Pizzuti v. Corporation ( 1993 )

USCA1 Opinion

          February 4, 1993  UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT

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          No. 92-1947

                                  DONATO F. PIZZUTI,

                                Plaintiff, Appellant,

                                          v.

                                POLAROID CORPORATION,

                                 Defendant, Appellee.

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                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                   [Hon. Edward F. Harrington, U.S. District Judge]
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                                        Before

                              Torruella, Circuit Judge,
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                            Bownes, Senior Circuit Judge,
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                              and Stahl, Circuit Judge.
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                                _____________________

               Joseph J. Brodigan, with whom  William D. Gardiner, James M.
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          Langan,  and  Langan,  Dempsey  &  Brodigan, were  on  brief  for
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          appellant.
               Francis  H.  Fox, with  whom  Scott  C. Moriearty,  Marianne
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          Meacham and Bingham, Dana & Gould, were on brief for appellee.
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                    TORRUELLA, Circuit Judge.  This appeal arises out of  a
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          summary  judgment  granted  on  behalf  of  Polaroid  Corporation

          ("Polaroid") dismissing a breach of contract action brought  by a

          former employee, Donato F. Pizzuti ("Pizzuti").1  We affirm.

                    The crux of the  lawsuit concerns the interpretation of

          Polaroid's Profit Sharing Retirement Plan (the "Retirement Plan")

          as well  as that  company's Employee Incentive  Compensation Plan

          (the  "Bonus Plan")  with  respect to  Pizzuti's contention  that

          Polaroid's employer  contributions from  April, 1976  to January,

          1986 were undersubscribed.  Pizzuti based this contention on  the

          winning and eventual settlement of  a patent infringement suit by

          Polaroid against  Eastman Kodak  Co. ("Kodak") pursuant  to which

          Kodak  paid approximately  $925  million in  cash and  short-term

          securities  to  Polaroid  for infringements  occurring  from 1976

          through 1986.  Pizzuti  contends that those payments require  the

          restatement of Polaroid's profits for those years and in turn the

          payment  of the additional  benefits and bonuses  that would have

          been received from these additional receipts.

                    Although  Pizzuti objects  to  the granting  of summary

          judgment,  we  believe otherwise.   This  is  a classic  case for

          summary  judgment:    no  material  facts  are  in   dispute  and

          disposition is dependent  only on the legal interpretation of the

          Retirement  and   Bonus Plans.   See  Fed. R.  Civ.  P. 56.   The
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          standard of review of  the district court's decision is  de novo,
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          1    Although  originally  brought  as  a  class  action  in  the
          Massachusetts  Superior Court,  it  was never  certified as  such
          either by the  state court or by the district  court after it was
          removed to the federal court.














          as only issues of  law are involved.  ITT Corp. v. LTX Corp., 926
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          F.2d 1258, 1261 (1st Cir. 1991).

                    The Retirement  Plan is a contribution  plan as defined

          in   3(34) of the Employee Retirement Income Security Act of 1974

          ("ERISA"),  as amended, 29 U.S.C.   1002(34), and is thus subject

          to construction pursuant to federal common law.  Firestone Tire &
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          Rubber  Co. v.  Bruch, 489 U.S.  101, 110 (1989).   In construing
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          ERISA-governed plans,  we apply "common-sense canons  of contract

          interpretation."   Wickman  v. Northwestern  Nat'l Ins.  Co., 908
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          F.2d 1077, 1084 (1st Cir.) (quoting Burnham v. Guardian Life Ins.
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          Co., 873 F.2d 486, 489 (1st Cir. 1989)), cert. denied, 111 S. Ct.
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          581 (1990).  Although the Bonus Plan is governed by Massachusetts

          law,  the standard  of interpretation  is similar,  requiring the

          court  to  give  nonambiguous  terms  their  usual  and  ordinary

          meaning.   Ober v. National  Casualty Co., 318  Mass. 27, 30,  60
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          N.E.2d 90, 91 (1945).

                    A reading of the  Plan leads us to the  same conclusion

          reached by the  district court:   "[n]othing in  the language  of

          either plan requires Polaroid to revisit a  previously-determined

          net profit and recalculate that figure based upon gains or losses

          resulting  from subsequent  litigation,  or  any  other  source."

          Pizzuti  v. Polaroid  Corp., No.  91-13018-H, slip  op. at  2 (D.
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          Mass.  July  9,  1992).    Section 3.01  of the  Retirement  Plan

          provides:

                      [T]he term "net profit" for any Plan Year
                      shall  mean the  total on  a consolidated
                      basis  of the  net earnings  of [Polaroid
                      and  its  subsidiaries]  for   such  year

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                      (excluding gains from the  sale, exchange
                      or  other  disposition   of  capital   or
                      depreciable  assets  not in  the ordinary
                      course  of  business),  as   computed  by
                      [Polaroid's]  accountants  in  accordance
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                      with standard accounting practices .  . .
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                      [Polaroid's]  determination  of such  net
                      profits  shall  be  conclusive   for  all
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                      purposes under the Plan.
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          (Emphasis added.).

                    The  undisputed  evidence  demonstrates  that  standard

          accounting   practices  require  that   litigation  judgments  or

          settlements  may  only  be  recognized  as  income  in  the  year

          received.   This fact is reinforced by  Polaroid's recognition of

          the  entire  $925  million  settlement  amount  as  1991  income,

          notwithstanding  that Polaroid  undoubtedly would  have benefited

          under  the  tax code  had it  been  allowed to  redistribute this

          settlement as proposed by Pizzuti.

                    Section  3.01  of  the  Bonus Plan  also  provides  for

          calculation of "net profits" on an annual basis "by the Company's

          accountants  in accordance  with standard  accounting practices,"

          and also states  that "[t]he Company's determination  of such net

          profit shall be conclusive for all purposes under the Plan."

                    There is nothing ambiguous in the indicated language of

          the Plans.   See ITT Corp.  v. LTX Corp., supra  at 1261 (whether
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          contract term is ambiguous is question of law for the court).  It

          requires  that net profits be determined annually, on the year in

          which   the  income   is   received,  and   that  the   Company's

          determination in this  respect is decisive  and final as  regards

          the Plans.  There is nothing more to be said.


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                    The judgment of the district court is affirmed.   Costs
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          to appellee.


















































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