Ortegón v. Giddens ex rel. SIPA Liquidation of Lehman Bros.
Ortegón v. Giddens ex rel. SIPA Liquidation of Lehman Bros.
Opinion of the Court
SUMMARY ORDER
Claimant-Appellant Mary Ortegón (“Or-tegón”) appeals a decision by the United States District Court for the Southern District of New York (Caproni, /.), affirming an order by the United States Bankruptcy Court for the Southern District of New York (Chapman, B.J.) granting the Trustee’s motion for summary judgment on Ortegón’s claim for breach of contract. Ortegón claims that Lehman Brothers, Inc., (“LBI”) breached its contract with her by failing to pay her a $350,000 bonus, notwithstanding the undisputed facts that, first, LBI terminated its contractual relationship with Ortegón before she began any work contemplated by the contract, and, second, that LBI terminated this relationship prior to the official start date for performance contemplated by that contract. For the reasons stated below, we affirm the district court's decision. We assume the parties’ familiarity with the underlying facts, procedural history, and issues on appeal in this case.
“We exercise plenary review over a district court’s affirmance of a bankruptcy court’s decision[ and] review the bankruptcy court’s conclusions of law de novo and its findings of fact for clear error.” In re AppliedTheory Corp., 493 F.3d 82, 85 (2d
“Under New York law, ‘the initial interpretation of a contract “is a matter of law for the court to decide.” ’ ” Int’l Multifoods Corp. v. Commercial Union Ins. Co., 309 F.3d 76, 83 (2d Cir. 2002) (quoting K. Bell & Assocs., Inc. v. Lloyd’s Underwriters, 97 F.3d 632, 637 (2d Cir. 1996)). If the court finds the contract, on its face, to be ambiguous, the court may accept extrinsic evidence as to the contact’s meaning, but “ ‘[i]f the court finds that the contract is not ambiguous it should assign the plain and ordinary meaning to each term and interpret the contract without the aid of extrinsic evidence’ and it may then award summary judgment.” Id. (quoting Alexander & Alexander Servs., Inc., v. These Certain Underwriters at Lloyd’s, London, England, 136 F.3d 82, 86 (2d Cir. 1998)).
On January 16, 2007, Ortegón accepted an offer of employment at LBI by countersigning the letter containing the offer. The offer letter, which with her acceptance embodied the terms of the contract between the parties, codified the expected compensation for that employment. Included in the compensation package for “the performance year 2007” was a “minimum bonus in the amount of $350,000” that the letter stipulated would be paid unless Ortegón had “resigned or ... been terminated from the Firm [for specifically enumerated causes].” App’x at 218. With the exception of this for-cause divestiture provision, the contract was for at-will employment. See App’x at 219 (“[E]ither you or the Firm may terminate the employment relationship at any time for any reason . . ”). The contract stated- that LBI “expect[ed Ortegón’s] employment to begin on or about January 18, 2007,” App’x at 218, a date that the record makes clear was initially Ortegón’s “start date,” App’x at 212. On January 17, 2007, however, a ■ representative from LBI notified Ortegón that LBI had postponed this start date indefinitely. On January 18, Ortegón met with LBI managers in connection with the offer. Shortly thereafter, Ortegón received a letter, dated January 19, 2007, which stated: “This is to confirm that, as we have discussed, Lehman Brothers has rescinded its offer of employment.” App’x 116.
At the outset, we agree with Ortegón that the offer letter became a binding contract between Ortegón and LBI when she signed it. However, the courts below correctly rejected Ortegón’s argument that she is entitled to the $350,000 minimum bonus (even though she never began the work contemplated by the contract nor appeared for work on any formal start date) on her theory that she became an “employee” of LBI by accepting the offer and by completing the pre-employment re
This is true even were we to conclude that the contract tied the bonus to Orteg-ón’s status as an “employee” rather than to her performance, because the contract does not contemplate that Ortegón could be an “employee” independently of her performance. Instead, the contract provides that employment commences on a “start date,” which is stated to be the beginning of the “performance year 2007.” App’x at 38 (emphasis added). Further, although the contract notes that the “offer of employment is conditional” upon successful completion of the pre-employment process, it nowhere states that employment itself begins upon such completion. App’x at 39. Thus, the contract leaves no basis to conclude that Ortegón ever became an “employee” of LBI in any sense contemplated by the contract.
The fact that Ortegón was ready and willing to perform and was prevented from doing so by LBI does not alter the analysis. Under the terms of the contract, Or-tegón’s employment was to be at will. In New York, an at-will employment relationship “may be freely terminated by either party at any time without cause or notice,” Horn v. N.Y. Times, 100 N.Y.2d 85, 91, 760 N.Y.S.2d 378, 790 N.E.2d 753 (2003), even before the employee has commenced performance, see Mayer v. Publishers Clearing House, 205 A.D.2d 506, 507, 613 N.Y.S.2d 190 (1994). LBI thus had the right to end its relationship with Ortegón before she began working there.
Accordingly, and finding no merit in Or-tegón’s remaining contentions, we AFFIRM the judgment of the district court.
. As we find that the language of the contract unambiguously defines employee such that it is clear Ortegón never became an "employee” for purposes of the contract, we need not and do not address Ortegón’s proffered extrinsic evidence addressing the question when the parties understood employment to begin.
. Because the contract was for at-will employment, the reason for LBI’s decision to terminate the contract is immaterial. Although Ortegón earlier filed a complaint before the Equal Employment Opportunity Commission alleging that LBI terminated the contract for improper reasons, see App’x at
Reference
- Full Case Name
- Mary Annette ORTEGÓN v. James W. GIDDENS, as Trustee for the SIPA Liquidation of Lehman Brothers Inc., Trustee-Appellee
- Cited By
- 1 case
- Status
- Published