KEITH S. GIBBY, :

:

Plaintiff :

:

v. : Civil Action No. DKC-96-2860

:

INTERNATIONAL BUSINESS :

MACHINES CORPORATION, :

:

Defendant :

I. PLAINTIFF HAS STATED A CLAIM FOR UNJUST ENRICHMENT AND QUANTUM MERUIT

Plaintiff does not disagree that to establish a claim for unjust enrichment, Plaintiff must show that the Defendant realized a benefit and that it was unjustly enriched. However, the Defendant's argument that in order to prove that the Defendant was unjustly enriched, Plaintiff must show that he had a legitimate expectation to claim compensation is misplaced. (Defendant's Reply Brief at 5-6).

As set forth in Plaintiff's original Opposition Brief at p. 9, the elements of unjust enrichment do not require Plaintiff to prove he had a legitimate expectation to receive compensation. The only elements that exist for the cause of action of unjust enrichment are the following:

1. A benefit conferred upon the Defendant by the Plaintiff;

2. Appreciation or knowledge by the Defendant of the benefit;

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).

Thus, from the initial stages of Defendant's argument, Defendant's argument is misplaced. The cause of action of unjust enrichment does not have an element that the Plaintiff must have a legitimate expectation that the Plaintiff will be paid by the Defendant in rendering the services.⁽¹⁾

However, as set forth above, even if the Plaintiff has to plead and prove the element that he had a legitimate expectation of compensation when rendering valuable services to the Defendant, Plaintiff can plead and prove such an element in this case. This is so because of the fact that the Defendant's brochure is so ambiguous regarding the various disclaimer language as will be discussed below, that Plaintiff did have a reasonable expectation for payment. §§1.3 and 1.9 of the plan and §1.3 of the Evaluator's Guide clearly provide Plaintiff with a reasonable expectation of payment.

The Defendant has also cited the case of Mass Transit Administration v.Granite Construction Co. 57 Md. App. 766, 471 A.2d 1121 (1984), claiming that this case undercuts the Plaintiff's argument. The particular citation to this case does not undercut Plaintiff's argument whatsoever as Plaintiff has made it clear in the pleadings that the cause of action of Quantum Meruit as opposed to unjust enrichment can only be pled if Plaintiff's breach of contract claim is not allowed by this Court. The particular quotation that the Defendant cites to at p. 7 of it's Reply Brief simply makes this particular part of Maryland law clear. That is, one cannot have a breach of contract claim and at the same time have a cause of action for Quantum Meruit. However, this does not apply to Plaintiff's claim for unjust enrichment.

II. THE SUGGESTION PLAN BROCHURE DID NOT CLEARLY DISALLOW ANY PROMISE TO PAY PLAINTIFF; AT BEST ANY DISCLAIMER LANGUAGE IS AMBIGUOUS.

Defendant argues that the Plaintiff fails to address key disclaimers noted in

§§1.0 and 1.12 of the IBM Suggestion Plan. Just as Defendant claims that Plaintiff has ignored these disclaimers, the Defendant has selectively addressed certain language Plaintiff has presented to the Court in the Suggestion Plan but ignored other clear language that strongly suggests that the Plaintiff would be paid under the Suggestion Plan in question.

For example, the Defendant has totally glossed over §1.9 entitled "What Happens to Your Suggestion." This section states in part, "if all eligibility criteria have been met and the Suggestion is to be implemented, an award is calculated based upon tangible savings or intangible value to IBM." Thus, the Defendant's claim that there is no language in the Suggestion Plan stating that IBM will make an award without equivocation is simply without merit based upon this one section of the Suggestion Plan alone. IBM's only way around this clear language is by arguing that this section relates to the issue of "how awards are calculated and not whether an award is appropriate." This is a meritless assertion as the reasonable reader and this Court must look at the entire document as a whole.

To support it's argument, Defendant points the Court to the title of §1.4 entitled "How Awards Are Calculated," and claims that the language of §1.9 falls under the heading of §1.4. This is not so as the section Plaintiff is referring to is §1.9 which is entitled "What Happens to Your Suggestion." §1.9 delineates the entire suggestion process and does not deal only with the issue of how awards are calculated. Thus Defendant's argument is incorrect.

Further, IBM downplays §1.3 of the plan by stating that this Section uses the language one "can" earn a cash award. However, if this language is read together with §1.9 that an award "is" calculated, then this strongly implies to the reader that an award will be paid if all eligible conditions are met and the suggestion is adopted. Simply put, a reasonable reader would understand the use of the word "can" to mean that if all eligibility criteria are met then one will receive an award; however, if some eligibility criteria are not met one will not receive an award. That is why the word "can" is used.

Further, it must be noted that IBM ignores the second sentence of §1.3 which states, "the actual amount is determined from a calculation of tangible savings or intangible value..." This sentence along with the earlier sentence of §1.3 and §1.9 when read together leads the reasonable reader to only one conclusion: that an award will be paid if all eligible conditions are met. The fact that IBM previously has given itself the discretion to make an award only creates an ambiguity at best when all of this language is read together.

IBM also seems to downplay the clear intent of the Plaintiff as expressed through its own actions in awarding Plaintiff awards in 14 other cases over many years. If IBM did award Plaintiff money time after time over many years, this goes to show that IBM's disclaimers meant nothing to it and should be ignored by the Plaintiff and reasonable reader of the plan if IBM awarded Plaintiff money time after time. IBM claims that the fact that it made some awards on some occasions cannot override it's clear intent in the disclaimers. This is simply not the case as it's past conduct indicates that it itself was ignoring the disclaimers by paying Plaintiff for the value of suggestions if he met the criteria.

Further, IBM has totally ignored the §1.3 in the Evaluator's Guide of the Suggestion Plan claiming that since this document was used by evaluators and not those submitting suggestions it cannot be examined. This section states in part, "a tangible savings award is granted...when cash savings or cost avoidance results from implementation of the specific solution made in a suggestion..." This Evaluator's Guide was made available to Mr. Gibby when he served as a non-manager's suggestion evaluator from 1984 to 1993, wearing a separate hat representing IBM. Nonetheless it shows IBM's intent under the plan. Since he had access to this document and since it shows IBM's intent as expressed to it's own evaluators, this Court must use it to glean the intent of the parties of the suggestion plan given the ambiguous nature of the plan.

Accordingly, it is IBM which has sought to pick and chose the language that suits it best. The language cited by Plaintiff when taken together with the language cited by Defendant creates at best an ambiguity in terms of the intent of the parties and whether IBM has unfettered discretion or whether IBM must pay for the suggestion if all criteria are met and the suggestion is implemented. This Court simply cannot grant a Motion for Judgment on the Pleadings based upon the ambiguity in these terms and it is up to a jury to decide the intent of the parties.

III. IN THE ALTERNATIVE, THE IBM SUGGESTION PLAN CREATED A CONTRACT AND THE DEFENDANT MUST ACT IN GOOD FAITH.

Plaintiff will not reiterate his arguments made at length in the original Opposition Brief regarding the fact that the Defendant's suggestion plan constitutes a contract. Plaintiff simply must respond to two of the Defendant's arguments.

First, Defendant argues that the IBM Suggestion plan is similar to the personnel policies in MacGill v. Blue Cross, 77 Md. App. 613, 551 A.2d 501, 504 (1989) in that the IBM Suggestion plan, according to Defendant, "prescribes and limits procedures for evaluating suggestions but does not prescribe which one merits awards." (Defendant's Reply Brief at 11). Again, Defendant totally overlooks §1.9 of the Suggestion Plan which states, "If all eligibility criteria have been met and the Suggestion is to be implemented, an award is calculated..." Clearly this section strongly suggests that if all eligibility criteria have been met and the suggestion is implemented, one will receive an award. Thus, the plan does prescribe which suggestions merit awards -- those that meet the eligibility criteria and are implemented.

Secondly, the defendant has argued that even if there is a contract between the parties, it is only required to act in good faith if the particular contract document requires it to act in good faith citing Elliott v. Bd of Trustees, 104 Md. App. 93, 655 A.2d 46, 54 (1995). However, Elliott does not state such a proposition that at all. Elliott only says if the manual requires one to act in good faith then one must act in good faith. However, Elliott does not state that good faith in a contract is only required if stated in the contract. Such a contention is contrary to Maryland law. This argument is basically turning contract law on its head as there is an implied covenant of good faith and fair dealing in all contracts whether it is written into the contract or not. Food Fair Stores, Inc. v. Blumberg, 234 Md. 521, 200 A.2d 166, 174 (1964). See Port East Transfer, Inc. v. Liberty, 330 Md. 376, 624 A.2d 520, 524 (1993) - when parties to contract are silent on issue of good faith, law will impose implied promise of good faith. The fact that IBM may have put ambiguous disclaimers in its Suggestion Plan does not mean that it can act in bad faith simply because the contract does not reflect it. As noted in Port East Transfer, Inc. supra since the contract is silent on issue of implied covenant of good faith, the law imposes such a covenant. Defendant's suggestion to the contrary does not follow Maryland law. Thus, this Court if it finds a contract must impose the implied covenant of good faith on Defendant IBM such that IBM's failure to make any payment in this case must be scrutinized by a jury and the jury must be allowed to award damages.

For all of the above reasons as well as the reasons set forth in Plaintiff's original Opposition Brief, Plaintiff respectfully requests that this Court deny the Defendant's Motion for Judgment on the Pleadings and grant Plaintiff's Motion for Leave of Court to file the Amended Complaint in this matter.

Respectfully Submitted,

VAN GRACK, AXELSON & WILLIAMOWSKY, P.C.

By:___________________________________

Bruce M. Bender

110 N. Washington Street, 5th Floor

Rockville, Maryland 20850

(301) 738-7660

LAW OFFICES OF GARY SIMPSON

By: ____________________________________

Gary H. Simpson

9505 Kingsley Avenue

Bethesda, Maryland 20814

(301) 493-0345

I HEREBY CERTIFY that on this 3rd day of January, 1997, a copy of the foregoing was mailed, via first class mail, postage prepaid to:

Michael S. Horne, Esq.

Covington & Burling

1201 Pennsylvania Avenue, N.W.

P.O. Box 7566

Washington, D.C. 20044-7566

_________________________________

Bruce M. Bender

1. ¹ Plaintiff agrees that this particular element is required to plead the cause of action of quantum meruit. The Defendant has failed to differentiate these two causes of action which have different elements under Maryland law. (See Appendix A, excerpt from Sandler, Pleading causes of Action in Maryland, (1991). §2.12, Elements of Quantum Meruit, §2.13, Elements of Unjust Enrichment. These excerpts clearly show the different elements in these two causes of action.