Robert Cleveland, Jr. v. Frontstream DTI

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0693n.06
No. 12-6281
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
ROBERT L. CLEVELAND, JR., )
aka Bob Cleveland, ) FILED
) Jul 29, 2013
Plaintiff-Appellant, ) DEBORAH S. HUNT, Clerk
)
v. )
) ON APPEAL FROM THE
FRONTSTREAM DTI, LLC, a Delaware ) UNITED STATES DISTRICT
limited liability company, ) COURT FOR THE MIDDLE
) DISTRICT OF TENNESSEE
Defendant-Appellee. )
BEFORE: BOGGS and McKEAGUE, Circuit Judges; BECKWITH, District Judge.*
PER CURIAM. Robert L. Cleveland Jr. appeals the district court’s grant of summary
judgment for his former employer in a diversity breach-of-contract action.
In 2008, the parties entered into a contract under which Frontstream DTI, LLC (Frontstream)
would employ Cleveland for four years as an executive vice president. The contract would then
renew automatically from year to year, unless either party gave three-months’ notice. The contract
also provided that, in the event Cleveland’s employment was terminated other than for cause,
Frontstream would be obligated to pay him for half of the remaining term of the contract and, if
Cleveland gave ninety-days’ notice before receiving his final salary payment, Frontstream would be
obligated to repurchase company stock owned by Cleveland.
*
The Honorable Sandra S. Beckwith, United States District Judge for the Southern District
of Ohio, sitting by designation.
No. 12-6281
Cleveland v. Frontstream DTI
On December 15, 2011, Frontstream informed Cleveland that his contract would not be
renewed and would expire on April 2, 2012, thus providing him with more than the ninety-days’
notice required. Cleveland was relieved of his duties, but he continued to be paid. On March 16,
2012, he filed this complaint alleging a breach of contract by Frontstream. He sought to require
Frontstream to repurchase his stock.
The parties filed cross-motions for summary judgment. The district court denied Cleveland’s
motion and granted Frontstream’s motion. The district court concluded that Cleveland was not
entitled to have his stock repurchased by Frontstream because his employment had not been
constructively terminated; rather, his employment contract had expired by its terms. Additionally,
the district court found that even if Cleveland’s employment had been constructively terminated, he
had not given the ninety-days’ notice required to obligate Frontstream to repurchase the stock,
rejecting Cleveland’s argument that it was impossible for him to give timely notice under his theory
of the case. Cleveland’s motion for reconsideration of the judgment was denied.
On appeal, Cleveland repeats his arguments that his employment was constructively
terminated, alleging that this event occurred on the date he filed his complaint. He therefore alleges
that it was impossible for him to give Frontstream the ninety-days’ notice required to trigger an
obligation to repurchase his stock because less than one month remained before he received his last
salary payment. Alternatively, he argues that, even if the constructive discharge occurred on
December 15, 2011, he did not have ninety days to give notice because Frontstream was only
obligated to pay him for half of the time remaining on his contract, which was less than ninety days.
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No. 12-6281
Cleveland v. Frontstream DTI
De novo review of this case reveals that summary judgment was properly entered for
Frontstream because there was no genuine dispute of material fact and Frontstream was entitled to
judgment as a matter of law. See Pennington v. State Farm Mut. Auto. Ins. Co., 553 F.3d 447, 450
(6th Cir. 2009).
Cleveland relies on Guiliano v. Cleo, Inc., 995 S.W.2d 88 (Tenn. 1999), for his argument that
he was constructively discharged. However, that case is distinguishable on several grounds.
Guiliano had a three-year employment contract that would renew in the absence of six-months’
notice. Id. at 92. More than one year remained on the contract when he was notified that it would
not be renewed and he was relieved of his duties. Id. at 93. He was replaced by his employer, and
he obtained a new job, at which point his former employer stopped paying him. Id. Thus, Guiliano
had more than one third of his contract remaining and was given notice more than twice as early as
required by the contract.
Cleveland, on the other hand, was informed that his four-year contract would not be renewed
with less than four months remaining, only slightly more than the three months’ notice required
under the terms of the contract. Furthermore, Frontstream submitted evidence that Cleveland was
not replaced and that he was paid for the remainder of the contract term. Cleveland disputes that he
was not replaced and argues that he, too, obtained a new job when he became self-employed.
However, in responding to a motion for summary judgment, a party may not rest on conclusory
allegations, but must present affirmative evidence in support of its claims. Cloverdale Equip. Co.
v. Simon Aerials, Inc., 869 F.2d 934, 937 (6th Cir. 1989). Cleveland’s employment ended at the
expiration of his four-year term in the precise manner envisioned by his employment contract.
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No. 12-6281
Cleveland v. Frontstream DTI
Cleveland was not constructively discharged, and Frontstream was not required to repurchase his
stock.
Although we need not reach the second issue raised by Cleveland (that it was impossible for
him to give ninety-days’ notice before his last salary payment), the argument is clearly without merit.
If Cleveland believed that he was constructively discharged on December 15, 2011, he had more than
sufficient time to give notice before he received his last payment from Frontstream in April 2012.
He has shown no reason to believe that Frontstream intended to cease paying him halfway through
the remaining term of the contract. His choice of the date he filed this complaint as the date of his
constructive discharge is wholly without evidentiary support.
Thus, de novo review shows that there is no genuine issue of material fact and that
Frontstream was entitled to judgment as a matter of law, and we accordingly affirm the district
court’s judgment.
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