CONTI, Chief Judge.
Pending before the court is a motion for summary judgment (ECF No. 57) filed by defendant and counterclaim plaintiff The University of Pittsburgh ("University") and a partial motion for summary judgment (ECF No. 60) filed by plaintiff and counterclaim defendant Michael Haywood ("Haywood").
Haywood initiated this diversity action on September 19, 2011, by filing a three-count complaint alleging: (1) a Pennsylvania state common law claim for breach of contract with respect to an employment contract (count A); (2) a Pennsylvania state common law claim for breach of contract with respect to an oral agreement (count B); and (3) a deprivation of Haywood's due process rights under the Fourteenth Amendment to the United States Constitution, pursuant to 42 U.S.C. § 1983 (count C). (Haywood's Complaint ("complaint") (ECF No. 1.))
On October 14, 2011, the University filed with the court its answer, affirmative defenses, and counterclaim alleging breach of confidentiality of an employment contract ("counterclaim"). (ECF No. 10.) On the same day, the University filed a partial motion to dismiss count C of the complaint (ECF No. 8) and a brief in support of its motion. (ECF No. 9) On November 4, 2011, Haywood filed a response in opposition to the University's motion to dismiss. (ECF No. 14.) On February 1, 2012, Haywood filed an answer to the University's counterclaim. (ECF No. 20.) On February 22, 2012, 2012 WL 591746, the court granted the University's partial motion to dismiss with respect to count C, i.e., Haywood's claim that the University deprived him of his constitutional rights. (ECF No. 24.)
On February 14, 2013, the University filed a cross-motion for summary judgment, a brief in support of that motion, a concise statement of material facts, and an accompanying appendix with respect to all remaining claims, i.e., count A, count B, and the counterclaim. (ECF Nos. 57, 58, 59.) On March 18, 2013, Haywood filed a brief i n opposition, and the University filed its reply. (ECF Nos. 68, 71.) On April 9, 2013, the parties filed a combined concise statement of material facts. (Combined Concise Statement of Material Fact ("C.S.F.") (ECF No. 72).)
On February 14, 2013, Haywood filed a cross-motion for summary judgment with respect to the University's counterclaim, a brief in support of his motion, a concise statement of material facts, and an accompanying appendix. (ECF Nos. 60, 61, 62, 63.) On March 18, 2013, the University filed a brief in opposition to Haywood's motion for summary judgment. (ECF No. 65.) On April 12, 2013, the parties filed a combined concise statement of material facts. (ECF No. 74.) The parties' motions for summary judgment having been fully briefed are now ripe to be decided by the court.
The factual background is derived from the undisputed evidence of record and the disputed evidence of record is viewed i n the light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ("The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.").
Haywood is an individual who formerly worked as a college football coach. (C.S.F. ¶ 1 (ECF No. 72); ECF No. 59-2.) The University is an institution of higher learning, and "an instrumentality of the Commonwealth to serve as a State-related institution in the Commonwealth System of Higher Education." (C.S.F. ¶ 2 (ECF No. 72); 24 PA. STAT. § 2510-202.)
In early December 2010, Steve Pederson ("Pederson"), athletic director for the University, recruited Haywood to serve as the University's head football coach. (Deposition of Steve Pederson ("Pederson's Dep.") at 5-6, 14-15 (ECF No. 59-3 at 118-121).) Jerome Cochran ("Cochran"), executive vice chancellor and general counsel for the University, negotiated the terms of the employment contract for the University. (C.S.F. ¶ at 13(ECF No. 72); Pederson's Dep. at 19 (ECF No. 59-3 at 122); Deposition of Jerome Cochran ("Cochran's Dep.") at 78 (ECF 59-3 at 73).) Albert Elias ("Elias"), Haywood's attorney and agent,
Haywood directly communicated with the University about the terms of the employment contract, did not have questions for Elias concerning terms of the employment contract, and only sought changes relating to the assistant coaches' compensation and salary pool. (Haywood's Dep. at 63-64, 69 (ECF No. 59-2 at 109-110, 113).) Haywood read and discussed the employment contract's compensation provisions with Elias, but did not read the non-economic terms of the employment contract. (Haywood's Dep. at 67-69, 71-72 (ECF No. 59-2 at 111-113, 114-115).) On December 16, 2010, Haywood entered into the employment contract with the University agreeing to serve as the University's head football coach. (C.S.F. ¶ 3 (ECF No. 74 at); Employment Contract (ECF No. 14-1).) The employment contract was to expire on January 15, 2016, unless otherwise extended or terminated. (Employment Contract ¶ 2.1 (ECF No. 14-1).)
Elias advises his clients to read the contracts they sign, but Haywood had not read the employment contract in its entirety as of August 29, 2012. (Elias' Dep. at 60 (ECF No. 70-1 at 101); Haywood's Dep. at 72 (ECF No. 59-2 at 115).) The employment contract provided Haywood a base salary of one million dollars per year, a vehicle, a private stadium box for home games, and supplemental compensation for exceptional performance. (Employment Contract ¶ 3 (ECF No. 14-1).) The employment contract provided: "All such annual base salary shall be paid to the employee in equal monthly installments, on the last day of each calendar month." (Employment Contract ¶ 3.1 (ECF No. 14-1).)
Under the terms of the employment contract, the University could terminate Haywood's employment with or without just cause. (Employment Contract ¶¶ 14.1, 14.2 (ECF No. 14-1); C.S.F. ¶ 19 (ECF No. 72 at 115).) If the University wanted to terminate the employment contract without just cause, it had to provide Haywood written notification of such termination pursuant to paragraph 14.2 of the employment contract. Paragraph 14.2 provided:
(Employment Contract ¶ 14.2 (ECF No. 14-1).) If the University terminated the employment contract with just cause, the University would be "relieved of all further obligations (financial and otherwise) to [Haywood]." (Employment Contract ¶ 14.1 (ECF No. 14-1); C.S.F. ¶ 20 (ECF No. 72).) The University could determine that just cause existed to terminate the employment contract if Haywood engaged in conduct
(Employment Contract ¶ 14.1(F) (ECF No. 14-1); C.S.F. ¶ 21 (ECF No. 72).) If the University terminated the employment contract without just cause, Haywood would
(Employment Contract ¶ 14.2 (ECF No. 14-1).) With respect to termination of the employment contract, paragraph 14.10 provided:
(Id. at ¶ 14.10.)
Elias does not remember discussing with Haywood any provisions of paragraph 14 of the employment contract, which governed termination of the employment contract. (C.S.F. ¶ 25 (ECF No. 72); Elias' Dep. at 61 (ECF No. 70-1 at 102).)
With respect to confidentiality, paragraph 17.1 of the employment contract provided:
(Employment Contract ¶ 17.1 (ECF No. 14-1); C.S.F. ¶ 26 (ECF No. 72).) Pursuant to this paragraph, the parties' confidentiality obligations survive the termination of the employment contract, money damages are an inadequate remedy, and the non-breaching party has a right to
Paragraph 24.1 of the employment contract provided:
(Employment Contract ¶ 24.1 (ECF No. 14-1); C.S.F. ¶ 28 (ECF No. 72).)
Haywood wanted a provision in the employment contract whereby the University would buyout his remaining contract with Miami University. (Haywood's Dep. at 61 (ECF No. 59-2 at 108).) Elias spoke with Cochran with respect to a Miami University buyout clause, and Haywood would not sign the employment contract with the University unless a buyout clause was included in the employment contract. (Elias' Dep. at 45-47 (ECF No. 70-1 at 98).) Elias stated Cochran told him "he was not going to put it in there but he assured [Elias] that it would get paid out, that [Elias] could trust him on his word." (Elias' Dep. at 47 (ECF No. 70-1 at 98).) Cochran did not tell Elias why he would not include a buy-out clause i n the Employment contract. (Elias' Dep. at 47-48 (ECF No. 70-1 at 98).) Pederson stated the University orally promised to buy-out Haywood's employment contract with Miami University, but that it did not happen because Haywood's employment "was terminated before we ever got to that point." (Pederson's Dep. at 20 (ECF No. 70-1 at 20).)
Elias stated it would be consistent with common practice for the University to buyout Haywood's existing contract with Miami University, and if a university agreed to such a condition, the employment contract would contain a provision explaining the terms of the buyout agreement. (Elias' Dep. at 45 (ECF No. 70-1 at 98).)
After Haywood's termination the University has "refused responsibility to buy [the Miami University contract] out." (Elias Dep. at 56 (ECF No. 70-1 at 100).) In February 2011 Miami University sent Haywood a letter demanding he personally pay the $300,000 buyout. (Elias' Dep. at 56 (ECF No. 70-1 at 100)); Haywood's Dep. at 247-48 (ECF No. 70-1 at 65.) Haywood did not have contact with Miami University regarding the buyout clause after February 2011, but testified that Miami University had discussed the buyout with Elias in 2012.(Id.)
On December 30, 2010, Haywood attempted to visit his two-year-old son at a residence Haywood owned in South Bend, Indiana ("residence") where his son and son's mother, Beth Marriott ("Marriott"), were staying. (Haywood's Dep. at 131-133 (ECF No. 70-1 at 36-37).) Haywood testified Marriott did not let him into the house because Marriott was upset with Haywood. (Haywood's Dep. at 133 (ECF No. 59-2 at 119); C.S.F. ¶ 30 (ECF No. 72).) After circling the residence on foot, knocking on the doors and windows, Haywood left the residence and stayed at a hotel. (Haywood's Dep. at 132 (ECF No. 70-1 at 36).)
On December 31, 2010, between 9:30 a.m. and 10:00 a.m., Haywood returned to the residence. (Haywood's Dep. at 133 (ECF No. 59-2 at 119); C.S.F. ¶ 31 (ECF No. 72).) Haywood testified he knew "without a doubt" that Marriott was mad at him when he returned to the house. (Haywood's Dep. at 134 (ECF No. 59-2 at 120); C.S.F. ¶ 31 (ECF No. 72).) Haywood circled the residence on foot again, knocking on the doors and windows. (Haywood's Dep. at 135 (ECF No. 70-1 at 37).) Haywood testified he did not know if Marriott and his son were in the residence. (Haywood's Dep. at 134 (ECF No. 59-2 at 120).) When no one answered the door at the residence, Haywood called his realtor, Jackie Rockie ("Rockie"). (Haywood's Dep. at 136 (ECF No. 70-1 at 37).) Haywood drove twenty minutes to meet Rockie in order to obtain a key to the residence. (Haywood's Dep. at 136 (ECF No. 70-1 at 37).)
Haywood returned to the residence with the key and attempted to open the front door. (Haywood's Dep. at 137-138 (ECF No. 70-1 at 38).) Haywood testified that when he put the key in the door, the lock turned but he could not open the door. (Haywood's Dep. at 137-138 (ECF No. 70-1 at 38).) Haywood circled the residence on foot again, knocking on the doors and windows. (Haywood's Dep. at 138 (ECF No. 70-1 at 38).) Haywood looked through a window and "notice[d] that there [was] a white pole up against the door, so [he] put the key in and leaned up against the door and the pole slid out." (Haywood's Dep. at 138 (ECF No. 70-1 at 38).) Haywood opened the door and walked into the residence. (Haywood's Dep. at 138 (ECF No. 70-1 at 38).) Haywood was surprised, but not angry, that the door was barricaded. (Haywood's Dep. at 140 (ECF No. 59-2 at 121).)
Haywood audio recorded portions of the events that took place inside the residence. (Haywood's Dep. at 139-144 (ECF No. 70-1 at 38-39).) Haywood testified to the following matters:
Marriott's testimony contradicted Haywood's testimony. She testified:
Haywood went into police custody around 3:00 p.m. on December 31, 2010. (Police Report (ECF No. 59-3 at 4-6); ECF No. 59-3 at 157-166.) Police took photographs of marks on Marriott's body that were consistent with the version of events Marriott related to the police officer. (Police Report (ECF No. 59-3 at 4-6); ECF No. 59-3 at 157-166.) After Haywood's arrest on December 31, 2010, a judge i n South Bend, Indiana determined there was probable cause that Haywood committed the offense of domestic battery with a child present. (C.S.F. ¶ 8 (ECF No. 72); Haywood Dep. at 221 (ECF No. 59-2 at 137); Police Report (ECF No. 59-3 at 4-6); ECF No. 59-3 at 2.)
The University first learned about Haywood's arrest from Ernest J. Borghetti ("Borghetti"), senior associate athletic director of media relations for the University. (Deposition of E.J. Borghetti ("Borghetti's Dep.") at 14 (ECF No. 59-2 at 14); Pederson's Dep. at 33 (ECF No. 59-3 at 123).) Borghetti learned about Haywood's arrest and the national media coverage of his arrest after receiving a phone call from the New York Times. (C.S.F. ¶ 42 (ECF No. 72); Borghetti's Dep. at 14, 16, 50 (ECF No. 59-2 at 14); Pederson's Dep. at 33-34 (ECF No. 59-3 at 123-124); Deposition of Mark Nordenberg ("Nordenberg's Dep.") at 60 (ECF No. 59-2 at 60); Marriot's Dep. at 50-60 (ECF No. 59-3 at 27-34); Cochran's Dep. at 44-45 (ECF No. 59-3 at 58-59).) Haywood was aware there was press coverage of his arrest because when he "walked in to be booked, it was on ESPN." (Haywood's Dep. at 207 (ECF No. 59-2 at 132).) After learning about Haywood's arrest, the University began gathering information by searching online. (Borghetti's Dep. at 16 (ECF No. 59-2 at 14); Pederson's Dep. at 33 (ECF No. 59-3 at 123).) Elias learned about Haywood's arrest on ESPN "as the rest of the world" did. (Elias' Dep. at 66 (ECF No. 59-2 at 82).)
Elias had two telephone conversations with Cochran on the night of December 31, 2010, i n which he informed Cochran that Haywood had i n fact been arrested and that Elias was trying to get him out of jail. (Elias' Dep. at 69-70 (ECF No. 59-2 at 84-85).) Specifically, Elias testified he would have told the University two things Andre Gammage, Haywood's criminal defense attorney, told him: Haywood was probably going to spend the night in jail, and that Gammage "had spoken with the DA briefly and that there probably was not going to be formal charges against [Haywood]." (Elias' Dep. at 78 (ECF No. 59-2 at 88).) Elias "wanted [Cochran] and [Pederson] to know that because [he knew] they were under a lot of heat and [he knew] what was being reported by ESPN. A ny time you turned the thing on, they were talking ... about al l the allegations of domestic violence." (Id.)
Cochran recalled one conversation he had on December 31, 2010 with Elias and took notes of that conversation. (ECF No. 59-4 at 9.) Cochran also recalled "a conversation with somebody, indicating there had been a discussion with the prosecutor that [Haywood] was being held over until they found a judge. And the prosecutor had full intentions, and believed he had a strong case, to move forward." (Cochran's Dep. at 12 (ECF No. 59-3 at 44).) According to Cochran, either Elias or Gammage relayed this information to him, and it was his understanding that "the prosecutor was determining which specific charges to make." (Id. at 13). Cochran's understanding was that the prosecutor had a strong case but there seemed to be a problem, which Cochran "suspected it had to do with the holiday, or finding a judge." (Id. at 12-13).
Elias also spoke with Steve Pederson ("Pederson"), the University's athletic director. (Elias' Dep. at 71 (ECF No. 59-2 at 86).) Elias told Pederson he did not know what Haywood had done, but told Pederson what he knew based upon information he received from media accounts and conversations with Gammage. (Elias' Dep. at 78 (ECF No. 59-2 at 88).) Pederson took notes of his telephone conversation with Elias. (Pederson's Dep. at 40 (ECF No. 59-3 at 128).) Pederson's notes indicate that Elias told Pederson that
Pederson and Cochran also spoke with Gammage on December 31, 2010 and January 1, 2011. (C.S.F. ¶ 48 (ECF No. 72); Deposition of Andre Gammage ("Gammage Dep.") at 28-30, 50 (ECF No. 59-2 at 162-164; 170).) Gammage spoke with both Pederson and Cochran once or twice on the evening of December 31, 2010. (Gammage's Dep. at 29 (ECF No. 59-2 at 163).) Gammage testified he explained to Cochran or Pederson:
(Id. at 29-30). Gammage testified that at this time, no decision had been made with respect to charging Haywood, but "based on the allegations against him, they were going to keep [Haywood] overnight." (Id. at 32). Gammage does not remember talking to anyone the night of December 31, 2010 about the strength of the case against Haywood. (Id. at 33).
On December 31, 2010 at 10:15 p.m., the University issued a statement acknowledging it was aware of the alleged incident between Haywood and Marriott, and that it expected the highest standard of conduct from its employees, including coaches, and that a breach of that standard was a very serious matter. (C.S.F. ¶ 51 (ECF No. 72); ECF No. 59-4 at 11).
Gammage testified that he kept in contact with Cochran the morning of January 1, 2011 and would have told Cochran "I'm still on the case, stay awake. Something is going to happen within the next few hours." (Gammage's Dep. at 50 (ECF No. 59-2 at).) On the morning of January 1, 2011, Nordenberg, Cochran, Borghetti, and Pederson met in Nordenberg's office to discuss the University's position with respect to Haywood (the "morning meeting"). (C.S.F. ¶ 53 (ECF No. 72); Pederson's Dep. at 8, 67 (ECF No. 70-1 at 128, 143).) Pederson testified that based upon the information the University had at the time of the morning meeting, the University was "clearly nearing a point at which it was likely that [the University] would terminate him." (Pederson's Dep. at 67-68 (ECF No. 70-1 at 143).) Pederson testified "but until I talked to [Haywood] on the phone and called and reported that conversation to the chancellor, I don't believe any final conclusion had been reached." (Pederson's Dep. at 58 (ECF No. 59-3 at 136).)
Nordenberg testified:
(Nordenberg Dep. at 20 (ECF No. 59-2 at 56).)
Cochran testified this determination was made based upon the information Elias or Gammage told him and the media coverage of Haywood's conduct and arrest. (Cochran's Dep. at 42, 44-45 (ECF No. 59-3 at 57-59).) At the morning meeting, Nordenberg, Cochran, Borghetti, and Pederson discussed the employment contract's provisions. (C.S.F. ¶ 56 (ECF No. 72); Pederson Dep. at 104-105 (ECF No. 59-3 at 152-153).)
Cochran advised Nordenberg that the University could terminate Haywood with just cause under paragraph 14.1 of the employment contract. Paragraph 14.1 provided that just cause meant "as determined by the University any conduct of the employees that is seriously prejudicial to the best interest of the University," that is "seriously prejudicial to the best interest of the of the University or its inter-collegiate athletics program; that violates the University's or the Department's then current mission; that brings the University into disrepute; or that reflects ... moral turpitude." (C.S.F. ¶ 57 (ECF No. 72); Employment Contract ¶ 14 (ECF No. 14-1).)
Cochran testified Nordenberg was the University's decision maker with respect to Haywood's employment, but that Nordenberg sought advice and counsel from Cochran, Pederson, and Borghetti. (Cochran's Dep. at 5-6 (ECF No. 70-1 at 158); Nordenberg's Dep. at 5 (ECF No. 59-2 at 51).)
Cochran asked Timothy Delaney ("Delaney"), Chief of Police for the University of Pittsburgh Police Department, to contact his counterpart at the University of Notre Dame to make contact with law enforcement officials in South Bend, Indiana. (Cochran's Dep. at 14 (ECF No. 59-3 at 46).) On January 1, 2011, at 12:22 p.m., Delaney responded to Cochran via email, writing the sheriff "could not release the report at this time due to its status as an ongoing investigation." (Cochran's Dep. at 15 (ECF No. 70-1 at 160).)
The University received three emails from alumni and parents of University students urging the University to terminate Haywood. (ECF No. 59-4 at 5-7.) The first email was sent at 1:23 a.m. on January 1, 2011, and the two other emails were sent shortly after noon on January 1, 2011. (ECF No. 59-4 at 5-7.)
At 1:19 p.m. on January 1, 2011, Borghetti sent Nordenberg an email with a draft of a termination statement with respect to Haywood. (Pederson's Dep. at 97 (ECF No. 59-3 at 151).)
By the afternoon of January 1, 2011, the University decided it was going to terminate Haywood unless something happened to suggest that the University should reconsider. (Cochran's Dep. at 22-23, 25 (ECF No. 59-3 at 47-49); Pederson's Dep. at 57-58, 68 (ECF No. 59-3 at 141, 143).)
Gammage testified he spoke with Cochran on the afternoon of January 1, 2011, and informed Cochran that Haywood had been charged. (Gammage's Dep. at 49 (ECF No. 70-1 at 169).) Gammage testified he spoke with Cochran multiple times on January 1, 2011. (Id. at 50) Gammage told Cochran that Haywood had been charged around 12 p.m., 1 p.m., or right
On January 1, 2011 at 3:10 p.m., Cochran called Elias on the telephone to inform hi m that the University intended to terminate Haywood's employment. (C.S.F. ¶ 62 (ECF No. 72); Nordenberg Dep. at 12 (ECF No. 59-2 at 54); Cochran Dep. at 11, 23, 36-37 (ECF No. 59-3 at 43, 48, 55-56).) Elias testified that Cochran told him during the conversation "irrespective of guilt or innocence, the University of Pittsburgh is going to terminate its relationship with Mike Haywood." (Elias' Dep. at 83 (ECF No. 70-1 at 107).) Elias asked Cochran to wait and talk to Haywood before making this determination. (Cochran Dep. at 24 (ECF No. 70-1 at 162); Elias' Dep. at 83 (ECF No. 70-1 at 107).) Cochran told Elias that speaking to Haywood was not necessary, as "it made no difference" because "[w]e were clearly to fire [Haywood]. We had not made a final decision or announced a final decision." (Cochran's Dep. at 24-25 (ECF No. 70-1 at 162-163).) Cochran testified the decision to terminate Haywood was made "certainly before [Cochran] talked to [Haywood]." (Cochran's Dep. at 25 (ECF No. 59-3 at 49).)
After the telephone conversation between Cochran and Elias, Elias telephoned Haywood's parents and Gammage to inform them that the University terminated Haywood's employment. (Elias Dep. at 86 (ECF No. 70-1 at 108).)
After Haywood's release from custody on January 1, 2011, at 3:30 p.m., Elias informed Haywood that his employment with the University was terminated. (Elias Dep. at 85 (ECF No. 70-1 at 108).) Haywood was disoriented after his release and wanted to go to Pittsburgh to talk to Pederson and Cochran. (Elias Dep. at 85, 87-89 (ECF No. 70-1 at 108-109).)
On January 1, 2011, at 3:50 p.m., Haywood called Cochran on the telephone and spoke to him for fourteen minutes. (C.S.F. ¶ 64 (ECF No. 72); Cochran Dep. at 26-27 (ECF No. 59-3 at 50-51); ECF No. 59-4 at 18.) Haywood explained his version of events that led to his arrest. (C.S.F. ¶ 64 (ECF No. 72); Cochran Dep. at 26-27 (ECF No. 59-3 at 50-51); ECF No. 59-4 at 18.) Haywood testified he was in a high emotional state during the telephone conversation and thought he was talking to Pederson, rather than Cochran. (Haywood's Dep. at 215 (ECF No. 70-1 at 57).) Haywood testified he told Cochran that media reports were wrong because he did not choke Marriot. (Haywood's Dep. at 216 (ECF No. 59-2 at 135).) Haywood testified that Marriott attacked hi m by grabbing his shoulder, he knocked her hand off hi m, and she slipped and fell into a wheelbarrow. (Id.) Haywood testified he told Cochran that he was on his way back to Pittsburgh, Pennsylvania, from South Bend, Indiana, to explain what happened on December 31, 2010, because the media reports were inaccurate. (Haywood's dep. at 216 (ECF No. 59-2 at 135).) Haywood testified he told Cochran he would be in Pittsburgh, Pennsylvania, "first thing tomorrow morning." (Haywood's Dep. at 216 (ECF No. 59-2 at 135).) Haywood testified Cochran said "Okay." (Haywood's Dep. at 216 (ECF No. 59-2 at 135).)
Based upon this conversation with Haywood on January 1, 2011, Cochran determined Haywood exercised poor judgment by going into the residence, getting into an
Cochran testified that the University made its decision to terminate Haywood for just cause based upon the following: Haywood breaking through the barricaded door of the residence, engaging physically with Marriott, and acting in a way which led to Haywood's arrest. (C.S.F. ¶ 58 (ECF No. 72); Cochran's Dep. at 60,61, 64-65 (ECF No. 59-3 at 67-68, 69-70).)
On January 1, 2011, at 4:28 p.m., Haywood spoke to Pederson and reported that his relationship with Marriott had been deteriorating. (C.S.F. ¶ 68 (ECF No. 72); Pederson Dep. at 71-72, 78, 93 (ECF No. 59-3 at 141-142, 146, 150); ECF No. 59-4 at 22; ECF No. 59-4 at 18.) Pederson took notes during this conversation. (ECF No. 59-4 at 22-3.) Haywood told Pederson what happened on December 31, 2010, and that Marriott had blocked, or barricaded, the door to the residence. (Haywood's Dep. at 218 (ECF No. 67-1).) Pederson's notes indicate Haywood told him the door was "barricaded" and Marriot "fell over a little kids [sic] floaty" and Haywood "caught [Marriott] as she fell over a wheel barrel." (ECF No. 59-4 at 22.) Pederson testified that Haywood's statement that he had entered the residence through a barricaded door was sufficient for Pederson to determine that Haywood's lack of judgment put Haywood in a position that made it impossible for Haywood to continue as the University's head football coach. (C.S.F. ¶ 70 (ECF No. 72); Pederson Dep. at 82 (ECF No. 59-3 at 148).) Pederson's notes of the conversation indicate that Haywood apologized to the University and stated, "I truly understand what position this puts you guys in." (ECF No. 59-4 at 23.)
Haywood does not remember the telephone conversation with Pederson from January 1, 2011, and does not remember apologizing to hi m. (Haywood's Dep. at 218 (ECF No. 59-2 at 136).)
On January 1, 2011, Pederson and Cochran informed Nordenberg about their conversations with Haywood. (Nordenberg's Dep. at 18 (ECF No. 59-2 at 55)) Nordenberg testified that after receiving that information, the University made the final decision to terminate Haywood. (Id.) Nordenberg testified that Haywood's accounts of the events on December 31, 2010, confirmed the media reports and did not provide new information to change the University's decision with respect to whether Haywood's employment should continue. (C.S.F. ¶ 75 (ECF No. 72)); Nordenberg Dep. at 18, 45 (ECF No. 59-2 at 55, 63).
Nordenberg believes the University quickly, but carefully, conducted a reasonable inquiry into the circumstances around Haywood's arrest prior to his termination. (C.S.F. ¶ 76 (ECF No. 72); Nordenberg Dep. at 59, 66, 81 (ECF No. 59-2 at 66, 69, 79).) Nordenberg testified that he determined Haywood engaged in conduct which provided the University just cause to terminate hi m, including bringing the University into disrepute and engaging i n conduct which was "seriously prejudicial to the best interest of the University or its inter-collegiate sports athletic program." (C.S.F. ¶ 78 (ECF No. 72); Nordenberg's Dep. at 7, 27-28, 71-73 (ECF No. 59-2 at 52, 59-60, 73-75); Cochran's Dep. at 51-52 (ECF No. 59-3 at 60-61).)
At 5:26 p.m. on January 1, 2011, Nordenberg sent an email to the members of
(ECF No. 59-4 at 31.) The email contained a press release that would be issued to the public announcing Haywood's termination. (Id. at 31-32.)
At 5:42 p.m. on January 1, 2011, the University issued the press release announcing the termination of Haywood's employment with the University. (C.S.F. ¶ 81 (ECF No. 72); Nordenberg's Dep. at 25-26 (ECF No. 59-2 at 57-58); Borghetti Dep. at 37-38 (ECF No. 59-2 at 100-01).) The press release provided, i n part:
(ECF No. 59-4 at 34.)
On January 4, 2011, the University mailed Haywood a letter, signed by Cochran, that confirmed Haywood's termination. (ECF No. 59-4 at 39.) The letter provided, in part:
(Id.)
On February 11, 2011, Haywood and Marriott agreed to a stipulation ("stipulation") with respect to the events of December 31, 2010. (Haywood-Marriott Stipulation of Events ("Stipulation") (ECF No. 59-2 at 143-145).) The stipulation provided that the State of Indiana agreed to withhold prosecution of domestic battery, a class A misdemeanor, if Haywood complied with each term of the agreement. (Stipulation (ECF No. 59-2 at 148-149).) The stipulation provided:
(Stipulation (ECF No. 59-2 at 144).) The stipulation provided that if the case ever went to trial, the stipulation would be binding. (Stipulation at 43 (ECF No. 59-2 at 144).) Haywood agreed to the terms of the stipulation. (Stipulation (ECF No. 59-2 at 151).) Haywood testified he signed the stipulation because "it was the only way in which we were going to get a pretrial diversion, and [he] wanted this to be over as fast as possible." (Haywood's Dep. at 240 (ECF No. 70-1 at 63).)
In June 2011, Haywood, Gammage, and Elias approved a press release by The Buzbee Law Firm that contained certain of the financial terms set forth in the employment contract. (Haywood's Dep. at 273-274 (ECF No. 59-2 at 138-139); ECF No. 59-3 at 2). The press release provided, in part:
(ECF No. 59-3 at 2.) Haywood knew the press release would be sent to numerous media outlets. (Haywood's Dep. at 275 (ECF No. 59-2 at 138-139).) Haywood did not know that a representative from The Buzbee Law Firm would be making appearances on television programs discussing Haywood's termination as the University's head football coach. (Id.) Elias testified, "USA Today has every salary of every coach known to man. You could get that." (Elias' Dep. at 110 (ECF No. 59-2 at 90).) Elias also testified "the whole world knows" the financial terms stated in the press release. (Id.)
Federal Rule of Civil Procedure 56(a) provides that summary judgment shall be granted "if the movant shows that 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). A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated when there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether the dispute is genuine, the court's function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 249, 106 S.Ct. 2505. The court is to draw all reasonable inferences in favor of the nonmoving party. El v. Se. Pa. Transp. Auth., 479 F.3d 232, 238 (3d Cir.2007) ("In considering the evidence, the court should draw all reasonable inferences against the moving party.")
The United States Court of Appeals for the Third Circuit has stated:
Id. The court may consider material evidence that would be admissible or usable at trial in deciding the merits of a motion for summary judgment. Horta v. Sullivan, 4 F.3d 2, 8 (1st Cir.1993) (citing 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 2721, at 40 (2d ed.1983)); Pollack v. City of Newark, 147 F.Supp. 35, 39 (D.N.J.1956), aff'd, 248 F.2d 543 (3d Cir.1957) ("[I]n considering a motion for summary judgment, the court is entitled to consider exhibits and other papers that have been identified by affidavit or otherwise made admissible in evidence.").
To prove a breach of contract claim under Pennsylvania law, a plaintiff must demonstrate (1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract, and (3) resultant damages. Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir.2003). The University contends "the undisputed facts demonstrate that Mr. Haywood cannot meet his burden on the second and third of these elements," i.e., "no reasonable jury could find that the University breached the [Employment] Contract," or that an alleged breach resulted in damages. (ECF No. 58.) The parties do not dispute the existence of an agreement, i.e., the employment contract. The parties dispute the facts with respect to the second and third elements of Haywood's prima facie case, i.e., breach of a duty under the employment contract and resultant damages to Haywood.
Haywood in count A of the complaint alleges the University breached the employment contract by refusing to pay him liquidated damages under paragraph 14.2 of the employment contract when it terminated him without just cause. (ECF No. 1 at 6.) Inherent in this claim is an allegation that the University breached the contract because it did not act in good faith in determining the University had just cause to fire him. Haywood in his brief in response to the University's motion for summary judgment concedes the University terminated him with just cause, but argues the University's "arbitrary interpretation of the just cause provision of the employment contract effectively renders Mr. Haywood's termination as one `without just cause' under the employment contract, which obligates Defendant to pay to Mr. Haywood liquidated damages." (ECF No. 68 ¶ 2.) Haywood argues: "[A]t the time [the University] decided to terminate [him], it had not conducted any reasonable, good faith investigation in to [sic] the circumstances giving rise to [his] arrest." (ECF No. 68 at 2.) According to Haywood, the University's actions "violated the duty of good faith in all contracts executed under Pennsylvania law" and rendered his termination as one "without just cause." (Id.)
The University in its motion for summary judgment argues "[t]he [Employment] Contract did not contain any requirement that the University conduct an investigation, hold a hearing, seek Mr. Haywood's consent, or await the outcome of a criminal trial prior to just cause termination." (ECF No. 58 at 10.) The University argues that "the [Employment] Contract expressly afforded the University the sole discretion to determine when just cause existed for certain categories of conduct," and that it terminated Haywood with just cause pursuant to paragraph 14.1(F) of the employment contract. (Id.) The University argues that under those circumstances, it did not breach the employment
Section 205 of the Restatement (Second) of Contracts provides: "Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement."
The Third Circuit Court of Appeals has noted that the implied duty of good faith in Pennsylvania "is not limitless. Rather, there must be some relationship to the provisions of the contract itself to invoke the duty of good faith." W. Run Student Hous., 712 F.3d at 170. Here, the contractual provision in issue is paragraph 14.1 of the employment contract, which provided that the University
(Employment Contract ¶ 14.1 (ECF No. 14-1 at 18)) (emphasis added.) Just cause
(Employment Contract ¶ 14.1(F) (ECF No. 14-1 at 19-20)) (emphasis added.) Under the employment contract the University had the duty to act reasonably in making the determination with respect to whether Haywood's conduct on December 31, 2010, fell within the ambit of paragraph 14(F). The implied duty of good faith, however, cannot "override the express terms of a contract;" indeed, "the covenant of good faith does nothing more than fill in those terms of a contract that have not been expressly stated." Phila. Plaza-Phase II, 2002 WL 1472337, at *5. "Otherwise, the court would violate the axiom that it `not imply a different contract than that which the parties have expressly adopted.'" W. Run Student Hous., 712 F.3d at 170 (quoting Hutchison v. Sunbeam Coal Corp., 513 Pa. 192, 519 A.2d 385, 388 (1986)).
"[T]he covenant of good faith and fair dealing[, when applicable,] acts as a term of the contract, and that covenant arises from the contract itself." Zaloga, 671 F.Supp.2d at 630-31 (citing Ash, 932 A.2d at 884). A breach of the implied duty of good faith is, therefore, a breach of the contract between the parties. Whether a party failed to exercise good faith in its performance of the contract is a fact-based inquiry. The Pennsylvania Superior Court has noted:
Stamerro, 889 A.2d at 1259 (quoting Somers v. Somers, 418 Pa.Super. 131, 613 A.2d 1211, 1213 (1992)). "`The covenant of good faith may also be breached when a party exercises discretion authorized in a contract in an unreasonable way.'" Montanez v. HSBC Mortg. Corp., 876 F.Supp.2d 504, 513 (E.D.Pa.2012) (quoting Phila. Plaza-Phase II v. Bank of Am. Nat'l Trust & Savs. Assoc., No. 3745 April Term 2002, 2002 WL 1472337, at *6 (Pa.Ct.C.P.Phila.Cnty. June 21, 2002)).
The University argues that Haywood cannot prove it breached the employment contract by violating its duty to act in good faith because the employment contract expressly provided the University the discretion to determine that just cause existed to terminate him. (ECF No. 58 at 9.) According to the University:
(ECF No. 14-1 ¶ 14.1(F).) Likewise, the duty of good faith did not require the University to take any specific action prior to terminating the employment contract; rather, inherent in the University's right to determine whether just cause existed to terminate the employment contract was the implied duty to act reasonably to make that determination.
Whether the University acted reasonably in determining Haywood's conduct on the night of December 31, 2010, provided it with just cause to terminate the employment contract under paragraph 14.1(F) depends upon the University's conduct and knowledge prior to terminating the employment contract. As discussed infra, there are disputes of fact with respect to when, i.e., at what point in time, the employment contract was terminated.
Int'l Diamond Imp., Ltd. v. Singularity Clark, L.P., 40 A.3d 1261, 1271 (Pa.Super.Ct.2012) (citing Wright v. Bristol Patent Leather Co., 257 Pa. 552, 101 A. 844, 845 (1917)). The Pennsylvania Supreme Court has held that "[m]ere general statements of an intention to do something are
Evidence of record indicates there are three possible events that arguably could be the time of termination of the employment contract: (1) the January 1, 2011, 3:10 p.m. telephone conversation between Cochran and Elias; (2) the press release issued by the University on January 1, 2011 at 5:42 p.m.; and (3) the letter the University mailed to Elias on January 4, 2011.
Haywood argues the University terminated the employment contract without cause via the Cochran and Elias telephone conversation on January 1, 2011. This argument lacks merit. A reasonable jury could not find the telephone conversation operated as termination of the employment contract without just cause because termination without just cause pursuant to paragraph 14.2 must be effectuated by writing; indeed, without a writing, the telephone conversation could not serve as an unambiguous conveyance of an unquestionable purpose to insist on the rescission of the employment contract without just cause. In other words, without written notification of termination, Haywood's contract would still be in effect, unless the oral notification was based upon just cause. At the time of the Cochran and Elias telephone conversation, the evidence of record shows a genuine dispute with respect to whether just cause existed at that time. If just cause did not exist, a jury only could conclude the employment contract was not terminated during the Cochran and Elias telephone conversation on January 1, 2011.
During the afternoon of January 1, 2011, Cochran telephoned Elias at 3:10 p.m. to inform him that the University was terminating Haywood. (C.S.F. ¶ 62 (ECF No. 72).) Cochran testified with respect to Haywood's termination as follows:
(Cochran Dep. at 11, 23 (ECF No. 59-3 at 43, 48).) Elias, on the other hand, testified with respect to Haywood's termination as follows:
(Elias' Dep. at 139-42 (ECF No. 70-1 at 121-22).)
In accord with Elias' testimony, the press release issued by the University on January 1, 2011 at 5:42 p.m. provided:
(ECF No. 59-4 at 34 (emphasis added).) Three days later on January 4, 2011, the University mailed Haywood a letter, signed by Cochran, confirming that Haywood's termination took place on January 1, 2011, during the telephone conversation between Cochran and Elias. (ECF No. 59-4 at 39.) The letter provided, in part:
(Id.)
In light of the conflicting evidence with respect to Cochran and Elias' telephone conversation on January 1, 2011, at 3:10 p.m., there is a dispute of fact with respect to whether the telephone conversation between Cochran and Elias operated as a termination of the employment contract. The parties dispute what was said during the telephone conversation between Cochran and Elias and whether the telephone conversation operated as a clear and unambiguous notice of termination of the employment contract. In considering contract termination, the Pennsylvania Supreme Court has held: "The effect of a notice depends upon its terms; and we cannot say, as a matter of law, that these vague oral manifestations" gave definitive information that the employment contract was terminated. Berwick Hotel Co., 150 A. at 616. A jury must determine the credibility of the witnesses, reconcile the conflicting testimony, and the weight to be given to the University's press release and letter to Haywood. A reasonable jury could find Elias' testimony credible and determine Cochran's and Elias' telephone conversation operated as a termination of the employment contract. On the other hand, if a jury found Cochran's testimony about the telephone conversation credible, the telephone conversation would merely be "ambiguous indications of intent to terminate" the employment contract, and thus, insufficient to operate as termination of the employment contract. Int'l Diamond Imp., 40 A.3d 1261, 1271 (Pa.Super.Ct.2012); see Wright, 101 A. at 845; Accu-Weather, Inc., 644 A.2d at 1254.
In considering whether the Cochran and Elias telephone conversation operated as a just cause termination of the employment contract, a jury would need to assess whether the University acted in good faith in making its determination that Haywood caused the University disrepute. This fact-based inquiry depends upon what the University did and knew at the time of the Cochran and Elias telephone conversation. The undisputed facts of record show that at the time of the Cochran and Elias telephone call:
There, however, exist disputes of fact with respect to what was said during Pederson's and Cochran's conversations with Gammage and Elias on January 1, 2011. Cochran testified that Gammage or Elias told him:
(Cochran's Dep. at 43 (ECF No. 70-1 at 167).) Elias testified the information he relayed to Cochran came from discussions with Gammage and information he saw in the media. (Elias' Dep. Dep. at 77-78 (ECF No. 59-2 at 87-88).) Elias testified he did not tell Cochran that the prosecutor in South Bend, Indiana, decided to file charges against Haywood, the prosecutor had a strong case, or the district attorney's office had intentions to prosecute Haywood. (Elias' Dep. at 133-134 (ECF No. 70-1 at 120).) Elias testified, "Everything that Mr. Cochran got from me, if it was anything, it was what I was watching in front of TV on ESPN that I'm sure he was watching too. I knew nothing of the case." (Elias' Dep. at 145-146 (ECF No. 70-1 at 123).) Gammage testified he does not remember when he told the University that charges were being filed — it may have been before or after the Cochran and Elias telephone conversation. (Gammage's Dep. at 50 (ECF No. 59-2 at 170).) Gammage testified he would not have told Cochran the evidence the state had against Haywood or that he saw photographs of the marks on Marriot after the incident on December 31, 2010. (Id. at 51.)
To determine whether the University was terminating the employment contract for just cause during the Cochran and Elias telephone conversation on January 1, 2011, i n light of the foregoing conflicting testimony, a jury would need to resolve the disputes of fact with respect to what the University knew at the time of the telephone conversation. If a reasonable jury credits the testimony of Cochran, it could find just cause existed, even though the University did not speak with Haywood prior to terminating the employment contract, based upon the information gathered online, in media, and relayed by Elias or Gammage, i.e., the prosecutor intended to file charges against Haywood and had a strong case against him, Haywood forced himself through a barricaded door, and had a physical altercation with Marriot, which left marks on her neck. If the jury so found it could conclude the University acted in good faith when it determined it had just cause to terminate him. Under those circumstances, the University would not owe liquidated damages to Haywood because it did not breach the employment contract.
On the other hand, if the jury does not believe Cochran and credits the testimony of Elias and Gammage, it may find the University attempted to terminate Haywood based upon media reports without speaking to Haywood or knowing whether the district attorney's office intended to
Even if a jury found the Cochran and Elias telephone conversation (1) was not effective as a just cause termination; or (2) breached the contract because the University failed to exercise good faith, the issue remains whether the press release issued by the University on January 1, 2011 at 5:42 p.m. or — at the latest — the letter the University mailed to Elias on January 4, 2011, operated as termination of the employment contract with just cause.
If the employment contract was not terminated during the Cochran and Elias telephone conversation, a reasonable jury would have to find based upon the evidence of record that the press release issued by the University on January 1, 2011 at 5:42 p.m., three hours and thirty-two minutes after the Cochran and Elias telephone conversation, operated as termination of the employment contract. (ECF No. 59-4 at 39.) The press release provided, in pertinent part:
(ECF No. 59-4 at 34.) This language is clear, unambiguous, and conveys an unquestionable purpose to insist on the rescission of the employment contract. Haywood does not contend that he was unaware of the press release.
Even assuming the press release did not operate as a clear termination, a reasonable jury would have to find based upon the evidence of record that the letter the University mailed to Elias on January 4, 2011, operated as termination of the employment contract. The letter provided, in part:
(Id.) Like the January 1, 2011 press release issued by the University, this letter is clear, unambiguous, and conveys an unquestionable purpose to insist on the rescission of the employment contract. The University mailed the letter to Elias' Dallas, Texas address. (Id.) There is no dispute that Elias received the letter. (Elias' Dep. at 91 (ECF No. 70-1 at 109).) The remaining issue is whether the University acted in good faith at those times in terminating the employment contract with just cause.
Because the University spoke with Haywood prior to issuing the press release on January 1, 2011, and did not gather additional material information prior to January 4, 2011, the analysis with respect
Haywood told Cochran "that Marriott attacked him by grabbing his shoulder, he knocked her hand off hi m, and she slipped and fell into a wheelbarrow." (Haywood's Dep. at 216 (ECF No. 59-2 at 135).) Haywood told Cochran that he was on his way back to Pittsburgh, Pennsylvania, from South Bend, Indiana, to explain what happened on December 31, 2010 because the media reports were inaccurate. (Id.) Based upon this conversation with Haywood on January 1, 2011, Cochran determined Haywood exercised poor judgment by going into the residence, getting into an argument with Marriott, and placing himself in a situation that led to Haywood's arrest. (C.S.F. ¶ 67 (ECF No. 72); Cochran's Dep. at 34 (ECF No. 59-3 at 54).)
Pederson took notes of his conversation with Haywood. (ECF No. 59-4 at 22-23.) Haywood told Pederson his relationship with Marriot had been deteriorating. (C.S.F. ¶ 68 (ECF No. 72); Pederson Dep. at 71-72, 78, 93 (ECF No. 59-3 at 141-142, 146, 150); ECF No. 59-4 at 22; ECF No. 59-4 at 18.) The notes indicate Haywood told Pederson the door was "barricaded" and Marriot "fell over a little kids [sic] floaty," and Haywood "caught [Marriott] as she fell over a wheel barrel." (ECF No. 59-4 at 22.) Pederson testified that Haywood's statement that he had entered the residence through a barricaded door was sufficient for Pederson to determine that Haywood's lack of judgment put Haywood in a position that made it impossible for Haywood to continue as the University's head football coach. (C.S.F. ¶ 70 (ECF No. 72); Pederson Dep. at 82 (ECF No. 59-3 at 148).)
On January 1, 2011, Pederson and Cochran informed Nordenberg about their conversations with Haywood. (Nordenberg's Dep. at 18 (ECF No. 59-2 at 55) Nordenberg testified this is the time when the University made the final decision to terminate Haywood. Nordenberg, who at that time knew about Haywood's arrest and that charges were filed against him, concluded Haywood engaged in conduct which provided the University just cause to terminate him, including bringing the University into disrepute and engaging in conduct which was "seriously prejudicial to the best interest of the University or its inter-collegiate sports athletic program." (C.S.F. ¶ 78 (ECF No. 72)); Nordenberg's Dep. at 7, 27-28, 71-73 (ECF No. 59-2 at 52, 59-60, 73-75); Cochran's Dep. at 51-52 (ECF No. 59-3 at 60-61).)
In light of what the University did and knew at the time it issued the press release on January 1, 2011 at 5:42 p. m. and sent the letter to Elias on January 4, 2011, a reasonable jury could only find — based upon Haywood's own statements to Cochran and Pederson about what he did — that
Based upon the foregoing discussion, a reasonable jury could only find the University breached the employment contract if it found the University attempted to terminate the employment contract via the Cochran and Elias telephone conversation without exercising good faith. If a jury finds in favor of the University on that issue, then there was no breach of contract. Even if a jury made a finding that the University breached the employment contract, however, Haywood would not be entitled to damages. Paragraph 14.1 of the employment contract expressly provided that upon just cause termination "the University shall be relieved of all further obligations (financial and otherwise) to Employee." (Employment Contract ¶ 14.1 (ECF No. 14-1).) This language clearly and unambiguously provides that all obligations the University owed to Haywood cease upon termination of the employment contract with just cause. Once the University exercised good faith and determined it had just cause to terminate the employment contract, i.e., at the latest when it issued the January 1, 2011 press release or sent the January 4, 2011 letter to Elias, all obligations it owed to Haywood, including the obligation to pay Haywood liquidated, nominal, or any other kind of damages, ceased. Under the terms of the employment contract, the University cannot be held liable to Haywood as a matter of law because it terminated him with just cause and in good faith at the latest on January 1, 2011 via the press release issued at 5:42 p.m. or by sending Elias the letter dated January 4, 2011. The University's motion for summary judgment must, therefore, be granted with respect to count A because Haywood cannot establish the third element of a claim for breach of contract — resultant damages.
Haywood alleges he entered into a separate oral contract ("oral contract") with the University whereby the University agreed to buy out the remaining term of his coaching contract with Miami University. (Complaint (ECF No. 1).) Haywood alleges the University breached its duty under this oral contract by refusing to buy out the remaining term of the Miami University contract. (Id.) Haywood alleges the University's breach of this duty proximately caused Haywood to suffer monetary damages in the amount of $300,000, which Miami University is now demanding Haywood personally pay. (Id.)
In its motion for summary judgment, the University argues Haywood cannot establish a breach of the alleged oral contract because: (1) the employment contract was integrated and the parol evidence rule bars this alleged prior oral agreement; and (2) the employment contract expressly barred extra-contractual obligations when termination occurred. (ECF No. 57.)
As discussed supra, a plaintiff suing for breach of contract under Pennsylvania law must demonstrate (1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract, and (3) resultant damages. Ware, 322 F.3d at 225. The University argues the first element, i.e., the existence of a contract, cannot be proven in this case with respect to the Miami University buyout because evidence with respect to the parties' prior oral agreement to buyout the
The court will address the applicability of the parol evidence rule to this claim and each of the elements of a claim for breach of contract to determine whether summary judgment is appropriate with respect to this claim.
The Pennsylvania Supreme Court has explained the parol evidence rule as follows:
Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479, 854 A.2d 425, 436 (2004) (quoting Gianni v. Russell & Co., 281 Pa. 320, 126 A. 791, 792 (1924)). For the parole evidence rule to apply, there must be a writing that represents the "entire contract between the parties." (Id.)
The court must determine, as a matter of law, whether the writing at issue, i.e., the employment contract, is an integrated agreement. McGuire v. Schneider, Inc., 368 Pa.Super. 344, 534 A.2d 115, 118 (1987). A written contract is "integrated" if it represents a final and complete expression of the parties' agreement. Kehr Packages Inc. v. Fidelity Bank, Nat. Ass'n, 710 A.2d 1169, 1173 (Pa.Super.Ct.1998) (citing Lenzi v. Hahnemann Univ., 445 Pa.Super. 187, 664 A.2d 1375, 1379 (1995)). To determine whether a writing is the parties' complete expression of their agreement, the writing must be examined and "if it appears to be a contract complete within itself, couched in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the [parties'] engagement, it is conclusively presumed that [the writing represents] the whole engagement of the parties." Gianni, 126 A. at 792.
"An integration clause which states that a writing is meant to represent the parties' entire agreement is also a clear sign that the writing is meant to be just that and thereby expresses all of the parties' negotiations, conversations, and agreements made prior to its execution." Yocca, 854 A.2d at 436 (Pa.2004). The effect of an integration clause is to make the parol evidence rule particularly applicable. Hart v. Arnold, 884 A.2d 316, 341 (Pa.Super.Ct.2005). Here, there is no dispute that the employment contract contained an integration clause. Paragraph 24.1 of the employment contract provided:
(employment contract ¶ 24.1 (ECF No. 14-1); C.S.F. ¶ 28 (ECF No. 72).) The existence of this clause in the employment contract indicates the employment contract represents the parties' entire agreement with respect to Haywood's employment with the University. Absent an exception, the parol evidence rule would, therefore, bar the admission of evidence with respect to negotiations, conversations, and agreements
There is an "admission exception" to the parol evidence rule when the party seeking to enforce the agreement as written has made admissions that the agreement does not, in fact, constitute the entire agreement between the parties even when it contains an integration clause. Giant Food Stores, Inc. v. Marketplace Commc'n Corp., 717 F.Supp. 1071, 1074 (M.D.Pa. 1989) (citing Coal Operators Cas. Co. v. Charles T. Easterby and Co., Inc., 440 Pa. 218, 269 A.2d 671, 672 (1970)). The Pennsylvania Supreme Court has recognized this exception to the parol evidence rule:
Scott v. Bryn Mawr Arms, Inc., 454 Pa. 304, 312 A.2d 592, 595 (1973) (citing In re Boyd's Estate, 146 A.2d at 820). In Yuhas v. Schmidt, the court further explained:
Yuhas v. Schmidt, 434 Pa. 447, 258 A.2d 616, 621 (1969) (quoting In re Slavinski's Estate, 420 Pa. 504, 218 A.2d 125, 128 (1966)).
The parol evidence rule bars the admission of material contrary to the express terms of the written agreement "unless it is that the whole of the agreement is not set forth in the writing." Domino's Pizza LLC v. Deak, 383 Fed. Appx. 155, 159 (3d Cir.2010) (quoting Scott, 312 A.2d at 595). "The burden is on the proponent of the parol evidence to establish such an admission of incompleteness in the writing by clear, precise, and convincing evidence." Domino's Pizza LLC, 383 Fed.Appx. at 159 (citing Scott, 312 A.2d at 595). The burden is of both law and fact. Domino's Pizza LLC, 383 Fed.Appx. at 159 (citing Coal Operators Cas. Co., 269 A.2d at 674). "The admission of incompleteness must have been made, or alleged to have been made, at a time subsequent to entering into the written agreement." Domino's Pizza LLC, 383 Fed.Appx. at 159 (citing Scott, 312 A.2d at 596).
It is undisputed in this case that the University promised to buyout Haywood's remaining contract with Miami University. Pederson testified that the University orally promised to buyout Haywood's employment contract with Miami University, but that it did not happen because Haywood's employment "was terminated before we ever got to that point." (Pederson's Dep. at 20 (ECF No. 70-1 at 20).) Elias testified he spoke with Cochran regarding a buyout clause, and Haywood would not sign the employment contract unless a buyout clause was included in the contract. (Elias' Dep. at 45-47 (ECF No. 70-1 at 98).) Elias testified that Cochran told him "he was not going to put it in there but he assured [Elias] that it
Based upon the foregoing, the admission exception applies in this case because Haywood presented clear, precise, and convincing evidence, i.e., Pederson's testimony, that the parties' written agreement was not the parties' entire agreement. See Int'l Milling Co. v. Hachmeister, Inc., 380 Pa. 407, 110 A.2d 186, 191 (1955) ("The presence of an integration clause cannot invest a writing with any greater sanctity that the writing merits where, as here, it assertedly does not fully express the essential elements of the parties' undertakings."). Under those circumstances, the parol evidence rule does not bar the admission of evidence with respect to the parties' oral agreement that the University would buyout Haywood's contract with Miami University.
It is undisputed that the University did not buyout Haywood's remaining contract with Miami University. Pederson testified that not only did the University promise to buyout Haywood's remaining contract with Miami University, but also that it did not happen because Haywood's employment "was terminated before we ever got to that point." (Pederson's Dep. at 20 (ECF No. 70-1 at).) After Haywood's termination, the University "refused responsibility to buy [the Miami University contract] out." (Elias Dep. at 56 (ECF No. 70-1 at 100).) Under those circumstances, because there is no genuine dispute of material fact with respect to whether the University bought out Haywood's remaining contract with Miami University, Haywood could satisfy the second element of his prima facie case, i.e. a breach of a duty imposed by the oral agreement.
"To prove damages, a plaintiff must give a factfinder evidence from which damages may be calculated to a `reasonable certainty.'" Ware, 322 F.3d at 225-226 (quoting ATACS Corp. v. Trans World Commc'n, Inc., 155 F.3d 659, 668 (3d Cir.)). "At a minimum, reasonable certainty embraces a rough calculation that is not `too speculative, vague or contingent' upon some unknown factor." Ware, 322
There is no genuine dispute of fact that Haywood would have suffered damages if the University breached the oral agreement. In February 2011, Miami University sent Haywood a letter demanding he personally pay the $300,000 buyout. (Elias' Dep. at 56 (ECF No. 70-1 at 100)); Haywood's Dep. at 247-248 (ECF No. 70-1 at 65.) Haywood has not been in contact with Miami University regarding the buyout clause since February 2011, but testified that Miami University discussed the buyout with Elias in 2012.(Id.) Under those circumstances, there is no genuine dispute of material fact with respect to the third element of a claim for breach of contract, i.e., resultant damages.
The University argues that even if the parol evidence rule does not bar its promise to buyout Haywood's remaining contract with Miami University, the terms of the employment contract expressly barred extra-contractual obligations when termination of the employment contract occurred. (ECF No. 57 ¶ 2.) Having determined the parol evidence rule does not bar evidence of the existence of the oral agreement to buyout Miami University, the court must consider whether the obligations of the University under the oral agreement or resulting from a breach of that agreement survived termination of the employment contract. This issue presents a matter of contract interpretation.
"If contracting parties choose, they may express their agreement in one or more writings and, in such circumstances, the several documents are to be interpreted together, each one contributing (to the extent of its worth) to the ascertainment of intent of the parties." Int'l Milling Co., 110 A.2d at 191 (citing Hous. Mortg. Corp. v. Allied Constr, Inc., 374 Pa. 312, 97 A.2d 802, 805 (1953)). "It is a general rule of contract law that where two writings are executed at the same time and are intertwined by the same subject matter, they should be construed together and interpreted as a whole, each one contributing to the ascertainment of the true intent of the parties." Kroblin Refrigerated Xpress, Inc. v. Pitterich, 805 F.2d 96, 107 (3d Cir.1986) (citations omitted). "The presence of an integration clause i n separate agreements is not a bar to the agreements being construed together as long as the agreements are part of the same business transaction." Patel v. Patel, Civ. No. 06-1846, 2007 WL 2907944, at *6 (M.D.Pa. Sept. 28, 2007) (quoting Kroblin Refrigerated, 805 F.2d at 107-109). Where two agreements are made as part of one transaction they will be read together to express the essential elements of the parties' undertaking, notwithstanding the presence of an integration clause in the second agreement. Patel, Civ. No. 06-1846, 2007 WL 2907944, *6 (citing Neville v. Scott, 182 Pa.Super. 448, 127 A.2d 755, 757 (1956)).
Here, the court must consider the parties' intent with respect to the University's oral agreement to buyout Miami University. The record contains evidence that the University did not intend the oral agreement to buyout Miami University to be a part of the employment contract. Cochran told Elias that the University would buyout Haywood's remaining contract with Miami University, but that he would not put it in the employment contract. (Elias' Dep. at 47 (ECF No. 70-1 at 98).) Viewing the evidence in the light most favorable to the nonmoving party, the buyout provision was not included in the employment contract. The oral agreement under those circumstances arguably would not be
The employment contract provided:
(Employment Contract ¶ 14.1 (ECF No. 14-1) (emphasis added)). The court must consider whether under this provision the University was relieved from its obligation to buyout Haywood's contract with Miami University if it terminated Haywood with just cause. The issue depends upon whether "all further obligations" means only obligations under the employment contract or any obligations existing between the parties, including agreements separate from the employment contract. This issue is a matter of contract interpretation.
"The paramount goal of contract interpretation is to determine the intent of the parties." Baldwin v. Univ. of Pgh. Med. Ctr., 636 F.3d 69, 75 (3d Cir. 2011) (quoting Am. Eagle Outfitters v. Lyle & Scott Ltd., 584 F.3d 575, 587 (3d Cir.2009)). "Courts are to consider `not the inner, subjective intent of the parties, but rather the intent a reasonable person would apprehend in considering the parties' behavior.'" Baldwin, 636 F.3d at 75 (quoting Am. Eagle Outfitters, 584 F.3d at 582); see Mellon Bank, N.A. v. Aetna Bus. Credit, Inc., 619 F.2d 1001, 1009 (3d Cir. 1980) ("[C]ourts must eschew the ideal of ascertaining the parties' subjective intent and instead bind parties by the objective manifestations of their intent."). The strongest objective manifestation of intent is the language of the contract. Baldwin, 636 F.3d at 75 (citing Mellon Bank, 619 F.2d at 1009).
"Courts have the responsibility to determine as a matter of law whether contract terms are clear or ambiguous." Baldwin, 636 F.3d at 76 (citing Mellon Bank, 619 F.2d at 1011). "If the words of the contract are capable of more than one objectively reasonable interpretation, the words are ambiguous." Baldwin, 636 F.3d at 76 (citing Am. Eagle Outfitters, 584 F.3d at 587). But, where "the language is clear and unambiguous, the express terms of the contract will control." Atkinson v. LaFayette Coll., 460 F.3d 447, 452 (3d Cir.2006). "The court can grant summary judgment on an issue of contract interpretation if the contractual language being interpreted `is subject to only one reasonable interpretation.'" Id.
Here, the employment contract expressly provided that upon just cause termination "the University shall be relieved of all further obligations (financial and otherwise) to Employee." (Employment Contract ¶ 14.1 (ECF No. 14-1).) The use of the language, "all further obligations" is not limiting, but all encompassing. In construing a writing, "it is basic that it must be read as a whole and every portion thereof considered in determining its intent and true purpose." In re Alloy Mfg. Co. Emp. Trust, 411 Pa. 492, 192 A.2d 394, 396 (1963) (internal citations omitted). "Stated another way, the intention of parties to a written instrument is to be garnered from a reading of the entire writing and not from detached portions, it
Reading the employment contract as a whole, it is clear words of limitation are used in some paragraphs and not i n others. For example, paragraphs 14.4 and 14.10, contain the word "hereunder" to refer to obligations existing only under the employment contract. There is no limiting language i n paragraph 14.1. The court i n determining the intent and true purpose of the employment contract, must consider the use of limiting language in some of the provisions and not in others. If the parties intended to limit "all further obligations" to those existing only under the employment contract, they could have done so. Paragraph 14.1 does not contain any words of limitation. Paragraph 14.1, therefore, can only be read to indicate the parties' intent that "all further obligations" applies to obligations both under and apart from the employment contract. The only objectively reasonable interpretation of paragraph 14.1 is that upon just cause termination of the employment contract, all obligations the University had, including and apart from the employment contract, cease. Haywood, furthermore, failed to offer any argument or evidence contradicting the clear and unambiguous meaning of this provision.
As discussed supra, a reasonable jury could only find that the employment contract was terminated with just cause and in good faith at the latest via the January 1, 2011 press release or the January 4, 2011 letter to Elias. At the time of the just cause termination all obligations of the University to Haywood ceased. The oral agreement to buyout Haywood's remaining contract with Miami University or obligations arising from its breach did not, therefore, survive the just cause termination of the employment contract, i.e., after the just cause termination, the University had no obligation to buyout the Miami University contract, and there can be no resultant damage from breach of the oral agreement, whether actual or nominal. The University's motion for summary judgment with respect to count B will, therefore, be granted.
The University in its counterclaim alleges Haywood breached the confidentiality provision of the employment contract when he, through his agents and attorneys, disclosed financial terms of the employment contract. (ECF No. 58 at 19-20.) The University and Haywood filed cross-motions for summary judgment with respect to this claim. (ECF Nos. 57, 60.) The University moves for summary judgment claiming it is undisputed that Haywood and his agent breached the employment contract' employment contract's financial terms. (ECF No. 58 at 19-20.) The University is seeking nominal damages. (Id.) Haywood moves for summary judgment arguing the University did not identify any damages caused by his alleged breached of the employment contract. (ECF No. 61 ¶ 7.)
As discussed supra, a plaintiff asserting a claim for breach of contract under Pennsylvania law must demonstrate (1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract, and (3) resultant damages. Ware, 322 F.3d at 225. Here, there is no genuine dispute of fact that an agreement existed. The confidentiality provision of the employment contract provided:
(Employment Contract ¶ 17.1 (ECF No. 14-1); C.S.F. ¶ 26 (ECF No. 72)). It is also undisputed that Haywood's confidentiality obligations survived termination of the employment contract. (Employment Contract ¶ 17.1 (ECF No. 14-1); C.S.F. ¶ 27 (ECF No. 72)).
The University argues in its motion for summary judgment: "[I]t is undisputed that Mr. Haywood and/or his agents breached the [Employment] Contract's confidentiality obligations by publicizing the Contract's financial terms." (ECF No. 58.) The University claims Haywood breached the confidentiality provision by authorizing the release of a June 2011 press release issued by the Buzzbee Law Firm, which represented Haywood.
The June 2011 press release provided, in pertinent part:
(Press Release (ECF No. 59-3 at 2)).
In its brief in support of its motion for summary judgment, the University did not identify what "financial" information contained in the press release violated the
First, the court must consider whether the information disclosed in the press release constitutes confidential information. It is clear in Pennsylvania that information available publicly is not confidential information. Bell Fuel Corp. v. Cattolico, 375 Pa.Super. 238, 544 A.2d 450, 461 (1988) (citing Carl A. Colteryahn Dairy, 203 A.2d 469, 472-73 (affording no protection to delivery route listings that were not a particular secret, easily discoverable and common knowledge)). See e.g., Spring Steels, Inc. v. Molloy, 400 Pa. 354, 162 A.2d 370, 375 (1960) (customer lists that are publicly available are not particular secrets of the employer entitled to protection); Vincent Horwitz Co. v. Cooper, 352 Pa. 7, 41 A.2d 870, 871 (1945); Agra Enter., Inc. v. Brunozzi, 302 Pa.Super. 166, 448 A.2d 579, 582 (1982); see also Wound Care Ctr., Inc. v. Catalane, Civ. No. 10-336, 2011 WL 553875, at *16 (W.D.Pa. Feb. 8, 2011).
Haywood did not address whether the press release contained confidential information in his response to the University's motion for summary judgment. The court, however, cannot grant summary judgment in favor of the University solely because Haywood failed to respond to its motion for summary judgment with respect to that issue. The University is entitled to judgment as a matter of law only if the evidence of record supports such a finding. Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 175 (3d Cir.1990) ("Even though Rule 56(e) requires a non-moving party to `set forth specific facts showing that there is a genuine issue for trial', it is `well-settled... that this does not mean that a moving party is automatically entitled to summary judgment if the opposing party does not respond.'").
Although Haywood did not raise the issue in his brief in opposition to the University's motion for summary judgment, in the combined statement of material facts, he asserts the information disclosed in the press release is not confidential.
Having determined that based upon the record presented a reasonable jury could find the financial terms disclosed were publically available, the court must consider whether Haywood breached the confidentiality provision of the employment contract by disclosing information that is publically available. Restrictive covenants, including confidentiality agreements, are not favored in Pennsylvania, but have long been held to be enforceable if: (1) they are incident to an employment relationship between the parties; (2) the restrictions imposed by the covenant are reasonably necessary for the protection of legitimate interests of the employer; and (3) the restrictions imposed are reasonably limited in duration and geographic extent. Hess v. Gebhard & Co. Inc., 570 Pa. 148, 808 A.2d 912, 917 (2002).
With respect to confidentiality agreements, the court needs only to consider the second element, i.e., whether the restrictive covenants are reasonably necessary for the protection of legitimate interests of the employer. See Henry Hope X-Ray Prod., Inc. v. Marron Carrel, Inc., 674 F.2d 1336, 1342 (9th Cir.1982) (applying Pennsylvania law) ("[A] confidentiality agreement's restrictions may not be greater than is required for the protection of the person for whose benefit the restraint is imposed' and impose undue hardship upon the person restricted.") In Hess, the Pennsylvania Supreme Court held: "If the information the employer seeks to keep confidential could be obtained by legitimate means by its competitors, enforcement of the covenant on that basis is not appropriate." Hess, 808 A.2d at 924 (citing Carl A. Colteryahn Dairy v. Schneider Dairy, 415 Pa. 276, 203 A.2d 469, 473 (1964) (commenting that "equity will not protect mere names and addresses easily ascertainable by observation or reference to directories.")).
While the restrictions imposed by the confidentiality provision of the employment contract may be reasonable to protect the University's confidential information, the restrictions are not reasonable as applied to information that is publicly available. Based upon Elias' undisputed testimony that the financial terms contained i n the press release were available on USA Today, the restrictions would not be reasonably necessary to protect the University's legitimate interests. In other words, the University would have no legitimate interest in protecting information that is publicly available.
Based upon the evidence of record, there is sufficient evidence for a reasonable jury to find Haywood did not breach the confidentiality provision of the employment contract when he released information publicly available via the press release. The University did not point to evidence sufficient to prove the second element of its prima facie case, i.e., breach of the confidentiality provision of the Employment contract. The University's motion for summary judgment will, therefore, be denied with respect to its counterclaim.
With respect to the third element in a breach of contract claim, Haywood argues his motion for summary judgment should be granted because the University "cannot show with any reasonable certainty that it has suffered any damages as a result of Mr. Haywood's alleged breach of his Employment contract with [the University]." (ECF No. 60-1). The University argues Haywood's argument is moot because the University only seeks nominal damages. (ECF No. 65.)
In Stevenson v. Economy Bank of Ambridge, 413 Pa. 442, 197 A.2d 721, 728 (1964), the Pennsylvania Supreme Court held that because "the basic unit of American money is the dollar ... in the future, when nominal damages are awarded i n our courts, one dollar ($1) shall be the measure thereof." The Third Circuit Court of Appeals applying Pennsylvania law has followed this rule. Nicholas v. Pennsylvania State University, 227 F.3d 133, 146 (3d Cir.2000) (citing United States ex rel. Tyrrell v. Speaker, 535 F.2d 823, 830 (3d Cir.1976)). Haywood's motion for summary judgment must, therefore, be denied because the University, if it proves the other elements of a claim for breach of contract, may be entitled to nominal damages.
Based upon the foregoing, the University's motion for summary judgment with respect to breach of confidentiality on its counterclaim will be denied. Because of Elias' undisputed testimony that the financial terms i n the press release are publicly available, a reasonable jury could find that Haywood did not breach the confidentiality provision of the Employment contract.
The situation is different with respect to the element of breach of the confidentiality provision in Haywood's motion for summary judgment. The issue of confidentiality was not raised in Haywood's cross-motion. Haywood did not argue he is entitled to summary judgment on the University's counterclaim because the information disclosed in the press release was confidential. Haywood argued only the third element, i.e., he is entitled to summary judgment on the counterclaim because the University cannot prove damages. The University, therefore, did not have notice or an opportunity to respond to the argument that a reasonable jury could not find Haywood breached the confidentiality provision in the employment contract. The court will not grant summary judgment to Haywood on that issue sua sponte when he did not raise it in his motion. See 10A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 2719 (3d ed.1998) (noting it some courts have held it is reversible error to enter summary judgment without "providing the parties a reasonable opportunity to present opposing material.") (citing, inter alia, Crown Cent. Petroleum Corp. v. Waldman, 634 F.2d 127, 129 (3d Cir.1980)); Twin City Fed. Sav. and Loan Ass'n v. Transamerica Ins. Co., 491 F.2d 1122, 1126 (8th Cir.1974) ("Although a district court may assist through pretrial proceedings in sharpening the issues, a court may not pose the issue and then proceed to decide the same without a motion for summary judgment."). Haywood may seek leave to file a motion for summary judgment with respect to this issue within thirty days of the entry of the order with respect to the pending motions for summary judgment. Under those circumstances, Haywood's motion for summary judgment with respect to the University's counterclaim for breach of confidentiality must be denied because if the University proves Haywood
For the reasons set forth in this memorandum opinion, the University's motion for summary judgment (ECF No. 57) is GRANTED IN PART with respect to counts A and B of the complaint and DENIED with respect to the counterclaim. Haywood's motion for summary judgment (ECF No. 60) on the University's counterclaim is DENIED. An appropriate order will be entered.
(C.S.F. ¶ ¶ 84, 85 (ECF No. 72)).
