United States District Court, E.D. Louisiana
SMITTY'S SUPPLY, INC.
LINDSAY MORGAN HEGNA
ORDER AND REASONS
ANN VIAL LEMMON UNITED STATES DISTRICT JUDGE.
IS HEREBY ORDERED that Stephen D. Kelley's
Motion for Partial Summary Judgment on Claim for
Severance Pay (Rec. Doc. 338) is
GRANTED insofar as the court finds that the
term "good reason" is not ambiguous, and
DENIED insofar as the court finds that fact
issues preclude summary judgment at this time;
IT IS FURTHER ORDERED that Smitty's
Supply, Inc.'s ("Smitty's") Motion
for Partial Summary Judgment Concerning Severance
Pay (Rec. Doc. 340) is DENIED.
Stephen D. Kelley worked for Smitty's as Chief Financial
Officer from February 2014 through his resignation in May
2016. Prior to acceptance of his employment, Kelley
negotiated his salary and benefits with Edgar Smith, the sole
owner of Smitty's. Their agreement was memorialized in
email exchanges dated February 2 and 3, 2014. It provided in
pertinent part: "I will be provided 1.5 years lump sum
severance pay to be calculated as follows: (base pay
[currently $500, 000] prior year performance bonus and
estimated current year incentive pay [if applicable])
[multiplied by] 1.5; should my termination be terminated by
employer without cause or by employee with good reason at any
time." In addition (among other things), the agreement
provided that Kelley would participate in a bonus incentive
plan at a level of 17.5%. To this, Smith responded "Your
trust is well placed my friend, I am excited and agree in
principal to all below as per our conversation
yesterday." After Kelley had worked at Smitty's for
about six months, his base salary was lowered by 60% and his
participation in the bonus incentive plan was reduced from
17.5% to 10%. He contends that while unhappy with these
reductions, he accepted them based upon Smith's
representation that he would receive a 5% synthetic equity
interest in Smitty's and its affiliated
companies that would vest over time. Smith charged Kelley
with developing the plans to provide the synthetic equity
resigned his employment in May 2016. He alleges that his
resignation was for good reason, namely, the reduction of his
salary and incentive bonuses. In so arguing, he claims that
he agreed to forgo a substantial portion of his base salary
and incentive bonuses based on assurances that they would be
made up through the synthetic equity interest or other
deferred compensation, and that (for reasons not relevant to
the instant motion), he had come to believe that Smitty's
did not intend to fulfill those promises. Kelley also alleges
that he was concerned about what he considered unethical or
unlawful business practices. Thus, he argues he is entitled
to summary judgment enforcing the severance pay provision in
his agreement with Smitty's.
in contrast, argues first, that the emails excerpted above do
not constitute a meeting of the minds because "good
reason" is an ambiguous term since it is not
specifically defined in the agreement. Smitty's also
argues that Kelley resigned not for good reason, but because
he recognized that he was about to be terminated for poor
of the Federal Rules of Civil Procedure provides that the
"court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact and
the movant is entitled to judgment as a matter of law."
Granting a motion for summary judgment is proper if the
pleadings, depositions, answers to interrogatories,
admissions on file, and affidavits filed in support of the
motion demonstrate that there is no genuine issue as to any
material fact that the moving party is entitled to judgment
as a matter of law. Fed.R.Civ.P. 56(a); Anderson v.
Liberty Lobby, Inc., 106 S.Ct. 2505, 2509-10 (1986). The
court must find "[a] factual dispute . . . [to be]
'genuine' if the evidence is such that a reasonable
jury could return a verdict for the nonmoving party . . .
[and a] fact . . . [to be] 'material' if it might
affect the outcome of the suit under the governing
substantive law." Beck v. Somerset Techs.,
Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing
Anderson, 106 S.Ct. at 2510).
moving party meets the initial burden of establishing that
there is no genuine issue, the burden shifts to the
non-moving party to produce evidence of the existence of a
genuine issue for trial. Celotex Corp. v. Catrett,
106 S.Ct. 2548, 2552 (1986). The non-movant cannot satisfy
the summary judgment burden with conclusory allegations,
unsubstantiated assertions, or only a scintilla of evidence.
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th
Cir. 1994) (en banc). If the opposing party bears the burden
of proof at trial, the moving party does not have to submit
evidentiary documents properly to support its motion, but
need only point out the absence of evidence supporting the
essential elements of the opposing party's case.
Saunders v. Michelin Tire Corp., 942 F.2d 299, 301
(5th Cir. 1991).
interpretation of an unambiguous contract is an issue of law
for the court. Amoco Prod. Co. v. Texas Meridian
Resources Exploration Inc., 180 F.3d 664, 668 (5th
Cir.1999). Interpreting a contract is determining the common
intent of the parties. La. Civ. Code art. 2045. “Such
intent is to be determined in accordance with the plain,
ordinary, and popular sense of the language used, and by
construing the entirety of the document on a practical,
reasonable and fair basis.” Amitech U.S.A., Ltd. v.
Nottingham Const. Co., 57 So.3d 1043, 1057-58 (La. Ct.
App. 2010).“When the words of a contract are clear and
explicit and lead to no absurd consequences, no further
interpretation may be made in search of the parties'
intent.” La. Civ. Code art. 2046. “The words of a
contract must be given their generally prevailing meaning.
Words of art and technical terms must be given their
technical meaning when the contract involves a technical
matter.” La. Civ. Code art. 2047. “Words
susceptible of different meanings must be interpreted as