United States District Court, D. New Hampshire
STEVEN J. McAULIFFE, District Judge.
Following a jury verdict in plaintiff's favor, the defendants, Zurich American Insurance Company, American Zurich Insurance Company, and Universal Underwriters Insurance Company (collectively "Zurich"), moved for judgment as a matter of law with respect to each of the plaintiff's claims. See Fed.R.Civ.P. 50(b). Walsh objects and moves for an award of attorneys' fees. After hearing the matter, and for the following reasons, the court denies Zurich's motion for judgment as a matter of law, and grants Walsh's motion for attorneys' fees.
The defendants seek judgment as a matter of law on plaintiff's breach of contract and wage claims on grounds that 1) the record fails to support the necessary finding that the parties achieved a meeting of the minds with respect to an August 2008 incentive payment plan (that the jury found constituted a binding contract); 2) the jury's finding that Zurich withheld wages from Walsh "willfully and without good cause" is inconsistent with New Hampshire law and is not supported by the evidence of record; and 3) even under a subsequent, February 2009, incentive plan, there "is simply no basis upon which to find that Walsh was entitled to payments" based upon a deal Zurich entered with the Great American Insurance Company ("GAIC").
In response to Walsh's motion for attorneys' fees, Zurich echoes its motion for judgment notwithstanding the verdict, arguing that, because there is insufficient evidence to support Walsh's wage claim, and no evidence tending to show that Zurich's failure to pay the contested amount was "[willful] and without good cause, " Walsh is not entitled to attorneys' fees under the governing state statute: N.H. Rev. Stat. Ann. ch. 275:53.
The jury heard evidence supporting facts consistent with the verdict as follows. After leaving Zurich's employment in October of 2010, Walsh filed suit seeking wages he claimed he was owed as an employee of Zurich. Walsh testified that Zurich proposed, and he accepted, a salary incentive compensation plan in August of 2008 (the "Incentive Plan"). Walsh thereafter sold insurance products in reliance on the Incentive Plan's terms. Specifically, Walsh claimed he was entitled to be compensated under the Incentive Plan for a significant deal that he began negotiating in September of 2008 with Automobile Protection Corporation ("APCO"), and that he closed in December of 2008. The APCO deal would generate approximately $132, 000, 000 in premiums for Zurich each year for up to five years, and generated approximately $77, 000, 000 in premiums in 2009. Under the Incentive Plan, Walsh was entitled to incentive salary payments equivalent to 1.125% of all premiums realized from sales made through the alternative distribution channel ("ADC") program he managed. The APCO deal generated premiums realized from sales made through the ADC program.
Zurich refused to pay Walsh on the APCO deal under the terms of the Incentive Plan. Instead, it paid Walsh under a different plan that it claims was a "final" incentive plan agreed to by Walsh and Zurich in February of 2009, after Walsh closed the APCO deal (the "Replacement Plan"). The Replacement Plan provided for a much lower incentive compensation rate - only $1, 000 per $1, 000, 000, or.1%, of ADC premiums realized. Walsh also claimed incentive payments related to a subsequent deal with GAIC pursuant to the terms of the Replacement Plan, but Zurich refused to make that incentive payment as well.
Before giving the case to the jury, the court granted Zurich's motion for judgment as a matter of law on a claim by Walsh for wrongful termination. After four days of trial, the jury found by special verdict "that defendants breached the August 2008 Incentive Plan by failing to fully compensate [the plaintiff] for the APCO deal." The jury also found that Zurich withheld from Walsh "compensation that he was due for the APCO deal willfully and without good cause." The jury further found that Zurich "breached the February 2009 [Replacement] Plan by failing to fully compensate [Walsh] on the GAIC deal" and, thereby, withheld from Walsh "compensation that he was due for the GAIC deal willfully and without good cause."
"The standard for granting a Rule 50 motion [for judgment as a matter of law] is stringent." Malone v. Lockheed Martin Corp., 610 F.3d 16, 20 (1st Cir. 2010). A court may set aside a jury's verdict and award judgment as a matter of law only "when the evidence points so strongly and overwhelmingly in favor of the moving party that no reasonable jury could have returned a verdict adverse to that party." Id. In making that determination, the court must "view the evidence in the light most favorable to the verdict, making no determination of [its] own as to the credibility of witnesses or the weight of the evidence." Rodriguez-Garcia v. Miranda-Marin, 610 F.3d 756, 765 (1st Cir. 2010). The court may not, therefore, "displace a jury's verdict merely because [the court] disagrees with it or would have found otherwise in a bench trial." Ahern v. Scholz, 85 F.3d 774, 780 (1st Cir. 1996) (internal citation omitted). Put differently, Rule 50 relief is warranted only if the evidence "is so one-sided that the movant is plainly entitled to judgment, for reasonable minds could not differ as to the outcome." Gibson v. City of Cranston, 37 F.3d 731, 735 (1st Cir. 1994); see also Murray v. Ross-Dove Co., 5 F.3d 573, 576 (1st Cir. 1993) (proper to allow motion where evidence "would not permit a reasonable jury to find in favor of the plaintiffs on any permissible claim or theory"). Under the rule, the burden is on the moving party to "specify... the law and facts that entitle [it] to the judgment." Coons v. Indus. Knife Co., 620 F.3d 38, 44 (1st Cir. 2010) (quoting Fed.R.Civ.P. 50(a)(2)).
Zurich asserts that the record evidence fails to support the jury's verdict in favor of Walsh. The jury was carefully instructed that it must find that the parties reached a meeting of the minds with respect to the Incentive Plan (which point Zurich vigorously contested) before it could be considered an enforceable contract between Walsh and Zurich. The jury was also instructed that for Walsh to be entitled to payment under the subsequent Replacement Plan for the GAIC deal, the GAIC deal must have come within the scope of the plan's terms, and Walsh or someone under his management or control must have played a role in producing the deal. And, the meaning of the phrase "willfully and without good cause, " as it is used in New Hampshire's wage and hour law, was explained to the jury.
After having been fully instructed, the jury expressly found that Zurich breached the Incentive Plan by failing to fully compensate Walsh for the APCO deal; that Zurich breached the Replacement Plan by failing to fully compensate Walsh for the GAIC deal; and, on both counts, that Zurich withheld compensation owed Walsh both willfully and without good cause. The evidence produced at trial adequately supports the jury's verdict and Zurich has failed to demonstrate otherwise.
Meeting of the Minds as to the Incentive Plan
The defendants contend that there is insufficient evidence in the record to support the jury's finding that Zurich and Walsh reached a meeting of the minds with respect to the terms of the Incentive Plan such that it became the operative contract controlling Walsh's incentive payment for the APCO deal (which closed in December of 2008).
As determined by the Supreme Court of New Hampshire, and as explained in the jury instructions, an "employer's unilateral promulgation to present at-will employees of a statement of intent to pay and provide such economic benefits may be recognized under New Hampshire law as an offer to modify their existing relationship by means of a unilateral contract, which offer is subject to such an employee's acceptance by continued performance of his duties." Panto v. Moore Bus. Forms, Inc., 130 N.H. 730, 731 (1988). Because "compensation and fringe benefits are usual incidents of this contractually governed economic relationship, it is generally true that a statement on these subjects by the party who pays the compensation can be viewed objectively... as meant to be a subject of binding agreement." Id. at 735 (citation omitted). As with any other contract, for an offer and acceptance to form a unilateral contract, there "must be a meeting of the minds in order to form a valid contract. A meeting of the minds is present when the parties assent to the same terms, " which "is analyzed under an objective standard." Chisholm v. Ultima Nashua Indus. Corp., 150 N.H. 141, 145 (2003) (citations omitted).
To support its contention that the parties never reached a meeting of the minds with respect to the Incentive Plan, Zurich relies on the same arguments it made to the jury at trial - arguments that were plainly (and supportably) rejected. First, Zurich contends that the written Incentive Plan that Walsh claimed he and various Zurich officers and agents agreed upon could not have been relied upon as evidence of a "meeting of the minds" because the document was plainly marked "draft" at the bottom of each page.
Second, defendants point to trial evidence, and an alleged absence of testimony from Walsh and other current and former Zurich executives, to support its argument that no reasonable jury could have concluded that the parties reached a meeting of the minds as to the Incentive Plan. For example, defendants contend that Walsh's testimony did not establish that the parties reached a meeting of the minds because, in an August 14, 2008, meeting, at which Walsh claims that he, Kane (an executive with salary setting authority), and Stoothoff (Walsh's immediate superior) met to finalize his sales goals and incentive percentages, the only specific language Walsh attributed to Kane was, "Here's how we're thinking of paying you. Does this look right, " as he handed Walsh an early copy of the Incentive Plan. (emphasis supplied). That statement, the defendants argue, reflects ongoing negotiations, not a meeting of the minds.
Zurich also points to the following statements, among others, adduced at trial from Walsh that it claims support its theory that the Incentive Plan was never finalized: (1) Walsh testified he was "not sure" whether the Incentive Plan had been "implemented... through the company's incentive group"; (2) "[w]hether [the Incentive Plan] was finalized in Zurich's mind because it didn't go through [human resources] or anything else, I can't attest to that"; (3) "Mr. Stoothoff and Mr. Kane may have - once that meeting ended and we agreed to a plan, they may have had other things to do with it"; and (4) "I never heard of anything being final. I mean, that's backroom [human resources] or accounting. Whoever does that, I don't know."
The defendants further argue that Stoothoff admitted on cross examination that the Incentive Plan was not final, that he had no authority to bind Zurich to the agreement, that he had never received approval from Kane to finalize the agreement, and that the plan was still in draft form when he left Zurich at the end of August 2008. Similarly, according to Zurich, Diane Eldridge, who worked in Zurich's human resources department, confirmed during her testimony that the Incentive Plan was a draft that had never been approved by Zurich, and Kane gave no testimony that he gave final approval to implement the Incentive Plan.
The defendants also argue, seemingly for the first time in this motion, and certainly more explicitly than they argued at trial, that an August of 2008 email exchange among Walsh, Kane, Stoothoff, and Eldridge, in which Walsh asked to reconcile the definition of "alternative distribution channel" as it was used in one part of the plan, evidences a rejection of the Incentive Plan and a counteroffer by Walsh that Zurich never accepted. Zurich further alleges that the contrast in the volume and specificity of the confirmation emails exchanged regarding the Replacement Plan compared ...