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Harris v. Vitran Express, Inc.

United States District Court, W.D. Pennsylvania, Pittsburgh.

August 25, 2017

DARRELL HARRIS, Plaintiff,
v.
VITRAN EXPRESS, INC., VITRAN EXPRESS CANADA, INC., VITRAN CORPORATION, INC., DATA PROCESSING, LLC, HR-1, CORPORATION, CT TRANSPORT, INC., Defendants,

          MEMORANDUM OPINION [1]

          CYNTHIA REED EDDY UNITED STATES MAGISTRATE JUDGE

         I. INTRODUCTION

         Presently before the court is Plaintiff Darrell Harris' petition for damages and fees. The petition has been fully briefed and a hearing on the matter was held on January 20, 2017. For the reasons that follow, Plaintiffs petition is granted in part and denied in part.

         II. PROCEDRUAL POSTURE

         Because the court writes primarily for the parties, only the background necessary for the disposition of the fee petition will be addressed here. The court previously granted summary judgment in Plaintiffs favor for his breach of contract claims for Vitran Express Inc.'s ("VEI's") failure to pay severance and retention compensation and on his Pennsylvania Wage Payment and Collection Law ("WPCL") claim pursuant to Federal Rule of Civil Procedure 56(f), after giving the parties the opportunity to brief the matter, and the matter having been so briefed, but did not make a determination as to the amount of damages to be awarded to Plaintiff under the Employment Agreement and Retention Incentive Agreement. Consistent with that decision, the court ordered the parties to brief the issue of attorneys' fees and damages applicable under the WPCL along with other costs and prejudgment interest. Each topic will be discussed separately.

         III. FINDINGS OF FACT

         a. Harris' Termination of Employment and Relevant Employment Agreement Provisions Regarding Damages

         1. Plaintiff, Darrel Harris, was recruited by Defendant Vitran Express, Inc, ("VEI") with six other senior executives to lead a turnaround of VEI's troubled United States truck-based freight operations.

         2. Plaintiff began his employment with VEI on August 1, 2012 in the capacity of Senior Vice-President of Sales and Marketing/Pricing.

         3. On January 23, 2013, Plaintiff and VEI entered into an Executive Employment Agreement ("Employment Agreement").

         4. The Employment Agreement provided Plaintiff with an annual base salary of $250, 000 which was to continue until Harris' employment with VEI otherwise ended pursuant to the terms and conditions set forth in the Employment Agreement.

         5. Paragraph 3(b)(ii) of Plaintiff s Employment Agreement would entitle Plaintiff to twelve (12) months' worth of compensation ($250, 000) if his employment was termination "without case."

         6. By letter dates October 17, 2013 from Moroun to Plaintiff, Moroun terminated Plaintiffs employment.

         7. By Memorandum Opinion dated November 2, 2016, the Court held that VEI terminated Plaintiff on October 17, 2013 "without cause, " as that term is defined in the Employment Agreement.

         b. Retention Compensation

         8. On June 25, 2013, VEI, Vitran Corporation Inc. and Plaintiff entered into a Retention Incentive Agreement.

         9. The Retention Incentive Agreement provides that Plaintiff is entitled to an amount of $62, 500 if he remained continuously employed with VEI through December 31, 2013, and an amount of $125, 000 if he remained continuously employed with VEI through April 30, 2014.

The agreement provides in pertinent part that:
(c) . . . the Executive shall remain entitled to receive the First Retention Payment and the Second Retention Payment if the Executive ceases to be an active employee of the Company or an affiliate of the Company at any time prior to the Second Retention Date [(or April 30, 2014)]: (i) on account of the Executive's termination by the Company or its applicable affiliate without "cause for termination" in which case payment of both the First Retention Payment and the Second Retention Payment, if and to the extent not then paid, shall be made by the Company or, failing payment by the Company, by Parent to the Executive within five (5) business days after the date of the Executive's termination by the Company or its applicable affiliate[.]

Retention Incentive Agreement § l(c)(i) [ECF No. 75-1].

         c. Severance Compensation

         10. The Employment Agreement provides for two separate severance amounts: (1) if Plaintiff was terminated "without cause, " he is "entitled to a lump sum amount equivalent to twelve (12) months' compensation[;]" and (2) if Plaintiff was terminated "without cause" within 365 days following a "change of control" of VEI, Plaintiff is entitled to "a lump sum amount equivalent to eighteen (18) months' compensation." Employment Agreement [ECF No. 71-5] at § 3(b)(iii), (b)(iv).

         11. While there are different definitions of "change in control" under the agreement, Plaintiff relies on Section 3(c)(B)(ii) in arguing he is entitled to eighteen months' severance compensation:

(B) as a result of a takeover bid, merger, consolidation or other business combination, or sale of assets of the Parent, that in each case is supported by a majority of the directors of the Parent, . . . (ii) the persons who were the directors of the Parent immediately before the transaction, cease to constitute a majority of the board of directors of the Parent either directly, or indirectly, as a result of the applicable transaction[.]

Id. at § 3(c)(B)(ii).

         12. Section 2(a) of the Employment Agreement defines "Parent" as Vitran Corporation, Inc., a Canadian corporation.

         13. On October 7, 2013, and pursuant to the Stock Sale and Purchase Agreement, Data Processing, LLC purchased the stock of Vitran Corporation - a Nevada corporation - from Parent VEI.

         14. Mr. Moroun is the sole owner/member of Data Processing, LLC.

         d. The Butler County Action

         15. Prior to Plaintiff filing the present federal action, VEI filed an Action for Declaratory Relief in the Court of Common Pleas of Butler County on November ...


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