ALABAMA AGR. AND MECHANICAL UNIV. v. Jones

• Decision Date: 14 May 2004
• Citation: 895 So.2d 867
• Parties: ALABAMA AGRICULTURAL AND MECHANICAL UNIVERSITY et al. v. Dr. Jeanette JONES.
• Court: Alabama Supreme Court

895 So.2d 867

ALABAMA AGRICULTURAL AND MECHANICAL UNIVERSITY et al. v. Dr. Jeanette JONES.

1021960.

Supreme Court of Alabama.

May 14, 2004.

Rehearing Denied August 27, 2004.

Roderic G. Steakley and William R. Lunsford of Sirote & Permutt, P.C., Huntsville, for appellants.

Frederick L. Fohrell and Robert C. Lockwood of Wilmer & Lee, P.A., Huntsville; and J. Cecil Gardner and Samuel H. Heldman of Gardner, Middlebrooks, Gibbons, & Kittrell, Mobile, for appellee. WOODALL, Justice.

Alabama Agricultural and Mechanical University ("A & M"); its president, Dr. John Gibson; and 11 members of its board of trustees (hereinafter referred to collectively as "the University") appeal from a declaratory judgment in favor of Dr. Jeanette Jones, a tenured professor of biology at A & M, awarding her approximately $44,000 in her action seeking back pay and injunctive relief, based on an alleged oral contract with the University. We reverse and remand.

I. Background

The events underlying this dispute began early in the 1994-95 academic year, while Dr. Jones was the vice president for research and development for A & M. At that time, Dr. David Henson, who was then president of A & M, allegedly made an oral promise to Dr. Jones to increase her salary by approximately $10,000. More specifically, "her salary [was to] be raised in two steps — one step that academic year (1994-95), and the second step the following year (1995-96) — ending up with a salary of approximately $90,000 per year." Dr. Jones's brief, at 4-5.

In September 1994, Dr. Henson initiated the first step by submitting a directive to the vice president for business and finance, who, in turn, passed the directive to the director of the department of human resources and personnel. Thus, Dr. Jones received the first step of her raise, which was evidenced by a "Personnel Action Form," signed by Dr. Henson on September 16, 1994, effective from October 1, 1994, to September 30, 1995. However, Dr. Henson resigned as president of the University in August 1995, and, by a letter dated September 5, 1996, his successor, Dr. Gibson, notified Dr. Jones that her "employment as Vice President for Research and Development" would terminate on September 30, 1996, although she continued to be employed as a biology professor. Dr. Jones never received the second step of the salary increase.

On June 8, 1998, Dr. Jones filed a grievance with the grievance committee for A & M ("the committee"). The committee recommended that Dr. Jones receive "payment of the 1995 adjustment if it [should be] found that the [board of trustees] approved consecutive year payments," because she had "served as Vice-President during a second year." Subsequently, Joe Boyer, the Interim Provost/Academic Vice President, wrote Dr. Gibson a letter, stating, in pertinent part:

"A hearing has been held on the allegations of Dr. Jones that the University has acted inappropriately insofar as she is concerned. She alleged that (1) it was inappropriate to have removed her as Vice President for Research and Development. The [committee] did not address this issue. It did, however, recommend that Dr. Jones be paid a sum of money that she claims is owed to her. The claim is based upon an unsubstantiated claim that the former President of [A & M] promised a salary adjustment to all vice presidents. Since the first installment on the adjustment was paid, she claims that she is due the remainder of the adjustment. Had Dr. Jones remained in the position, she would have a claim to the adjustment since, in my view, the adjustment was for the position of Vice President, not the holder of the position. I would not therefore accept the recommendation of [the committee] on this claim."

(Emphasis added.) Dr. Gibson concurred with Boyer's recommendation, and declined Dr. Jones's request for the salary increase.

On June 14, 2000, Dr. Jones sued A & M, as well as Dr. Gibson and the 11 trustees in their official capacities. Her complaint, as last amended, contained a breach-of-contract claim, alleging that the University had adopted a salary schedule that "form[ed] a part of Jones's employment contract with the [University]," and that the University had breached the contract "by wrongfully failing to award Jones the second half of the salary increase." She sought "specific performance and/or injunctive relief..., including but not limited to orders directing [the University] to increase [her] salary in accordance with the second half of the salary increase, and reimburse Jones for failure to award the salary increase in the past, and/or to award back pay." (Emphasis added.) Dr. Jones's complaint also sought a judgment declaring that she was "entitled to an increase in her salary in accordance with the salary increase," and to "an award of back pay for failure of [the University] to award the salary increase." (Emphasis added.) Finally, her complaint sought a writ of mandamus, directing the University to "increase her salary in accordance with the salary increase," and to "award back pay." (Emphasis added.)

The University answered the complaint, asserting affirmative defenses, including sovereign immunity and the Statute of Frauds. The University later moved for a summary judgment. The trial court denied the motion, but with the notation: "No monetary damages can be awarded as to the contract count."

The case was tried without a jury. The trial court determined that the University was "required to increase [Dr. Jones's] annual salary by an amount of $4,955.00 annually, beginning with the 1998-99 academic year." Notwithstanding its previous conclusion that no damages could be awarded for breach of contract, the court awarded Dr. Jones back pay. More specifically, it ordered the University to "pay to [Dr. Jones] an amount equal to the compensation she would have received from the beginning of the 1998-99 academic year until the date of [its] order if [she] had received a raise of $4,995.00 for the 1998-99 academic year, and continuing to the [date of the order]." The award was to be augmented by "all cost of living increases provided to [A & M] employees," plus prejudgment interest. The trial court also ordered the University "to immediately raise [Dr. Jones's] annual compensation in the amount of $4,995.00, plus any cost of living increase from 1998." Thus, the trial court ordered both retrospective and prospective relief. The University appealed.

Although the University raises a number of issues on appeal, two of those issues are dispositive. The first issue is whether sovereign immunity, as expressed in Ala. Const.1901, § 14, bars either the retrospective or prospective relief ordered by the trial court. The second issue is whether the Statute of Frauds bars either retrospective or prospective relief. We would ordinarily address sovereign immunity as a threshold issue. However, because of the peculiar interplay of the two defenses in this case, we will first address the Statute of Frauds defense.

II. Statute of Frauds

Although it is apparently not seriously disputed that some promise was made to Dr. Jones regarding a two-step raise, the University does dispute the terms of such a promise and argues that the promise violates Ala.Code 1975, § 8-9-2(1). That provision renders void "[e]very agreement which, by its terms, is not to be performed within one year from the making thereof," unless it, "or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party to be charged therewith." Even if the University admitted the existence of an oral agreement, "such an admission would not prevent the Statute of Frauds from voiding the contract if the contract meets the criteria of the statute." Ex parte Ramsay, 829 So.2d 146, 154 (Ala.2002).

Dr. Jones's response to the University's argument is that the Statute of Frauds does not apply to this contract, either (1) because it could have been performed within one year, or (2) because the contract is no longer executory, that is, that Dr. Jones has fully performed. We address each of these arguments in turn.

A. The One-Year Provision

"The one-year provision of the Statute of Frauds applies to any agreement which by its terms cannot be performed within one year." Abbott v. Hurst, 643 So.2d 589, 592 (Ala.1994) (emphasis added). Dr. Jones argues that the promise was capable of performance in one year, and, therefore, that the Statute of Frauds does not apply. However, this argument is belied by her own characterization of the promise. Specifically, she states: "In a one-on-one meeting, President Henson indicated that [Dr. Jones's] salary would be raised in two steps — one step that academic year (1994-95), and the second step the following year (1995-96) — ending up with a salary of approximately $90,000 per year." Dr. Jones's brief, at 4-5. Elsewhere, she says: "The first half of that pay raise would be paid during the 1994-95 school year; and, the second half would be paid during the 1995-96 school year." Dr. Jones's brief, at 5-6. In other words, according to Dr. Jones, she was to receive one step in the first year, and the second step a year later. This oral promise is a quintessential example of one to which § 8-9-2(1) is applicable. On its face, the promise of the second step of the raise was incapable of performance within one year of the making of the promise. Dr. Jones would not, indeed could not, receive any part of the second-step salary increase until she had been paid for one year under the first step. Thus, unless Dr. Jones can demonstrate that the oral promise falls within an exception to the Statute of Frauds, she cannot recover from the University.

B. Executed or Executory

Dr. Jones invokes the executed-contract exception to the Statute of Frauds. Specifically, she states that the "`Statute of Frauds voids only executory contracts, not executed contracts.... A contract is executed, and not voided by the Statute of Frauds, if the...