Walsh v. Zurich American Ins. Co.

2014 DNH 064

• Court: District Court, D. New Hampshire
• Decided: April 3, 2014
• Docket: 12-CV-72-SM
• Status: Published

Opinion

Walsh v. Zurich American Ins. Co. 12-CV-72-SM 04/03/14 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

James Walsh, Plaintiff

v. Case No. 12-cv-72-SM Opinion No. 2014 DNH 064 Zurich American Insurance Company; American Zurich Insurance Company; and Universal Underwriters Insurance Company, Defendants

O R D E R

Having carefully considered the pleadings, supporting

memoranda, exhibits, and argument of counsel during the hearing

on defendants' summary judgment motion (document no. 16), the

court denies the motion.

The claim in this case is, essentially, that plaintiff and

his employer, Zurich American Insurance Company, agreed that he

would be paid a base salary and incentivepay duringcalendar

year 2009. The incentive pay, plaintiffsays, was to be paid in

accordance with a description and schedule negotiated and

delivered to him in August of 2008. The incentive pay applied to

2009 (effective April 1, 2009), but that plan will be referred to

as the "August 2008 plan" to distinguish it from a subseguent

2009 incentive pay plan that Zurich claims governs the parties'

relationship. The August 2008 plan included a provision for payment of up

to 1.125% of the value of insurance business written by plaintiff

(and collected by Zurich) under a new program developed by

Zurich. Importantly, plaintiff says the August 2008 plan

included sales made under the program in 2008. And, while Zurich

denies that the August 2008 plan ever achieved contractual

character, it does not seem to argue that, if effective as a

contract, it still didn't cover December 2008 sales.

As it turned out, plaintiff was responsible for making a

dramatic sale (over $200 million) in December of 2008. Plaintiff

says that after he made the sale, Zurich unilaterally imposed a

change to his incentive pay plan (the "Revised Plan"). The

Revised Plan drastically reduced his incentive pay - from a

potential 1.125% of a total sale's value to only $1,000.00 per $1

million of insurance sold under the new program (i.e., 0.1%) . He

asserts that he had no real choice but to acguiesce in the

unilateral change and, although he appears to have agreed to the

new terms, he argues that the change was not supported by

adeguate consideration. Conseguently, says plaintiff, the

Revised Plan is not enforceable, at least not with respect to the

large December 2008 sale. Zurich declined to pay any incentive

pay on the large sale under the August 2008 plan, but did pay

2 Walsh for that sale under the Revised Plan (what Zurich calls the

"approved" plan).

Zurich says the August 2008 plan was merely a draft, was

never officially "approved," was reflective only of ongoing

discussions, and never matured into an enforceable agreement. In

any event, says Zurich, plaintiff agreed to the terms of the

Revised Plan long before the August 2008 plan was to become

effective. Zurich denies that plaintiff's sale of over $200

million dollars in insurance under the new program motivated it

to substantially alter an agreed-upon incentive pay agreement.

It insists that an incentive pay plan was not finalized or agreed

to by Zurich until early 2009 - after the sale.

This brief summary perhaps over simplifies what is a complex

legal and factual case, but the point is clear. There are

multiple disputes with respect to material facts that preclude

entry of summary judgment. The parties have decidedly different

versions of the critical facts, including Zurich's policies,

customs and practices associated with setting incentive pay

generally, and, in Walsh's case, facts related to the new program

that was under development and that he was recruited to lead.

And there are material disputes with respect to the parties'

understanding of the nature of the incentive pay (e.g., whether

3 it was in the nature of commissions, or a performance bonus),

when it became payable, what sales factor into the calculation,

and when the plan terminates.

Plaintiff has the burden of proving a contractual

entitlement to the incentive pay he seeks. While he may have a

difficult evidentiary road to travel, still, his essential claim

is that the parties reached an agreement in August 2008 with

respect to the incentive pay to be paid him in 2009, and Zurich

breached that agreement with respect to incentive pay owed him on

the December 2008 sale. He has presented sufficient evidence to

establish that his claim will turn on the resolution of factual

disputes.

The most significant dispute, perhaps, is whether the

parties' words and actions manifested an objective intent to be

bound by the terms set out in the August 2008 incentive pay plan

given to Walsh. That is, what did they in fact say or do, did

their statements and actions manifest an intent to be

contractually bound by that document, and were Walsh's

understandings and expectations reasonable? Generally, "it is a

guestion of fact whether any particular conduct or actions imply

a contractual understanding." Bourgue v. EPIC, 42 F.3d 704 (1st

Cir. 1994).

4 This is not a case in which the words and actions of the

parties are so clear themselves that reasonable people could not

differ on their meaning. Rather, this is a case in which the

evidence does not seem to point unerringly in a single direction;

it is capable of supporting conflicting inferences.

Consequently, a jury might plausibly credit Walsh's version as to

what was said, done, and intended, given the record as currently

developed. Id. While Walsh's proof at trial may come up short

(as a matter of law or fact), on this record, whether the August

2008 incentive plan constitutes a contract between Walsh and

Zurich, and whether a superceding contract effectively nullified

its provisions, is largely a matter to be determined by a finder

of fact. See Crellin Technologies, Inc. v. Eguipmentlease Corp.,

18 F .3d, (1st Cir. 1994).

Conclusion

The motion for summary judgment (document no. ^6) is denied.

SO ORDERED.

steven J/ McAuliffe nited States District Judge April 3, 2014

cc: Jamie N. Hage, Esq. Damon Hart, Esq. Christopher B. Kaczmarek, Esq. Douglas J. Miller, Esq. Donald S. Prophete, Esq.