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
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.
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
Applying this standard to this case, this Court must deny the
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 salaries
shall increase to $60,000.00 paid in the same
method as above.
Paragraph 2 of the Memorandum Agreement provides: