The opinion of the court was delivered by: WEINER
Two separate actions have been consolidated for trial before this court. Both actions arise from the same factual basis. The respective plaintiffs have filed motions for summary judgment, and have agreed to a Stipulation of Facts for purposes of the summary judgment motions only. The parties have stipulated that New Jersey law is controlling. The general background of the cases as set forth in the Stipulation of Facts is as follows.
John H. Doolan and Thomas H. Doolan ("Doolans"), residents of Pennsylvania, entered into a purchase agreement with Coutinho, Caro & Co., Inc. ("CCC"), a German corporation, on October 26, 1979, whereby CCC agreed to purchase shares of stock and assets of certain companies ("Doolan interests") in which the Doolans were partners, stockholders and/or officers. On that date the Doolan interests merged into Doolan Steel Corporation ("DSC"). DSC is a Delaware corporation with its principal place of business in New Jersey and is a wholly owned subsidiary of CCC. The Doolans were retained as corporate officers and as trustees of the pension and profit sharing plans already in effect. In the purchase agreement a variety of representations and warranties were made by both parties concerning assets and liabilities. These extended beyond October 26, 1979, for the full period of any statute of limitations.
On April 27, 1983, the Doolans retired from employment with DSC, the terms of which were embodied in a letter agreement. The terms of the letter agreement stipulate that each of the Doolans was entitled to payment of benefits from the DSC Pension Plan and the DSC Profit Sharing Plan.
The action brought by the Doolans requests liquidated damages from DSC for its allegedly untimely payment of profit sharing plan retirement benefits per the letter of agreement signed by the parties on April 27, 1983. The action brought by CCC requests reimbursement from the Doolans for workmen's compensation retroactive premium adjustment insurance expenses paid by DSC allegedly for the pre-acquisition liability of the Doolans.
For the reasons which follow we grant the motion of the Doolans for summary judgment in an amount determined by this court, and deny the motion of CCC for summary judgment.
To prevail upon a motion for summary judgment the moving party must conclusively demonstrate to the court's satisfaction that there exists no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law, Fed.R.Civ.P. 56(c), Major's Furniture Mart, Inc. v. Castle Credit Corp., Inc., 602 F.2d 538, 539 (3d Cir.1979); Drexel v. Union Prescription Centers, Inc., 582 F.2d 781, 784 (3d Cir.1978). We must view the evidence in the light most favorable to the party opposing the motion. Bishop v. Wood, 426 U.S. 341, 347 n. 11, 96 S. Ct. 2074, 2079 n. 11, 48 L. Ed. 2d 684 (1976); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 994, 8 L. Ed. 2d 176 (1962); Drexel v. Union Prescription Centers, Inc., supra, at 784.
MOTION OF THE DOOLANS FOR SUMMARY JUDGMENT
The Stipulation of Facts entered into by the parties details that on April 27, 1983 the Doolans retired from employment with DSC. The terms of the retirement were embodied in a letter agreement which detailed the procedures to be followed by the Doolans and DSC. The Doolans were entitled to both pension and profit sharing benefits.
On April 25, 1983, at the request of DSC officers, John Wegmann, treasurer/controller of DSC, transmitted a letter to Connecticut General Life Insurance Company ("CG") requesting disbursements in the amount of $869,048 from the DSC Pension Plan and $299,000 from the DSC Profit Sharing Plan for benefits payable to the Doolans. In that letter, Wegmann stated that he had to estimate the Profit Sharing Plan values because he had not yet received from CG the 12/31/82 statement of the current valuations of the Profit Sharing Plan. On April 29, 1983, DSC received from CG a letter enclosing the 12/31/82 Profit Sharing Plan account information. On May 3, 1983, Mr. Weberbauer, vice-president of DSC, sent a letter to CG requesting a detail of both interest and charges for the Profit Sharing Plan accounts because the net interest credited for 1982 as per the yearly statement was far below the stated interest rates for the year.
On or about May 18, 1983, DSC received from CG the requested Pension Plan and Profit Sharing funds. The profit sharing funds were deposited on June 3, 1983 by DSC into a Merrill Lynch Ready Assets Trust account to the benefit of the "Doolan Steel Corp. Profit Sharing Plan." On June 23, 1983, the Doolans were paid their pension plan benefits.
On July 7, 1983, CG notified Mr. Weberbauer by letter that it was in the process of calculating the interest credited to the Profit Sharing Fund as of 12/31/82. A copy of CG's letter was sent to John Doolan on July 11, 1984.
On or about August 19, 1983, Mr. Hueskin, an officer of DSC sent a letter to John Doolan in which he stated that the workmen's compensation assessments paid by DSC were due from the Doolans and that he hoped the matter could be resolved before the final numbers on the Profit Sharing funds were received from CG.
On September 23, 1983, DSC received the updated valuation statements for the Profit Sharing Plan from CG. On September 27, 1983, DSC sent separate checks to the Doolans amounting to $299,114.37 representing disbursement of the profit sharing benefits.
There are no genuine issues of fact in the case sub judice when the evidence is viewed in the light most favorable to the party opposing the motion. Both parties agree that the letter agreement entered into by the parties on April 27, 1983, for the Doolans retirement is valid, and we must therefore accept it as the final expression of the parties' agreement, Restatement of Contracts 2d, Sec. 209. But it is at this point that the parties disagree.
Plaintiffs (Doolans) contend that the terms of the letter agreement, paragraph 4, detail the procedures to be followed for the distribution of the pension and profit sharing funds. By these terms the profit sharing plan distribution was to be valued by Mr. Wegmann, the controller-treasurer of DSC, subject only to verification by DSC's outside accountants at the request of the parties. The pension plan valuation was to be performed by the outside accountants. By April 25, 1983, both valuations were completed and on that date Mr. Wegmann mailed a request for both amounts to CG. CG promptly remitted these funds and on June 23, 1983, the pension plan benefits were distributed to the Doolans, but on June 3, 1983, the Profit Sharing funds were deposited to a Merrill Lynch account under the control of DSC.
The Doolans contend that the time frame for the profit sharing distribution was dependent upon the pension plan distribution. They specifically point to language in paragraph 4 which states that "payment of your lump-sum benefits under the DSC Profit Sharing Plan will be made no later than the time payment is made under the Pension Plan." As pension benefits were paid on June 23, 1983, plaintiffs contend that this was also the due date for distribution of the profit sharing benefits.
The Doolans were not paid their profit sharing benefits until September 27, 1983. Therefore, they contend that the liquidated damage clause (paragraph 7) of the letter agreement must be given ...