Cohen & Co., CPAs v. Messina, CPA, No. 48894

• Court: United States Court of Appeals (Ohio)
• Writing for the Court: McMANAMON; NAHRA, P.J., and KRUPANSKY
• Citation: 24 Ohio App.3d 22,24 OBR 44,492 N.E.2d 867
• Parties: , 24 O.B.R. 44 COHEN & COMPANY, CPAs, Appellant, v. MESSINA, CPA, Appellee.
• Decision Date: 08 April 1985
• Docket Number: No. 48894

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24 Ohio App.3d 22 492 N.E.2d 867, 24 O.B.R. 44 COHEN & COMPANY, CPAs, Appellant,
v.
MESSINA, CPA, Appellee. No. 48894 Court of Appeals of Ohio, Eighth District, Cuyahoga County. April 8, 1985. Syllabus by the Court

A client-ownership provision appearing in a personnel manual is void for want of consideration where the client-ownership provision was not included in the original contract of employment but first appeared in the personnel manual after the employer-employee relationship began and was strictly for the protection of the employer.

Donald S. Scherzer, Cleveland, for appellant.

David J. Hessler, Brecksville, for appellee.

McMANAMON, Judge.

On May 17, 1982, plaintiff-appellant, Cohen and Company ("Cohen"), filed an action against defendant-appellee, Anthony J. Messina, to enforce certain client ownership provisions in its personnel manual. ¹ [492 N.E.2d 869] Cohen claims that these provisions require Messina to compensate Cohen for clients appellee allegedly took from the firm following his resignation. Appellant subsequently filed an amended complaint which included a claim based on promissory estoppel. The company contends that Messina's avowed intention to pay for the clients he took estopped

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him from denying his obligation to make such payments.

The matter was tried to the court, which determined that Messina became an employee of Cohen on October 1, 1977. During February 1979, the company issued a personnel manual which delineated company policies and procedures. Among the subjects included was a section entitled "Termination of Employment," which contained a client-ownership provision. The manual was originally written by Ronald B. Cohen, the company's managing partner, who also had final authority to make any changes or modifications in it. A revised version of the manual which contained an identical termination provision was distributed sometime in November 1979.

Prior to leaving Cohen on November 1, 1981, Messina had discussions with firm members concerning his termination. At the direction of Ronald Cohen, Messina informed various clients he was leaving the firm to establish his own accounting practice. Messina never solicited these clients and took no Cohen clients with him when he left.

For a period of approximately one week to several months following Messina's departure, various firm clients on their own initiative notified Cohen of their intention to terminate their relationship with the firm and to engage Messina's services. Ronald Cohen and other firm employees then contacted those clients in an attempt to persuade them to remain with Cohen. Despite such efforts, several clients left appellant and employed Messina. Cohen sued Messina for the net amount billed and received by him for accounting services rendered to former clients.

This appeal challenges the trial court's ruling that neither an enforceable contract nor promissory estoppel required Messina to pay for the Cohen clients he later serviced. Appellant cites five assignments of error. ² Because appellant's first three assignments of error are related, they will be consolidated for review.

I

The major issue in this case is whether Cohen's personnel manual and the client-ownership provision contained in it have the efficacy of a binding contract. The appellant contends that the trial court erred in refusing to enforce the subject provision as a binding contract which obligated Messina to pay for the clients he allegedly took from the firm following his resignation. We disagree.

Ohio courts have given effect to provisions in employee manuals and other documents provided by the employer as

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part of the employment contract. Hedrick v. Center for Comprehensive Alcoholism Treatment (1982), 7 Ohio App.3d 211, 213, [492 N.E.2d 870] 454 N.E.2d 1343. Smith v. Teledyne Industries, Inc. (E.D.Mich.1984), 578 F.Supp. 353, 354 (diversity suit applying Ohio contract law). Such manuals may be important in establishing the terms and conditions of employment. See Hedrick, supra. However, in order for such manuals to be considered valid contracts, there must be a "meeting of the minds." Parklawn Manor, Inc. v. Jennings-Lawrence Co. (1962), 119 Ohio App. 151, 156, 197 N.E.2d 390 [26 O.O.2d 341]. The parties must have a distinct and common intention which is communicated by each party to the other. In re Estate of Moore (P.C.1962), 90 Ohio Law Abs. 170, 174 [26 O.O.2d 37]. The determination of contractual intent involves questions of fact whose resolution has already been determined by the trial court.

In support of its argument that the client-ownership provision in the company's personnel manual is enforceable as a valid contract, appellant relies primarily on Harding v. Montgomery Ward Co. (1944), 41 Ohio Law Abs. 243, in which the Court of Appeals for Miami County concluded that the basis of the employee's claim was a contract which had been entered into by way of a store manual issued by the company to fix and control the salary and bonus to be paid to store managers.

We find important factual distinctions between Harding and the instant case. In Harding, the manual was already in existence when the employee entered into the employment. In addition, the court found that the nature of the bonus indicated that both parties agreed to the terms embodied in the store manual.

The instant record discloses that the personnel manual was published and issued to employees some sixteen months after Messina joined the Cohen firm. Although appellant maintains that the disputed provision constituted a binding contract because it was the only agreement between the parties as to client ownership, the record indicates that the parties never reached any such agreement. The trial court found that neither the initial nor the revised version of the manual contained an attestation clause. While an attestation clause is not essential to the formation of a valid contract, its absence was an indication that Cohen employees were not required to acknowledge that they received copies of the manual or understood or agreed with the policies and procedures outlined.

From the record before us, we are unable to conclude that the parties intended the manual to become part of the employment contract.

Appellant further argues that despite the company's ability to unilaterally modify the personnel manual, the subject provision is enforceable. This court has...