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Pagani v. Modus eDiscovery

United States District Court, W.D. North Carolina, Charlotte Division

March 30, 2017

THOMAS PAGANI, Plaintiffs,
v.
MODUS EDISCOVERY, Defendants.

          ORDER

          GRAHAM C. MULLEN, UNITED STATES DISTRICT JUDGE

         THIS MATTER is before the Court following Defendant's Motion for Summary Judgment (Doc. No. 11), Plaintiffs Memorandum in Opposition to Defendant's Motion for Summary Judgment (Doc. No. 19), and Defendant's Reply Brief in Support of Motion for Summary Judgment (Doc. No. 22).

         I. Background

         Action Legal Document Services of Charlotte, LLC ('ALD") hired Plaintiff Thomas Pagani on January 3, 2006 and entered into the Employment Agreement. In December 2010, having purchased the assets of ALD, Defendant Modus eDiscovery, Inc. ("Modus") (formerly known as "Ivize Services, Inc." ("Ivize")) assumed responsibility for Plaintiffs Employment Agreement.

         Modus terminated Pagani's employment on December 12, 2012. At that time, Pagani was a Regional Discovery Executive at Modus.

         Section 1 of the Employment Agreement provides that "[t]he Company shall employ [Plaintiff], and [Plaintiff] will provide services to the Company, for a term commencing as of the closing of the Acquisition . . . and continuing until terminated pursuant to Section 9." Schmidt Decl. ¶ 3, Exh. A at ¶1.

         Under Paragraph 9 of his Employment Agreement, Modus could terminate Plaintiffs employment with or without "Cause." Schmidt DecL, 3, Ex. A at ¶ 9. "Cause" is defined in the Employment Agreement between Plaintiff and Defendant as "Tier 1 Cause, Tier 2 Cause, Tier 3 Cause and/or Tier 4 Cause." (Schmidt Decl. ¶ 3, Exh. A at ¶ 9(d)). If Modus terminated Pagani, while possessing Tier 1 or Tier 2 Cause, Pagani would not be entitled to any severance. Schmidt Decl. 1, Exh. A at ¶ 9 (c). "Tier 2 Cause" is defined as:

(x)(a) the Net Sales from the Company's operations, during the most recent six calendar months ended at least 20 days prior to the date as of which Tier 2 Cause is to be determined, were less than $397, 475.50 ... or (b) the Net Sales from the Company's operations, during the most recent twelve calendar months ended at least 20 days prior to the date as of which Tier 2 Cause is to be determined, were less than $753, 315... and (y) the Company had losses (determined in accordance with generally accepted accounting principles) for such six calendar month period or twelve calendar month period, as applicable.

Id.. Notably, Tier 2 Cause requires that the Net Sales from the Charlotte operations be below certain amounts in either a six-month ($397, 475.50) or 12-month ($753, 315) period, and that the business in Charlotte had losses for the same period. Id.. The Employment Agreement defines the "Company" as Action Legal Document Services of Charlotte, LLC. Id. at 1.

         The point of contention in this case is whether Pagani is eligible for severance. This boils down to whether Pagani was fired for Tier 2 Cause as defined in the Employment Agreement. If he was, then Pagani would not be entitled to severance. The Defense claims that Pagani was terminated for Tier 2 Cause. Plaintiff claims that he is entitled to severance payments and other damages resulting from Defendants' alleged breach of contract because his employment was terminated without "Cause."

         When this complaint was filed there was multiple defendants and multiple claims. However, at this point, the only claim left in this case is a claim for breach of contract against Defendant Modus where Plaintiff claims contractual entitlement under the Employment Agreement to 18 months of severance payments from Modus. Defendant Modus has moved for summary judgment on this claim. Plaintiff Pagani opposes their motion. This matter is now ripe for disposition.

         II. Standard of Review

         "The court shall grant summary judgment 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 dispute is genuine "if die evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248 (1986). "The mere existence of a scintilla of evidence" in support of the non-movant's position is not sufficient to establish a genuine dispute. Id. at 252. A materia] fact affects the outcome of the suit under the applicable substantive law. See Id. at 248. When determining whether a dispute is genuine or a fact is material, courts are required to view the facts and draw reasonable inferences in the light most favorable to the party opposing the summary judgment motion. Scott v. Harris,550 U.S. 372, 378 (2007). The Court "may not make credibility determinations or weigh the evidence, " Reeves v. Sanderson ...


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