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Dennis Divenuta v. Bilcare

March 30, 2011

DENNIS DIVENUTA, PLAINTIFF,
v.
BILCARE, INC., DEFENDANT.



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

MEMORANDUM

Plaintiff Dennis Divenuta ("Divenuta"), a citizen of New Jersey, brings this diversity action against Bilcare, Inc. ("Bilcare"), a Delaware corporation with its principal place of business in Pennsylvania, alleging breach of contract, promissory estoppel, and violation of Pennsylvania's Wage Payment and Collection Law ("WPCL"), 43 Pa. Stat. Ann. §§ 260.1 et seq. Currently before me is Bilcare's motion for summary judgment under Federal Rule of Civil Procedure 56. For the reasons set forth below, I will grant Bilcare's motion in part and deny it in part.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY*fn1

This case arises from an employment relationship between Divenuta and Bilcare. In a letter dated March 31, 2008, Divenuta, a former attorney and certified human-resources professional, was offered the position of vice president of business development at Bilcare, with a base salary of $180,000 per year and an anticipated start date of April 21, 2008. (Def. Bilcare, Inc.'s Separate Statement of Undisputed Material Facts in Supp. of its Mot. for Summ. J. ("Def.'s Facts") ¶¶ 4, 10; Mem. of Law in Supp. of Def. Bilcare, Inc.'s Mot. for Summ. J. ("Def.'s Br.") Ex. 1, Letter from Kathleen M. Roesing to Dennis Divenuta (Mar. 31, 2008) ("Offer Letter"), at 1, 3.) Under the terms of the offer, Divenuta was to be awarded a one-time sign-on bonus of $20,000, payable in four equal installments. (Offer Letter at 1.)*fn2 The offer letter also provided that Divenuta would be eligible for additional incentive payments, to be calculated monthly and paid quarterly, equal to "the greater of (a) an override of 1/2 % on gross revenue (less pass-through costs) or (b) 50% of [Divenuta's] salary." (Id.) Divenuta was not guaranteed employment for any specified period of time (id. at 2--3), but the offer letter provided that if Divenuta's employment terminated "involuntarily for any reason other than cause, disability, violation or perceived violation of an Agreement with a previous employer," Divenuta would be entitled to "a severance package of six months['] salary and health benefit continuation" (id. at 2).

Divenuta signed the offer letter, acknowledging that the "letter does not constitute either an employment contract or a guarantee of employment for a specified period of time." (Id. at 2--3.) The letter also cautioned that "all benefits and company policies may be subject to change." (Id. at 2.)

Divenuta alleges that before accepting this offer, he "repeatedly advised" Bilcare's vice president of human resources that he had a severely disabled child and that, because of the high expenses associated with caring for his child, he "would require timely payment of all compensation promised," and alleges that the vice president of human resources assured him that all payments would be made in a timely manner. (Pl.'s Resp. to Def.'s Statement of Facts in Supp. of Def.'s Mot. for Summ. J. ("Pl.'s Resp. to Def.'s Facts") ¶ 37.) Divenuta further asserts that during the negotiation process, Bilcare "repeatedly guaranteed [him] the $25,000 incentive payments." (Pl.'s Resp. to Def.'s Facts ¶ 34; Pl.'s Mem. of Law in Opp'n to Def.'s Mot. for Summ. J. ("Pl.'s Br.") Ex. A, Dep. of Dennis Divenuta (June 23, 2010) ("Divenuta Dep."), at 209:6--210:8, 293:8--294:5.)*fn3

According to Divenuta, Bilcare paid the first three installments of his sign-on bonus-albeit late-but failed to pay the fourth and final installment. (Pl.'s Resp. to Def.'s Facts ¶ 22; Divenuta Dep. at 272:13--274:4.)*fn4 Bilcare made one quarterly incentive payment of $25,000 to Divenuta, but did not make any other incentive payments to him during the course of his employment. (Def.'s Facts ¶ 21.)

On February 4, 2009, Bilcare sent Divenuta an e-mail notifying him that "[d]ue to a business based decision to re-evaluate the salaries of all Bilcare PPR staff based on current financials," Divenuta's salary would be reduced from $180,000 to $100,000 per year, effective March 1, 2009. (Def.'s Br. Ex. 9 at 1--2.) The e-mail stated that "[t]his notice serves as notification that your salary will be decreased as stated above. Your acceptance or declination must be indicated on the attached form . . . . If you decide not to accept this revised salary, we will consider this your voluntary resignation from Bilcare PPR." (Id. at 2.) Although Divenuta contends that he did not accept this salary reduction, he continued to work at Bilcare after his salary was reduced. (Def.'s Facts ¶ 20; Pl.'s Resp. to Def.'s Facts ¶ 20.)

On September 21, 2009, Bilcare notified Divenuta that the company was terminating his employment for cause. (Def.'s Br. Ex. 11.)

On August 11, 2009, while Divenuta was still employed at Bilcare, he filed this action, alleging that Bilcare had breached the terms of his offer letter by reducing his salary and by failing to pay him the sign-on bonus and incentive compensation to which he was entitled. Divenuta also sought recovery under the doctrine of promissory estoppel and under the WPCL.

After discovery, Bilcare filed this motion for summary judgment.

II. STANDARD OF REVIEW

A motion for summary judgment will be granted only "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).*fn5 "Facts that could alter the outcome are 'material,' and disputes are 'genuine' if evidence exists from which a rational person could conclude that the position of the person with the burden of proof on the disputed issue is correct." Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 743 (3d Cir. 1996). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'"

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting First Nat'l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289 (1968)).

The moving party bears the initial burden of showing that there is no genuine issue of material fact and that it is entitled to relief. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its initial burden, the nonmoving party must present "specific facts showing that there is a genuine issue for trial," Matsushita, 475 U.S. at 587 (internal quotation marks omitted), offering concrete evidence supporting each essential element of its claim, see Celotex, 477 U.S. at 322--23. The nonmoving party must show more than "[t]he mere existence of a scintilla of evidence" for elements on which it bears the burden of production, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986), and may not "rely merely upon bare assertions, conclusory allegations or suspicions," Fireman's Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982).

When a court evaluates a motion for summary judgment, "[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255. "Summary judgment may not be granted . . . if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed." Ideal Dairy Farms, 90 F.3d at 744 (internal quotation marks and citations omitted). "[A]n inference based upon a speculation or conjecture," however, "does not create a material factual dispute sufficient to defeat entry of summary judgment." Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n.12 (3d Cir. 1990).

III. DISCUSSION

Seeking relief under the theories of breach of contract, promissory estoppel, and violation of the WPCL, Divenuta claims that he is entitled to damages for the reduction in his salary and for Bilcare's failure to pay the incentive compensation that he alleges was owed to him under the terms of his offer letter.

A. Breach-of-Contract Claims

Divenuta claims that Bilcare breached its contract with him by reducing his salary and by failing to pay incentive compensation owed to him.*fn6 In addition to seeking payment of the amounts he alleges are owed to him under the terms of his offer letter, Divenuta seeks compensatory damages for the decline in his credit rating, which he contends was caused by Bilcare's failure to pay compensation owed to him.

1. Reduction in Salary

Divenuta claims that, under the terms of his offer letter, he was promised a salary of $180,000 and that Bilcare breached its contract with him by reducing his salary to $100,000. Bilcare argues that Divenuta's claim must fail because Divenuta was an at-will employee and as such he was subject to prospective changes in the terms of his employment, including a reduction in his ...


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