Derosa v. Shiah

• Decision Date: 08 June 1992
• Docket Number: No. A92A0017,A92A0017
• Citation: 421 S.E.2d 718,205 Ga.App. 106
• Parties: DEROSA v. SHIAH, et al.
• Court: Georgia Court of Appeals

Page 718

421 S.E.2d 718

205 Ga.App. 106

DEROSA v. SHIAH, et al.

No. A92A0017.

Court of Appeals of Georgia.

June 8, 1992.

Reconsideration Denied July 23, 1992.

Certiorari Denied Oct. 22, 1992.

Richard R. Thomas, Atlanta, for appellant.

Stowers, Hayes, Clark & Roane, Fred G. Stowers, E. Hearst Roane, Jr., H. Fred Gober, Atlanta, for appellees.

COOPER, Judge.

Appellant appeals from the trial court's grant of appellees' motions for summary judgment.

In March 1989, appellant accepted an offer of employment with appellee Stratus Petroleum Corporation ("Stratus"). The terms of appellant's employment with Stratus were reflected in two documents in which appellant was guaranteed two years of employment at a salary of $85,000 per year plus various corporate benefits. In the fall of 1989, appellant became aware of negotiations between Stratus and appellee Louis Dreyfus Energy Corporation ("Dreyfus") for the takeover of Stratus' operations. Appellant approached appellee Thomas Shiah ("Shiah"), the president of Stratus, to discuss the rumored takeover and appellant's employment. In January 1990, Stratus and Dreyfus reached an agreement in the form of a lease of the operating assets of Stratus to Dreyfus. A comprehensive Operating Lease Agreement ("Lease Agreement") was executed by Stratus and Dreyfus to effect their agreement. Beginning February 1, 1990, appellant was employed by Dreyfus, at the same salary and with the same benefits as were provided by Stratus. On March 14, 1990, appellant was notified that he was being terminated by Dreyfus, effective the next day. Severance pay for 30 work days was wired into appellant's bank account. Appellant filed a complaint against appellees alleging breach of contract by both Stratus and Dreyfus in their failure to honor the terms of his original employment contract with Stratus. Appellant also made an allegation of intentional interference with contract against Dreyfus. After a hearing on appellees' motions for summary judgment, the trial court issued an order which, without explanation, granted the motions.

1. Appellant first argues that the trial court erred in granting summary judgment on the breach of contract claim against Dreyfus. Appellant argues that, pursuant to the terms of the lease agreement, his employment contract was assigned to, and assumed by, Dreyfus and that Dreyfus breached the contract by terminating him without cause. Appellees respond that the lease agreement does not render Dreyfus liable under appellant's employment contract with Stratus; that the lease agreement only provided that Dreyfus shall employ appellant; that appellant accepted employment with Dreyfus under new terms as an employee at will without a written contract; and that, in any event, there was an accord and satisfaction between Dreyfus and appellant as to their respective obligations when appellant accepted severance pay from Dreyfus.

The clarity and meaning of the terms of the lease agreement are central to the determination of whether appellant's employment contract was assigned to, and assumed by, Dreyfus. Although the trial court's order does not specify the analysis employed by the court in reaching its decision, we will assume that the court proceeded in accordance with the steps required of a trial court for construction of a contract. " 'There are three steps in the process of contract construction. The trial court must first decide whether the contract language is ambiguous; if it is ambiguous, the trial court must then apply the applicable rules of construction (OCGA § 13-2-2); if after doing so the trial court determines that an ambiguity still remains, the jury must then resolve the ambiguity. [Cit.]' [Cit.]" (Citations omitted.) Copy Systems of Savannah v. Page, 197 Ga.App. 435, 436, 398 S.E.2d 784 (1990).

Section 6.1(a) of the lease agreement provides that Dreyfus "shall employ and be responsible for each person whose name appears on Schedule 1.4 and who does not refuse employment ... ('Terminal Employees')." Appellant's name appears on Schedule 1.4. Section 6.4 states that Dreyfus "shall assume and be responsible for all of the Benefit Arrangements covering nonunion Terminal Employees...." Section 6.7(a) defines "Benefit Arrangements" specifically as including all employment contracts listed on Schedule 6.7(a). Schedule 6.7(a) lists under "employment, labor and collective bargaining agreements" the employment agreement between Stratus and appellant. Also, Section 6.7(h) states that "[n]either the execution and delivery of this Lease nor the consummation of the transactions contemplated herein will terminate or modify, or give a third party a right to terminate or modify, the provisions or terms of any Benefit Arrangement...." Further, Shiah testified that in his opinion appellant's contract was an obligation of Dreyfus under the lease agreement. In contrast to these lease agreement provisions which arguably support appellant's contention that his contract was assumed by Dreyfus, Section 6.8 of the lease agreement disclaims responsibility for contracts specifying employment duration, and provides that "[n]otwithstanding the foregoing, nothing express or implied in this Lease is intended to confer upon any member or former member of the SPC Employees, the Terminal Employees or the Existing Lessee Employees any rights or remedies (including any rights of employment for any specified period of time), nor shall [any such member or former member] ... be considered to be a third party beneficiary to this Lease." Appellees further emphasize that Section 6.1 only requires Dreyfus to offer employment but does not impose any liability on Dreyfus for pre-existing employment contracts. Appellees also cite the last paragraph of Section 6.4 which states that Dreyfus is not obligated to provide any specific level of benefits after January 1, 1990 and can amend, terminate or modify benefits thereafter. We conclude that an ambiguity exists on the issue of whether Dreyfus assumed liability under appellant's employment contract with Stratus based on the language of Sections 6.4, 6.7(a) and 6.7(h) of the lease agreement, on the one hand, and the language of Section 6.8, on the other hand. Even after applying the applicable rules of construction, the ambiguity remains. See Karlan, Inc. v. King, 202 Ga.App. 713, 415 S.E.2d 319 (1992). The intent of the parties to the lease agreement with respect to the assumption of appellant's employment contract is " 'an evidentiary, factual matter for resolution by the jury and not a matter of law for determination by the court.' " Prince v. Kujawa, 178 Ga.App. 828(1), 344 S.E.2d 680 (1986). Because of the ambiguity of the lease agreement, the grant of summary judgment was in error.

The grant of summary judgment to appellees on the issue of an accord and satisfaction between appellant and Dreyfus was also in error. "Accord and satisfaction occurs where the parties to an agreement, by a subsequent agreement, have satisfied the former agreement, and the latter agreement has been executed." OCGA § 13-4-101. "Like any other contract, accord and satisfaction requires a meeting of the minds as to the subject matter embraced therein, if it is to be valid and binding. [Cits.] Where there is no agreement to settle all matters in dispute, no accord and satisfaction result. [Cits.]" Wallace v. Harrison, 166 Ga.App. 461(2), 304 S.E.2d 487 (1983). Furthermore, " '[a]s a general rule, whether there is accord and satisfaction is a question for the jury. (Cit.)' [Cit.]" Pierce v. Taylor, 190 Ga.App. 819(2), 380 S.E.2d 351 (1989). Appellees contend that appellant's acceptance of the severance pay offered by Dreyfus and appellant's choice to accept continuation of health insurance benefits are conclusive of an accord and satisfaction between the parties. We disagree. Although appellees produced evidence that appellant responded to the notice of his severance pay by stating, "that's fair," this is not sufficient to show a meeting of the minds on accord and satisfaction. In fact, appellant states in his affidavit that he never negotiated the amount of severance pay with Dreyfus; that the company simply told him how much he would receive; that he never discussed with Dreyfus whether the severance pay was in satisfaction of any other claims he had; that he never intended the severance pay to release Dreyfus or Stratus from their obligations under his employment contract; that he never signed any document releasing any claims he had; and that he never intended the severance pay to be in satisfaction of any other claims he may have. The record shows that the separation notice given to appellant at the time of his termination from Dreyfus says nothing about the satisfaction of any other claims of appellant. Deposition testimony reveals that Dreyfus had no explanation for the amount of severance pay given to appellant but that it was a discretionary amount. The money was wired into appellant's account; appellant never endorsed a check for the amount or signed any other document indicating his intent with respect to the purpose of the severance pay. "The existence vel non of mutual intention is ordinarily a question of fact which is reserved for determination by the jury. [Cits.]" Mayer v. Turner, 142 Ga.App. 63(1), 234 S.E.2d 853 (1977). Compare Mobley v. Fulton Roofing Co., 173 Ga.App. 563(1), 327 S.E.2d 540 (1985). In this case, we determine that a genuine issue of material fact as to the existence of an accord and satisfaction does exist, and this issue should be submitted to a jury. Mayer, supra 142 Ga.App. at 64, 234 S.E.2d 853. Therefore, as to appellant's first enumeration of error, the breach of contract claim against Dreyfus, the trial court erred in granting summary judgment to Dreyfus.

2. In his next enumeration, appellant contends that the trial court erred in granting summary judgment on the breach of contract claim against Stratus in which appellant...