STUART M. BERNSTEIN, Bankruptcy Judge.
Alan Wattenmaker, a former employee of the debtor Avaya, Inc. ("Avaya"),
Except as may be otherwise noted, the facts set forth are not subject to reasonable dispute. Avaya hired Wattenmaker on April 20, 1998 and terminated him from employment on June 11, 2009. In June 2012, Wattenmaker, represented by counsel, sued Avaya in New York Supreme Court claiming discrimination based on age, religion and disability. (Decision and Order, N.Y. Cty. Index No. 102877/2012, slip. op. at 1 (N.Y. Sup. Ct. dated July 22, 2016) ("Decision & Order").
The Settlement Term Sheet contemplated a more formal agreement, (id. at ¶ 1; Decision & Order at 2), and Wattenmaker, by his counsel, was required to deliver a fully executed agreement by December 3, 2013 or waive his ability to receive any payments under the settlement agreement in 2013. (Settlement Term Sheet at ¶ 11.) During the following year, the parties exchanged documents but could not reach agreement. (Decision & Order at 2.) Avaya forwarded what it considered the final draft on October 7, 2014 ("October Draft"), and when Wattenmaker refused to sign it, moved in state court to enforce the Settlement Term Sheet or alternatively, the October Draft. (Id.)
The state court concluded that the Settlement Term Sheet was binding and enforceable, (id. at 2-7), and the October Draft did not supersede it because Wattenmaker did not sign the October Draft. (Id. at 8.) It appears that a money judgment in the sum of $92,000 ("Judgment") was also entered on September 14, 2016, because Wattenmaker's counsel filed a Notice of Entry of Judgment on or about September 16, 2016 that referred to a Judgment.
Following the commencement of the chapter 11 case, Wattenmaker filed the Claim.
(Sur-Reply at ¶ 4 & Ex. C.) When informal attempts to resolve the Objection failed, Avaya filed the Supplemental Declaration of James Kobar in Support of the Debtors' Eighth Omnibus Objection to Certain: (I) Amended Claims; (II) No Liability Claims; and (III) Claims to Be Modified with Respect to Claim No. 3103, dated July 11, 2018 ("Kobar Declaration") (ECF Doc. # 2094) in support of the Objection.
Wattenmaker was out of town during the summer of 2018 working at a summer camp, and upon his return, the Court scheduled a conference relating to the Objection for September 6, 2018. Following the conference, the Court signed an order scheduling the trial on the Objection for November 7, 2018. (See Order (I) Scheduling Trial Date and Procedures in Connection With the Debtors' Objection to Claim No. 3103, and (II) Granting Related Relief, signed Sept. 12, 2018 (ECF Doc. # 2188).) The scheduling order also stated that the Kobar Declaration would constitute Kobar's direct testimony and Wattenmaker could depose Kobar at a mutually convenient time before the trial. (Id. at ¶ 4.)
Instead of deposing Kobar, Wattenmaker filed a request for an extension of discovery and an adjournment of the trial date. (See Motion to Extend the Due Date for Discovery and Trial Date, in Connection with the Debtors' Objection to Claim No. 3103, and (II) Granting Related Relief, dated Sept. 30, 2018 (ECF Doc. # 2207).) Avaya's counsel disclosed at the ensuing hearing that Wattenmaker had served 133 discovery requests consisting of document demands and/or interrogatories. (Transcript of 10/25/18 Hr'g at 11:23-12:3 ("Tr. (10/25)" (ECF Doc. # 2236).) After reviewing the proposed discovery, the Court concluded that Wattenmaker's discovery requests were largely if not completely irrelevant to the three issues that governed Wattenmaker's pension calculation: his start date, his termination date and his band (described below) under the collective bargaining agreement ("CBA") between Avaya and the CWA. Because the material facts appeared to be few and not subject to reasonable dispute, the Court suggested that Avaya make a motion for partial summary judgment or summary judgment. (Id. at 51:16-53:10.) In accordance with the Court's suggestion, Avaya filed the Motion.
Avaya seeks summary judgment limited to determinations on the following issues: (i) the Settlement Term Sheet is binding and enforceable, (Motion at 3-8), a proposition that Wattenmaker does not dispute although he contends that Avaya breached the Settlement Term Sheet (see Declaration of Claimant and Claimant's Reply to Avaya Inc.'s Motion for Summary Judgment (Claim #3103) and Declaration of Claimant and Claimant's Justification for Discovery, dated Dec. 11, 2018 (ECF Doc. # 2259, at ECF pp. 4-5 of 11)); (ii) the CBA and Pension Plan govern the calculation of Wattenmaker's pension, the relevant information needed to calculate the pension are not subject to dispute, (Motion at 8-9), and it follows that Wattenmaker became entitled to a monthly pension, beginning on February 2013, in the sum of $1,123.68; (iii) Wattenmaker has failed to identify any specific claim for additional medical or retirement benefits to which he is entitled, (id. at 9-10), and (iv) the sum of $92,000 is an allowable unsecured claim, not a priority claim. (Id. at 10-12.)
Wattenmaker's contentions have been spread across numerous pleadings and are repeated in the Claimant's Reply and Opposition to Avaya Inc.'s Motion for Summary Judgment and Memorandum of Law in Support of Opposition, filed Apr. 2, 2019 ("Wattenmaker Opposition") (ECF Doc. # 2324). His principal contention is that the Settlement Term Sheet required Avaya to reinstate him for one day as an active employee and give him work. (See id. at ECF p. 25 of 61 ("The meaning of this condition [reinstatement for one day] is that Avaya is obligated to reinstate Claimant, giving the Claimant work to perform as an active full time (SCSE) with all the rights, salaries, benefits and etc. of that position.").) It never did, and consequently, he was never terminated and is still employed by Avaya. (See, e.g., id. at ECF p. 13 of 61 ("Avaya mentions that Creditor claims to be employed till this very day but has not present [sic] a single argument to refute this statement."); Tr. (10/25) at 15:21-16:1 (stating that he has not been terminated and is still employed by Avaya).)
Wattenmaker points to other alleged breaches of the Settlement Term Sheet. He contends, among other things, that Avaya has failed to provide him with wages for the one day he worked, overtime pay, vacation pay, carry beeper payments, "Call out Tech/Engineer" payments, meal and travel allowance payments, on the job educational benefits, off the job and after-hours educational benefits, non-profit organization Avaya match contributions/donations, leave of absence benefits, city allowance pay upgrade, various awards, additional "cross over time" from Bell Atlantic, New York Telephone employment and the right to view, make comments on, and get a complete copy of his employee personal file. (Wattenmaker Opposition at ECF p. 10 of 61.) Avaya has also deprived him of certain pension and "voluntary retirement" benefits (the latter includes "newsletters, phone, museum, misc. discounts, monthly retirement Breakfasts that all retirees and active (SCSEs) attend etc."), denied him the separate medical benefits due under the CBA or independent of the CBA, breached the confidentiality and non-disparagement provisions and failed to comply with certain deadlines. (Id. at ECF pp. 10-12, 25-27 of 61.)
Finally, Wattenmaker argues that the $92,000 is entitled to priority because it was not due and owing until the Judgment was entered and that occurred within four months of the petition date, (see id. at ECF pp. 7-8 of 61), and he should be reimbursed for expenses incurred due to Avaya's failure to make sure that Wattenmaker received the benefits to which he was entitled. (Id. at ECF pp. 12 of 61.)
As this is essentially a contract case, I briefly review the principles that govern the determination of the Motion. When asked to interpret contractual language, the question under New York law
A claim for pension benefits is based on the Avaya Inc. Pension Plan ("Pension Plan").
The following critical information is undisputed or cannot be reasonably disputed. First, Wattenmaker was born in January 1948 and reached his 65
One of the purposes of the settlement embodied in the Settlement Term Sheet was to give Wattenmaker additional service credit by creating a new, albeit fictional retirement date; the parties agreed that he would be reinstated and voluntarily retire on the same day, January 13, 2014, and be entitled to sixteen years of service credit. (Settlement Term Sheet at ¶ 2.) As the New York Supreme Court explained in enforcing the Settlement Term Sheet:
(Decision & Order at 4.) Finally, Wattenmaker conceded that if the January 13, 2014 retirement date is correct, he belonged in band 125. (Tr. (10/25) at 16:2-16.)
Given a band of 125 and sixteen years of service credit, we can readily compute Wattenmaker's monthly pension under the unambiguous provisions of the Pension Plan. According to the table on pages 30-31 of the Pension Plan, (see Kobar Declaration, Ex. B, at ECF pp. 68-69 of 244), his monthly pension is $70.23 multiplied by his sixteen years of service, or $1,123.68.
Wattenmaker's proffered interpretation, that Avaya never gave him duties, never terminated him and still employs him, is unreasonable. The Settlement Term Sheet was entered into more than four years after Wattenmaker last worked for Avaya and a year after Wattenmaker had sued Avaya for employment discrimination. It settled a litigation; it was not an employment agreement. Reading the Settlement Term Sheet as a whole, Wattenmaker's simultaneous reinstatement and retirement was part of the deal to give him more service credit and a larger pension, not new duties for the one day he was deemed to be reinstated. In addition, it granted him the retirements under the CBA based on a retirement date of January 13, 2014. The Settlement Term Sheet is unambiguous on this critical issue, and I conclude as a matter of law that Wattenmaker was terminated on January 13, 2014 and became entitled under the Pension Plan to receive a monthly pension of $1,123.68 beginning on February 1, 2013.
Wattenmaker maintains that Avaya breached the confidentiality and non-disclosure agreements. Under the Settlement Term Sheet, the confidentiality and non-disparagement provisions (¶¶ 6, 7) bind only Wattenmaker. In addition, his allegations of breach are conclusory.
Wattenmaker further alleges that Avaya breached the Settlement Term Sheet by failing to provide a litany of employment and voluntary retirement benefits summarized above, benefits that supposedly attached to his reinstatement and voluntary retirement. (See Wattenmaker Opposition at ECF pp. 9-10 of 61.) Many of the benefits he lists incorrectly assume that he became an active employee of Avaya after January 13, 2014 and remains an active employee to this day. In addition, the Settlement Term Sheet did not provide these benefits and Wattenmaker has failed to identify their source, such as the Pension Plan, the CBA, employment manuals or similar documents. Wattenmaker also fails to identify any employment and voluntary retirement benefits available to him under the CBA or otherwise that he has not received. For example, he has not pointed to any expense he incurred that Avaya wrongfully refused to fund. Accordingly, Avaya is entitled to partial summary judgment to the extent that the Claim seeks a monetary award based on the failure to provide retirement benefits other than his monthly pension benefits granted under the Pension Plan.
Wattenmaker's argument that a portion of the $92,000 settlement is entitled to a wage priority lacks merit. The Bankruptcy Code affords a limited priority for "wages, salaries, or commissions, including vacation, severance, and sick leave pay" that were "earned 180 days before the date of the filing of the petition," 11 U.S.C. § 507(a)(4)(A) (emphasis added) and "claims for contributions to an employee benefit plan . . . arising from services rendered within 180 days before the date of the filing." 11 U.S.C. § 507(a)(5)(A) (emphasis added). Wattenmaker's claim for employment discrimination accrued no later than the date he was terminated by Avaya in June 2009. The $92,000 settlement as well as the other provisions of the Settlement Term Sheet, executed in November 2013, resolved that claim and any other claims that Wattenmaker had relating to his employment with Avaya.
Wattenmaker's contention that the $92,000 was not earned until the Decision & Order was filed in September 2016, within the 180-day period, is wrong. He confuses a disputed claim with an unmatured claim. By June 2009, all of the facts that gave rise to his employment discrimination claim (and Avaya's alleged liability) were fixed. At that point, Wattenmaker held an unliquidated, matured, disputed employment discrimination claim and brought a lawsuit in 2012 on that claim. The Settlement Term Sheet merely liquidated the claim and rendered it undisputed. Even using the reinstatement/retirement date of January 13, 2014 as Wattenmaker's last date of employment, the settlement was still not "earned 180 days before" the petition date or based on services rendered "within 180 days" of the petition date. Accordingly, Avaya is entitled to partial summary judgment determining that Wattenmaker's claim for $92,000 is a general, unsecured claim, not a priority claim.
Having determined the amount of Wattenmaker's monthly pension benefit and the correct classification of the $92,000 settlement, certain factual and legal issues preclude a complete disposition of the Claim and the Objection.
First, the Claim includes legal fees and "expenses TBD." These were not addressed in the Motion.
Second, the computation of the pension benefit portion of the Claim requires further factual development. At some point, Wattenmaker refused the tender of pension benefit payments and equitable principles may stop the running of interest on the payments he refused. See Koch v. Greenberg, 14 F.Supp.3d 247, 285 (S.D.N.Y. 2014).
Third, the parties dispute the date that interest began running on the $92,000 settlement. Avaya concedes that interest may be owed from the date of the entry of the judgment enforcing the Settlement Term Sheet to the petition date. (Motion at 10 n. 5.) Wattenmaker contends that it began to accrue on the date that the Settlement Term Sheet was signed. (Wattenmaker Opposition at ECF pp. 46-47 of 61.) The accrual of pre-verdict interest is governed by N.Y.C.P.L.R. § 5001. The parties will have an opportunity to clarify their positions regarding the date on which interest began to accrue in future proceedings.
For the reasons stated, the Motion is granted. The Court has considered Wattenmaker's other arguments and concludes that they lack merit. The parties should contact chambers to schedule a hearing to address further proceedings.
So ordered.