AM General LLC v. Armour

James Armour’s employment contract with AM General LLC entitled him to payment of a long-term incentive plan (LTIP). When Armour retired, he was to receive a lump sum LTIP payment, but instead he started receiving quarterly installment payments in the form of checks. AM General attempted to make the final installment payment with a subordinate promissory note. Armour rejected the Note and requested full payment. Thereafter, AM General filed a complaint seeking a declaratory judgment that it had not breached the LTIP portion of its agreement with Armour. Armour counterclaimed, asserting that AM General breached the employment agreement by failing to pay Armour the full LTIP payment when it was due and claiming that, by attempting to pay the remaining portion of the LTIP payment with a promissory note, AM General breached the duty of good faith and fair dealing. The trial court entered summary judgment in favor of Armour. The Court of Appeals reversed, finding a genuine issue of material fact with regard to how “payment” could be made under the LTIP provision of the agreement. The Supreme Court granted transfer and affirmed the grant of summary judgment, holding that AM General breached its employment agreement with Armour because the Note did not constitute payment under the employment agreement. View "AM General LLC v. Armour" on Justia Law