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Cabrera v. Sun Chemical Corp.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 30, 2007

CARLOS R. CABRERA, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
SUN CHEMICAL CORPORATION, DEFENDANT-APPELLANT/CROSS-RESPONDENT.

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

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

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.

I.

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.

II.

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

POINT I. THE TRIAL COURT ERRED IN DENYING SUN'S MOTIONS BASED ON CONTRACT INTERPRETATION. POINT II.

THE TRIAL COURT ERRED IN DENYING SUN'S MOTIONS BASED ON THE ABSENCE OF AN ANTICIPATORY BREACH.

A. SUN DID NOT REPUDIATE THE CONTRACT.

B. SUN DID NOT REPUDIATE THE CONTRACT BY NOT ACCEPTING PLAINTIFF'S INTERPRETATION OF THE SEVERANCE PROVISION.

C. ONLY ACTUAL REMOVAL OF PLAINTIFF'S EXECUTIVE RESPONSIBILITIES COULD TRIGGER SEVERANCE.

POINT III. THE TRIAL COURT SHOULD HAVE GRANTED JUDGMENT N.O.V. OR A NEW TRIAL.

A. PLAINTIFF'S ADMISSIONS AT TRIAL REQUIRED THE TRIAL COURT TO GRANT SUN'S POST-TRIAL MOTIONS.

B. THE TRIAL COURT ERRED IN PERMITTING VIGNOLO TO TESTIFY ON HIS PERSONAL INTERPRETATION OF THE CONTRACT. POINT IV.

THE COURT SHOULD GRANT A NEW TRIAL ON THE CONTRACT CLAIM IF IT DOES NOT DISMISS THE CLAIM.

A. THE TRIAL COURT IMPROPERLY INSTRUCTED THE JURY THAT THE CONTRACT WAS AMBIGUOUS AND NEEDED TO BE INTERPRETED BY THE JURY.

B. THE VERDICT WAS CONTRARY TO THE WEIGHT OF THE EVIDENCE.

In support of his cross-appeal, plaintiff presents two arguments, as follows:

POINT I. THE TRIAL COURT'S DISMISSAL OF PLAINTIFF'S DISCRIMINATION CLAIM WAS ERRONEOUS.

POINT II. THE TRIAL COURT ERRED WITH REGARD TO INSTRUCTING THE JURY AS TO THE APPROPRIATE AWARD OF DAMAGES AND AS TO ITS DENIAL OF INTEREST TO MR. CABRERA.

A. THE JURY SHOULD HAVE BEEN ABLE TO CONSIDER ALL ASPECTS OF Mr. CABRERA'S DAMAGES AND THE TRIAL COURT ERRONEOUSLY LIMITED THE DAMAGE CALCULATION.

B. Mr. CABRERA WAS WRONGFULLY DENIED INTEREST ON HIS JURY AWARD.

III.

In its first point, defendant claims error in the trial court's denial of its summary judgment motion, suggesting the contract interpretation issues should never have been presented to the jury. Contending the employment agreement terms were unambiguous, defendant maintains there was no room for jury interpretation, and the trial court should have enforced the terms as written, determining there was no breach.

Ruling on defendant's summary judgment request, Judge Mecca, the motion judge, stated:

The plain language of the employment contract requires that the plaintiff demand severance only after he did not have executive responsibilities to perform. . . .

Well, from the plaintiff's point of view[,] I think the fact that a person is in a position working for a company for 35 years . . . and has a view of what his job function is, if you believe he was told that this would no longer be his function, that might be intolerable or a jury might conclude that that was an intolerable situation.

On the other hand, they [sic] may conclude to the contrary. The fact is . . . that's an issue of fact that has to be determined by a jury. I also have the case of Gr[a]y v. New York[]Newspapers[, 957 F.2d 1070, 1083 (3d Cir. 1992),] . . . where it holds that the law does not permit an employee's subjective perceptions to govern the claim of constructive discharge.

A[s] in that case[,] the plaintiff was neither terminated nor forced out of the job by Sun and he claims he suffered an adverse employment action essentially because he was told by Sun that Sun would be initiating a search for a CIO and because he was allegedly told by his manager that his only responsibilities would be these special projects.

But the plaintiff counters by saying that the reason . . . summary judgment is inappropriate is because the plaintiff's breach of contract claim should survive --in particular Paragraph 9(c)(2) -- because it's disputed whether the CFO told the plaintiff that his responsibilities would be reduced, including but not limited to . . . removal of the budgeting responsibility, clearly an executive function.

So that's an issue that has to be determined. . . . [I]n addition, it's disputed whether the CFO made clear to the plaintiff [that] the plaintiff would not be considered for the [I]FO position and that a search was already underway to fill the position.

In this case there's still a material fact issue as to whether the changes in plaintiff's employment constituted a reduction in the executive responsibilities which would trigger Paragraph 9(c)(2) of the employment contract and result in a breach of the contract by the defendant.

A request for summary judgment, should be granted only if "the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2. Summary judgment must be denied if "the competent evidential materials presented, when viewed in the light most favorable to the non-moving party in consideration of the applicable evidentiary standard, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Ibid.

We review a grant of summary judgment de novo, using the same standard applied by the trial court. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995); Turner v. Wong, 363 N.J. Super. 186, 198-99 (App. Div. 2003).

When interpreting a contract, the trial court's goal is to ascertain the "intention of the parties to the contract as revealed by the language used, taken as an entirety; and, in the quest for intention, the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain . . . ." Driscoll Const. Co., Inc. v. State, Dept. of Trans., 371 N.J. Super. 304, 313 (App. Div. 2004) (quoting Onderdonk v. Presbyterian Homes of N.J., 85 N.J. 171, 184 (1981) (other citations omitted)). Typically, the interpretation of a contract is a legal question for the court. Id. 313-14. However, if the meaning is both unclear and dependent on additional parole evidence to aid in interpretation, it should be left for the jury. Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J. Super. 78, 92 (App. Div. 2001); Great Atl. & Pac. Tea Co., Inc. v. Checchio, 335 N.J. Super. 495, 502 (App. Div. 2000). After review of the record, we concur with Judge Mecca's conclusion on this issue. Defendant's argument that no breach occurred because plaintiff retained his title as an executive and suffered no pay modification is unsupported by the contract terms, which additionally require that the executive's position be accompanied by "a level of responsibilities, powers and authority appropriate to an executive position." The record on summary judgment, when construed in the light most favorable to plaintiff, Brill, supra, 142 N.J. at 540, revealed that the contract did not define the term "executive." Plaintiff's perception that the IT restructuring resulted in a significant reduction in his job responsibilities--changing from the head of the IT department to a new unspecified assignment to oversee "special projects"--required testimony to discern what the new assignment entailed and whether the change was a sufficient reduction in responsibility to represent a demotion, thus triggering section 9(c)(2) of the employment agreement. Determination of these factual gaps was properly left for the jury's consideration. See Gilhooley v. County of Union, 164 N.J. 533, 545 (2000).

IV.

Defendant next argues its pre-trial motion to dismiss should have been granted because plaintiff remained an executive at the time he resigned, thus, dispelling plaintiff's anticipatory breach argument. "An anticipatory breach is a definite and unconditional declaration by a party to an executory contract--through word or conduct--that he will not or cannot render the agreed upon performance." Ross Systems v. Linden Dari-Delite, Inc., 35 N.J. 329, 340 (1961). Where the breaching party evidences an intent not to fulfill the contract, the opposite party may bring suit immediately without waiting for the date set for performance. Miller & Sons Bakery Co. v. Selikowitz, 8 N.J. Super. 118, 122 (App. Div. 1950).

Defendant argued at trial that plaintiff suffered no immediate change in his employment responsibilities, as the new CIO was not yet hired. In fact, the search process took nine months to complete. Therefore, no breach occurred at the time plaintiff chose to resign. Defendant also ably presented its position that plaintiff's motive in resigning was to take a new position, which provided higher compensation, a CIO title, and the opportunity to report to a CFO with whom he had great rapport, rather that stay with defendant until a new department supervisor was hired.

The factual determination of whether plaintiff's departure resulted from personal reasons or the anticipated future change in his employment responsibilities, if any, along with the question of whether any change in responsibilities constituted a sufficient reduction in the "level of responsibilities, powers and authority" to allow plaintiff to invoke Section 9(c)(2) of the employment agreement were questions properly left to the province of the jury. Judge Donohue's comprehensive jury instructions fully outlined the legal parameters and appropriately defined the factual issues for the jury to decide.

V.

Defendant claims error in the trial judge's denial of its in limine motion to bar what it characterizes as improper lay opinion testimony, and the denial of its post-verdict motion for judgment notwithstanding the verdict or a new trial on plaintiff's contract claim based on the admission of said testimony. See N.J.R.E. 602. In our de novo review, we apply the same standard for assessing the evidence as does the trial court upon a motion for a judgment notwithstanding the verdict under Rule 4:40-2. Frugis v. Bracigliano, 177 N.J. 250, 269 (2003). Similar to the standard of review for a summary judgment motion, all inferences from the evidence are to be drawn in favor of the non-moving party. Verdicchio v. Ricca, 179 N.J. 1, 30 (2004); see also Taweel v. Starn's Shoprite Supermarket, 58 N.J. 227, 236 (1971).

Biagio Vignolo, defendant's former CFO, testified on behalf of plaintiff. He stated that he had reviewed contracts similar to plaintiff's because, as CFO, he had been responsible for defendant's human resources department. Vignolo stated he was "very familiar" with the operative provisions of plaintiff's contract, which were similar to those of defendant's other executive contracts. Vignolo opined that a potential change in plaintiff's reporting relationship or responsibilities would constitute a breach of contract, although he admitted he had no personal knowledge of the terms of plaintiff's contract or defendant's reasoning to search for a CIO.

Defendant diligently challenged Vignolo's credibility on that point. No evidence disproved Vignolo's claims of similarity, providing sufficient basis for Vignolo's lay opinion testimony regarding the contract terms. Also, plaintiff's claim of a reduction in the scope of his responsibility was buttressed by the testimony of defendant's witnesses who stated that the new CIO would be charged with certain functions which generally, in the past, had been handled by plaintiff. Based upon this record, we determine Judge Donohue properly exercised his discretion in denying defendant's in limine motion and in admitting Vignolo's testimony at trial. See Dinter v. Sears, Roebuck & Co., 252 N.J. Super. 84, 92 (App. Div. 1991).

Regarding defendant's application for judgment notwithstanding the verdict or a new trial, a jury verdict is entitled to a presumption of correctness, Baxter v. Fairmont Food Co., 74 N.J. 588, 598 (1977), as a jury's evaluation of factual issues must be afforded "the utmost regard." Love v. Nat'l R.R. Passenger Corp., 366 N.J. Super. 525, 532 (App. Div.), certif. denied, 180 N.J. 355 (2004). "Only when upon examination the verdict is found to be so contrary to the weight of the evidence as to give rise to the inescapable conclusion that it is the result of mistake, passion, prejudice or partiality, may it be disturbed." Aiello v. Myzie, 88 N.J. Super. 187, 194 (App. Div.), certif. denied, 45 N.J. 594 (1965). We conclude that plaintiff provided sufficient credible evidence that the change in his reporting relationship, in conjunction with changes in his scope of responsibility, sustained the jury's verdict, which we determine was not contrary to the weight of the evidence was supported by the record as a whole. Crego v. Carp, 295 N.J. Super. 565, 577-79 (App. Div. 1996).

VI.

In light of the preceding determinations, after considering defendant's contentions raised in its final point challenging the jury instructions and arguing the verdict was against the weight of the evidence, we conclude the arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

VII.

Addressing the issues presented in plaintiff's cross-appeal, Judge Donohue concluded plaintiff presented insufficient evidence of a prima facie case of discrimination, stating: "Probably the most telling issue that I have is the plaintiff's own testimony, who [sic] indicated that he never felt there was any type of discrimination against him." The evidence does not demonstrate a cognizably reasonable belief of an improper discriminatory action by defendant sufficient to demonstrate a prima facie case. Accordingly, we conclude that the trial court appropriately granted defendant's motion to dismiss plaintiff's discrimination claim as a matter of law.

Next, plaintiff argues the trial court erred by limiting the jury instruction on damages to consideration only of the "base salary provision" of section 9(c)(2), thereby omitting other severance benefits addressed in Section 10(b)(2) of the employment contract, including the continuation of health insurance, a car allowance, and defendant's contribution to plaintiff's 401(k) plan.

When submitting its verdict, the jury determined defendant had breached the employment contract, but it did not fix the amount of plaintiff's consequential damages. Further deliberations produced the damage award. Plaintiff argues that the jury should have been given instructions to consider each element of damages allowed by the contract, which would include those items set forth in section 10(b)(2) of the contract, not simply the one year's severance provision of section 9(c)(2).

Our review discloses the trial court properly instructed the jury to consider the contract provisions when determining a damage award. Judge Donohue charged the jury that if defendant committed a material breach of the contract, it was "required to pay the plaintiff severance pay equal to 12 months of [plaintiff's] base salary and certain other benefits for a period of 12 months after the notice of termination." Additionally, the trial court related that plaintiff was claiming payment of "severance and certain other benefits provided in the employment contract," which it named as the benefits found under Section 10(b). During deliberations, the jury requested to review the instructions regarding damages. Judge Donohue re-read the instructions he had previously recited. Thus, the jury was to determine whether a breach of contract occurred and what contractual provisions applied to an applicable damage award resulting from that breach, with the understanding that plaintiff carried the burden of persuasion on each issue. It is a fair inference that the jury properly followed the instructions given and deliberated accordingly.

See Clark v. Piccillo, 75 N.J. Super. 123, 134 (App. Div. 1962).

Additionally, although the post-verdict instruction to clarify a "dollar amount" did not mention Section 10(b), we do not read the trial court's charge to suggest the original instructions had been superseded. Given that plaintiff failed to object to the post-verdict instruction at trial, we conclude no plain error is presented. R. 2:50-1.

Finally, we perceive no misapplication of discretion in the trial court's denial of plaintiff's request for prejudgment interest on the damage award. We conclude Judge Donohue's decision to deny prejudgment interest based on this record does not present "a manifest denial of justice," Musto v. Vidas, 333 N.J. Super. 52, 74 (App. Div. 2000), sufficient to warrant reversal on appeal.

Affirmed.

20070730

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