37 F.3d 1274 (8th Cir. 1994), 93-3681, Paul v. Farmland Industries, Inc.

Docket Nº:93-3681.
Citation:37 F.3d 1274
Party Name:Ronald B. PAUL, Appellant, v. FARMLAND INDUSTRIES, INC., Appellee.
Case Date:September 16, 1994
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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37 F.3d 1274 (8th Cir. 1994)

Ronald B. PAUL, Appellant,



No. 93-3681.

United States Court of Appeals, Eighth Circuit

September 16, 1994

Submitted May 9, 1994.

Rehearing and Suggestion for Rehearing En Banc Denied Oct. 26, 1994.

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Kelly L. McClelland, Liberty, MO, argued (Kelly L. McClelland and Kevin A. Graham, on the brief), for appellant.

William C. Martucci, Kansas City, MO, argued (William C. Martucci and Daniel B. Boatright, on the brief), for appellee.

Before BOWMAN, Circuit Judge, HEANEY, Senior Circuit Judge, and BEAM, Circuit Judge.

BEAM, Circuit Judge.

Ronald B. Paul appeals an adverse judgment in this action for age discrimination in employment, fraud and breach of contract. We affirm.


Paul was hired by Farmland in 1987 as Vice-President and Chief Information Officer and was terminated less than two years later. He filed this action alleging age discrimination in employment under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Sec. 621, and breach of contract and fraud under Missouri law. At the close of the evidence, after a nine-day trial, the district court entered judgment as a matter of law in favor of Farmland on Paul's fraud and breach of contract claims. The age discrimination claim was submitted to the jury and the jury returned a verdict in favor of Farmland.

On appeal, Paul asserts that the district court erred in entering judgment as a matter of law on the fraud and breach of contract claims and erred with respect to the ADEA claim in receiving certain documents from Paul's personnel file from a former employer. He asserts that the improper evidence requires reversal of the jury verdict.


We review the district court's interpretation of state law de novo. Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991). In

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reviewing the district court's grant of judgment as a matter of law, we apply the same standard as the district court. Jacobs Mfg. Co. v. Sam Brown Co., 19 F.3d 1259, 1263 (8th Cir.1994). We consider the evidence and the reasonable inferences that may be drawn from the evidence in the light most favorable to Paul. Id.

A. Breach of Contract

We agree with the district court that Paul did not present a submissible breach of contract claim. Paul relies on several documents to create an ostensible contract of employment for a term of three years. 1 These include a letter from the President of Farmland offering Paul the position and a long-term management incentive plan referenced in the letter. Nowhere in these documents do we find any expression, or even intimation, that either party contemplated employment for a term of years. The three-year management incentive plan merely outlines a component of Paul's compensation package. Under Missouri law, absent an employment contract to the contrary, an employee may be discharged for cause or without cause and the employee has no cause of action for wrongful discharge as a matter of law. Johnson v. McDonnell Douglas, Corp., 745 S.W.2d 661, 662 (Mo.1988) (en banc). Because Paul has presented no evidence of a contract for a term of years, the district court properly entered judgment on his breach of contract claim.

B. Fraud

Similarly, Paul did not prove a submissible case of fraud. Paul's fraud claim is premised on the contention that he was induced to leave another job and induced to work for Farmland by the false promise of Mr. James Rainey, Farmland's President, that Paul would have a contract of employment for three years. The district court found that an employee "may not assert a fraud claim that is essentially a cloaked contract claim." Paul v. Farmland Indus., Inc., No. 90-0594-CV-W-1, Order at 7 (W.D.Mo. Sept. 27, 1993) (citing Hanrahan v. Nashua Corp., 752 S.W.2d 878, 883 (Mo.Ct.App.1988)).

Under Missouri law, when a tort action arises from the breach of a contract, a plaintiff is precluded from maintaining both a breach of contract and a fraud claim against an employer. Bernoudy v. Dura-Bond Concrete Restoration, Inc., 828 F.2d 1316, 1318 (8th Cir.1987). A fraud claim is permitted only if it arises from acts that are separate and distinct from the contract. Id. We need not resolve the issue of whether Paul presented a "cloaked" contract claim or a fraud claim based on separate and distinct acts, because we find, in any event, that Paul did...

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