Dickinson v. Auto Center Mfg. Co., 76-4472

Decision Date07 May 1979
Docket NumberNo. 76-4472,76-4472
Citation594 F.2d 523
PartiesGeorge B. DICKINSON, Plaintiff-Appellant, v. AUTO CENTER MANUFACTURING CO., a Florida Corporation, et al., Defendants- Appellees.
CourtU.S. Court of Appeals — Fifth Circuit

Page 523

594 F.2d 523
George B. DICKINSON, Plaintiff-Appellant,
v.
AUTO CENTER MANUFACTURING CO., a Florida Corporation, et
al., Defendants- Appellees.
No. 76-4472.
United States Court of Appeals,
Fifth Circuit.
May 7, 1979.

Page 524

Jack W. Hayden, Houston, Tex., for plaintiff-appellant.

Tom Alexander, Houston, Tex., Joe Teague Caruso, Merritt Island, Fla., Norman J. Reidmueller, Houston, Tex., for defendants-appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before GEE and VANCE, Circuit Judges, and HUNTER, District Judge. *

VANCE, Circuit Judge:

George B. Dickinson brought this action against Auto Center Manufacturing Co. and its president, John W. McLeod, for breach of contract and fraud. At the close of Dickinson's case, the trial court judge directed a verdict in favor of defendants. Dickinson appeals, arguing that the court should have permitted the case to be decided by the jury. We affirm in part, and reverse and remand in part.

Dickinson is a certified public accountant who practiced public accounting in El Paso, Texas, for many years. In 1971, John McLeod's wife, Martha McLeod, engaged Dickinson to organize records and to prepare a tax return for her Cape Canaveral, Florida, business, which was a sole proprietorship at that time. With Dickinson's help, Auto Center Manufacturing Co. was incorporated under the laws of Florida in March 1972. Martha McLeod owned all shares of the company's stock, and John McLeod was its president. The McLeods began encouraging Dicksinson to move to Cocoa Beach, Florida, and to become a full-time employee of the company. Dickinson and the McLeods discussed the conditions of

Page 525

Dickinson's possible employment on several occasions, but the negotiations were inconclusive. Dickinson claims that in May 1972 John McLeod, in Cocoa Beach, Florida, telephoned Dickinson at his home in El Paso, Texas, and agreed to employ Dickinson on Dickinson's terms. Dickinson testified that during this conversation, McLeod agreed to pay him a salary of sixty thousand dollars per year and, in September 1973, after the end of his first year of employment, a twenty-five thousand dollar bonus with which he could purchase twenty-five percent of the company's stock. At trial, John McLeod said that he did not remember a telephone conversation with Dickinson during which he urged Dickinson to work for the company and accepted Dickinson's conditions. He also denied having agreed to give Dickinson a bonus that could be used to purchase a twenty-five percent interest in the company. The parties did not execute a written employment agreement.

Dickinson withdrew from his Texas accounting partnership, 1 moved to Florida, and began working for Auto Center Manufacturing Co. in July 1972. On several occasions, John McLeod and Dickinson discussed the issuance of stock to Dickinson and John McLeod's sons, Stephen McLeod and John McLeod, Jr. Dickinson prepared stock certificates dated March 27, 1973, in which he was allotted twenty-five percent of the company's stock; John McLeod, Jr., and Stephen McLeod were each allotted twenty percent; John McLeod was allotted ten percent; and Martha McLeod retained twenty-five percent of the stock. Dickinson claims that the certificates were drafted at John McLeod's request. The certificates, however, were never signed. On the same day, March 27, 1973, John McLeod, Martha McLeod, Dickinson, John McLeod, Jr., and Stephen McLeod met in the company's Florida offices to discuss the assignment of stocks. Notes taken by John McLeod at this meeting and admitted into evidence at the trial contain the phrase, "our goal ($)2,000,000 personal net worth," and the figures, "51%-25%-24%." Dickinson argues that at the meeting the McLeods agreed that twenty-five percent of the stock would be issued to Dickinson immediately in exchange for twenty-five thousand dollars to be paid on September 30, 1973, and that Martha McLeod would retain seventy-five percent of the stock. John McLeod, Jr., and Stephen McLeod, Dickinson testified, were to be issued twenty-four percent of the stock leaving Martha McLeod with fifty-one percent when John and Martha McLeod achieved a personal net worth of two million dollars and were relieved of personal guarantees. John McLeod, however, testified that no stock was to be issued until the two million dollar goal was reached. No stock was, in fact, issued, and Martha McLeod remains the holder of all shares of Auto Center Manufacturing Co. stock. Dickinson's employment with Auto Center Manufacturing Co. was terminated on June 26, 1973, four days before he would have completed his first year with the company.

In his complaint, Dickinson alleged that Auto Center Manufacturing Co. and John McLeod 2 fraudulently induced him to leave his partnership in Texas and to accept employment with the defendants in Florida and that they breached their employment contract with him. At trial, Dickinson attempted to show that the parties made two oral employment agreements and that both agreements had been breached by the defendants. Dickinson claims that during the May 1972 telephone conversation he promised to work for the company in exchange for John McLeod's promise that the company would employ him until both parties terminated the relationship and that it would pay him a bonus with which he could

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