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Valdenor Reyes v. Metromedia Software

January 4, 2012


The opinion of the court was delivered by: Gabriel W. Gorenstein, United States Magistrate Judge


Plaintiff Valdenor Reyes brings this action against his former employer Metromedia Software, Inc. on the ground that Metromedia violated his employment contract. Reyes has moved for partial judgment on the pleadings seeking a declaration that he is entitled to certain commission payments under the terms of his employment contract and that Metromedia has breached those terms.*fn1 For the reasons discussed below, Reyes's motion is granted.*fn2


A. Facts

The facts relevant to this motion are undisputed.

Defendant Metromedia Software, Inc. ("Metromedia") entered into an employment contract with Reyes, which was drafted by Metromedia and is dated January 1, 1998. See Employment Agreement, dated Jan. 1, 1998 (annexed as Ex. A to Reyes Decl.); Complaint, filed Mar. 29, 2011 (Docket # 1) ("Compl.") ¶ 8. Reyes's responsibilities under the contract included selling Metromedia's "HotelEXPERT product" and providing training and support services relating to the use of that product. See Employment Agreement ¶ 1.

Paragraph 2 of the Employment Agreement, entitled "Compensation," is divided into two parts. The first part provided for compensation as consideration for "the due and faithful performance of the Services under this Agreement, and only for so long as you are an employee of the Company . . . and only for so long as you are rendering such Services to the Company."

Id. ¶ 2(a). The provisions of this paragraph promise Reyes three forms of compensation: (i) commissions equal to 6% of annual "gross revenues"; (ii) $50,000 for services rendered between May 20 and December 31, 1998; and (iii) a weekly salary of $2,884.62 beginning on January 1, 1999. Id. ¶¶ 2(a)(i)--(iii). The second part provided for the issuance of 53 shares of stock to Reyes as compensation for past services. Id. ¶ 2(b).

A separate section of the Employment Agreement, ¶ 4, is entitled "Term and Termination." This paragraph provides that Reyes's employment would commence on January 1, 1998 and continue for five years unless Metromedia terminated him for cause, the possible bases for which are listed in the agreement. See id. ¶ 4(a). This section also provides that if Reyes continued to perform services after the termination date of the agreement -- that is, after December 31, 2002 -- without a written extension, the parties' continued employment relationship would be governed by the same terms and conditions contained in the Employment Agreement unless the parties entered into a new agreement or either party terminated the existing agreement on 30 days notice. Id. ¶ 4(b).

The next section of ¶ 4 provided that if the contract were "terminated for any reason whatsoever, other than fraud, embezzlement, or gross negligence, commissions will be paid to [Reyes] pursuant to Section 2(a)(i) above for a period of seven (7) years from the date of such termination." Id. ¶ 4(c).

The parties executed a second agreement, dated November 9, 2007, entitled "Memorandum of Agreement." See Memorandum of Agreement, dated Nov. 9, 2007 (annexed as Ex. B to Reyes Decl.) ("Mem. of Agreement"); Compl. ¶ 15. The Memorandum of Agreement provided that "[i]t is the intention of both [Reyes] and [Metromedia] to extend the terms of [the Employment Agreement]" and that "[a]ll terms contained in the Employment Agreement, unless otherwise modified by this Memorandum, shall continue in effect until June 30, 2008 ("Employment Term")." Mem. of Agreement at 1. Furthermore, the Memorandum of Agreement provided that the original Employment Agreement "shall automatically be extended until December 31, 2008," unless either party notified the other of its intention not to extend the contract by May 31, 2008. Id.

The Memorandum of Agreement's substantive modifications to the Employment Agreement principally related to the terms of Reyes's agreement not to compete with Metromedia in the event the Employment Agreement were terminated and to the commissions Reyes would receive under sales contracts arising out of an agreement Reyes was then negotiating with Hilton Hotels Corporation on behalf of Metromedia. See id. at 1--3.

Metromedia terminated Reyes's employment on January 8, 2010. Compl. ¶ 28. Metromedia did not terminate Reyes's employment for any of the reasons listed in ¶ 4(c) of the Employment Agreement. Compl. ¶ 29. Metromedia paid commissions owed to Reyes pursuant to the Memorandum of Agreement for the years 2008 and 2009, and some commissions for 2010 -- presumably consisting of commissions earned prior to his termination. Compl. ¶ 24; Answer ...

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