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Robert Reiser & Co. v. Scriven

United States District Court, D. Massachusetts

September 1, 2016

ROBERT REISER & COMPANY, Plaintiff/Counterclaim-Defendant,
v.
SCOTT SCRIVEN, Defendant/Counterclaim-Plaintiff.

          MEMORANDUM AND ORDER ON ROBERT REISER & COMPANY'S MOTION FOR SUMMARY JUDGMENT

          F. Dennis Saylor IV United States District Judge

         This is a contract dispute arising out of an employment termination. Jurisdiction is based on diversity of citizenship. Plaintiff Robert Reiser & Company has brought suit against defendant Scott Scriven, a former employee, alleging claims for breach of contract, conversion, and breach of the implied covenant of good faith and fair dealing. Scriven has brought counterclaims against the company alleging claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and retaliation.

         Reiser has moved for summary judgment on its breach of contract and conversion claims and all of Scriven's remaining counterclaims. Reiser has also moved to strike certain portions of an affidavit filed by Scriven under the “sham affidavit” rule. For the following reasons, both the motion to strike and the motion for summary judgment will be granted in part and denied in part.

         I. Background

         A. Factual Background

         The following facts are either undisputed or taken in the light most favorable to Scriven as the non-moving party.

         Plaintiff Robert Reiser & Company (“Reiser”) is a supplier of food processing and packaging equipment located in Canton, Massachusetts. (Dkt. 80, Def. Resp. to Pl. SMF ¶¶ 1-2). Roger Reiser is the President and Chief Executive Officer of the company. (Id. ¶ 2). George Reiser is a Vice President. (Id.).[1]

         At the beginning of 2013, defendant Scott Scriven was President and Chief Executive Officer at Weber, Inc., in Kansas City, Missouri. (Id. ¶ 3). In February 2013, Reiser company executives, including Roger and George, contacted Scriven to gauge his interest in working for the company. (Id. ¶ 4). Over the next few months, Scriven was contacted by Roger, George, and Jack Derby, the Chairman of the Board at Reiser, for the purpose of recruiting him to join the company. (See id.).

         On July 12, 2013, Reiser offered Scriven the position of Senior Vice President of Sales and Marketing, “reporting directly to Roger as CEO and President.” (Anderson Decl. Ex. 4, “Offer Letter”). The offer letter stated that should Scriven accept the position, his employment would be “at will, ” and the company could terminate his employment “at any time, for any reason, with or without notice.” (Id. at 4).

         The offer letter also included a relocation package. As part of that package, the company offered to give Scriven a “$300, 000 interest-free loan for the purchase of a new house.” (Id. at 3). The terms stated that the loan “would be a note to Reiser secured by the property”; “[i]t would be a 20 year note”; “[p]ayments would begin in [y]ear 6”; and “[i]f [Scriven] were to leave Reiser, this note would be due.” (Id.). Finally, the offer letter provided that upon termination, Scriven was entitled to six months of severance pay if the company were to recommend a separation without cause. (Id.).

         Scriven accepted the offer from the company and submitted his resignation to his former employer on July 15, 2013. (Def Resp. to Pl. SMF ¶ 7).

         In late 2013, Scriven accepted a $400, 000 loan from Reiser, which he used toward purchasing a home in Massachusetts for $405, 000. (Id. ¶ 12). Of that amount, $300, 000 was in accordance with Scriven's relocation package as outlined in the offer letter. The terms of the additional $100, 000 loan were set forth in e-mail correspondence between Scriven and Eric Olson, Reiser's Chief Financial Officer. (Id. ¶ 11). The $100, 000 was also interest-free, and it was to be paid back with the proceeds from the sale of Scriven's home in Kansas City. (Id. ¶¶ 11-12).

         In August 2013, shortly after beginning at Reiser, Scriven learned that the company did not pay overtime to non-exempt hourly employees, including service technicians. (Scriven Dep. 70-71). The issue was first raised at a strategy meeting among senior managers by Bob Fleck, a manager in Reiser's service division. (Id.). A “brief debate” was held on whether the company should, in fact, pay overtime to non-exempt employees, with Scriven advocating on the side of the employees. (Id. at 72). The discussion was ended abruptly by George, who asked whether those in favor of paying overtime were “labor lawyers.” (Id. at 73).

         In January 2014, Scriven allegedly learned that the company “routinely over-invoiced customers” on machine purchases. (Id. at 78-79). Scriven raised concerns with CFO Olson, who allegedly acknowledged the over-invoicing. (Id. at 80). According to Scriven, Olson told him that he had previously broached the subject with George, who instructed him to “mind his own business.” (Id.).

         Reiser contends that Scriven's performance fell short of the company's expectations, and that, in substance, Scriven was in over his head and unable to deliver on certain critical functions. Scriven, of course, disputes that characterization of his work. It is undisputed, however, that Chairman Derby and others met with Scriven on more than one occasion to discuss concerns over certain issues falling within Scriven's responsibilities. Derby met with Scriven in April and May 2014 to discuss the fact that hiring in sales and marketing positions was behind schedule. (Def. Resp. to Pl. SMF ¶ 14).[2] Reiser contends that Scriven met again with Derby, Roger, and George in September 2014 to discuss his performance, and that the three expressed dissatisfaction with Scriven's sales plan and requested that he provide a new, more detailed plan. (Id. ¶ 18).[3] Reiser also contends that the three men were unhappy with Scriven's “lack of depth in understanding the Reiser business.” (Anderson Decl. Ex. 7, at 2).

         Derby and Scriven met again following the company's October 2014 board meeting. (Scriven Dep. 102-03). Reiser contends that Derby identified several areas of concern with Scriven's performance, including the fact that several critical positions remained unfilled and that Scriven's discussion of the second-quarter sales plan at the board meeting had been poor. (Def. Resp. to Pl. SMF ¶ 19). For his part, Scriven testified that he remembered the meeting “revolving more around the frustration that [he] and the sales managers had with trying to meet budget numbers that nobody believed to be realistic.” (Scriven Dep. 103). A follow-up meeting was held on October 22, 2014, with Roger and George also in attendance. (Id. at 122). On October 29, 2014, Derby e-mailed Scriven, requesting that he prepare a “short term recovery plan” for sales; when Scriven asked Roger what he was looking for in the plan, Roger allegedly responded, “That's what we f-ing hired you for, ” and refused to provide Scriven with any further guidance. (Scriven Dep. Ex. 13; Scriven Dep. 143-45).

         On February 2, 2015, George and Roger terminated Scriven's employment. (Def Resp. to Pl. SMF ¶ 24). During the meeting, Roger and George told Scriven they would pay his severance, but did not discuss whether he was being fired for cause. (Id. ¶ 26). Scriven received a $100, 000 bonus for 2014, and a partial severance payment. (Id. ¶ 30). Scriven returned to his home in Kansas City, which had not been sold; eventually, he sold his Massachusetts home for $455, 000, of which $400, 000 is being held in escrow. (Id. ¶¶ 27, 33).

         During his employment, Reiser provided Scriven with a company-owned laptop computer; after his termination, Reiser allowed him to take the laptop home in order to remove any personal information contained in it. (Id. ¶ 26). Scriven is still in possession of the laptop. (Id. ¶ 27).

         B. Procedural Background

         On April 29, 2015, Reiser filed the complaint in this action. It alleges claims for (1) breach of contract, (2) conversion, and (3) breach of the implied covenant of good faith and fair dealing. On June 23, 2015, Scriven answered and brought eight counterclaims. Of those counterclaims, only Scriven's claims for breach of contract, breach of the implied covenant of good faith and fair dealing, and retaliation remain.[4]

         Reiser has now moved for summary judgment on all claims and counterclaims. Reiser has also moved to strike certain portions of an affidavit filed by Scriven under the “sham affidavit” rule. For the following reasons, the motion to strike and the motion for summary judgment will be granted in part and denied in part.

         II. Reiser's Motion to Strike

         As an initial matter, Reiser has moved to strike from the record an affidavit submitted by Scriven and a “reference check sheet” that Scriven contends contains favorable statements made by Jack Derby concerning Scriven's performance at Reiser. For the following reasons, the motion will be granted in part as to the affidavit, and denied as to the reference check sheet.

         A. Motion to Strike Portions of Scriven's Affidavit

         Reiser has moved to strike three paragraphs of Scriven's affidavit under the “sham affidavit” rule. “When an interested witness has given clear answers to unambiguous questions, he cannot create a conflict and resist summary judgment with an affidavit that is clearly contradictory, but does not give a satisfactory explanation of why the testimony is changed.” Colantuoni v. Alfred Calcagni & Sons, Inc., 44 F.3d 1, 4-5 (1st Cir. 1994); see also Torres v. E.I. Dupont De Nemours & Co., 219 F.3d 13, 20 (1st Cir. 2000); 10A Charles Alan Wright, Arthur R. Miller, & Mary Kay Allen, Federal Practice & Procedure § 2726 (3d ed. 1998). The “sham affidavit” rule safeguards the integrity of summary judgment proceedings by preventing a party from “manufactur[ing] a dispute of fact by contradicting his earlier sworn testimony without a satisfactory explanation of why the testimony is changed.” Abreu-Guzman v. Ford, 241 F.3d 69, 74 (1st Cir. 2001).

         Reiser identifies three paragraphs in Scriven's affidavit that it contends are contradictory to his deposition testimony. The first is Scriven's statement that at a strategy meeting in August 2013, George Reiser asked whether he and Eric Olson were “labor attorneys.” (Scriven Aff. ¶ 13). That statement is not clearly contradictory to Scriven's testimony that he viewed George's statement as directed at him, Olson, and Bob Fleck, who had raised the issue at the meeting.

         The second statement is Scriven's assertion in his affidavit that he “attempted to address the overtime issue without success, which compromised my status with R. Reiser and G. Reiser.” (Scriven Aff. ¶ 14). That statement does appear to contradict his deposition testimony:

Q: Did you ever speak to anybody else [other than Gretchen O'Brien] about [the overtime issue]?
A: No.

(Scriven Dep. 76). He also further testified that neither Roger nor George ever “said anything” to him about the issue. (Id.). Scriven does not offer any explanation for the discrepancy between his affidavit and his deposition answers; accordingly, paragraph 14 of the affidavit will be struck.

         The third statement is Scriven's assertion that he raised his concerns about over-invoicing directly with Roger Reiser after first discussing the issue with Olson. (Scriven Aff. ¶ 17).[5] ...


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