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HomeMy WebLinkAbout2010-2662 BRUCE K. BARCLAY, : IN THE COURT OF COMMON PLEAS OF Plaintiff, : CUMBERLAND COUNTY, PENNSYLVANIA : : CIVIL ACTION - LAW : v. : : No. 10-2662 BBEC, INC., : Defendant : JURY TRIAL DEMANDED IN RE: PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEADINGS and DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS BEFORE HESS, P.J. AND MASLAND, J. ORDER OF COURT th AND NOW, this 10 day of January, 2011, upon consideration of the Plaintiff’s Motion for Judgment on the Pleadings, and Defendant’s response thereto, and after oral argument by the parties, the Plaintiff’s Motion for Judgment on the Pleadings is GRANTED, and Defendant is directed to abide by the terms and conditions of the Employment Agreement with regards to the health insurance coverage of the Plaintiff by providing health insurance coverage in accordance with the terms of the agreement, at company cost, until Plaintiff either attains the age of 65 or dies. It is further ordered, upon consideration of the Defendant’s Motion for Judgment on the Pleadings, and Plaintiff’s response thereto, and after oral argument by the parties, the Defendant’s Motion for Judgment on the Pleadings is DENIED. BY THE COURT, _____________________ Kevin A. Hess, P.J. BRUCE K. BARCLAY, : IN THE COURT OF COMMON PLEAS OF Plaintiff, : CUMBERLAND COUNTY, PENNSYLVANIA : : CIVIL ACTION - LAW : v. : : No. 10-2662 BBEC, INC., : Defendant : JURY TRIAL DEMANDED IN RE: PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEADINGS and DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS BEFORE HESS, P.J. OPINION AND ORDER HESS, P.J., January 10, 2011 Before the court at this time are two motions. Plaintiff, Bruce K. Barclay, has filed a Motion for Judgment on the Pleadings. (Plaintiff’s Motion for Judgment on the Pleadings, filed June 28, 2010). Defendant, BBEC, Inc., has also filed a Motion for Judgment on the Pleadings. (Defendant’s Motion for Judgment on the Pleadings, filed September 20, 2010). Both parties filed briefs in support of, and in opposition to, the respective motions, and the case has been argued. The facts of the matter are not in dispute. On April 21, 2010, Plaintiff filed a Declaratory Judgment and Breach of Contract action against Defendant regarding health insurance benefits and coverage. (Complaint, filed April 21, 2010). On June 3, 2010, Defendant filed an Amended Answer with New Matter to Plaintiff’s Complaint. (Amended Answer, filed June 3, 2010). The complaint arises out of an Employment Agreement signed by the parties, and a true and correct copy of the agreement was attached to the complaint as Exhibit A. (Complaint, Ex. A, Admitted in Amended Answer, ¶ 5). On December 15, 2000, the parties entered into an agreement whereby Plaintiff Barclay was to become an employee of Defendant BBEC. (Complaint, ¶ 5; 2 Admitted in Amended Answer, ¶ 5). On April 9, 2008, Plaintiff Barclay voluntarily terminated his employment with Defendant BBEC. (Complaint, ¶ 9; Admitted in Amended Answer, ¶ 9). Subsequently, Barclay’s health insurance with BBEC was terminated. Voluntary termination of employment is addressed in Subsection 3(b) of the Employment Agreement and provides as follows: Voluntary Termination, Retirement, or Death. If the Employee voluntarily terminates employment, retires or dies, the Employee’s employment under this Agreement will be deemed terminated as of the date of the Employee’s voluntary termination, retirement or death and all rights of the Employee hereunder will cease as of the date of such termination and any benefits payable to the Employee will be determined in accordance with the pension, welfare, fringe benefit, expense reimbursement, salary deferral and insurance programs of the Company then in effect. (Complaint, ¶ 10; Admitted in Amended Answer, ¶ 10). Also contained in the Employment Agreement at Subsection 5(a) is a health insurance provision which provides as follows: 5. Other Benefits: (a) Health Insurance. Company agrees to provide health insurance coverage on behalf of Employee at Company cost during the Term. Further, Company agrees to provide health insurance coverage, on behalf of Employee, following the end of his employment under this Agreement at Company cost until the earlier of Employee’s death or the date Employee attains age 65. (Complaint, ¶ 7; Admitted, but denying any inference or legal conclusion, in Amended Answer, ¶ 7). Plaintiff’s complaint alleges that Subsection 5(a) requires Defendant to continue to provide health insurance coverage to Plaintiff following the end of his employment and until Plaintiff attains the age of 65 or dies, with no distinction made for voluntary or involuntary termination, and, therefore, the Defendant’s termination of his health insurance was a violation of the terms of the Employment Agreement. (Complaint, ¶ 9). Defendant contends that 3 Subsection 3(b), the voluntary termination provision, which provides that “all rights of the employee hereunder will cease as of the date of such termination. . .,” makes the termination of Plaintiff’s health insurance coverage proper, and Plaintiff is not entitled to health insurance coverage because of his voluntary retirement. (Amended Answer, ¶ 10). A Motion for Judgment on the Pleadings under Pennsylvania Rule of Civil Procedure 1034 may properly be granted in cases so free and clear of doubt that a “trial would be a fruitless exercise.” Bata v. Central-Penn Nat. Bank of Philadelphia, 423 Pa. 373, 378, 224 A.2d 174, 178 (1966). In ruling on such motions, a court must consider only the pleadings and any documents properly attached thereto. Id. at 179. Judgment on the pleadings may not be entered where material issues of fact are in dispute. Miami National Bank v. Willens, 410 Pa. 505, 507- 08, 190 A.2d 438, 439 (1963). Both parties agree that the Employment Agreement attached to the complaint is a true and correct copy of the agreement between them, and, as a result, the material facts are not in dispute. (Complaint, ¶ 5; Admitted in Amended Answer, ¶ 5). All that remains, therefore, is the interpretation of the agreement and resultant obligations of the parties. It is well-settled that the interpretation of a contract is a question of law. McMullen v. Kutz, 603 Pa. 602, 609, 985 A.2d 769, 773 (2009). Indeed, the well-established principles of contract law also guide a court’s interpretation of employment agreements, just as any other contract. Ferrer v. Trustees of University of Pennsylvania, 573 Pa. 310, 338, 825 A.2d 591, 608 (2002). In Pennsylvania, certain principles of contract interpretation are well-settled. The primary task of a court in interpreting a contract is to “ascertain the intent of the parties as manifested by the language of the written instrument.” Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 305, 469 A.2d 563, 566 (1983). When ascertaining the intent of 4 the parties, a court should derive that intention from “the entire writing and not from detached portions, it being necessary to consider every part thereof in order to resolve the meaning of a particular part as well as that of the whole.” In re Alloy Mfg. Co. Emp. Trust , 411 Pa. 492, 496, 192 A.2d 394, 396 (1963). Furthermore, if a contract is clear and unambiguous “neither oral testimony nor prior written agreements or other writings are admissible to explain or vary the terms of that contract.” Ragnar Benson, Inc. v. Hempfield Tp. Mun. Authority, 2007 Pa. Super. 28, ¶ 16, 916 A.2d 1183, 1190 (citing Lenzi v. Hahnemann Univ., 445 Pa. Super. 187, 664 A.2d 1375, 1379 (1995)). Where the contract is clear and unambiguous, therefore, its meaning is to be determined from within the four corners of the document alone. Clairton Slag, Inc. v. Department of General Services, 2 A.3d 765, 773 (Pa. Cmwlth. 2010) (citing East Crossroads Ctr., Inc. v. Mellon-Stuart Co., 416 Pa. 229, 230, 205 A.2d 865, 866 (1965)). The question of whether a contract is ambiguous is a question of law. Id. When a contract is ambiguous, a court “may examine the surrounding circumstances to ascertain the intent of the parties.” Halpin v. LaSalle University, 432 Pa. Super. 476, 481, 639 A.2d 37, 39 (1994). Simply because parties to a contract disagree on its interpretation does not unavoidably render the contract ambiguous; rather, when making the determination of whether a contract is ambiguous or not, a court “must view the contract as a whole and not in discrete units.” Id. (citing O’Brien Energy Systems, Inc. v. American Employers’ Ins. Co., 427 Pa. Super. 456, 461, 629 A.2d 957, 960 (1993)). Finally, as noted above, the general rules of contract interpretation are also fully applicable to employment agreements, just as any other contracts. Ferrer, 573 Pa. at 338. As a result, “[t]erms in one section of the contract should not be interpreted in a manner which nullifies other terms.” Flatley by Flatley v. Penman, 429 Pa. Super. 517, 521, 632 A.2d 1342, 5 1344 (1993). Illogical interpretations, therefore, are to be rejected. Id. Furthermore, “specific provisions ordinarily will be regarded as qualifying the meaning of broad general terms in relation to a particular subject.” In re Alloy Mfg. Co. Emp. Trust, 411 Pa. at 496. The Employment Agreement in the instant case, when construed as a whole, is clear and unambiguous. It is unnecessary, therefore, to refer to anything other than the agreement itself, and, as a result, judgment on the pleadings is proper. The issue is whether the Employment Agreement requires Defendant BBEC to continue to provide health insurance coverage, at company cost, to Plaintiff Barclay until he attains the age of 65 or dies, despite his voluntary termination. We hold that it does. Subsection 5(a) unambiguously provides for ongoing health insurance for the Plaintiff “following the end of his employment under this Agreement at Company cost until the earlier of Employee’s death or the date Employee attains age 65.” (Complaint, ¶ 7; Admitted, but denying any inference or legal conclusion, in Amended Answer, ¶ 7). Subsection 3(b) provides that in the event of a voluntary termination by the employee, “all rights of the Employee hereunder will cease as of the date of such termination and any benefits payable to the Employee will be determined in accordance with the. . . insurance programs of the Company then in effect.” (Complaint, ¶ 10; Admitted in Amended Answer, ¶ 10) (emphasis added). It is clear, therefore, that Subsection 3(b), the voluntary termination provision, separates out from all rights under the contract, those rights related to insurance benefits. Those “benefits payable to the Employee” which are “determined in accordance with the. . .insurance programs of the Company then in effect” are separate and distinct from “all rights of the Employee hereunder,” such as the right to a salary (Subsection 4(a)), or the right to a company automobile (Subsection 4(e)). Viewing the clauses together, and indeed, viewing the contract as a whole as we must, it is clear that the 6 intent of the parties at the time the Employment Agreement was signed was to provide health insurance at company cost, to Plaintiff, after his voluntary termination, and until he attains the age of 65 or dies. Defendant’s interpretation would mean that a voluntary termination of employment by Plaintiff would result in fewer benefits than would an involuntary termination for cause. Indeed, Defendant argues throughout its brief that “[w]hile an employee who was involuntarily terminated either for cause or for disability, would maintain his rights to health insurance coverage as provided under Section 5 of the Agreement. . .” an employee who voluntarily leaves 1 the employ of Defendant, even under good terms, is to lose his health insurance coverage. We reject, as we must, this illogical interpretation of the contract. See Flatley by Flatley, 632 A.2d at 1344. Termination for cause is defined in Subsection 3(a) of the Employment Agreement, and provides as follows: (i) the Employee is convicted of or enters a plea of guilty or nolo contendere to a felony, a crime of falsehood, or a crime involving fraud or moral turpitude, or the actual incarceration of the Employee for a period of ten (10) consecutive days; or (ii) the Employee has, in the reasonable opinion of the Board of Directors, committed an intentional act of fraud, embezzlement or theft in connection with the Employee’s duties in the course of his employment or has caused intentional damage to property of the Company or has intentionally and wrongfully disclosed Confidential Information. (Complaint, Ex. A, Admitted in Amended Answer, ¶ 5). We decline to accept an interpretation that would provide for the continuing health insurance coverage of an employee discharged for embezzlement or theft but deny the same benefit to an employee who leaves voluntarily under good terms. 1 Defendant’s Brief in Opposition to Plaintiff’s Motion for Judgment on the Pleadings, p.4. 7 ORDER th AND NOW, this 10 day of January, 2011, upon consideration of the Plaintiff’s Motion for Judgment on the Pleadings, and Defendant’s response thereto, and after oral argument by the parties, the Plaintiff’s Motion for Judgment on the Pleadings is GRANTED, and Defendant is directed to abide by the terms and conditions of the Employment Agreement with regards to the health insurance coverage of the Plaintiff by providing health insurance coverage in accordance with the terms of the agreement, at company cost, until Plaintiff either attains the age of 65 or dies. It is further ordered, upon consideration of the Defendant’s Motion for Judgment on the Pleadings, and Plaintiff’s response thereto, and after oral argument by the parties, the Defendant’s Motion for Judgment on the Pleadings is DENIED. BY THE COURT, _____________________ Kevin A. Hess, P.J. John R. Ninosky, Esquire For the Plaintiff George B. Faller, Jr., Esquire For the Defendant :rlm 8