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Jason Selch v. Columbia Management

August 29, 2012

JASON SELCH,
PLAINTIFF-APPELLANT,
v.
COLUMBIA MANAGEMENT, COLUMBIA WANGER ASSET MANAGEMENT, L.P., BANK OF AMERICA, INC., AND WAM RIGHTS
PARTNERSHIP, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. No. 05 CH 16773 Honorable Kathleen M. Pantle, Judge Presiding.

The opinion of the court was delivered by: Justice Murphy

JUSTICE MURPHY delivered the judgment of the court, with opinion. Justices Neville and Salone concurred in the judgment and opinion.

OPINION

¶ 1 Plaintiff, Jason Selch, appeals from an order of the circuit court of Cook County granting summary judgment in favor of defendants, Columbia Management, Columbia Wanger Asset Management, L.P. (C-WAM), Bank of America, Inc., and WAM Rights Partnership. On appeal, plaintiff asserts that the court erred in granting summary judgment where a genuine issue of material fact exists as to: (1) whether defendant was properly terminated for cause; and (2) whether C-WAM's formal warning agreement constituted a contract. Additionally, plaintiff contends that the court erred in striking his late jury demand. For the following reasons, we affirm the judgment of the trial court.

¶ 2 I. BACKGROUND

¶ 3 Plaintiff, Jason Selch, filed a nine-count second amended complaint with the circuit court of Cook County on September 11, 2008. Plaintiff's complaint asserted the following claims: declaratory judgment against Bank of America (BOA) (count I); breach of contract against BOA (count II); declaratory judgment against WAM Rights Partnership (the Partnership) (count III); tortious interference with contract against C-WAM (count IV); tortious interference with contract against BOA (count V); tortious interference with contract against BOA Columbia Management (Columbia) (count VI); breach of contract against C-WAM (count VII); breach of contract against Columbia and C-WAM (count VIII); and tortious interference with contractual relationships against Columbia and BOA (count IX).

¶ 4 The first six counts are based on plaintiff's contention that defendants were not justified in terminating him for cause in conjunction with an October 31, 2001, letter agreement (Letter Agreement) between the Partnership and plaintiff. The next three counts are based on plaintiff's assertion that he was terminated in violation of a formal warning letter (the Formal Warning), which plaintiff contends was a contractual agreement between C-WAM and himself.

¶ 5 The parties filed cross-motions for summary judgment. On February 26, 2010, the circuit court granted defendants' motion for summary judgment on counts VII and VIII, finding that the Formal Warning, as a matter of law, did not constitute a contract. Then, on April 19, 2011, the circuit court granted defendants' remaining claims for summary judgment, finding that, as a matter of law, plaintiff's conduct fell under the definition of "cause" in the Letter Agreement. Plaintiff appealed.

¶ 6 A. History of Plaintiff's Employment

¶ 7 On June 27, 1994, plaintiff was hired by Wanger Asset Management, L.P. (WAM), as an investment analyst. In 1999, plaintiff was awarded fractional partnership appreciation rights in WAM, as a reward for his strong performance. After a series of transactions, WAM was eventually bought out by C-WAM, a subsidiary of BOA, and plaintiff obtained the right to a percentage of the proceeds from the sale of WAM to Liberty Financial Companies, Inc. (Liberty) (one of the transactions prior to the buy out by C-WAM). Plaintiff's percentage of the proceeds was to be paid through an up-front payment, a three-year contingent payment, and a five-year contingent payment. At the time of his termination from C-WAM, the contingent payments were worth close to $2 million.

¶ 8 The initial acquisition of WAM, by Liberty, occurred on June 9, 2000. The parties involved executed an agreement and plan of merger (Merger Agreement) to join the two companies. When Liberty bought WAM, it paid an initial lump-sum payment and two contingent, or future, payments (Contingent Payments), based on the profitability of the new company, Liberty Wanger Asset Management, L.P. (L-WAM). As a result of the merger, plaintiff agreed to cancel his WAM fractional partnership appreciation rights for a lump-sum payment and two contingent payments.

¶ 9 In September 2009, the Partnership created the WAM rights partnership non-qualified profit sharing plan (the Plan) to provide for the distribution of the Contingent Payments to plaintiff and others in his position. As a part of the Plan, the participants in the Plan could lose their rights to the Contingent Payments if they were terminated for "cause" or for "good reason," as defined in the Plan.

¶ 10 After the acquisition of WAM by L-WAM, Liberty again put itself up for sale. As a result of this decision, Liberty provided its employees, including plaintiff, with an employment agreement (Agreement) in order to ensure that they were secure in their positions. The Agreement provided employees with at least two years of employment from the date of the closing of any sale a severance package totaling $695,000 plus benefits. Again, as with the Plan, the Agreement identified that employees could be terminated by the company for "cause" or "good reason" and noted that if employees were thus terminated, they would sacrifice their severance packages. The Agreement defined "cause" for termination as a:

"conviction of a felony, engaging in misconduct that injures the Company, performing your duties with gross negligence or any material breach of your fiduciary duties as an employee of the Company."

¶ 11 Likewise, the Agreement defined "good reason" for termination as:

"(i) a reduction in your base compensation, (ii) a material change in your level of work responsibilities which has not been remedied within 30 days after you have given written notice of such claimed event or (iii) a requirement that you be based at a location more than 50 miles outside the Chicago metropolitan area."

¶ 12 Six months after plaintiff executed the Agreement, Liberty and Fleet National Bank (Fleet) executed a transaction, whereby Fleet acquired the outstanding stock and equity of Liberty, the Agreement went into effect, and L-WAM became C-WAM.

¶ 13 The Letter Agreement, which was created on October 31, 2001, through the transaction of Fleet and Liberty, amended the Merger Agreement. There were nine parties to the Letter Agreement: L-WAM; BOA (then FNB); the Partnership; WAM Acquisition GP, Inc.; and Ralph L. and Leah Z. Wanger, Charles P. McQuaid, Robert A. Mohn, and John H. Park. The Letter Agreement again provided that an employee or partner of C-WAM would lose his or her right to receive the Contingent Payments if he or she were terminated for "cause," as defined in the companies' respective employment agreements. Liberty and Fleet officially became C-WAM on November 1, 2001.

¶ 14 Finally, on April 1, 2004, Fleet merged with BOA and C-WAM came to be owned by Columbia, a subsidiary of BOA. BOA became the umbrella company for all those involved. BOA assumed the rights and obligations which had been created by Fleet under the October 31, 2001, Letter Agreement.

ΒΆ 15 B. Plaintiff's ...


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