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July 10, 1972

Joseph F. ZIMMER, Plaintiff,

Brieant, District Judge.

The opinion of the court was delivered by: BRIEANT


Brieant, district Judge.

 Defendants move for partial summary judgment dismissing the third, fourth and fifth claims set forth in the amended complaint. Defendant Wells Management Corporation ("Wells") is the parent of Pro-Data Computer Services, Inc. ("Pro-Data"). Defendant Melvin Paradise is an attorney. The first cause of action against Pro-Data alleges that plaintiff entered into an employment agreement with Pro-Data on October 17, 1967, by which he was hired as Director of Administration, for a period of one (1) year, ending November 30, 1968. He claims $1,438.97 back salary on this cause of action.

 The second cause of action asserts that on October 21, 1968, he entered into an employment agreement with Pro-Data, which is annexed to and made a part of the complaint, by which he was hired in "an essential executive capacity" for a year commencing October 1, 1968, at an annual salary of $25,000.00. He alleges due performance and further that on and after November 1, 1968, he was employed jointly by defendants Pro-Data and Wells.

 He further alleges that on February 14, 1969, the defendants Pro-Data and Wells, without just cause, discharged him and refused to permit him to continue performance, although he was ready, able and willing to do so. On this claim he asserts damages of $4,557.19 in gross lost wages.

 On the third cause of action, plaintiff asserts that as additional consideration for the employment agreement of October 21, 1968, Pro-Data sold, and plaintiff purchased, 1,800 shares of Wells stock, restricted shares, for $180.00; that he duly paid for the stock, and received a stock certificate which was endorsed in blank and deposited with defendant Paradise as escrow agent to be held pursuant to the terms and conditions of the employment agreement which, briefly stated, provided for defeasance of plaintiff's rights to the stock under certain provisions hereinafter more particularly referred to. It is further alleged that Paradise, in breach of the escrow agreement, turned over the shares and the assignment to Wells and refuses to deliver them to plaintiff. On this cause of action plaintiff asserts damages of $60,000.00.

 This is a diversity action between a citizen of New Jersey, and New York individuals or corporations. Movants do not on this motion attack the measurement of damages, and the Court declines to reach this issue of its own motion since the value of restricted stock in Wells is not readily apparent on the pleadings. If the causes of action do not, in aggregate, involve a matter in controversy having a value in excess of $10,000.00, no jurisdiction will lie in diversity.

 The fourth cause of action is a repetition of the third cause of action, pleaded to include reliance on the implied covenant of good faith and fair dealing on the part of defendants Wells and Pro-Data, which must be read into the contract of employment. Kirke La-Shelle Co. v. Paul Armstrong Co., 263 N.Y. 79, 87, 188 N.E. 163 (1933).

 The fifth cause of action recasts the same facts to support a claim for conversion of the Wells stock, said to have a value of $60,000.00.

 Defendants urge that this is a simple case, calling for the Court to construe, as a matter of law, the terms of the employment agreement. Conditions of the escrow agreement to avoid defeasance of ownership of the common stock by plaintiff, were the completion of the initial contract term of employment, and the execution of new employment agreements between the parties. Execution and performance of an employment agreement for two years would have vested 20% of the stock, an additional two year period would have vested an additional 40% of the stock, and, at the end of five years, plaintiff would have been entitled to the full indefeasible ownership of all of the stock. The parties have specifically agreed in writing that the employee shall be "fully vested with the stock (100%) only after a period of five years of employment".

 The escrow agreement contemplates five years of employment pursuant to written agreements to be mutually agreed upon in futuro. If these papers must be read literally, plaintiff's right to his stock depends on obtaining agreements to agree; on their face illusory and void.

 Defendants admit that plaintiff's employment was involuntarily terminated on February 14, 1969, more than eight months prior to completion of the term of the initial employment agreement, and that no new employment agreements were ever mutually agreed upon or executed. The purchase price of the shares, $180.00, has been tendered to plaintiff.

 Defendants rely on cases involving employee pension and retirement plans, in which there is complete or partial defeasibility of benefits when employment is severed for any cause. Schneider v. McKesson & Robbins, Inc., 254 F.2d 827 (2d Cir. 1958).

 The Court considers the pension plan cases inapposite, because pension plans, which, at most, represent additional consideration, contemplate that faithful employees will be the beneficiary of retirement allowances, but that those who are not continued for any reason will not participate. This is an express covenant of most pension plans which are ...

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