Bigham v. McCall Service Stations, Inc., WD

• Decision Date: 08 June 1982
• Docket Number: No. WD,WD
• Citation: 637 S.W.2d 227
• Court: Missouri Court of Appeals
• Parties: 25 Wage & Hour Cas. (BNA) 837 Donald L. BIGHAM, Plaintiff-Respondent, v. McCALL SERVICE STATIONS, INC., Defendant-Appellant. 32479.

Page 227

637 S.W.2d 227

25 Wage & Hour Cas. (BNA) 837

Donald L. BIGHAM, Plaintiff-Respondent, v. McCALL SERVICE STATIONS, INC., Defendant-Appellant.

No. WD 32479.

Missouri Court of Appeals, Western District.

June 8, 1982.

Motion for Rehearing and/or Transfer to Supreme Court

Overruled and Denied Aug.

3, 1982.

Application to Transfer Denied Sept. 13, 1982.

John G. Killiger, Kansas City, S. Preston Williams, Thomas E. Barzee, Jr., North Kansas City, for defendant-appellant.

Daniel M. Czamanske, Riverside, for plaintiff-respondent.

Before SOMERVILLE, C. J., and WASSERSTROM and LOWENSTEIN, JJ.

WASSERSTROM, Judge.

Plaintiff Donald L. Bigham sued to recover deductions from his wages made by McCall Service Stations, Inc. in alleged violation of Section 44-319, Kan.Stat.Ann. The trial court entered judgment on a jury award of $1,459.47 actual damages and $168,750.00 punitive damages, from which defendant appeals. We reverse.

McCall, a Kansas corporation duly qualified to do business in Missouri, is engaged in the operation of retail gasoline service stations, and maintains its principal business offices in Missouri. It has seven stations located in Kansas and nine stations in Missouri. In November 1971, Bigham, a resident of Missouri, began work for McCall as an attendant at the McCall station in Quindaro, Kansas. ¹ After seven or ten weeks he transferred to the McCall station in Riverside, Missouri, where he worked for one year. Then he was transferred successively to two other McCall Missouri stations for short periods. He then returned to work at the Riverside station where he became the manager in January 1974.

At that time, McCall had an established policy and practice with respect to station managers. There were two managers at each station for each of two separate shifts. The two managers signed a memorandum to the company jointly assuming responsibility for $400 delivered to them by McCall for the purpose of making change. Each manager was liable for any cash shortages and was given credit for any overages which occurred during his shift. Each manager was liable for any bad checks accepted during his shift and also for the giving of any credit on credit cards as to which the credit card company had given notice that further credit should not be extended. In consideration for those additional duties and responsibilities, the supervisors were paid higher salaries than attendants and the managers each also received a bonus based on the amount of gallonage sold at the station. In addition, McCall permitted the managers to operate the business of selling cigarettes at the station, the profits from which belonged to the managers; the company advanced the amount of cigarette taxes and then charged the amount of the taxes to the respective managers. Bigham was fully aware of the foregoing practices and rules at the time he accepted the promotion to manager. ²

After Bigham became a manager in 1974, McCall made a number of deductions from his salary because of bad checks and the giving of credit on posted credit cards, aggregating for the year $806.75. ³ In addition, McCall deducted amounts as "short in station" aggregating for the year $652.72. The total of those two categories for the year 1974 came to $1,459.47.

Bigham remonstrated with his supervisor concerning the amount of these deductions. His supervisor replied that Bigham had assumed the liabilities with the promotion and therefore had to put up with it or quit. Bigham did quit in November of 1974 and instituted this suit against McCall in March 1975. The suit was tried and submitted to the jury on the theory that the deductions in question violated Section 44-319, Kan.Stat.Ann., which provides as follows:

"Withholding of wages. (a) No employer may withhold, deduct or divert any portion of an employee's wages unless: (1) The employer is required or empowered to do so by state or federal law; (2) the deductions are for medical, surgical or hospital care or service, without financial benefit to the employer, and are openly, clearly and in due course recorded in the employer's books; or (3) the employer has a signed authorization by the employee for deductions for a lawful purpose accruing to the benefit of the employee.

* * * "

On this appeal, McCall raises six points. The first of those points makes the fundamental contention that Section 44-319, upon which Bigham rests his case, has no application under the facts here. Because we rule that point in favor of McCall, and because that point disposes of the whole case, it becomes unnecessary to discuss or rule upon any of McCall's other points.

The starting point for a discussion of the issues presented must be the legal proposition that the statute of a state does not ordinarily have any extra-territorial effect. The rule in this regard was stated in Horstman v. General Electric Company, 438 S.W.2d 18, 20 (Mo.App.1969), as follows:

" ' "Prima facie, every statute is confined in its operation to persons, property, rights, or contracts, which are within the territorial jurisdiction of the Legislature which enacted it. The presumption is always against any intention to attempt giving to the act an extra-territorial operation and effect." '; and citing Hilton v. Guyot, 159 U.S. 113, 16 S.Ct. 139, 40 L.Ed. 95. ' " No law has any effect, of its own force, beyond the limits of the sovereignty from which its authority is derived." ' "

To the same effect: Stanley v. Wabash, St. L. & P. Ry. Co., 100 Mo. 435, 13 S.W. 709 (1890); State v. Stanley, 104 Kan. 475, 179 P. 361 (1919); 73 Am.Jur.2d Statutes Section 357 (1974). ⁴

While not denying the foregoing principle against extra-territoriality, Bigham argues that this case comes within certain exceptions to or variations upon that doctrine. His first and major reliance is upon the rule of "lex loci contractus" under which the laws which exist at the time and place of making a contract, and at the place where it is to be performed, affecting its validity, construction, enforcement, termination and discharge, enter into and form a part of the contract as if they were expressly referred to or incorporated therein. Bliven v. Brunswick Corp., 575 S.W.2d 788, 790-791 (Mo.App.1978) and cases therein cited.

That principle has no pertinence here. The original employment contract under which Bigham commenced work in Kansas occurred in 1971. Section 44-319 did not go into effect until July 1973. Therefore the 1971 contract could not have incorporated a statute which was not enacted until more than a year and a half later. Moreover, by the time the statute in question did go into effect, the contract of employment was no longer being performed in Kansas.

Bigham relies very heavily on the opinion of this court in Bliven v. Brunswick Corp., supra. In that case Bliven, a Missouri resident, was employed in Missouri to serve as the manager of a bowling alley in Missouri. After so serving for nine months, he was transferred to Louisiana for five months, then to Iowa for two months, and then to Kansas for eight months. Bliven was then terminated and demanded a service letter which was not given. He brought suit in Missouri on the Missouri service letter statute. This court held that the case came within the Missouri statute despite the various transfers and discharge out-state.

The present case, however, is more nearly like McCluney v. Jos. Schlitz Brewing Co., 649 F.2d 578 (8th Cir. 1981) which discusses and distinguishes Bliven. ⁵ McCluney had been hired as an industrial relations manager of the Schlitz Kansas City plant in 1956. In 1970 he was transferred and promoted to manager in a Schlitz North Carolina plant where he served for five years. In 1975 he received another promotion to vice president of plant operations and was transferred to Wisconsin. Shortly thereafter a disagreement arose between the parties which led to his termination. McCluney demanded a service letter under the Missouri service letter statute, and after receiving one he filed suit for damages. The court held that the application of the...