Cobb Beauty Coll., Inc. v. Scamihorn, A16A1459

• Decision Date: 15 November 2016
• Docket Number: A16A1459
• Citation: 792 S.E.2d 769,339 Ga.App. 751
• Parties: COBB BEAUTY COLLEGE, INC. v. SCAMIHORN.
• Court: Georgia Court of Appeals

339 Ga.App. 751

792 S.E.2d 769

COBB BEAUTY COLLEGE, INC.

v.SCAMIHORN.

A16A1459

Court of Appeals of Georgia.

November 15, 2016

Reconsideration Denied December 6, 2016

Charles Madden Cork III, Sidney Lee Storesund, Marietta, for Appellant.

Todd Emory Hatcher, Gregory, Doyle, Calhoun & Rogers, Marietta, for Appellee.

Rickman, Judge.

Randall "Randy" Scamihorn, former director of Cobb Beauty College, Inc. ("CBC"), filed a breach of contract action against CBC after the college released him within his first year of employment and informed him that it did not intend to renew his contract. The trial court granted summary judgment to Scamihorn after concluding that CBC breached a provision of the employment agreement governing contract renewal, which the court held unambiguously provided that Scamihorn's initial term of employment was three years, and that CBC's right of renewal (or nonrenewal) did not accrue until that time. On appeal, CBC contends that the trial court erred in its interpretation of the paragraph governing renewal, and further argues that it was entitled to terminate Scamihorn for cause under a separate provision of the employment agreement.

We agree with the trial court that the renewal provision of the contract unambiguously sets forth an initial three-year term, and therefore affirm the trial court's ruling as to that issue. We nevertheless conclude that a genuine issue of material fact remains as to whether CBC was entitled to terminate Scamihorn's employment for cause, and therefore reverse the trial court's grant of summary judgment in favor of Scamihorn on his breach of contract claim. We remand for proceedings consistent with this opinion.

To prevail at summary judgment, the moving party must demonstrate that there is no genuine issue of material fact and that the evidence and all reasonable inferences and conclusions drawn therefrom, viewed in the nonmovant's favor, warrant judgment as a matter of law. We review de novo the trial court's ruling on a motion for summary judgment.

(Citation and punctuation omitted.) Hart v. Sirmans , 336 Ga.App. 212, 784 S.E.2d 67 (2016).

So viewed, the evidence shows that Scamihorn and CBC entered into an employment agreement on May 11, 2010. The employment agreement contained two provisions relevant to this action, one in paragraph three and one in paragraph five. These provisions provided:

3. Term of Employment. This Agreement shall remain in effect for 3 years from the effective date, renewed automatically on a year-to-year basis unless either party gives the other party 60 days' prior written notice before the anniversary date of the initial term or any one-year renewal term. Employee shall begin said term of employment on the 1st day of July 2010.

5. Termination of Employment. This Agreement and the employment by CBC of Employee hereunder shall terminate upon the occurrence of any of the following events: ... (c) upon written notice of termination of employment for cause given by CBC. "Cause" shall mean (i) theft; or wrongful appropriation by Employee; (ii) falsification of records by Employee; (iii) dishonest acts by Employee; (iv) negligence of Employee; (v) incompetence of Employee; (vi) insubordination of Employee; (vii) disloyalty of Employee to CBC; (viii) breach of Employee's duty of care or duty of loyalty to CBC; (ix) Employee's willful neglect; or (x) Employee's violation of any law, rule or regulation. In the event of a proposed termination for cause, CBC will give Employee notice of the facts and circumstances surrounding the alleged cause and provide Employee with an opportunity to present his response to the alleged reason for cause....

On March 31, 2011, approximately nine months into his employment, Scamihorn was given a letter drafted by counsel for CBC informing him that CBC did not intend to renew his contract. The letter requested that Scamihorn remove all of his personal belongings the same day or no later than two days later. Scamihorn was given 60–days severance pay and asked not to return to CBC. The letter did not detail any reason CBC was releasing Scamihorn from its employment, and Scamihorn subsequently retained counsel who sent CBC's counsel a letter asserting that CBC breached the employment agreement by its effort not to renew it within the initial three-year term, and demanding that Scamihorn be paid the remainder of his three-year salary and additional damages. The letter from Scamihorn's counsel also rejected CBC's position that the release from employment was for cause.

In requests for admission filed by Scamihorn and answered by CBC, CBC admitted that it did not provide written notice of cause relating to Scamihorn's release from employment. However, CBC denied that it had failed to provide any facts and circumstances surrounding the alleged cause; denied that it had failed to give Scamihorn an opportunity to respond to the alleged cause before terminating the employment agreement; and denied that it did not have cause to terminate the employment agreement. CBC also filed a motion to relieve the parties of the mediation requirement, in which it also set forth various allegations against Scamihorn that it asserted gave it cause to terminate Scamihorn's employment. CBC further argued that Scamihorn was terminated for cause in a pleading entitled "pre-trial brief."

In response to Scamihorn's motion for summary judgment, CBC submitted the affidavit of CBC's owner,¹ who had executed the agreement with Scamihorn on behalf of CBC. The owner's affidavit detailed many ways in which she alleged that Scamihorn breached paragraph five of the employment agreement, thus authorizing his termination for cause.²

Focusing on CBC's initial letter in which it stated its intention not to renew Scamihorn's contract, the trial court granted summary judgment to Scamihorn. Specifically, it held that paragraph 3 of the employment agreement unambiguously set forth an initial three year term, and the option not to renew did not arise until 60 days prior to that three year date. CBC contends that the trial court's interpretation of the renewal provision contained in paragraph 3 of the employment agreement was erroneous and, further, that it had an independent right to terminate Scamihorn for cause under paragraph 5. We agree with the trial court's interpretation of paragraph 3 of the employment agreement and, therefore, affirm its ruling on that issue. Nevertheless, because there is a genuine issue of material fact as to whether CBC had cause to terminate Scamihorn's employment, we reverse the grant of summary judgment to Scamihorn.

1. CBC contends that the trial court's interpretation of the renewal provision contained in paragraph 3 of the employment agreement was erroneous.

Construction of a contract, at the outset, is a question of law for the court. And such construction involves three steps: first, the trial court must decide whether the language is clear and unambiguous. If it is, the court simply enforces the contract according to its clear terms; the contract alone is looked to for its meaning. Next, if the contract is ambiguous in some respect, the court must apply the rules of contract construction to resolve the ambiguity. Finally, if the ambiguity remains after applying the rules of construction, the issue of what the ambiguous language means and what the parties intended must be resolved by a jury.

(Punctuation and footnotes omitted.) Holcim (US), Inc. v. AMDG, Inc. , 265 Ga.App. 818, 820, 596 S.E.2d 197 (2004).

The trial court correctly held that the language in paragraph 3 of the employment agreement, that it "shall remain in effect for 3 years from the effective date" and would renew automatically unless notice was given 60 days...