SCOTT G. SMITH v. TYCO INTERNATIONAL (US), INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5878-05T15878-05T1

SCOTT G. SMITH,

Plaintiff-Appellant,

v.

TYCO INTERNATIONAL (US), INC.

Defendant-Respondent.

________________________________________________________________

 

Argued March 13, 2007 - Decided April 9, 2007

Before Judges Holston, Jr. and Grall.

On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Mercer County, Docket No. DC-9387-05.

Scott G. Smith, appellant, argued the cause pro se.

Allyson M. Smith argued the cause for respondent (Ogletree, Deakins, Nash, Smoak & Stewart, attorneys; Peter O. Hughes and Ms. Smith, on the brief).

PER CURIAM

Plaintiff, Scott G. Smith, appeals the February 9, 2006 order of the Special Civil Part granting summary judgment in favor of defendant, Tyco International (US), Inc. (Tyco). Smith sued Tyco for what he alleges was Tyco's failure to comply with a termination agreement between Tyco and him with respect to vacation pay.

Smith was employed by Tyco pursuant to a December 18, 2003 "offering" letter of employment in the position of assistant treasurer. Plaintiff signed the offering letter, which detailed the compensation and benefits available to him during his employment with Tyco. The offering letter provides, "[Plaintiff] will be eligible for four (4) weeks of vacation beginning with [his] start date." Smith's employment began January 16, 2004.

Tyco terminated Smith's employment on April 28, 2004, for reasons unrelated to his job performance. Plaintiff was provided with a termination letter that detailed the benefits he was eligible to receive in connection with his termination in exchange for a release required to be signed by him.

The April 28, 2004 termination agreement, entered into by Smith and Tyco, provided that Smith would receive "12 months of pay at a monthly rate . . . which will be payable in equal installments in a manner and on days that correspond to Tyco's regular pay days and payroll practices." With respect to "vacation," the agreement stated: "You will be paid for any accrued, but unused calendar year vacation days." Tyco paid Smith for five vacation days on July 27, 2004. Smith sued Tyco contending he was entitled to payment for twenty-eight days.

The court granted Tyco's motion for summary judgment determining that "the four weeks of vacation pay . . . which plaintiff became eligible for in his first year of employment, is in fact subject to proration because the employment ended approximately 1/4 into that first year."

In exchange for Tyco's agreement to pay Smith for accrued vacation and the other benefits described in the termination letter, plaintiff signed an Agreement and General Release (release). The release incorporates the terms of the termination letter and provides:

This Agreement and General Release sets forth the entire agreement between the parties hereto and fully supersedes any prior agreements or understandings between the parties. Employee acknowledges he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to accept this Agreement and General Release.

Plaintiff claims that because of the integration clause found in the offering letter of employment, the court erred when it considered Tyco's salaried vacation policy as extrinsic evidence to aid in its interpretation of the vacation provision of the termination agreement. Plaintiff contends the offering letter of employment, the termination agreement letter, and the release should have been the only written documents considered by the court in arriving at its decision.

Plaintiff argues that the offering letter specifically and clearly provides that he will be eligible for four weeks of vacation beginning with his start date, yet he was paid only 5/28th of his accrued, unused vacation. Plaintiff contends the court's decision was arrived at by applying Tyco's general salaried vacation policy. Plaintiff claims that policy was previously unknown to him. Lastly, plaintiff asserts that the "eligible for" language in the offering agreement grants and vests him with severance and vacation benefits upon cessation of employment in the same way.

A moving party is entitled to summary judgment if there is no genuine issue as to any material fact challenged and the moving party is entitled to a judgment or order as a matter of law. R. 4:46-2. "[A] determination whether there exists a 'genuine issue' of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party. Brill v. Guardian life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

The terms of Smith's contract of employment are recited with specificity in the December 18, 2003 offer of employment, which Smith accepted on December 19, 2003. The termination agreement and release signed by Smith on May 28, 2004 incorporate the April 28, 2004 termination letter. The termination letter specifies the benefits Smith is entitled to receive in connection with the termination of his active employment with Tyco.

The termination agreement states "[Smith] will be paid for any accrued but unused current calendar year vacation days." Smith argues and we agree that his termination vacation day benefit refers to the vacation benefit recited in the December 18, 2003 offering letter. That letter, under "Benefits," states: "You will also be entitled to all employee benefits that Tyco customarily makes available to employees in positions comparable to yours. Specifically, . . . [y]ou will be eligible for four (4) weeks of vacation beginning with your start date."

We are convinced that a fair reading of the benefits section of the offering letter is that Tyco's general policies govern the accrual of vacation days for which Smith is eligible. We are satisfied, therefore, that Tyco's salaried vacation policy was properly admissible as extrinsic evidence to explain the meaning of the term accrued vacation in plaintiff's termination letter and consistent with the integration clause found in the release. See Conway v. 287 Corporate Ctr. Assocs., 187 N.J. 259, 269 (2006) (quoting Atl. N. Airlines v. Schwimmer, 12 N.J. 293, 301-02 (1953) ("[e]vidence of the circumstances [surrounding execution of a contract] is always admissible in aid of the interpretation of an integrated agreement. This is so even when the contract on its face is free of ambiguity."). The Court further advised:

In sum, we permit a broad use of extrinsic evidence to achieve the ultimate goal of discovering the intent of the parties. Extrinsic evidence may be used to uncover the true meaning of contractual terms. It is only after the meaning of the contract is discerned that the parol evidence rule comes into play to prohibit the introduction of extrinsic evidence to vary the terms of the contract.

[Id. at 270.]

The types of extrinsic evidence that may be used in the interpretation of contracts, "include consideration of the particular contractual provision, an overview of all the terms, the circumstances leading up to the formation of the contract, custom, usage, and the interpretation placed on the disputed provision by the parties' conduct." Id. at 269 (quoting Kearny PBA Local #21 v. Town of Kearny, 81 N.J. 208, 221 (1979)).

"Generally, contracts are given their plain and ordinary meaning. When the terms of a contract are clear, the court must enforce them as written." E. Brunswick Sewerage Auth. v. E. Mill Assocs., Inc., 365 N.J. Super. 120, 125 (App. Div. 2004) (internal citations omitted).

Tyco agreed to provide plaintiff with "compensation" and "benefits" as defined in plaintiff's termination letter. According to the termination letter, plaintiff was entitled to receive payment for "accrued, but unused current calendar year vacation days." Under "Tyco Policies and Procedures," the "Salaried Vacation Program," effective May 2003, under the subheading "policy" defines the term "accrued." The "policy" applies to all Tyco salaried employees and governs the administration of vacation days. The policy states: "Employees accrue/earn vacation through the year on a prorated monthly basis. . . . [E]mployees who terminate during the year will . . . receive pay for their accrued, but unused, vacation hours."

The plain meaning of the word "accrue" in the termination letter is that the vacation pay to which Smith was entitled accumulated during his three and one-half months employment at Tyco and did not vest or become due at the beginning of his employment. The word "accrue" when used in the context of vacation time means "to accumulate or have due after a period of time." Websters Ninth New Collegiate Dictionary, 50 (1984). Thus, by its very definition, the word accrue implies that under Smith's termination agreement he was only eligible to receive payment for the amount of vacation time he accumulated during his employment tenure at Tyco. Plaintiff was employed by Tyco for about three and one-half months. As a result, Smith accrued three months or one-quarter of his eligible vacation time, which amounts to one week. That is the amount of vacation pay Tyco paid to plaintiff. If plaintiff's contention that his four weeks of vacation time had totally vested at the start of his employment were correct, the use of the word accrue in the termination agreement would be superfluous.

We are convinced that the plain meaning of the word "accrue" as found in the termination agreement, when read in conjunction with the offering agreement and the policy provision concerning vacation pay contained in Tyco's written "Salaried Vacation Program," is the eligible amount of vacation days accumulated throughout the calendar year. Thus, Smith received the correct payment for the vacation time that accrued during his three and one-half months of employment. The fact that the vacation provision in the offering agreement states that Smith is eligible for vacation beginning with his start date, we are convinced, means that as long as plaintiff remained employed with Tyco he would be entitled to four weeks of vacation each calendar year and that he could take his vacation starting in the beginning of the calendar year. See Caponegro v. State Operated School District of the City of Newark, Essex County, 330 N.J. Super. 148 (App. Div. 2000) (rejecting plaintiffs' argument that because vacation time could be used as the beginning of the year it should have been regarded as being earned at the beginning of the year). We are satisfied that the court correctly granted Tyco summary judgment.

 
Affirmed.

(continued)

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9

A-5878-05T1

 

April 9, 2007