Del Monaco v. Czech Asset Management, Limited Partnership et al
Filing
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ORDER. Defendants' motion 50 for summary judgment is GRANTED in part and DENIED in part. Summary judgment is granted for Defendants on Counts Two, Three, and Four, and denied on Count One. As the remaining Count is only against Defendants Czech Asset Management, LP and Czech Management GP, LLC, the case against Stephen J. Czech is dismissed. Signed by Judge Michael P. Shea on 8/30/16. (Tegeler, D.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
ROBERT A. DEL MONACO,
No. 3:14-CV-01313 (MPS)
Plaintiff,
v.
CZECH ASSET MANAGEMENT,
LIMITED PARTNERSHIP, CZECH
MANAGEMENT GP, LLC, AND STEPHEN J.
CZECH,
Defendants.
RULING ON MOTION FOR SUMMARY JUDGMENT
I.
Introduction
Robert A. Del Monaco brings this suit against his former employer, Czech Asset
Management, LP (“CAM”), a related entity, Czech Management GP, LLC (“GP”), and CAM’s
principal, Stephen J. Czech. Mr. Del Monaco claims that Defendants failed to deliver a promised
bonus of $200,000 for work performed in 2013, and brings claims of breach of contract against
CAM and GP (Count One), promissory estoppel against CAM and GP (Count Two), and
violation of Connecticut wage statutes against CAM, GP, and Mr. Czech (Counts Three and
Four). Defendants now move for summary judgment on all counts, arguing among other things
that Mr. Del Monaco became ineligible for a bonus when he gave notice of his resignation on
June 1, 2014. (ECF No. 50.) For the reasons set forth below, the defendants’ motion is
GRANTED in part and DENIED in part.
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II.
Undisputed Facts
The following facts are undisputed. Defendant CAM is an asset management company
doing business in Connecticut, Defendant GP is CAM’s general partner, and Defendant Stephen
Czech is CAM’s Managing Partner. (Defendant’s Local Rule 56(a)1 Statement, ECF No. 52
(“Def.’s L.R. 56(a)1 Stmt.”) ¶¶ 1-3; Plaintiff’s Local Rule 56(a)2 Statement, ECF No. 54-10
(“Pl.’s L.R. 56(a)2 Stmt.”) ¶¶ 1-3. In January 2012, CAM hired plaintiff Robert Del Monaco to
be its Chief Financial Officer, and he began work in March 2012. (Def.’s L.R. 56(a)1 Stmt. ¶¶ 45; Pl.’s L.R. 56(a)2 Stmt. ¶¶ 4-5.)
A. Offer Letter and Employee Handbook
Prior to beginning work at CAM, Mr. Del Monaco received and acknowledged both an
offer letter and the CAM employee handbook. (Def.’s L.R. 56(a)1 Stmt ¶¶ 5, 8, 10; Pl’s L.R.
56(a)2 Stmt. ¶¶ 5, 8, 10.) Regarding 2012 compensation, the offer letter stated:
For calendar year 2012, your annualized Total Reward will consist of an annual base
salary of $200,000 paid in semi-monthly installments… and a discretionary cash bonus
payable when year-end cash bonuses are paid to similar situated employees, and in no
event later than March 15, 2013, both contingent upon satisfactory performance and
conduct and that you remain employed through, and not give or receive notice of
termination of your employment prior to, in each case, the applicable payment date.
(Def.’s L.R. 56(a)1 Stmt ¶¶ 6; Pl’s L.R. 56(a)2 Stmt. ¶ 6; ECF No. 54-1 at 1.) The offer
letter also required “sixty (60) days advance written notice of your Resignation” and provided
that “during the Notice Period… [you] will continue to be paid your base salary…. However,
you will not be eligible to receive any compensation other than base salary (i.e., a bonus) if you
decide to leave CAM.” (Def.’s L.R. 56(a)1 Stmt ¶ 6; Pl’s L.R. 56(a)2 Stmt. ¶ 6; ECF No. 54-1 at
2.) The offer letter also states that “this offer is contingent upon… your review and
acknowledgment of the provisions of the CAM employee handbook.” (ECF No. 54-1 at 4.)
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The employee handbook provides further detail on bonus compensation at CAM,
explaining that bonuses are discretionary and that employees are ineligible for bonuses if they
are not in “good standing”:
Depending on business conditions and Firm performance, and an employee’s individual
performance and conduct… the Firm may pay a discretionary year-end bonus as
incentive compensation to certain eligible employees. Even if eligible, an employee who
is not deemed to be in good standing at the time such bonuses are paid, will not receive a
bonus. The decision whether to pay a bonus, and if so how much, is at the sole discretion
of the Managing Partner.
(Def.’s L.R. 56(a)1 Stmt ¶ 9; Pl’s L.R. 56(a)2 Stmt. ¶¶ 9; ECF No. 54-2 at 5.) The
handbook then goes on to define “good standing”:
An employee will not be deemed to be in good standing under this policy, as determined
by the Firm in its sole discretion, if, among other things, he or she (i) is not, for any
reason, an employee of the Firm at the time that bonuses are paid to similarly situated
employees, (ii) has given or received notice of termination prior to the bonus payment
date, (iii) is subject to a notice of termination requirement and has not complied with any
applicable notice requirement or (iv) is deemed by the Firm in its discretion to not be in
good standing because, for example, the employee is not meeting the Firm’s performance
and conduct expectations. Nothing herein limits the Firm’s discretion in determining
whether an employee is in good standing and/or eligible to receive a discretionary bonus.
Id. Finally, the handbook prohibits certain agreements contrary to its terms:
No employee or representative of the Firm, other than the Firm’s Managing Partner, has
any authority to make any agreement contrary to the foregoing. Any such purported
agreement entered into by the Firm’s Managing Partner will not be enforceable unless it
is in writing, has been reviewed by Human Resources and is executed by the employee
and the member of the Firm’s Managing Partner.
(Def.’s L.R. 56(a)1 Stmt ¶ 9; Pl’s L.R. 56(a)2 Stmt. ¶¶ 9; ECF No. 54-2 at 6).
B. 2012 Bonus
CAM found Mr. Del Monaco’s performance in 2012 to be satisfactory and he received a
bonus of $200,000 following a performance review with Mr. Czech. (Def.’s L.R. 56(a)1 Stmt ¶
11; Pl’s L.R. 56(a)2 Stmt. ¶ 11.) Mr. Del Monaco received his 2012 bonus on May 31, 2013,
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more than two months after the deadline set out in the offer letter. (Def.’s L.R. 56(a)1 Stmt ¶ 12;
Pl’s L.R. 56(a)2 Stmt. ¶ 12.)
C. 2013 Bonus
The parties disagree about many of the events that took place between May 31, 2013, and
May 19, 2014. They agree, however, that on May 19, 2014, Mr. Del Monaco emailed Mr. Czech
to inquire about his 2013 bonus. (Def.’s L.R. 56(a)1 Stmt ¶ 12; Pl’s L.R. 56(a)2 Stmt. ¶ 12.) The
same day, Mr. Czech responded by email (in full):
R: The dollar amount of your bonus will be identical to the bonus you received
last year. That said, I do want to sit down with you to discuss a variety of topics.
VERY unfortunately (as a result of the well-known Fund I company issues) and
the project you and Staci are assisting with, I am traveling non-stop and now won’t be in
the office until May 30th.
That said, we’ll sit down when I get back and go through your review. I’ll also
provide you with bonus timing at that time. Thanks.
(Def.’s L.R. 56(a)1 Stmt ¶ 19; Pl’s L.R. 56(a)2 Stmt. ¶ 19; ECF No. 53-8.)
Also on May 19, 2014, Mr. Del Monaco received news of an upcoming offer of
employment from Torchlight Investors, an investment management firm. (Def.’s L.R. 56(a)1
Stmt ¶ 15; Pl’s L.R. 56(a)2 Stmt. ¶ 15.) He received and accepted a written offer from Torchlight
Investors on May 22 or 23, 2014. (Def.’s L.R. 56(a)1 Stmt ¶ 21; Pl’s L.R. 56(a)2 Stmt. ¶ 21.)
By the end of May 2014, all CAM employees but Mr. Del Monaco had received their
2013 bonuses. (Czech Depo. at 61, ECF No. 53-2 at 17; Del Monaco Aff. ¶¶ 32, 36, ECF. No. 54
at 8-9.) On May 30, 2014, Mr. Del Monaco was absent from work and sent another email
inquiring about payment of his 2013 bonus.(Def.’s L.R. 56(a)1 Stmt ¶¶ 22-23; Pl’s L.R. 56(a)2
Stmt. ¶¶ 22-23; ECF No. 53-9.) Then, on June 1, 2014, Mr. Del Monaco submitted notice of his
resignation from CAM, and left CAM 60 days later. (Def.’s L.R. 56(a)1 Stmt ¶ 24; Pl’s L.R.
56(a)2 Stmt. ¶ 24; ECF No. 53-10.)
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Facts that are disputed will be discussed below where relevant.
III.
Standard of Review
Summary Judgment is appropriate only when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). The moving party bears the burden of demonstrating that no genuine issue exists as
to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323–25 (1986). An issue of fact
is “material” if it “might affect the outcome of the suit under the governing law.” Konikoff v.
Prudential Ins. Co. of America, 234 F.3d 92, 97 (2d Cir. 2000). “A dispute regarding a material
fact is genuine if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party . . . .” Williams v. Utica Coll. of Syracuse Univ., 453 F.3d 112, 116 (2d Cir.
2006) (internal quotation marks and citation omitted). “When viewing the evidence, the court
must assess the record in the light most favorable to the non-movant and draw all reasonable
inferences in the non-movant’s favor.” Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir.
2000).
IV. Discussion
A. Breach of Contract
Defendants argue that Mr. Del Monaco was ineligible for a 2013 bonus as a matter of
law. According to the CAM employee handbook, an employee is ineligible for a bonus if he or
she gives “notice of termination prior to the bonus payment date.” (ECF No. 52-3 at 5.)
Defendants claim that the unambiguous meaning of the term “bonus payment date” is the date
when the individual employee in question receives his or her bonus. Therefore, they argue,
regardless of whether or not Mr. Del Monaco was promised a bonus, when he gave notice of
termination on June 1, 2014, prior to actually receiving a bonus, he forfeited his eligibility.
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For purposes of summary judgment, the “question of whether the language of a contract
is clear or ambiguous is a question of law to be decided by the court.” Compagnie Financiere de
CIC et de L'Union Europeenne v. Merrill Lynch, Pierce, Fenner & Smith Inc., 232 F.3d 153,
157–58 (2d Cir. 2000) (internal citations omitted). “The mere fact that the parties advance
different interpretations of the language in question does not necessitate a conclusion that the
language is ambiguous.” Cantonbury Heights Condo. Ass'n, Inc. v. Local Land Dev., LLC, 273
Conn. 724, 735 (2005). However, “where contractual language is susceptible of at least two
fairly reasonable interpretations, this presents a triable issue of fact, and summary judgment is
improper.” Rothenberg v. Lincoln Farm Camp, Inc., 755 F.2d 1017, 1019 (2d Cir. 1985)
(internal citations and quotation marks omitted). “This generally means that a motion for
summary judgment may be granted in a contract dispute only when the contractual language on
which the moving party's case rests is found to be wholly unambiguous and to convey a definite
meaning. Ambiguity here is defined in terms of whether a reasonably intelligent person viewing
the contract objectively could interpret the language in more than one way.” Topps Co. v.
Cadbury Stani S.A.I.C., 526 F.3d 63, 68 (2d Cir. 2008) (internal citations omitted).
The Court disagrees with Defendants that the term “bonus payment date” unambiguously
means the date on which an individual employee receives his or her bonus. In fact, there is
substantial textual evidence to the contrary. The term “bonus payment date” must be understood
in the context of surrounding provisions of the employee handbook and offer letter. See HSB
Grp., Inc. v. SVB Underwriting, Ltd., 664 F. Supp. 2d 158, 190 (D. Conn. 2009) (“when
interpreting a contract, the Court must look at the contract as a whole, consider all relevant
portions together and, if possible, give operative effect to every provision in order to reach a
reasonable overall result”) (citing O'Brien v. U.S. Fid. & Guar. Co., 235 Conn. 837, 843 (1996)
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(internal quotation marks omitted). The handbook states that an employee is not in good standing
if he or she, “(i) is not, for any reason, an employee of the Firm at the time that bonuses are paid
to similarly situated employees, (ii) has given or received notice of termination prior to the bonus
payment date….” (ECF No. 52-3 at 5 (emphasis added).) The handbook also explains that “the
Firm may pay a discretionary year-end bonus as incentive compensation to certain eligible
employees. Even if eligible, an employee who is not deemed to be in good standing at the time
such bonuses are paid, will not receive a bonus.” (ECF No. 52-3 at 5 (emphasis added).) Read
in context, “bonus payment date” could reasonably be interpreted as a reference to “the time that
bonuses are paid to similarly situated employees” and also “the time such bonuses are paid” to
“certain eligible employees.” The offer letter, which is contingent upon agreement to the
provisions of the handbook (ECF No. 54-1 at 4) and thus incorporates those provisions by
reference, provides further support for this position. It discusses the date for 2012 compensation
as “when year-end cash bonuses are paid to similarly situated employees, and in no event later
than March 15, 2013” and later refers back to that date as “the applicable payment date.” (Id. at
1.) All of these provisions suggest that the term “bonus payment date,” as used in the handbook,
means the date on which “bonuses are paid to similarly situated employees.” Although this is not
the only possible interpretation, it is a plausible one, as it harmonizes the related provisions and
avoids the potentially unworkable result of an employee waiting indefinitely, even years, for an
earned bonus, long after all similarly situated employees had received their bonuses. See Welch
v. Stonybrook Gardens Co-op., Inc., 158 Conn. App. 185, 198 (2015) (courts “will not construe a
contract's language in such a way that it would lead to an absurd result”).
At best, then, the term “bonus payment date” is ambiguous and subject to more than one
reasonable interpretation. Summary judgment is therefore inappropriate and extrinsic evidence
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(such as Mr. Czech and Mr. Del Monaco’s respective intentions and whether there was a custom
and practice of payment by a certain date) may be considered by the finder of fact.
Separately, Defendants argue that any promises made by Mr. Czech concerning a bonus
for 2013 work, including in his May 19, 2014 email, are unenforceable because they are contrary
to the employee handbook, which provides that bonus decisions are discretionary and forecloses
unilateral promises concerning compensation contrary to its terms. Defendants are correct that
the handbook makes clear that “whether to pay a bonus, and if so how much, is at the sole
discretion of the Managing Partner” and “[n]othing herein limits the Firm’s discretion in
determining whether an employee is in good standing and/or eligible to receive a discretionary
bonus.” (ECF No. 54-2 at 5.) They are also correct that the employee handbook states that “any
agreement contrary to the foregoing” is not enforceable unless properly executed and reviewed.
(Id. at 6.) However, their argument ultimately fails, because Mr. Czech’s May 19, 2014 email
was not in fact “contrary to” the employee handbook, and treating it as binding would not violate
the handbook provisions stating that bonus decisions are discretionary. Instead, a reasonable jury
could find on this record that Czech’s promise to pay a bonus to Mr. Del Monaco was simply an
exercise of the very discretionary power laid out in the handbook.
B. Promissory Estoppel
Mr. Del Monaco separately brings a claim of promissory estoppel. “To recover on a
theory of promissory estoppel, a plaintiff must plead and prove four elements: 1) the promisor
made a clear and definite promise; 2) the promisee reasonably relied on the promise; 3) the
promise induced the action taken by the promisee; and 4) injustice can be avoided only by
enforcement of the promise.” Adair v. Pfizer, Inc., 245 F. Supp. 2d 437, 444 (D. Conn. 2003).
The parties dispute a number of facts related to the promissory estoppel claim, including whether
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Mr. Del Monaco relied on the promise of a bonus to his detriment by forbearing from seeking
other employment. (Def.’s L.R. 56(a)1 Stmt. ¶ 13 P’s L.R. 56(a)2 Stmt. ¶ 13.)
Any factual disputes that might exist on this point are immaterial, however, because even
if Mr. Del Monaco did forbear from seeking employment, it would not be sufficient to prove
promissory estoppel. Several courts in this district have held that “forbearance from seeking job
opportunities is not sufficient to show detrimental reliance for purposes of promissory estoppel.”
Croslan v. Hous. Auth. for City of New Britain, 974 F. Supp. 161, 168 (D. Conn. 1997). See also
Pavia v. Severn Trent Servs., Inc., No. CIV.A. 14CV659 AWT, 2015 WL 477180, at *2 (D.
Conn. Feb. 5, 2015) (same) Curcio v. Hartford Fin. Servs. Grp., 472 F. Supp. 2d 239, 245 (D.
Conn. 2007) (same); Martin v. Dupont Flooring Sys., Inc., No. CIV.A. 301CV2189 SRU, 2004
WL 726903, at *6 (D. Conn. Mar. 31, 2004), aff'd, 125 F. App'x 369 (2d Cir. 2005). One court to
reach the opposite conclusion, Linker v. Koch Investments, Inc., distinguished Croslan and held
that forbearing from seeking employment could constitute reasonable reliance in a case where
not seeking employment was akin to “turn[ing] down other job opportunities” because “although
[Plaintiff] did not receive any formal job offers… at his level of seniority it was common
practice for firms not to extend a formal offer until an applicant requested one.” 62 F. Supp. 2d
611, 614–15 (D. Conn. 1999). Mr. Del Monaco does not present any evidence to show that in his
case forbearance from seeking employment entailed turning down other job opportunities along
the lines of Linker. His promissory estoppel claim fails as a matter of law.
C. Connecticut Wage Statutes
Finally, Mr. Del Monaco claims that the allegedly promised bonus would constitute
“wages” under Conn. Gen. Stat. § 31-71a(3), and that Defendants’ failure to pay thus entitles
him to double damages under Conn. Gen. Stat. § 31-72 . For a bonus to constitute a wage under
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Conn. Gen. Stat. 31-71a(3): “(1) the award of compensation must be non-discretionary, (2) the
amount of the compensation must be non-discretionary, and (3) the amount of the bonus must be
dependent on the employee's performance.” Datto Inc. v. Braband, 856 F.Supp.2d 354, 371
(D.Conn.2012) (citing Ass'n Res., Inc. v. Wall, 298 Conn. 145, 173–77 (2010)).
Mr. Del Monaco cites no evidence to suggest that Mr. Czech’s decision regarding
whether to award a bonus or the amount of the bonus was non-discretionary. To the contrary, the
employee handbook plainly states that both the bonus itself and the amount are discretionary:
“the decision whether to pay a bonus and if so, how much, is at the sole discretion of the
Managing Partner.” (ECF No. 54-2 at 5.) According to the employee handbook, bonus decisions
are based on “business conditions and Firm performance, and an employee’s individual
performance and conduct (including, but not limited to, adhering to the Firm’s ethics,
compliance and risk management standards).” (Id.) Mr. Del Monaco offers no evidence to
dispute this.1 In a case such as this one “when the amount of a bonus is discretionary and is not
ascertainable by applying a formula, the bonus does not constitute wages under the statute.”
Ziotas v. Reardon Law Firm, P.C., 296 Conn. 579, 587, 997 A.2d 453, 457 (2010).
V.
Conclusion
For the foregoing reasons, defendants’ motion for summary judgment (ECF No. 50) is
GRANTED in part and DENIED in part. Summary judgment is granted for Defendants on
Counts Two, Three, and Four, and denied on Count One. As the remaining Count is only against
Defendants CAM and GP, the case against Mr. Czech is dismissed.
And even assuming that Mr. Czech’s email of May 19, 2014 promised Mr. Del Monaco a
particular bonus amount of $200,000, that promise was merely an exercise of Mr. Czech’s
discretion and did not convert the bonus into a wage under Conn. Gen. Stat. 31-71a(3).
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IT IS SO ORDERED.
/s/
a
Michael P. Shea, U.S.D.J.
Dated:
Hartford, Connecticut
August 30, 2016
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