to provide a waiver and release which complied with the
terms of the Employment Agreement.

Andersen asserts that Section 3(d)

expressly provides that Andersen must “execute a waiver and release of claims
in a form proposed by the Bank, but which release shall not limit [his] ability to
make claims or bring actions arising under the terms of this [Agreement].” [Dkt.
#29, Ex. A]. Andersen contends that the Bank’s first and second proposed waiver
and releases did limit his ability to make claims or bring actions arising under the
terms of the Agreement and therefore Defendants themselves breached the terms
of the Employment Agreement.

Andersen therefore argues that the plain

language of the Employment Agreement does not require him to sign a proposed
waiver and release which so limited his rights. Andersen points to Section 7 of
the Bank’s second proposed waiver and release to demonstrate that the
proposed release did limit his ability to make claims and bring actions under the
agreement. Section 7 of the Bank’s second proposed release states in relevant
part that “in consideration for the payments and benefits to Employee provided in
this Agreement, Employee agrees to and hereby does release and discharge the
[Bank] from any and all claims, causes of action, arbitrations, and demands of
any kind, whether known or unknown, which he has or ever has had, which are
based on acts or omission occurring up to and including the date this Agreement
is fully executed.” [Dkt. #29. Ex. D].

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The Court finds that Andersen has pled sufficient facts which plausibly
demonstrate that Defendants breached the Employment Agreement.

The plain

language of Section 3(d) only requires that Andersen execute a waiver and
release which did not limit his ability to make claims or bring actions arising
under the terms of the Employment Agreement. Andersen has pled sufficient
facts that demonstrate that the Bank failed to propose a release which did not
limit his ability to make claims or bring actions arising under the terms of the
Employment Agreement as expressly provided under Section 3(d). Moreover, it is
clear from the allegations in the Amended Complaint, that Andersen attempted to
obtain from the Bank a proposed waiver and release which complied with the
terms of the Employment Agreement and that the Bank repeatedly failed to
provide him with one.

Unsurprisingly, these facts are the basis for Andersen’s

breach of implied covenant of good faith and fair dealing claim.
The Court finds Defendant’s argument that Andersen has failed to satisfy a
condition precedent to be specious because it is clear from the allegations in the
amended complaint that it was the Bank who failed to tender to Andersen a
proposed waiver that complied with the express terms of the Employment
Agreement and not that Andersen failed to execute a proposed waiver that was
compliant with the Agreement.

If the Bank had proposed a waiver and release

which did comply with the terms of the Employment Agreement and Andersen
had failed to execute it, those facts would suggest that Andersen failed to satisfy
a condition precedent. However, Andersen has plausibly alleged that the Bank
did not propose a compliant waiver and release and therefore the Court cannot
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conclude that Andersen failed to satisfy a condition precedent as Defendant
argues.

The condition precedent in Section 3(d) is expressly contingent upon

the Bank’s tender of a waiver and release which did not limit Andersen’s ability to
make claims or bring actions arising under the terms of the Employment
Agreement.

Therefore, the condition precedent was never triggered due to the

Bank’s failure to provide Andersen with an appropriate release. Accordingly, the
Court finds that the amended complaint contains sufficient factual matter to state
a breach of contract claim that is plausible on its face. Defendants’ motion to
dismiss Plaintiff’s breach of contract claim is hereby denied.
ii.

Analysis of whether the term of Andersen’s employment was
automatically renewed for an additional two years until July 2013

Defendants have indicated that they offered Andersen twelve months
salary and COBRA benefits in accordance with Section 3(d) of the Employment
Agreement. Section 3(d) in relevant part states “you shall be entitled to receive
the unpaid portion of your Base Salary, Bonus (if any), earned up to, and prorated
to, the end of the Term, as it existed without regard to this termination, or twelve
(12) months, whichever is longer.” [Dkt. 19, Ex. A]. Defendants contend that the
“Term” of the Employment Agreement should end on July 15, 2011. Defendants
reason that pursuant to Section 3(a) of the Employment Agreement, the Term
only renewed automatically for a successive two-year period on the two year
anniversary of the Commencement Date or any renewals thereof which in this
case was July 15, 2011.

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Section 3(a) provides in relevant part “the term of this Agreement shall be
renewed automatically for successive two-year periods on the two-year
anniversary of the Commencement Date or unless either party gives written
notice of its intention not to renew the Agreement to the other party at least
twelve (12) months in advance of the annual anniversary of the Commencement
Date or any renewals thereof.” [Dkt. 19, Ex. A]. Defendants argue that since the
Bank terminated Andersen’s employment effective September 4, 2010 that was
prior to the two year anniversary of the Commencement Date or any renewals
thereof on July 15, 2011 and therefore the Term did not automatically renew for
an additional two-year period. Accordingly, the Bank contends that the Term
ended on July 15, 2011.
On the other hand, Andersen contends that since neither party gave notice
at least twelve months in advance of the annual anniversary of the
Commencement Date which in the case was July 16, 2010 that the Term
automatically renewed when the notice period in Section 3(a) passed on July 16,
2010. Accordingly, Andersen argues that the Term was automatically renewed for
an additional two year period on July 16, 2010 when Defendants failed to notify
Andersen of their intention to not renew and therefore the Term ended on July 15,
2013. Further, Andersen contends that to adopt the Defendant’s interpretation of
the Agreement would render the requirement regarding advance notice of nonrenewal meaningless and reminds the Court that when construing contracts, the
Court shall give “effect to all the language included therein, as the law of contract
interpretation militates against interpreting a contract in a way that renders a
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provision superfluous.” Ramirez v. Health Net of the Northeast, Inc., 285 Conn. 1,
14 (2008).
Under Section 3(d) of the Employment Agreement which governs
“termination without cause” it provides that Andersen is entitled to receive the
unpaid portion of his base salary, bonus (if any), “earned up to, and prorated to,
the end of the Term, as it existed without regard to this termination.” [Dkt. #29,
Ex. A] (emphasis added). Here, the express language of Section 3(d) requires the
Court to interpret the renewal provision contained in Section 3(a) “without regard
to [Andersen’s] termination.” [Dkt. #29, Ex. A]. Therefore if Defendants had not
terminated Andersen’s employment effective September 4, 2010, since the
Defendants did not notify Andersen of their intention to not renew the contract on
July 16, 2010 the Term did renew for an additional two-year period until July 15,
2013. It is well established that the “individual clauses of a contract, however,
cannot be construed by taking them out of context and giving them an
interpretation apart from the contract of which they are a part. A contract should
be construed so as to give full meaning and effect to all of its provisions ...”
Levine, 244 Conn. at 753 (internal quotation marks and citation omitted). The
Court must therefore give effect to express language in Section 3(d) which
provides that the Term should be measured “without regard to [Andersen’s]
termination.” [Dkt. #29, Ex. A]. To do otherwise would render the language
provided in Section 3(d) meaningless. In light of the language in Section 3(d)
which requires the Court to construe the language in Section 3(a) regarding
renewal of the Term “without regard to [Andersen’s] termination” the Court finds
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that under the Agreement, the Term had automatically renewed and therefore
ended on July 15, 2013.
Analysis of Good Faith and Fair Dealing Claim
Defendants argue that Andersen has failed to properly plead an action for
breach of the implied covenant of good faith and fair dealing. Under Connecticut
law, an action for breach of the covenant of good faith and fair dealing requires
proof of three essential elements: “first, that the plaintiff and the defendant were
parties to a contract under which the plaintiff reasonably expected to receive
certain benefits; second, that the defendant engaged in conduct that injured the
plaintiff's right to receive some or all of those benefits; and third, that when
committing the acts by which it injured the plaintiff's right to receive benefits it
reasonably expected to receive under the contract, the defendant was acting in
bad faith.”

American Intern. Specialty Lines Co. v. HMT Inspections,

No.MMXCV095007419S, 2011 WL 1759098, at *5 (Conn. Super. Ct. April 13, 2011)
(internal quotation marks and citation omitted). In particular, Defendants argue
that Andersen has failed to proffer any fact above and beyond the Bank’s alleged
breach of the Employment Agreement to support his claim that the Bank acted in
bad faith.
The Connecticut Supreme Court explained in De La Concha of Hartford,
Inc. v. Aetna Life Ins. Co., 269 Conn. 424 (2004) that:
It is axiomatic that the ... duty of good faith and fair dealing is a covenant
implied into a contract or a contractual relationship … [E]very contract
imposes upon each party a duty of good faith and fair dealing in its
performance and its enforcement. In other words, every contract carries an
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implied duty requiring that neither party do anything that will injure the
right of the other to receive the benefits of the agreement. The covenant of
good faith and fair dealing presupposes that the terms and purpose of the
contract are agreed upon by the parties and that what is in dispute is a
party's discretionary application or interpretation of a contract term. To
constitute a breach of [the implied covenant of good faith and fair dealing],
the acts by which a defendant allegedly impedes the plaintiff's right to
receive benefits that he or she reasonably expected to receive under the
contract must have been taken in bad faith. Bad faith in general implies
both actual or constructive fraud, or a design to mislead or deceive
another, or a neglect or refusal to fulfill some duty or some contractual
obligation, not prompted by an honest mistake as to one's rights or duties,
but by some interested or sinister motive .... Bad faith means more than
mere negligence; it involves a dishonest purpose.
De La Concha of Hartford, Inc. v. Aetna Life Ins. Co., 269 Conn. 424, 432 (2004)
(internal quotation marks and citations omitted).
Andersen argues that the Bank acted in bad faith by not making any
severance payments that were due under the Employment Agreement and by
seeking to require Andersen to sign a waiver which was in contravention of the
express terms of the Employment Agreement.

The facts as alleged in the

amended complaint demonstrate that Andersen repeatedly tried to obtain from
the Bank a proposed waiver and release that was compliant with the express
terms of the Employment Agreement.

As discussed above, Andersen has plead

sufficient facts plausibly demonstrating that the Bank failed to provide him with
an appropriate waiver which did not limit his ability to make claims or bring
actions arising under the terms of the Agreement. The Bank has not articulated a
reason for its failure to proffer a waiver-free release for Andersen’s signature.
Contrary to Defendant’s contention, these alleged facts do plausibly demonstrate
an outright refusal to fulfill a contractual obligation which was not prompted by
an honest mistake but by some interested motive. The Employment Agreement
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clearly required that the Bank proffer to Andersen a waiver and release which did
not limit his ability to make claims or bring actions under the Agreement.
Andersen repeatedly tried to obtain from the Bank a proposed waiver and release
that was compliant with the express terms of the Agreement.

Moreover,

Andersen has pled facts which demonstrate that the Bank repeatedly attempted
to make Andersen sign a waiver and release which would have limited his ability
to make claims against the Bank. Accordingly if Andersen had signed a release
which limited his ability to make claims against the Bank that would have
furthered the Bank’s financial interests. Therefore, Andersen has alleged facts
which plausibly demonstrate that the Bank purposefully failed to provide him an
appropriate waiver out of interested motive.

Since Andersen has pled sufficient

facts which plausibly demonstrate bad faith on the part of Defendants, the
Defendant’s motion to dismiss the breach of the implied covenant of good faith
and fair dealing claim is denied.
Analysis of Connecticut Wage Statute Claim
Defendants argue that Andersen does not have a cause of action under
Conn. Gen. Stat. §37-71e, the Connecticut Wage Statute, as wages under the
statute are defined in Section 37-71a(3) as “compensation for labor or services
rendered by an employee” and Connecticut Courts have consistently held that
severance pay does not constitute wages under this definition. [Dkt. #12, Def.
Mem. at 12]. Defendants also argue that any bonus Andersen would be entitled to
was purely discretionary and therefore not recoverable under the statute. [Id.].
See Weems v. Citigroup, Inc., 289 Conn. 769, 782 (2008) (“[B]onuses that are
15 

awarded solely on a discretionary basis and are not linked solely to the
ascertainable efforts of the particular employee, are not wages under §3771a(3).”).
In his opposition to the Defendants’ motion to dismiss, Andersen concedes
that the post-termination payments of his continued base salary and COBRA
reimbursement do not constitute wages under the Statute. [Dkt. #20, Pl. Mem. at
22].

Andersen instead points to the “BOI International Retention Award” he

received as the basis for his wage claim.

Andersen argues that the retention

award was not discretionary but instead contingent on certain objective criteria
such as obtaining certain financial benchmarks and therefore would constitute
wages under §37-71a(3). However as Defendants call to attention the express
terms of the retention award state that payment is conditioned on “[Andersen]
remaining in the employment of the Bank of Ireland Group between the date of
this letter and the actual payment date (relevant payroll in March 2011).” [Dkt.
#29, Ex. F]. Since Andersen’s employment with the Bank ended on September 4,
2010, he was not an employee during the actual payment date in March 2011.
Therefore, by the express terms of the award, Andersen would not be entitled to
the second payment provided for in the award. Accordingly, Defendant’s motion
to dismiss Andersen’s Connecticut Wage Statute claim is granted.
Conclusion
Based upon the above reasoning, the Defendants’ [Dkt. #11] motion to
dismiss is DENIED IN PART AND GRANTED IN PART. Plaintiff’s breach of

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contract and breach of the implied covenant of good faith and fair dealing claim
remains extant. Plaintiff’s Connecticut Wage Statute claim is hereby dismissed.
IT IS SO ORDERED.

______/s/____________
Hon. Vanessa L. Bryant
United States District Judge

Dated at Hartford, Connecticut: November 30, 2011

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