Jeffrey Behm and Debra Bouffard recently filed a brief in the Second Circuit Court of Appeals defending a summary judgment order obtained on behalf of their client, BlueCross and BlueShield of Vermont (“BCBSVT”), in which the trial court dismissed a breach of contract claim brought by BCBSVTs’ former Chief Executive Officer. Oral argument has not yet been scheduled.
The case arose from an agreement entered a few weeks before the Plaintiff’s retirement in which BCBSVT agreed to pay the Plaintiff $580,000 of unvested incentive compensation in the few years following his retirement. After the Plaintiff’s retirement, but before the first payment was made to him, Vermont’s Department of Banking Insurance and Health Care Regulation (“BISHCA”) began investigating whether the compensation paid to Plaintiff in the years preceding his retirement had been excessive and in violation of BCBSVT’s statutory duties. Formal proceedings were then initiated that resulted in a BISHCA order, finding that Plaintiff had been paid a significant amount in excessive compensation. BCBSVT refused to pay the additional incentive compensation to Plaintiff because it believed doing so would constitute additional excessive compensation.
The United States District Court for Vermont held in its Summary Judgment Order (U.S. Dist. Ct. Dkt. No. 1:11-cv-00049) that BCBSVT’s performance under its agreement with the Plaintiff had been discharged by the doctrine of supervening legal impracticability. It therefore dismissed the Plaintiff’s claim for breach of contract and it also dismissed, on other grounds, Plaintiff’s claim for breach of the covenant of good faith and fair dealing. No appeal was taken from the dismissal of Plaintiff’s breach of covenant claim.
Jeffrey Behm will argue the case before the Second Circuit Court of Appeals.
