Cederstrand v. Lutheran Brotherhood

• Decision Date: 14 September 1962
• Docket Number: No. 38455,38455
• Parties: , 117 L.R.R.M. (BNA) 2603 Elizabeth Wold CEDERSTRAND, Appellant, v. LUTHERAN BROTHERHOOD, Respondent.
• Court: Minnesota Supreme Court

Page 213

117 N.W.2d 213

263 Minn. 520, 117 L.R.R.M. (BNA) 2603

Elizabeth Wold CEDERSTRAND, Appellant, v. LUTHERAN BROTHERHOOD, Respondent.

No. 38455.

Supreme Court of Minnesota.

Sept. 14, 1962.

Syllabus by the Court

Where, in an action for breach of an employment contract, the evidence is too nebulous and uncertain to establish that such contract embodied a provision against dismissal except for cause, Held trial court did not err in granting employer's motion for judgment notwithstanding the verdict.

Robert L. Van Fossen, Dorsey, Owen, Marquart, Windhorst & West, Henry Halladay and Bernard G. Heinzen, Minneapolis, for appellant.

Doherty, Rumble & Butler, M. J. Doherty and R. J. Leonard, St. Paul, Arthur C. Wangaard, Minneapolis, for respondent.

ROGOSHESKE, Justice.

This is an action for damages arising out of a contract of employment. Plaintiff appeals from the trial court's order granting judgment notwithstanding a jury verdict in her favor and ordering a new trial in the event of a reversal; also from the judgment entered thereafter.

Plaintiff, an employee of defendant, claims that she was discharged by defendant without cause contrary to a provision of an employment contract existing in April 1955 when her employment was terminated. The primary and decisive question presented is whether the evidence, viewed most favorable to plaintiff, was sufficient to establish that the employment contract, of the type she claimed, embodied a provision securing her against dismissal except for cause.

The evidence so viewed could have established that plaintiff was a long time, faithful, and dedicated employee of defendant, a non-profit fraternal benefit insurance society. The society was established in 1917, its membership being limited to those baptized in the Lutheran faith or affiliated with a Lutheran church organization. Its primary activity is issuing benefit certificates providing for payment of benefits in case of death or disability to its members. It is not represented as a commercial enterprise, but rather as a religiously orientated and motivated fraternal association designed 'to aid the Lutheran Church in extending the Lutheran faith, to foster patriotism, loyalty justice, charity, and benevolence, * * * to encourage industry, saving, thrift, * * * to give aid in case of poverty, sickness, accident, or other misfortunes, * * * and otherwise to promote the spiritual, intellectual and physical welfare of its members.' As provided in its bylaws, its management is vested in a Board of Directors elected by the General Convention, an Executive Committee, and the usual officers elected by the Board, each and all being subject to the General Convention in which is vested final authority. J. A. O. Preus, one-time governor of Minnesota, was its first secretary-treasurer and has been chairman of the Board for 40 years. During the period in question, Herman L. Ekern was president until 1951 when he was succeeded by Carl F. Granrud, who is presently serving in that office. Lorenz Jost, who became plaintiff's immediate superior, has been treasurer from 1955 to 1959 and for 10 years prior thereto he was comptroller. During the period of plaintiff's employment and at least prior to 1931, all of defendant's employees were required to purchase insurance of at least $1,000, thereby becoming a member of defendant with all attendant rights and duties, including liability for assessment in case of insolvency. As business grew, the number of employees increased from a mere handful to about 225 at the time of trial.

In 1922 plaintiff became a part-time employee and in 1928 she was employed full time. At first she was assigned duties of a stenographer, bookkeeper, and auditor of accounts. In 1930 she was assigned the title of cashier and assistant to the corporation officer in charge of personnel. In 1945 she became personnel supervisor, and in 1951 she was designated cashier, personnel director, and officer manager. For many years, prior to and up to the time her request for a leave of absence was granted, she had, under the supervision of a corporate officer, general duties and responsibility for payroll accounting; for writing checks including payroll checks; for supervising the switchboard operators and the receptionist; and for the total employment function including recruiting, interviewing, testing, selecting, employing, counseling, assigning, and supervising personnel under her charge. Although not a corporate officer under defendant's bylaws, she had advanced to an executive status in duties and responsibilities as well as salary which, in 1954, had reached $7,300 per year. As a part of her duties she assisted her corporate supervisor in recording, if not in formulating, the employment policies of defendant as they were developed and established. She kept current a book in the nature of an office manual entitled 'Control Copy of Personnel Policies and Practices of Lutheran Brotherhood,' Hereinafter referred to as exhibit Y. Although designated a copy, only one such manual existed. She also prepared various editions of an employee's handbook and employee's bulletins containing such parts of the employment policies and practices of defendant as were published for direct communication and distribution to employees.

Exhibit Y, a 42 page loose-leaf paper-covered booklet, was compiled with the knowledge and authority of her immediate corporate supervisor. As the title suggests and the 'index' confirms, it was a manual used by plaintiff and perhaps other supervisors. The subjects covered changed and increased as the number of employees and defendant's personnel problems increased. By far the larger part is devoted to matters of trivial nature from such subjects as collections for gifts and time off for funerals to the gratuitous distribution of vitamins to office personnel. However, quite a number deal with matters of substance such as pension fund, maternity and sick leave, and that new employees shall be considered as 'temporary' for at least a period of 3 months and not more than 6 months and that 'they do not become 'permanent' employees unless the possibility of continued employment is mutually satisfactory.' As early as 1930 it contained the following provision: 'A person is not dismissed without cause, and it is customary to give a warning and an opportunity to 'make good' before final dismissal.' Although this is the only reference to this subject, the wording remained unchanged during the entire existence of the manual. This provision never appeared in the handbook or bulletins distributed to employees. However, the 'policy and practice' it expressed, as well as all other provisions, were referred to by plaintiff in the performance of her duties as personnel director. It was also mentioned, and perhaps discussed, with unestablished frequency among some unnamed employees at unspecified times and circumstances. On some unspecified occasion or occasions, it was likely mentioned or discussed by two corporate officers, President Ekern, now deceased, and Mr. Fred C. Mueller, a retired secretary of defendant who testified for plaintiff. Similarly, on some unspecified occasion or occasions it was shown to President Granrud and other undesignated successor officers.

Sometime in 1931 President Ekern met with the then 30 to 50 employees to announce the formulation of a retirement plan called the 'Home Office Retirement Program'. In explaining the benefits to the employees and urging them to approve the same he is quoted as saying that 'there would be no dismissals as long as people showed willingness to work and the ability and wanting to learn' and that 'there was chances for advancement and people could have a job as long as they wished until retirement.' He was further quoted as saying that defendant 'was one of the finest companies to work for and as long as the company grew the people that stayed there the longest had the chance to build up for higher jobs and there was no reason for dismissal as long as (they) wanted to work and were willing to learn the details of the company, anything that helped the company's progression.' The inauguration of the plan was not conditioned upon a vote of approval of the employees, but an oral vote was taken and, with a few exceptions, the employees were in favor of it. Under its terms each employee deposited 5 percent of his salary and defendant underwrote the plan contributing from 2 1/2 percent to 10 percent of the employee's salary depending upon the length of service. Upon termination of employment the employee could withdraw the amount deposited by both, 25 percent immediately upon leaving defendant's employ and all or any part after one year's notice. The 1931 plan was modified in 1955 but has remained essentially the same, being at all times subject to any change or termination as the Board of Directors saw fit. Plaintiff was present at the meeting and voted in favor of the plan and became a participant in it.

In 1931 or 1932, when defendant was experiencing the effects of the general economic depression, plaintiff and other employees, upon defendant's solicitation for funds to strengthen its borrowing capacity, purchased a 'few hundred' dollars of unsecured, interest bearing 'surplus notes'.

In January 1954 plaintiff's husband was elected Potentate of Zuhrah Temple of the Shrine. Shortly thereafter she advised President Granrud that her responsibilities to her husband and his office would entail time away from her job, and she mentioned the possibility of a leave of absence. President Granrud discouraged that possibility. There were absences from time to time and her superiors criticized her for this. During the year she persisted in urging a leave in conversations with President Granrud and Mr. Jost, and on the last occasion she requested either a leave of absence or a respectable retirement income. On October 8, 1954, the Executive Committee granted her...