Angotti v. State Farm Mut. Auto. Ins. Co.
| Decision Date | 22 November 1991 |
| Docket Number | No. 91-1048,91-1048 |
| Citation | 948 F.2d 1288 |
| Parties | NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. Anna A. ANGOTTI, Plaintiff-Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Before NATHANIEL R. JONES and SUHRHEINRICH, Circuit Judges, and WELLFORD, Senior Circuit Judge.
On December 26, 1989, plaintiff-appellant Anna Angotti filed a complaint in state court against State Farm Mutual Insurance Company alleging that State Farm had discharged her without just cause in violation of her employment contract. Predicated on diversity of citizenship, State Farm removed the action to United States District Court. On December 6, 1990, the district court granted State Farm's motion for summary judgment, finding that Angotti had offered no evidence indicating that her termination had been other than for just cause. For the reasons that follow, we affirm in part and reverse in part.
In June of 1988, after the successful completion of State Farm's agent training program, Angotti accepted employment with State Farm as a "trainee agent," and subsequently executed an employment contract entitled the State Farm Trainee Agent Agreement ("Agreement"). The Agreement, a standard one for trainee agents, includes a number of provisions relating to the terms and conditions of employment. Part II(A) of the Agreement provides: "Your continued employment is contingent upon, among other things, your demonstration of: (1) ability to be trained and receive instruction, (2) ability to meet prospecting and production requirements, and (3) personal and professional development consistent with the requirements of the Trainee Agent Development Guide." J.A. at 166. The guide referred to in this section explains the requirements listed there more fully and provides that the trainee agent's supervisor must complete weekly progress reports of the trainee agent. Part V of the Agreement further provides: "Either you or the Company may terminate this Agreement by written notice delivered to the other or mailed to the other's last known address." J.A. at 167. Furthermore, the Agreement states that it "shall be the sole and entire employment agreement between [the parties]" and "supersedes and replaces any prior employment or agency agreement(s) with any of the State Farm Companies or all of them." J.A. at 166. Finally, the Agreement states that "no change, alteration or modification of this Agreement may be made except by written agreement between [the parties]." J.A. at 166.
In her initial meeting with Agency Director Lawrence LaPorte, Angotti recalls being told that her employment could be terminated "if production is not there" or for embezzlement. J.A. at 110. Angotti testified that based upon her understanding of the "[A]greement itself, and just by talking to other agents, [Agency Manager James] Luzod [and] Mr. LaPorte," she would not be terminated "unless they found proper causes." J.A. at 133. LaPorte, in answer to whether the items listed in Part II(A) constituted the only grounds for which one could be terminated, testified "[g]enerally speaking, yes." J.A. at 256.
Angotti began her employment in State Farm's Oak Park, Michigan office under the tutelage of agency manager Luzod. Angotti, like all other trainee agents, was assigned prospecting, production, and income goals by her agency manager. Angotti testified that she was led to believe that these were not strict requirements, but "a goal to strive for on a monthly basis." J.A. at 117. LaPorte also testified that the production goals were not mandatory minimums, and that it was not State Farm's policy to automatically terminate an employee for failure to meet the standards after a six- or twelve-month period.
In July of 1988, Charles Moran replaced Luzod as Angotti's agency manager. Thereafter began what Angotti described as a less than amicable relationship with Moran. Despite the fact that in February, 1989, Angotti secured the highest number of applications and the second highest volume in sales of life insurance in her district, Moran nevertheless recommended her termination. LaPorte denied the recommendation. Soon thereafter, Angotti met with LaPorte and told him of Moran's unfriendliness and hostility towards her. When she requested a transfer to another manager, LaPorte refused. Upon learning that Angotti had met with LaPorte, Moran made it clear to Angotti that he "did not care to be her friend" and "didn't appreciate [her having gone] to LaPorte one-on-one." J.A. at 149.
In June, 1989, Moran again recommended termination of Angotti's employment citing her inability to meet production goals. LaPorte accepted Moran's recommendation. In his review and acceptance of LaPorte's decision, Charles Trubac, Regional Vice President of State Farm, cited both Angotti's low production and Moran's opinion of her unwillingness to succeed as the grounds for her termination. 1
While conceding that, by June of 1989, her performance had fallen somewhat below her assigned production requirements, Angotti contends that her figures remained well above those of many other similarly situated trainee agents whom State Farm did not terminate. According to Angotti's expert witness, Michael Thomson, Angotti's 1989 overall production figures missed her projected standards by 5.8%, while State Farm retained other trainee agents whose production fell beneath their respective production goals by as much as 74.4%. J.A. at 90-91.
Both parties agree that the production requirements did not establish a mandatory minimum that employees were required to meet to avoid automatic termination. Angotti claims, however, that so many trainee agents failed to meet their production requirements, and by so much more than she, that termination of her employment for failure to meet the goals did not constitute just cause, and asserts that Moran's personal animus may have motivated his decision to recommend her termination.
In granting summary judgment to State Farm, the district court made two findings. First, the court held that the Agreement, when read in its entirety, did not constitute an at-will employment contract, but rather required that termination of Angotti's employment be supported by just cause. Second, the court held that just cause existed in this case as a matter of law, reasoning that Angotti did not dispute that she failed to meet her production requirements, and had further failed to offer any evidence that State Farm "somehow thwarted her efforts to meet [the] requirements." J.A. at 22. In this appeal, Angotti challenges the court's finding that just cause existed as a matter of law, while State Farm contends that the court erred in finding that the agreement constituted a just-cause rather than an at-will contract.
Our review of a district court's grant of summary judgment is de novo. Curry v. Vanguard Ins. Co., 923 F.2d 484, 485 (6th Cir.1991). With this in mind, we first consider State Farm's contention that the Agreement constituted an at-will contract of indefinite term rather than a just-cause employment contract.
The general rule of contractual construction in Michigan has long held that, "in the absence of a contractual basis for holding otherwise, either party to an employment contract for an indefinite term may terminate it at any time for any, or no, reason." Suchodolski v. Michigan Consol. Gas Co., 316 N.W.2d 710, 711 (Mich.1982). With the watershed case of Toussaint v. Blue Cross & Blue Shield, 292 N.W.2d 880 (Mich.1980), and its progeny, however, Michigan common law has been guided by the principle that "an employment contract providing that an employee would not be terminated except for cause [is] enforceable although no definite term of employment [is] stated." Valentine v. General Am. Credit Inc., 362 N.W.2d 628, 629 (Mich.1984). Toussaint rested its analysis in part on a distinction between an employer's express agreement to terminate for cause and statements of company policy and procedure to that effect. Toussaint, 292 N.W.2d at 890. This distinction has been reaffirmed in subsequent cases. See Bullock v. Automobile Club of Mich., 444 N.W.2d 114, 117-18 (Mich.1989), cert. denied, 110 S.Ct. 1118 (1990); In re Certified Questions, 443 N.W.2d 112, 114 (Mich.1989). As to both types of contracts, the Toussaint court noted that an employer remained free to "protect itself by entering into a written contract which explicitly provides that the employee serves at the pleasure or at the will of the employer or as long as his services are satisfactory to the employer." Toussaint, 292 N.W.2d at 891 n. 24.
In the instant case, both parties agree, and the district court assumed, that the Agreement itself definitively established the terms and conditions of Angotti's employment. The parties merely disagree as to whether the language of the Agreement created an at-will or just-cause employment relationship. Because the issue is one of straightforward contractual interpretation, the meaning of the Agreement's language is a question of law for the court. See Hawkins v. Smithson, 449 N.W.2d 676, 678 (Mich.Ct.App.1989). In addition, Michigan common law clearly establishes that, where an express contract exists, the court should not find an implied contract covering the same subject. De Haan's Estate v. De Haan's Estate, 134 N.W. 983, 985 (Mich.1912).
Both parties cite a plethora of cases allegedly supporting their contrary interpretations of the Agreement. These cases appear to us to fall into two rather distinct categories. In the first group are those cases in which the employer, following Toussaint's admonition that employers carefully articulate whether the contract is at-will, explicitly...
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