Mason v. Amtrust Financial Services, Inc.

Background

Eugene Mason worked for AmTrust Financial Services, Inc. as Senior Vice President, Professional Liability, beginning in September 2013. His employment letter provided for two bonuses: an annual bonus equal to three percent of new underwriting income and a discretionary bonus. The letter stated that the bonuses would be paid in the year after they were earned, as long as Mason’s employment had not ended before payment. It also described his employment as at-will.

In July 2016, Mason signed an agreement requiring employees to bring employment-related lawsuits against AmTrust or related individuals within the longer of six months after the relevant event or six months after signing the agreement. The agreement also waived the right to a jury trial. AmTrust later terminated Mason’s employment on July 17, 2019.

Mason filed suit on September 9, 2019, against AmTrust and David Lewis. After earlier proceedings, the only remaining claim was Mason’s breach-of-contract claim against AmTrust concerning unpaid underwriting and discretionary bonuses for 2014 through 2018. AmTrust moved for summary judgment on the claims for bonuses earned in 2014 through 2017, arguing that the contractual filing deadline barred them.

Summary Judgment Standard

Summary judgment is a decision without a trial when the evidence shows that no genuine dispute exists about a fact that could affect the result and the moving party is entitled to judgment under the law. The court viewed the facts in the light most favorable to Mason, the party opposing the motion.

Contractual Filing Deadline

New York law permits parties to agree in writing to a filing period shorter than the usual statute of limitations, unless the agreement resulted from improper pressure or overreaching or the period is unreasonably short. The court noted that New York courts have upheld six-month contractual filing periods.

The court interpreted Mason’s agreement as requiring him to sue within six months of the relevant employment event, unless the alternative six-month period measured from the date he signed the agreement provided more time. Because Mason filed suit on September 9, 2019, claims based on employment events occurring before March 9, 2019 were outside the applicable period. The court found that AmTrust paid the 2014 through 2017 bonuses by May of the following year. Therefore, claims concerning those bonuses were untimely.

Mason’s Arguments

Mason argued that factual disputes remained about whether he received all of his discretionary bonuses and whether AmTrust used fraudulent accounting practices and concealed them. The court ruled that those issues did not prevent enforcement of the filing deadline because any claim for an underpaid bonus had to be brought within six months after the bonus was paid or was due.

Mason also argued that he did not voluntarily sign the agreement because he faced the loss of his job and did not negotiate its terms. The court rejected that argument. It held that requiring an at-will employee to sign an employment agreement to avoid termination was not an improper threat, and that Mason continued working for AmTrust for more than three years after signing, waiving his ability to repudiate the agreement on that basis.

The court further rejected Mason’s argument that the agreement was ambiguous. It found that the agreement clearly identified the two possible six-month periods and specified that the longer period applied. The court explained that claims concerning the 2014 and 2015 bonuses had to be brought within six months after Mason signed the agreement, while claims concerning the 2016 and 2017 bonuses had to be brought within six months after those bonuses were paid or became due.

The court also rejected Mason’s argument that the agreement lacked consideration, meaning something of legal value exchanged for a promise. Because Mason was an at-will employee and AmTrust did not terminate him until more than three years after he signed, the court held that AmTrust’s continued forbearance from terminating him supplied sufficient consideration.

Finally, Mason argued that the filing deadline should be extended because AmTrust allegedly concealed fraudulent accounting practices. The court discussed equitable estoppel, a doctrine that can prevent a defendant from relying on a filing deadline when the defendant’s specific deceptive conduct kept the plaintiff from suing on time. The court found that Mason had not alleged or offered evidence of a scheme that prevented him from understanding his bonuses or of concealment in response to timely inquiries. It also found that his references to other lawsuits against AmTrust did not satisfy his burden.

Ruling

Judge Denise Cote granted AmTrust’s September 11, 2020 motion for summary judgment. The court granted summary judgment to AmTrust on Mason’s claims for 2014, 2015, 2016, and 2017 bonuses. The remaining claim was Mason’s breach-of-contract claim concerning his 2018 bonuses, which the opinion stated was scheduled for trial.