Bowers Window and Door Co., Inc. v. Dearman, 58611

Decision Date13 September 1989
Docket NumberNo. 58611,58611
Citation549 So.2d 1309
Parties113 Lab.Cas. P 56,144 BOWERS WINDOW AND DOOR COMPANY, INC., William B. Bowers, as Agent for Bowers Window and Door Company, Inc., and William B. Bowers, Individually v. Rick R. DEARMAN.
CourtMississippi Supreme Court

Earl Keyes, Keyes Moss Piazza & Woods, Jackson, for appellant.

Marvin E. Wiggins, Jr., Martin & Jones, Meridian, for appellee.

Before HAWKINS, P.J., and SULLIVAN and PITTMAN, JJ.

PITTMAN, Justice, for the Court:

Complaint was filed by Rick Dearman on or about February 8, 1987, in the Chancery Court of Lauderdale County against William B. Bowers and Bowers Window and Door Company (hereinafter "Bowers"). Dearman sought specific performance of an oral contract of employment, or alternatively, damages for breach of that contract. The cause came on for trial in the Chancery Court of Lauderdale County on May 28, 1987, before the Hon. George Warner, Jr.

At the conclusion of Dearman's case, both sides rested. The Chancellor held in favor of Dearman and awarded damages against Bowers Window and Door Company in the amount of $2,000.00 per month from June 1, 1987, through December 15, 1988. In addition, Dearman was awarded a lump sum payment of $12,280.00 representing past due salary. The lower court also ordered that Dearman would be obligated to abide by the terms of the contract in the event Bowers elected to re-hire him, and that his expenses would be reimbursed according to the terms of the contract. Finally, William Bowers was dismissed from the suit individually.

Bowers promptly filed notice of appeal and raises the following issues:

I. THE LOWER COURT ERRED IN DETERMINING THAT THE ORAL EMPLOYMENT CONTRACT OF SEPTEMBER 3, 1986, WAS TO EXTEND THROUGH DECEMBER, 1988.

II. THE LOWER COURT ERRED IN APPLYING THE DOCTRINE OF EQUITABLE ESTOPPEL AS AN EXCEPTION TO THE BAR OF THE STATUTE OF FRAUDS.

Since 1978, Rick Dearman had been employed as a salesman for McGinnis Distributing Company in Meridian, Mississippi. Dearman was for the most part happy with his situation at McGinnis, but he desired more. Apparently feeling that McGinnis could not offer the kind of advancement he desired, Dearman embarked on a job search in mid-1986.

Dearman's venture into the job market caused him to send a resume to William Bowers, president of Bowers Window and Door Company, then headquartered in Ridgeland, Mississippi. In his resume, Dearman included the usual facts and stated that the only employment move he would consider would be for an advancement over his present position. To put this consideration into perspective, Dearman was being paid a guaranteed salary of $300.00 per month plus commissions by McGinnis. In the year 1984, Dearman earned $41,000.00, in the year 1985 he earned $22,875.63, and through mid-September, 1986, he earned $20,844.00.

At the time Bowers received Dearman's resume there were no immediate openings. However, Bowers lost a sales representative from the Jackson area in August, 1986, prompting William Bowers to contact Dearman. Bowers queried Dearman about the recent opening in the Jackson area, but Dearman declined an offer to interview because he had recently married, and he had just completed construction of a new home in Meridian. Dearman did, however, proposition Bowers about expanding into the Meridian area, but no accord was reached. From this point forward, details of the budding relationship begin to differ.

It is Bowers's story that he heard nothing from Dearman after he declined to interview for the Jackson opening until Dearman showed up uninvited at the Ridgeland office on September 3, 1986. By this time the Jackson position had been filled, but Dearman was there to talk about a position in Meridian. William Bowers and Dearman met for approximately one hour and fifteen minutes, during which Dearman related his working knowledge and experience in the Meridian area, and allegedly told Bowers that he could generate $40,000.00 to $50,000.00 in sales per month in that area.

Dearman, on the other hand, asserts that following his refusal of the Jackson position, William Bowers called him to say that he was considering expansion into the Meridian area, and that he wanted to talk with Dearman because of Dearman's experience in the Meridian area.

Regardless of how the meeting came about, the parties uniformly agree that during this meeting on September 3, 1986, William Bowers extended on behalf of the company an oral offer of employment to Dearman, which Dearman accepted. The agreement provided that Dearman would work for Bowers as a sales representative in the Meridian area. Dearman thereafter began work for Bowers on September 15, 1986.

It is likewise uncontradicted that one condition of Dearman's employment with Bowers was that he terminate his employment relationship with McGinnis, and this he did. However, before terminating his relationship with McGinnis, Dearman desired written confirmation of the Bowers offer. On September 5, 1986, a letter from Bowers was sent to Dearman and read as follows:

This letter will confirm our conversation on Wednesday, September 3, 1986, wherein I offered you a sales position with our company. As stated, I will guaranteed you a base income of $24,000.[sic] yearly and an expense allowance of $400.00 per month.

Sincerely,

BOWERS WINDOW & DOOR CO., INC.

/s/ William B. Bowers

Dearman, William Bowers, and Sarah Bowers, secretary for the company, testified that the above terms are the only ones that Dearman requested confirmation on. All other terms, most notably duration, remained solely the subject of oral agreement. In addition to the guaranteed salary and expenses, Dearman was eligible for commissions on sales.

One of the outcome determinative issues on this appeal is whether the parties orally agreed to a contract of employment for a definite term or indefinite term. Once again, the allegations differ sharply. According to Bowers, the employment agreement was for an indefinite term. In other words, Bowers viewed the relationship as terminable at the will of either party. Both William Bowers and Sarah Bowers testified that this was their understanding of the relationship.

Dearman, on the other hand, asserts that William Bowers extended an offer of employment for a definite term to run from September 15, 1986, through December, 1988. Dearman testified that during the September 3, 1986, meeting, William Bowers "guaranteed [Dearman] employment through '88"; that "[Bowers] stated to [Dearman] that he would guarantee ... employment through '88"; that the agreement reached on September 3 was for "secure employment through '88 at $24,000 per year guaranteed base income and expense account of $400 per month."

Leaving for now the question of duration, Dearman did not produce according to Bowers's satisfaction and this prompted Bowers to approach Dearman in early November, 1986. Bowers expected Dearman to generate the $40,000.00 to $50,000.00 in sales per month which he allegedly indicated he could produce. Dearman, of course, denies that he made this assurance, and testified that he told Bowers only that he could produce, but in no certain amount. William Bowers testified that he approached Dearman around November 1, 1986, to discuss his lack of production. According to interrogatory answers filed by Bowers, expenses incurred on behalf of Dearman from September 15, 1986 to November, 1986, exceeded the profit generated by Dearman during this same period.

At this early November meeting, Bowers proposed a sales quota for Dearman and a change in pay structure from a guaranteed base salary to a strict commission pay plan. According to William Bowers's testimony, Dearman accepted this change, but when Dearman continued to lack production, Bowers was forced to terminate him on November 18, 1986.

According to Dearman's complaint and testimony, William Bowers came to Meridian on November 18, 1986, and informed him for the first time that his compensation structure was being altered due to a lack of production. The changes being proposed by Bowers were not acceptable to Dearman, and he immediately sought legal advice. Dearman testified that the guaranteed salary originally offered by Bowers was the primary inducement for leaving the employ of McGinnis Distributing Company, and that he would never have left McGinnis for the new terms which Bowers proposed on November 18.

As a final note, it is not disputed that Dearman was paid according to the original terms through mid-November, 1986. On November 25, 1986, Dearman wrote a letter to Bowers Window and Door which read as follows:

Bill,

Please send me a letter stating that I am no longer employed with Bowers WDW & Door Co., so I can put in for my unemployment benefits.

They need confirmation from you, stating reasons. I told them you were closing this territory.

The unemployment will not cost you anything, as it will be drawn against the time worked at McGinnis Dist. Co.

Also, a copy of phone bills is enclosed and I am also turning in the pager.

Sarah Bowers responded on behalf of the company the next day as follows:

Dear Rick:

As per our agreement, you are not actually employed by Bowers Window & Door Co. You were to be a self-employed sales person representing our company.

Since you were employed on a contract basis, I do not feel I can give you a written statement that you are no longer employed with Bowers Window & Door Co.

Sincerely yours,

/s/ Sarah B. Bowers

Notwithstanding the above, Dearman began receiving unemployment benefits, and ultimately instituted this suit for specific performance, or alternatively, for damages in an amount representing lost wages, expenses and punitive damages.

DISCUSSION

The parties to this proceeding do not dispute that an agreement for employment was reached on September 3, 1986. Nor do they dispute that Dearman was to be paid $24,000.00 per year in guaranteed base salary, $400.00 per month expenses, plus...

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