Bullock v. Automobile Club of Michigan

• Decision Date: 06 June 1989
• Docket Number: Docket No. 78027
• Citation: 444 N.W.2d 114,432 Mich. 472
• Parties: William J. BULLOCK, Plaintiff-Appellee, v. AUTOMOBILE CLUB OF MICHIGAN a/k/a AAA and Auto Club Insurance Association, a Michigan corporation, Defendants-Appellants. 432 Mich. 472, 444 N.W.2d 114, 131 L.R.R.M. (BNA) 2701, 4 Indiv.Empl.Rts.Cas. (BNA) 684
• Court: Michigan Supreme Court

Page 114

444 N.W.2d 114

William J. BULLOCK, Plaintiff-Appellee, v. AUTOMOBILE CLUB OF MICHIGAN a/k/a AAA and Auto Club Insurance Association, a Michigan corporation Defendants-Appellants.

Docket No. 78027.

432 Mich. 472, 444 N.W.2d 114, 131 L.R.R.M. (BNA) 2701,

4 Indiv.Empl.Rts.Cas. (BNA) 684

Supreme Court of Michigan.

Argued March 5, 1987.

Decided June 6, 1989.

[432 MICH 473] John W. Mason, Law Offices John W. Mason, P.C., Dearborn, Mary Taylor Zick, Thomas H. Bannigan, Theodore S. Andris, P.C., Southfield, for plaintiff-appellee.

Kalvin M. Grove, Steven L. Gillman, Allison C. Blakley, Fox and Grove, Chartered, Chicago, Ill., Robert J. Finkel, Finkel, Whitefield & Selik, Southfield, for defendants-appellants.

The Fishman Group, Steven J. Fishman, [432 MICH 474] Malcolm D. Brown, Bloomfield Hills, for amicus curiae Michigan State Chamber of Commerce.

Butzel Long Gust Klein & Van Zile, P.C., William M. Saxton, David B. Calzone, Detroit, for amicus curiae Greater Detroit Chamber of Commerce.

OPINION

BOYLE, Justice.

I

This is an interlocutory appeal by the defendant from the trial court's denial of its motion for summary judgment pursuant to GCR 1963, 117.2(3), ¹ alleging that there is no genuine issue of material fact and that AAA is therefore entitled to judgment as a matter of law. ² The motion was filed before defendant's answer and before any meaningful discovery.

"A motion for summary judgment filed before interrogatories and depositions are taken tests whether a cause of action has been stated, but a motion, filed after depositions and interrogatories, generally tests whether the opposing party's appropriate data raises a genuine issue as to any material fact. The function of a court in disposing of a motion for summary judgment is not to decide issues of fact, but to ascertain whether or not there is an issue of fact to be tried, resolving all doubts as to the existence of a genuine issue of fact against a moving party. The fact allegations in the affidavits of the party opposing the motion must be considered to be true. Inferences must be viewed in the light most favorable to the party opposing the motion." 7 Callaghan's Michigan Pleading & Practice (2d ed), Sec. 43.12, p 30.

The timing of the defendant's motion, coupled with the failure of the defendants to specifically identify the issue as to which it believes there is no genuine issue of material fact, ³ places this case in an awkward posture for appellate review. Also, the trial court's analysis and that of the Court of Appeals focused on the employment-manual exception to employment at will and the question as to whether and under what circumstances an employer may alter policy manuals. However, turning first to the pleadings, ⁴ I find the following, common allegations:

"3. That when Plaintiff entered the employ of Defendant he entered the employ of Defendant based upon [sic] the following promises:

"a) That he would have a lifetime job as long as he did not steal;

"b) that he would work as a commission salesman for Defendant and enjoy the benefits of a seven (7%) percent commission for sales which had been in effect for many years "c) that if he worked hard and built up his 'book of business,' he would be able to earn large sums of money;

"d) that if he worked hard and built up his 'book of business,' he could enjoy his later working years with Defendant by realizing commissions from the 'book of business,' which 'book of business' is the accumulated memberships and policies which a commission salesman builds up over the years.

"4. That for many years, Defendant worked very hard and built up his 'book of business' in reliance upon the promises of Defendant and in order to enable him to enjoy the benefits of a large salary due to his individual efforts in developing his business."

In addition to these common allegations, count I of the first amended complaint asserts a breach of contract upon the basis of the following actions of AAA:

"a) Eliminating commissions as a basis of compensation for sales persons;

"b) establishing a 'unit compensation' program whereby the commission salesmen would only get a certain amount of money per membership or policy rather than a percentage commission as had been promised to the commission salesmen when they entered the employ of Defendant;

"c) establishing non-competitive rates for its product;

"d) coercing Plaintiff and other similarly situated out of their employment thereby breaching the express and implied contract between Plaintiff and Defendant."

Finally, paragraph 7 of the first amended complaint alleges that these actions violated plaintiff's reasonable expectations based upon defendant's "policy statements," while paragraph 8 alleges a breach of oral promises:

"That as a consequence of the breach of the express oral promises of Defendant, Plaintiff has lost a job which was guaranteed to be a lifetime job in which he was told he would be able to earn large commissions." ⁵

In support of its motion, AAA submitted two affidavits. The affidavit of Gerald Trocchio asserts facts relevant only to the issue of NLRA preemption. On the other hand, the affidavit of Frederick A. Cruise, Vice President for Corporate Operations, states a number of facts relevant to the state law issues of this appeal. This affidavit essentially admits that plaintiff was discharged for failure to meet minimum production quotas imposed by AAA after reaching impasse in its negotiations with plaintiff's union. Of greatest significance, however, are paragraphs 6 and 7 of the affidavit of Mr. Cruise:

"6. The Company has continuously reviewed and revised its employment policies. For example, examination of the Company's Sales Rules Manual reveals that the entire manual was revised on July 1, 1972, and that particular sections were again revised on November 1, 1973 and July 1, 1975. Def.Exh. A. Similarly, memorandum issued by the Company in 1971 and 1978 pertaining to minimum production requirements reveals that in 1971 sales personnel were required to sell a minimum of thirty memberships per month and in 1978 sales personnel were required to sell a minimum of twenty memberships. Def.Exh. B. Likewise, examination of the Company's 'Employee Complaint Review Policy' reveals that it was revised in November, 1979, and again in April, 1981. Def.Exh. C.

"7. Defendant's Exhibits A, B, and C to Defendants' Memorandum of Law in Support of Defendants' Motion to Dismiss are true and correct copies of documents maintained by Defendants in the ordinary course of its business."

After reviewing the pleadings and affidavits, the trial court denied defendant's motion for summary judgment. Bullock submitted his own affidavit in the Court of Appeals, stating in part:

"7. The Company never reserved the right to unilaterally change Company rules regarding grounds for demotion and/or discharge. I was clearly told by the Company at the time I was hired and many times thereafter that nobody gets fired unless they steal.

"8. The Sales Rules Manual distributed to commission sales representatives, to the extent they contained any language regarding termination of employees, were not followed. During the fifteen (15) years I was with the Company, no sales representative was ever terminated for unsatisfactory performance, although some employees were admittedly not producing. The Company had both a direct promise and custom and practice that no one would get fired unless they stole."

The defendant's motion to strike this affidavit was denied by the Court of Appeals on February 2, 1985. The defendant has not renewed its motion in this Court.

The Court of Appeals affirmed the trial court's denial of the defendant's motion for summary judgment. ⁶

II

We agree with part II of Justice Levin's opinion, concluding that plaintiff's claim is not preempted by the National Labor Relations Act, 29 U.S.C. Sec. 151 et seq. Proper resolution of the state law issues raised by the defendant requires further analysis.

III

Without identifying the nature or elements of Bullock's claim, AAA argues in support of its general assertion that no genuine issue of material fact precluded the trial court from granting its summary judgment motion. What at first blush might be oversight is undoubtedly due to a desire to preserve a position when an answer is filed, both as to the formation of the contract pled by Bullock and the existence of such a contract at the time of Bullock's discharge. The defendant's efforts to preserve these questions are sound strategy, but the pleadings and affidavits currently before us present undisputed oral promises made to Bullock at the time he entered defendant's employ. These must be deemed true. ⁷

The defendant argues that a right to amend employment policies is fully consistent with the presumption of employment at will. We agree. This observation, however, is most pertinent to the plaintiff having pled in part that defendant's actions violated his reasonable expectations based on "policy statements" of the defendant, the origin and precise nature of which have not yet been identified. Bullock has also pled that the defendant's actions breached an express oral promise.

While the policy manual legitimate expectations analysis of Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980), may have in practice obscured that portion of the opinion dealing with a contract arising from an express agreement, oral or written, it is clear that the Toussaint majority held both that a provision of an employment contract providing that an employee shall not be discharged except for cause is legally enforceable and that the contract may be established in alternative ways. According to Toussaint, formation may be "either by express agreement, oral or written, or as a result of an employee's legitimate expectations grounded in an employer's policy statements." Id., p. 598, 292 N.W.2d 880 (emphasis added).

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