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Cabrera v. Sun Chemical Corp.

July 30, 2007


On appeal before the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-1679-03.

Per curiam.


Argued January 9, 2007

Before Judges Kestin, Weissbard and Lihotz.

On March 10, 2003, plaintiff Carlos R. Cabrera filed a complaint to enforce the severance provisions of his employment contract with defendant Sun Chemical Corporation, and to claim damages resulting from age and ethnic origin discrimination. At the close of evidence, on defendant's motion, the trial court dismissed plaintiff's discrimination claim. The jury rendered a verdict for plaintiff on the breach of contract claim and awarded damages of $182,000.

Defendant appeals from the pre-trial order denying its motion for summary judgment and to dismiss plaintiff's contract claim, and from the denial of its post-verdict motion for judgment notwithstanding the verdict or, in the alternative, for a new trial. Plaintiff cross-appeals from the trial court's orders dismissing the discrimination claim and denying interest on his damage award. We affirm.


Defendant is an international manufacturer of chemicals and other products. Plaintiff began working as a data processor in defendant's Fort Lee headquarters in March 1968, at age twenty-two. Plaintiff worked his way up through the ranks in the information technology department (IT), and in 1997, was appointed to a newly created position of Vice President of Information Systems. Plaintiff believed his position was the equivalent of a chief information officer (CIO), although defendant's organization had no designated position with that title. Plaintiff reported directly to defendant's chief financial officer (CFO), Rudi Lenz.

Plaintiff asserted he was "responsible for the overall implementation, [] strategy and delivery of information systems." In describing his responsibilities, plaintiff testified that he "set the strategic direction of" IT for defendant, implemented defendant's IT strategy, managed its two data warehouses, and indirectly managed the IT departments of all the divisions. Plaintiff acknowledged that he did not have direct control over the day-to-day operations of defendant's approximately 185 IT personnel, and that he needed approval to act from the CFO, and sometimes from senior management, on certain important matters, including the $24 million IT budget, substantial IT purchases, and significant changes to IT strategy or policy.

Effective January 1, 2002, plaintiff and defendant entered into an employment contract for a period of twelve months, which was renewable annually. The contract stated plaintiff was an "executive officer," a term which was not defined by the document. The contract also stated that plaintiff was "to perform the duties, services and such other administrative and managerial functions as may be assigned to [him] from time to time by the board of directors . . . directly, or through officers of the Corporation," and also to perform those duties and services "subject at all times to the general supervision and direction" of the board.

The contract's termination provisions at Section 2, permitted defendant to terminate the contract by giving plaintiff twelve months' written notice, and, at Sections 9(a) and 9(b), permitted termination upon plaintiff's death or disability, a material breach by plaintiff that he failed to remedy after receiving written notice, or for cause, which was defined as dishonesty, "gross misconduct," or "acts of moral turpitude."

Section 9(c) set forth the provisions regarding plaintiff's termination of the contract, which stated:

c) This Agreement may be terminated by Executive upon the occurrence of any of the following events, in which case the Corporation shall pay to the Executive severance payments equal to twelve (12) months' current base salary and the notice and payment provisions of Section 2 shall not apply:

(1) Written notice from the Executive to the Corporation that the Corporation has breached a material provision of this Agreement and such breach is not remedied within fifteen (15) days after such notice; or

(2) If, during the term of this Agreement, Executive shall not be continued as an executive officer with a level of responsibilities, powers and authority appropriate to an executive position, the Corporation shall be deemed to have materially breached this Agreement and Executive may terminate his employment on thirty (30) days written notice to the Corporation, given within thirty (30) days after discontinuance of Executive as an executive officer of the Corporation.

During a review on January 23, 2003, plaintiff was advised of various concerns raised with his job performance. On a scale of one to five, with five being the best rating, Lenz rated plaintiff a two, stating he "needs improvement but meets or exceeds some requirements." Lenz additionally explained to plaintiff the defendant's plans to hire a CIO. Lenz also told plaintiff that he would remain the Vice President of Information Systems and would be in charge of "special projects." Plaintiff was advised that his compensation would remain unchanged and, ultimately, plaintiff would report to the CIO rather than to Lenz.

Plaintiff resigned on February 6, 2003. In his letter of resignation he cited Section 9(c)(2) of his employment contract and demanded twelve months severance pay. Plaintiff admitted he had begun contemplating a search for a new position in 2001, and had learned of and interviewed for the position he ultimately accepted prior to his 2003 performance review.


On appeal, defendant presents the following issues for our consideration:


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