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February 4, 1991


The opinion of the court was delivered by: Brotman, District Judge:


The court has before it defendants' motion and plaintiff's cross-motion for summary judgment. Because there are material facts in dispute with regard to the breach of contract claims, summary judgment will be denied. Summary judgment will be granted on the fraudulent misrepresentation claim in favor of defendants. As to the claims asserted under the Employees Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq., the court finds that plaintiff's cause of action is time-barred and, therefore, will grant summary judgment to defendant.


Plaintiff is a former employee of JCI Data Processing, Inc. (JCI) who held the position of Vice President/Director of Marketing at the time of his resignation from the company in 1988. His amended complaint states that Victor Johnson, President and Chairman of the Board of JCI, made an offer of employment to plaintiff in late 1976 that included a promise he would receive a five percent ownership interest in the company. The agreement was not put in writing. Repeated attempts by Starr to establish the agreement in a signed writing were unsuccessful. In June 1984, plaintiff advised Johnson that he was quitting his employment, citing defendants' failure to increase his salary and to grant the promised ownership interest in writing. Starr claims that, in response, Johnson offered plaintiff a $20,000 raise, an expense account increase and a five percent ownership interest in the company if plaintiff would stay on at JCI. Plaintiff claims that Johnson told him that he would instruct his lawyer to draw up the papers for transfer of the ownership interest and plaintiff thereupon withdrew his resignation. The papers were never produced and the ownership interest never transferred.

In September 1976, JCI left its parent, Provident National Bank, and formed its own independent corporation with many of Provident's former employees. During the first year of operations, plaintiff learned that approximately 30 employees were covered under a company-sponsored pension plan that JCI created for those employees who left Provident. Plaintiff requested to be included in the plan, which request Johnson granted retroactively. The plan was formed by annually crediting each eligible employee with an amount equal to five percent of his or her base salary. Annual statements were distributed to employees that showed the total amount accumulated and credited to each employee's account. Starting in 1986, the annual statement also noted that "this fund will continue to be accrued through your retirement as a JCI employee at age 65, at which time the total dollars accumulated will be paid to you." No other documents with regard to the plan were distributed to employees.

In April 1988, plaintiff again submitted his resignation, citing defendants' continued failure to convey the five percent ownership interest and to adequately compensate him. Plaintiff's employment terminated on June 30, 1988. On April 18, 1989, plaintiff's attorney inquired as to the status of his pension account, which had a balance of approximately $26,000, and what options were available in order to receive payment. Johnson never replied.

Based on the facts above, on July 5, 1989 plaintiff filed a complaint alleging the following counts: breach of contract for failure to convey the five percent ownership interest (Count I); promissory estoppel as to the ownership interest (Count II); fraud and misrepresentation as to the ownership interest (Count III); breach of contract to establish and maintain a pension plan (Count IV); promissory estoppel as to the pension plan (Count V); breach of fiduciary obligations in violation of ERISA, 29 U.S.C. § 1104(a)(1)(A) and (B) (amended Count VII); failure to provide information in violation of ERISA, 29 U.S.C. § 1132 (Count VIII); failure to comply with applicable ERISA requirements in the establishment, operation, maintenance and funding of the pension plan (Count IX); and denial of plan benefits entitled as a matter of law (Count X).*fn1 As relief, plaintiff seeks compensatory and punitive damages, an injunction against any act which violates ERISA, other equitable and remedial relief to redress such violations, enforcement and clarification of plaintiff's rights and benefits under ERISA, relief pursuant to 29 U.S.C. § 1109 and costs and attorney's fees.

Defendant has moved the court for summary judgment on grounds that no contract to transfer an ownership interest was ever formed; the elements necessary to establish promissory estoppel are missing; the JCI retirement plan is exempt from ERISA; the statute of limitations bars plaintiff's claims for breach of fiduciary duty under ERISA; JCI did not breach its agreement to provide a retirement benefit to plaintiff; and the facts are inadequate to prove fraud and misrepresentation. Plaintiff's cross-motion seeks partial summary judgment on the ERISA claims.


The standard for granting summary judgment is a stringent one. A court may grant summary judgment only when the materials of record "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Hersh v. Allen Prods. Co., 789 F.2d 230, 232 (3d Cir. 1986); Lang v. New York Life Ins. Co., 721 F.2d 118, 119 (3d Cir. 1983). In deciding whether there is a disputed issue of material fact the court must view all doubt in favor of the non-moving party. Meyer v. Riegel Prods. Corp., 720 F.2d 303, 307 n. 2 (3d Cir. 1983), cert. denied, 465 U.S. 1091, 104 S.Ct. 2144, 79 L.Ed.2d 910 (1984); Smith v. Pittsburgh Gage & Supply Co., 464 F.2d 870, 874 (3d Cir. 1972). The threshold inquiry is whether there are "any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986).

Recent Supreme Court decisions mandate that "a motion for summary judgment must be granted unless the party opposing the motion can produce evidence which, when considered in light of that party's burden of proof at trial, could be the basis for a jury finding in that party's favor." J.E. Mamiye & Sons, Inc. v. Fidelity Bank, 813 F.2d 610, 618 (3d Cir. 1987) (Becker, J., concurring) (citing Anderson, 477 U.S. 242, 106 S.Ct. 2505, and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). Moreover, once the moving party has carried its burden of establishing the absence of a genuine issue of material fact, "its opponent must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). Thus, if the non-movant's evidence is merely "colorable" or is "not significantly probative," the court may grant summary judgment. Anderson, 477 U.S. at 249-50, 106 S.Ct. at 2510-11.

A. Breach of Contract to Transfer Ownership

The parties have conducted depositions and discovery that reveal that disputed material facts exist with regard to the five percent ownership interest. For example, plaintiff claims that Johnson told him in June 1984 that "I had earned the ownership interest, it was now mine and that he would have his lawyers draw up the papers within the next few weeks." Based on that oral promise, Starr accepted the offer and withdrew his resignation. Starr Affidavit, Plaintiff's Exhibit 1 at ¶ 9. Johnson recalls referring the stock option issue to his lawyer to put something in writing, Transcript of Johnson Deposition at 51, but he also claims that he told Starr he would give him "some rights to ownership at some time," never specifying when. Transcript of Johnson Deposition at 47.

Given these conflicting recollections, it is up to the jury to decide whether there was a meeting of the minds supported by adequate consideration. Defendants' argument that the parties never agreed on all of the essential terms relating to transfer of the ownership interest and, therefore, no contract existed, is countered by Starr's recollection that the ownership interest would be transferred without condition or restriction, thus obviating the need to express the form of transfer. In addition, all prior discussions between the parties had been with respect to the transfer of stock. Viewing all doubt in favor of the non-moving party, the court finds that material issues of fact are in dispute. Summary judgment on the breach of contract claim as to the five percent ownership issue will be denied.

B.  Promissory Estoppel

Defendant contends that plaintiff's factual scenario does not meet the legal requirements of promissory estoppel, i.e., (1) a clear and definite promise by the promisor (2) with the expectation that the promisee will rely thereon, (3) the promisee does in fact reasonably rely on the promise and (4) promisee incurs a definite and substantial detriment in reliance on the promise. Restatement of Contracts (Second), ยง 90. At most, defendant's argument has raised disputed issues of material fact for the jury to decide. Plaintiff has shown sufficiently all the ...

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