Crawford v. Scott

• Docket Number: A23A0480
• Decision Date: 10 August 2023
• Citation: 368 Ga.App. 249,889 S.E.2d 421
• Parties: CRAWFORD v. SCOTT et al.
• Court: Georgia Court of Appeals

368 Ga.App. 249

889 S.E.2d 421

CRAWFORD v. SCOTT et al.

A23A0480

Court of Appeals of Georgia.

August 10, 2023

Thompson O'Brien Kappler & Nasuti, Aaron Marcus Kappler, Norcross, William John Diehl, for Appellant.

Briskin Cross & Sanford, Byron M.G. Sanford, Alpharetta, Mary Trachian-Bradley, Atlanta, for Appellee.

Pipkin, Judge.

Edward Crawford sued his former business partners, Appellees Duncan and Graham Scott, for multiple causes of action following Crawford's termination of employment from Floorcare Specialists, Inc.("Floorcare"), and subsequent removal from the company's Board of Directors.¹The trial court granted partial summary judgment on Crawford's claims of wrongful termination and breach of fiduciary duty, and he appeals.For the reasons discussed below, we affirm the partial grant of summary judgment as to Crawford's claims of wrongful termination and breach of fiduciary duty based upon Crawford's wrongful termination.However, we reverse the grant of summary judgment as to the remainder of Crawford's breach of fiduciary duty claim.

"Summary judgment is appropriate ‘if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ "Yim v. Carr , 349 Ga. App. 892, 893 (1), 827 S.E.2d 685(2019)(quotingOCGA § 9-11-56 (c) ).On appeal, "we owe no deference to the trial court's ruling and we review de novo both the evidence and the trial court's legal conclusions.Moreover, we construe the evidence and all inferences and conclusions arising therefrom most favorably toward the party opposing the motion."(Citations and punctuation omitted.)Bryant v. Optima Intl. , 339 Ga. App. 696, 696, 792 S.E.2d 489(2016).

So viewed, the evidence shows that, in January 2019, Crawford was the Chief Financial Officer and Chief Operating Officer of Floorcare.He also served on the Board of Directors with Duncan and Graham and was a minority shareholder in the company.It is undisputed that, at all relevant times, Crawford did not have a written employment contract with Floorcare.On January 2, 2019, Crawford arrived at the office in what appeared to be an intoxicated state.According to Duncan, Crawford was loud, vulgar, and belligerent, and eventually left the premises.Crawford later contested the allegation that he was intoxicated by providing Duncan with medical records indicating that Crawford might have suffered a hyperglycemic episode, the symptoms of which are consistent with appearing intoxicated.After speaking with other employees about Crawford's behavior, Duncan delivered a termination letter to Crawford on January 18, 2019, ending Crawford's employment with the company.Crawford was subsequently removed from the Board of Directors, but maintained his status as a minority shareholder.

Thereafter, Crawford filed the instant action alleging, among other things, ² that he was wrongfully terminated and that Appellees breached certain fiduciary duties owed to him, such as "wrongfully terminating Mr. Crawford, failing and refusing to reimburse Mr. Crawford for ... [e]xpenses, destroying Mr. Crawford's [p]ersonal [p]roperty, and failing to manage and act in the interest of Floorcare."³Following discovery, Appellees moved for partial summary judgment on these claims to the extent that they were predicated on Crawford's termination.In their motion, Appellees argued that Crawford was an at-will employee who could be terminated without cause, that his status as an at-will employee provided no action for breach of fiduciary duty, and that the business judgment rule prevented relief for a claim of breach of fiduciary duty based upon Crawford's termination from the company.In response, Crawford asserted that there was a genuine issue of material fact as to whether he was an at-will or a contractual employee.Specifically, Crawford argued that he had an implied, verbal, one-year employment contract with Floorcare that, he alleged, placed him within the exceptions of OCGA § 34-7-1.⁴In support of this argument, Crawford relied upon the following portions of his own affidavit:

11.Floorcare's officers, including its President/CEO and its Chief Operations Officer received an annual salary set by the Board of Directors.

12.Floorcare's Board of Directors historically and as a matter of routine practice made annual reviews of its officers at an annual meeting.Its Board of Directors made evaluations concerning the officers and their compensation on an annual basis.

13.Annually at a meeting the Board of Directors approved the renewal of the officer's employment and set the officer's salary during that annual term.

14.In 2017, the Board of Directors reduced the officers’ salaries by 33% – from $150,000 to $100,000.The Board of Directors committed to reconsider the officer's positions and annual salary with Floorcare in one year, as was Floorcare's practice.

15.In 2018, the Board of Directors renewed the officer[s’] employment at Floorcare for a term of one year at the same salary as provided in 2017.

Crawford also relied on minutes from some of the Board of Directors’ meetings that had occurred in 2017 and 2018, and on portions of the employee handbook, to argue that a jury question existed as to whether he had an implied, verbal employment contract.As to his claim of breach of a fiduciary duty, Crawford argued that Appellees acted "in bad faith with the intent of depriving Crawford of his interests in Floorcare" and that, since Crawford's removal, Duncan Scott has "misappropriate[d] Floorcare assets and usurp[ed] corporate opportunities of Floorcare" for the benefit of another company.

After a hearing, the trial court granted Appellees’ partial motion for summary judgment for wrongful termination and for breach of a fiduciary duty based upon wrongful termination, finding that Crawford was an at-will employee subject to termination without cause.The trial court also construed the remaining portion of Crawford's claim for a breach of fiduciary duty as "a veiled derivative action" and, sua sponte, granted partial summary judgment on the entire claim.

1.On appeal, Crawford maintains that there is a genuine issue of material fact concerning whether he had a verbal, implied, one-year employment contract that was not terminable at-will under OCGA § 34-7-1.We disagree.Even accepting that all of the documents Crawford relies upon are admissible evidence, and viewing those documents in the light most favorable to Crawford, the record shows that there is no genuine issue of material fact establishing a meeting of the minds between Crawford and Appellees that would constitute a valid, verbal, implied employment contract.SeeOCGA § 13-3-1("To constitute a valid contract, there must be ... the assent of the parties to the terms of the contract....");Turfgrass Group Inc. v. Georgia Cold Storage Co. , 346 Ga. App. 659, 665, 816 S.E.2d 716(2018)("An implied contract only differs from an express contract in the mode of proof; both equally proceed upon the mutual agreement of the parties, and cannot exist without it.")(citation and punctuation omitted).Indeed, the employee handbook upon which Crawford so heavily relies affirmatively states that all Floorcare employees " are employed at will." (Emphasis supplied.)

Further, even if we were to assume that Crawford had a verbal employment contract, he has failed to establish, as a matter of law, that the contract was for a definite time."[U]nder Georgia law, an oral promise as to an employment contract for an indefinite period of time is not enforceable.Such contract is terminable at will, and violation of its terms will not support a breach of contract claim."(Citations and punctuation omitted.)Pickle Logging, Inc. v. Georgia Pacific Corp. , 276 Ga. App. 398, 400, 623 S.E.2d 227(2005).Here, Crawford points to the statements in his affidavit that the Board of Directors made annual reviews of its officers and renewed an officer's employment and salary on an annual basis.This, Crawford argues, created a genuine issue of material fact as to whether he had a verbal employment contract with a definite term.We disagree, as nothing in Crawford's affidavit shows that his annual "wages [were] payable at a stipulated period."OCGA § 34-7-1.Instead, Crawford was given an annual salary while employed at Floorcare, which, as a matter of law, does not establish a definite term.SeeIkemiya v. Shibamoto America, Inc. , 213 Ga. App. 271, 273 (1), 444 S.E.2d 351(1994)(rejectingplaintiff's argument that his employment agreement "was for the definite term of ‘one year with automatic renewals’ solely because the parties agreed he was to receive an annual salary of $60,000," because "[t]he computation of the salaries on an annualized basis does not turn this compensation term into a duration term")(citation and punctuation omitted);American Standard, Inc. v. Jessee , 150 Ga. App. 663, 665 (1), 258 S.E.2d 240(1979)(holding that documents referring to an annual salary merely established the total amount payable during a twelve-month period and not the duration of the contract).Cf.Freeman v. Smith , 324 Ga. App. 426, 435-436 (2), 750 S.E.2d 739(2013)(interpreting provision in an offer letter that employee was "subject to annual renewals," and holding this phrase did not establish a definite, specific term of employment where letter also stated employee served "at the pleasure of the President")(overruled on other grounds byFranklin v. Pitts , 349 Ga. App. 544, 826 S.E.2d 427(2019) ).Based on the foregoing, the trial court properly determined that Crawford was an at-will employee and granted summary judgment on the wrongful termination claim.

2.Crawford next contends that the trial court erred by granting summary judgment on the portion of his breach of fiduciary...