Appeal by plaintiff form a judgment of the United States District Court for the Southern District of New York, Leonard B. Sand, Judge, summarily dismissing complaint after remand in 769 F.2d 109 (1985); appeal by defendant from order denying costs.
Lumbard, Oakes, and Kearse, Circuit Judges.
This case returns to us following proceedings on remand from our decision in Wakefield v. Northern Telecom, Inc., 769 F.2d 109 (1985) (" Wakefield I "), which granted defendant Northern Telecom, Inc. ("NTI"), a new trial on the breach of contract claim of its former employee, plaintiff Wilfred J. Wakefield. Wakefield now appeals from a judgment of the United States District Court for the Southern District of New York, Leonard B. Sand, Judge, summarily dismissing his complaint after further discovery on remand. Wakefield contends that the district court erred in granting summary judgment primarily because (1) this Court in Wakefield I had ordered a new trial, and (2) there were genuine issues of material fact as to the terms of the contract governing Wakefield's compensation and as to NTI's motivation for terminating Wakefield's employment. NTI challenges orders of the district court denying leave to file an untimely bill of costs following its successful appeal in Wakefield I. The appeals were consolidated for argument. For the reasons stated in Parts I and II below, we vacate the judgment dismissing the complaint and remand for trial. For the reasons stated in Part III below, we affirm the rulings as to costs.
The factual background of the dispute is adequately detailed in Wakefield I and will be but briefly summarized here. Prior to 1978, Wakefield was a salesman for Danray, Inc. ("Danray"), a company that sold communications switching systems. Wakefield's compensation was a base salary plus commissions on sales he produced. The Danray sales incentive plan ("Danray Plan" or "Plan"), which by its terms was effective from January 1 through December 31, 1978, provided that 50% of the salesman's commission would be paid 30 days after Danray's acceptance of an order and the other 50% would be paid 30 days after the customer's acceptance of the system. The Plan also contained the following provision concerning terminated employees ("Paragraph J"):
In order to receive incentive compensation under this Plan, the participant must be a Danray employee on the date the incentive compensation is to be paid pursuant to the Plan. It will be Danray's policy to ensure a fair, equitable and prompt payment of any incentive due an employee whose employment is terminated or who is transferred to a non-sales position.
In the plan, Danray "reserve[d] the right to modify, amend or cancel this Plan at any time."
In January 1978, Danray was acquired by NTI which also sold switching systems. NTI had a different sales incentive plan and thereafter considered modifying the two plans. In 1979, NTI adopted two new provisions concerning the payment of commissions. Wakefield contends that these two provisions superseded the Danray Plan; NTI contends that they merely modified it.
Through most of 1979, Wakefield was working on a proposed sale to IBM and other companies of switching equipment worth approximately $16 million. On October 26, 1979, NTI discharged 57 employees; one of them was Wakefield. Shortly thereafter, a contract for the anticipated sale to IBM was signed for $12 million. Invoking Paragraph J of the Danray Plan, NTI has refused to pay Wakefield any commission on the sale because he was not an employee at the time the contract was signed.
Wakefield commenced the present action, advancing various theories of recovery, of which only a breach of contract theory remains.
A. The First Trial and Wakefield I
A jury trial was held on Wakefield's breach of contract claim. The court instructed the jury, inter alia, that it could find in Wakefield's favor if it found either that Wakefield had "substantially performed" all of his contractual obligations or that NTI "did not act in good faith" toward Wakefield. The jury returned a verdict in favor of Wakefield in the amount of $111,079.87. NTI's motions for judgment notwithstanding the verdict ("n.o.v.") or a new trial were denied, and NTI appealed.
On appeal, we noted that Wakefield advanced two theories in support of his contract claim: (1) that NTI's 1979 communications concerning modification of the sales incentive plan wholly superseded the Danray Plan and, containing no provision similar to Paragraph J, eliminated any requirement that Wakefield be an NTI employee when the commissions became payable, so long as he had procured the sale; and (2) that NTI had fired him precisely in order to avoid paying him commissions on sales that were complete but for formalities, thereby violating an implied covenant of good faith and fair dealing. We found the district court's instructions to the jury flawed because (1) Paragraph J, if not superseded, was an express contractual requirement and hence strict compliance, rather than substantial compliance, would be required in order to entitle Wakefield to commissions on sales consummated after his termination; and (2) the court's instructions on good faith dealing had been too broad and the jury should have been told that it could not find in favor of Wakefield unless it found that his termination had been substantially motivated by NTI's desire to deny him commissions and was not part of a legitimate reduction in work force or the result of dissatisfaction with him.
Noting that the dispute as to the continued viability of Paragraph J had not been submitted to the jury, and concluding that "a properly instructed jury could have awarded damages to Wakefield upon either of [his] theories described above," Wakefield I, 769 F.2d at 113, we remanded for a new trial. We stated that
Wakefield may prevail in one of two ways. First, he may attempt to prove that Paragraph J of the 1978 Danray Sales Incentive Plan did not apply to some or all of the sales for which he seeks commissions, and that he substantially fulfilled the requirements of any applicable contracts to earn commissions for those sales. Second, he may attempt to prove that NTI's desire to avoid paying him commissions that were virtually certain to become vested was a substantial motivating ...