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7/26/2019 Mason v. Telefunken Semiconductors Amer, 1st Cir. (2015)
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United States Court of AppealsFor the First Circuit
No. 14- 1962
THOMAS R. MASON,
Pl ai nt i f f , Appel l ant ,
v.
TELEFUNKEN SEMI CONDUCTORS AMERI CA, LLC,
Def endant , Appel l ee.
APPEAL FROM THE UNI TED STATES DI STRI CT COURT
FOR THE DI STRI CT OF NEW HAMPSHI RE
[ Hon. J oseph N. Lapl ant e, U. S. Di st r i ct J udge]
Bef ore
Howard, Chi ef J udge,Sel ya and Lynch, Ci r cui t J udges.
Kennet h J . Bar nes, wi t h whomLaw Of f i ce of Kennet h J . Bar nes,Anne M. Ri ce, and Ri ce Law Of f i ce PLLC wer e on br i ef , f orappel l ant .
I r vi n D. Gor don, wi t h whom Sul l oway & Hol l i s, P. L. L. C. was onbr i ef , f or appel l ee.
J ul y 29, 2015
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SELYA , Circuit Judge. Thi s case i nvol ves a ser i es of
shi f t i ng empl oyment ar r angement s. Pl ai nt i f f - appel l ant Thomas R.
Mason asser t s t hat def endant - appel l ee TSI Semi conduct ors Amer i ca,
LLC ( TSA) , f ormer l y known as Tel ef unken Semi conduct ors Amer i ca,
LLC, abr i dged hi s cont r act ual r i ght s wi t h r espect t o no f ewer t han
t hree of t hese ar r angement s. At t he summary j udgment st age, t he
di st r i ct cour t concl uded t hat Mason had f ai l ed t o make out a
genui ne i ssue of mat er i al f act suf f i ci ent t o sust ai n any of hi s
cl ai ms. Af t er car ef ul consi der at i on, we r ever se i n par t , af f i r m
i n par t , and r emand f or f ur t her pr oceedi ngs.
I. BACKGROUND
I n 2009, Mason began work i n a seni or engi neer i ng
posi t i on f or Tej as Si l i con, I nc. ( Tej as) , a Cal i f or ni a- based
corporat i on wi t h an of f i ce i n New Hampshi r e. The t er ms of Mason' s
empl oyment were del i neat ed i n a wr i t t en agr eement ( t he Agreement )
t hat t ook ef f ect on Apr i l 1, 2009. The Agr eement cont ai ned a
sect i on ent i t l ed "Consequences of Ter mi nat i on of Empl oyment . "
Par t of t hi s sect i on per mi t t ed Tej as t o t er mi nat e Mason' s
empl oyment wi t hout cause upon 60 days' wr i t t en not i ce, i n whi ch
event Mason woul d be ent i t l ed t o cont i nued sal ary payment s and
benef i t s f or one year . I f , however , t he t er mi nat i on was "due t o
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t he acqui si t i on, mer ger , or buyout by anot her ent i t y, " t hen Mason' s
sever ance pay and benef i t s woul d cont i nue f or t wo years. 2
The Agreement st i pul at ed t hat Mason' s empl oyment was f or
a f i xed ter m ( one year ) , whi ch woul d renew aut omat i cal l y on each
anni ver sary of t he Agr eement ' s ef f ect i ve dat e unl ess ei t her par t y
el ect ed not t o r enew. An el ect i on not t o r enew coul d be made by
pr ovi di ng wr i t t en not i ce no f ewer t han 30 days pr i or t o t he
anni ver sary dat e.
Mason' s empl oyment wi t h Tej as cont i nued unevent f ul l y f or
t wo year s, and t he Agr eement r enewed aut omat i cal l y on Apr i l 1,
2010 and Apr i l 1, 2011. The l andscape changed, t hough, i n December
of 2011 when Mason l earned of an i mpendi ng cor por at e
r est r uct ur i ng. 3 As Mason under st ood i t , Tej as woul d t er mi nate hi s
empl oyment and TSA woul d of f er hi m new empl oyment . Soon
t her eaf t er , TSA wr ote t o Mason and of f er ed hi m empl oyment i n hi s
t hen- cur r ent posi t i on at hi s t hen- cur r ent sal ar y, begi nni ng
J anuar y 1, 2012 ( t he Of f er Let t er ) .
2 The Agr eement ent i t l ed Mason, i n cer t ai n ci r cumst ances, t oi mmedi ate vest i ng of st ock opt i ons as part of a sever ance package.Because t hi s appeal i s not concerned wi t h t he quant um of damages( i f any) t o whi ch Mason may be ent i t l ed, we make no f ur t herr ef er ence t o t he st ock opt i on pr ovi si ons.
3 The par t i es di sput e t he nat ur e of t he cor por at e event t hatul t i mat el y t r anspi r ed. TSA mai nt ai ns t hat Tej as cont i nues t o exi stas a separate and i ndependent ent i t y; Mason mai nt ai ns t hat Tej aswas mer ged i nt o TSA. Our di sposi t i on of t hi s appeal does notr equi r e us t o r esol ve t hi s di sput e, and we shal l r ef er t o t hi sevent neut r al l y as t he "2011 r eor gani zat i on. "
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Mason deci ded t o accept empl oyment wi t h TSA and, i n
December of 2011, si gned f our document s: a document ent i t l ed
"Amendment t o Empl oyment Agreement " ( t he Amendment ) ; t he Of f er
Let t er ; a document ent i t l ed "Empl oyment , Conf i dent i al I nf or mat i on
and I nvent i on Assi gnment Agreement " ( t he New Agreement ) ; and a
document ent i t l ed "Empl oyee Tr ansf er Agreement and General
Rel ease" ( t he Rel ease) . By i t s t erms, t he Amendment was t o t ake
ef f ect on J anuar y 1, 2012. Mason, Tej as, and TSA al l si gned i t ,
t hus memor i al i zi ng t hei r mut ual i nt ent t o amend t he Agr eement .
The Amendment went on t o st at e t hat , "ef f ect i ve as of
J anuar y 1, 2012, " each r ef er ence t o Tej as i n t he Agreement woul d
be repl aced by a r ef er ence t o TSA; t hat Tej as woul d " t r ansf er and
assi gn t o [ TSA] t he Agr eement and al l of i t s r i ght s, dut i es and
obl i gat i ons t her eunder " ; and t hat TSA woul d assume t hose r i ght s,
dut i es, and obl i gat i ons. I t al so pr ovi ded t hat " t he Agr eement
shal l cont i nue under [ Mason' s] empl oyment r el at i onshi p wi t h
[ TSA] . "
The Of f er Let t er , t hough, provi ded t hat Mason' s
empl oyment wi t h TSA woul d be "f or no speci f i ed per i od of t i me" and
woul d be "an at - wi l l empl oyment r el at i onshi p, " under whi ch ei t her
Mason or TSA coul d " t er mi nat e t he r el at i onshi p at any t i me, f or
any r eason, wi t h or wi t hout cause. " Appar ent l y i n r esponse t o
t hi s l anguage, Mason wr ot e ( i n t he si gnat ur e bl ock of t he Of f er
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Let t er ) t he words "As Amended (At t ached) " and annexed a copy of
t he Amendment .
The New Agreement cont ai ned, i n capi t al l et t er s, Mason' s
acknowl edgment " t hat , except as set f or t h i n any ot her wr i t t en
agr eement bet ween me and t he company, my empl oyment wi t h t he
company const i t ut es ' at - wi l l ' empl oyment . " Mason execut ed t hi s
document wi t hout any qual i f i cat i on.
To compl et e t he pi ct ure, t he Rel ease provi ded t hat , i n
exchange f or $1000 and t he of f er of new empl oyment by TSA, Mason
woul d "ABSOLUTELY AND I RREVOCABLY AND UNCONDI TI ONALLY" r el ease TSA
f r om"any and al l cl ai ms" agai nst TSA or i t s "[ r ] el at ed [ p] ar t i es, "
i ncl udi ng cl ai ms ar i si ng "as a resul t of [ hi s] empl oyment wi t h and
separat i on f r om empl oyment " as of December 31, 2011. Here agai n,
Mason added a hol ogr aphi c coda, st at i ng cr ypt i cal l y "EXCEPT AS
AMENDED I N ' AMENDMENT TO EMPLOYMENT AGREEMENT. ' "
I n J anuary of 2012, Mason began t oi l i ng f or TSA. Two
mont hs l at er — on Febr uary 29 —TSA sent hi m an e- mai l announci ng
t hat t he Agr eement "wi l l not be ext ended f or an addi t i onal one-
year per i od and wi l l aut omat i cal l y expi r e Apr i l 1, 2012. " The e-
mai l pr oposed t hat , shoul d t he par t i es "agr ee t o cont i nue t he
empl oyment r el at i onshi p on and af t er Apr i l 1, 2012, t hen t he
empl oyment r el at i onshi p shal l be i n accor dance wi t h" t he Of f er
Let t er and t he New Agreement .
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t r i gger ed t he dut y t o pay sever ance. The di st r i ct cour t ent er ed
summary j udgment i n f avor of TSA upon concl udi ng t hat on a pl ai n
r eadi ng of t he r el evant cont r act ual pr ovi si ons, none of t hese
event s const i t ut ed a t ermi nat i on under t he Agreement . See Mason
v. Tel ef unken Semi conduct or s Am. , LLC, No. 12- 507, 2014 WL 3962470,
at *8 ( D. N. H. Aug. 13, 2014) . Thi s t i mel y appeal f ol l owed.
II. ANALYSIS
We r evi ew a deci si on to grant or deny summar y j udgment
de novo. See Bi sbano v. St r i ne Pr i nt i ng Co. , 737 F. 3d 104, 107
( 1st Ci r . 2013) ; Aver y v. Hughes, 661 F. 3d 690, 693 ( 1st Ci r .
2011) . I n t hi s i nst ance, Mason appeal s onl y t he di st r i ct cour t ' s
ent r y of summary j udgment i n f avor of TSA, not t he cour t ' s deni al
of hi s own mot i on f or summary j udgment . Hence, we t ake t he f act s
and t he r easonabl e i nf er ences ext r act abl e t her ef r om i n t he l i ght
most f avorabl e t o Mason. See Tor r es Vargas v. Sant i ago Cummi ngs,
149 F. 3d 29, 30 ( 1st Ci r . 1998) . We wi l l af f i r m onl y i f we ar e
sat i sf i ed t hat t her e i s no genui ne i ssue of mat er i al f act and TSA
i s ent i t l ed t o j udgment as a mat t er of l aw. See Vi neber g v.
Bi ssonnet t e, 548 F. 3d 50, 55 ( 1st Ci r . 2008) . Such an af f i r mance
may r est on any gr ound made mani f est by t he r ecord. See Houl t on
Ci t i zens' Coal . v. Town of Houl t on, 175 F. 3d 178, 184 ( 1st Ci r .
1999) .
Si nce t hi s i s a di ver si t y case, we l ook t o f eder al l aw
f or t he summary j udgment f r amework and to st at e l aw f or t he
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subst ant i ve r ul es of deci si on. See Hanna v. Pl umer , 380 U. S. 460,
473 ( 1965) ; Ar t uso v. Ver t ex Phar m. , I nc. , 637 F. 3d 1, 5 ( 1st Ci r .
2011) . The par t i es have st i pul at ed t hat Cal i f or ni a i s t he
wel l spr i ng of t he r el evant st at e l aw, and t hat st i pul at i on j i bes
wi t h the choi ce- of - l aw pr ovi si ons cont ai ned i n the Agr eement and
t he Amendment . Consequent l y, we accept t hi s st i pul at i on at f ace
val ue wi t hout per f or mi ng a f ul l - bl own choi ce- of - l aw anal ysi s. See
But l er v. Bal ol i a, 736 F. 3d 609, 612 ( 1st Ci r . 2013) ; Ar t uso, 637
F. 3d at 5.
Thi s appeal necessar i l y r i ses or f al l s wi t h t he breach
of cont r act cl ai ms. I n cont r act di sput es, t he cour t may const r ue
cl ear and unambi guous cont r act t erms as a mat t er of l aw. See
Tor r es Var gas, 149 F. 3d at 33. I f , however , ambi gui t y l urks, an
exami nat i on of ext r i nsi c evi dence "becomes essent i al . " I d.
Cal i f or ni a f ol l ows t he f ami l i ar r ul e t hat an ambi gui t y
ar i ses i f , when vi ewed i n cont ext , a cont r act t er m i s equal l y
suscept i bl e t o more t han one r easonabl e meani ng. See Dore v.
Ar nol d Wor l dwi de, I nc. , 139 P. 3d 56, 60 ( Cal . 2006) ; Tr ansamer i ca
I ns. Co. v. Super i or Cour t , 35 Cal . Rpt r . 2d 259, 264 ( Cal . Ct .
App. 1994) . Whet her a cont r act t er m i s ambi guous i s i t sel f a
quest i on of l aw. See Bl acki e v. Mai ne, 75 F. 3d 716, 721 ( 1st Ci r .
1996) ; Al l en v. Adage, I nc. , 967 F. 2d 695, 698 ( 1st Ci r . 1992) .
Agai nst t hi s backdr op, a ser i es of quest i ons must be
asked concer ni ng each of Mason' s br each of cont r act cl ai ms. To
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begi n, an i nqui r i ng cour t must ask whet her t he di sposi t i ve cont r act
l anguage i s suscept i bl e t o more t han one reasonabl e
i nt er pr et at i on. See Tor r es Var gas, 149 F. 3d at 33. I f not , t he
cour t may pr oceed t o const r ue t he l anguage and di spose of t he
summary j udgment mot i on accor di ngl y. See Newpor t Pl aza Assocs. v.
Dur f ee At t l ebor o Bank ( I n re Newpor t Pl aza Assocs. ) , 985 F. 2d 640,
644 ( 1st Ci r . 1993) . But i f t her e i s mor e t han one r easonabl e
i nt er pr et at i on, t he cour t must t hen ask whet her t he ext r i nsi c
evi dence r eveal s a genui ne i ssue of mat er i al f act r egar di ng t he
meani ng of t he ambi guous l anguage. See Al l en, 967 F. 2d at 698.
I f t he ext r i nsi c evi dence i s " so one- si ded t hat no reasonabl e
per son coul d deci de t he cont r ary, " t he meani ng of t he l anguage
becomes evi dent and t he er st whi l e ambi gui t y wi l l not pr ecl ude
summary j udgment . Bos. Fi ve Cent s Sav. Bank v. Sec' y of Dep' t of
HUD, 768 F. 2d 5, 8 ( 1st Ci r . 1985) . But i f t he ext r i nsi c evi dence
bear i ng on t he meani ng of t he r el evant l anguage i s " cont est ed or
cont r adi ct or y, " summar y j udgment wi l l not l i e. Al l en, 967 F. 2d at
698 n. 3.
Wi t h t hi s f r amework i n pl ace, we tur n to Mason' s breach
of cont r act cl ai ms. We addr ess t he pur por t ed t er mi nat i on event s
sequent i al l y.
A. The December 2011 Reorganization.
Mason' s f l agshi p cl ai m i s t hat t he di st r i ct cour t er r ed
i n gr ant i ng summary j udgment on hi s breach of cont r act cl ai m
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ar i si ng out of t he 2011 r eor gani zat i on and t he concomi t ant
cessat i on of hi s empl oyment wi t h Tej as. He argues t hat t he
r el evant cont r act ual pr ovi si ons are ambi guous and t hat a genui ne
i ssue of mat er i al f act exi st s r egar di ng t he cont r act i ng par t i es'
under st andi ng of t he Agr eement ' s t er mi nat i on cl ause.
Termi nat i on i s not def i ned i n t he Agreement , and t he
dr af t er s obvi ousl y used t he word i n more t han one sense. At
var i ous pl aces, t he t er mi nat i on cl ause r ef er s t o t er mi nat i on "of
empl oyment " gener al l y, t er mi nat i on of " [ t he empl oyee' s]
empl oyment " speci f i cal l y, and t er mi nat i on of "empl oyment wi t h t he
Company. " Mason i nsi st s t hat one r easonabl e i nt er pr et at i on of t he
Agr eement i s t hat t he par t i es i nt ended f or t er mi nat i on t o have t he
r el at i vel y narr ow meani ng of t er mi nat i on of empl oyment wi t h Tej as.
He suggest s t hat const r ui ng a t er mi nat i on cl ause t o r equi r e
sever ance payment s r egar dl ess of new empl oyment compor t s wi t h the
nor m f or compani es i n Tej as' s i ndust r y and wi t h ot her sur r oundi ng
l anguage i n t he Agreement .
TSA demurs. I t ar gues t hat t he pl ai n meani ng of
" t er mi nat e" i s t o "di scont i nue" or "sever , " and t hat Mason' s
empl oyment was nei t her di scont i nued nor sever ed but , r ather ,
t r ansf err ed seaml essl y f r omTej as t o TSA. Thus, Mason' s empl oyment
coul d not have "t ermi nat ed" because he was never wi t hout a j ob. 4
4 Ther e i s some i nher ent t ensi on i n TSA' s posi t i on. On t heone hand, i t ar gues t hat i t i s not a successor ent i t y t o Tej as and
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" [ W] ords are l i ke chamel eons; t hey f r equent l y have
di f f er ent shades of meani ng dependi ng upon t he ci r cumst ances. "
Uni t ed St at es v. Romai n, 393 F. 3d 63, 74 ( 1st Ci r . 2004) . Thi s
adage i s r el evant because t he t er mi nat i on cl ause i n the Agr eement
i s i mpr eci se and, as such, i s suscept i bl e t o ei t her of t he
compet i ng i nt er pr et at i ons ur ged by t he l i t i gant s. Af t er al l , t he
Agr eement uses t he wor d " t er mi nat i on" l oosel y, i n r ef er ence t o
" t er mi nat i on of empl oyment , " t er mi nat i on of " [ t he empl oyee' s]
empl oyment , " and t ermi nat i on of empl oyment "wi t h t he Company. "
Then, t oo, wi t h r espect t o t he cont i nuat i on of benef i t s, t he
cont r act i ng par t i es appear t o have cont empl at ed t he possi bi l i t y of
new empl oyment f ol l owi ng t ermi nat i on, yet t hey di d not make cl ear
how t hat new empl oyment woul d rel at e t o sever ance benef i t s.
Fi nal l y, t he Agr eement cont empl at es t he possi bi l i t y of t er mi nat i on
due t o "acqui si t i on, mer ger , or buyout " but does not expr essl y
precl ude severance payment s even i n t he event of empl oyment by t he
successor ent i t y.
I n our est i mat i on, TSA' s i nvocat i on of di ct i onar y
def i ni t i ons does not assi st i t s cause. Even i f we assume t hat
t he l anguage of t he Rel ease ( whi ch TSA dr af t ed) i ndi cat es t hat i tsought t o hi r e Tej as empl oyees f r ee and cl ear of obl i gat i ons owedby Tej as. On t he ot her hand, TSA ar gues t hat Mason' s empl oymentwi t h Tej as t r ansf er r ed seaml essl y f r om Tej as t o TSA wi t hout anyt ermi nat i on of Mason' s empl oyment . "Havi ng one' s cake and eat i ngi t , t oo, i s not i n f ashi on i n t hi s ci rcui t , " Uni t ed St at es v. Ti er ney, 760 F. 2d 382, 388 ( 1st Ci r . 1985) , and we ar e skept i calt hat TSA can have i t bot h ways.
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" t er mi nat e" means "di scont i nue" or "sever , " as TSA i nsi st s,
Mason' s empl oyment wi t h Tej as coul d r easonabl y be f ound t o have
been di scont i nued or sever ed r egar dl ess of any " t r ansf er " t o TSA.
Moreover , our doubt s about t he meani ng of " t ermi nat e" must be
wei ghed i n l i ght of a l egal r egi me pr escr i bi ng that "unempl oyment
i s not a pr er equi si t e t o t he r i ght t o separ at i on pay. " Chapi n v.
Fai r chi l d Camer a & I nst r um. Cor p. , 107 Cal . Rpt r . 111, 115 ( Cal .
Ct . App. 1973) . Rat her , such a r i ght "may, and f r equent l y does,
exi st wher e t her e i s no i nt er r upt i on what ever i n t he cont i nui t y of
empl oyment . " I d.
The upshot i s t hat t he Agreement f ai l s t o make cl ear
whet her t he cont r act i ng par t i es i nt ended t hat a t er mi nat i on
suf f i ci ent t o t r i gger t he payment of sever ance benef i t s coul d occur
even i n t he event of i mmedi at e r eempl oyment by anot her ent i t y as
part of a company- t o- company t r ansact i on. Consequent l y, t he
t er mi nat i on cl ause i s ambi guous as a mat t er of l aw.
The quest i on, t hen, r educes t o whether t he ext r i nsi c
evi dence r el at i ng t o t he meani ng of t he cl ause i s so concl usi ve
t hat i t di spel s t he ambi gui t y. See Tor r es Var gas, 149 F. 3d at 33;
Bos. Fi ve Cent s, 768 F. 2d at 8. I n ascer t ai ni ng t he meani ng of a
cont r act t er m, evi dence of t he cont r act i ng par t i es' i nt ent at t he
t i me of cont r act f or mat i on i s most s i gni f i cant . See Peopl e ex
r el . Lockyer v. R. J . Reynol ds Tobacco Co. , 132 Cal . Rpt r . 2d 151,
158 ( Cal . Ct . App. 2003) . Thi s pr i nci pl e appl i es even wher e, as
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her e, one of t he l i t i gant s was not a si gnat or y t o t he Agr eement :
under Cal i f or ni a l aw, a successor i n i nt er est t o a cont r act who
has not r enegot i ated t he t er ms of t he cont r act i s bound by t he
meani ng assi gned t o i t s t er ms by t he or i gi nal par t i es. See Appl er a
Cor p. v. MP Bi omeds. , LLC, 93 Cal . Rpt r . 3d 178, 196 ( Cal . Ct .
App. 2009) ; Spect or v. Nat ' l Pi ct ur es Cor p. , 20 Cal . Rpt r . 307,
312 ( Cal . Ct . App. 1962) . TSA i s t her ef ore bound by t he shar ed
i nt ent of t he cont r act i ng part i es t o t he Agr eement ( Mason and
Tej as) . 5 See Spect or , 20 Cal . Rpt r . at 312. Of cour se, post -
f ormat i on, pr e- di sput e conduct al so may bear on t he meani ng of a
cont r act ' s t er ms. Under Cal i f or ni a l aw, evi dence of such conduct
may be r el evant i n ascer t ai ni ng t he cont r act i ng par t i es' shar ed
under st andi ng of a cont r act ' s or i gi nal meani ng. See Oceansi de 84,
Lt d. v. Fi d. Fed. Bank, 66 Cal . Rpt r . 2d 487, 492- 93 ( Cal . Ct .
App. 1997) .
Her e t he r ecor d i s l ar gel y devoi d of any ext r i nsi c
evi dence showi ng a shared under st andi ng bet ween Mason and Tej as
about t he meani ng of " t er mi nat i on" as t hat t er m i s used i n t he
Agr eement . What ext r i nsi c evi dence exi st s i s not so one- si ded as
t o cur e t he ambi gui t y and compel a f i ndi ng agai nst Mason. For
5 We not e t hat t he Amendment di d not al t er any of t hesubst ant i ve t er ms of t he Agr eement . I t mer el y memor i al i zed t hepar t i es' under st andi ng that TSA woul d assume Tej as' s r i ght s anddut i es under t he Agr eement and ef f ect uat ed t hat assumpt i on bysubst i t ut i ng TSA f or Tej as i n t he Agr eement ' s t ext .
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exampl e, t her e i s conf l i ct i ng evi dence anent t he nat ur e of t he
2011 r eor gani zat i on and whet her t he cont r act i ng par t i es t hought at
t he t i me of t he r eorgani zat i on t hat Mason' s empl oyment wi t h Tej as
was bei ng t ermi nat ed wi t hout cause.
The post - f or mat i on evi dence on whi ch TSA r el i es
( pr i nci pal l y, Mason' s f ai l ur e t o seek sever ance payment s dur i ng
t he f i r st t wo mont hs of hi s empl oyment wi t h TSA) i s subj ect t o
var yi ng i nt er pr et at i ons. Fur t her mor e, one of Mason' s swor n
st atement s aver s t hat he and Tej as' s presi dent ( who si gned t he
Agr eement on Tej as' s behal f ) under st ood t he 2011 r eorgani zat i on t o
const i t ut e a ter mi nat i on under t he Agr eement , r egar dl ess of
whet her Mason deci ded to cast hi s l ot wi t h the successor f i r m. 6
As post - f ormat i on, pr e- di sput e evi dence, t he Amendment
i t sel f ( al t hough si gned by Mason, Tej as, and TSA) t el l s us ver y
l i t t l e. I t s pr eambl e st at es t hat "as par t of [ a] cor por at e
consol i dat i on and r eor gani zat i on, Tej as wi l l be mer ged i nt o and
wi t h [ TSA] or wi l l be di ssol ved as a cor por at e ent i t y af t er J anuar y
1, 2012, and [ Mason] wi l l become empl oyed by [ TSA] as of J anuar y
1, 2012. " Wi t hal , t he Amendment i s tot al l y si l ent as to t he
6 We not e t hat Mason al so r el i es upon t he sworn st at ement oft he f ormer Tej as presi dent as evi dence t hat Tej as t er mi nat edMason' s empl oyment wi t hi n t he meani ng of t he Agreement . As t headmi ssi bi l i t y of t hi s af f i davi t was cont r over t ed i n t he cour tbel ow, we gi ve i t no wei ght i n our anal ysi s. Si mi l ar l y, we l eaveopen t he r el evance of a document composed by TSA as par t of t he2011 r eor gani zat i on ( col l oqui al l y known as " Exhi bi t A") .
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mechani cs of how Mason woul d cease t o work f or Tej as and st ar t t o
wor k f or TSA. I t i s equal l y si l ent as t o t he i mpl i cat i ons of t hose
act i ons, i ncl udi ng whet her Mason was ent i t l ed to sever ance
benef i t s as a r esul t .
The shor t of i t i s t hat ascer t ai ni ng t he meani ng of t he
t er mi nat i on cl ause i n t he cont ext of t he 2011 r eor gani zat i on hi nges
l ar gel y on t he credi bi l i t y of Mason' s cl ai ms as t o t he cont r act i ng
par t i es' shar ed i nt ent and t he i nf er ences t o be dr awn f r om t he
ci r cumst ances surr oundi ng t he si gni ng of t he Amendment and t he
par t i es' conduct . Such mat t er s ar e open t o r easonabl e di sput e
and, t her ef or e, ar e not t he st uf f of summar y j udgment . Rat her ,
t hey ar e squar el y wi t hi n t he pr ovi nce of t he f act f i nder . See,
e. g. , Ander son v. Li ber t y Lobby, I nc. , 477 U. S. 242, 255 ( 1986) ;
Mandel v. Bos. Phoeni x, I nc. , 456 F. 3d 198, 206 ( 1st Ci r . 2006) .
TSA has a f al l back posi t i on. I t ar gues t hat even i f
Mason' s empl oyment wi t h Tej as was t ermi nat ed i n December of 2011,
t he Rel ease oper at ed t o absol ve TSA of any l i abi l i t y f or sever ance
benef i t s owed t o Mason. Thi s ar gument l acks f orce.
By i t s t er ms, t he Rel ease di schar ged TSA f r om "any and
al l cl ai ms" t hat Mason may have had, i ncl udi ng any cl ai ms r esul t i ng
f r om hi s separ at i on f r om empl oyment ef f ect i ve December 31, 2011.
TSA posi t s t hat t hi s i nst r ument ext i ngui shed any cl ai m t hat Mason
may have had agai nst TSA f or sever ance benef i t s as a r esul t of t he
t er mi nat i on of hi s Tej as empl oyment . Al t hough t hi s ar gument has
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a cer t ai n super f i ci al appeal , i t f ai l s t o t ake i nt o account Mason' s
handwr i t t en coda to t he Rel ease, whi ch st at ed "EXCEPT AS AMENDED
I N ' AMENDMENT TO EMPLOYMENT AGREEMENT. ' " Accor di ng t o one of
Mason' s sworn st at ement s, t hi s coda was i nt ended t o exempt f r om
t he Rel ease any sever ance obl i gat i ons Tej as owed t o hi m under t he
Agr eement — and i t s wor di ng i s r easonabl y suscept i bl e t o t hat
i nt er pr et at i on. And i f t hose obl i gat i ons wer e exempt ed f r om t he
Rel ease — a mat t er on whi ch we t ake no vi ew — TSA mi ght have
assumed t hem by oper at i on of t he Amendment .
To sum up, t he handwr i t t en coda, t hough not compel l i ng
Mason' s const r uct i on, r ender s t he Rel ease suscept i bl e to mor e than
one r easonabl e i nt er pr et at i on. Ext r i nsi c evi dence i n t he r ecor d
does not r el i eve t hi s uncer t ai nt y. I t f ol l ows t hat t he Rel ease
does not , as a mat t er of l aw, bar Mason' s cl ai m f or sever ance
benef i t s ar i si ng out of t he 2011 r eor gani zat i on. See Tor r es
Var gas, 149 F. 3d at 33; Al l en, 967 F. 2d at 698 n. 3.
That ends t hi s aspect of t he mat t er . Because genui ne
i ssues of mat er i al f act per meat e t he r ecor d, t he di st r i ct cour t
shoul d not have granted TSA' s mot i on f or summar y j udgment on
Mason' s cl ai m f or sever ance benef i t s ar i si ng out of t he 2011
r eor gani zat i on.
B. The February 2012 Non-Renewal.
Mason next cl ai ms t hat TSA t ermi nat ed hi s empl oyment
wi t hout cause when i t not i f i ed hi m i n Febr uar y of 2012 t hat i t
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woul d not r enew t he Agreement but woul d l et i t expi r e on March 31,
2012. The di st r i ct cour t r ej ect ed t hi s cl ai m, gr ant i ng summar y
j udgment i n f avor of TSA on t he basi s t hat non- r enewal was not
t ant amount t o t ermi nat i on. See Mason, 2014 WL 3962470, at *8.
As sai d, t he ef f ect i ve dat e of t he Agr eement was Apr i l
1, 2009. I t s non- r enewal cl ause expl ai ns t hat Tej as ( and by
subst i t ut i on, TSA) agr eed to empl oy Mason " f or a per i od commenci ng
on t he Ef f ect i ve Dat e and endi ng on t he f i r st anni ver sar y of t he
Ef f ect i ve Dat e ( t he ' Ter m' ) . " The "Ter m" woul d be extended f or
addi t i onal one- year per i ods unl ess ei t her par t y gave wr i t t en
not i ce of i t s exer ci se of t he non- r enewal opt i on "at l east t hi r t y
( 30) days pr i or t o t he appl i cabl e anni ver sar y of t he Ef f ect i ve
Dat e. "
Mason f i r st asser t s t hat t he non- r enewal cl ause i s
ambi guous as t o whet her t he exer ci se of t he r i ght of non- r enewal
had t he ef f ect of endi ng hi s empl oyment wi t h TSA or si mpl y endi ng
t he pr ot ect i ons pr ovi ded by t he Agr eement . I n hi s vi ew, empl oyment
under t he Agr eement was not merel y "l abor f or wage" but , r at her ,
"a speci f i c rel at i onshi p wi t h a speci f i c empl oyer . . . f or
par t i cul ar and agr eed upon t erms and condi t i ons. " When empl oyment
under t hose t er ms and condi t i ons ended, hi s t hesi s r uns, t he
empl oyment i t sel f was necessar i l y t er mi nated and the dut y t o pay
sever ance benef i t s was ki ndl ed.
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Wor ds ar e not i nf i ni t el y mal l eabl e, see, e. g. ,
Levi nsky' s, I nc. v. Wal - Mar t St or es, I nc. , 127 F. 3d 122, 129 ( 1st
Ci r . 1997) , and a cont r act t er m i s not ambi guous si mpl y because an
i magi nat i ve par t y conj ur es up an al t er nat e i nt er pr et at i on, see
F. D. I . C. v. Si ngh, 977 F. 2d 18, 22 ( 1st Ci r . 1992) ; Lockyer , 132
Cal . Rpt r . 2d at 158. Read nat ur al l y, t he non- r enewal cl ause i s
not suscept i bl e t o Mason' s pr of f er ed i nt er pr et at i on. Af t er al l ,
a cont r act t er m shoul d not be const r ued i n i sol at i on; r at her , i t
shoul d be const r ued i n l i ght of t he cont r act as a whol e. See,
e. g. , Power i ne Oi l Co. v. Super i or Cour t , 118 P. 3d 589, 598 ( Cal .
2005) . By t he same t oken, a cour t shoul d const r ue a cont r act t o
gi ve ef f ect t o each mat er i al t er m and not t o r ender any t er m
meani ngl ess. See Luer as v. BAC Home Loans Servi ci ng, LP, 163 Cal .
Rpt r . 3d 804, 823 ( Cal . Ct . App. 2013) . These t enet s hel p t o
expl ai n why Mason' s cl ai m f ai l s.
"Non- r enewal " and " t er mi nat i on" ar e di st i nct t er ms
havi ng di f f er ent meani ngs. 7 Her e, mor eover , t he st r uct ur e of t he
7 " Ter mi nat i on" i s t ypi cal l y def i ned as t he "act of br i ngi ngt o an end or concl udi ng, " Webst er ' s Thi r d New I nt er nat i onalDi ct i onar y 2359 ( 2002) , or a "concl usi on or di scont i nuance, "Bl ack' s Law Di ct i onar y 1700 ( 10t h ed. 2014) . By cont r ast ,"nonr enewal " means " a f ai l ur e to renew, " see i d. at 1220, wher e"r enew" t ypi cal l y means t o "make or do agai n, " Webst er ' s Thi r d NewI nt er nat i onal Di ct i onar y 1922 ( 2002) , or t o "r est or [ e] orr eest abl i sh[ ] , " Bl ack' s Law Di ct i onar y 1488 ( 10t h ed. 2014) . Thi sdi f f er ence i n meani ng i s al l t he mor e cl ear wher e, as her e, t hewor ds r ef er t o di f f er ent obj ect s: as t o t er mi nat i on, t he Agr eementspeaks t o var i ous ki nds of t er mi nat i on of empl oyment , but as t o
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Agr eement makes i t nose- on- t he- f ace pl ai n t hat t he cont r act i ng
par t i es never i nt ended t o use t hose di st i nct t er ms synonymousl y.
Fi r st , t he non- r enewal cl ause appear s i n sect i on t wo of t he
Agr eement under t he headi ng "Ter m, " whereas t he t ermi nat i on cl ause
appears i n sect i on si x under t he headi ng "Consequences of
Termi nat i on of Empl oyment . " See, e. g. , Al ameda Cnt y. Fl ood Cont r ol
v. Dep' t of Wat er Res. , 152 Cal . Rpt r . 3d 845, 862 ( Cal . Ct . App.
2013) ( appl yi ng r ul e t hat " [ w] here t he same word or phrase mi ght
have been used . . . i n di f f er ent por t i ons of a [ cont r act ] but a
di f f er ent wor d or phr ase havi ng di f f er ent meani ng i s used i nst ead,
t he const r uct i on empl oyi ng t hat di f f er ent meani ng i s t o be f avor ed"
( i nt er nal quot at i on mar ks omi t t ed) ) . Second, t he cont r act i ng
par t i es' i nt ent t o def i ne di f f er ent meani ngs i s wel l - i l l ust r at ed
by compar i ng t he 30- day not i ce requi r ement i n t he non- r enewal
cl ause wi t h t he 60- day not i ce r equi r ement i n t he "wi t hout cause"
por t i on of t he t er mi nat i on cl ause. I f t he par t i es had i nt ended
non- r enewal t o const i t ut e t er mi nat i on under t he Agr eement , t her e
woul d have been no need f or di spar ate not i ce per i ods. I ndeed,
such di sparat e per i ods woul d make no sense.
I n an ef f or t t o bl unt t he f or ce of t hi s r easoni ng, Mason
ar gues t hat t he di spar at e not i ce per i ods do not f or ecl ose t he
possi bi l i t y t hat non- r enewal i s a f or mof t er mi nat i on. He suggest s
non- r enewal , t he Agr eement speaks t o non- r enewal of t he t er m oft he cont r act .
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t hat a j ur y r easonabl y coul d concl ude t hat t he cont r act i ng par t i es
agr eed t o a shor t er not i ce per i od f or non- r enewal because they
ant i ci pat ed t he possi bi l i t y t hat a deci si on not t o renew mi ght
occur cl oser to t he anni ver sar y dat e. But common sense
def enest r at es t hi s suggest i on. For one t hi ng, Mason' s
i nt er pr et at i on woul d hol l ow out t he bar gai ned- f or 60- day not i ce
r equi r ement f or t er mi nat i on wi t hout cause. For anot her t hi ng,
t her e i s a common- sense expl anat i on f or t he di spar at e not i ce
per i ods: t hat t ermi nat i on woul d end empl oyment wi t h TSA al t ogether
wher eas non- r enewal woul d onl y el i mi nate cer t ai n pr otect i ons under
t he Agr eement . Mason' s suggest ed r eadi ng compl etel y over l ooks
t hi s expl anat i on.
The mar ket pl ace r at i onal e f or such a common- sense
r eadi ng i s appar ent . The sever ance pr ovi si ons f or t er mi nat i on
wi t hout cause ar e generous ( but per haps mor e ephemeral t han Mason
woul d have l i ked) , and the cont r act i ng par t i es may wel l have want ed
t o ensur e t hat ei t her si de coul d r evi si t t hose pr ovi si ons
per i odi cal l y. The non- r enewal cl ause of f er ed t he par t i es j ust
such a vehi cl e.
To say mor e about t hi s cl ai m woul d be super er ogator y.
We hol d that t he non- r enewal cl ause i s not ambi guous i n the cont ext
of t he Agr eement as a whol e. See Dore, 139 P. 3d at 60. Gi vi ng
t he cont r act l anguage i t s pl ai n meani ng, see i d. , TSA' s exer ci se
of t he non- r enewal opt i on di d not work a t ermi nat i on of empl oyment
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wi t hi n t he meani ng of t he Agr eement and, t hus, di d not t r i gger an
ent i t l ement t o sever ance payment s. Accor di ngl y, t he di st r i ct
cour t di d not er r i n gr ant i ng summary j udgment on t hi s cl ai m.
C. The May 2012 Layoff.
I n t he cour t bel ow, Mason cont ended t hat TSA' s
t ermi nat i on of hi s empl oyment as par t of a company- wi de r educt i on
i n f orce on May 17, 2012 const i t ut ed t er mi nat i on wi t hout cause
wi t hi n t he pur vi ew of t he Agr eement and, t hus, t r i gger ed an
ent i t l ement t o severance payment s. Because Mason di d not r enew
t hi s cont ent i on i n hi s openi ng br i ef on appeal , he wai ved i t . See
DeCar o v. Hasbro, I nc. , 580 F. 3d 55, 64 ( 1st Ci r . 2009) . And whi l e
Mason di d at t empt t o r esur r ect t hi s cont ent i on i n hi s r epl y br i ef ,
t hat was t oo l at e. See Ci pes v. Mi kasa, I nc. , 439 F. 3d 52, 55
( 1st Ci r . 2006) ; Sandst r omv. ChemLawn Corp. , 904 F. 2d 83, 87 ( 1st
Ci r . 1990) .
We add t hat even i f t hi s cont ent i on had been pr eser ved
on appeal , i t woul d f ai l i n l i ght of our hol di ng t hat TSA' s t i mel y
exer ci se of i t s r i ght of non- r enewal t er mi nat ed t he Agr eement
wi t hout t er mi nat i ng Mason' s empl oyment . See supr a Par t I I . B. We
expl ai n br i ef l y.
To begi n, TSA val i dl y exerci sed i t s r i ght of non- r enewal
ef f ect i ve March 31, 2012. Consequent l y, Mason' s subsequent
empl oyment was not cover ed by the Agreement but , i nst ead, was f or
"no speci f i ed t er m. " Cal . Lab. Code § 2922. Under Cal i f or ni a
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l aw, empl oyment wi t hout a f i xed t er m i s pr esumed t o be at wi l l .
See i d. ; Guz v. Becht el Nat ' l , I nc. , 8 P. 3d 1089, 1100 ( Cal . 2000) .
Mason at t empts t o over come t hi s presumpt i on. He
suggest s t hat si nce he cont i nued t o wor k f or TSA af t er t he
expi r at i on of t he Agr eement , per f ormi ng t he same t asks under t he
same j ob t i t l e f or t he same sal ar y and benef i t s as he pr evi ousl y
had r ecei ved, an i mpl i ed- i n- f act cont r act ar ose bet ween Apr i l 1
and May 17. I n hi s vi ew, t hi s i mpl i ed cont r act amount ed t o a
cont i nuat i on of t he Agr eement , so t hat he enj oyed t he same
severance prot ect i ons on May 17 as he had when t he Agreement was
i n f orce.
Thi s i s l i t t l e mor e t han wi shf ul t hi nki ng. Under
Cal i f or ni a l aw, a cour t cannot i mpl y a cont r act i n f act cont ai ni ng
t er ms t hat di r ect l y cont r adi ct t er ms of an expr ess at - wi l l
agr eement . See Toml i nson v. Qual comm, I nc. , 118 Cal . Rpt r . 2d
822, 830 ( Cal . Ct . App. 2002) ; Hal vor sen v. Ar amar k Uni f . Ser vs. ,
I nc. , 77 Cal . Rpt r . 2d 383, 385 ( Cal . Ct . App. 1998) . Thi s i s
especi al l y t r ue wher e t he wr i t t en agr eement was si gned by t he
empl oyee and expr essl y l i mi t s t he manner i n whi ch t he at - wi l l
pr ovi si ons may be al t er ed. See, e. g. , St ar zynski v. Capi t al Pub.
Radi o, I nc. , 105 Cal . Rpt r . 2d 525, 529 ( Cal . Ct . App. 2001) .
Here, Mason si gned t wo document s i n December of 2011 — t he Of f er
Let t er and t he New Agr eement —whi ch expl i ci t l y acknowl edged t hat ,
absent t he Agr eement , hi s empl oyment wi t h TSA woul d be at wi l l .
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What i s mor e, each document st i pul at ed t hat t he at - wi l l pr ovi si ons
coul d not be al t ered except by a wr i t i ng si gned bot h by Mason and
TSA' s presi dent . I n t he f ace of t hese unmodi f i ed documents, Mason
cannot over come t he presumpt i on that hi s empl oyment on May 17 was
at wi l l . See i d. Ther ef or e, hi s l ayof f di d not ent i t l e hi m t o
t he prophyl axi s of t he Agr eement ( whi ch had by t hen expi r ed) . See
Hal vor sen, 77 Cal . Rpt r . 2d at 385.
I n an ef f or t t o change t he t r aj ect or y of t he debat e,
Mason argued bel ow t hat even i f hi s i mpl i ed cont r act argument
f ai l ed, t he non- r enewal of t he Agr eement di d not t ake ef f ect on
Apr i l 1 because t he Amendment ( whi ch had an ef f ect i ve dat e of
J anuar y 1) by some myst er i ous al chemy caused t he Agreement ' s
ef f ect i ve dat e t o mi gr at e f r om Apr i l 1 t o J anuar y 1. By t hi s
l ogi c, t he non- r enewal coul d not have been ef f ect i ve bef or e
December 31, 2012 —and Mason woul d have st i l l been cover ed by the
Agr eement ( and i t s sever ance pr otect i ons) when he was l ai d of f i n
May.
Thi s ar gument i s j ej une. The Amendment makes pel l uci d
t hat t he onl y aspect of t he Agr eement t hat i t al t er ed was t o
subst i t ut e TSA f or Tej as. I t pr ovi ded t hat t hi s subst i t ut i on woul d
t ake ef f ect on J anuar y 1, 2012, but i t di d not pr ovi de t hat ei t her
t he ter m of t he Agr eement or i t s ef f ect i ve dat e woul d i n any way
be revi sed.
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That i s game, set , and mat ch. We hol d t hat Mason' s cl ai m
f or sever ance benef i t s st emmi ng f r om hi s l ayof f on May 17, 2012
has been wai ved; and t hat , i n al l event s, summary j udgment on t hat
cl ai m was appr opr i at e.
III. CONCLUSION
We need go no f ur t her . 8 For t he r easons el uci dat ed
above, we rever se t he di st r i ct cour t ' s summar y j udgment r ul i ng i n
par t , af f i r m t hat r ul i ng i n par t , and r emand f or f ur t her
pr oceedi ngs consi st ent wi t h t hi s opi ni on. No cost s shal l be t axed
on appeal .
So Ordered.
8 Our deci si on t oday does not deal wi t h Mason' s cl ai m f orbr each of t he i mpl i ed covenant of good f ai t h and f ai r deal i ng.Even t hough t he di st r i ct cour t di d not addr ess t hi s cl ai m i n anymeani ngf ul way, i t gr ant ed j udgment on t he case as a whol e, andMason t ook pai ns t o pr eser ve t hi s par t i cul ar cl ai m on appeal .Gi ven t hi s sequence of event s, we deem i t pr udent t o ref r ai n f r omaddr essi ng t he mat t er her e and, i nst ead, l eave i t open on r emand.Cf . Uni t ed St at es v. Ti cchi ar el l i , 171 F. 3d 24, 29 ( 1st Ci r . 1999) .I n cont r ast , Mason di d not pr eser ve on appeal hi s cl ai m f or avi ol at i on of t he Cal i f or ni a Labor Code. Thus, we deem t hat cl ai mf or ecl osed on r emand. See, e. g. , Uni t ed St at es v. Connel l , 6 F. 3d27, 30 ( 1st Ci r . 1993) .