Pinkerton Tobacco Co. v. Melton

437 S.E.2d 923, 246 Va. 356, 10 Va. Law Rep. 428, 1993 Va. LEXIS 138
CourtSupreme Court of Virginia
DecidedNovember 5, 1993
DocketRecord No. 921965
StatusPublished

This text of 437 S.E.2d 923 (Pinkerton Tobacco Co. v. Melton) is published on Counsel Stack Legal Research, covering Supreme Court of Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pinkerton Tobacco Co. v. Melton, 437 S.E.2d 923, 246 Va. 356, 10 Va. Law Rep. 428, 1993 Va. LEXIS 138 (Va. 1993).

Opinions

CHIEF JUSTICE CARRICO

delivered the opinion of the Court.

In this breach of contract case, The Pinkerton Tobacco Company appeals from a judgment based upon a jury verdict awarding a former employee, William H. Melton, damages for the company’s failure to pay him compensation under its “Long-Term Incentive Plan” (the Plan). According to its language, the Plan’s objectives are as follows:

(a) To attract and retain key management personnel in order to ensure the short- and long-term success of the Company.
(b) To provide incentive for such personnel that will tie their interests and motivations with those of the owners of the Company.
(c) To provide opportunities for personal financial gain to individuals who make significant contributions to the success of the Company.

The Plan was designed to provide participants with enhanced compensation if the company attained certain threshold levels of financial performance during a three-year cycle. Shortly after the commencement of a cycle, participants were issued “performance units,” ascertained on the basis of their relative positions in the company. It was contemplated, however, that payment would not be made until completion of the full performance cycle.

Pertinent here is a cycle beginning January 1, 1987, and ending December 31, 1989. Approximately 100,000 performance units were allocated for this cycle, with 4,825 assigned to Melton who, at [358]*358the time, was Pinkerton’s vice-president of marketing. He was discharged from employment with Pinkerton on January 3, 1989, and, hence, did not complete the performance cycle.

In the event of a participant’s termination of employment mid-cycle, the Plan provided as follows:

If a participant leaves the Company before the end of a performance cycle for reasons other than death, disability, or retirement, the units awarded to the incumbent would be forfeited and reclaimed for distribution to other participants. In the event of death, total and permanent disability, or retirement, a participant, or a participant’s estate, would be eligible to receive an incentive award pro-rated for the months during which the individual participated in the performance cycle.

Melton claimed that when he was discharged, his supervisor assured him he would receive an award under the Plan. However, Pinkerton rejected Melton’s demand for payment, and he responded by filing a motion for judgment seeking recovery of damages from Pinkerton in the sum of $119,563.50.

Pinkerton filed grounds of defense denying any liability to Melton and also filed a pretrial motion for summary judgment. The trial court denied the motion, holding that the provisions of the Plan were ambiguous and that a jury should resolve the ambiguity. In a jury trial, Melton received a verdict for $70,895.33, upon which the trial court entered judgment. We awarded Pinkerton this appeal.

The focus of the parties’ debate concerning ambiguity is upon the word “leaves,” as used in the phrase, “[i]f a participant leaves the Company.” Pinkerton argues there is no ambiguity in the phrase.

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Bluebook (online)
437 S.E.2d 923, 246 Va. 356, 10 Va. Law Rep. 428, 1993 Va. LEXIS 138, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pinkerton-tobacco-co-v-melton-va-1993.