Gibby's Appellate Brief

This Honorable Court has subject matter jurisdiction pursuant to 28 U.S.C. §1332(a) based upon diversity of citizenship. Specifically, Appellant Keith Gibby is a resident of the State of Maryland, and Appellee IBM is a Corporation organized under the laws of the State of New York. The amount in controversy in this case exceeds $50,000.00.

This Court has Appellate Jurisdiction in this case based upon a decision rendered by the United States District Court for the District of Maryland (Southern District). (A. 251.) Specifically, on or about October 23, 1996, IBM filed a Motion for Judgment on the Pleadings (A. 69.), and on or about November 19, 1996, Gibby filed an Opposition. (A. 128.) The United States District Court for the District of Maryland (the Honorable Deborah K. Chasanow presiding) granted IBM's Motion for Judgment on the Pleadings, without a hearing, on or about July 16, 1997. (A. 251.) The District Court's Order granting IBM's Motion for Judgment on the Pleadings was a final Order and disposed of all claims with respect to the parties involved. In accordance with Rule 4(a) of the Federal Rules of Appellate Procedure, Gibby filed his Notice of Appeal on or about August 5, 1997, within the prescribed time period. (A. 259.)

I. DID THE TRIAL COURT ERR AS A MATTER OF LAW BY GRANTING IBM'S MOTION FOR JUDGMENT ON THE PLEADINGS AND CONCLUDING THAT GIBBY FAILED TO STATE A CLAIM FOR WHICH RELIEF MAY BE GRANTED?

This litigation arises out of Keith Gibby's prior employment with IBM. During Gibby's employ with IBM from approximately 1984 through 1994, IBM had a "Suggestion Plan" in effect to entice employees to submit ideas to management to "help the company run its operations better and perhaps save it money". (A. 7; A. 14.) Said Suggestion Plan provided that employees could earn between $50.00 and $150,000.00 for ideas submitted to and implemented by IBM. (A. 15.) During the course of his employ, Gibby submitted numerous ideas to IBM which were implemented by IBM and saved IBM hundreds of thousands of dollars. (A 6-12; A. 189-197). Notwithstanding the implementation of Gibby's numerous ideas, IBM failed to compensate him for the reasonable value of numerous ideas pursuant to and in breach of the plan. Id.

On or about July 22, 1996, Gibby filed a Complaint against IBM in the Circuit Court for Montgomery County, Maryland, alleging causes of action for Breach of Contract and Negligent Misrepresentation based upon IBM's refusal to compensate him for the reasonable value of his numerous ideas which were submitted to and implemented by IBM pursuant to said Suggestion Plan. (A. 4.) Thereafter, on or about September 11, 1996, IBM removed said Complaint to the United States District Court for the District of Maryland pursuant to 28 U.S.C. §1441. (A. 59.)

On or about October 23, 1996, IBM filed a Motion for Judgment on the Pleadings, asserting that the Suggestion Plan did not create a binding obligation on the part of IBM to compensate Gibby for ideas submitted to and implemented by IBM. (A. 69.) Gibby filed his Opposition to said motion on or about November 19, 1996. (A. 128.) Gibby also filed an Amended Complaint accompanied by a Motion for Leave of Court to File Amended Complaint contemporaneously with said Opposition. (A. 189; A. 243.) Along with the prior alleged causes of action for Breach of Contract and Negligent Misrepresentation, the Amended Complaint alleged two additional causes of action for Unjust Enrichment and Quantum Meruit. (A. 189-197.)

On or about July 16, 1997, the United States District Court for the District of Maryland (Southern District), the Honorable Deborah K. Chasanow presiding, granted IBM's Motion for Judgment on the Pleadings, without a hearing. (A. 251-258.) The Court further denied Gibby's Motion for Leave of Court to File Amended Complaint on the same grounds it granted IBM's Motion for Judgment on the Pleadings. Id. The Court concluded that the Amended Complaint failed to state a claim for which relief may be granted because the Suggestion Plan stated that payment for the submission and implementation of any idea is within the sole discretion of IBM and that the decision of IBM with respect to the amount of the cash award, if any, shall be final, binding and conclusive. Id. As such, on or about August 5, 1997, Gibby appealed the Trial Court's ruling. (A. 259.)

Keith Gibby was an IBM employee and manager for approximately ten years through 1994. (A. 189.) During Gibby's employ, IBM had in place a "Suggestion Plan" that allowed employees to earn between $50.00 and $150,000.00 for ideas submitted under the Suggestion Plan if the suggestion saved IBM money. The amount of money to be paid the employee "is determined...during a set period of time after implementation." (A. 189; A. 201.) The Suggestion Plan establishes a set criteria for submittal of ideas to which IBM conformed . (A. 190-193.) Keith Gibby submitted four groups of suggestions to IBM which saved IBM millions of dollars; yet IBM arbitrarily refused to compensate Gibby whatsoever.

Mr. Gibby was an IBM Manager in 1989-90 and also a non-manager suggestion evaluator and suggestion plan presenter from 1984-93. (A. 190.) As such, he had access to several other documents including the Manager's Manual and Evaluator's Guide to Suggestions submitted under the Suggestion Plan. Id. Each of these documents reinforced Gibby's understanding that IBM would pay money to IBM for valuable suggestions if the suggestion saved IBM money; in fact, during the course of his employ with IBM, Gibby submitted fourteen other suggestions to IBM which were implemented by IBM, and was paid $90,237.00 in awards for said suggestions. Id. Said fourteen suggestions are not the subject of this case. However, Gibby submitted four groups of additional Suggestions which were also implemented by IBM for which Gibby has not been compensated pursuant to the Suggestion Plan. (A. 189-193.) These Suggestions are the subject of this case.

The pertinent language of the Suggestion Plan, the Manager's Manual and the Evaluator's Guide to Suggestions follows:

A. Suggestion Plan

"§1.0 - Your Ideas Have Value - Since it was established in 1928, IBM's Suggestion Plan has been good for both the company and the employees who submitted useful ideas. For example, from 1975 to 1984, employees' suggestions have saved the company over $300 million and earned nearly $60 million in awards for IBMers. . ." (A. 199.)

"Each suggestion submitted to IBM is with the understanding that it will be within the complete discretion of the company to publish, use, or refuse it. If the suggestion is published or used, the decisions of the company shall be final, binding and conclusive as to the amount of a cash award, if any, and the person or persons entitled to the award, and all other matters concerning the suggestion and its publication and use." (A. 200.)

"§1.3 Award from $50 to $150,000 - If all eligible conditions are met and your suggestion is adopted for implementation, it can earn you a cash award from $50 to $150,000. The actual amount is determined from a calculation of tangible savings or intangible value resulting from your suggestion during a set period of time after implementation." (A. 200.)

"§1.4 How Awards Are Calculated - Because of the large variety of suggestions received, these rules cannot cover every conceivable situation. The decision of the company shall be in its sole discretion and final, binding, and conclusive in all matters pertaining to award calculations, including but not limited to the amount and calculations of the award and the time of payment." (A. 202.)

"§1.8 What Subjects To Avoid - "The basic intent of the Suggestion Plan is to award ideas that cause action resulting in savings or intangible value to IBM. To receive an award all eligibility requirements must be met." (emphasis added) (A. 205.)

"§1.9 What Happens To Your Suggestion - If all eligibility criterion have been met and the Suggestion is to be implemented, an award is calculated based upon tangible savings or intangible value to IBM." (A. 206-207.)

B. IBM Manager's Manual

"A. PURPOSE - The IBM Suggestion Plan provides a way of rewarding employees for suggestions which are implemented." (A. 217.)

"B. MANAGEMENT RESPONSIBILITIES - Management should: . . . 7. Grant appropriate recognition to employees whose ideas are adopted." Id.

"E. Subject Eligibility - The basic intent of the Suggestion Plan is to award ideas that cause action resulting in savings or intangible value to IBM." (A. 218.)

C. Evaluator's Guide - IBM Suggestion Plan

"PREFACE Evaluator's Guide - A vital program since 1928, the Plan provides cash awards to employees for ideas of value, ideas that work." (A. 228.)

"§1.3 Recommending implementation - A tangible savings award is granted...when cash savings or cost avoidance results from implementation of the specific solution made in a suggestion..." (A. 234.)

In light of the fact that Gibby's four groups of ideas were actually implemented by IBM, resulting in a savings to IBM of several million dollars, it is clear that Gibby followed the applicable criteria to be entitled to compensation pursuant to the Suggestion Plan. (A. 191-193.) Despite the Suggestion Plan's promise that an award is calculated if all eligibility criteria are met, that value "is determined...after implementation [assessing IBM's savings]" (A. 201) (emphasis added), that the plan's clear minimum and maximum award parameters are between $50.00 to $150,000.00, and that the statement of intent is to award ideas, (Id.), IBM refused to pay Gibby what he was due for his creative and valuable ideas. (A. 191-193.) Moreover, the Suggestion Plan was provided to and relied upon by Gibby to his detriment as IBM falsely and in bad faith failed and refused to abide by the Suggestion Plan's implied duty of good faith to pay Gibby. (A. 193-194.)

In this case, Gibby basically asserts that the Amended Complaint properly alleges causes of action under Maryland law, the law applicable to this case. Specifically, during Gibby's employ with IBM, Gibby provided IBM with four extremely valuable suggestions which has saved Gibby millions of dollars since their implementation. Since Gibby has not been compensated for said suggestions, he contends that IBM has been unjustly enriched and that the Trial Court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings because Gibby alleged in his Amended Complaint the necessary elements to recover on a claim for Unjust Enrichment. Further, any examination of the purported disclaimer is irrelevant to this cause of action.

Next, with respect to Gibby's claim based upon Quantum Meruit, Gibby asserts that the Trial Court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings because Gibby alleged in his Amended Complaint the necessary elements to recover on such a claim. Specifically, Gibby has pled that he rendered valuable services to IBM by developing four suggestions and submitting them to IBM who accepted and implemented the same. Gibby has alleged that he reasonably expected to be compensated for said suggestions because the disclaimer relied upon so heavily by the lower court is patently ambiguous.

Alternatively, Gibby asserts that the Trial Court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings because Gibby sufficiently alleged the necessary elements for breach of contract. Gibby has alleged that IBM's Suggestion Plan constituted an offer for a unilateral contract of which Gibby accepted and that IBM subsequently breached. Specifically, Gibby provided four sets of suggestions to IBM which were implemented by IBM and saved IBM millions of dollars. Gibby argues that he is therefore entitled to reasonable compensation which IBM has refused to pay in breach of its unilateral contract. Gibby further argues that, although said unilateral contract (i.e. the Suggestion Plan) disclaims the obligation to pay for Gibby's services (by providing IBM with the sole discretion to determine the cash amount to which Gibby would be entitled), said disclaimer is ineffectual and ambiguous. Moreover, Gibby claims that even if said disclaimer is effectual, IBM abused its discretion by acting in bad faith and refusing to pay Gibby a reasonable sum for his several million dollar suggestions.

Finally, Gibby asserts that the Trial Court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings because Gibby sufficiently alleged the necessary elements for negligent misrepresentation.

I. STANDARD OF REVIEW:

In assessing a Rule 12 (c) Motion for Judgment on the Pleadings, Courts must review the facts contained in the pleadings and their attachments, and do so in a light most favorable to the non-moving party. Fed. R. Civ. P. 12 (c); See Nat. Metropolitan Bank v. United States, 323 U.S. 454 (1945), 65 S.Ct. 354 (factual allegations in the opposing party's pleading are taken as true for purposes of the motion only). The standard for this assessment is virtually the same as that used in resolving a Rule 56 Motion for Summary Judgment, i.e. to determine whether there are any remaining disputes of material fact, and if not, whether a party is entitled to judgment as a mater of law. Celotex v. Catrett, 477 U.S. 317, 327 (1986), 91 L.Ed. 265, 106 S.Ct. 2548.

On appeal, this Court stands in the shoes of the lower court and must determine whether the lower court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings and concluding that Gibby failed to state causes of action for which relief may be granted based upon Unjust Enrichment, Quantum Meruit, Breach of Contract and/or Negligent Misrepresentation. In order to make such determination, this Court must accept the allegations of Gibby's Amended Complaint as true, i.e. that Gibby submitted suggestions which he claims to have submitted; that the submissions met the requirements of the Suggestion Plan; that IBM adopted the suggestions thereby making millions of dollars; and that IBM has refused to pay Gibby for said suggestions. Thus, when viewing these allegations in the light most favorable to Gibby, this Court must decide whether Gibby stated claims for Unjust Enrichment, Quantum Meruit, Breach of Contract, and/or Negligent Misrepresentation for which

relief may be granted. If this Court applies said standard, this Court must reverse the trial court's decision to grant IBM's Motion for Judgment on the Pleadings and remand this case back to the trial court for trial on the merits.

II. THE TRIAL COURT ERRED AS A MATTER OF LAW IN GRANTING IBM'S MOTION FOR JUDGMENT ON THE PLEADINGS BECAUSE IBM'S AMENDED COMPLAINT SUFFICIENTLY ALLEGES A CAUSE OF ACTION FOR UNJUST ENRICHMENT.

Gibby's Count I in his Amended Complaint states a common law claim for unjust enrichment. (A. 193.) He provided IBM with four sets of collective suggestions and IBM took them and made and saved money by using these suggestions. (A. 189-194.) IBM forcefully argued in its Motion for Judgment on the Pleadings that Gibby has no contract rights under its "Suggestion Plan" to any monetary or other relief. The trial court erroneously agreed without addressing whatsoever Gibby's specific cause of action for unjust enrichment which clearly has separate and distinct elements from the cause of action for breach of contract, all of which were properly alleged. Instead, the trial court's decision with respect to the unjust enrichment claim was based upon Gibby's cause of action for breach of contract; the trial court basically lumped the claim for unjust enrichment as well as for quantum meruit together with the contract claim and stated that since Gibby did not state a cause of action for breach of contract, then the claims for unjust enrichment and quantum meruit failed as well. However, the trial court failed to address the sufficiency of the allegations of Gibby's claim for unjust enrichment (and quantum meruit), and thus, erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings.

The necessary allegations that a plaintiff must assert in a claim of unjust enrichment are as follows: (1) a benefit conferred upon the defendant by the plaintiff; (2) appreciation or knowledge by the defendant of the benefit; and, (3) acceptance by the defendant of the benefit under such circumstances as to make it inequitable for the defendant to retain the benefit without payment of its value. Yost v. Early, 87 Md.App. 364, 589 A.2d 1291, cert denied, 324 Md. 123 (1991); Accord Mass Transit Administration v. Granite Const. Co., 57 Md. App. 766, 471 A.2d 1121 (1984); Everhart v. Miller, 47 Md. App. 131, 422 A.2d 28 (1980). Contrary to IBM's assertion argued in the lower court, to establish a claim for unjust enrichment, Gibby does not have to allege or show that he had a legitimate expectation to claim compensation. Sandler, Pleading causes of Action in Maryland, (1991). §2.12, Elements of Quantum Meruit, §2.13, Elements of Unjust Enrichment. Such an allegation or showing is only necessary to establish a claim for quantum meruit. Thus, the purported disclaimers expressed in IBM's Suggestion Plan are irrelevant to Gibby's cause of action for unjust enrichment as said cause of action is independent of any contractual limitations imposed by the Suggestion Plan. The lower court clearly erred as a matter of law by holding that the disclaimer barred Mr. Gibby's claim for unjust enrichment since Gibby's state of mind regarding compensation has no bearing in properly pleading this claim. (emphasis added).

Unjust enrichment is defined as the "unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience . . . Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another." Everhart, 47 Md. App. at 136, 422 A.2d at 31 (quoting 66 Am. Jur. 2d Restitution and Implied Contracts, §3 (1973)). See also, Mass Transit, 57 Md. App., at 773-74, 471 A.2d at 1125 (The doctrine of unjust enrichment applies where the defendant, upon the circumstances of the case, is obliged by ties of natural justice and equity to refund the money. Accordingly, a person who has been unjustly enriched at the expense of another is required to make restitution to that party. Everhart, 47 Md. App. at 136, 422 A.2d at 31 (citing Restatement of Restitution §1 (1937)). Again, an individual is not required to show that he reasonably believed that he would be compensated in order to sufficiently plead a cause of action for unjust enrichment.

Gibby has sufficiently alleged all of the elements of an unjust enrichment claim. First, he conferred a benefit upon IBM. Ideas have value, and Gibby provided IBM with four collective sets of stellar ideas according to the Amended Complaint saving it millions of dollars. (A. 189-194.) IBM, on the other hand, disputes the value of Gibby's ideas asserting that said ideas had already been submitted by others or were "predated". This is a dispute of fact which may not properly be decided on a Motion for Judgment on the Pleadings.

Second, IBM had knowledge of the benefit conferred upon it by Gibby, i.e. his ideas were implemented and saved IBM millions of dollars. According to the allegations of Gibby's Amended Complaint which must be deemed as true, Gibby provided IBM with those ideas in writing. Id.

Third, IBM accepted and retained the ideas Gibby provided under such circumstances as to make it inequitable for the IBM to retain and use these ideas without paying Gibby their reasonable value. Id. Again, the ideas were implemented and saved IBM millions of dollars. Clearly, it is inequitable for IBM to entice employees to provide their ideas saving IBM millions of dollars with promises of compensation and yet arbitrarily take the ideas without compensation.

Thus, since Gibby sufficiently pled the necessary allegations to pursue a claim for unjust enrichment, the lower court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings, and this Honorable Court must reverse said decision and remand this matter back to the trial court for a hearing on the merits.

The Gibby, as a result of the foregoing, is entitled to "damages" or restitution under his unjust enrichment claim. In determining damages under an unjust enrichment claim, the measure of damages is the gain to the IBM, not the loss by the Gibby. Mass Transit Admin., 57 Md. Ap. at 775, 471 A.2d at 1126 (The restitution claim ... is not aimed at compensating the plaintiff, but at forcing the defendant to disgorge benefits that would be unjust for him to keep.) The IBM has benefitted in the millions of dollars saved from the ideas conferred upon it by Gibby.

IBM is likely to propose several defenses to Gibby's unjust enrichment claim. It will argue that unjust enrichment does not lie because Gibby officiously thrusted his ideas upon the IBM. Officiousness is defined as the "interference in the affairs of others not justified by the circumstances under which this interference takes place. Everhart, 47 Md. App. at 137, 422 A.2d at 32. In this case, the IBM did its level best to get its employees, including Gibby, to make suggestions by actively soliciting their ideas per its written Suggestion Plan. Additionally, it is clear from the facts of record that a jury could determine that what Gibby provided to the IBM in terms of intellectual property (ideas) enriched the IBM and that it would be inequitable for IBM to retain those benefits simply because there was a lack of a contractual understanding. Mass Transit Admin., 57 Md. App. at 780, 471 A.2d at 1128.

IBM will also argue that Gibby is restricted to "contract" remedies. This argument will fail as a matter of law because, under IBM's theory as stated in its Motion for Judgment on the Pleadings, there is no enforceable contract. (A. 75-79.) In its motion, IBM heavily relies upon Calkins v. Boeing Company, 8 Wash. App. 347, 506 P.2d 329 (1973), which held that "No legal agreement existed between the parties [in a suggestion plan case] since the promise of the employer was illusory and payment for suggestion was absolutely within the discretion of the employer." Id. at 332.

Even if a contract did exist between the parties, a claim for unjust enrichment, as opposed to quantum Meruit, is nonetheless viable. The possible existence of an express contract is not fatal to a claim of unjust enrichment. Matarese v. Moore-McCormack Lines, 158 F.2d 631, (2d Cir. 1946). The same would not be true for a quantum meruit claim. Mass Transit, supra at 1126. Unjust enrichment and quantum Meruit are two separate legal claims in Maryland. Bennett Heating & Air Conditioning, Inc. v. Nationsbank of Maryland, 103 Md. App. 749, n.4, 654 A.2d 949 (1995).

Cases in other jurisdictions support Gibby's unjust enrichment claim. In Liggett & Myers Tobacco Co. v. Meyer, 101 Ind. App. 420, 194 N.E. 206 (1935), the court allowed a jury to award damages for the use of an unsolicited method of advertising cigarettes on billboards. Similarly, in Hamilton National Bank v. Belt, 210 F.2d 706 (D.C. Cir. 1953), the court allowed a recovery for the use of an unsolicited idea for a series of radio broadcasts. In both cases, the courts emphasized that the ideas were novel, new, and in concrete form.

A case of considerable import is the famous case of Matarese v. Moore-McCormack Lines, 158 F.2d 631 (2d Cir. 1946). In Matarese, an inventor brought an action for "recovery of quantum Meruit upon the theory of unjust enrichment," Id. at 632, for the unlawful appropriation of an invention for the loading and unloading of cargo. After the defendant discharged the inventor, he brought suit on the defendant's promise to pay him one-third of the cost savings created by the invention. The court found that the doctrine of unjust enrichment was fully applicable to the case even though an express contract obviously existed. Thus, the possible existence of an express contract in the case at bar is not fatal to a claim of unjust enrichment.

There is one salient feature about Liggett and Matarese (supra) that must be emphasized here. Specifically, the disclosing party in both these cases expected compensation for the disclosure. In Liggett, the plaintiff had requested compensation when he disclosed the idea; in Hamilton and Matarese, the plaintiffs and defendants had expressly negotiated the contracts providing for the compensation. The point is that the courts protect an idea-bearing party from defendants who take the idea and seek to manipulate the benefit of the bargain to their sole advantage for their unjust enrichment. Therefore, Gibby is entitled to relief under his unjust enrichment claim if the facts are as he has alleged. He will need to prove that his ideas came first and were adopted by IBM and that IBM benefitted in some substantial way from them. If he comes forward with such proof, his measure of damages will be the reasonable value of those ideas to the IBM. Accordingly, the trial court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings, and this Honorable Court must reverse and remand this matter.

III. THE TRIAL COURT ERRED AS A MATTER OF LAW IN GRANTING IBM'S MOTION FOR JUDGMENT ON THE PLEADINGS BECAUSE IBM'S AMENDED COMPLAINT SUFFICIENTLY ALLEGES A CAUSE OF ACTION FOR QUANTUM MERUIT.

Gibby's Amended Complaint sufficiently alleges a cause of action under the theory of quantum meruit. Gibby has alleged the necessary allegations that must be pled on a claim for said cause of action which are as follows: (1) valuable services were rendered to IBM; (2) the services were rendered to the person sought to be charged, the IBM; (3) the services were accepted by the IBM, used and enjoyed by it; and, (4) The services were rendered under such circumstances that reasonably notified IBM that Gibby, in performing such services, expected to be paid by Gibby. Waco Scaffold & Shoring Co. v. 425 Eye Street Assocs., 355 A.2d 780, 783 (D.C. App. 1976); see also Mass Transit Admin. v. Granitz Constr. Co., 57 Md. App. 766, 774, 471 A.2d 1121, 1125 (1984) and Skeens v. Miller, 331 Md. 331, 628 A.2d 185 (1993) (a quantum meruit action may be filed by an attorney upon termination of representation, regardless of whether the contingency set forth in an underlying retainer agreement had not occurred; the attorney could recover even if the underlying case was unsuccessful).

Gibby has alleged sufficient facts to make out each element in a quantum meruit action. First, valuable services were rendered in the form of an idea. Second, the services were rendered to IBM directly on its Suggestion Plan form. Third, IBM accepted the ideas of Gibby, implemented the same and saved money as a result (i.e. millions of dollars). Fourth, the Gibby reasonably expected to be paid for the service/ideas, especially in light of the parties prior course of dealing wherein Gibby was paid over $90,000.00 for fourteen other suggestions; obviously, Gibby would not have continued to submit ideas without the expectation that he would continue to be compensated. Moreover, there is no evidence that Gibby's suggestions were a gift to IBM. IBM induced its employees to come forward with ideas and suggested that they would be paid upon the implementation of the idea. (A. 194-195.) Any language in the Suggestion Plan alleged to constitute a disclaimer on the payment of compensation is patently ambiguous given said prior course of dealing between the parties, the large monetary range of compensation, i.e. $50.00 to $150,000.00 and the language of the plan itself. (See infra at 21-22.)

In determining damages under the quantum Meruit theory, the measure of recovery is the gain to the IBM, not the loss by the Gibby. Mass Transit Admin., 57 Md. App. at 775, 471 A.2d at 1126. Here the amount of recovery is a share of the amount of savings gained by IBM as a result of Gibby's ideas. Assuming arguendo there is no contract, as IBM argued extensively in its motion, Gibby's recovery is not capped by the $150,000.00 figure mentioned in the employee Suggestion Plan documents. Again, the trial court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings, and this Honorable Court must reverse and remand this matter back to the trial court for a hearing on the merits.

IV. THE TRIAL COURT ERRED AS A MATTER OF LAW IN GRANTING IBM'S MOTION FOR JUDGMENT ON THE PLEADINGS BECAUSE IBM'S AMENDED COMPLAINT SUFFICIENTLY ALLEGES A CAUSE OF ACTION FOR BREACH OF CONTRACT.

Through its Suggestion Plan, IBM made an offer for a unilateral contract to Keith Gibby. A unilateral contract is one where only one party makes a promise and is subject to a legal obligation. Calamari and Perillo, Contracts, § 1-11. The other party may accept an offer for unilateral contract in exchange for performance or forbearance according to the terms of the offer. Clarke v. Lacey, 213 Md. 482 132 A.2d 478 (1925); see Calamari and Perillo, Contracts. at § 2-10. The presence of unilateral contracts pervades employment law and has formed an exception to the employment-at-will doctrine, particularly in cases involving employee handbooks.

IBM argued in its motion that Maryland courts would follow several out-of-state cases from California and Washington (A. 76-78.) IBM therefore suggests that no contract was formed. Gibby vehemently disagrees with this contention.

Insofar as unilateral contracts are concerned, Maryland law provides some relevant case law: Written policy statements and other policy directives become contractual obligations when, with knowledge of their existence, employees rely on those statements containing palpable promises, and accordingly perform or forbear to their detriment. See Dahl v. Brunswick, 277 Md. 471 356 A.2d 221 (1976); MacGill v. Blue Cross of Maryland, Inc., 77 Md. App. 613, 551 A.2d 501 cert. denied, 315 Md. 692, 556 A.2d 673 (1989); Staggs v. Blue Cross of Maryland, Inc., 61 Md. App. 381, 486 A.2d 798, cert. denied 303 Md. 295, 493 A.2d 349 (1985). Moreover, it is for a jury to determine if a contract was disclaimed. Elliot v. Board of Trustees of Montgomery County Comm. College, 104 Md. App. 93, 655 A.2d 46 (1995).

The primary Maryland case on this point is Dahl v. Brunswick, 277 Md. 471, 356 A.2d 221 (1976). In Dahl, twenty-one former employees of the Concorde Yacht Division of the Brunswick Corporation brought suit for severance pay after the division was sold to the Test Corporation, who agreed to continue Brunswick's policies with respect to Brunswick's severance and vacation pay policies. Dahl, 277 Md. at 475-77. Relying on a series of written policy statements issued by Brunswick, the plaintiffs brought suit against the Brunswick Corporation seeking severance pay and other forms of pay. Id. at 475-76. After dismissal at the trial court, the Maryland Court of Appeals held that policy directives constituted an offer of unilateral contract accepted by the employees by their continued employment. Id. at 477. While the employer conceded the issue of unilateral contract in Dahl, the case established that an employer's policies could constitute a contract under Maryland law, contrary to the State's at-will employment policy. See Dahl 277 Md. at 475, 356 A.2d 221 (stating that "[Defendant] concedes, as it should, that its policy directive constituted an offer for unilateral contract...")(emphasis added).

Staggs v. Blue Cross of Maryland, Inc., 61 Md. App. 381, 486 A.2d 798 cert. denied 303 Md. 295, 493 A.2d 349 (1985), extended Dahl's rule as it held that an employer's policy directives may constitute a offer to form a unilateral contract to include employee handbooks. In Staggs, Maryland's Court of Special Appeals held that it "[s]aw no difference between provisions in a handbook or personnel policy statement affording post-termination, such as severance pay, and those affording pre-termination benefits [as was the case in Dahl]..." Staggs, 61 Md. App. 381, 486 A.2d 798. Accordingly, the Court held that provisions contained in the employer's "employee handbook," if properly expressed, may constitute a contractual undertaking enforceable by the employee. Id. at 303 Md. App. 392, 486 A.2d 803-04.

In MacGill v. Blue Cross of Maryland, Inc., 77 Md. App. 613, 551 A.2d 501 cert. denied, 315 Md. 692 556 A.2d 673 (1989), the Court of Special Appeals drew on dicta from Staggs which stated that general statements of policy in employee handbooks would not amount to an offer. MacGill limited the viability of employee handbooks as contractual obligations to only those situations where "implicit in the policies was a promise, made to each employee, of a specific and definite benefit (see footnote 1), should the company's contractual undertaking be accepted." Id. at 618. Thus, to create contractual obligations under Maryland law,:

[Footnote 1: "In Dahl the promised benefit was two weeks severance pay; in Staggs, it was the applicability of, and access to, otherwise unavailable pre-termination procedures." 77 Md. App. at 618, 551 A.2d at 503.]

Id. at 619-20, n.3. The purpose of allowing policy directives and statements like those found in Staggs and its progeny is to protect the legitimate expectations of the employees who justifiably rely on the policy statements. Castiglione v. Johns Hopkins Hosp., 69 Md. App. 325, 517 A.2d 786 (1987), 309 Md. 325, 523 A.2d 1013 (1987).

In this case, IBM has not put forth a broad statement of policy, but rather establishes a specific plan for benefits. Specifically, §1.0 of IBM's "[P]lan provides a set of procedures for evaluating ideas and rewarding those who submitted them." (A. 200). Further, §1.9 of the Plan provides for specific, objective procedures for application of benefits (A. 206-207), and §1.3 of the Plan states that "[I]f all eligible conditions are met and your suggestion is adopted for implementation, it can earn you from $50 to $150,000. (A. 201). §1.7 sets forth what types of suggestions can earn awards. Moreover, the entire Suggestion Plan brochure was intentionally distributed to Gibby (A. 189-190; A. 199, and Gibby submitted his ideas as required by the Plan (A. 190-192.) Further, Gibby had submitted fourteen prior suggestions over many years for which he was paid $90,237.00. (A. 190.) Thus, a course of dealing between the parties is clearly established.

All of the language in the Suggestion Plan, the Manager's Manual and the Evaluator's Guide set forth above show that a reasonable person could only conclude that IBM would pay money for ideas that have value. The clear intent is seen in the initial introductory language of the Suggestion Plan setting forth that IBMers have earned over $60 million in awards over many years, as well as other statements in the Suggestion Plan setting forth that awards can be earned from $50 to $150,000. (A. 199.) Further and most importantly, §1.9 states that if all eligibility criteria have been made . . ." an award is calculated ". . . Any reasonable person would interpret all of the above language to mean that depending on the value of the suggestion to IBM, it would pay them a reasonable award within this range. IBM does not in any manner qualify the Suggestion Plan's compensating intent by stating, "If you provide us an idea that saves us money, you may not get an award at all"; rather, the Plan strongly implies that the award will be in a monetary range if the suggestion saves the company money. The fact that the word "can" is used in Par. 1.3 of the plan eminently implies that one will get an award if one saves IBM money; at best the phraseology used is patently ambiguous, especially read together with Par. 1.9 which states that if all eligibility criteria are met "an award is calculated."

Consistent with the Suggestion Plan, the language in the Manager's Manual and the Evaluator's Guide also strongly suggests that an employee will be granted an award if an idea is submitted that saves IBM money. Specifically, The Manager's Manual states, "The IBM Suggestion Plan provides a way of rewarding employees for suggestions which are implemented." (A. 217.) The Evaluator's Guide states, "A vital program since 1928, the Plan provides cash awards to employees for ideas of value, ideas that work." It further provides, "A tangible savings award is granted...when cash savings or cost avoidance results from implementation of the specific solution made in a suggestion..." (A. 228-229.)

The totality of the above facts indicates that a unilateral contract existed because IBM communicated the specific offer to Gibby, who accepted by submitting his ideas according to the established guidelines. Gibby's idea was submitted according to the Plan guidelines with the expectation that he would be compensated for their use, based upon the reasonable cost savings to IBM; yet, he never was paid. (A. 191-192.)

IBM asserts that there was no contract between IBM and Gibby. (A. 75.79.) However, the IBM document is written in the form of an offer to pay cash awards for the use of an employee's idea. For example, the brochure states that "[t]he idea that crossed your mind--the impression you had--might just be worth something to IBM., and you." (A. 199.) The statement is almost a classic formulation of an agreement to contract. Effectively the brochure is stating that "one hand washes the other" or, more crassly, "do something for me and I'll make it worth your while." To reiterate, the brochure must be read and understood as a reasonable person would have understood it. Sands v. Sands, 252 Md. 137, 249 A.2d 187 (1969) (test of true interpretation of offer and acceptance is not what party making it thought it meant but what a reasonable person in the position of the parties would have thought it meant). When read in that fashion, the IBM brochure can only be understood as being an offer of a unilateral contract.

Finally, IBM cited in its motion Stewart v. IBM, CV-94-052-H-RMH (D. Mont. July 24, 1995) (A. 109.) It is interesting to note that when the Montana court examined IBM's own suggestion plan, it held the plan to be an enforceable contract. (A. 108-111.) This court has also held a suggestion plan similar to IBM's was a valid enforceable contract and that the submitter of the suggestion was entitled to an award under the plan. Raybestos-Manhattan Inc. v. Rowland, 460 F.2d 697,700 (4th Cir. 1972). In examining the issue of whether a suggestion plan constituted a contract, this Court in Rowland, the Honorable Judge Field presiding, specifically stated:

"In our opinion, the suggestion system of the plaintiff was in itself a continuing offer to all of its employees. In this respect it was analogous to a prize competition. See Carlini v. United States Rubber Co., 8 Mich App. 501, 154 N.W. 2d 595 (1969). Accordingly when Rowland submitted his suggestion he accepted the offer of the plaintiff subject, of course, to all of the provisions of the suggestion system. The result was a valid and enforceable contract." (emphasis added) (other citations omitted)

IBM, in its motion, further cited the Stewart case to support its argument that it has unlimited discretion in granting an award. As will be set forth infra, however, said argument is without merit because said discretionary language must be deemed unenforceable by this Court as IBM did not act in good faith. Nonetheless, Stewart is distinguishable in any event because the plaintiff in Stewart was paid certain sums for his idea by IBM but complained that he was not paid enough. The circumstances in Stewart are clearly distinguishable from the circumstances in this case as Gibby was not paid any money whatsoever despite submitting four collective sets of ideas that saved IBM millions of dollars. Thus, Gibby in the instant case is not complaining about the amount of the award but the fact that IBM in bad faith chose to award him nothing despite his submission of numerous cost-saving ideas that saved IBM multi-millions of dollars. In this regard, the trial court erred as a matter of law in granting IBM's Motion for Judgment on the Pleadings, and this Honorable Court must reverse and remand this matter to the trial court for a hearing on the merits.

Maryland recognizes that employers may protect themselves from contract claims arising from employment polices and directives if they sufficiently disclaim contractual intent. Bagwell v. Peninsula Reg. Med. Ctr.. 106 Md. App. 470, 665 A.2d 297 (1995); Castiglione v. Johns Hopkins Hosp., 69 Md. App. 325, 517 A.2d 786 (1987), cert. denied, 309 Md. 325, 523 A.2d 1013 (1987). The cases are clear in stating that contractual intent must be "expressly disclaimed." Bagwell, 106 Md. App. 470, 493, 665 A.2d 297 (1995); Castiglione, 69 Md. App. 328-29, 340, 517 A.2d 786 (1987), 309 Md. 325, 523 A.2d 1013 (1987) (stating that language of disclaimer must be clear and conspicuous).

In Haselrig v. Public Storage, 86 Md. App. 116, 128, 585 A.2d 294 (1991), the Court of Special Appeals of Maryland held that two attempted disclaimers of contractual privity in an employee handbook were not sufficient, as a matter of law, to disclaim contractual intent. The Court held that disclaimers must be "clear and unequivocal." Id. (emphasis added). The employer in Haselrig cited two "disclaimers" in its employee handbook in support of its argument that it had disclaimed contractual privity. Id. The disclaimers stated:

"The relationship between you and PSI is predicated on an at will basis. That is to say, either the employee or the employer may terminate the relationship at any time.

. . . . . . . .

It should be understood that employment and compensation can be terminated with or without cause and with or without notice at any time at the option of either the Company or the employee."

Id. at 120-21., 585 A.2d 294.

Despite the attempted disclaimer language, which had been placed under the heading captioned "Employment Relationship", the Court held that privity was not disclaimed. Id. The Court stated that the efficacy of the disclaimer was a matter for the jury, not the court, to decide. Id. The Court reasoned:

"If we determine that the language of the provisions is ambiguous--an ambiguity exists when the language in the provision is, to a reasonably prudent layman, susceptible of more than one meaning, (Truck Insurance Exchange v. Marks Rentals, Inc., 288 Md. 428, 433, 418 A.2d 1187 (1980)), or where the placement of the provisions in the handbook has that effect and/or is equivocal, then the issue of the Gibby's justification in relying on the other provision is for the factfinder. When the issue is, as it is here, the justiciability of an employee's reliance on a handbook, we must consider both the placement of the provisions in the handbook and the placement of the provisions.

Id., 86 Md. App. at 128, 585 A.2d 294 (emphasis added).

Applying Haselrig to the instant case, this court must find that the lower court erred as a matter of law by examining the specific language in the Suggestion Plan. There are clearly two separate statements made by IBM. The disclaimer in §1.0 states that:

"the decisions of the company shall be final, binding and conclusive as to the amount of the cash award if any . . ."

Yet §1.9 clearly states:

"If all eligibility criteria have been met and the Suggestion is to implemented, an award is calculated . . ."

The latter clause clearly leads a reasonable person to only one conclusion -- that compensation will be paid if all eligibility criteria are met and the suggestion is implemented. If read together with §1.0 and §1.3 allowing cash awards from $50.00 to $150,000.00 (not $0 to $150,000.00) the language at best creates an ambiguity, just like the disclaimer in Haselrig.

Bearing significantly on this point is the case of Osborn v. Boeing Airplane Co., 309 F.2d 99 (9th Cir. 1962). In Osborn, an employee submitted a suggestion pursuant to a plan which gave Boeing the right to determine how much to award the employee if the idea was used. Indeed, the plan seemed to give Boeing the right to determine whether the employee should be paid at all, even though Boeing was using the suggestion to its benefit. The court analyzed the plan as something like an adhesion contract, and strictly construed the plan's language against Boeing (see footnote 2). Ultimately, the court held that the question of whether the plaintiff's particular suggestion was submitted gratuitously was for the jury. The Ninth Circuit found that despite Boeing's attempt at retaining total discretion, "a possible interpretation of the language" implied that Boeing's discretion was not unfettered but was constrained by good faith. Id. at 102-03 (footnotes omitted).

[Footnote 2: Some ten years after that decision, however, the State appellate court of Washington considered a similar claim against Boeing. Calkins v. Boeing Co., 8 Wash. App. 347, 506 P.2d 329 (1973). The language of the plan had been changed by Boeing during the interim; the state court found that "[t]he terms of the suggestion system now in use would not mislead an employee read their austere, distinct and literal wording." 506 P.2d at 331.]

Further support for Gibby's position is seen in several other cases. First, in Didley v. General Motors Corp., 837 F. Supp 535 (W.D.N.Y. 1993) the Court held that summary judgment was improper in a breach of contract action involving plaintiff's claim under a suggestion plan, despite the existence of an explicit "finality" provision giving General Motors unfettered discretion in determining the amount of an award, if any, under a suggestion plan. The Court stated there are several exceptions to the rule that finality provisions are enforceable.

These include whether "(1) the decision was not made within the framework of the rules governing the suggestion plan, (2) the suggestion committee acted fraudulently or in bad faith, or, (3) the decision was based on gross mistake." Id. at 539 citing Sterling v. General Motors Corp., No. 419213, slip op. at 7-8 (Conn. Super. Ct. 1987), Carlini v. United States Rubber Co., 8 Mich. App. 501, 154 N.W. 2d 595,597 (1967), Quate v. Hydra-Matic, 1990 WL 169109 (S.D.Ind. 1990). Thus, the Didley court allowed plaintiff's claims to go forward for breach of contract holding that the defendant's failure to follow its own rules of the suggestion plan fell within these exceptions. Additionally, the Didley court allowed plaintiff's claims for quantum Meruit to go forward as well. The same logic applies here as IBM did not follow the rules of the plan ­ if all eligibility criteria were met and the suggestion is implemented an award is calculated . . . (Par. 1.9 of plan). Accordingly, under this authority the case must be allowed to go to the jury. The lower Court failed to address any of this authority at all.

Other state cases have also held suggestion plans enforceable even with a "finality" provision if the employer's discretion was exercised in bad faith when, for example, the suggestion committee refuses to exercise its discretion and award the plaintiff money despite a useful idea. See Lone Star Steel Co. v. Scott, 759 S.W. 2d 144, 152 (Tex. App. 1988)(Court upheld multi million dollar verdict for plaintiff because suggestion committee refused to set an amount and exercise its discretion and thus acted in bad faith; see also Carlini v. United States Rubber Company, supra, at 598 (Court reversed grant of Motion for Summary Judgment regarding suggestion plan with finality provision because of a suggestion committee's failure to make a decision or the fact it may have made a decision based upon a gross mistake.)

In the instant case, Gibby clearly alleged in his Amended Complaint for breach of contract that IBM failed to make its decision within the framework of the Plan by repeatedly denying Gibby's requests for payments. (A. 189-197.) IBM's alleged denials were based upon its contention that Gibby's suggestions were "predated," the suggestion involved subjects "periodically examined by management" or dealt with a "subject in the maturing process." Gibby has alleged that such contentions by IBM are patently false and that IBM did not follow the terms of its own Plan. (A. 191.) Further, in the Amended Complaint, Gibby has alleged IBM acted in bad faith. (A. 189-197.) Accordingly, Gibby's claims must be allowed to go forward as these allegations are all factual disputes to be decided by a jury. The trial court erred as a matter of law in granting IBM's Judgment on the Pleadings, and this Honorable Court must reverse and remand this matter for a trial on the merits.

Maryland Courts follow this reasoning of implying good faith in contractual undertakings and emphasize the importance of good faith in the bargaining process. In Elliot v. Board of Trustees of Montgomery County Comm. College, 104 Md. App. 93, 655 A.2d 46 (1995), the Court of Special Appeals held that "in cases where an employer has contracted to do something, that requires it to exercise its discretion, then it must exercise its discretion in good faith." Id. 104. Md. App. at 108, 655 A.2d 53. In other words, the Court held that despite an employer's assertion that they retain discretion in resolving contract language, this discretion is not unfettered, but is constrained by good faith. Id. See Hrehorovich v. Harbor Hosp. Center, Inc., 93 Md. App. 772, 796, 614 A.2d 1021 (1992) (stating that although at-will employment situations, which by definition are not contracts, do not include aspects of good-faith, other contracts do).

Admittedly, the IBM documents suggest tepidly that the decision as to the amount and whether to pay compensation is discretionary with IBM. Yet, the latter interpretation is clearly ambiguous and contrary to the parties prior course of dealing. This fact, however, is insufficient to win the day for IBM because here, in the context of the entire Suggestion Plan which is brimming with offers of money for ideas, any disclaimer of the Plan's enforceability must make clear that even excellent, "million dollar" ideas can be taken and implemented by IBM without payment, not just the paltry ideas. The disclaimer is clearly ambiguous on its face and cannot be enforced for this reason alone notwithstanding IBM's bad faith in the transaction.

The real question at issue is whether a reasonable person reading the IBM literature would have so understood the literature as an offer to contract or whether the reasonable person would have felt that contractual liability would be disclaimed. More to the point, would a reasonable person have interpreted the brochure to mean that IBM reserved the right to withhold any compensation at all for the very ideas it solicited even if the use of those ideas were enormously beneficial to IBM? Obviously, Gibby contends that a reasonable person would only believe that IBM must award money for a cost-saving idea (see footnote 3).

[Footnote 3: Further support for this contention is the parties' own course of dealing over several years. As stated above, Gibby submitted fourteen suggestions for which he was paid $90,237.00. Where the terms of a contract are ambiguous or vague the court can look to the course of dealing between the parties to determine intent. Capitol Converting Equipment, Inc. v. LEP Transport, Inc., 750 F.Supp. 863, 865-66 (N.D. Ill. 1990).]

Assuming that there is an element of good faith implied into this Suggestion Plan, then IBM breached its contract with Mr. Gibby. See Hrehorovich v. Harbor Hosp. Center, Inc., 93 Md. App. 772, 796 614 A.2d 1021 (1992). Gibby reasonably accepted the offer to contract by submitting the four collective sets of ideas described in his Amended Complaint. Despite the retention of the discretion to make a reasonable award, the obligation of good faith prevented IBM from using that discretion as it did.

What is most important for the purposes of this appeal is that the result in cases such as Haselrig and Elliot depends on the court's determination as to how a reasonable person would have understood a plan's language. The same reasoning should apply here -- if the language of the brochure clearly disclaimed contractual intent, than Gibby might not have submitted an idea that saved IBM millions of dollars. However, he did submit ideas and thus accepted IBM=s offer.

Thus, it was particularly inappropriate to dismiss Gibby=s Amended Complaint and by granting IBM=s Motion for Judgment on the Pleadings. The language of the IBM Suggestion Plan is not at all clear and unambiguous in stating that, even if an idea is used and generates tremendous savings, IBM reserves the right to take the idea, implement it, and pay nothing at all to the submitter of the idea. IBM must prove that a reasonable person would understand and interpret its Suggestion Plan to prevail. Clearly, this is a jury question, and the lower court thus erred as a matter of law by granting IBM=s Motion for Judgment on the Pleadings, and this Honorable Court must reverse and remand this matter for a trial on the merits.

According to IBM, it reserved the right not to make any award to a submitter of an idea, even though the idea is very profitably used by IBM. Nonetheless, good faith frequently operates as a limitation on the exercise of rights or discretion that a party may have under a contract. See Tymshare, Inc. v. Covell, 727 F.2d 1145, 1152 (D.C. Cir. 1984). Therefore, in applying the obligation of good faith to any particular contract or set of circumstances, the question is what conduct, although perhaps permitted by the literal terms of the contract, is nevertheless excluded by the obligation to act in good faith or not to act in bad faith.

Indeed, Maryland and other jurisdictions are in line with the viewpoint of the commentators, who find there is an implied obligation of good faith in all contracts. Accord Elliot, 104 Md. App. 93, 655 A.2d 46 (1995). This obligation requires that the parties will "refrain from doing anything which will destroy or injure the other party's right to receive the fruits of the contract". 17A C.J.S. "Contracts" '328 at 286 (1963). The implied duty of good faith has also been recognized in the Restatement of Contracts: "Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement". Restatement (Second) of Contracts '205 (1981).

The precise requirements of good faith are difficult to specify in advance. Frequently, "good faith" is defined by discussing what it is not, i.e., by giving examples of bad faith. Thus, the Restatement of Contracts discusses the concept as follows: The phrase "good faith" is used in a variety of contexts, and its meaning varies somewhat with the context. Id. '205 comment a. More specifically, the drafters of the Restatement have explained:

Id. '205, comment d (emphasis added). As the foregoing quotation suggests, the essence of the implied obligation of good faith is the protection of the reasonable expectation of the parties, which includes a reasonable interpretation of the terms of the bargain.

Id. '570 (Kaufman Supp. ed. 1984) (emphasis added). As one author has noted, the obligation of good faith is especially important in cases where the realization of one party's expectations is dependent on the other party.

Burton, "Breach of Contract and the Common Law Duty to Perform in Good Faith", 94 Harv. L. Rev. 369, 380, 383-84 (1980) (footnotes omitted).

Professor Burton observed that applying the doctrine of good faith Arequires a better understanding of the contractual expectation interest...@.

Burton, supra, 94 Harv. L. Rev. at 372-73 (footnotes omitted).

In its Motion for Judgment on the Pleadings, IBM emphasized language from the IBM Suggestion Plan to the effect that if an idea is used, the decision as to the amount of the award "if any" lies in the sole discretion of IBM. (A. 80.) IBM's language is not as clear to the reasonable reader as IBM wishes. (See supra, at pp. 6-7). The Plan leads the reader to believe that IBM would, in good faith, pay for the ideas it uses. For instance:

The language is unclear simply because it does not say what IBM wishes it to say. To reiterate, IBM argues that it was under no obligation to pay for its use of the submitted idea, no matter how beneficial the idea is to IBM. However, IBM does state a minimum payment for its plan awards, i.e. $50.00. (A. 199.) The reservation of discretion could only be understood by a reasonable person to mean if an implemented idea had little or no utility or little measurable economic benefit, it may only merit a $50.00 award but if it saved IBM millions of dollars it would merit an award of $150,000.00, the maximum allowable under the Plan.

Any reasonable person reading the IBM form would not have concluded that if they submit an idea to IBM which created great profit, perhaps a million dollars, for the company, they would have no right to compensation from IBM. The documents must be read, as any person would read them, i.e. with the notions of good faith in mind. No reasonable person reading this Plan, with good faith in mind would think that the Plan allows IBM to simply appropriate a million dollar idea without any remuneration to the submitter. Mr. Gibby's expectation was that he would be compensated for the use of his ideas if they proved to be greatly beneficial to IBM. Someone in Gibby=s position would believe that IBM promised them substantial compensation if it used an idea that resulted in great profits. The ideas Gibby submitted allegedly saved IBM millions of dollars; it was an abuse of the discretion reposed in IBM for IBM to have refused to compensate Gibby altogether. The obligation of good faith, when measured by the expectation of Gibby, requires that he be compensated for the use of the idea. If he is not, then he will be deprived of the benefit of the bargain he made with IBM.

A talisman of a unilateral contract is that only one party is bound. Here, Gibby was not bound to submit an idea. If he did, however, and IBM used it, then a contract between the parties arose. The obvious question here is what were the terms of payment for the use of the idea. Gibby submits that, while IBM retained the discretion as to the amount of reasonable payment, IBM did not retain the discretion to refuse to pay Gibby anything for an idea that saved IBM millions of dollars. Doing so would constitute misappropriation, and the Suggestion Plan cannot be reasonably be interpreted in that way. Thus, it was a breach of the obligation of good faith for IBM to have exercised its discretion in the manner it did. Thus, under the plethora of case law cited, supra at pp. 24-27, IBM's discretionary language is unenforceable because of its failure to act in good faith. The trial court erred as a matter of law in granting IBM=s Motion for Judgment on the Pleadings, and this Honorable Court must reverse and remand this matter for a hearing on the merits.

Contrary to the IBM=s contention that Gibby is improperly trying to repackage his contractual argument in tort, "[t]ort liability can be imposed upon contractual privity or its equivalent." Hrehorovich, 93 Md. App. at 772, 798 614 A.2d at 1034 (1992). A liability in tort may arise from the breach of a duty owed under the terms of the contract. Id. Because IBM did not properly disclaim its offer for unilateral contract, it may also be liable in tort for its representations.

In Maryland, the elements of a claim for negligent misrepresentation are as follows: (1) the defendant, owing a duty of care to the Plaintiff, negligently asserts a false statement; (2) the defendant intends that the statement will be relied upon by the Plaintiff; (3) the defendant knows the statement will cause injury if Plaintiff relies on it; (4) the plaintiff justifiably relies upon the defendant's statement; and, (5) the plaintiff suffers damages as a result of the defendant's statement. Ward Dev. So. v. Ingrao, 63 Md. App. 645, 656, 493 A.2d 421 (1985). In assessing a rule 12 (c) Motion for Judgment on the Pleadings in a light most favorable to Gibby, Gibby=s pleadings adequately state a claim for this tort. Fed. R. Civ. P. 12 (c); See Nat. Metropolitan Bank v. United States, 323 U.S. 454 (1945), 65 S.Ct. 354 (Factual allegations in the opposing party's pleading are taken as true for purposes of the motion only).

In short, Gibby properly pled the first element of the tort of negligent misrepresentation. Gibby pled that IBM represented to him that he could be paid for his ideas if the ideas met the necessary criteria. (A. 195-196.) Taking the facts alleged in the pleadings in a light most favorable to Gibby, Gibby reasonably believed that IBM would evaluate and pay him for use of his four collective sets of ideas, which he contends, IBM implemented. (A. 191-193.) IBM has refused to pay Gibby according to its established award methodology, despite his requests for payment. (A. 189-197.)

Gibby sufficiently pled the second element of his tort claim, as is evident from both the pleadings and the Suggestion Plan itself; i.e. coupled with the Suggestion Plan itself and IBM=s representations, IBM solicited suggestions from its employees and included a monetary enticement. Id. IBM specifically sought reliance on the offer of payment in order to elicit suggestions. (A. 189-190.).

Gibby properly pled the third element of his tort claim. The first line of IBM=s Suggestion Plan proves that IBM reasonably knew that Gibby and other IBM employees would rely on the Suggestion Plan and submit ideas. The Plan's introductory sentence states as follows: "Since it was established in 1928, IBM's Suggestion Plan has been good for both the company and the employees who submitted useful ideas....I encourage you to look for better ways to run the business and to submit your ideas." (A. 199.) Indeed, since 1928, the Defendant has known that employees rely on the Plan's representation, and surrender their ideas according to the Plan's representations of payment. The Amended Complaint, including but not limited to paragraphs 4-17, 22-24, and 28, evinces the various ways relied on the Plan's representations.

Finally, the pleadings properly plead the fourth and fifth elements of the tort and assert that Gibby justifiably relied upon the IBM's statement of payment and suffered damages as a result of said statement. Indeed, Gibby was justified in his reliance and expectation of payment because the IBM itself established a range of payments made -- from $50.00 to 150,000.00, giving Gibby the expectation that he be awarded something. Further, his prior course of dealing with IBM as well as the dealings of IBM in its payment of over sixty million dollars to other employees pursuant to the Plan led him to this conclusion as well. (A. 190; A. 199.) Instead, Gibby was not paid (see footnote 4) but nonetheless surrendered his valuable ideas. (A. 189-197.) Taking all of the averments made by Gibby in a light most favorable to him makes it clear that, as a matter of law, he has sufficiently pled a claim for Negligent Misrepresentation. The trial court erred as a matter of law in granting IBM=s Motion for Judgment on the Pleadings, and this Honorable Court must reverse and remand this matter for a trial on the merits.

[Footnote 4: Despite the IBM's intimations, it is not relevant that Gibby does not assert any specific proof that other employees were not paid. See IBM's Memorandum In Support of its Motion to Dismiss, at A. 86. Furthermore, Gibby alleges in his Complaint that he was not paid "Despite numerous requests." (A. 191.)]

For all of the above reasons, Gibby respectfully requests this Court reverse and remand this matter to the trial court for a trial on all four Counts of the Amended Complaint.