Walsh v. Zurich American Insurance Company et al

Filing 36

///ORDER denying 16 defendants' motion for summary judgment. So Ordered by Judge Steven J. McAuliffe.(lat)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
James Walsh,
Plaintiff
v.

Case No. 12-cv-72-SM
Opinion No. 2014 DNH 064

Zurich American Insurance Company;
American Zurich Insurance Company; and
Universal Underwriters Insurance Company,
Defendants
O R D E R
Having carefully considered the pleadings, supporting
memoranda, exhibits, and argument of counsel during the hearing
on defendants’ summary judgment motion (document no. 16), the
court denies the motion.

The claim in this case is, essentially, that plaintiff and
his employer, Zurich American Insurance Company, agreed that he
would be paid a base salary and incentive pay during calendar
year 2009.

The incentive pay, plaintiff says, was to be paid in

accordance with a description and schedule negotiated and
delivered to him in August of 2008.

The incentive pay applied to

2009 (effective April 1, 2009), but that plan will be referred to
as the “August 2008 plan” to distinguish it from a subsequent
2009 incentive pay plan that Zurich claims governs the parties’
relationship.

The August 2008 plan included a provision for payment of up
to 1.125% of the value of insurance business written by plaintiff
(and collected by Zurich) under a new program developed by
Zurich.

Importantly, plaintiff says the August 2008 plan

included sales made under the program in 2008.

And, while Zurich

denies that the August 2008 plan ever achieved contractual
character, it does not seem to argue that, if effective as a
contract, it still didn’t cover December 2008 sales.

As it turned out, plaintiff was responsible for making a
dramatic sale (over $200 million) in December of 2008.

Plaintiff

says that after he made the sale, Zurich unilaterally imposed a
change to his incentive pay plan (the “Revised Plan”).

The

Revised Plan drastically reduced his incentive pay - from a
potential 1.125% of a total sale’s value to only $1,000.00 per $1
million of insurance sold under the new program (i.e., 0.1%).

He

asserts that he had no real choice but to acquiesce in the
unilateral change and, although he appears to have agreed to the
new terms, he argues that the change was not supported by
adequate consideration.

Consequently, says plaintiff, the

Revised Plan is not enforceable, at least not with respect to the
large December 2008 sale.

Zurich declined to pay any incentive

pay on the large sale under the August 2008 plan, but did pay

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Walsh for that sale under the Revised Plan (what Zurich calls the
“approved” plan).

Zurich says the August 2008 plan was merely a draft, was
never officially “approved,” was reflective only of ongoing
discussions, and never matured into an enforceable agreement.

In

any event, says Zurich, plaintiff agreed to the terms of the
Revised Plan long before the August 2008 plan was to become
effective.

Zurich denies that plaintiff’s sale of over $200

million dollars in insurance under the new program motivated it
to substantially alter an agreed-upon incentive pay agreement.
It insists that an incentive pay plan was not finalized or agreed
to by Zurich until early 2009 - after the sale.

This brief summary perhaps over simplifies what is a complex
legal and factual case, but the point is clear.

There are

multiple disputes with respect to material facts that preclude
entry of summary judgment.

The parties have decidedly different

versions of the critical facts, including Zurich’s policies,
customs and practices associated with setting incentive pay
generally, and, in Walsh’s case, facts related to the new program
that was under development and that he was recruited to lead.
And there are material disputes with respect to the parties’
understanding of the nature of the incentive pay (e.g., whether

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it was in the nature of commissions, or a performance bonus),
when it became payable, what sales factor into the calculation,
and when the plan terminates.

Plaintiff has the burden of proving a contractual
entitlement to the incentive pay he seeks.

While he may have a

difficult evidentiary road to travel, still, his essential claim
is that the parties reached an agreement in August 2008 with
respect to the incentive pay to be paid him in 2009, and Zurich
breached that agreement with respect to incentive pay owed him on
the December 2008 sale.

He has presented sufficient evidence to

establish that his claim will turn on the resolution of factual
disputes.

The most significant dispute, perhaps, is whether the
parties’ words and actions manifested an objective intent to be
bound by the terms set out in the August 2008 incentive pay plan
given to Walsh.

That is, what did they in fact say or do, did

their statements and actions manifest an intent to be
contractually bound by that document, and were Walsh’s
understandings and expectations reasonable?

Generally, “it is a

question of fact whether any particular conduct or actions imply
a contractual understanding.”

Bourque v. FDIC, 42 F.3d 704 (1st

Cir. 1994).

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This is not a case in which the words and actions of the
parties are so clear themselves that reasonable people could not
differ on their meaning.

Rather, this is a case in which the

evidence does not seem to point unerringly in a single direction;
it is capable of supporting conflicting inferences.
Consequently, a jury might plausibly credit Walsh’s version as to
what was said, done, and intended, given the record as currently
developed.

Id.

While Walsh’s proof at trial may come up short

(as a matter of law or fact), on this record, whether the August
2008 incentive plan constitutes a contract between Walsh and
Zurich, and whether a superceding contract effectively nullified
its provisions, is largely a matter to be determined by a finder
of fact.

See Crellin Technologies, Inc. v. Equipmentlease Corp.,

18 F.3d, (1st Cir. 1994).

Conclusion
The motion for summary judgment (document no. 16) is denied.
SO ORDERED.

____________________________
Steven J. McAuliffe
United States District Judge
April 3, 2014
cc:

Jamie N. Hage, Esq.
Damon Hart, Esq.
Christopher B. Kaczmarek, Esq.
Douglas J. Miller, Esq.
Donald S. Prophete, Esq.
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