SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK---------------------------------------------------------------xMATTHEW MILLS STEVENSON, :

:Plaintiff, : Index No. 601581/2006

:-against- :

: Oral Argument RequestedTHE BANK OF NEW YORK COMPANY, INC., :THE ESTATE OF J. CARTER BACOT, :DENO D. PAPAGEORGE, THOMAS A. :RENYI, J. MICHAEL SHEPHERD, :

:Defendants. :

---------------------------------------------------------------x

MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

MORGAN, LEWIS & BOCKIUS LLP

Christina Joy F. Grese101 Park AvenueNew York, NY 10178212-309-6000

Michael L. Banks*1701 Market StreetPhiladelphia, PA 19103215-963-5387*Admitted pro hac vice

Attorneys for Defendants

FILED: NEW YORK COUNTY CLERK 09/05/2012 INDEX NO. 601581/2006

NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 09/05/2012

TABLE OF CONTENTS

Page

-i-

Preliminary Statement.................................................................................................................... 1

Statement of Undisputed Facts ...................................................................................................... 2

Mr. Stevenson Is Asked To Leave BNY To Become General Manager Of BNY-IMB........................................................................................................................ 2

Mr. Stevenson Inquires About His BNY Pension Benefits ............................................... 4

The Pension Issue Remains Unresolved in Mr. Stevenson’s Mind ................................... 5

BNY Conducts Hypothetical Calculations of the Alleged Pension Benefit ...................... 8

Mr. Stevenson Acknowledges that His BNY Pension Benefit Accruals Ceased When He Joined BNY-IMB and Agrees to Release BNY from the Alleged Pension Obligation................................................................................................. 8

Mr. Stevenson’s Employment with BNY-IMB Is Terminated........................................ 10

Argument ..................................................................................................................................... 12

I. Legal Standard For Summary Judgment.......................................................................... 12

II. Mr. Stevenson Cannot Demonstrate An Entitlement To Supplemental Pension Benefits ............................................................................................................................ 12

A. Mr. Stevenson Cannot Prove Breach of Contract Because There Was No Meeting of the Minds........................................................................................... 14

B. Mr. Stevenson Cannot Prove Promissory Estoppel As A Matter Of Law........... 20

C. Mr. Stevenson Cannot Prove Negligent Misrepresentation As A Matter Of Law ................................................................................................................. 21

D. Mr. Stevenson Cannot Prove Fraud As A Matter Of Law................................... 22

E. Mr. Stevenson Cannot Prove Unjust Enrichment As A Matter Of Law.............. 23

F. Mr. Stevenson Cannot Prove Tortious Interference As A Matter Of Law .......... 24

III. Mr. Stevenson’s Defamation Claim Fails As A Matter of Law ...................................... 25

A. Swiss Law Governs.............................................................................................. 26

B. Plaintiff Has No Evidence That Any Of The Defendants Actually Made Or Published Any Defamatory Statements .......................................................... 27

Conclusion ................................................................................................................................... 30

ii

TABLE OF AUTHORITIES

Page(s)CASES

Arochem Int’l, Inc. v. Buirkle,968 F.2d 266 (2d Cir. 1992).....................................................................................................25

Arsenault v. Forquer,197 A.D.2d 554, 602 N.Y.S.2d 653 (2d Dep’t 1993) ..............................................................26

Barber v. Daly,185 A.D.2d 567, 586 N.Y.S.2d 398 (3d Dep’t 1992) ..............................................................12

Bernstein v. Felske,143 A.D.2d 863, 533 N.Y.S.2d 538 (2d Dep’t 1988) ..............................................................18

Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc.,98 F.3d 13 (2d Cir. 1996).........................................................................................................21

Brookhaven Hous. Coalition v. Solomon,583 F.2d 584 (2d Cir. 1978).....................................................................................................18

Callabero v. First Albany Corp.,237 A.D.2d 800, 654 N.Y.S.2d 866 (1st Dep’t 1997) .............................................................12

Cent. Fed. Sav., F.S.B. v. Nat’l Westminster Bank, U.S.A.,176 A.D.2d 131, 574 N.Y.S.2d 18 (1st Dep’t 1999) ...............................................................13

Century Pac., Inc. v. Hilton Hotels Corp.,528 F. Supp. 2d 206 (S.D.N.Y. 2007), aff’d, 354 F. App’x 496 (2d Cir. 2009)......................21

Dillon v. City of New York,261 A.D.2d 34, 704 N.Y.S.2d 1 (1st Dep’t 1999) ...................................................................26

Donovan v. Dillingham,688 F.2d 1367 (11th Cir. 1982) ...............................................................................................19

Gardner v. Ethier,173 A.D.2d 1002, 569 N.Y.S.2d 835 (3d Dep’t 1991) ............................................................12

Giordano v. Thomson,564 F.3d 163 (2d Cir. 2009).....................................................................................................22

Grimo v. Blue Cross/Blue Shield of Vermont,34 F.3d 148 (2d Cir. 1994).......................................................................................................19

iii

TABLE OF AUTHORITIES(Continued)

Page(s)Heller v. Kurz,

228 A.D.2d 263, 643 N.Y.S.2d 580 (1st Dep’t 1996) .............................................................22

Hughes v. LaSalle Bank, NA,419 F. Supp. 2d 605 (S.D.N.Y 2006).......................................................................................25

Hughes v. Standard Chartered Bank,No. 09-4594, 2010 WL 1644949 (S.D.N.Y. Apr. 14, 2010) ...................................................22

Hume v. United States,132 U.S. 406 (1889).................................................................................................................20

Hydro Investors, Inc. v. Trafalgar Power, Inc.,227 F.3d 8 (2d Cir. 2000).........................................................................................................20

Lama Holding Co. v Smith Barney, Inc.,88 N.Y.2d 413, 646 N.Y.S.2d 76 (1996) .................................................................................23

Landcom, Inc. v. Galen-Lyons Joint Landfill Comm’n,687 N.Y.S.2d 841 (4th Dep’t 1999).........................................................................................22

Lazard Freres & Co. v. Protective Life Ins. Co.,108 F.3d 1531 (2d Cir. 1997)...................................................................................................25

Marlio v. McLaughlin,288 A.D.2d 97, 734 N.Y.S.2d 4 (1st Dep’t 2001) ...................................................................13

Mazzola v. CNA Ins. Co145 Misc. 2d 896, 548 N.Y.S.2d 610 (Civ. Ct. Queens Cnty. 1989)......................................20

McGrath v. Hilding,41 N.Y.2d 625, 394 N.Y.S.2d 603 (1977) ...............................................................................23

Metal Cladding, Inc. v. Brassey,159 A.D.2d 958, 553 N.Y.S.2d 255 (1st Dep’t 1990) .............................................................23

Metro. Elec. Mfg. Co. v. Herbert Constr. Co.,183 A.D.2d 758, 583 N.Y.S.2d 497 (2d Dep’t 1992) ..............................................................22

Murray v. Xerox Corp.,811 F.2d 118 (2d Cir. 1987).....................................................................................................22

iv

TABLE OF AUTHORITIES(Continued)

Page(s)N.F.L. Ins. Ltd. by Lines v. B & B Holdings, Inc.,

874 F. Supp. 606 (S.D.N.Y. 1995) ..........................................................................................13

Paz v. Singer Co.,151 A.D.2d 234, 542 N.Y.S.2d 10 (1st Dep’t 1989) ...............................................................13

Perfect Trading Co. v. Goldman, Sachs & Co.,236 A.D.2d 221, 653 N.Y.S.2d 116 (1st Dep’t 1997) .............................................................18

Ripple’s of Clearview, Inc. v. Le Havre Assocs.,88 A.D.2d 120, 452 N.Y.S.2d 447, appeal denied, 57 N.Y.2d 609, 456 N.Y.S.2d 1026 (1982) .....................................................20

Robinson v. Sweeney,301 A.D.2d 815, 753 N.Y.S.2d 583 (3d Dep’t 2003) ..............................................................13

Sivel v. Readers Digest, Inc.,677 F. Supp. 183 (S.D.N.Y. 1988) ..........................................................................................22

STATUTES

CPLR § 3016(a) .............................................................................................................................26

CPLR § 3212..............................................................................................................................1, 12

C.P.LR. § 3212(b)..........................................................................................................................12

OTHER AUTHORITIES

Fisch, Evidence § 1098 (2d ed.).....................................................................................................13

Restatement of Torts, Second § 558 ..............................................................................................26

1

Pursuant to New York Civil Practice Law and Rules (“CPLR”) § 3212, Defendants The

Bank of New York Company, Inc. (“BNY”),1 The Estate of J. Carter Bacot, Deno D.

Papageorge, Thomas A. Renyi, and J. Michael Shepherd (collectively, “Defendants”), by and

through their attorneys, Morgan, Lewis & Bockius LLP, respectfully submit this Memorandum

of Law in Support of their Motion for Summary Judgment.

PRELIMINARY STATEMENT

Plaintiff Matthew Mills Stevenson (“Mr. Stevenson”) initiated this action on May 5,

2006, by filing a 49-page, 145-paragraph Complaint. He asserts seven common law claims

against his former employer, BNY, for which he last worked in 1991, and against several of its

former executives, including former Chairman and Chief Executive Officer, Thomas A. Renyi

(“Mr. Renyi”), former Senior Executive Vice President and Chief Financial Officer, Deno D.

Papageorge (“Mr. Papageorge”), former General Counsel, Michael Shepherd (“Mr. Shepherd”),

and the Estate of BNY’s deceased former Chairman and CEO, J. Carter Bacot (“Mr. Bacot”).2

This case is not complex, although one might think otherwise after reading Mr.

Stevenson’s lengthy and largely irrelevant recitation of alleged international business scandals,

conspiracies, and illegal activity that he ascribes to BNY, his former Swiss employer, Bank of

New York - Inter Maritime Bank, Geneva (“BNY-IMB”), and various other entities and

individuals in his Complaint. When these extraneous items are removed, it is clear that Mr.

1 The corporate defendant in this case, The Bank of New York Company, Inc., is currently known as The Bank of New York Mellon Corporation. Mr. Stevenson actually was employed by The Bank of New York, a wholly owned subsidiary that is now known as The Bank of New York Mellon. For purposes of simplicity, The Bank of New York Mellon is referred to herein as “BNY,” without further attempts to distinguish among the corporate entities.

2 Defendants initially removed the lawsuit to federal court and obtained the dismissal of all claims based upon ERISA preemption (as to the pension claims) and failure to state a claim for relief (as to the defamation claim). The Second Circuit reversed, holding that ERISA preemption did not attach to the pension claims and, therefore, there was no basis for federal subject matter jurisdiction. The matter was remanded back to the state court.

2

Stevenson has only a two-part claim: one for additional pension benefits, and one for defamation

based on a single published letter from BNY-IMB, which is not a party in this litigation.

As more fully explained below, Mr. Stevenson’s claims and allegations are both factually

and legally without merit. First, Defendants never promised Mr. Stevenson that he would

continue to accrue pension benefits under BNY’s pension plan during the 13 years that he

worked for a separate employer in Switzerland. Mr. Stevenson admits as much in his deposition.

At most, Mr. Stevenson was told that BNY would preserve the vested pension benefits that Mr.

Stevenson had accrued from BNY prior to his departure in 1991 to work for BNY-IMB, which it

did. Second, Mr. Stevenson’s defamation claim fails because Mr. Stevenson has not alleged, and

cannot prove, that Defendants took any affirmative action to publish a defamatory statement.

STATEMENT OF UNDISPUTED FACTS

Mr. Stevenson Is Asked To Leave BNY To Become General Manager Of BNY-IMB

Mr. Stevenson was employed by BNY from 1983 to 1991, as a Vice President in its

International Division. Compl. ¶¶ 2, 15. In March of 1991, he was asked to leave BNY to

become the General Manager of BNY-IMB in Geneva, Switzerland. See Ex. 1 to Affirmation of

Christina Joy F. Grese (“Grese Aff.”). At the time, BNY owned a 19.9% interest in BNY-IMB.

Grese Aff., Ex. 2. BNY-IMB was controlled by Bruce Rappaport, who was the Chairman of the

Board of Directors of BNY-IMB. Id.

On or about April 1, 1991, Mr. Stevenson met with Mr. Bacot, BNY CEO, and Mr.

Papageorge, BNY CFO, to discuss what was initially expected to be a 2-3 year assignment.

Grese Aff., Ex. 1; Stevenson Dep. at 231-232; Papageorge Dep. at 154-155; Tantillo Dep. at

125-126.3 During this meeting Mr. Bacot said that Mr. Stevenson’s benefits and house in

3 Relevant pages of the deposition transcripts for Mr. Stevenson, Mr. Papageorge, and Mr. Tantillo are attached to the Grese Aff. as Exhibits 3, 4, and 5, respectively.

3

Brooklyn would be “maintained” during his absence. The assurances were very general, and did

not elaborate on the details. Grese Aff., Ex. 3, Stevenson Dep. at 145, 186; Grese Aff., Ex. 4,

Papageorge Dep. at 151-152. Mr. Stevenson accepted the position and relocated to Switzerland.

See Grese Aff., Ex. 6. At the time of his relocation, BNY paid Mr. Stevenson $2,576.94 for his

accrued, unused vacation, and another $32,968 in discretionary payments. Grese Aff., Ex. 7.

BNY also agreed to engage a real estate management firm to maintain Mr. Stevenson’s home in

Brooklyn and paid Mr. Stevenson’s moving expenses. Grese Aff., Ex. 8. Initially, BNY also

allowed Mr. Stevenson to continue to participate in BNY’s health insurance plans as long as he

paid the required premiums. Grese Aff., Ex. 9. At no time after he began his employment with

BNY-IMB in 1991 did Mr. Stevenson request to return to BNY or make any efforts to inquire

about positions with BNY. Grese Aff., Ex. 3, Stevenson Dep. at 228; Grese Aff., Ex. 4,

Papageorge Dep. at 414.

In November of 1991, Douglas Tantillo, BNY Vice President of Employee Relations,

wrote a memorandum to Mr. Stevenson confirming the understanding of the parties relating to

Mr. Stevenson’s relocation to Switzerland and the preservation of various welfare benefits and

profit sharing accounts. Grese Aff., Ex. 6. This memorandum was silent on any supposed

promise to accrue additional pension benefits. Id.

When Mr. Stevenson accepted the Geneva assignment, BNY agreed to maintain a

“notional salary” on his behalf. Grese Aff., Ex. 10. The notional salary made annual

adjustments to Mr. Stevenson’s base salary for “administrative purposes” for the first few years

while he was in Switzerland. Id. The purpose of this arrangement was to “facilitate [Mr.

Stevenson’s] eventual return to the Bank.” Id. Specifically, the notional salary was intended to

set a target compensation level at which Stevenson was expected to be paid if he returned to the

4

United States in 2-3 years, so that Mr. Stevenson would not be treated like a new hire in terms of

his base salary. Grese Aff., Ex. 5, Tantillo Dep. at 124-127; Angers Dep. at 35-38, 79-80;4 Grese

Aff., Ex. 4, Papageorge Dep. at 180-182. This had nothing to do with pension benefits or

accruals, other than the fact that when Mr. Stevenson returned, the new salary level would be

factored into the pension formula. Id.

Mr. Stevenson Inquires About His BNY Pension Benefits

Over the ensuing 13 years, Mr. Stevenson inquired frequently about the details of the

pension arrangement. He posed questions to Mr. Bacot, Mr. Papageorge, Thomas Angers,

former BNY Head of Human Resources, and others. He also referred frequently in letters and

memoranda to the lack of resolution and confusion relating to his BNY pension benefits.5

For example, in February 1995, Mr. Stevenson corresponded with Mr. Tantillo about

medical benefits, his “notional salary” and pension. Grese Aff., Ex. 13. Mr. Tantillo addressed

Mr. Stevenson’s “January 1995 Questions” by explaining that the notional or shadow salary was

intended to facilitate Mr. Stevenson’s return to BNY at a later date. Id. In addressing the

pension issue, Mr. Tantillo explained that Mr. Stevenson’s benefit accruals under the BNY

pension plan ceased in 1991, and would not begin again until he returned to covered employed at

BNY. Id. He stated further that according to his notes, BNY could take administrative action on

Mr. Stevenson’s return to “bridge” benefits so that Mr. Stevenson would continue to accrue

benefits where he left off in 1991. Id. This potential bridging arrangement simply was intended

to give Mr. Stevenson a single period of service rather than two separate pieces. Grese Aff., Ex.

4 Relevant pages of the deposition transcript for Mr. Angers are attached to the Grese Aff. as Exhibit 11.

5 Mr. Stevenson became a participant in BNY-IMB’s pension plan shortly after he became employed by BNY-IMB. Grese Aff., Ex. 3, Stevenson Dep. at 235. See also Grese Aff., Ex. 12, at MMS 458.

5

11, Angers Dep. at 51-52, 78-79; Grese Aff., Ex. 4, Papageorge Dep. at 179-180; Grese Aff., Ex.

5, Tantillo Dep. at 206-211.

Mr. Stevenson did not express any disagreement with these explanations. On the

contrary, he wrote back to Mr. Tantillo on February 22, 1995, stating that “I looked at the letter

that was given to me when I left, and it matches your version more than mine.” Grese Aff., Ex.

14. He also conceded that when he met with Mr. Bacot and Mr. Papageorge in 1991, “the

statements then on maintaining my pension were more general.” Id.

The Pension Issue Remains Unresolved in Mr. Stevenson’s Mind

Mr. Bacot retired from BNY in 1997, and Mr. Papageorge retired in June 1999. As Mr.

Papageorge’s retirement was approaching, Mr. Stevenson worked with Geoffrey Bennett,6 a

London-based BNY executive who had functioned as a liaison between BNY and Mr. Stevenson

on numerous issues, to secure a written memorialization of the pension arrangement. This

resulted in a memorandum dated April 7, 1999, which Mr. Bennett wrote and Mr. Papageorge

signed. Grese Aff., Ex. 17; Grese Aff., Ex. 16, Bennett Dep. at 101-102; Grese Aff., Ex. 4,

Papageorge Dep. at 229-230. The memorandum noted that Mr. Stevenson would receive a

pension: “according to the BNY Plan” using his 1991 base salary and assuming normal salary

adjustments, and that “there would be no break in service for the purpose of calculating

retirement benefits.” Grese Aff., Ex. 17.

6 Mr. Bennett remains friendly with Mr. Stevenson and provided an affidavit in an attempt to support Mr. Stevenson’s claims. See Ex. 15 to Grese Aff. Notably, Mr. Bennett admitted that Mr. Stevenson’s attorneys drafted the affidavit, and that he signed it without any changes. See Grese Aff., Ex. 16, Bennett Dep. at 50-51. In any event, the affidavit is more conclusory than factual and is belied by Mr. Bennett’s deposition testimony. Indeed, as Mr. Bennett conceded at his deposition, Mr. Bacot was just as general with him in discussing the pension issue as he had been with Mr. Stevenson. According to Mr. Bennett, Mr. Bacot repeatedly said he wanted Mr. Stevenson treated fairly, but Mr. Bennett could not remember any other statements by Mr. Bacot or Mr. Papageorge relating to Mr. Stevenson’s pension. Id. at 28-32, 37, 48-53. Mr. Bennett added that Mr. Bacot left all of the details to “personnel people,” including Mr. Angers and Mr. Tantillo, who affirm that there was no promise to accrue BNY benefits while Mr. Stevenson worked in Geneva.

6

The memorandum also stated that Mr. Stevenson would qualify for the BNY SERP

(Supplemental Executive Retirement Plan) because his position in Switzerland was equivalent to

a Senior Vice President at BNY. Id. The SERP reference meant simply that if Mr. Stevenson

returned to employment at BNY in an equivalent position as a Senior Vice President, he would

be eligible for consideration as a potential SERP participant, but nothing was automatic in that

regard. Grese Aff., Ex. 11, Angers Dep. at 13-16; Grese Aff., Ex., 4, Papageorge Dep. at 239-

240; Renyi Dep. at 190-192; Wellinger Dep. at 87-88.7 In fact, there were quite a number of

senior vice presidents who were denied SERP participation. Grese Aff., Ex. 18, Renyi Dep. at

192. Indeed, the SERP plan document states that participation requires Compensation

Committee approval, and the Committee never approved Mr. Stevenson as a participant. Grese

Aff., Ex. 20; Grese Aff., Ex. 3, Stevenson Dep. at 204; Grese Aff., Ex. 18, Renyi Dep. at 190-

191. Moreover, Mr. Stevenson would have had to be age 50 or older to be a participant in the

plan, and he was terminated by BNY-IMB in 2004 before reaching that age. Furthermore,

participation in the SERP closed in the fall of 1999, a few months after the April 1999

memorandum was written and when Mr. Stevenson was just 45 years old at that time. Grese

Aff., Ex. 11, Angers Dep. at 13-16, 52-53. Notably, the SERP was never mentioned during Mr.

Stevenson’s discussion with Messrs. Papageorge and Bacot in April 1991. Grese Aff., Ex. 3,

Stevenson Dep. at 200.

The April 1999 memorandum did not resolve all of the open issues or even the doubts in

Mr. Stevenson’s mind. The last paragraph of the memorandum requests that Mr. Angers arrange

for a document to be prepared detailing “his and his family’s benefits.” Grese Aff., Ex. 17. No

7 Relevant pages of the deposition transcripts for Thomas Renyi and Russell Wellinger are attached to the Grese Aff. as Exhibits 18 and 19, respectively.

7

such follow-up writing was prepared, despite numerous requests by Mr. Stevenson, and the

details therefore remained “unresolved.” Grese Aff., Ex. 3, Stevenson Dep. at 441.

For example, on November 7, 2000, Mr. Stevenson wrote to Mr. Rappaport that he

considered the subject of the pension unresolved, and he complained about BNY’s “lack of

clarity in dealing with these subjects.” Grese Aff., Ex. 21. He similarly requested a writing from

Mr. Angers on May 1, 2001, because his status had been a “source of some confusion, especially

with my pension status. . . .” Grese Aff., Ex. 22. Mr. Angers declined to provide the requested

information in his May 29, 2001 response. Grese Aff., Ex. 23.

Mr. Stevenson continued to try to obtain clarification from Mr. Bacot, who had long

since retired from BNY. For example, in 2003, Mr. Stevenson met with Mr. Bacot at a BNY

rental apartment in New York. They discussed a number of issues, including the investigation of

BNY by the Manhattan District Attorney’s office over the issue of whether a pension was

promised to Mr. Stevenson “off the books.” Grese Aff., Ex. 3, Stevenson Dep. at 154-155. Such

a promise, had it been made, might have demonstrated a degree of unlawful control by BNY

over BNY-IMB that was inconsistent with what BNY had reported to banking authorities in the

U.S. Mr. Stevenson, Mr. Papageorge, Mr. Renyi and others were interviewed by the District

Attorney’s office, and, notably, no charges were pursued. Grese Aff., Ex. 4, Papageorge Dep. at

572-573, 577; Grese Aff., Ex. 18, Renyi Dep. at 154.

At the meeting in the New York apartment, the issue of the pension was discussed but

“still unresolved.” Grese Aff., Ex. 3, Stevenson Dep. at 156. Mr. Bacot reiterated that Mr.

Stevenson remained a participant in the plan and urged him to take up the issue with Mr. Angers

as to the details of the arrangement. Id. at 157. On several others occasions, Mr. Stevenson

8

raised the issue with Mr. Bacot, who responded that he would talk to Mr. Papageorge and look

into the matter. Id. at 164-165.

BNY Conducts Hypothetical Calculations of the Alleged Pension Benefit

In the late 1990s, in response to contentions by Mr. Stevenson that he should be

permitted to continue to accrue BNY pension benefits, even though he was working for BNY-

IMB and accruing separate pension benefits in Switzerland, various hypothetical pension

calculations were performed by Ernst & Young, as well as other consultants and BNY benefits

planning personnel. Grese Aff., Ex. 24. The estimates were taken to enable BNY and BNY-

IMB management to determine whether, and to what extent, to provide Mr. Stevenson with

additional benefits in response to his constant questions and complaints, and to get a sense of the

potential exposure, given that Mr. Stevenson was threatening claims against BNY. When it

became apparent that what Mr. Stevenson was seeking was a substantial amount of money

beyond anything that he was promised, a conclusion was reached at BNY that there was no

reason or ability to pursue the matter further. Grese Aff., Ex. 11, Angers Dep. at 57-65; 131-

140.8

Mr. Stevenson Acknowledges that His BNY Pension Benefit Accruals Ceased When HeJoined BNY-IMB and Agrees to Release BNY from the Alleged Pension Obligation

In response to Mr. Stevenson’s ongoing questions about pension benefits and the

adequacy of his compensation, BNY-IMB engaged a benefit consultant at CC&T in Geneva to

recommend a solution. The consultant prepared a July 2000 report, recommendation and draft

agreement that: (a) confirmed relevant facts, including that Mr. Stevenson’s BNY accruals

“ceased” when he went to Switzerland, that such BNY accruals were “frozen,” and that Mr.

8 These hypothetical calculations include a number of assumptions that never were promised or even discussed with Mr. Stevenson, including a hypothetical tax “gross up” of benefit payments, participation in the SERP, and the assumption of retirement from active service at alternative ages of 55 and 60, even though Mr. Stevenson was terminated by BNY-IMB at age 49.

9

Stevenson had become a permanent employee of BNY-IMB; and (b) the solution to the pension

problem was to have BNY-IMB contribute a supplemental amount to Stevenson’s Swiss pension

(485,100 Swiss Francs, or about $303,000 at the time) in full satisfaction of any pension claims

against BNY and BNY-IMB. Grese Aff., Ex. 25. Notably, Mr. Stevenson sent the report to Mr.

Rappaport in November 2000 suggesting that it “quantifie[d] the amount outstanding.” Grese

Aff., Ex. 21, at MMS 955.

Mr. Stevenson signed the consultant’s report/agreement in 2002, as did Guido Condrau, a

member of the BNY-IMB Compensation Committee, and initialed every page, including those

making the above-enumerated acknowledgements. Grese Aff., Ex. 12. The resulting agreement

fully released BNY for any pension-related claims. Id. at MMS 460. Mr. Stevenson

subsequently confirmed the validity of this agreement on February 12, 2004, when he wrote to

Mr. Rappaport to state that that the agreement was signed and later “ratified by the full Board on

October 8, 2003.” Grese Aff., Ex. 26. He further stated that it was clear that there was a BNY-

IMB liability to him for the pension settlement that should have been recorded on the BNY-IMB

balance sheet. Id. at MMS 1178. Similarly, in his February 25, 2004 letter to Mr. Rappaport, he

stated that “I have a signed agreement with BNY-IMB and that this Bank, in my view, has an

unreported liability not mentioned in the financial statements.” Grese Aff., Ex. 27.9

9 Not surprisingly, Mr. Stevenson has since retreated from his position that the July 2002 report/agreement that he and Mr. Condrau signed is a binding agreement, noting that a second member of the BNY-IMB Compensation Committee, Noga Rappaport, did not sign the agreement. Grese Aff., Ex. 3, Stevenson Dep. at 450-468. Nevertheless, the fact remains that – regardless of whether the agreement is a binding agreement to resolve the pension dispute – Mr. Stevenson acknowledged in this document that his BNY accruals “ceased” when he went to Switzerland, that such BNY accruals were “frozen,” and that he had become a permanent employee of BNY-IMB. Grese Aff., Ex. 12, at MMS 458. Defendants are not seeking summary judgment on this issue, but if this case is tried, they will present evidence that the matter was resolved by agreement in 2002 and that Mr. Stevenson’s only recourse is to pursue his claim against BNY-IMB if it failed to pay him the pension that it promised to pay.

10

Mr. Stevenson’s Employment with BNY-IMB Is Terminated

Beginning in the late 1990s, Mr. Rappaport (who was still the majority owner of BNY-

IMB) experienced a significant decline in his mental faculties, and his behavior was becoming

increasingly erratic and dangerous. Grese Aff., Ex. 4, Papageorge Dep. at 217-218. Mr.

Stevenson complained on numerous occasions to Mr. Renyi, who had replaced Mr. Bacot as

CEO of BNY, noting that Mr. Rappaport was bringing a gun to work and acting irrationally.

Grese Aff., Ex. 28. Mr. Stevenson advocated the removal of Mr. Rappaport as Chairman, along

with the purchase by BNY of Mr. Rappaport’s shares of the Swiss bank. Id. Mr. Renyi

ultimately concluded, however, that BNY would not consider the acquisition of BNY-IMB

shares. Instead, representatives of BNY began to work with Mr. Rappaport’s wife and family

members to sell all of the BNY-IMB shares to a third party. Grese Aff., Ex. 18, Renyi Dep. at

92-96. Two Israeli banks – Bank Hapoalim and Bank Leumi – were identified as potential

buyers. Grese Aff., Ex. 4, Papageorge Dep. at 380-381.

While plans were being made for the sale, steps were taken to remove Mr. Rappaport

from his position as Chairman. Mr. Rappaport had given a power of attorney to his wife, who

arranged to appear at a Board meeting in March 11, 2004 to vote on her husband’s removal. Id.

at 219-222.

When Mr. Stevenson learned that BNY would not be acquiring Mr. Rappaport’s shares of

BNY-IMB, his approach changed dramatically. At a dinner meeting with the Directors on

March 10, 2004, Stevenson vocally opposed the decision to remove Mr. Rappaport as Chairman,

challenging whether there was authority to do so in light of the fact that Mr. Rappaport still

owned the majority of the shares and would not be present to vote at the Board meeting. Grese

Aff., Ex. 30, at MMS 941; Grese Aff., Ex. 4, Papageorge Dep. at 393-404, 406-407; Shepherd

11

Dep. at 178-186.10 Thereafter, and prior to the March 11 Board meeting, Mr. Papageorge

discussed with Mr. Stevenson the fact that it appeared necessary to make a change in

management. Grese Aff., Ex. 30, at MMS 941; Grese Aff., Ex. 3, Stevenson Dep. at 19-21;

Grese Aff., Ex. 4, Papageorge Dep. at 406-413, 415, 426-429. Recognizing that there was a

significant rift between the Board and Mr. Stevenson on a critical issue involving the sale of the

bank, the BNY-IMB Board decided to terminate Mr. Stevenson’s employment. Grese Aff., Ex.

30; Grese Aff., Ex. 4, Papageorge Dep. at 429, 433. The discussions were spearheaded by Mr.

Papageorge, who had retired from BNY five years earlier but who continued to serve on the

BNY-IMB Board. Grese Aff., Ex. 4, Papageorge Dep. at 412-428. Ultimately, at a Board

meeting held without Mr. Stevenson on March 11, 2004, the Board approved the decision to

terminate Mr. Stevenson’s employment. Grese Aff., Ex. 31; Grese Aff., Ex. 4, Papageorge Dep.

at 433. Mr. Stevenson was informed of the Board’s decision by letter the following day. Grese

Aff., Ex. 31.

Mr. Stevenson was told initially to take vacation time, and it was expected that an

amicable separation agreement would be negotiated. Grese Aff., Ex. 3, Stevenson Dep. at 13.

He was also told, though, that if an agreement could not be reached, the Board reserved the right

to terminate him for cause based on his opposition to the removal of Mr. Rappaport against the

will of the Board and other issues that surfaced. Grese Aff., Ex. 31, at BNYM_105; Grese Aff.,

Ex. 4, Papageorge Dep. at 476-477.

Mr. Stevenson hired an attorney, Charles Poncet, who previously had served on the

BNY-IMB Board and represented BNY-IMB, and who made demands that the BNY-IMB Board

considered to be unreasonable. Grese Aff., Ex. 4, Papageorge Dep. at 470-476. Over a period of

10 Relevant pages of the deposition transcript for Michael Shepherd are attached to the Grese Aff. as Exhibit 29.

12

a few weeks, negotiations occurred between Mr. Poncet, and Gion Clopath, lawyer and BNY-

IMB Board Vice-Chairman, concerning a separation package arrangement, but no agreement

was reached. Id. In early April 2004, as prospects for an amicable resolution seemed to be

evaporating, Mr. Stevenson was sent a letter advising him that he was being terminated “for

cause.” Grese Aff., Ex. 32. The letter specified the reasons in detail, including not only the

refusal to cooperate on the removal of the Chairman but a variety of other issues on which Mr.

Stevenson had clashed with officers and Board members. Id. The letter was signed by Mr.

Clopath and Moriel Matalon. Id. Neither Mr. Clopath nor Mr. Matalon were employed by or

associated with BNY.

As a result of the termination “for cause,” Mr. Stevenson was not paid several million

dollars in salary and benefits that he would have been owed under a Retention Agreement that he

had signed in 2001. Grese Aff., Ex. 33. He filed a claim solely against BNY-IMB before the

Swiss Labor Board, contending that the reasons for his termination were falsified or exaggerated.

Compl. ¶ 11. Mr. Papageorge and Mr. Shepherd did not testify or appear at the hearing, nor did

any BNY officers or employees. Grese Aff., Ex. 3, Stevenson Dep. at 254, 259. The Swiss

Labor Board found that the termination was without cause, and it awarded Mr. Stevenson the

Retention Agreement pay and benefits. Mr. Stevenson was awarded and received 3,752,476.25

Swiss Francs (or about $2.87 million) at the time of the award), including 91,515.88 toward his

Swiss pension, and interest. Compl. ¶ 11; Grese Aff., Ex. 34, at MMS 2592-2593.

ARGUMENT

I. LEGAL STANDARD FOR SUMMARY JUDGMENT

Under CPLR § 3212, summary judgment is proper if, upon all papers and proof

submitted, the moving party establishes that it is entitled to judgment in its favor as a matter of

law. N.Y. C.P.LR. § 3212(b); Barber v. Daly, 185 A.D.2d 567, 569, 586 N.Y.S.2d 398, 400 (3d

13

Dep’t 1992). If this showing is made, the burden shifts to the opposing party to raise triable

issues of fact by admissible proof. Callabero v. First Albany Corp., 237 A.D.2d 800, 801, 654

N.Y.S.2d 866, 868 (1st Dep’t 1997). The law is well-settled that “mere conclusions, expressions

of hope or unsubstantiated allegations or assertions are insufficient” to defeat a summary

judgment motion. Gardner v. Ethier, 173 A.D.2d 1002, 1004, 569 N.Y.S.2d 835, 835 (3d Dep’t

1991). Instead, the opposing party must produce evidence sufficient to require a trial of material

questions of fact on which he rests his claim. Barber, 586 N.Y.S.2d at 400 (citations omitted).

In this case, Mr. Stevenson has failed to proffer any evidence, other than his own self-

serving testimony and unsubstantiated allegations, to support his pension benefits and

defamation claims. Accordingly, there are no genuine issues of material fact, and Defendants’

motion for summary judgment should be granted in its entirety.

II. MR. STEVENSON CANNOT DEMONSTRATE AN ENTITLEMENT TO SUPPLEMENTAL PENSION BENEFITS

Mr. Stevenson contends that in March or April of 1991, BNY orally promised to maintain

his pension benefits once he went to work for BNY-IMB in Switzerland, and to allow him to

accrue additional pension benefits indefinitely even though he no longer worked for BNY. See

Compl. ¶¶ 108-111. In Counts I through VI of his Complaint he asserts six common law theories

in support of this claim for supplemental pension benefits: (1) breach of contract; (2) promissory

estoppel; (3) unjust enrichment; (4) negligent misrepresentation; (5) fraud; and (6) tortious

interference with a contractual/promissory obligation. Notably, Mr. Stevenson does not contend

that any of the individual Defendants (all former BNY executives) ever promised to pay these

benefits personally, yet he asserts his benefit claims against them nonetheless.

Mr. Stevenson cannot establish a claim of breach of contract, nor can he establish any of

his remaining common law causes of action for supplemental pension benefits.

14

A. Mr. Stevenson Cannot Prove Breach of Contract Because There Was NoMeeting of the Minds

It is axiomatic that one who seeks to recover under a contract must prove that a binding

agreement was made and establish its terms. Paz v. Singer Co., 151 A.D.2d 234, 235, 542

N.Y.S.2d 10 (1st Dep’t 1989) (citing Fisch, Evidence § 1098 (2d ed.)). Where, as here, a

defendant disputes plaintiff's allegation that an agreement was formed, the plaintiff “has the

burden of establishing all essential terms of the alleged contract, with sufficient definiteness that

the Court can interpret its terms. Plaintiff must also establish that there was a meeting of the

minds, demonstrating the parties’ mutual assent and mutual intent to be bound.” N.F.L. Ins. Ltd.

by Lines v. B & B Holdings, Inc., 874 F. Supp. 606, 611 (S.D.N.Y. 1995) (emphasis added). See

also Robinson v. Sweeney, 301 A.D.2d 815, 817, 753 N.Y.S.2d 583, 586 (3d Dep’t 2003) (“To

create a binding contract, there must be a manifestation of mutual assent sufficiently definite to

assure that the parties are truly in agreement with respect to all the material terms”). This issue

“is generally one of law, properly determined on a motion for summary judgment.” Cent. Fed.

Sav., F.S.B. v. Nat’l Westminster Bank, U.S.A., 176 A.D.2d 131, 132, 574 N.Y.S.2d 18, 18 (1st

Dep’t 1999). If an agreement is not reasonably certain in all its material terms, there can be no

legally enforceable contract. Marlio v. McLaughlin, 288 A.D.2d 97, 98, 734 N.Y.S.2d 4, 6 (1st

Dep’t 2001).

Based on all the evidence gathered during discovery, Mr. Stevenson clearly cannot

establish the existence of an agreement to provide him continued accruals in the BNY pension

benefit plan while he worked for a separate employer in Switzerland, as the communications and

discussions upon which he relies demonstrate anything but a clear “meeting of the minds” on

such an agreement.

15

Mr. Stevenson relies upon several written communications and alleged oral discussions

between 1991 and 2004 in support of his claim for additional BNY pension benefits. He first

contends that in April 1991, when Messrs. Bacot and Papageorge asked him to take the job as

General Manager of BNY-IMB, and in response to Mr. Stevenson’s questions about his BNY

benefits, Messrs. Bacot and Papageorge responded, “Don’t worry. We’ll take care of that. We’ll

maintain them.” Compl. ¶ 29; Grese Aff., Ex. 3, Stevenson Dep. at 145-146.11 No additional

details were provided, and Mr. Papageorge did not elaborate at that meeting. Grese Aff., Ex. 3,

Stevenson Dep. at 186-187.

This initial discussion was vague, to say the least. Mr. Stevenson was left with doubt

about what, exactly, he had been promised. As a result, he made numerous inquiries about his

pension benefits between 1991 and 2004. Although Mr. Stevenson now asserts in conclusory

fashion that the benefit promises were reiterated to him frequently, he concedes that Messrs.

Bacot and Papageorge never provided him with any of the essential details and terms of a

pension arrangement, and that his attempts to obtain such information from Messrs. Angers and

Tantillo were futile.

While Mr. Stevenson attempts to cobble together an enforceable agreement by pointing

to communications made years after the April 1991 meeting, those subsequent communications –

far from indicating a promise or contract to provide additional pension benefits – support nothing

other than a mere promise to preserve the vested pension benefits that Mr. Stevenson had

accrued from BNY prior to his 1991 departure to work at BNY-IMB. For example, in 1995,

Douglas Tantillo in BNY’s Personnel Department wrote:

11 Mr. Papageorge similarly testified that there was no specific promise beyond a very general discussion that Mr. Stevenson’s pension benefits would be maintained. Grese Aff., Ex. 4, Papageorge Dep. at 151-152. In fact, Stevenson was a vested participant in the BNY pension plan and the benefits that he accrued from 1983 to 1991 were not affected by his relocation. Thus, any statement that was made at the 1991 meeting about maintaining his pension benefits was consistent with the BNY plan and federal pension laws.

16

As an inactive employee of the Bank of New York (from June 2, 1991), participation in both the BNY Pension Plan and BNY Profit Sharing plan are maintained, but benefit accruals ceased on that date. Your pension accrual is frozen at that date (as a vested participant), and cannot begin again until you again become an active employee. My only notes on this topic indicate that we discussed that the Bank could take administrative action upon your return to New York to give you credit (i.e. bridge) the break-in-service while you were in Switzerland. As prospects for your return are either indefinite or fading, the issue of pension coverage increases in importance. I have already spoken to Geoff Bennett and Frank Peterson on this issue; Susan McFarlan and I will speak to Deno, and I will then make a proposal to Frank.

Compl. ¶ 46; Grese Aff., Ex. 13 (underline emphasis in original; bold emphasis added). Mr.

Stevenson responded by confirming the accuracy of Mr. Tantillo’s summary. Grese Aff., Ex. 14.

On or about April 7, 1999, in response to Mr. Stevenson’s request, Mr. Bennett drafted a

memorandum (for Mr. Papageorge’s signature) to Mr. Angers, describing the arrangement that

was discussed eight years earlier at the time of Mr. Stevenson’s transfer, when it was thought

that Mr. Stevenson would be returning to BNY within 2-3 years. This memorandum stated, in

pertinent part:

This will confirm a series of conversations including you, Doug Tantillo and Mark Saulnier regarding [Matthew Stevenson and BNY Retirement Benefits]. When Matthew departed BNY on [June 12, 1991] to become Managing Director of our affiliate bank, BNY-IMB, we agreed that BNY would provide him with a pension benefit according to the BNY Plan. The benefit was to be calculated on his base salary at the time he left BNY and assumed normal annual salary adjustments. In effect, there would be no break in service for the purpose of calculating retirement benefits. Matthew’s current position is equivalent to Senior Vice President level at BNY, and therefore he would qualify for the SERP as well.12

Compl. ¶ 6; Grese Aff., Ex. 17.13

12 Notwithstanding the reference to SERP in the 1999 memorandum, as noted above, Mr. Stevenson does not have a legitimate argument in favor of hypothetical SERP payments for the following reasons: (1) the BNY Compensation and Organization Committee of the Board was the only party authorized to determine who participates in the SERP; (2) effective third quarter of 1999, no new members were granted participation in the SERP (other than Senior Planning Committee members); and (3) the Committee has never considered for SERP participation any officer (other than Senior Planning Committee members) below the age of 50, and Mr. Stevenson did not turn 50 until April 29, 2004, long after the SERP was frozen.

13 The 1998 and 1999 hypothetical pension benefit calculations prepared after Mr. Stevenson had raised questions about his pension and the possible value of an enhanced benefit from BNY do not support the existence of a contract to pay supplemental pension benefits.

17

These letters and memoranda do not support the existence of a promise or contract that

would have entitled Mr. Stevenson to accrue BNY pension benefits during the time that he

worked for BNY-IMB in Switzerland. At most, they support only two promises. First, they

support only a promise to preserve Mr. Stevenson’s vested pension benefits that he accrued

based on his service to BNY from 1983-1991, and to provide him benefits in accordance with the

BNY pension plan document. That was hardly surprising; Mr. Stevenson was a vested

participant in BNY’s funded pension plan based on his service prior to 1991, and the benefits he

accrued before moving to Switzerland remain payable to him when he reaches normal retirement

age. Indeed, the 1999 internal memorandum that he cites notes that he would be eligible for “a

pension benefit according to the BNY plan.” Grese Aff., Ex. 17 (emphasis added). Second, if

and when Mr. Stevenson would return to covered BNY employment in the United States, there

would be some consideration given to bridging him so that his credited service would continue

where he left off, without a break. In other words, if he had 8 years of service when he left, he

would return with 8 years plus one day, and begin accruing new pension benefits from that point

forward. This would give him a better pension than if he returned as a new hire to begin a

second, but separate period of credited service with BNY.14

While in his deposition Mr. Stevenson referenced additional discussions concerning his

pension benefits with Messrs. Bacot and Papageorge during the late 1990s, 2000, and 2003, he

was unable to provide any further details as to what exactly the pension commitment was, how it

would be calculated, or what would be used to determine the level of benefits. Grese Aff., Ex. 3,

14 Significantly, both the 1995 Tantillo memo and the 1999 Papageorge memorandum speak of a bridging arrangement, which would only apply upon a return to covered employment at BNY. That is what was contemplated in 1991, but the potential for bridging did not materialize because Stevenson never returned to BNY. In fact, at no time during his employment at BNY-IMB or after his termination in 2004 did Stevenson apply or ask to return to employment at BNY. Grese Aff., Ex. 3, Stevenson Dep. at 228; Grese Aff., Ex. 4, Papageorge Dep. at 414.

18

Stevenson Dep. at 153-154, 157-158, 209-214. Rather, he repeatedly testified simply that he

discussed the pension “commitment” with Mr. Bacot, Mr. Papageorge, and others over a number

of years, and that those individuals acknowledged “a commitment” had been made and that Mr.

Stevenson deserved to have the “commitment” fulfilled. Id.15

In sum, these vague communications are insufficient to create a binding commitment that

Mr. Stevenson would continue to accrue BNY pension benefits during the 13 years that he

worked for a separate employer in Switzerland. Indeed, Mr. Stevenson admits that at the outset,

it was contemplated that the assignment in Switzerland would last approximately 2-3 years.

Compl. ¶ 29; Grese Aff., Ex. 3, Stevenson Dep. at 231. No one – including Mr. Stevenson

himself – expected that he would work in Switzerland for approximately 13 years without

ever returning to covered employment in New York.16

Regardless of what Mr. Stevenson may have believed about continuing pension accruals,

it is clear that numerous, material details were never discussed or resolved, and that the promise

he is attempting to construct in this litigation is beyond what was contemplated in 1991 when he

and Messrs. Papageorge talked about a 2-3 year assignment. Indeed, when Mr. Stevenson

alleges that his inquiries as to his “status” went unanswered, and that no one provided him

information about “his benefits” (Compl. ¶ 5), he really is complaining that no one ever clearly

15 According to Mr. Stevenson, this alleged pension benefit was deliberately kept off BNY’s books due to regulatory issues concerning BNY’s purported control of BNY-IMB and, particularly, investigations in or about 2000 by the Manhattan District Attorney’s office and the United States Department of Justice purportedly concerning whether BNY’s alleged pension obligation to Mr. Stevenson had enabled BNY to control BNY-IMB without reporting that control to banking regulators. Mr. Stevenson, however, has no evidence supporting this theory. The more logical conclusion simply is that no such commitment was ever made to Mr. Stevenson other than to preserve his vested BNY pension benefits.

16 The question in 1991 was how to avoid penalizing Mr. Stevenson with regard to his U.S. pension as a result of a short-time assignment overseas. Once it became clear that Mr. Stevenson was not returning to the U.S. and that he was working in Switzerland on a more permanent basis, he began to accrue pension benefits from BNY-IMB. Consequently, even if BNY had promised Mr. Stevenson that he would continue to accrue BNY pension benefits while working for BNY-IMB in Switzerland (which it did not), those benefits should be offset against any BNY pension enhancement. Grese Aff. Ex. 5, Tantillo Dep. at 213-214.

19

promised him any additional benefits. At his deposition, Mr. Stevenson acknowledged that the

missing “key ingredient” to him was a document for his files explaining the details of the

pension arrangement, as the April 1999 memorandum suggested would be forthcoming. No such

memorandum or document was ever prepared or sent, and the details were therefore

“unresolved.” Grese Aff., Ex. 3, Stevenson Dep. at 441. At no time was there any mention of a

pension formula or any discussion of when benefits would commence, how accruals would be

determined based on compensation in Switzerland, and what impact Mr. Stevenson’s Swiss

pension had on pension accruals in the United States. Likewise, there was no discussion of what

would happen if Mr. Stevenson chose to remain in Switzerland indefinitely, or if he left to take

another job without returning to covered employment at BNY, or if BNY ceased to have an

ownership interest in BNY-IMB, or if his employment with BNY-IMB was terminated, as was

the case. Id. at 218-221, 233-234.

This failure to specify material terms of the alleged agreement is fatal, as the very essence

of a contract is definiteness as to material matters. Bernstein v. Felske, 143 A.D.2d 863, 533

N.Y.S.2d 538 (2d Dep’t 1988). Indeed, a court cannot decree performance of an agreement

unless it can discern with reasonable certainty and particularity what the terms of an arrangement

are. Brookhaven Hous. Coalition v. Solomon, 583 F.2d 584, 593 (2d Cir. 1978). See also

Perfect Trading Co. v. Goldman, Sachs & Co., 236 A.D.2d 221, 653 N.Y.S.2d 116 (1st Dep’t

1997) (Gammerman, J.) (affirming summary judgment dismissing breach of contract claim

where oral communications reduced to writing between the parties did not provide material

terms related to compensation and duration of agreement). The mere invocation of the word

“pension” or “pension benefits” – by either or both parties – and the mere fact that Mr.

Stevenson may believe that he was to receive supplemental pension benefits does not create an

20

enforceable pension obligation. Court decisions in the ERISA context are instructive here, and

hold that evidence of a simple decision to extend benefits to an employee does not prove that an

enforceable plan has been established under ERISA, unless the plaintiff can show that a

reasonable person can ascertain, among other things, the intended benefits. See Donovan v.

Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982) (en banc) (cited with approval in Grimo v.

Blue Cross/Blue Shield of Vermont, 34 F.3d 148, 151 (2d Cir. 1994)). In the instant matter, Mr.

Stevenson has not shown, nor can he show, facts from which a reasonable person could

ascertain, with any certainty, the scope of the alleged pension benefit, other than his own self-

serving speculation. He admits to having no knowledge as to whether he would receive the

alleged pension benefit in certain circumstances (Grese Aff., Ex. 3, Stevenson Dep. at 217-221,

233-234) and, therefore, he has offered no evidence from which a reasonable person could

ascertain the benefits which allegedly were intended.

In short, the parties never reached a “meeting of the minds” as to an agreement to provide

Mr. Stevenson supplemental pension benefits. Therefore, there was no contract to be breached.

Furthermore, Mr. Stevenson has absolutely no basis for the pursuit of a breach of contract claim

against individual Defendants, Mr. Bacot (now deceased) and Mr. Papageorge, as he does not

allege that either undertook personal contractual obligations to pay pension benefits to him. See

Grese Aff., Ex. 3, Stevenson Dep. at 141. Consequently, Mr. Stevenson’s claim for breach of

contract – against all Defendants – fails as a matter of law and must be dismissed.

B. Mr. Stevenson Cannot Prove Promissory Estoppel As A Matter Of Law

The undisputed facts fail to support a claim of promissory estoppel. The elements of

promissory estoppel are (1) a clear and unambiguous promise; (2) a reasonable and foreseeable

reliance by the party to whom the promise is made; and (3) an injury sustained by the party

asserting the estoppel by reason of his reliance. Ripple’s of Clearview, Inc. v. Le Havre Assocs.,

21

88 A.D.2d 120, 122, 452 N.Y.S.2d 447 (2d Dep’t), appeal denied, 57 N.Y.2d 609, 456 N.Y.S.2d

1026 (1982). In sum, promissory estoppel is only available where one party reasonable relies on

the promise of another and it would be unconscionable – or amounting to “contractual

overreaching, imposition, oppressiveness or unfairness” – to deny enforcement of the alleged

agreement. Mazzola v. CNA Ins. Co ., 145 Misc. 2d 896, 901, 548 N.Y.S.2d 610, 613 (Civ. Ct.

Queens Cnty. 1989) (citing Hume v. United States, 132 U.S. 406 (1889)).

Even assuming, arguendo, that Mr. Stevenson could establish the other necessary

elements of promissory estoppel, his claim fails because, as demonstrated above, the

communications and other evidence upon which he relies in support of his claim that he was

promised he would continue accrue additional BNY pension benefits during his employment by

BNY-IMB were anything but clear and unambiguous.

C. Mr. Stevenson Cannot Prove Negligent MisrepresentationAs A Matter Of Law

Mr. Stevenson also cannot establish negligent misrepresentation, as such a claim requires

him to show, among other things, that Defendants made a false representation that they should

have known was incorrect. See, e.g., Hydro Investors, Inc. v. Trafalgar Power, Inc., 227 F.3d 8,

20 (2d Cir. 2000) (reciting the elements of negligent misrepresentation as (1) defendants had a

duty, as a result of a special relationship, to give correct information; (2) defendants made a false

representation that they should have known was incorrect; (3) the information supplied in the

representation was known by the Defendants to be desired by the plaintiff for a serious purpose;

(4) the plaintiff intended to rely and act upon the information; and (5) the plaintiff reasonably

relied on it to his detriment).

Even assuming, arguendo, that Mr. Stevenson can establish the other requisite elements

of a negligent misrepresentation claim, he certainly cannot establish that in April 1991 (or at any

22

other time) Defendants falsely represented that he would continue to accrue additional BNY

pension benefits if he moved to Switzerland and became General Manager of BNY-IMB, and

that they knew or should have known that representation was false. Mr. Stevenson cannot even

establish that such a representation was made – much less than it was false when made. Indeed,

in his deposition Mr. Stevenson testified that he believed Mr. Bacot was being truthful and

honest with him during their first discussion concerning benefits in April 1991 (Grese Aff., Ex.

3, Stevenson Dep. at 146, 168-170), and the only basis for his current belief that Mr. Bacot was

not being honest is that BNY ultimately did not “honor” the commitment Mr. Stevenson claims

was made. Id.

D. Mr. Stevenson Cannot Prove Fraud As A Matter Of Law

Mr. Stevenson similarly cannot establish fraud. To prove fraud under New York law, a

plaintiff must show that: (1) the defendant made a material false representation; (2) the

defendant intended to defraud the plaintiff thereby; (3) the plaintiff reasonably relied upon the

representation; and (4) the plaintiff suffered damages as a result of such reliance.

Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc., 98 F.3d 13, 19 (2d Cir. 1996)

(citations omitted). “Each element of … fraud must be shown by clear and convincing

evidence.” Century Pac., Inc. v. Hilton Hotels Corp., 528 F. Supp. 2d 206, 219 (S.D.N.Y. 2007),

aff’d, 354 F. App’x 496 (2d Cir. 2009). Here, Mr. Stevenson’s fraud claim fails because he has

no evidence that BNY or any of its executives knowingly made a false representation to Mr.

Stevenson about his pension benefits with the intention that he rely on it. Indeed, as noted

above, the only basis for Mr. Stevenson’s current belief that Mr. Bacot was not being honest is

that BNY ultimately did not “honor” the commitment Mr. Stevenson claims was made. Grese

Aff., Ex. 3, Stevenson Dep. at 168-170. That is insufficient to establish fraudulent intent, and

without any evidence of fraudulent intent, Mr. Stevenson’s claim fails. See Murray v. Xerox

23

Corp., 811 F.2d 118, 122 (2d Cir. 1987) (Plaintiff “has failed to offer evidence of fraudulent

intent. The sole basis upon which [plaintiff] rests his claim is [defendant’s] purported failure to

follow through on the promise of promotion [and transfer]. No other evidence is offered which

indicates that [defendant] did not intend to comply with his promise from its inception. Without

such evidence, a showing of fraudulent intent fails as a matter of law.”); Sivel v. Readers Digest,

Inc., 677 F. Supp. 183, 187 (S.D.N.Y. 1988) (noting that “plaintiff must demonstrate the lack of

intent to perform at the time the promise is made, and he may not rest upon an adverse inference

arising from the nonperformance”).

E. Mr. Stevenson Cannot Prove Unjust Enrichment As A Matter Of Law17

Mr. Stevenson cannot prevail upon his claim for unjust enrichment because he cannot

demonstrate that Defendants were enriched at his expense, and “that equity and good conscience

require the plaintiff to recover the enrichment from the defendant.” Giordano v. Thomson, 564

F.3d 163, 170 (2d Cir. 2009). While Mr. Stevenson offers a formulaic recitation of the elements

of an unjust enrichment cause of action in his Complaint, he does not have any evidence

supporting the proposition that his moving to Geneva and assuming the position of General

Manager of BNY-IMB conferred a benefit upon Defendants for which he, in equity, should be

compensated. See, e.g., Hughes v. Standard Chartered Bank, No. 09-4594, 2010 WL 1644949,

at *7 (S.D.N.Y. Apr. 14, 2010). “Enrichment alone will not suffice to invoke the remedial

powers of a court of equity.” McGrath v. Hilding, 41 N.Y.2d 625, 629, 394 N.Y.S.2d 603, 606

(1977).

17 Notably, New York courts agree that the quasi-contract theory of unjust enrichment “applies [only] in the absence of an express agreement.” See Landcom, Inc. v. Galen-Lyons Joint Landfill Comm’n, 687 N.Y.S.2d 841, 842 (4th Dep’t 1999); Heller v. Kurz, 228 A.D.2d 263, 643 N.Y.S.2d 580 (1st Dep’t 1996); Metro. Elec. Mfg. Co. v. Herbert Constr. Co., 183 A.D.2d 758, 758, 583 N.Y.S.2d 497, 498 (2d Dep’t 1992). Mr. Stevenson cannot have it both ways – a party is not entitled to relief under both an alleged express contract theory and under a theory of unjust enrichment.

24

The critical inquiry is whether “under the circumstances and as between the two parties to

the transaction the enrichment [was] unjust.” Id. Mr. Stevenson cannot prove any such unjust

enrichment. Indeed, when he left BNY to assume the General Manager position at BNY-IMB,

BNY paid him accrued, unused vacation and discretionary payments in excess of $34,000, paid

his moving expenses, paid a property manager to take care of and ultimately sell his home in

Brooklyn, continued his welfare benefits, and maintained his profit-sharing accounts and vested

pension benefits. Moreover, BNY provided Mr. Stevenson the opportunity to become General

Manager of a bank (when he had previously been only a Vice President of BNY) which, as

evidenced by Mr. Stevenson’s long career at BNY-IMB and the substantial monetary

compensation he earned in his role as General Manager of BNY-IMB, was a valuable benefit.

Unjust enrichment is not appropriate where, as here, plaintiff received benefits from defendant.

Metal Cladding, Inc. v. Brassey, 159 A.D.2d 958, 553 N.Y.S.2d 255 (1st Dep’t 1990).

F. Mr. Stevenson Cannot Prove Tortious Interference As A Matter Of Law

Finally, Mr. Stevenson cannot demonstrate tortious interference with a contract because

(1) for the same reasons set forth above, he cannot show the existence of a valid contract with

BNY or anyone else to provide him BNY pension benefit accruals while he worked for a

separate employer in Switzerland; and (2) he cannot prove that Messrs. Renyi, Shepherd, and/or

Papageorge intentionally or improperly procured a breach of that contract. Lama Holding Co. v

Smith Barney, Inc., 88 N.Y.2d 413, 646 N.Y.S.2d 76 (1996) (noting that to state a claim for

tortious interference, the plaintiff must show the existence of its valid contract with a third party,

defendant’s knowledge of that contract, defendant’s intentional and improper procuring of a

breach, and damages).

Nowhere does Mr. Stevenson show how Messrs. Renyi, Shepherd, and Papageorge

induced BNY to breach its alleged contractual obligations. Rather, he describes a sequence of

25

alleged scandals and criminal investigations, concluding, without any supporting evidence, that

Messrs. Renyi, Shepherd, and Papageorge wanted to avoid satisfying BNY’s pension obligation

and prevent Mr. Stevenson “from disclosing certain improper and potentially illegal activities in

which they were involved,” and that “[t]o silence and discredit him, BNY, Renyi, Shepherd and

Papageorge were instrumental in causing BNY-IMB improperly and illegally to terminate its

employment contract with Stevenson, falsely to fire him “for cause,” and to refuse to pay him all

salary, bonuses and benefits due from BNY-IMB.” Compl. ¶ 67. How these allegations would

support a contractual claim for benefits against Messrs. Renyi, Shepherd, and Papageorge is a

complete mystery. Mr. Stevenson’s tortious interference claim rests on mere speculation and is

therefore insufficient to withstand summary judgment.

III. MR. STEVENSON’S DEFAMATION CLAIM FAILS AS A MATTER OF LAW

Mr. Stevenson’s claim for “libel, defamation and damage to reputation” against

Defendants BNY, Renyi, Shepherd and Papageorge lacks any basis in law or fact. Specifically,

Plaintiff alleges that “[w]ith knowledge of the falsity of the factual assertions in the For Cause

letter, Defendants BNY, Renyi, Shepherd and Papageorge caused, approved and/or acquiesced in

the drafting and mailing of the For Cause letter to Stevenson and the publication of the letter to,

among others, the Geneva Bar Association, BNY-IMB’s auditor, and to Swiss regulators in or

around April 2005.” Compl. ¶ 142. Further, Mr. Stevenson alleges that Defendants had the

ability and power to prevent the publication of the letter, and did not. Compl. ¶ 143.

As explained in detail below, however, Mr. Stevenson’s defamation claim fails because

Mr. Stevenson has not alleged, and cannot prove, that Defendants actually took any affirmative

action to publish a defamatory statement.

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A. Swiss Law Governs

As a threshold matter, Mr. Stevenson’s defamation claim should be governed by Swiss

law because the alleged “publications” occurred in Switzerland, where he lived and worked.

When determining which jurisdiction’s law to apply to a plaintiff’s tort claim, New York courts

apply the law of the jurisdiction with the most significant interest in the dispute. See Arochem

Int’l, Inc. v. Buirkle, 968 F.2d 266, 270 (2d Cir. 1992); Hughes v. LaSalle Bank, NA, 419 F.

Supp. 2d 605 (S.D.N.Y 2006). Where the claim involves a cause of action which regulates

conduct (as opposed to loss allocation) New York courts usually apply the law of the jurisdiction

in which the tort occurred – because that jurisdiction has the most significant interest in

governing conduct which occurred there. See id. In assessing which jurisdiction has a more

significant interest, courts consider the site of the alleged tort and the domiciles of the parties.

See Id. at 619. The site of the tort actually controls the analysis in cases where the parties, as

here, live in different jurisdictions.18

There is no question that the allegedly defamatory publications in this case occurred in

Switzerland, and Mr. Stevenson does not allege otherwise. Thus, the site of the tort is

Switzerland, and its law should be applied to Mr. Stevenson’s defamation claim. The additional

“interest test” factors also support that outcome. The alleged defamatory publication was

actually made by a Swiss bank, for which Mr. Stevenson worked – in Switzerland. BNY is the

only Defendant named in the defamation claim located in New York – all of the individual

Defendants are citizens of other states or countries. See Compl., pgs. 6-8. Finally, Mr.

Stevenson currently resides in Switzerland, and any damages he alleges resulted from the alleged

defamation also occurred in Switzerland. Any connection New York has to the alleged

18 In New York, courts may apply the laws of different jurisdictions to contract and tort claims within the same case. See Lazard Freres & Co. v. Protective Life Ins. Co., 108 F.3d 1531, 1540 (2d Cir. 1997).

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defamation, which is difficult if not impossible to see, is attenuated at best, and Swiss law should

apply.

B. Plaintiff Has No Evidence That Any Of The Defendants Actually Made OrPublished Any Defamatory Statements

Under Swiss law, a plaintiff may bring a claim for defamation if the statements at issue

violated the plaintiff’s personal integrity and thereby caused the plaintiff a personal injury. See

Grese Aff., Ex. 35, Affidavit of Alex Wittmann. Swiss defamation claims are governed by

Article 28ss of the Swiss Civil Code, in connection with Article 41 of the Swiss Code of

Obligations. See id. These articles permit plaintiffs to bring defamation claims against persons

who took an active part in effecting the alleged personal injury. See id.19

Mr. Stevenson claims that BNY and Messrs. Renyi, Shepherd and Papageorge “caused,

approved and/or acquiesced in the drafting and mailing of the For Cause letter to Mr. Stevenson

and the publication of the letter to, among others, the Geneva Bar Association, BNY-IMB’s

auditor, and to Swiss Regulators in or around April 2005.” Compl., pg. 47. Mr. Stevenson

claims that these individuals “had the ability and power to prevent the production and publication

of the For Cause letter ….” Id. Importantly, Mr. Stevenson was unable during his deposition to

support his claim other than through unsubstantiated hearsay. Grese Aff., Ex. 3, Stevenson Dep.

at 64-66, 123-125; Grese Aff., Ex. 36, Affidavit of Jean Goutchkoff.

Mr. Stevenson does not even allege that any of the Defendants actually drafted the “for

cause” letter, published its contents, or made statements regarding its contents, to any third party.

19 Under New York law, the elements of a defamation claim are a false statement, published without privilege or authorization to a third party, constituting fault as judged by, at a minimum, a negligence standard, and, it must either cause special harm or constitute defamation per se. Dillon v. City of New York, 261 A.D.2d 34, 704 N.Y.S.2d 1 (1st Dep’t 1999) (citing Restatement of Torts, Second § 558). CPLR § 3016(a) requires that in a defamation action, “the particular words complained of ... be set forth in the complaint.” The complaint also must allege the time, place and manner of the false statement and to specify to whom it was made. Arsenault v. Forquer, 197 A.D.2d 554, 602 N.Y.S.2d 653 (2d Dep’t 1993). To the extent that Mr. Stevenson contends that New York law applies to his defamation claim, he fails to satisfy any of these standards and requirements.

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Nor has he provided any evidence – other than his own baseless speculation – supporting the

same. Mr. Stevenson only has a vague recollection of seeing a letter from the Geneva Bar

Association indicating that it had a copy of his “for cause” termination letter, and he does not

know who gave the letter to it. Grese Aff., Ex. 3, Stevenson Dep. at 49-51. He also does not

know who communicated his “for cause” termination to the Swiss Banking Commission. Id. at

92-93. Mr. Stevenson has no evidence whatsoever linking the publication of the “for cause”

termination letter from BNY-IMB to BNY or the individual Defendants. Neither Messrs.

Papageorge, Shepherd, or Renyi, nor any other BNY employees, are signatories to the letter. At

the time, Mr. Stevenson was General Manager of a bank in Switzerland, whereas Messrs.

Papageorge and Shepherd were no more than outside Directors of that bank, permanently

residing and working in New York and elsewhere, and Mr. Renyi obviously was fully engaged

with the operations of BNY in New York. While Messrs. Papageorge and Shepherd certainly

attended meetings of the BNY-IMB Board of Directors from time to time, there is no logical

reason to believe that they or Mr. Renyi would be involved in handling the ministerial aspects of

Mr. Stevenson’s termination from BNY-IMB – including the distribution of the “for cause”

termination letter. Nor does Mr. Stevenson have any evidence suggesting they were. Mr.

Stevenson conceded at his deposition that Mr. Renyi was not at all involved in any Board

decisions, and other than being an “alternate” on Mr. Stevenson’s termination “task force,” Mr.

Shepherd had no involvement either.20 Grese Aff., Ex. 3, Stevenson Dep. at 29, 122. Indeed,

Mr. Shepherd resigned from BNY in October 2004 (and was no longer a BNY-IMB Board

member after that time), and therefore could not possibly been involved in any alleged

20 Mr. Shepherd testified that he does not recall seeing the March 12, 2004 letter, Grese Aff., Ex. 29,Shepherd Dep. at 229, participating in any “task force” meetings, or at all participating on the “task force.” Id. at 230-232. Mr. Shepherd also does not recall ever seeing the April 2, 2004 “for cause” letter sent to Plaintiff. Id. at240-241.

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publication of the “for cause” letter in April 2005. Grese Aff., Ex. 29, Shepherd Dep. at 7-8;

Grese Aff., Ex. 37. Mr. Papageorge testified without contradiction that after the termination

decision was reached, he returned to his home in Bermuda and left the details and negotiations to

BNY-IMB Board members in Geneva. Grese Aff., Ex. 4, Papageorge Dep. at 467, 474-480.

Although Mr. Stevenson provided an affidavit from Jean Goutchkoff stating that “the

fired-for-cause letter was given to the bank’s external auditors,” Goutchkoff Aff. ¶ 14, noticeably

absent from that affidavit is any indication that any BNY employee or individual Defendant

wrote or published the “for cause” letter. While Mr. Goutchkoff apparently believes that Mr.

Papageorge “wanted Mr. Stevenson out of the way,” Goutchkoff Aff. ¶ 14, the pertinent issue is

not whether Mr. Papageorge or anyone else disliked Mr. Stevenson or whether they wanted to

discredit him, as Mr. Goutchkoff speculates – the issue is who provided the “for cause” letter to

BNY-IMB’s auditors, the Swiss Banking Commission, and the Geneva Bar Association, as Mr.

Stevenson alleges. No one, including Mr. Goutchkoff, has any firsthand knowledge that BNY or

any of the individual Defendants sent the letter to BNY-IMB’s auditors, the Swiss Banking

Commission, or the Geneva Bar Association. Goutchkoff Dep. at 74-77, 89-93.21

Absent such evidence, it simply cannot be said that any of the Defendants took an

“active” role in effecting any injury Mr. Stevenson allegedly suffered from the alleged

publication(s) of his “for cause” termination letter. Mr. Stevenson’s defamation claim should be

dismissed because it does not state a claim upon which relief can be granted under Swiss law.

21 Relevant pages of the deposition transcript of Jean Goutchkoff are attached to the Grese Aff. as Ex. 38.

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CONCLUSION

For the foregoing reasons, Defendants respectfully request that this Court grant their

Motion for Summary Judgment and dismiss Plaintiff’s claims, with prejudice, and grant

Defendants such other relief as the Court deems just, proper, and equitable.

Dated: September 4, 2012 MORGAN, LEWIS & BOCKIUS LLPNew York, New York

/s/ Christina Joy F. GreseChristina Joy F. Grese101 Park AvenueNew York, NY 10178212-309-6000

Michael L. Banks*1701 Market StreetPhiladelphia, PA 19103215-963-5387*Admitted pro hac vice

Attorneys for Defendants