Karyn Davenport v. Albridge Solutions, Inc.

FILED
NOT FOR PUBLICATION MAY 17 2011

MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S . CO U RT OF AP PE A LS

FOR THE NINTH CIRCUIT

KARYN DAVENPORT, No. 10-15554

Plaintiff - Appellant, D.C. No. 2:08-cv-01511-JCM-
GWF
v.

ALBRIDGE SOLUTIONS, INC.; MEMORANDUM *
PFPC, INC.,

Defendants - Appellees.

Appeal from the United States District Court
for the District of Nevada
James C. Mahan, District Judge, Presiding

Argued and Submitted April 11, 2011
San Francisco, California

Before: KOZINSKI, Chief Judge, HAWKINS and GOULD, Circuit Judges.

The Retention Incentive Agreement specifies that 'cause' includes an

employee's acts of 'fraud' or 'dishonesty,' which PNC (PFPC's parent company)

would determine using the same 'standards applicable generally to conduct of

similarly situated employees.' The Agreement didn't limit the standards to only

*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
 page 2

those incorporated by reference. See Dissent at 1. Davenport had every

opportunity to familiarize herself with PNC's standard policies prior to signing the

Agreement; instead, she chose not to asµ 'any questions about the [A]greement'

because it seemed 'straightforward.'

The standards for determining 'cause' include PNC's Bonding

Requirements Policy, which PNC reproduced in its Employee Manual. Entering

into 'a pre-trial disposition program' for 'passing bad checµs' was listed in the

Policy as a specific example of a 'dishonest or fraudulent act[],' even if the act

was committed prior to employment at PNC. Davenport had committed such an

act when she pled nolo contendere and received probation before judgment for

passing a bad checµ. PNC therefore had 'cause' to terminate her under the

Agreement.

Additionally, the Policy made coverage under PNC's fidelity bond a

condition of continued employment 'regardless of job title or classification.' Once

PNC had 'become[] aware' of Davenport's criminal history, she 'bec[a]me

ineligible to perform worµ for PNC.' Thus, in determining that Davenport's act of

fraud and dishonesty was cause for termination, PNC applied a 'standard[]

applicable generally to conduct of similarly situated employees.' To have tried to

cover Davenport under the fidelity bond despite her criminal history would have
 page 3

required PNC to treat her differently from similarly situated employees.

Because Davenport's act of 'fraud' and 'dishonesty' met the Agreement's

definition for cause, we needn't decide if Southwest Gas Corp. v. Vargas, 901 P.2d

693 (Nev. 1995), applies only to implied contracts. Cf. Kern v. Palmer Coll. of

Chiropractic, 757 N.W.2d 651, 659-60 & n.6 (Iowa 2008). Nor do we need to

admit parol evidence as to the parties' intentions. See Dissent at 2; Canfield v.

Gill, 697 P.2d 476, 477 n.1 (Nev. 1985).

AFFIRMED.
 FILED
Davenport v. Albridge Solutions, Inc., No. 10-15554 MAY 17 2011

MOLLY C. DWYER, CLERK
Hawµins, Senior Circuit Judge, dissenting: U.S . CO U RT OF AP PE A LS

I dissent because the Retention Incentive Agreement (the 'Agreement') is

ambiguous. The Agreement's definition of 'cause' is susceptible to more than one

reasonable interpretation, as it is unclear whether 'fraud, misappropriation, breach of

fiduciary duty, felony, theft, dishonesty, or moral turpitude' refers to only prospective

misconduct by the employee. See Dell Computer Corp. v. Rodriguez, 390 F.3d 377,

389 (5th Cir. 2004). Relying upon a bonding requirement contained in an Employee

Manual that was neither incorporated by reference in the Agreement nor reviewed by

Karyn Davenport prior to executing the Agreement (available only on the company's

intraweb and acµnowledged by her three weeµs after signing the Agreement), the

majority excuses Albridge Solutions from the normal rule that an ambiguous term is

construed against the drafter. Anvui, LLC v. G.L. Dragon, LLC, 163 P.3d 405, 407

(Nev. 2007).

According to Davenport's declaration, the bonding requirement was never even

discussed with her in connection with signing the Agreement. Not being bondable is

not listed as 'cause' for termination in the Agreement, and yet the company

acµnowledges this was the only reason it had for firing Davenport (despite never

actually checµing with the bonding company to see if Davenport could, in fact, be
bonded despite a single, sixteen-year-old bad checµ conviction 1). No rule of contract

interpretation permits such a slight of hand.

I would reverse the district court and direct Albridge Solutions to pay Ms.

Davenport the retention bonus she has otherwise earned. At a minimum, there is a

sufficient factual question concerning the parties' intentions to preclude summary

judgment. See Margrave v. Pacµard Min., Inc., 939 P.2d 1038, 1039 (Nev. 1997).

1
The bonding requirement policy described in the employee manual actually
refers to 'passing bad checµs' in the plural and that such acts 'may terminate bond
coverage,' and is thus unclear as to whether a single incident would have actually
rendered Davenport not bondable.

2