Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

David Matiella v. Directv

February 6, 2012

DAVID MATIELLA, PLAINTIFF,
v.
DIRECTV, INC.,
DEFENDANT.



The opinion of the court was delivered by: Richard J. Holwell, District Judge:

MEMORANDUM OPINION AND ORDER

On March 7, 2011, plaintiff David Matiella ("Matiella") commenced this action against defendant DIRECTV in the New York Supreme Court for the County of New York alleging breach of contract and tortious interference with contract under state law. Matiella's complaint alleges that DIRECTV wrongfully prohibited him from exercising certain stock options he earned during his career with Hughes Electronics Corporation ("HEC"), a wholly owned subsidiary of General Motors ("GM") that DIRECTV later acquired. On April 11, 2011, DIRECTV filed a Notice of Removal pursuant to 28 U.S.C. § 1446 to remove the action to this Court on the ground that Matiella's state law claims were preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). Matiella now moves to remand the action to state court, and DIRECTV cross moves to dismiss it pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons that follow, Matiella's motion to remand is GRANTED, and DIRECTV's motion to dismiss is DENIED.

BACKGROUND

The following facts are taken from Matiella's complaint, the documents attached to his complaint, and the documents specifically referenced in his complaint.

In 2000, Matiella, a United States citizen currently residing and domiciled in Mexico, was employed as an executive with GM. (Compl. ¶¶ 1, 3; Decl. of David Matiella ¶ 1.) In October 2000, GM transferred Matiella to work for GM's wholly owned subsidiary, HEC. (Compl. ¶ 4.) HEC in turn assigned Matiella to work for its subsidiary Directv Latin America ("DTVLA"), where Matiella worked until his retirement on April 1, 2002. (See Compl. ¶¶ 5-6.)

On November 1, 2000, while Matiella was working for DTVLA, HEC awarded him stock options pursuant to the terms of a plan known as the HEC Incentive Plan. (Compl. ¶¶ 7-8.) The options gave Matiella the right to purchase 20,000 shares of General Motors/Hughes ("GMH") stock at a total exercise price of $32,105. (Compl. ¶ 7.) Under the terms of the grant, the options were exercisable until November 2, 2010. (Id.) The HEC Incentive Plan, however, provided that the exercise period could be cut short if an employee terminated his employment with HEC. Specifically, the HEC Incentive Plan provided that if an employee terminated his employment

(voluntarily or involuntarily) at any time on or after the first anniversary of the date of grant of an option for any reason other than death or dismissal for cause, or voluntary termination without the consent of Hughes, then, unless the GM Committee determines otherwise, the option will terminate not later than the fifth anniversary . . . of the date of termination of employment or, if earlier, the expiration date of the option. (Compl. ¶ 9 (emphasis added).)

In 2002, GM announced a program known as the 2002 U.S.-Wide Window Retirement Program (the "Window Program"). (See 2002 U.S.-Wide Window Retirement Program (Window) Information for Executive Candidates (SERP Eligible) ("Window Program"), 1 (attached as Ex. 1 to Decl. of Thomas L. Follosco ("Follosco Decl.") (the Follosco Decl. is attached as Ex. C to DIRECTV's Notice of Removal)).) The Window Program was designed to provide an incentive to retire for certain eligible executives between the ages of fifty and sixty-one. (Compl. ¶ 11.) To provide the incentive, the Window Program offered eligible executives a variety of early retirement benefits. According to an information sheet provided by GM, the Window Program offered participating executives the opportunity to receive Salaried Retirement Program benefits and health care benefits that would not be reduced for age. (See Window Program, 1, 3.) The Window Program also provided participants "Supplemental Life Benefits Program (SLBP) coverage and Personal Umbrella Liability Insurance (PULI) . . . during retirement." (Id. at 3.) The Window Program also offered eligible executives benefits related to stock options. For example, the Window Program provided that retiring executives could retain the first installment of any stock options granted in 2002. (Id. at 3.) The Program also provided that stock options granted on or after January 1, 1999 would remain exercisable until their original expiration date. (Id. at 3.) Matiella alleges that this provision applied to his stock options and that therefore his stock options remained exercisable until November 2, 2010, their original expiration date. (Id. ¶¶ 12-13.) The information sheet also provided,

This Window is governed by provisions of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC). The Named Fiduciary with respect to GM Benefit Plans, exclusive of the Investment of such plan's assets, is the Investment Funds Committee of the Board of Directors of General Motors Corporation. The Plan Administrator is General Motors Corporation. (Id. at 4.) The program required all retirements under the Window Program to become effective on April 1, 2002. (Id. at 1.)

Matiella was eligible to retire under the Window Program, and he chose to do so. (Compl. ¶ 15.) His retirement became effective on April 1, 2002. (Id.) In 2003, DIRECTV acquired HEC and assumed GM and HEC's liability with respect to certain employee benefits, including those accrued under the HEC Incentive Plan and the Window Program. (Id. ¶ 17.)

In May 2010, Matiella contacted a broker at Morgan Stanley Smith Barney to arrange for the exercise of his stock options. (Id. ¶ 18.) DIRECTV, however, intervened and cancelled the transaction. (Id. ¶ 21.) In an email to Matiella, DIRECTV explained that it cancelled the transaction because, under both its and GM's interpretation of the Window Program, Matiella's General Motors/Hughes stock options had expired on April 1, 2007, five years after Matiella's retirement. (See Compl. Ex. A.) DIRECTV explained that the provision in the Window Program providing that stock options acquired on or after January 1, 1999 would be exercisable until their original expiration date did not apply to General Motors/Hughes stock options, and instead only applied to certain other General Motors stock options which Matiella did not own. (Id.) DIRECTV thus refused to permit Matiella to exercise the stock options. Matiella subsequently brought this action, alleging that DIRECTV's conduct amounted to a breach of contract and also that DIRECTV tortiously interfered with a contract between Matiella and Morgan Stanley relating to the exercise of the options.

LEGAL STANDARD

I.Motion to Remand

Removal of a case is only appropriate if the federal district court would have original subject matter jurisdiction over the action. 28 U.S.C. § 1441(a). The case must be remanded if the federal court lacks subject matter jurisdiction over the action. Id. § 1447(c). DIRECTV's primary basis for removal is that federal question jurisdiction exists, i.e., that this action "aris[es] under the Constitution, ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.