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JONES v. DUNKIRK RADIATOR CORP.

November 13, 1991

RONALD G. JONES, PLAINTIFF,
v.
DUNKIRK RADIATOR CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Skretny, District Judge.

DECISION AND ORDER

INTRODUCTION

Now before this Court is the motion of the defendant Dunkirk Radiator Corporation ("defendant") for summary judgment pursuant to Fed.R.Civ.P. 56.

The plaintiff Ronald G. Jones ("plaintiff") has filed a one count Complaint alleging wrongful discharge stemming from breach of contract.

This Court has jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332. New York law applies to this case.

This lawsuit stems from a business venture ("the venture") undertaken between the plaintiff, defendant and a third person, not a party to this lawsuit, Larry Burkhart ("Burkhart"). In 1985, plaintiff and Burkhart entered into a relationship with the defendant to develop, manufacture and supply a special heat pump previously unavailable on the market. Under their arrangement plaintiff and Burkhart were chiefly responsible for the product's design and marketing while the defendant would be the initial source of capital infusion. On December 17, 1985, in furtherance of the venture, plaintiff, Burkhart and the defendant executed a document entitled Basic Memorandum Agreement ("the Memorandum Agreement"). Generally, under the terms of the Memorandum Agreement, plaintiff and Burkhart agreed to become employees of defendant at an annual salary, the defendant agreed to ". . . expend a minimum of $150,000.00 . . ." on the venture and all parties agreed that "[a]t such time as annual sales volume for the product reaches a level of $1,800,000.00 . . . [,]" the parties would form a partnership with capital subscriptions by each. In 1988, however, after plaintiff and Burkhart became employees of the defendant, after the defendant had spent more than $150,000.00 on the venture, but before annual sales had reached the 1.8 million level, the defendant terminated the Memorandum Agreement, effectively ending the defendant's employment relationship with the plaintiff.

Subsequently, plaintiff commenced this lawsuit, alleging wrongful discharge stemming from defendant's breach of contract. The plaintiff seeks compensation for the period from his discharge to the date on which the defendant ceased selling the product line, January 22, 1988 to March 20, 1989.

Moving for summary judgment, the defendant contends that, pursuant to the Memorandum Agreement, once it expended $150,000.00 on the venture, the plaintiff became an at will employee, under New York law terminable for any reason at any time. Opposing the defendant's motion, the plaintiff argues that under the entirety of the agreement which he had with the defendant, he was not an at will employee.

In support of its motion, the defendant has filed a legal memorandum ("d. memo."), a reply memorandum ("d. reply"); the affidavit of the defendant's president, Thomas Reed ("Reed"); various exhibits ("d. exh."); and a statement of facts not in dispute ("d. fact").

In opposition to the defendant's motion, the plaintiff has filed a legal memorandum ("p. memo."); the deposition transcripts with exhibits of Ronald G. Jones ("Jones Deposition"), Thomas E. Reed ("Reed Deposition"), Harry A. Hebberd ("Hebberd Deposition") and. George T. Underhill III; and a statement of facts in dispute ("p. fact").

Conclusion: For the reasons set forth below, this Court denies the defendant's motion for summary judgment.

SUMMARY JUDGMENT

Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate where ". . . there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The burden is upon the moving party to demonstrate the absence of a material factual dispute. Fed.R.Civ.P. 56(e). Once that burden is met, the non-moving party ". . . must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). This Court must draw all reasonable inferences in favor of the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970).

The function of the district court in considering a summary judgment motion is not to resolve disputed issues of fact but only to determine whether there is a genuine issue to be tried. Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991).

Applying this standard to this case, this Court must deny the defendant's motion.

FACTS

The following material facts are not in dispute.

On December 17, 1985, the plaintiff, defendant and Burkhart executed the Memorandum Agreement. (d. exh. A).

Paragraph 1 of the Memorandum Agreement provides:

    On January 6, 1986 Jones and Burkhart will
  become employees of Dunkirk at an annual salary
  rate of $40,000.00 to be paid bi-weekly. They will
  receive the same fringe benefits as other
  management employees of Dunkirk. When unit
  shipments reach 1,000 units, the annual ...

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