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McGoldrick v. TruePosition

March 17, 2009

MICHAEL AND MARY MCGOLDRICK, PLAINTIFFS,
v.
TRUEPOSITION, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Joyner, J.

MEMORANDUM and ORDER

Before the Court is Defendants' Motion for Summary Judgment, Plaintiffs' Response in Opposition, and Defendants' Reply thereto. For the foregoing reasons, we will GRANT IN PART and DENY IN PART.

BACKGROUND

Plaintiffs Mr. and Mrs. McGoldrick are dual citizens of the United States and Ireland and currently reside in Ireland.*fn1

Defendant TruePosition is a Delaware Corporation doing business in Pennsylvania, with its headquarters in Berwyn, Pennsylvania. Defendant TruePosition, Inc. Amended and Restated 1995 Stock Incentive Plan (the "Plan") was the stock option plan in which Mr. McGoldrick participated and Defendant Administration Committee of the Plan (the "Committee") was the Committee which administered the Plan. Finally, Defendant Joseph Sheehan served as President and Chief Operating Office of TruePosition during a portion of Mr. McGoldrick's tenure with the company, including the time at which his employment was terminated.

Plaintiff Mr. McGoldrick began working for TruePosition in September 1997 as its Vice President of Sales. His employment contract included a salary of $150,000.00 a year, a bonus opportunity of 50% of his salary, and a grant of 7,500 options of TruePosition stock. Between 1997 and September 2004, Mr. McGoldrick was an at-will employee mostly working out of his home in Connecticut. In 2002, Mr. McGoldrick was promoted to Vice President of International Sales and in September 2004, Mr. McGoldrick moved to Ireland for an international assignment. Mr. McGoldrick was supervised first by Mr. Kent Sanders, who was residing in Stockholm, and later, by Mr. Joseph Sheehan, who worked in the Berywn, Pennsylvania headquarters. Between 2004 and 2005, multiple permutations of Mr. McGoldrick's foreign assignment contract were exchanged between Mr. McGoldrick and TruePosition. At no time did both parties sign the contract.

In early June 2006, TruePosition offered Mr. McGoldrick, and other current employees, a one-time cash out offer to buy stock options. In early June, Mr. McGoldrick was aware that the offer was forthcoming, but had not seen the offer and was confused about its terms, specifically about whether he would have to sign a non-compete provision. He, along with colleague Paul Czarnecki, sent an email memo to Mr. Sheehan on June 19, 2006, addressing this concern, as well as other sensitive topics. See Pl. Exh. 28. Mr. McGoldrick received the formal cash-out offer, in the form of a letter, in Ireland on June 21, 2006. Mr. McGoldrick did not immediately accept this offer. Due to the aforementioned email sent by Mr. McGoldrick to Mr. Sheehan, Mr. Sheehan, on advice of legal counsel, asked Mr. McGoldrick to come to the Berwyn office for a meeting. On June 29, 2006, after coming to Berwyn to meet with Mr. Sheehan at TruePosition headquarters, Mr. McGoldrick was terminated for failure to follow company directives. Mr. Sheehan told Mr. McGoldrick that he could not find a copy of a signed foreign assignment contract and, as such, the company was under no obligation to pay for the McGoldrick's to repatriate to the United States. Additionally, Mr. Sheehan revoked the cash out offer. See Def. Exh. 21. Within the ninety (90) days that followed, Mr. McGoldrick asked the Committee, consisting of Mark Carelton and John Orr, to allow him to accept the cash out offer. The Committee declined to entertain Mr. McGoldrick's requests.

Soon after Mr. McGoldrick was terminated, Mrs. McGoldrick called a CIGNA Benefits Representative and was told that the McGoldrick's CIGNA benefits had been terminated on June 29, 2006. According to TruePosition's practice, upon the termination of an employee, TruePosition's human resoures department completes a Personnel Action Form ("PAF") with the name of the employee and the date of the action. This PAF is sent to the payroll department who inputs the payroll information into a system maintained by ADP. This input creates an electronic fee that is transmitted to Liberty Media, TruePosition's parent company. Liberty Media sends this information to PayFlex, a third party administrator responsible for sending COBRA notices to departing employees. This Notice is sent to the employees address as it appears in the ADP system used by TruePosition's payroll. In TruePosition's system, Mr. McGoldrick's address was listed as TruePosition's headquarters in Berwyn, Pennsylvania; hence, the Notice was sent to TruePosition on or around July 21, 2006. See Def. Exh. 23. TruePosition then contends that the Notice was forwarded to the McGoldrick's in Ireland because TruePosition regularly forwarded Mr. McGoldrick's mail to Ireland. See Pl.

Exh. 21. Mr. McGoldrick never received the Notice, though he receive other mail from TruePosition. On or around January 11, 2007, Mr. and Mrs. McGoldrick received a "Certificate of Group Health Plan Coverage" from CIGNA, showing that their coverage had ended on December 31, 2006. Confused about the dates on the certificates, Mrs. McGoldrick called CIGNA Benefits and was told that TruePosition had called in the middle of December to modify the policy end date and extend it until December. Mr. Czarnecki, Mr. McGoldrick's colleague who was also terminated, contends that he did not receive a COBRA notice either. See Pl. Exh. 11, at 174.

On June 26, 2007, Mr. and Mrs. McGoldrick filed the present action against Defendants on June 26, 2007, in this Court. This Court has subject matter jurisdiction over the action due to the federal question raised as to the Consolidated Omnibus Budget Reconciliation Act of 1985, 29 U.S.C. §§ 1161, et seq. ("COBRA"), and the Employee Retirement Income Security Act, 29 U.S.C. § 1132(c)(1) ("ERISA"). Supplemental jurisdiction has been invoked over the remaining state law claims: the Pennsylvania Wage Payment and Collection Law claim and the common law claims of breach of contract, breach of fiduciary duty, and unjust enrichment.

Defendants filed their Motion for Summary Judgment on December 17, 2008, and Plaintiffs responded on January 16, 2009. Defendants then submitted a Reply on January 30, 2009.

STANDARD

Summary judgment is proper "if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). An issue is genuine only if there is a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party, and a factual dispute is material only if it might affect the outcome of the suit under governing law. Kaucher v. County of Bucks, 456 F.3d 418, 423 (3d Cir. 2006), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the non-moving party bears the burden of persuasion at trial, "the moving party may meet its burden on summary judgment by showing that the nonmoving party's evidence is insufficient to carry that burden." Id., quoting Wetzel v. Tucker, 139 F.3d 380, 383 n.2 (3d Cir. 1998). In conducting our review, we view the record in the light most favorable to the non-moving party and draw all reasonable inferences in their favor. See Nicini v. Morra, 212 F.3d 798, 806 (3d Cir. 2000).

DISCUSSION

Defendants move for summary judgment as to all remaining counts of the Amended Complaint, addressed in three categories:

(1) Claims related to the cash out offer (Count IX: Unjust Enrichment and Count X: Breach of Fiduciary Duty); (2) Claims related to costs of repatriating to the United States and other personal expenses (Count I and V: Violations of the Pennsylvania Wage Payment and Collection Law; Counts III and VII: Breach of Contract; Counts IV and VIII: Breach of Covenant of Good Faith and Fair Dealing); (3) Claims related to Mr. and Mrs. McGoldrick's COBRA benefits (Count XI: Failure to Provide Notice). Counts II and VI: Violations of the Delaware Wage Payment Collection Act have been dismissed per a Stipulation of Dismissal (Doc. No. 33) and will, accordingly, not be addressed by this Court.

I. Claims Related To the Cash Out Offer

A. Count IX: Unjust Enrichment

Plaintiff alleges unjust enrichment due to TruePosition's revocation of the cash out offer. Unjust Enrichment is a quasi-contract remedy. Such an implied contract in law "imposes a duty, not as a result of any agreement, whether express or implied, but in spite of the absence of an agreement when one party receives an unjust enrichment at the expense of another." Hershey Foods Corp. v. Ralph Chapek, Inc., 828 F.2d 989, 998-999 (3d Cir. 1987), citing Schott v. Westinghouse Electric Corp., 436 Pa. 279, 259 A.2d 443 (1969). In order to show unjust enrichment, a "claimant must show that the party against whom recovery is sought either wrongfully secured or passively received a benefit that would be unconscionable for the party to retain without compensating the provider." Hershey, 828 F. 2d at 999, citing Torchia ex rel. Torchia v. Torchia, 346 Pa. Super. 229, 233 (Pa. Super. Ct. 1985). Otherwise stated, "[t]he elements of unjust enrichment are 'benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.'" AmeriPro Search, Inc. v. Fleming Steel Co., 2001 PA Super. 325, P10 (Pa. Super. Ct. 2001), quoting Styer v. Hugo, 422 Pa. Super. 262, 619 A.2d 347, 350 (Pa. Super. Ct. 1993). As Mr. McGoldrick has the burden of persuasion at trial on this issue, this Court will examine whether TruePosition has shown that Mr. McGoldrick's evidence is insufficient to carry the elements of the claim.

Mr. McGoldrick's claim of unjust enrichment centers upon past work he has done on behalf of TruePosition and the cash out offer made by TruePosition to Mr. McGoldrick in June 2006. Specifically, Mr. McGoldrick asserts that he conferred a benefit upon TruePosition by nearly securing a lucrative deal with the Saudi Telecom Company -- one that, at the end of lengthy patent infringement litigation with the firm that was originally awarded the contract, resulted in a judgment of $45,300,000.00 for TruePosition. McGoldrick then argues that TruePosition demonstrated its appreciation of McGoldrick's work by offering to cash out his vested stock options. Finally, McGoldrick argues that it would be inequitable for TruePosition to retain the benefit of the cash out offer because he enriched them through the deal with the Saudi Company.

TruePosition argues that Mr. McGoldrick was simply doing his job by attempting to secure a deal with the Saudi Company.

TruePosition notes that this offer was made to all of its current employees, that it was specifically Mr. McGoldrick's job to secure such contracts, and additionally, that he did not, in fact, secure the Saudi contract. Further, it asserts that the cash out offer was a motivational tool, was an offer revoked before acceptance and was not accepted in the period of time set out in the original offer.*fn2 Hence, TruePosition contends that Mr. McGoldrick has not presented evidence of an ...


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