United States District Court, S.D. New York
WILLIAM W. GILMAN and EDWARD J. McNENNEY, JR., Plaintiffs,
MARSH & MCLENNAN COMPANIES, INC., et al., Defendants
For William W. Gilman, Edward J. McNenney, Jr., Plaintiffs: Jeffrey Lew Liddle, LEAD ATTORNEY, Blaine Howell Bortnick, James William Halter, Jennifer Rodriguez, Liddle & Robinson, LLP, New York, NY; Keith Martin Fleischman, The Fleischman Law Firm, New York, NY.
For Marsh & McLennan Companies, Inc., Marsh Inc., Marsh USA Inc., Marsh Global Broking Inc., Defendants: Jonathan D Polkes, Nicholas James Pappas, LEAD ATTORNEYS, Weil, Gotshal & Manges LLP (NYC), New York, NY.
For Michael Cherkasky, Defendant: Andrew W. Stern, LEAD ATTORNEY, Cliff Fonstein, James Ormerod Heyworth, V, Sidley Austin LLP (NY), New York, NY.
OPINION AND ORDER
J. PAUL OETKEN, United States District Judge.
Plaintiffs William W. Gilman and Edward J. McNenney, Jr., bring this action against their former employers, Defendants Marsh & McLennan Companies, Inc., several of Marsh's subsidiaries (collectively " Marsh" ), and Michael Cherkasky, Marsh's former CEO. Plaintiffs claim that Marsh and Cherkasky wrongfully withheld severance pay and stock in violation of the Employee Retirement and Income Security Act (" ERISA" ), 29 U.S.C. § 1001, et seq., and in breach of their stock contracts with Marsh. Plaintiffs and Defendants
now move for summary judgment and Defendants move to strike an affidavit from Samantha Mohs, a Marsh employee. For the reasons that follow, Defendants' motion for summary judgment is granted, Plaintiffs' motion for summary judgment is denied, and Defendants' motion to strike is denied.
Gilman and McNenney worked at Marsh, a global insurance broker, for 28 and 14 years, respectively. Both worked in the excess casualty insurance division and were regularly promoted throughout their careers. By the time they were terminated, in 2004, they were managing directors.
In early 2004, the New York Attorney General (" NYAG" ) began to investigate Marsh's contingent commission practices on the suspicion that they violated antitrust laws, securities laws, and other New York business regulations. Marsh began a simultaneous internal investigation. Gilman and McNenney cooperated fully in this internal investigation by speaking to Marsh's attorneys. The NYAG ultimately filed a civil complaint against Marsh. The complaint was eventually dismissed.
Shortly after the filing of the complaint, during the week of October 18, 2004, Marsh suspended Gilman and McNenney, with pay. Around the same time, Marsh forced its CEO, Jeffrey Greenberg, to resign and replaced him with Cherkasky, a close personal friend of then-NYAG Eliot Spitzer. According to Gilman and McNenney, Marsh replaced Greenberg with Cherkasky as part of a deal with Spitzer to avoid criminal prosecution of the corporation. After taking office, Cherkasky met with Spitzer and agreed to waive Marsh's attorney-client privilege in exchange for avoiding criminal prosecution of the company. As part of this deal, Marsh turned over handwritten notes and typed summaries of Gilman and McNenney's meetings with Marsh's attorneys.
On October 25, 2004, the NYAG published a press release announcing its agreement with Marsh. It stated that " the goals that would have been advanced by a criminal prosecution of the corporation . . . will be better accomplished by criminal prosecution of individuals." (Dkt. No. 93, Declaration of James Halter, Exhibit 14, at 235-38 [" Halter Declaration" ].) According to Gilman and McNenney, Cherkasky knew that they would be prosecuted. In fact, the NYAG civil complaint named Gilman as a wrongdoer and mentioned McNenney as being involved.
In connection with the ongoing investigations, Marsh requested that Gilman and McNenney submit to interviews. McNenney contends that Marsh requested that he interview with the NYAG. Marsh contends that it requested that he interview with its attorneys. The parties agree that Marsh requested that Gilman interview only with Marsh's attorneys. After consulting with their personal attorneys, both Gilman and McNenney declined to be interviewed.
Marsh fired McNenney on October 28, 2004. On November 1, 2004, Gilman attempted to retire by faxing paperwork to Marsh. Marsh refused his retirement and, instead, fired him for cause on November 2. Marsh said that the reason it fired Gilman and McNenney was because they refused to interview with its attorneys. Gilman and McNenney contend that they were scapegoats fired to appease the NYAG. In any event, Marsh denied them severance pay, stock options, and the stock bonus units and deferred stock units they had already accrued.
Shortly after being fired, Gilman and McNenney were criminally indicted in New York Supreme Court. They went to trial on fraud, securities fraud, and antitrust charges. Justice James Yates tried the case without a jury and acquitted Gilman and McNenney of all charges except one. That conviction, however, was vacated after subsequent events revealed that the NYAG had violated its obligations under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Justice Yates concluded that had the prosecution disclosed the evidence in its possession, there was " not only a possibility, but a probability that its disclosure would have produced a different result." (Halter Declaration, Exhibit 21, at *19.)
Both parties move for summary judgment. Marsh moves for summary judgment on all issues in the case; and Gilman and McNenney move for summary judgment on the issue of whether Marsh terminated them for cause. Marsh has moved to strike Mohs's affidavit. Because the Court concludes that the affidavit does not affect the result, Marsh's motion to strike is denied as moot.
A. Legal Standard
Summary judgment is appropriate when " there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56. A fact is material if it " might affect the outcome of the suit under the governing law," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and a dispute is genuine if, considering the record as a whole, a rational jury could find in favor of the non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
The initial burden of a movant on summary judgment is to provide evidence on each element of her claim or defense illustrating her entitlement to relief. Vermont Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004). If the movant meets this initial burden of production, the non-moving party must then identify specific facts demonstrating a genuine issue for trial. Fed.R.Civ.P. 56(f). The court views all evidence " in the light most favorable to the nonmoving party and draw[s] all reasonable inferences in its favor." Anderson, 477 U.S. at 250-51. A motion for summary judgment may be granted only if " no reasonable trier of fact could find in favor of the nonmoving party." Allen v. Coughlin, 64 F.3d 77, 79 (2d Cir. 1995) (citation omitted). But the non-moving party cannot rely upon mere " conclusory statements, conjecture, or speculation" to meet its burden. Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996) (citing Matsushita, 475 U.S. at 587).
Because both parties have moved for summary judgment, the Court will take the facts in the light most favorable to ...