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Gruber v. Regis Corp.

United States District Court, D. Colorado

August 21, 2019

COURTNEY GRUBER, Plaintiff,
v.
REGIS CORP., a Minnesota corporation, Defendant.

          ORDER

          RAYMOND P. MOORE, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the parties' cross motions[1] for summary judgment (ECF Nos. 23, 27) on claims arising from Plaintiff Courtney Gruber's (“Ms. Gruber”) former employment with Defendant Regis Corporation (“Regis”). Ms. Gruber alleges Regis violated the Colorado Wage Claim Act (“CWCA”) and breached a letter agreement by failing to make certain payments owed to her. The cross motions are fully briefed and ripe for resolution. The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.

         I. FACTUAL AND PROCEDURAL BACKGROUND[2]

         Regis was in the business of owning and operating hair salons. Effective September 7, 2016, Regis hired Ms. Gruber as its Vice-President of Premium Operations. Ms. Gruber received an annual salary of $220, 000, was eligible for bonuses, and received a $50, 000.00 grant of equity (Restricted Stock Units or “RSUs”) in Regis which would vest in equal annual amounts over a three-year period (August 19, 2016 to August 19, 2019) if she was continuously employed during that three-year period. While Ms. Gruber was employed by Regis, she signed the Code of Business Conduct and Ethics which provided, among other things, that while employed it was a conflict of interest for her to compete with Regis and she was required to protect confidential information. (ECF No. 28-4.)

         On October 1, 2017, Regis sold its mall-based salon business to The Beautiful Group (“TBG”). At that time, Ms. Gruber reported to Russell Testa, Regis's Vice President of Human Resources and Premium Operations. Prior to the closing of the sale to TBG, Mr. Testa and Ms. Gruber discussed entering into an agreement that would induce Ms. Gruber to continue to work for Regis and/or TBG during the transition of the mall-based salon business to TBG. A letter agreement (the “Letter Agreement”) dated November 10, 2017 was prepared and thereafter signed by the parties. That Letter Agreement defines the “Closing” as October 1, 2017 and provides, in relevant part, as follows:

“This letter agreement is intended to memorialize the agreement between you and Regis Corporation … regarding your potential severance during the post-Closing transition period.”
***
2. “If, at any time up to six months after Closing [April 30, 2018], TBG makes you a job offer and you accept the offer, Regis will accelerate the vesting of your then-unvested Regis equity awards, in accordance with Regis' policy for Transferred Employees, in exchange for a standard and customary release (the ‘Acceleration').”
3. “If TBG does not make you a job offer by the six-month anniversary of Closing, Regis will use its reasonable best efforts to place you in another position with Regis that is acceptable to both you and Regis. If Regis is unable to do so, Regis will pay you severance equal to six months of your salary and the Acceleration in exchange for a standard and customary release.”
4. “Furthermore, if TBG makes you a job offer and you decline, Regis will pay you severance equal to six months of your salary and the Acceleration. If you are hired by TBG and then terminated without cause at any time prior to October 1, 2018, Regis will pay you severance equal to six months of your salary in exchange for a standard and customary release.”
5. This Letter Agreement has no force and effect after October 1, 2018. … It replaces all prior agreements between you and Regis regarding post-Closing severance and equity acceleration.

(ECF No. 1-1.) Prior to the parties' signing of the Letter Agreement, there were no specific discussions between the parties about what the term “job offer” or “customary and standard release” meant.

         Following the closing, Ms. Gruber worked under Michael Reinstein of TBG but remained a Regis employee and continued to receive her regular salary. In late December 2017, Mr. Reinstein asked Ms. Gruber if she was interested in staying with TBG. Ms. Gruber was not sure and told Mr. Testa about Mr. Reinstein's inquiry. After consideration of the matter, Ms. Gruber told TBG she was not interested in working for them and, a few days later, Mr. Reinstein announced Ms. Gruber's departure from TBG. Effective January 1, 2018, Ms. Gruber was no longer actively working with TBG.

         Ms. Gruber used her accrued vacation and took the month of January 2018 off from Regis. Regis terminated Ms. Gruber's employment effective January 31, 2018, with the stated reason of “involuntary due to TBG acquisition.” Ms. Gruber would not accept any job at Regis that would not have involved running an entire division, but Regis did not have any positions that met her job requirements.

         At some point in time, Regis presented Ms. Gruber with a “Separation and Non-Disparagement Agreement and General Release” (the “Separation Agreement”) which contained, among other things, a “General Release, ” confidentiality provision, and non-compete and non-solicitation provisions. (ECF No. 24-8.) Ms. Gruber did not object to paragraph 3 in the Separation Agreement titled “General Release” but would not sign the Separation Agreement as presented. Without a signed Separation Agreement, Regis would not make any payments to Ms. Gruber or accelerate her equity in Regis. Ms. Gruber's lawsuit followed.

         Ms. Gruber's complaint raises two claims based on allegations that she is entitled to (1) two months of salary under the six-month term of the Letter Agreement; (2) acceleration of 4, 822 units[3] of Regis equity; and (3) $110, 000 in severance. As the complaint currently stands, however, [4] the first claim is under the CWCA and seeks, as “wages or compensation, ” the 4, 822 units of Regis equity. The second claim is for breach of the Letter Agreement seeking three months' salary, the 4, 822 units of Regis equity, and $110, 000 in severance. On the second claim, the parties' disputes are (1) whether the Letter Agreement is enforceable; (2) whether Regis was required to employ Ms. Gruber for six months; (3) whether Ms. Gruber received a “job offer”; and (4) whether a “standard and customary release” requires Ms. Gruber to sign a document containing more than the “General Release” set forth in the Separation Agreement. The parties' cross motions for summary judgment assert the Court can resolve the claims as a matter of law. The Court examines the arguments in turn to determine if it is so.

         II. LEGAL STANDARD

         Summary judgment is appropriate only if there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Gutteridge v. Oklahoma, 878 F.3d 1233, 1238 (10th Cir. 2018). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132, 1136 (10th Cir. 2000). “The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Scott v. Harris, 550 U.S. 372, 380 (2007) (citation omitted). A fact is “material” if it pertains to an element of a claim or defense; a factual dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a reasonable jury could return a verdict for either party. Anderson, 477 U.S. at 248.

         When the court is presented with cross motions for summary judgment, it “must view each motion separately, in the light most favorable to the non-moving party, and draw all reasonable inferences in that party's favor.” United States v. Supreme Court of New Mexico, 839 F.3d 888, 906-07 (10th Cir. 2016) (citations and quotations marks omitted). “‘Cross motions for summary judgment are to be treated separately; the denial of one does not require the grant of another.'” Christian Heritage Academy v. Oklahoma Secondary School Activities Ass'n, 483 F.3d 1025, 1030 (10th Cir. 2007) (quoting Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979)).

         III. ANALYSIS

         A. The Agreement

         Regis' motion asserts there is no enforceable agreement because an essential term was not agreed to, namely, the terms of the “standard and customary release”; thus, Regis contends, there is only an agreement to agree. Ms. Gruber's motion assumes there is an agreement, but Regis' response asserts there is only an agreement to agree or, alternatively, there was no meeting of the minds and Ms. Gruber was negligent in not inquiring as to the terms of Regis' “standard and customary release.” Ms. Gruber counters[5] that by Regis' evidentiary and judicial admissions, it has admitted that an enforceable agreement exists and cannot now argue otherwise. These arguments require an analysis of federal law concerning the alleged admissions and Colorado[6] contract law.

         1. Evidentiary and Judicial Admissions

         “Judicial admissions are formal, deliberate declarations which a party or his attorney makes in a judicial proceeding for the purpose of dispensing with proof of formal matters or of facts about which there is no real dispute.” Asarco, LLC v. Noranda Mining, Inc., 844 F.3d 1201, 1212 n.3 (10th Cir. 2017) (quotation marks and citation omitted). Stipulations consisting of affirmative, formal, factual statements can be judicial admissions. Wheeler v. John Deere Co., 935 F.2d 1090, 1097-1099 (10th Cir. 1991). “A judicial admission must be deliberate, clear, and unequivocal.” Skyline Potato Co. v. Rogers Bros. Farms, No. 10-CV-02353-WJM-KLM, 2011 WL 2791531, at *5 (D. Colo. July 15, 2011) (citing Matter of Corland Corp., 967 F.2d 1069, 1074 (5th Cir. 1992)); Armstrong v. JPMorgan Chase Bank Nat. Ass'n, 633 Fed.Appx. 909, 912 (10th Cir. 2015) (“If unequivocal, judicial admissions are binding.” (quotation marks, brackets, and citation omitted)).

         “Admissions” on questions of law are ordinarily not binding. First Amer. Title Ins. Co. v. Northwest Title Ins. Co., 906 F.3d 884, 893 (10th Cir. 2018). Further, judicial admissions are not absolute as they “may be withdrawn whenever necessary to prevent manifest injustice.” Wheeler, 935 F.2d at 1098 (discussing stipulations).[7] Where “the party making an ostensible judicial admission explains the error in a subsequent pleading or by amendment, the trial court must accord the explanation due weight.” Smith v. Argent Mortg. Co., 331 Fed.Appx. 549, 556 (10th Cir. 2009) (quotation marks and citation omitted). A district court has “broad discretion in determining whether to hold a party to a stipulation or whether the interests of justice require that the stipulation be set aside.” Id.

         Evidentiary admissions, on the other hand, “can be controverted or explained by a party, and such admissions include pleadings in another case, superseded or withdrawn pleadings in the same case, [and] judicial admissions in another case.” Asarco, 844 F.3d at 1212 n.3 (quotation marks and citation omitted). The testimony of Rule 30(b)(6) representatives “is merely an evidentiary admission” and, therefore, does not have preclusive effect. Vehicle Market Research, Inc. v. Mitchell, Int'l, 839 F.3d 1251, 1260-61 (10th Cir. 2016).

         Ms. Gruber argues Regis' admissions that the Letter Agreement is an enforceable contract is found in four instances. The Court addresses them in turn.

         First, Ms. Gruber argues that Regis' admission is found by its failure to argue in its motion to dismiss that the Letter Agreement is not a contract. Ms. Gruber fails to point the Court to any assertion in Regis' Rule 12(b)(6) papers which would constitute a deliberate, clear, and unequivocal statement that the Letter Agreement is an enforceable contract. Further, Ms. Gruber cites to no legal authority that if a party does not raise an argument in a Rule 12(b)(6) motion it constitutes a binding admission as to matters not raised. Thus, the Court rejects this argument as without legal or factual basis. See Fed. R. Civ. P. 12(b)(6) (“[A] party may assert the following defenses by motion…failure to state a claim upon which relief can be granted.” (emphasis added)).

         Next, Ms. Gruber asserts Regis' stipulation in the Scheduling Order that “Plaintiff and Defendant entered into a contract in November 2017, a copy of which is attached to the Complaint” constitutes an evidentiary admission that an enforceable agreement exists. Regis argues it did not stipulate the Letter Agreement was enforceable; its statement is not inconsistent with its argument that the Letter Agreement was an agreement to agree; and its motion to dismiss was then pending and its list of anticipated defenses was not exclusive (see ECF No. 17, p. 2 (“[a]mong the defenses Regis anticipates…”)). Ms. Gruber relies on Lopez v. Next Generation Constr. & Environmental, LLC, No. 16-CV-00076-CMA-KLM, 2018 WL 4111027 (D. Colo. Aug. 29, 2018), but this case supports Regis' position. There, the Lopez court gave weight to the undisputed facts in the scheduling order where defendant's answer was filed before the scheduling orders were issued, and the facts were not subsequently disputed in the parties' final pretrial order. Here, Regis' answer was filed after the scheduling order and disputed the enforceability of the Letter Agreement. Further, the Court takes judicial notice ...


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