Steinke v. Sungard Financial

CourtCourt of Appeals for the First Circuit
DecidedAugust 6, 1997
Docket96-2326
StatusPublished

This text of Steinke v. Sungard Financial (Steinke v. Sungard Financial) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Steinke v. Sungard Financial, (1st Cir. 1997).

Opinion

USCA1 Opinion


For the First Circuit
____________________
No. 96-2326

JAMES A. STEINKE,

Plaintiff, Appellant,

v.

SUNGARD FINANCIAL SYSTEMS, INC.,

Defendant, Appellee.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Richard G. Stearns, U.S. District Judge]

____________________

Before

Stahl, Circuit Judge,
Lynch, Circuit Judge,
and O'Toole,* U.S. District Judge.

____________________

Margaret S. Garvey , with whom Wm. David Byassee , Freeborn & Peters ,
David C. Casey, Thomas A. Bockhorst, and Peckham, Lobel, Casey, Prince
& Tye, were on brief for appellant.
Mark Blondman, with whom Scott F. Cooper, Blank Rome Comisky &
McCauley, and Testa, Hurwitz & Thibeault, LLP, were on brief for
appellee.
____________________

August 6, 1997
____________________

_____________________
*Of the District of Massachusetts, sitting by designation.

STAHL, Circuit Judge. Plaintiff-appellant James A.

Steinke appeals the district court's grant of summary judgment

in favor of defendant-appellee SunGard Financial Systems, Inc.

("SFS") on his breach of contract and promissory estoppel

claims. We affirm.

Background

We state the facts in the light most favorable to the

party opposing summary judgment. See Hoeppner v. Crotched

Mountain Rehabilitation Ctr., 31 F.3d 9, 14 (1st Cir. 1994).

Steinke is a former SFS employee. SFS, a wholly-

owned subsidiary of SunGard Data Systems, Inc., develops and

sells computer software used for investment and financial

purposes. In 1992, SFS decided to create a brokerage division

called "Phase3" to develop software applications for the

securities industry and specifically to compete with Security

Industrial Software ("SIS"). SIS was a multi-service company

whose primary business involved providing software and related

services to self-clearing broker dealers. In 1992, Steinke was

the President and Chief Executive Officer of SIS. In December

1992, Citicorp/Quotron, SIS's parent corporation, decided to

sell SIS to a company called ADP.

1. In April 1993, Phase3 was renamed SunGard Brokerage
Systems. For purposes of clarity, however, we substitute the
name Phase3 for SunGard Brokerage Systems as the relevant
entity throughout this opinion.

-2- 2

When Dr. David Wismer, President and Chief Executive

Officer of SFS, learned of ADP's acquisition of SIS, he thought

Steinke might become available to head Phase3 and immediately

began to recruit Steinke to come to Waltham, Massachusetts to

lead Phase3. SFS's first efforts to recruit Steinke began in

April or May 1992, when Wismer told Steinke that he understood

SIS was well run and that he could use that type of management

at Phase3. Late in 1992, Steinke attended a presentation that

Wismer and James Mann, Chairman and Chief Executive Officer of

SunGard Data Systems, made to Quotron. During this

presentation, Wismer and Mann discussed with Quotron the

possibility of SunGard Data Systems acquiring SIS. Mann also

told Steinke during the meeting that if Steinke was to work for

SFS, he would have one year to get to know the operations of

Phase3 and two years after that to "conquer the ADP market."

In early February 1993, Steinke met with Wismer at

Stapleton International Airport in Denver to discuss possible

employment at SFS. During this meeting, Wismer told Steinke

that he wanted him to fill Phase3's need for professional

management. Wismer informed Steinke that SFS expected him to

take three years to acquire former SIS customers and to reach

Phase3's $50 million annual revenue target.

Later that month, Steinke met with Fraser Chambers,

Executive Vice President of SFS's Eastern Region. Steinke

inquired as to how SFS funded its divisions; Chambers responded

-3- 3

that funding would be available if Steinke returned profits

over a three-year period.

Over the weekend of February 19-20, 1993, Steinke

attended an SFS meeting in Naples, Florida. In Naples, Steinke

met with a variety of SFS personnel, including Wismer,

Chambers, and Mann, in order to finalize the terms of his

employment with SFS. Wismer informed Steinke that he was in

the process of putting together an offer letter for Steinke.

The SFS executives also reiterated that SFS senior executives

were rated by their performance over a three-year period.

Wismer in particular indicated that Steinke would have three

years to "show his mettle" at SFS by achieving the aggressive

financial results SFS demanded of its Phase3 division. Wismer

told Steinke that SFS might not make its numbers in 1992, but

that the plan Wismer had developed was sound and Steinke had

three years to "make his numbers." Wismer reassured Steinke

that if he could make his numbers in that time frame, he would

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