Astra USA, Inc. v. Bildman

13 Mass. L. Rptr. 686
CourtMassachusetts Superior Court
DecidedDecember 19, 2000
DocketNo. 980580C
StatusPublished
Cited by1 cases

This text of 13 Mass. L. Rptr. 686 (Astra USA, Inc. v. Bildman) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Astra USA, Inc. v. Bildman, 13 Mass. L. Rptr. 686 (Mass. Ct. App. 2000).

Opinion

Hinkle, J.

These consolidated cases arise out of the relationship between Astra USA, Inc. (“Astra”) and Lars P.E. Bildman, its former president, Chief Executive Officer and a director.3 Bildman’s motion for partial summary judgment addresses two of Astra’s claims in Civil Action No. 98-0580-C. First, Bildman argues that summary judgment is warranted on Astra’s declaratory judgment request that it properly rescinded his employment contract (Count IV). Second, Bildman argues for summary judgment on Astra’s claim that he should reimburse Astra for expenses incurred in connection with its settlement of a Title VII suit filed by the Equal Employment Opportunity Commission (“the EEOC”).4 After a hearing, for the following reasons, the court ALLOWS Bildman’s motion.

BACKGROUND

Except where noted, the following facts are undisputed in the summary judgment record.

In 1981, Astra hired Bildman as its president and Chief Executive Officer and appointed him to its Board of Directors. On June 15, 1993, Astra entered into a new written employment agreement with Bildman, effective July 1 of that year. From 1993 until his suspension in April 1996, Bildman continued as Astra’s president, CEO and as a director.

During negotiations with Bildman regarding that employment contract, no Astra representative asked him about his personal conduct, and Bildman made no representations about it. The contract itself also made no reference to such conduct.

On April 28, 1996, Astra’s Board suspended Bildman and began an investigation into his conduct. In June 1996, Astra terminated Bildman and rescinded his employment contract.

The summary judgment record is replete with references to Bildman’s misconduct, allegedly occurring between 1987 and 1996. A close examination of the evidentiary support in the record shows that Bildman’s pre-1993 misconduct5 involves using Astra funds for personal expenses, touching female employees, and failing to stop such conduct by other Astra employees. See ¶¶2-4, 11(a), Astra’s Counterstatement of Undisputed Material Facts and the affidavits referenced therein.

In 1998, the Equal Employment Opportunity Commission (“the EEOC”) filed a complaint against Astra, EEOC v. Astra USA, Inc., Civil Action No. 98-40014 (D.Mass.), which alleged that Astra had violated Title VII of the Civil Rights Act of 1964 and Title I of the Civil Rights Act of 1991 by subjecting female employees to quid pro quo sexual harassment and a hostile work environment. The complaint alleged involvement by Bildman and other Astra “management officials, its agents and customers” in the harassment and, among other things, stated that:

Although aware of the pervasive harassment, [Astra] failed to take remedial action and instead took actions to conceal the harassment and minimize its liability, including but not limited to discouraging complaints of sexual harassment, terminating individuals who complained of sexual harassment, requiring employees to sign statements stating that they had not witnessed sexual [687]*687harassment and/or racial harassment, entering into settlement agreements with those who complained of sexual harassment which precluded those individuals from filing charges with the EEQC and/or providing information to the EEOC and requiring individuals to sign an arbitration agreement waiving their rights to the remedies provided under Title VII and the 1991 CRA, as a condition of future participation in the company's profit sharing plan.

Astra settled this complaint by entering into a consent decree with the EEOC, which established a fund in the amount of $9,850,000 for its employees who had been subjected to sexual harassment. The consent decree stated that Bildman and other Astra “management officials, agents, and customers” had participated in the sexual harassment, and, among other relief, directed Astra to maintain and comply with its sexual harassment policy.

The consent decree did not include an admission of wrongdoing by Astra. Bildman was not a party to the EEOC case or the investigations nor was he represented at the proceedings or the settlement negotiations.

DISCUSSION

Summary judgment is appropriate where there are no material facts in dispute and the moving party is entitled to judgment as a matter of law. See Community Nat. Bank v. Dawes, 369 Mass. 550, 553-55 (1976); Mass.R.Civ.P. 56(c). The moving party bears the burden of affirmatively demonstrating the absence of a triable factual issue and of showing that it is entitled to judgment. See Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). Where the party moving for summary judgment does not have the burden of proof at trial, that party may meet its burden by submitting affirmative evidence that negates an essential element of the opponent’s case or “by demonstrating that proof of an element is unlikely to be forthcoming at trial.” Flesner v. Technical Commun. Corp., 410 Mass. 805, 809 (1991); see also Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). Once the moving party demonstrates the absence of a trial issue, the opposing party must respond with evidence of specific facts establishing the existence of a factual dispute. See Pederson, 404 Mass. at 17.

In moving for summary judgment, Bildman contends that Astra has an adequate remedy that precludes rescission of his employment contract and that there is no authority for Astra’s reimbursement claim. In response, Astra contends that during negotiations for his employment contract, Bildman had a legal duty, specifically a fiduciary duty, to disclose any misconduct in which he had previously been engaged. Astra also asserts that Title VII consent decrees, including Astra’s, are subject to separate reimbursement claims against the employees involved in the misconduct.

I. Astra’s Claim for Rescission of Bildman’s Employment Agreement (Count IV)

In Count IV, Astra seeks a declaratory judgment that it properly rescinded Bildman’s employment contract. Astra seeks rescission on the theory that Bildman fraudulently induced it to execute the agreement by failing to disclose his misconduct. See ¶¶54-62, 75-80, Astra’s Complaint. Astra argues that Bildman’s positions as officer and director imposed a fiduciary duty to disclose his misconduct. See ¶60, Astra’s Complaint. However, Astra has provided no evidence that Bildman affirmatively misrepresented any material fact in connection with negotiations for his employment contract. See Yorke v. Taylor, 332 Mass. 368, 371 (1955); Reed v. A.E. Little Co., 256 Mass. 442, 448-50 (1926) (fraudulent inducement requires either negligent or intentional misrepresentations). Bildman contends that the agreement cannot be equitably rescinded in the circumstances of this case, where he performed under the contract for three years and, according to the uncontroverted evidence, made no affirmative misrepresentation during the contract negotiations or in the contract itself.

Astra’s arguments in favor of rescission three years after inception of the agreement on a theory of failure to disclose information about which Astra never inquired are unpersuasive. No legal authority brought to my attention supports the use of rescission in these circumstances.6 As the Supreme Judicial Court stated in Coggins v. New England Patriots Football Club, Inc., 397 Mass.

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Related

Astra USA, Inc. v. Bildman
20 Mass. L. Rptr. 581 (Massachusetts Superior Court, 2006)

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Bluebook (online)
13 Mass. L. Rptr. 686, Counsel Stack Legal Research, https://law.counselstack.com/opinion/astra-usa-inc-v-bildman-masssuperct-2000.