Vogel v. E.D. Bullard Company
Filing
110
MEMORANDUM OPINION & ORDER: (1) IT IS ORDERED that Dft's 71 MOTION for Summary Judgment is GRANTED IN PART and DENIED IN PART. (2) IT IS FURTHER ORDERED that ALL FURTHER PROCEEDINGS ARE CONTINUED GENERALLY. (3) Dft shall SHOW CAUSE why declaratory judgment shall not be entered in favor of Pla w/respect to claim in Count VI of Amended Complaint w/in 21 days of entry of this Order. Signed by Judge Joseph M. Hood on 6/7/2013.(GLD)cc: COR,D,JC
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
JAMES D. VOGEL,
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
E.D. BULLARD COMPANY,
Defendant.
**
**
**
Civil Action No.
5:12-cv-11-JMH
MEMORANDUM
OPINION & ORDER
**
**
This matter is before the Court upon the Motion for
Summary
Judgment
of
Defendant
E.D.
Bullard
Company
(“Bullard”) [DE 71], in which Bullard asks the Court to
determine whether, among other things and as a matter of
law, it ever promised Plaintiff James D. Vogel (“Vogel”) a
rose
garden
and,
even
enforceable promise.
if
it
did,
whether
that
was
an
Vogel has filed a Response [DE 72]
stating his objections to the Motion, and Bullard has filed
a Reply [DE 75] in further support of its Motion.
Having
considered the matter carefully in light of the undisputed
facts and the relevant law, the Court concludes that, as a
matter of law, the claims stated in Plaintiff’s Amended
Complaint [DE 60] are without merit and shall be dismissed.
I.
Background
Defendant
Bullard
is
a
maker
of
fire
and
safety
equipment,
which
international
September
Bullard
employment
Bullard.
where
he
level.
2010
in
markets
by
an
of
an
eleven
recruit
years
and
follow-up
Bullard
invited
become
in
to
an
in
retained
by
leave
his
employee
of
to
an
Vogel
October
communications
Vogel
on
contacted
was
Vogel
interviewed
worked,
products
recruiter,
to
and
several
its
Vogel
executive
recruiter
resided
sells
Plaintiff
effort
The
and
with
interview
in
Minnesota,
2010.
the
with
Kentucky in November and December 2010.
After
recruiter,
personnel
in
At that time,
Bullard provided him a job description for the position for
which
Vogel
was
being
Marketing and Sales.
recruited
–
Vice
President
of
The job description set forth the
specifics of the position, including “tak[ing] the lead in
managing,
training
and
motivating
approximately
forty
marketing and sales professionals and support staff around
the world,” and stated that Bullard was a “team-oriented
environment” where work was “fun,” and where there were
“great colleagues to work with.”
was
also
provided
to
Vogel
which
An organizational chart
depicted
that
all
of
Bullard’s marketing, sales, and customer service functions
reported to the Vice President of Marketing and Sales and
that
the
position
would
oversee
marketing,
customer service functions on a global level.
2
sales,
and
During
lucrative
the
recruiting
financial
process,
opportunity
Bullard
touted
presented
to
the
Vogel,
including short-term and long-term incentive compensation
that was available after employment for the requisite time,
as well as the authority and automony that he would have as
the
global
head
of
Bullard’s
Marketing
and
Sales
activities; the substantial time, support, and guidance he
would receive in order to learn the company’s organization,
processes,
Officer
strategies,
Richard
and
Miller’s
staff
during
(“Miller”)
Chief
two-year
Executive
transition
into retirement; and the supportive and positive atmosphere
and culture which existed at Bullard.
President and Chief
Operating Officer Eric Pasch (“Pasch”) represented to Vogel
that he would be “debt free in a few years” of employment
because of the compensation that would come his way if he
joined the company.
During the recruiting process, Miller
and Pasch explained to Vogel that it would take six to
twelve months for him “to get to know the business” and
that
he
would
use
that
time
to
absorb
the
business,
products, and culture, before making appropriate marketing
and sales changes.”
Miller promised Vogel that his “main
focus [would] be to offer support and guidance to the new
Vice President of Marketing and Sales during” the two year
period prior to his retirement.
3
Vogel
interviewed
with
Miller,
Pasch,
and
Linda
Huesing, Bullard’s Director of Human Resources during his
first round of interviews, in November 2010.
Huesing told
Vogel that Deborah Kenny, the past prior Vice President of
Marketing and Sales, had left because she was not a “good
fit” and that she had left based on a “mutual agreement.”
In
response
to
Vogel’s
inquiries
about
the
culture,
atmosphere, and environment at Bullard, Huesing noted that
it was a “roll-up your sleeves” place, that employees at
all levels interacted with the senior management, and that
it was a non-union environment.
On
December
29,
2010,
Bullard
invited
Vogel
to
Lexington to interview with its owner and the Chairman of
the Board, Edward “Jed” Bullard.
In that interview, Vogel
was informed that he would spend the first six to twelve
months
of
processes,
his
employment
strategies,
and
assessing
staff
the
issues
organization,
at
Bullard
to
determine what was needed at the company and who would be
reporting to him at the conclusion of that year.
Pasch has
testified that Bullard represented to Plaintiff that the
“global”
Sales
duties
would
of
the
include
Vice
President
international
of
Marketing
responsibility
and
“over
time,” that he would reach responsibility for “worldwide”
sales and marketing through “steps.”
4
On December 30 and 31, 2010, Pasch and Vogel engaged
in
telephone
Minnesota
residence,
prospective
exchanged
conversations,
to
Employment
emails
discuss
with
which
while
Vogel
the
Bullard.
included
was
terms
Pasch
revised
of
at
his
Vogel’s
and
Vogel
offers
of
employment to confirm the “principal elements” of the offer
to Vogel.
Vogel received and accepted his final offer of
employment while he was in Minnesota.
In their offer of employment, memorialized in a later
dated December 30, 2010, Bullard represented that he would
receive
a
bi-weekly
$200,000.00.
salary
of
$7,602.31,
annualized
to
He would participate in the Short Term and
Long Term Management Incentive Programs as set forth in a
memorandum describing those benefits.1
Vogel offered to pay
for a number of relocation expenses, including “temporary
living expenses up to $2,400 per month for up to six months
or the end of September if needed.”
There was also a
“[s]igning bonus of $20,000 (taxable as ordinary income,
1
The short-term incentive plan memorandum which governed that benefit
states that “[p]ersons terminating employment prior to the date of
incentive payments will forfeit any awards.” In addition, the plan
documentation notes that “[n]ew employees with at least six months’
service will be eligible (subject to the terms of eligibility…) for
pro-rata awards.” The long-term incentive program documents include a
similar provision, stating that “[c]ertain executive managers… who have
held their current positions for a period of not less than one year
will be eligible to participate in the Plan, subject to nomination by
the Chief Executive Officer and approval of the Company’s Board of
Directors.” The memorandum goes on to state that “[j]ob title alone
does not guarantee participation of any employee in the Plan.”
5
payable 30 days after your start date . . . and subject to
full
repayment
to
the
Company
should
you
voluntarily
terminate your employment within two years of yours tart
date.”
Other elements of the offer included “[f]our weeks
of paid vacation plus eleven paid holidays (includes three
personal
‘holidays’
of
your
choosing).”
Bullard
also
promised him a performance and salary review within a year
from his employment date, among other things.
Plaintiff
concedes that he did not raise the issue of whether his
employment was at-will or for a term in his pre-employment
negotiations.
In an email sent after Vogel agreed to join Bullard,
Miller
wrote
that
he
would
“join
with
Eric
[Pasch]
to
support you in every way I can and in any way you need.”
He further indicated that he and Pasch would “do all we can
to help make the transition as smooth as possible.”
Id.
Bullard further encouraged him to accept the offer, writing
that it saw “only positive outcomes should you honor us by
joining the Company” that, while “[t]here [would] be plenty
of hard work . . . this hard work will be conducted in a
supportive
and
positive
environment
with
colleagues
who
have a passion for what they do and even have a little fun
along the way!”
6
Vogel accepted the offer and came to work at Bullard.
Once there, he received Bullard’s Employee Handbook, which
Vogel acknowledged that he received on January 19, 2011,
stating, among other things, that “[v]acation is accrued
weekly.”
Also, about a month after Vogel commenced his
employment at Bullard, he was presented with a document
entitled
“Agreement”
receiving
the
and
$20,000
Agreement
effectively
concerning
the
providing
it
in
asked
signing
of
the
to
bonus.
modified
repayment
for
was
the
the
event
sign
He
did
it
so.
parties’
$20,000
of
before
The
agreement
signing
Vogel’s
bonus,
voluntary
departure from the company or “if Bullard terminate[d] his
employment for cause within two years after his hire date,”
reserving to Bullard the sole judgment of whether Vogel’s
termination
was
“for
cause.”
The
Agreement
further
provided that Plaintiff “underst[ood] that by accepting the
signing bonus this is fully sufficient consideration for
entering
into
this
provided
that
Vogel
Agreement
with
each provision.”
legal
agreement.”
“had
the
counsel”
Finally,
opportunity
and
that
he
the
to
Agreement
review
the
“underst[ood]
Pasch specifically pointed out the change
in the language from the original offer letter and, aware
of the change in the language, Vogel signed the Agreement
anyway.
7
As
it
happened,
once
he
arrived
at
Bullard,
Vogel
found that there was no one to escort him around the office
or introduce Vogel to key members of the organization and
discuss the business of Bullard with him.
Pasch later
informed Vogel that he was upset with Miller because Pasch
“did
not
have
on
workload”
time”
to
Pasch,
who
president of Bullard.
small
number
of
do
so
after
was,
at
Miller
that
“dumped
time,
the
his
new
Vogel was only able to arrange a
meetings
with
Miller
to
discuss
the
business of and his role at Bullard during what ended up
being his five months of employment at Bullard.
After
Vogel’s
Pasch
directed
first
Vogel
week
that
of
employment
he
should
with
not
go
Bullard,
to
Miller
“for
anything” without first seeking answers from others, and
then only if he first involved Pasch.
When Vogel did go to
Miller for information, Pasch exhibited displeasure with
Vogel for having done so.
Vogel
informed
Pasch
of
his
desire
to
have
weekly
meetings with Pasch to learn more about Bullard’s business
and to receive his feedback and guidance concerning his
work
and
informed
observations.
Vogel
that
he
Within
did
a
not
couple
want
to
of
weeks,
have
Pasch
regularly
scheduled meetings with him because he found them to be
8
“too constraining.”
Vogel had the impression that Pasch
was always extremely busy or had more important things to
do than to meet and speak with Vogel.
For example, Pasch
worked on other activities on his computer or read other
documents
during
meetings
with
Vogel
and
others.
Ultimately, Vogel explains that the vast majority of what
he learned about Bullard’s business, personnel, processes,
customers, markets, distributors and products derived from
persons other than Miller and Pasch.
Vogel often found himself at odds with Pasch once he
moved to Bullard.
Vogel did not support terminating Tom
Korb
Director
as
Vogel’s
Bullard’s
employment
tenure,
of
but
Marketing
Pasch
so
soon
overruled
into
him
and
directed that Mr. Korb be terminated. He felt that Pasch’s
management style involved bypassing management levels to go
numerous
lower
levels
into
the
organization
to
become
involved in or make or change decisions without including
or
communicating
management
meetings
chain
involving
with
of
other
command.
personnel
appropriate
Pasch
in
his
levels
excluded
marketing
in
the
Vogel
from
and
sales
group, which undermined Vogel’s ability to run his group
and caused him to feel out of the loop
Vogel felt that
Bullard’s culture fostered a concern about “who [would] be
fired next.”
Pasch informed Vogel on numerous occasions
9
that he was considering “getting rid of” numerous personnel
in
the
numerous
company.
Pasch
also
spoke
of
Bullard
and
employees
disparagingly
Bullard’s
about
owner
and
Chairman of the Board.
Vogel
was
environment
–
thrust
where
into
an
significant
extremely
personnel
challenging
changes
were
taking place within his group – and felt that he was given
no
genuine
opportunity
to
lead
the
marketing
and
sales
activities which he was experienced and well-equipped to
perform.
2011.
Given that, everything came to a head in June
On
June
24,
2011,
Pasch
“happy” that he joined Bullard.
asked
Vogel
if
he
was
Vogel informed Pasch that
(given Pasch’s micromanagement), he was not sure that he
was wanted or needed.
In response to Pasch’s inquiry,
Vogel informed Pasch that he found his management style to
be intimidating, threatening and in-your-face.
Pasch asked
Vogel to meet with him again on July 6, 2011 to inform
Pasch (a) whether Vogel wanted to be at Bullard, and (b)
what Vogel “brought to the table” at Bullard.
to
Pasch’s
direction,
Vogel
prepared
In response
a
15-point
presentation of what he “brought to the table” at Bullard
to
discuss
at
his
meeting
with
Pasch
on
July
6,
2011.
Vogel forwarded this presentation from his personal e-mail
10
address to himself at his Bullard e-mail address on July 6,
2011.
Vogel then attended the scheduled meeting with Pasch
as well as Bullard’s Director of Human Resources, Linda
Huesing.
“what
I
Although Vogel did not provide Pasch with his
bring
to
the
table”
presentation
which
he
had
prepared and transmitted to himself, Pasch had a copy of
the presentation, as (unbeknownst to Vogel at the time)
Pasch
was
monitoring
and
intercepting
Vogel’s
e-mail
communications. When Vogel noted that Pasch had a copy of
his
e-mail
note(s),
Pasch
stated
that
Vogel
must
have
previously given it to him (which Vogel did not), which was
an untruth.
Pasch informed Vogel in the meeting that he
had concluded that “Bullard is not the place for you”, and
he terminated Vogel’s employment five months after he began
employment.
Following
Vogel’s
involuntary
termination
from
employment with Bullard on July 6, 2011, Bullard forwarded
to him an “Agreement and General Release,” in which Bullard
stated that Vogel had “decided to resign from employment”
with
Bullard,
which
was
not
true.
The
Agreement
and
General Release offered to pay Vogel for “unused” vacation
hours and temporary living expenses up to $2,400 through
September 2011 only if he agreed to sign the Agreement and
11
General Release.
Additionally, the Agreement and General
Release offered to pay Vogel only four weeks salary “in
lieu of notice”, which Vogel felt was inconsistent with
Pasch’s
representation
to
Vogel
in
pre-employment
negotiations that Bullard “always takes care of employees
when they’re asked to leave” (which Vogel claims caused him
to drop his request for a six month severance provision in
his
employment
agreement
with
Bullard).
Vogel
did
not
accept Bullard’s proposed Agreement and General Release.
Ultimately,
Bullard
did
not
pay
living expenses through September 2011.
Vogel’s
Kentucky
Rather, Vogel was
personally liable for these expenses during July, August,
and September
2011.
Nor was Vogel paid for a number of
what he saw as his unused 2011 vacation days and holidays
or any severance payment.
He did not receive the benefit
of either short term or long term incentive programs.
Nor
did he receive the experience that he was told would be his
since
Bullard’s
Customer
Service
Asia
Pacific
areas
reporting structure.
were
Sales,
never
Europe
a
part
Sales,
of
and
Vogel’s
He also felt that he never led the
sales and marketing efforts at Bullard nor was he truly the
senior manager to lead the organization on all customer
interfacing issues or take the lead in managing, training
and motivating the approximately forty marketing and sales
12
professionals
and
support
staff
around
the
world.
Ultimately, he had no authority beyond the United States
and, internationally, Canada
He
also
employment
that
learned
he
after
was
the
Bullard’s
termination
fifth
Vice
of
his
President
Marketing and Sales in the last eight years at Bullard and
that
his
predecessor,
Deborah
Kenny,
had
her
employment
terminated involuntarily since she was not a “good fit,”
even though it was represented that she had mutually agreed
to
leave
Bullard’s
Bullard.
Ultimately,
Vogel
concluded
that
environment was “toxic” and that it was easy to
get “poisoned.”
13
II.
Standard of Review
Summary judgment should be granted where there is no
genuine issue of material fact and the moving party is
entitled to judgment as a matter of law.
Johnson v. United
States Postal Serv., 64 F.3d 233, 236 (6th Cir. 1995).
The
moving
the
party
bears
the
initial
burden
of
showing
absence of a genuine issue of material fact.
See Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986).
The burden
then shifts to the non-moving party to come forward with
evidence showing that there is a genuine issue for trial.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986).
A
mere
scintilla
of
evidence
is
insufficient;
rather, “there must be evidence on which the jury could
reasonably find for the [nonmovant].”
Id. at 252.
This
standard requires a court to make a preliminary assessment
of the evidence, in order to decide whether the non-moving
party’s evidence concerns a material issue and is more than
de minimis.
Hansel v. Keys, 87 F.3d 795, 800 (6th Cir.
1996). The mere “possibility” of a factual dispute is not
enough.
Mitchell v. Toledo Hosp., 964 F.2d 577, 582 (6th
Cir. 1992) (quoting Gregg v. Allen Bradley Co., 801 F.2d
859, 863 (6th Cir. 1986)).
III. Choice of Law
As an initial matter, the Court holds that Kentucky
14
law
applies
to
the
dispute
at
bar.
Federal
district
courts, sitting in diversity, apply the law, including the
choice of law rules, of the forum state.
of-law
rules
of
the
forum
state,
Thus, the choice-
the
Commonwealth
of
Kentucky, govern the decision in this breach of contract
case.
See Wallace Hardware Co. ., Inc. v. Abrams, 223 F.3d
382, 391 (6th Cir. 2000) (citing
Elec.
Mfg.
Co.,
313
U.S.
487
Klaxon Co. v. Stentor
(1941);
Banek
v.
Yogurt
Ventures U.S.A., Inc., 6 F.3d 357, 361 (6th Cir. 1993)).
With respect to the law of contracts, Kentucky courts apply
the modern choice of law test, looking to which state has
the most significant relationship to the transaction and
the parties. See Lewis v. Family Group, 555 S.W.2d 579 (Ky.
1977)
(abrogating
contractus).
the
traditional
rule
of
lex
loci
In tort cases, Kentucky does not apply the
most significant relationship test. “The conflicts question
should not be determined on the basis of a weighing of
interests ... but simply on the basis of whether Kentucky
has
enough
contacts
to
justify
applying
Kentucky
law.”
Adam v. J.B. Hunt Transport, Inc., 130 F.3d 219, 230 (6th
Cir. 1997); see also Foster v. Leggett, 484 S.W.2d 827, 829
(Ky.
1972)(“[I]f
necessarily
the
there
most
are
significant
significant
contacts—with
then Kentucky law should be applied”).
15
contacts—not
Kentucky,
With
respect
to
the
contract,
the
most
significant
relationship is clearly with Kentucky and its law as to
Plaintiff’s breach of contract, promissory estoppel, and
declaratory
Bullard
judgment
hired
(also
Plaintiff
a
contract
to
work
issue)
claims.
its
Kentucky
at
headquarters. Plaintiff traveled to Bullard three separate
times for
duties
Vogel
interviews during the recruitment process. The
expected
at
of
Bullard’s
communicated
from
Plaintiff
were
headquarters
its
largely
during
headquarters
explained
those
at
visits
other
to
or
times.
Plaintiff’s performance, or lack thereof, of any alleged
contract occurred solely in Kentucky.
Bullard’s alleged
breaches of any contract also occurred in the Commonwealth.
Bullard terminated Plaintiff’s at-will employment on July
6, 2011 during a conversation that took place at Bullard.
Accordingly, the Kentucky law of contracts and promissory
estoppel shall apply.
Further, the Court agrees with Defendant that Kentucky
law should apply with respect to the tort claims arising
out of fraud.
The alleged misrepresentations arose from
communications with Bullard’s headquarters is in Kentucky,
where
Plaintiff
was
ultimately
employed.
Plaintiff’s employment was terminated in Kentucky.
Further,
At the
very least, the Court concludes that any connection between
16
Minnesota
and
Plaintiff’s
tort
claims
significant than those of Kentucky.
will
apply
Kentucky
law
in
is
not
more
Accordingly, the Court
resolving
Plaintiff’s
tort
claims.
IV.
Discussion
A. Breach of Contract
While
the
parties
to
this
matter
quibble
over
the
nature of their agreement, there can be no doubt that the
parties to this matter had an agreement concerning Vogel’s
employment with Bullard:
an offer of employment was made
and Vogel accepted, it, coming to work for Bullard.
parties
disagree,
was,
as
Bullard
with
Bullard
in
however,
insists,
about
for
exchange
whether
Vogel’s
for
this
at-will
certain
The
agreement
employment
compensation
and
benefits or whether it was, as Vogel insists, an agreement
for employment for a two-year term during which he could
only be dismissed by Bullard for cause.
Vogel, however,
can identify no evidence that Bullard ever intended that
his employment be anything but at-will, and his claim for
breach of contract fails.
In
the
permanent
Commonwealth
employment
of
which
Kentucky,
is
not
“a
contract
supported
by
for
any
consideration other than the obligation of services to be
performed on the one hand and wages to be paid on the other
17
is a contract for an indefinite period, and, as such, is
terminable
Kentucky
at
the
will
of
either
Utilities
Co.,
150
party.”
S.W.2d
916,
Edwards
917–18
v.
(1941).
Where there is no clearly manifested intent to alter an
employee’s employment status from at-will to one where he
could only be terminated for cause, the default employment
relationship is “at will.”
See Street v. United States
Corrugated, Inc., 2011 U.S. Dist. LEXIS 7113, *12 (W.D. Ky.
2011) (“absent a clear statement not to terminate without
cause, the assumption is that the parties intended to enter
into an ordinary employment relationship, terminable at the
will
of
either
party”)
(citations
omitted).
Absent
a
specific contractual provision stating that discharge may
only
be
done
for
cause,
“an
employer
may
ordinarily
discharge an employee for good cause, for no cause, or for
a
cause
that
some
might
view
as
morally
indefensible.”
Miracle v. Bell Co. Emergency Med. Svcs., 237 S.W.3d 555,
558 (Ky. Ct. App. 2007);
Inc.,
2000
U.S.
App.
see also Mayo v. Owen Healthcare,
LEXIS
22257,
*5
(6th
Cir.
2000)
(interpreting Ky. law in holding “employment is ‘at will’
unless the parties otherwise agree”).
Plaintiff concedes that he did not raise the issue of
whether his employment was at-will or for a term in his
pre-employment negotiations.
Nonetheless, he claims that
18
he
had
“an
employment
agreement
for
a
definite
minimum
(two-year) term” based on correspondence from Rick Miller
and the offer letter that he received.
documents,
considered
alone
or
Neither of these
together,
purports
to
guarantee a term of employment, i.e., to change the at-will
quality of Vogel’s employment with Defendant.
Thus, Vogel
presents
contract
no
employment
evidence
with
that
Bullard
would
from
remove
the
his
general
rule,
and
of
his
employment was subject to termination at will.
True, Miller stated in his letter to Vogel that he
would retire from the company in two years and that he
would be offering Vogel his “support and guidance” during
that “transition period.”
to
Vogel
available
does
to
set
out
Further, Bullard’s offer letter
that
Plaintiff
certain
with
the
benefits
passage
of
would
be
time
–
participation in both short-term incentive compensation in
2011 and long-term compensation beginning at the end of
2012; that he would have “[f]our weeks of paid vacation
plus
eleven
paid
holidays
(includes
three
personal
‘holidays’ of your choosing)” per year; that Bullard would
provide him “temporary living expenses up to $2,400 per
month for up to six months or the end of September [2011]
if
needed”;
and
that
he
would
receive
a
salary
on
biweekly basis that added up to $200,000.00 per annum.
19
a
To
obtain the benefit of Miller’s “support and guidance” and
the benefits available over time, each of these provisions
presupposed
Vogel
continued
employment
on
the
dates
mentioned in order to qualify for and receive the benefits.
However, no reasonable person could conclude, without
more, these statements guaranteed his continued employment
on those dates.
potential
to
Without more, all employees who have the
benefit
from
the
counsel
of
a
senior
management official who plans to retire after a time or who
participate in benefit plans after a period of employment
would
have
instead
of
at
least
contract
traditional
for
at-will
that
period
employment.
of
time
Neither
the
case law nor common sense supports this conclusion.
In other words, the evidence leads to the inexorable
conclusion that Plaintiff had a contract of employment –
employment at-will – with Defendant.
There were terms and
conditions set forth to obtain compensation and benefits
but none of these terms or conditions suggested that Vogel
would be subject to dismissal solely for cause or that his
employment was for a term certain.
to
be
presented
contract claim.
to
a
trier
of
Thus, there is no issue
fact
on
his
breach
of
Rather, the Court concludes that summary
judgment in Defendant’s favor is warranted as a matter of
20
law with respect to Count I, Plaintiff’s breach of contract
claim.
B.
KRS § 337.055
Further, the undisputed material facts do not support
Defendant’s contention that Bullard did not violate KRS §
337.055, as set forth in Count II of the Complaint, because
it
failed
to
timely
pay
him
all
monies—namely
for
his
remaining vacation days for 2011 which he claims were owed
at the time of his termination.
The offer of employment
does not indicate that those vacation days were earned on a
pro-rata basis.
They were simply provided.
The material
facts do, however, support Defendant’s position it was not
obliged to pay him for holidays that had not yet occurred,
his living expenses for at least part of July and all of
August and September 2011, which were only “as needed,” and
short term and long-term compensation since he was not yet
qualified to participate in those benefits by virtue of
term
of
service
with
Bullard.
Thus,
Count
II
must
be
dismissed, in part, as well.
Vogel’s offer letter clearly sets forth that he would
be paid his salary on a bi-weekly basis but it provides
nothing with respect to the pro-ration of vacation days.
Rather, it states that he would receive a certain number of
vacation days and three personal holidays of his choice
21
upon employment.
Bullard’s Employee Handbook, which Vogel
acknowledged that he received on January 19, 2011, states
that “[v]acation is accrued weekly.”
Plaintiff
was
not
employed
by
It follows that since
Bullard
for
an
entire
calendar year, Bullard was only obligated to pay him for
any accrued vacation days at the point of his termination,
which it did.
Further,
condition
while
the
Bullard’s
offer
payment
letter
of
did
living
not
expenses
explicitly
in
July,
August, and September 2011 on his continued employment at
those times, it did provide that those expenses were to be
paid “as necessary.”
Once his employment was terminated,
those living expenses would no longer be “necessary” and,
thus, would be unowed.
Finally,
the
short-term
incentive
plan
memorandum
states that “[p]ersons terminating employment prior to the
date of incentive payments will forfeit any awards.”
addition,
the
plan
employees
with
at
documentation
least
six
notes
months’
that
service
In
“[n]ew
will
be
eligible (subject to the terms of eligibility…) for prorata
awards.”
documents
Thus,
supplied
to
the
plain
Plaintiff
language
during
of
the
the
plan
recruiting
process shows that the offered “participation” was subject
to the terms of eligibility.
Plaintiff started working at
22
Bullard
on
January
17,
2011.
Bullard
terminated
his
employment under six months later, on July 6, 2011, before
the
Board
of
Directors
voted
on
short-term
incentive
compensation. Accordingly, Plaintiff was not entitled to a
short-term
compensation
bonus.
The
long-term
incentive
program documents include a similar provision, stating that
“[c]ertain executive managers… who have held their current
positions for a period of not less than one year will be
eligible to participate in the Plan, subject to nomination
by
the
Chief
Executive
Officer
Company’s Board of Directors.”
state
that
“[j]ob
title
and
approval
to
participation
Plaintiff
in
the
the
The memorandum goes on to
alone
does
participation of any employee in the Plan.”
provided
of
establishes
long-term
not
guarantee
The memorandum
pre-requisites
incentive
program.
for
Since
Plaintiff was not eligible for a long-term incentive bonus,
as he had neither worked at Bullard for one year or longer
nor had Pasch nominated him, those benefits can hardly be
considered due and owing to Vogel.
In other words, the evidence demonstrates that Bullard
paid Plaintiff all monies owed to him as of July 6, 2011,
Count II fails as a matter of law.
C. Fraud,
Negligent
Equitable Estoppel
23
Misrepresentation,
and
In
Count
III
of
his
Complaint,
Vogel
claims
that
Bullard fraudulently induced him into leaving his former
employment and accepting the offer of employment at Bullard
for by a number of means.
First, he argues that its agents
misrepresented the culture of the company, stating that it
was a “supportive and positive atmosphere” when it was not.
Next, he argues that he was defrauded because he was told
that he would receive the benefit of the time, support, and
assistance of others at Bullard as he started his new role
when, in fact, he did not.
He also argues that the true
scope and authority of the Vice President of Marketing and
Sales
position
misrepresented
in
to
which
him
he
because,
agreed
while
to
serve
represented
was
as
“global,” he ultimately realized only responsibility for
marketing and sales in the United States and Canada during
his tenure.
Finally, he argues that he was injured because
he was told that the prior Vice President of Marketing and
Sales had left by “mutual agreement” as she was not a “good
fit” for the company when, in fact, her employment was
terminated.2
The Court has reviewed the undisputed evidence
2
He also argues that he was inducted to enter into a
contract of employment because Bullard promised him
participation
in
short-term
and
long-term
incentive
compensation in 2011 and 2012.
The Court has already
determined there was no evidence of such a promise.
It
24
and
concludes
that
he
has
not
identified
a
material
representation upon which his claim of fraud may stand.
Under Kentucky law, “[w]here an individual is induced
to
enter
into
the
contract
in
reliance
upon
false
representations, the person may maintain an action for a
rescission of the contract, or may affirm the contract and
maintain an action for damages suffered on account of the
fraud and deceit.”
Radioshack Corp. v. ComSmart, Inc.,
222 S.W.3d 256, 261 (Ky. Ct. App. 2007) (citing Bryant v.
Troutman, 287 S.W.2d 920, 920 (Ky. 1956); Faulkner Drilling
Co., Inc. v. Gross, 943 S.W.2d 634, 638–39 (Ky. Ct. App.
1997); Adams v. Fada Realty Co., 202 S.W.2d 439, 440 (Ky.
1947)).
Fraud is a closely circumscribed tort,
. . .requir[ing] proof, by clear and
convincing evidence, of the following
six elements: (1) that the declarant
made a material representation to the
plaintiff, (2) that this representation
was false, (3) that the declarant knew
the representation was false or made it
recklessly, (4) that the declarant
induced the plaintiff to act upon the
misrepresentation,
(5)
that
the
plaintiff
relied
upon
the
misrepresentation, and (6) that the
misrepresentation caused injury to the
plaintiff.
United
Parcel
Service
Company v. Rickert, 996 S.W.2d 464 (Ky.
1999). The plaintiffs reliance, of
follows that he could not have relied upon such a promise
if it was not made.
25
course, must be reasonable, McHargue v.
Fayette Coal & Feed Company, 283 S.W.2d
170 (Ky. 1955), or, as the Restatement
states,
“justifiable.”
Restatement
(Second) of Torts § 537 (1977). The
misrepresentation,
moreover,
must
relate to a past or present material
fact. “A mere statement of opinion or
prediction may not be the basis of an
action.” McHargue, 283 S.W.2d at 172.
This means, as the Court of Appeals
held,
that
forward-looking
opinions
about investment prospects or future
sales
performance
such
as
those
involved in this case generally cannot
be the basis for a fraud claim.
Flegles, Inc. v. TruServ Corp.,
289 S.W.3d 544, 549 (Ky.
2009).
“For a declarant's misrepresentation to be used as the
basis for fraud, it must relate to an existing or past
fact.
If the alleged misrepresentation relates to a future
promise or an opinion of a future event, then it is not
actionable.”
Radioshack Corp., 222 S.W.3d at 262 (citing
Edward Brockhaus & Co. v. Gilson, 92 S.W.2d 830, 834 (Ky.
1936); Rivermont Inn, Inc. v. Bass Hotels & Resorts, Inc.,
113 S.W.3d 636 (Ky. Ct. App. 2003); Church v. Eastham, 331
S.W.2d 718, 719 (Ky. 1960); McHargue, 283 S.W.2d at 172);
see also Brooks v. Williams, 268 S.W.2d 650, 652 (Ky. 1954)
(citing Am. Jur., Fraud and Deceit, § 35) (“It is a general
rule that fraud must relate to a present or pre-existing
fact and cannot ordinarily be predicated on representations
26
or
statements
that
involve
mere
matters
of
futurity
things to be done or performed in the future.”).
“puffing”
nor
“sales
misrepresentations.
talk”
qualify
Flegles, Inc.,
as
or
Neither
actionable
289 S.W.3d at 550.
Statements which indicated that the speaker believed
that Bullard had a “supportive and positive atmosphere” are
opinions,
subjectively
held
by
the
speaker,
serve as the basis for a fraud action.
S.W.2d at 172.
planned
to
transition
do
as
and
cannot
See McHargue, 283
Statements that Bullard and its employees
“all
[they
smooth
as
could]
to
possible”
make
[Plaintiff’s]
referred
to
future
conduct, which cannot be a predicate for a fraud claim, any
more than the other statements made to Vogel predicting
that he would be debt free in a few years or that there
could only be positive outcomes if Vogel joined Bullard.
See Radioshack Corp., 222 S.W.3d at 262; Brooks, 268 S.W.2d
at 652.
The evidence at bar shows that Bullard represented to
Plaintiff that the “global” duties of the Vice President of
Marketing
and
responsibility
Sales
“over
would
time,”
include
that
he
international
would
reach
responsibility for “worldwide” sales and marketing through
“steps.”
Further,
Plaintiff
had
already
assumed
responsibility for marketing and sales in Canada which is
27
not part of the United States.
Thus, his responsibilities
were already “international” in nature at the time of the
termination of his employment.
Further, “if a party could have learned of the basis
of the fraud, or if he could have uncovered it ‘by ordinary
vigilance or attention,’ his failure to do so deprives him
of a remedy.”
Republic Bank & Trust Co. v. Bear, Stearns &
Co., Inc., 707 F.Supp.2d 702, 710 (W.D. Ky. 2010) (quoting
Mayo Arcade Corp. v. Bonded Floors Co., 41 S.W.2d 1104,
1109 (Ky. 1931)).
Insofar as Plaintiff believes that he
was misled as to the culture at Bullard or the expectations
of
him
in
Marketing,
the
he
position
concedes
of
Vice
that
he
President
might
of
have
Sales
asked
and
more
questions, contacted former employees, or spoken further
with then-current employees to gain the information that he
now wishes that he had gained before making the decision to
join the company.
Further, Plaintiff concedes that he had
knowledge
level
of
the
of
turnover
in
the
marketing
department and the role for which he was interviewing –
prior to the time he accepted the job.
When he discussed
the departure of the prior Vice President of Sales and
Marketing, Debbie Kenny, with senior management at Bullard,
they informed him that the former Vice President was not a
good fit and that her employment had been terminated.
28
He
never sought to discuss that situation with Debbie Kenny,
although he concedes that he could have done so.
For all of these reasons, Plaintiff’s claim for fraud
fails.
in
Plaintiff’s claim for negligent misrepresentation
Count
IV
fails,
as
well,
since
he
has
provided
no
evidence that Bullard supplied “false information for the
guidance of [Vogel] in [his] business transactions” such
that
a
loss
was
“caused
to
[him]
reliance on the information.”
by
[his]
justifiable
Presnell Constr. Managers,
Inc. v. EH Constr., LLC, 134 S.W. 3d 575, 580 (Ky. 2004).
No
less,
Plaintiff’s
claim
for
relief
on
a
theory
of
equitable estoppel, set forth in Count V of his Complaint,
fails since it requires “both a material misrepresentation
by one party and reliance by the other party.”
v. LeMaster, 306 S.W.3d 55, 62 (Ky. 2010).
Fluke Corp.
Counts III, IV,
and V of Vogel’s Complaint shall be dismissed.
D.
Declaratory Judgment
In Count VI of Vogel’s Amended Complaint, he asks that
this
Court
relations
declare
by
and
the
rights,
between
status,
himself
and
and
other
Bullard
legal
concerning
obligations with respect to the signing bonus paid to him
and arising out of the parties agreement as set forth in
the
employment
letter
and
later
agreement.
Defendant
argues that, as a matter of law, Vogel is obliged to repay
29
the full value of the signing bonus under the terms of the
Agreement because he was terminated “for cause” and that,
as a result, the Court should deny him declaratory relief
that provides otherwise.
was
told
“Bullard
is
Vogel takes the position that he
not
the
place
for
you”
when
his
employment was terminated and, thus, he was not terminated
for cause.
that
Pasch
He also cites, as support for his position,
announced
Vogel’s
departure
stating that “Jim [Vogel] and I
from
Bullard
by
both realized that the
move to Bullard was not a good fit for him” and that “[w]e
all wish him the very best and thank him for his time while
at Bullard.”
court
He argues that the “factual record before the
establishes
entitled
to
that,
summary
at
a
judgment
minimum,
with
Bullard
respect
to
is
not
Vogel’s
petition for declaratory judgment.”
The term “for cause” is not defined in the Agreement
and,
quite
simply,
the
Court
will
construe
against its drafter in this situation.
a
contract
See B. Perini &
Sons, Inc. v. Southern Ry. Co., 239 S.W.2d 964, 965–66 (Ky.
1951).
Here,
the
Court
accepts
that
the
Agreement
uses
plain language and that “for cause” is used in the manner
commonly accepted, meaning that one is let go for a reason,
because
of
some
action
or
inaction
unacceptable
to
the
employer because it is illegal or in direct contravention
30
of company policy or directive from a superior – not just
mere
dissatisfaction
with
performance
and
nothing
more,
unless it is defined as such in a writing.
Certainly, Vogel has testified that, during a June 24,
2011, meeting he was advised that there were concerns about
his follow-up with respect to the accidental destruction of
catalogs
before
his
tenure
and
ensuring
the
timely
preparation of new catalogs for trade shows, his decision
to involve others in the company in developing a strategic
plan
rather
researching
than
proceeding
information
on
on
his
own,
competitors
his
from
delay
in
publically
available sources, and the fact that he was not leading.
That said, Bullard’s agents told Vogel that his employment
was terminated because he was not a “good fit.”
In light
of undisputed evidence that Bullard terminated him for that
reason, the Court will not second guess it.
The Court
determines that, as a matter of law, Defendant’s motion for
summary judgment in its favor on Plaintiff’s request for
declaratory judgment in Count VI is without merit and shall
be denied.
V.
Conclusion
For
all
of
the
reasons
stated
above,
Plaintiff’s
claims in Counts I through V of his Amended Complaint fail
31
as a matter of law in light of the undisputed material
facts.
Count VI, alone, survives.
Accordingly,
IT
IS
ORDERED
(1)
that
Defendant
Bullard’s Motion for Summary Judgment [DE 71] is GRANTED IN
PART and DENIED IN PART.
ALL
FURTHER
PROCEEDINGS
IT IS FURTHER ORDERED (2) that
ARE
CONTINUED
GENERALLY
and
(3)
that defendant shall SHOW CAUSE why a declaratory judgment
shall not be entered in favor of Plaintiff with respect to
the
claim
in
Count
VI
of
the
Amended
Complaint
twenty-one (21) days of entry of this order.
This the 7th day of June, 2013.
32
within
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?