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Ferrari v. Keybank National Association

January 5, 2009


The opinion of the court was delivered by: Michael A. Telesca United States District Judge



Plaintiffs Richard Ferrari ("Ferrari") and Robert Moore ("Moore") (collectively "plaintiffs") brought this action in New York State Supreme Court, Monroe County, seeking damages against defendant Keybank National Association a/k/a Keybank, N.A. ("Keybank" and/or "defendant"), for Keybank's alleged breach of contract, breach of implied covenant of good faith and fair dealing claims, violation of New York's Labor Law, as well as several other common law claims including promissory estoppel and unjust enrichment. Specifically, plaintiffs contend that Keybank breached an agreement by failing to pay them the full amount of their incentive compensation. Keybank moves for summary judgment on all counts of the Complaint claiming that there are no material issues of fact in dispute, and that it is entitled to judgment as a matter of law. Plaintiffs oppose Keybank's motion, and cross-move for summary judgment. For the reasons set forth below, I grant Keybank's motion for summary judgment, and deny plaintiffs' cross-motion for summary judgment.


I. Plaintiffs

Plaintiffs Ferrari and Moore were employed by Keybank during the period including January 1, 2000 through December 31, 2000 as commercial bankers in Keybank's commercial middle market ("CMM") banking division. See Defendant's Statement of Material Facts, ("DSOMF"), ¶13. In 2000, Moore was employed by Keybank in the Rochester Community Middle Market Group as a Relationship Manager ("RM") and Ferrari was employed as a Team Sales Leader ("TSL").*fn1 See Plaintiffs' Statement of Material Facts, ("PSOMF") ¶¶1-2. Both plaintiffs received a fixed salary in 2000. See DSOMF, ¶19, 21. For the period January 1 to March 31, 2000, Moore's fixed base salary was $77,000 and from April 1 to December 31, 2000 it was $78,000. See id., ¶22. Meanwhile, Ferrari's fixed base salary was $87,720 from January 1 through March 31, 2000 and $90,000 from April 1 through December 31, 2000. See id., ¶20.

II. The Incentive Plan

On or about December 30, 1999, defendant instituted "The 2000 Commercial Banking Middle Market Sale Team Incentive Plan" ("Incentive Plan"). See DSOMF, ¶1. It was during this time that plaintiffs, among others, received a letter via e-mail from Patrick Auletta, ("Auletta"), Keybank President of Commercial Banking, which provided the recipients with an overview of the Incentive Plan.*fn2 See PSOMF, ¶9. Attached to Auletta's e-mail was a link that included an Incentive Calculator ("Calculator"), which was accurate. See id., ¶10, 13. The Calculator provided eligible participants with a mechanism that would permit them to obtain a current update of incentive compensation eligibility predicated on their individual and team activity on a month-to-month and year-to-year basis. See id., ¶11. In addition, eligible participants in the Incentive Plan had access to the Calculator throughout the entire year of 2000. See id., ¶12. Plaintiffs claim that they relied on the Calculator to provide them with information as to the amount of their incentive compensation. See id., ¶14.

Plaintiffs initially became aware of the Plan in October 1999 at a National Sales Conference in Grand Traverse, Michigan. See id., ¶3. During that time, Auletta stated that the incentive compensation provided for under the Incentive Plan was an integral part of the overall compensation. See id. Defendants contend that any incentive compensation distributed to an eligible employee was in addition to any fixed salary provided to that employee. See DSOMF, ¶18.

The Incentive Plan was a valid and enforceable written employment contract to which plaintiffs were subject. See id., ¶2.

Under the heading "Plan funding and award allocation measures," the Plan Summary page of the Incentive Plan states in part:

The individual and team components will be earned and allocated pursuant to a non-discretionary formula. The discretionary component will be funded by a non-discretionary formula, and the pool is to be allocated at the discretion of management. Specific details are provided in Section 2 [of the Incentive Plan]. Sample award calculations are detailed in Section 2 [of the Incentive Plan].

See PSOMF, ¶26. Section 2 of the Incentive Plan distinguishes between TSLs and RMs as it relates to incentive compensation. See id., ¶21. Both the TSL and RM incentive compensation contain a) an individual award component; b) a team component; and c) a discretionary component. See id., ¶22. Further, Section 2 provides in part:

The Pool for the Team incentive will be funded based upon the performance of the applicable Community Middle Market ... Team. The basis of performance measurement for the Team award funding is the Contribution Margin (CM), as reported by KEIS, as a percentage of the Team plan. If Team level financials compared to plan are not available, then Team performance will be estimated based upon the best available Line of Business financial information. In all instances, consideration will be given to actual loan loss provision and asset quality.

See DSOMF, ¶3. According to defendant, "Contribution Margin" is generally defined as the revenue generated by a team from the sale to customers of bank products (e.g. loans, lines of credit etc.), less direct expenses. See id., ¶4. Moreover, "KEIS" refers to Keybank's internal bank computer program which maintains customer information, including the Contribution Margin for bank products utilized by each customer. See id., ¶5. In addition, Section 2 of the Incentive Plan states "the actual award amount is determined by the [Team Payout Schedule]" which allocates the Team Award pool based on Performance Level. See Defendant's Response to PSOMF, ¶26. Section 2 also states "Measurement of the Team level performance (actual or estimated) will be made by the Key Corporate Capital & Special Finance Unit Finance group, Commercial Bank LOB Executive and the Plan Administrator." See id.

Further, Section 3.1 of the Incentive Plan provides in part: In the event that (1) the design, structure and/or operation of the Plan, or (2) unanticipated market related events or circumstances result in an unanticipated or unintentional calculation, amount, duration, or structure of any incentive payment(s) to be made under the Plan, KeyCorp retains the absolute and unconditional right at all times to increase, decrease, or terminate any incentive formulas, targets and/or goals, to increase, decrease or terminate any, and all incentive awards to be paid under the Plan.

See DSOMF, ¶6. Section 3.2 also provides in part:

KeyCorp may, in its sole and absolute discretion...modify Participant's performance objectives [and/or] modify applicable Plan incentive goals....Such modifications may be made on a retroactive basis if KeyCorp determines that such modifications are necessary to accurately reflect the actual rather than the projected or anticipated rate of earnings[.]

As a condition of participating in the Plan, the Participant acknowledges that he or she understands KeyCorp's reservation of rights with regard to the payment of any and all incentive awards under the Plan, and the Participant agrees to be bound to the provision of Section 3.1 and this Section 3.2 hereof.

See id., ¶7. Moreover, Section 3.8 provides in part:

The Plan Administrator shall verify the amount of incentive awards, if any, to be paid to the Participant in accordance with the provisions of the Plan. The reasonable and equitable decision of the Plan Administrator as to the value of each ...

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