No Easy Answers

Thursday, March 26, 2009

Feilbogen v. AIG - Denial of MSJ [Doc 60]

                        DISTRICT OF CONNECTICUT

 ROBERT FEILBOGEN,                 :
    Plaintiff,                     :
   v.                              :     No. 3:03CV1624(DJS)
    Defendants.                    :

                        MEMORANDUM OF DECISION

     On September 24, 2003, plaintiff Robert Feilbogen filed this

action alleging that his former employers, defendants AIG Trading

Group Inc. ("Trading") and AIG Financial Products Corp. ("AIG

FP") failed to pay him guaranteed compensation despite an

obligation to do so.    Specifically, Feilbogen alleges the

following claims: breach of contract (First Cause of Action);

promissory estoppel (Second Cause of Action); violation of

Sections 31-71c and 31-71e of the Connecticut General Statutes

(Third Cause of Action); quantum meruit (Fourth Cause of Action);

unjust enrichment (Fifth Cause of Action); and constructive

discharge (Sixth Cause of Action).     On August 9, 2004, pursuant

to Rule 56(b) of the Federal Rules of Civil Procedure, defendants

filed a motion for summary judgment.    (See Dkt. # 32).   For the

reasons set forth herein, defendants' motion is GRANTED in part

and DENIED in part.

                             I. FACTS

     Defendant Trading, a subsidiary of American International

Group, Inc. ("AIG"), is a financial services firm and is a

corporation organized and existing pursuant to the laws of the

State of Delaware.   During the time period relevant to the

Complaint, its principal place of business was located at One

Greenwich Plaza, Greenwich, Connecticut, 06830.   Defendant AIGFP,

also a subsidiary of AIG, is a financial services firm and is a

corporation organized and existing pursuant to the laws of the

State of Delaware with its headquarters and principal place of

business located at 50 Danbury Road, Wilton, Connecticut, 06897.

     Feilbogen began working at Trading in 1990 in an entry-level

position and eventually ascended to a management position.

Feilbogen was a member of the foreign exchange forwards trading

desk until late 1997 or early 1998, where he quoted foreign

exchange forwards, floating rate agreements, interest rate swaps,

and options to Trading's customer base.   In 1998, Feilbogen

became Trading's Chief of Staff, where he reported to Chief

Executive Officer Gary Davis.   Feilbogen's responsibilities as

Chief of Staff included supervision of the risk management and

accounting groups, which included advising the groups of new

transactions that were being contemplated and coordinating the

groups' efforts with AIG. In addition, Feilbogen ensured that the

risk reports were accurate and acted as the spokesperson for the


senior partners in the company if they wanted a transaction to be

accounted for in a particular way.    Feilbogen oversaw the

reconciliation process for the monthly profit and loss estimate

reports between the risk management group and the accounting

group.   In 1999, Feilbogen became Trading's Chief Operating

Officer.   In addition to his then-existing duties, Feilbogen

became responsible for oversight of systems and operations.

     In December 2000, as part of AIG's purchase of Trading's

stock, Feilbogen became an Executive Vice-President and was

appointed to Trading's Executive Management Committee.    Also in

December of 2000, Davis and two other management employees left

Trading.   When Davis left, Bradford Klein became the CEO.    In

April 2001, John Finigan replaced Klein as CEO of Trading.

Feilbogen reported to Finigan following Klein's departure.

Dennis Zampella was a human resources manager employed by AIG who

was assigned to Trading to oversee personnel issues related to

the corporate transaction.

     In 2000, Feilbogen's annual salary was $200,000 and he

received a bonus of $720,000.   Feilbogen understood that Edward

Matthews, an executive of AIG, approved his compensation.

Trading claims that changes in compensation for employees at

Trading were sent to AIG for approval, and that either Matthews

or William Dooley of AIG had to approve any increases.    In 2000,

Feilbogen created and maintained spreadsheets that contained the


bonus figures to be paid to individuals at Trading.    Once the

bonus figures were approved by senior management at Trading, a

copy of the spreadsheet was forwarded to human resources at

Trading.   Human resources would coordinate with AIG to obtain the

necessary approvals for the bonus figures.    Feilbogen claims that

he and Klein discussed memorializing the 2001 and 2002 bonus

guarantees in writing for each employee, but they did not do so

because they were told that Matthews and Dooley preferred to keep

the guarantees verbal.

     On December 6, 2000, Matthews approved proposed guaranteed

bonus figures for 2001 and 2002 for Trading employees.    The

Trading employees with guaranteed bonus figures in the

spreadsheets approved by Matthews were informed of their 2001 and

2002 bonus guarantee figures sometime between December 6, 2000

and January 16, 2001.    In 2001, Feilbogen's annual salary was

$200,000; his guaranteed bonus for 2001 was $800,000. In 2002,

Feilbogen's salary was $200,000; his guaranteed bonus for 2002

was originally set at $600,000.    Matthews approved these amounts

in his memorandum of December 6, 2000.

     The 2001 and 2002 guarantees were adopted in December of

2000 as a means of encouraging employees to stay with the firm at

a time of management turnover.     Trading paid its annual bonuses

to employees no earlier than December of the bonus year, and on

occasion later.   Trading claims that, in the absence of a written


contract explicitly providing otherwise, it paid annual bonuses

only to persons who were employees at the time of bonus payment.

Feilbogen claims that Trading paid guaranteed bonuses to

employees who were terminated without cause prior to the time

bonuses were scheduled to be paid.    Feilbogen claims that the

employees who were guaranteed compensation for 2001 and 2002 were

not guaranteed employment; their employment remained at-will, but

if they were fired without cause during a year in which their

compensation was guaranteed, they would receive the full amount

of the guarantee.

      In late 2001 or early 2002, Feilbogen spoke with Finigan

about his 2002 compensation.   Feilbogen told Finigan that he

could earn $1,500,000 at a comparable position with another firm,

but that he would like to stay with Trading.    Finigan told

Feilbogen he would give some thought to his compensation and

consulted with Zampella.   On February 21, 2002, Zampella sent an

email to Dooley recommending that Feilbogen's 2002 compensation

be increased to $1,300,000 in bonus and $250,000 in salary.

Dooley approved the increase, and Trading's human resources

department noted Feilbogen's new guaranteed bonus figure of

$1,300,000 on a spreadsheet of guaranteed bonuses for 2002.

Shortly thereafter, Finigan told Feilbogen that his guaranteed

bonus figure for 2002 had been increased from $600,000 to

$1,300,000 and his salary had been increased from $200,000 to


$250,000.   After learning of his pay increase, Feilbogen spoke

with Zampella and asked Zampella if he should call to thank

Dooley.   Zampella said that it would not be necessary.

Feilbogen was paid a bonus of $1,300,000 for 2002 in February


     Sometime in the first half of 2002, Finigan asked Feilbogen

to help prepare a memorandum to AIG recommending that Trading

enter the energy business.   During the summer of 2002, Finigan

and Feilbogen discussed moving Feilbogen to the new energy

business on a full-time basis. Feilbogen testified that on or

about June of 2002, he spoke to Finigan about how he would be

compensated if he concentrated on the energy business on a

full-time basis.   Feilbogen told Finigan that he wanted to be

clear how he would be compensated, so that he could make personal

decisions, and that Finigan responded by saying, "I will pay you

the same amount of money--the same bonus for 2003 as 2002."

(Dkt. # 37 Ex. 1 at 97:20-21.)   Feilbogen claims that he asked

Finigan whether Finigan meant the original bonus amount of

$600,000 or the increased bonus amount of $1.3 million, and that

Finigan stated that he meant the $1.3 million figure.     Feilbogen

claims that he insisted upon clarification of his compensation

because he was apprehensive about working in a new venture and

that he would have to relocate to a more expensive area.

Feilbogen never spoke with Matthews or Dooley of AIG about what


his compensation would be for 2003, and human resources documents

do not reflect Feilbogen's 2003 bonus figure.   Defendants

vigorously dispute Feilbogen's claim to a guarantee for his 2003


     In 2002, Feilbogen began to participate in the development

of the energy business at Trading, but continued to act as

Trading's COO.   In September 2002, Tony Gordon was hired by

Trading as the CEO of the energy group and was made an Executive

Vice-President of Trading.   Gordon's salary was set at $300,000,

and he had a written employment contract with Trading that

included provision for a guaranteed bonus for 2003.   Feilbogen

and Gordon were the only Executive Vice-Presidents of Trading who

were working in the energy group in 2002.

     In January 2003, Feilbogen remained the COO of Trading, but

he was becoming more involved in the energy group.    Morrissey,

as Chief Financial Officer of Trading, reported to Feilbogen

until Feilbogen's COO responsibilities ended.   Paul Gentile and

James Garzone reported to Morrissey.   Morrissey, Gentile, and

Garzone provided accounting services to all the businesses in

Trading, including the energy group in 2002 and 2003.

     Feilbogen claims that certain accounting documents reflect

the fact that he was to receive a bonus of $1.3 million in 2003.

Bonuses for "back office" employees, such as Feilbogen, were

accounted for in an entry called "general fund."   Morrissey


consulted with Finigan about accruals for 2003 for general fund

bonuses for the energy group.    Morrissey originally proposed

accruing $2 million, based on his understanding of the bonuses

paid the prior year to Gordon and Feilbogen.    Finigan instructed

him that the accrual should be $3 million, which represented

Gordon's $1,700,000, and $1,300,000 for Feilbogen.    Around the

time of Gordon's departure from Trading, Morrissey told Gentile

that $1,700,000 of the $3,000,000 that was being accrued for

energy management bonuses was for Gordon.    Gentile assumed the

balance was an accrual for Feilbogen's bonus because Feilbogen

was the other person running the energy group.    Based on his

assumption, Gentile created entries titled "Management 1" and

"Management 2" on a spreadsheet titled "Energy Inc. Guarantees,"

which he prepared for Feilbogen's use.    (See Dkt. # 44 Ex. 6.)

The Energy Inc. Guarantees 2003 schedule lists accruals by month

of $141,666 for "Management 1" and $108,334 for "Management 2."

Management 1 represented Gordon and Management 2 represented


       These accruals were also reflected in an item entitled

"guarantee" on Trading's FRX Report, which is an extraction of

information from Trading's general ledger.    (See Dkt. # 37 Ex.

14.)    The accountants and Feilbogen saw the FRX report for the

energy group in the first half of 2003.    Gentile printed out the

Energy, Inc. Guarantees and the FRX reports in response to a


request from Feilbogen in early July of 2003.

     In early 2003, the decision was made to integrate the

operations of Trading into AIGFP.      The decision was announced to

employees in April of 2003.    In March or April of 2003, Finigan

told Feilbogen of the decision to integrate Trading into AIGFP.

In March or April of 2003, Feilbogen traveled to London to meet

with Joe Cassano, the Chief Executive Officer of AIGFP, to

discuss the integration of Trading into AIGFP.     As part of the

integration efforts, Cassano asked Feilbogen to provide him with

copies of written contracts for employees of the energy group at

Trading, and Feilbogen asked Zampella to put the package

together.    Feilbogen emailed the package to Cassano on May 8,

2003.   Included in the materials Feilbogen sent to Cassano was a

chart prepared by human resources personnel listing commitments

and a cover memorandum referring to the fact that Gordon had a

guarantee.    (See Dkt. # 37 Ex. 22.)   The materials made no

mention of a bonus guarantee to Feilbogen.     Cassano responded to

Feilbogen via email on May 10, 2003, and directed Feilbogen to

compile copies of "all the employment contracts or offer

acceptance letters that are in place for the team members."

(Id.)   Feilbogen forwarded this email to Zampella, requesting

that he make copies of "all energy employee contracts/offer

letters."    (Id.)

     At a meeting in Wilton concerning the integration process,


Feilbogen was informed by AIGFP that its energy activities would

be headed by another executive, Martin Wayne.    Feilbogen

testified that as time went on during the integration discussions

he did not receive information satisfactory to him as to what

role he would fulfill at AIGFP.    Feilbogen testified that he

understood in June 2003 only that he would be part of the energy

group at AIGFP.   Feilbogen and other Trading energy personnel

selected to join AIGFP in Wilton were scheduled to begin work in

Wilton on July 1, 2003.    AIGFP, using the compensation

information provided by Feilbogen and others created a chart,

dated June 16, 2003, titled "AIGTG Employee Transfers," which

contains information concerning the energy personnel transferring

from Trading, including base salary and whether the employee had

a bonus guarantee.    The "bonus guarantee" box for Feilbogen

stated "N/A."   (Dkt. # 35 Ex. E.)

     On the afternoon of June 25, 2003, Feilbogen sent an email

to Finigan stating the following:

     Marty Wayne called me today and told me that they will
     be presenting the energy group with contracts or
     letters on Friday indicating that we will become FP
     employees. These letters will apparently reflect any
     guarantees or deals in place. Have you spoken to Joe
     Cassano about my verbal guarantee? I asked Dennis, and
     he said he knew we had agreed on my comp for 2003, but
     wasnt [sic] sure if you had mentioned anything. I just
     don't want to find myself in the awkward position of
     asking about it or informing them for the first time
     about it on Friday. If you havent [sic] mentioned
     anything, let me know how you would like to handle it.

(Dkt. # 37 Ex. 26.)    Finigan then called Feilbogen and denied


having given him a guarantee.    Feilbogen claims that Finigan

stated that AIGFP did not approve of verbal deals and urged

Feilbogen not to mention his promise to anyone at AIGFP.

     On June 27, 2003, Wayne gave a letter to Feilbogen

describing AIGFP's offer of employment to Feilbogen.    The letter

stated that any bonus compensation for 2003 would be

discretionary, and that it superceded any prior discussion of

compensation. On July 1, 2003, Feilbogen had a videoconference

call with Cassano.    Feilbogen testified that Cassano told

Feilbogen that he wanted him on the team, but that employees at

AIGFP work on a discretionary bonus basis, and that the current

terms of the employment letter were the only terms under which

Feilbogen could join AIGFP.    Feilbogen testified that he told

Cassano that Finigan made him a promise and, by signing the

letter in its current form, he would be forgoing a bonus he felt

he was entitled to receive.    On July 9, 2003, Cassano sent a

letter to Feilbogen, stating as follows:

     [a]s we have previously advised you, we have discussed
     your position with John Finigan, among others, and it
     is clear that, contrary to the assertions in your
     e-mail, you were not given a 2003 guarantee. This
     conclusion is of course consistent with Trading Group's
     Policy Manual, by which you agreed in writing to be
     bound. The Policy Manual clearly states that, absent a
     written contract to the contrary, no employee has any
     entitlement to a bonus until it is actually received.

(Dkt. # 37 Ex. 25.)    On or about April 2, 1997, Trading issued a

Policy Manual.   The Trading Policy Manual states the following:


     [t]he Company may, but is not required to, pay
     employees a bonus based upon their performance and that
     of the Company. However, the determination as to
     whether and in what amount to pay such bonus shall be
     made by the Company in its sole discretion and, absent
     a written contract to the contrary, no employee has any
     entitlement to a bonus until it is actually received.

(Dkt. # 37 Ex. 26 at 38.)    On April 28, 1997, Feilbogen signed an

Acknowledgment of Compliance with Policy Manual, after being

provided with an opportunity to read it.       Feilbogen sent an email

to Cassano on July 9, 2003 stating that Feilbogen's employment

had ended, and claiming that Feilbogen had been terminated.

     There was no written severance policy at Trading.      There

was, however, a severance practice to offer employees, who were

not offered employment with AIGFP as a result of the integration

of Trading into AIGFP, one month of salary per year of service.

Trading claims that payment of severance was conditioned on

signing a release, and that employees who lost their job as a

result of the integration of Trading into AIGFP received an offer

of severance contingent on signing a release.

                            II.   DISCUSSION

     Feilbogen alleges the following claims: breach of contract

(First Cause of Action); promissory estoppel (Second Cause of

Action); violation of Sections 31-71c and 31-71e of the

Connecticut General Statutes (Third Cause of Action); quantum

meruit (Fourth Cause of Action); unjust enrichment (Fifth Cause

of Action); and constructive discharge (Sixth Cause of Action).


Defendants claim that his breach of contract cause of action is

barred by Connecticut's Statute of Frauds, and that the other

claims lack merit.

                             A.   STANDARD

     A motion for summary judgment may be granted "if the

pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue of material fact and that the

moving party is entitled to judgment as a matter of law."     Fed.

R. Civ. P. 56(c).    Summary judgment is appropriate if, after

discovery, the nonmoving party "has failed to make a sufficient

showing on an essential element of [its] case with respect to

which [it] has the burden of proof."     Celotex Corp. v. Catrett,

477 U.S. 317, 323 (1986).    "The burden is on the moving party `to

demonstrate the absence of any material factual issue genuinely

in dispute.'"   American Int'l Group, Inc. v. London Am. Int'l

Corp., 664 F.2d 348, 351 (2d Cir. 1981) (quoting Heyman v.

Commerce & Indus. Ins. Co., 524 F.2d 1317, 1319-20 (2d Cir.

1975)).   A dispute concerning a material fact is genuine "`if

evidence is such that a reasonable jury could return a verdict

for the nonmoving party.'"    Aldrich v. Randolph Cent. Sch. Dist.,

963 F.2d 520, 523 (2d Cir. 1992) (quoting Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986)).      The court must view all

inferences and ambiguities in a light most favorable to the


nonmoving party.   See Bryant v. Maffucci, 923 F.2d 979, 982 (2d

Cir. 1991).   "Only when reasonable minds could not differ as to

the import of the evidence is summary judgment proper."    Id.

                      B.   BREACH OF CONTRACT

     In his First Cause of Action, Feilbogen claims that

defendants breached an oral contract to pay him a guaranteed

bonus of $1.3 million in 2003.    The prima facie elements of a

breach of contract action are the existence of an agreement,

breach of the agreement by the defendant, and damages to the

plaintiff from the breach.   Rather than dispute these prima facie

elements in their motion for summary judgment,1 defendants claim

that, even if they did agree to pay Feilbogen a bonus of $1.3

million in 2003, this contract is not enforceable because it is

not written, and therefore is subject to Connecticut's Statute of

Frauds.   They also claim that Finigan lacked the authority to

enter into a contract of this kind on behalf of Trading, and that

Feilbogen was not entitled to a bonus as a matter of law based

upon Trading's Policy Manual.

                       1. STATUTE OF FRAUDS

     Defendants claim that Feilbogen's breach of contract claim

      Defendants vigorously dispute the existence of a contract
to pay Feilbogen a guaranteed bonus of $1.3 million, but they do
not seek judgment as a matter of law on this ground at this time.
Any reference to a contract in this memorandum should be viewed
in the spirit of performing the court's task under Rule 56 only
and not as an endorsement of the strength of plaintiff's claims.


is based upon an oral agreement that cannot be performed within

one year and is therefore unenforceable.   Connecticut's Statute

of Frauds provides the following: "[n]o civil action may be

maintained in the following cases unless the agreement, or a

memorandum of the agreement, is made in writing and signed by the

party, or the agent of the party, to be charged: . . . upon any

agreement that is not to be performed within one year from the

making thereof. . . ."   Conn. Gen. Stat. � 52-550(a)(5).

Defendants argue that, because the oral contract regarding the

amount of his 2003 bonus upon which Feilbogen relies arose during

a conversation between him and Finigan in August of 2002, and

bonuses were paid to employees no earlier than December of the

year that the bonus was due, any agreement regarding the amount

of Feilbogen's 2003 bonus could not have been performed within

one year because Feilbogen would have received his guaranteed

bonus in December of 2003 at the earliest.   As such, defendants

claim that the oral contract upon which Feilbogen relies is

subject to the bar set forth in Section 52-550(a)(5) because it

could not have been performed within one year.

     Feilbogen claims that the oral contract at issue could have

been performed in less than one year.   Specifically, he contends

that he would have received his guaranteed bonus if Trading

terminated his employment in 2003 for any reason other than for

cause.   Defendants dispute Feilbogen's interpretation of the oral



     Interpretation is an issue of fact, and is therefore

reserved for the factfinder, unless the evidence compels one

conclusion only.   "Interpretation requires a determination of the

intention of the parties as manifested by their words and

conduct."   Heyman v. CBS, Inc., 178 Conn. 215, 227-28 (1979).

"`The intention of the parties manifested by their words and acts

is essential to determine whether a contract was entered into and

what its terms were. . . .   This determination requires a finding

of mutuality of obligation.' . . .      Intention is an inference of

fact. . . ."   Hydro-Hercules Corporation v. Gary Excavating,

Inc., 166 Conn. 647, 652-53 (1974) (quoting Hess v. Dumouchel

Paper Co., 154 Conn. 343, 347 (1966)); see Lavigne v. Lavigne, 3

Conn. App. 423, 427-28 (1985).    "In the absence of `definitive

contract language,' however, `the determination of what the

parties intended to encompass in their contractual commitments is

a question of the intention of the parties, and an inference of

fact.'"   Finley v. Aetna Life and Cas. Co., 202 Conn. 190, 213

(1987) (quoting Bead Chain Mfg. Co. v. Saxton Products, Inc., 183

Conn. 266, 274-75 (1981)), overruled on other grounds by Curry v.

Burns, 225 Conn. 782 (1993); see Kakalik v. Bernardo, 184 Conn.

386, 393 (1981) (holding that the meaning of a contract is

"question of the intent of the parties, to be determined, as a

matter of fact, from the language of the contract, the


circumstances attending its negotiation, and the conduct of the

parties in relation thereto.").    "Because it is an inference of

fact, determining the intent of the parties is within the

province of the jury: it is the raison d'etre of the jury

system."    Gaudio v. Griffin Health Services Corp., 249 Conn. 523,

533 (1999) (internal quotation marks omitted) (quoting Coelho v.

Posi-Seal Intern., Inc., 208 Conn. 106, 113 (1988)).

     Defendants' motion must be denied because Feilbogen has

presented sufficient evidence to support his interpretation of

the oral contract at issue.    Feilbogen cites a "company policy"

for the proposition that he would be paid his guaranteed bonus if

Trading terminated his employment without cause during 2003.

(See Dkt. # 43 � 8.)    Feilbogen's statement is not a bald

assertion; he was a part of Trading's upper management for a

significant period of time and was familiar with compensation

issues.    Although defendants dispute Feilbogen's iteration of

company policy, they admit the fact that certain employees with

bonus guarantees whose employment ended prior to the payment of

bonuses were paid undisclosed amounts pursuant to severance

agreements.    (See Dkt. # 46 at 2 n.1.)    The characterization of

payments to departing employees with bonus guarantees is

immaterial� what is significant is the source of Trading's

obligation to make these payments.     Therefore, it is possible

that Feilbogen will be able to prove that Trading was obliged to


pay an employee a guaranteed bonus if Trading terminated the

employee for any reason other than for cause during the bonus


     Because Feilbogen may be able to prove that the oral

agreement to pay him a guaranteed bonus could have been performed

within one year, it is possible that this contract is not subject

to Connecticut's Statute of Frauds.   Defendants' motion for

summary judgment is therefore denied on this ground.

                      2. FINIGAN'S AUTHORITY

     Defendants claim that Finigan lacked the authority to enter

into an oral agreement to pay a guaranteed bonus to Feilbogen,

and that Feilbogen cannot prove that he perceived Finigan to have

the apparent authority to do so.   "`Apparent authority is that

semblance of authority which a principal, through his own acts or

inadvertences, causes or allows third persons to believe his

agent possesses.'"   Tomlinson v. Board of Educ. of City of

Bristol, 226 Conn. 704, 734 (1993) (quoting Lewis v. Michigan

Millers Mutual Ins. Co., 154 Conn. 660, 665 (1967)).

"[A]pparent authority is to be determined, not by the agent's own

acts, but by the acts of the agent's principal," and is an issue

of fact.   Two criteria are relevant to determining whether

apparent authority existed:

     [f]irst, it must appear from the principal's conduct
     that "the principal held the agent out as possessing
     sufficient authority to embrace the act in question, or
     knowingly permitted [the agent] to act as having such


     authority." [Nowak v. Capitol Motors, Inc., 158 Conn.
     65, 69 (1969)]. . . . Second, the party dealing with
     the agent must have, "acting in good faith, reasonably
     believed, under all the circumstances, that the agent
     had the necessary authority" to bind the principal to
     the agent's action. [Id.]

Tomlinson, 226 Conn. at 734-35.

     Defendants contend that any salary increase, including a

bonus increase, had to have been approved by either Dooley or

Matthews from AIG.   Defendants point out that Feilbogen's salary

and bonus increases for 2001 and 2002 were expressly approved by

Dooley and Matthews, and that Feilbogen was aware of this fact.

Defendants therefore claim that there is no reasonable basis for

Feilbogen to believe that Finigan had the authority to

unilaterally guarantee him a bonus of $1.3 million in 2003.

     Feilbogen could prove to the trier of fact that Finigan

acted with apparent authority when he entered into an oral

agreement to pay Feilbogen a guaranteed bonus in 2003.   In August

of 2003, Finigan was the CEO of Trading.   Although Feilbogen's

2001 and 2002 bonuses were approved by AIG management, and were

the subject of deliberation involving Dooley, Matthews, and

Zampella, Feilbogen's request originated with Finigan, and

Finigan was the person who conveyed approval of Feilbogen's

request to Feilbogen.   Although approval from AIG management had

been sought and obtained in the past, Feilbogen was not involved

in that process, and obtained no official notification from

Dooley, Matthews, or Zampella regarding his pay increases.    By


designating Finigan as the person with whom Feilbogen should

negotiate regarding his compensation, Trading conveyed the

impression that Finigan could enter into an agreement on its

behalf.   See Edart Truck Rental Corp. v. B. Swirsky and Co.,

Inc., 23 Conn. App. 137, 140 (1990) ("Apparent authority may be

derived from a course of dealing.").   Further, a factfinder could

conclude that Feilbogen's presumption that Finigan could set his

2003 bonus in an amount equal to his 2002 bonus as well as the

underlying presumption that Finigan would properly process his

decision through AIG management and human resources were both

reasonable under the circumstances.    Accordingly, Feilbogen may

be able to prove that Finigan acted with apparent authority, and

defendants' motion for summary judgment is denied on this ground.

     Defendants are not entitled to judgment as a matter of law

on Feilbogen's breach of contract claim.     In addition to the

reasons set forth herein, the court also finds that genuine

issues of material fact remain regarding whether defendants

waived the provision in AIG's Policy Manual regarding the payment

of bonuses, and whether AIGFP could be liable for an obligation

incurred by Trading.   As such, defendants' motion is denied with

respect to Feilbogen's First Cause of Action.

                        C. CLAIM FOR WAGES

     Feilbogen claims that defendants failed to pay him wages due

in violation of Sections 31-71c and 31-71e of the Connecticut


General Statues.   In their motion for summary judgment,

defendants argue that Feilbogen's 2003 bonus cannot be considered

"wages" as that term is defined in Section 31-71a(3).     The term

"wages" is defined as "compensation for labor or services

rendered by an employee, whether the amount is determined on a

time, task, piece, commission or other basis of calculation. . .

."   Conn. Gen. Stat. � 31-71a(3).     Courts confronting the issue

of whether a bonus is properly considered wages have recognized

the fact that there are many different kinds of payments to

employees falling within the general term "bonus," and that the

particular characteristics of each payment determine whether the

bonus constitutes wages.   To be sure, the term "bonus" does imply

a gratuitous payment, but experience suggests that bonuses are

often simply another form of compensation paid to employees for

services rendered.    When compelled to differentiate between the

two extremes, courts focus on the relationship between the

compensation and the employee's services rendered.     Courts that

have held that a bonus payment is wages have done so when the

payment is premised upon work or services the employee has

performed as opposed to the general success of the company or the

whim of management.   Thus, if there is some indication that the

bonus payment is premised upon the individual's quantifiable

performance, or otherwise based upon some kind of service

rendered, the bonus may be considered wages.


     Feilbogen may be able to prove that his bonus was unpaid

wages because the bonus bore a sufficient relationship to

services he rendered for defendants.   Feilbogen claims that,

although the bonus was not premised upon some quantifiable

criteria, it was given to him in recognition of the fact that he

would be leaving a secure management position so that he could

develop and create a new business venture on behalf of Trading.

Feilbogen claims that he spent a great deal of time and effort

developing a business plan and then implementing his plan for

starting the energy business.   He also claims that this business

plan had great value for defendants, but nevertheless that this

value would not immediately be realized in financial terms.

Further, Feilbogen's bonus was set at a negotiated amount prior

to the start of 2003, which suggests that, in determining the

amount of the bonus to be paid, defendants relied heavily upon

Feilbogen's expected contribution to their business.   The fact

that the bonus was guaranteed also suggests that it was related

to Feilbogen's expected contributions to the company and not upon

some abstract notion of success.

     Im sum, the nature of the bonus payment as Feilbogen

describes it could be considered wages as that term is used in

Sections 31-71c and 31-71e of the Connecticut General Statutes.

Specifically, the finder of fact could conclude that Feilbogen's

2003 bonus bore a sufficient relationship to the services he


rendered to the company such that the bonus would properly be

considered "compensation for labor or services rendered"; the

choice between what defendants consider a "retention incentive"

and what Feilbogen considers a payment for services rendered is a

properly reserved for the factfinder.   Therefore, defendants'

motion for summary judgment is denied with respect to Feilbogen's

Third Cause of Action.

                     D. CONSTRUCTIVE DISCHARGE

     Feilbogen claims that defendants constructively discharged

him from his position by directing him to sign the June 27, 2003

letter setting forth the terms of his continued employment.    He

contends that defendants "erroneously characterized [his]

discharge as a voluntary resignation in order to avoid paying

[Feilbogen] the severance he otherwise would have been paid," and

that defendants' "actions violated the public policy of

preventing overreaching by employers and the forfeiture by

employees of benefits earned by the rendering of substantial

service."   (Dkt. # 1, Sixth Cause of Action, �� 54-55.)

Feilbogen claims that, as a result of defendants' actions, he

should receive a severance benefit of $270,000.   Feilbogen, in

order to succeed on his claim, must present "sufficient evidence

for a jury to decide reasonably and legally that [he] had been

discharged in violation of public policy."   Seery v. Yale-New

Haven Hosp., 17 Conn. App. 532, 539 (1989); see Sheets v. Teddy's


Frosted Foods, Inc., 179 Conn. 471, 474 (1980).

     Defendants argue that Feilbogen cannot prove that he was

constructively discharged and that he was nevertheless not

entitled to severance benefits.   With respect to the first

argument, Feilbogen may be able to prove that he was

constructively discharged.   "`Constructive discharge of an

employee occurs when an employer, rather than directly

discharging an individual, intentionally creates an intolerable

work atmosphere that forces an employee to quit involuntarily.'"

Brittell v. Dept. of Correction, 247 Conn. 148, 178 (1998)

(quoting Chertkova v. Connecticut General Life Ins. Co., 92 F.3d

81, 89 (2d Cir. 1996)).   "`Working conditions are intolerable if

they are so difficult or unpleasant that a reasonable person in

the employee's shoes would have felt compelled to resign.'"

Brittell, 247 Conn. at 178 (quoting Chertkova, 92 F.3d at 89).    A

jury could find that compelling an employee to waive the right to

receive a $1.3 million guaranteed bonus, which constituted about

84% of the employee's total compensation of $1.55 million, would

have forced the employee to resign.   The fact that Feilbogen may

ultimately have received a bonus comparable to, or even in excess

of, $1.3 million does not alter this conclusion; according to the

most favorable construction of Feilbogen's evidence, his $1.3

million bonus was guaranteed, and defendants tried to force him

to waive the guarantee, making it possible that Feilbogen would


receive nothing.   The finder of fact must examine the evidence as

a whole in order to determine whether a reasonable person in

Feilbogen's position would have felt compelled to resign.

     Defendants other arguments addressed to this claim lack

merit.   The severance policy is subject to interpretation, which,

as stated previously herein, is within the province of the finder

of fact.   Feilbogen may be able to show that a severance benefit

was available to him and that execution of a release was not a

prerequisite to the right to collect severance.    As such,

defendants' motion is denied with respect to this claim.

                      E. PROMISSORY ESTOPPEL

     Feilbogen claims that Finigan promised him a guaranteed

bonus of $1.3 million for 2003, and, pursuant to the doctrine of

promissory estoppel, this court should enforce this promise

because Feilbogen relied upon it to his detriment.    Defendants

claim that Feilbogen cannot prove that he relied upon Finigan's

promise to his detriment.

     "Promissory estoppel is asserted when there is an absence of

consideration to support a contract."    Glazer v. Dress Barn,

Inc., 274 Conn. 33, 78 (2005).    With respect to promissory

estoppel, the Connecticut Supreme Court has endorsed the approach

set forth in Section 90 of the Restatement (Second) of Contracts,

which provides the following:

     [a] promise which the promisor should reasonably expect
     to induce action or forbearance on the part of the


     promisee or a third person and which does induce such
     action or forbearance is binding if injustice can be
     avoided only by enforcement of the promise. The remedy
     granted for breach may be limited as justice requires.

Rest. (Second) Contracts � 90 (1981).    "A fundamental element of

promissory estoppel, therefore, is the existence of a clear and

definite promise which a promisor could reasonably have expected

to induce reliance."    D'Ulisse-Cupo, 202 Conn. at 214.    Further,

"[t]o succeed on a claim of promissory estoppel, the party

seeking to invoke the doctrine must have relied upon the other

party's promise."    Stewart v. Cendant Mobility Services Corp.,

267 Conn. 96, 112 (2003).    "That reliance, of course, may take

the form of action or forbearance. . . .    Nevertheless, the

asserted reliance, regardless of its form, must result in a

detrimental change in the plaintiff's position" such that there

is a cost to the plaintiff of relying upon the promise.     Id. at


     Feilbogen has presented sufficient evidence for the

factfinder to conclude that he relied upon Finigan's promise to

his detriment.    Feilbogen's offer closely resembles the

plaintiff's offer of proof in Stewart, where the Connecticut

Supreme Court affirmed the trial court's entry of judgment based

upon a jury's verdict in the plaintiff's favor on her promissory

estoppel claim.    In Stewart, the plaintiff demonstrated that her

employer promised her that her husband's working for a competitor

would not have a negative effect upon her employment.      See id. at


111.    The evidence showed that the plaintiff did not have another

job offer at the time, nor did she have any definite idea of what

she would do had her employer failed to address her concerns

about her husband, but rather that she would enter a receptive

job marketplace as a highly desirable candidate, and would likely

command a substantial signing bonus.    See id. at 111-12.   Here,

Feilbogen has presented evidence indicating that he had a

longstanding invitation to discuss a position with Sempra Energy,

and that he could command a salary of $1.5 million in the job

marketplace.    Feilbogen could also prove that, because he did not

receive a bonus for his work at Trading for the period of January

through June of 2003, his reliance cost him the chance to earn a

full bonus for the year 2003.    Therefore, defendants' motion for

summary judgment is denied with respect to this claim.

                      F. QUASI-CONTRACT CLAIMS

        Feilbogen claims that, if no recovery is available under

his contract theories, he is entitled to restitution pursuant to

the quasi-contract theories of quantum meruit and unjust

enrichment.    "Unjust enrichment and quantum meruit are forms of

the equitable remedy of restitution by which a plaintiff may

recover the benefit conferred on a defendant in situations where

no express contract has been entered into by the parties."    Burns

v. Koellmer, 11 Conn. App. 375, 385 (1989).

       "Quantum meruit is a theory of contract recovery that does


not depend upon the existence of a contract, either express or

implied in fact. . . .    Rather, quantum meruit arises out of the

need to avoid unjust enrichment to a party, even in the absence

of an actual agreement."    Gagne v. Vaccaro, 255 Conn. 390, 401

(2001).   The doctrine of quantum meruit "strikes the appropriate

balance by evaluating the equities and guaranteeing that the

party who has rendered services receives a reasonable sum for

those services."   Id.   "The pleadings must allege facts to

support the theory that the defendant, by knowingly accepting the

services of the plaintiff and representing to [him] that []he

would be compensated in the future, impliedly promised to pay

[him] for the services []he rendered."    Burns, 11 Conn. App. at


     "Unjust enrichment applies whenever `justice requires

compensation to be given for property or services rendered under

a contract, and no remedy is available by an action on the

contract.'"   Gagne, 255 Conn. at 401 (quoting 12 S. Williston,

Contracts � 1479, at 272 (3d ed. 1970)).    The doctrine of unjust

enrichment is "based on the postulate that it is contrary to

equity and fairness for a defendant to retain a benefit at the

expense of the plaintiff."    Id.   "In order for the plaintiff to

recover under the doctrine, it must be shown that the defendants

were benefitted, that the benefit was unjust in that it was not

paid for by the defendants, and that the failure of payment


operated to the detriment of the plaintiff."   Burns, 11 Conn.

App. at 383.

     Defendants argue that they are entitled to judgment as a

matter of law on Feilbogen's restitution claims because the

subject matter of his claims, the unpaid $1.3 million bonus, is

subject to an express written agreement in the form of the Policy

Manual.    Defendants claim that "[w]hen an express contract exists

between the parties, no claim of quantum meruit or unjust

enrichment can lie."   (Dkt. # 33 at 31 (citing Rosick v.

Equipment Maintenance & Service, Inc., 33 Conn. App. 25, 27

(1993).)   In Rosick, the Connecticut Appellate Court affirmed the

trial court's entry of judgment as a matter of law in favor of

the defendant on the plaintiff's restitution claim where the

plaintiff sought reimbursement for extra work performed on a

project, but failed to seek reimbursement pursuant to the

procedure set forth in the written agreement between the parties

concerning the project.   Rosick, 33 Conn. App. at 38.   The court

held that "[t]he express contract provided a procedure for the

plaintiff to make a claim for extras and the road patching costs

fell within that procedure; thus, because there was an express

provision covering road patching, a quantum meruit claim to

recover this work is barred."   Id.

     Here, there is an express provision governing the payment of



     [t]he Company may, but is not required to, pay
     employees a bonus based upon their performance and that
     of the Company. However, the determination as to
     whether and in what amount to pay such bonus shall be
     made by the Company in its sole discretion and, absent
     a written contract to the contrary, no employee has any
     entitlement to a bonus until it is actually received.

(Dkt. # 37 Ex. 26 at 38.)   Feilbogen's claim that defendants were

unjustly enriched by receipt of the benefit of his services,

including certain special projects, without fairly compensating

him is contrary to the express language set forth in the Policy

Manual; according to the policy manual, Feilbogen expressly

agreed to the possibility that he would not receive a bonus in

any given year.   Even though the court has held that the

factfinder must decide whether defendants waived this provision

in one particular instance, thus permitting an oral modification

of the Policy Manual guaranteeing Feilbogen a $1.3 million bonus

for 2003, there is no evidence that defendants disavowed the

Policy Manual altogether.   Whether defendants are bound by a

promise or contractual undertaking to pay a bonus, or whether the

bonus itself meets the statutory definition of wages is a much

different question than whether justice requires that the court

order defendants to remunerate Feilbogen beyond the amount of his

salary despite an express agreement to the contrary.   As such,

defendants' motion for summary judgment is granted with respect

to the Fourth and Fifth Causes of Action.


                         III. CONCLUSION

     For the foregoing reasons, defendants' motion for summary

judgment (dkt. # 32) is GRANTED in part and DENIED in part.

Judgment as a matter of law shall enter in favor of defendants on

the Fourth and Fifth Causes of Action set forth in the complaint.

The parties shall file a joint trial memorandum on or before

September 8, 2006.

     So ordered this 15th day of May, 2006.

                                    DOMINIC J. SQUATRITO
                                UNITED STATES DISTRICT JUDGE



March 2006   April 2006   May 2006   June 2006   July 2006   August 2006   September 2006   October 2006   November 2006   December 2006   January 2007   February 2007   March 2007   April 2007   May 2007   June 2007   July 2007   August 2007   September 2007   November 2007   December 2007   January 2008   February 2008   March 2008   April 2008   May 2008   June 2008   July 2008   August 2008   September 2008   March 2009   April 2009  

This page is powered by Blogger. Isn't yours?