Opinion
Civil Action No. 03-3084.
October 5, 2004
MEMORANDUM AND ORDER
Presently before this Court are Defendant's Motion in Limine to Exclude Evidence (Docket No. 65), Plaintiff's Response to Defendant's Motion in Limine to Exclude Evidence (Docket No. 72), Defendant's Reply Memorandum in Support of its Motion in Limine to Exclude Evidence (Docket No. 75), and Plaintiff's Supplemental Brief in Response to Defendant's Motion in Limine to Exclude Evidence (Docket No. 80). The Court will grant Defendant's motion in part and deny Defendant's motion in part.
I. BACKGROUND
This case arises out of a breach of contract dispute between Plaintiff Vincent Naples and Defendant National Seating and Mobility, Inc., Naples's former employer. Following his termination on February 17, 1999, Naples filed a complaint in Pennsylvania state court alleging that his termination constituted a breach of his employment contracts. The case was removed to this Court on May 13, 2003. Defendant's Motion in Limine asks this Court to exclude three separate categories of evidence Defendant expects Plaintiff to refer to or introduce. First, Defendant seeks to exclude any evidence pertaining to Beckett Healthcare, Inc. ("Beckett"). Second, Defendant seeks to exclude all evidence relating to Defendant's Employee Handbook, Human Resources Policy Manual, and Policies and Procedures Manual (collectively, "Employment Documents"). Third, Defendant seeks to exclude evidence pertaining to Plaintiff's damages beyond November 4, 1999. The relevancy of each category of evidence is addressed in turn below.
II. LEGAL STANDARD
Under the Federal Rules of Evidence, evidence is deemed relevant and admissible if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Fed.R.Evid. 401, 402. A court may exclude relevant evidence "if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Fed.R.Evid. 403. In other words, if the admission of evidence will lead to the litigation of collateral issues, which create side issues which may distract the jury from the main issues, the Court may exclude the evidence. See Blancha v. Raymark Indus., 972 F.2d 507, 516 (3d Cir. 1992).
The Third Circuit has commented that, the definition of relevance under Rule 401 was not intended to "raise a high standard." Hurley v. Atlantic City Police Dep't., 174 F.3d 95, 109-10 (3d Cir. 1999). In fact, this standard has been referred to as "the minimum standard of relevancy." See Ofsharick v. GMAC Commer. Mortg. Corp., 2003 U.S. Dist. LEXIS 15646 (E.D.Pa. 2003). Because the Federal Rules make evidence relevant "if it has any tendency to prove a consequential fact, it follows that evidence is irrelevant only when it has no tendency to prove the fact." 22 Charles A. Wright Kenneth W. Graham, Jr., Federal Practice and Procedure: Evidence § 5166, at 74 n. 47 (1978). In this circuit, district courts are instructed to exclude evidence under Rule 403 "only sparingly since the evidence excluded is concededly probative."Blancha, 972 F.2d at 516 (citing United States v. Terzado-Madruga, 897 F.2d 1099, 1117 (11th Cir. 1990)).
III. DISCUSSION
A. Relevancy of Beckett Healthcare
Defendant anticipates that Plaintiff will use evidence concerning Beckett to show that Defendant terminated him not for poor performance or missing budgets, as Defendant has suggested, but to avoid making increased commission payments to Plaintiff. Plaintiff alleges that Defendant signed an agreement with Beckett shortly after Plaintiff was terminated, and that this agreement would have increased Defendant's profits. Portions of these profits would have flowed to Plaintiff through his commission-based salary as specified in his employment contracts had he not been terminated.
This Court issued an Order on September 30, 2004, striking from the Record all of Plaintiff's references to Beckett for the purpose of Defendant's Motion for Partial Summary Judgment. To this point Plaintiff has yet to present non-hearsay evidence to this Court supporting his allegations concerning Beckett and Beckett's relevance to his termination. However, for the purposes of this Motion in Limine the Court will assume that Plaintiff can present admissible evidence concerning Beckett.
Contrary to the argument set forth by Defendant in its Motion in Limine, evidence concerning Beckett is relevant to Plaintiff's breach of contract claim. While it is true that any agreement between Defendant and Beckett was signed after Plaintiff was terminated, the Court holds that such an agreement would suggest an alternative motive for Plaintiff's termination. The basis for Plaintiff's termination is a central fact at issue in this case, and any evidence that may show a potential reason Defendant had for terminating Plaintiff is a relevant matter admissible under Rule 401. The Court further finds that the Beckett evidence has probative value that outweighs any potential for undue prejudice, delay, or confusion, and therefore the evidence is admissible under Rule 403 as well.
B. Relevancy of the Employment Documents
Defendant suggests that Plaintiff may attempt to use evidence contained in the Employment Documents to prove that terms and conditions in the documents set out standards for his employment that are different from those set forth in his employment contracts, three of which contain an integration clause.
The Employment Documents at issue are relevant and will not be excluded from evidence. Although Defendant asserts the documents are "irrelevant" to this case, Defendant focuses its argument on the assertion that any attempt by Plaintiff to introduce this evidence as a way of modifying the terms of the employment contracts must be barred by the parol evidence rule. Defendant states that three of Plaintiff's four employment contracts contain integration clauses, thus precluding Plaintiff from introducing extrinsic evidence to modify the terms in the employment contracts.
The Pennsylvania Supreme Court has explained the parol evidence rule as follows:
Where the parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement. All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract . . . and unless fraud, accident or mistake be averred, the writing constitutes the agreement between the parties, and its terms and agreements cannot be added to nor subtracted from by parol evidence.Gianni v. Russell Co., 126 A. 791, 792 (Pa. 1924) (citations omitted); see also Scott v. Bryn Mawr Arms, Inc., 312 A.2d 592, 594 (Pa. 1973). Therefore, for the parol evidence rule to apply, there must be a writing that represents the "entire contract between the parties."Gianni, 126 A. at 792. An integration clause that states that a writing is meant to represent the parties' entire agreement is 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. See HCB Contractors v. Liberty Palace Hotel Associates, 652 A.2d 1278, 1280 (Pa. 1995); Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425, 436 (Pa. 2004).
Defendant's parol evidence argument fails for two reasons. First, the "integration clauses" Defendant refers to do not state that each agreement fully embodies all contractual rights between Plaintiff and Defendant. The clauses merely state that the written agreement embodies the entire agreement between the parties regarding the terms and issues outlined in the individual contracts themselves. For example, the integration clause in the Division Manager Working Interest Agreement states:
7. Entire Agreement. The parties hereto expressly acknowledge that this Agreement constitutes the entire contract between the parties concerning incentive bonus compensation and that, unless otherwise provided in this Agreement, any other agreements or understandings, oral or written, of any nature with respect to such matters are hereby superceded and revoked.
Division Manager Working Interest Agreement at 3 (emphasis added). The same is true for the Minimum Compensation Agreement, which states, "Whole Agreement. This writing sets forth the entire agreement between the parties concerning any minimum payment guarantees to Naples." The Sales Representative Employment Agreement, the document outlining the circumstances that would justify Defendant terminating Plaintiff, does not contain an integration clause at all but merely states that the agreement can only be amended in writing. Under these facts the parol evidence rule cannot bar introduction of evidence based on the integration clauses contained in Plaintiff's employment contracts.
Second, the parol evidence rule does not apply when a party seeks to introduce evidence for the purpose of showing a party's intent concerning complete integration of a contract. See Murray v. University of Pennsylvania Hospital, 490 A.2d 839 (1985). Plaintiff asserts that it will offer evidence in the Employment Documents to illustrate what each party intended by the terms in the employment contracts. Because this evidence is clearly relevant in this breach of contract case, and because the parol evidence rule does not require the Court to exclude this evidence, Defendant's motion will be denied as to the Employment Documents.
C. Relevancy of Plaintiff's Damages After November 4, 1999
This breach of contract case involves four employment contracts signed by Plaintiff and Defendant. The only contract at issue for the purposes of Defendant's motion regarding damages, however, is the Sales Representative Employment Agreement ("Employment Agreement"), signed by both parties on November 5, 1998. The Employment Agreement contains a "Term" paragraph stating:
Unless sooner terminated pursuant to the provisions of Paragraph 6 below, this Agreement shall continue in full force and effect for a period of one (1) year (the "Term") and thereafter until that date (the "Expiration Date") set forth in a notice given by one party to the other party stating such party's election to end this Agreement, which Expiration Date shall be not less than thirty (30) days after notice of such election is given.
Sales Representative Employment Agreement at 1, ¶ 2. Paragraph 6 of the Employment Agreement is titled "Termination" and states:
The employment of Representative may be terminated at any time prior to the expiration of the Term of this Agreement if Representative willfully breaches or habitually neglects the duties that Representative is required to perform under the terms of this Agreement, or demonstrates a continued incapacity to perform those duties. Termination of Representative's employment shall not be in limitation of any other right or remedy Dealer may have under this Agreement or in law or equity.
Defendant terminated Plaintiff on February 17, 1999. Plaintiff filed suit against Defendant alleging that his termination violated the terms of the Employment Agreement, essentially arguing that because he did not "willfully breach or habitually neglect" his responsibilities, Defendant had no legal basis for terminating him.
On the issue of damages, Plaintiff asserts that had he not been terminated after three months, he would have served the one-year term of his contract. Furthermore, citing the five-year employment history of a sales representative Plaintiff claims replaced him, and a report prepared by David L. Crawford, Ph.D., Plaintiff seeks damages for sales commissions he would have earned over a five-year period.
It is firmly established that Pennsylvania is an at-will employment jurisdiction. See McLaughlin v. Gastrointestinal Specialists, Inc., 750 A.2d 283 (Pa. 2000). The doctrine of "at will" employment provides generally that, in the absence of an employment contract or relevant statutory law, an employee may be fired at any time for any reason, or for no reason at all. See Geary v. United States Steel Corp., 319 A.2d 174, 176 (Pa. 1974) ("absent a statutory or contractual provision to the contrary, the law has taken for granted the power of either party to terminate an employment relationship for any or no reason."). However, an individual employed under a contract for a definite term may not be terminated before the expiration of the term except "for cause" unless the contract provides otherwise. Mark A. Rothstein et al., Employment Law § 9.2.
To support his argument that his damages should be calculated based on a potential five-year employment term, Plaintiff notes that the Pennsylvania Supreme Court has announced the applicable rule when an employee continues to work under an employment contract for a definite time beyond the specified time period:
Where a contract of employment for a definite time is made and the employee's services are continued after the expiration of that time, without objection, the inference is that the parties have assented to another contract for a term of the same length with the same salary and conditions of service.Smith v. Shallcross, 856 A.2d 140, 147-48 (Pa.Super. 1949) (quoting 1 Williston on Contracts, § 90).
The flaw in Plaintiff's argument is that Plaintiff did not continue his services for Defendant "after the expiration" of his term of employment under the contract. He was terminated after three months, well before the end of his one-year employment term. The Court therefore finds that the only relevant time period, for the purposes of the issue of damages in this breach of contract action, is the one-year time period from November 5, 1998, until the following year. All other evidence regarding potential earnings beyond that time period are irrelevant and therefore must be excluded from evidence in this case.
An appropriate order follows.
ORDER
AND NOW, this day of October, 2004, upon consideration of Defendant's Motion in Limine to Exclude Evidence (Docket No. 65), Plaintiff's Response to Defendant's Motion in Limine to Exclude Evidence (Docket No. 72), Defendant's Reply Memorandum in Support of its Motion in Limine to Exclude Evidence (Docket No. 75), and Plaintiff's Supplemental Brief in Response to Defendant's Motion in Limine to Exclude Evidence (Docket No. 80), IT IS HEREBY ORDERED that Defendant's Motion in Limine is GRANTED IN PART and DENIED IN PART as follows:
(1) All evidence concerning Beckett Healthcare, Inc. is relevant and therefore not excluded.
(2) All evidence concerning Defendant's Employment Handbook, Human Resources Policy Manual, and Policies and Procedures Manual is relevant and therefore not excluded.
(3) All evidence concerning Plaintiff's alleged damages after November 4, 1999, is hereby excluded.