Dove v. Rose Acre Farms, Inc., 1-281A46

• Decision Date: 11 May 1982
• Docket Number: No. 1-281A46,1-281A46
• Citation: 434 N.E.2d 931
• Parties: Mark DOVE, Plaintiff-Appellant, v. ROSE ACRE FARMS, INC., Defendant-Appellee.
• Court: Indiana Appellate Court

Page 931

434 N.E.2d 931

Mark DOVE, Plaintiff-Appellant, v. ROSE ACRE FARMS, INC., Defendant-Appellee.

No. 1-281A46.

Court of Appeals of Indiana, First District.

May 11, 1982.

Michael L. Rogers, North Vernon, for plaintiff-appellant.

Harold H. McConnell, North Vernon, for defendant-appellee.

NEAL, Judge.

Plaintiff-appellant Mark Dove (Dove) appeals a negative judgment of the Decatur Circuit Court in favor of defendant-appellee Rose Acre Farms, Inc. in a trial before the court without the intervention of a jury.

We affirm.

STATEMENT OF THE FACTS

The evidence most favorable to support the judgment and the facts found specially by the trial court are as follows. Dove had In June 1979, Rust called in Dove and other construction crew leaders and offered a bonus of $6,000 each if certain detailed construction work was completed in 12 weeks. As Dove conceded in his own testimony, the bonus card indicated that in addition to completing the work, he would be required to work at least five full days a week for 12 weeks to qualify for the bonus. On the same day Dove's bonus agreement, by mutual consent, was amended to ten weeks with a bonus of $5,000 to enable him to return to law school by September 1. Dove testified that there was no ambiguity in the agreement, and he understood that to qualify for the bonus he would have to work ten weeks, five days a week, commencing at starting time and quitting only at quitting time. Dove testified that he was aware of the provisions concerning absenteeism and tardiness as they affected bonuses, and that if he missed any work, for any reason, including illness, he would forfeit the bonus. The evidence disclosed that no exception had ever been made except as may have occurred by clerical error or inadvertence.

been employed by Rose Acre Farms, operated by David Rust (Rust), its president and principal owner, in the summers and other times from 1972 to 1979. The business of Rose Acre was the production of eggs, and, stocked with 4,000,000 hens and staffed with 300 employees, it produced approximately 256,000 dozen eggs per day. Rust had instituted and maintained extensive bonus programs, some of which were for one day only, or one event or activity only. For example, one bonus was the white car bonus; if an employee would buy a new white car, keep it clean and undamaged, place a Rose Acre sign on it, commit no tardiness or absenteeism, and attend one management meeting per month, Rose Acre would pay $100 per month for 36 months as a bonus above and beyond the employee's regular salary, to apply on payments. Any slight violation, such as being a minute late for work, driving a dirty or damaged car, or missing work for any cause, would work a forfeiture of the bonus. Other bonuses consisted of egg production bonuses, deed conversion bonuses, house management bonuses, and a silver feather bonus. This last bonus program required the participant to wear a silver feather, and a system of rewards and penalties existed for employees who participated. While the conditions of the bonuses varied, one condition existed in all bonus programs: during the period of the bonus, the employee must not be tardy for even a minute, and must not miss work any day for any cause whatever, even illness. If the employee missed any days during the week, he was sometimes permitted to make them up on Saturday and/or Sunday. Any missed work not made up within the same week worked a forfeiture of the bonus. These rules were explained to the employees and were stated in a written policy. The bonus programs were voluntary, and all the employees did not choose to participate in them. When a bonus was offered a card was issued to the participant stating his name and the terms and amount of the bonus. Upon completion of the required tasks, the card was attached to the pay sheet, and the bonus was added to the paycheck. Rust was strict about tardiness and absenteeism, whether an employee was on a bonus program or not. If an employee was tardy, his pay would be docked to the minimum wage, or he would be sent home and lose an entire day. A minute's tardiness would also deprive the employee of a day for purposes of seniority. As was stated in the evidence, bonuses were given for the "extra mile" or actions "above and beyond the call of duty." The purpose of the bonus programs and penalties was to discourage absenteeism and tardiness, and to promote motivation and dependability.

In the tenth week Dove came down with strep throat. On Thursday of that week he reported to work with a temperature of 104o , and told Rust that he was unable to work. Rust told him, in effect, that if he went home, he would forfeit the bonus. Rust offered him the opportunity to stay there and lay on a couch, or make up his lost days on Saturday and/or Sunday. Rust told him he could sleep and still qualify for the bonus. Dove left to seek medical treatment Rust refused Dove the bonus based solely upon his missing the two days of work. While there was some question of whether the construction job was finished, Rust does not seem to have made that issue the basis of his refusal. Bonuses to other crew leaders were paid. The trial court denied Dove's recovery and, in the conclusions of law, stated that Dove had not shown that all of the conditions of the bonus contract had been met. Specifically, Dove failed to work five full days a week for ten weeks.

and missed two days in the tenth week of the bonus program.

ISSUES

Dove presents the following issues for review in this appeal.

I. Whether the trial court, upon finding a valid contract, was correct in ignoring the doctrine of substantial performance, when it held that the plaintiff could only recover if every condition of the contract was met;

II. Whether the trial court was correct in enforcing the contractual terms which had become impossible to perform through no fault of the plaintiff; and

III. Whether the trial court was correct in allowing the defendant to seek enforcement of all terms of the contract when it entered the action with "unclean hands."

Issue III was not raised in the motion to correct errors as required by Ind.Rules of Procedure, Trial Rule 59(D)(1), and the same is waived by virtue of Ind.Rules of Procedure, Appellate Rule 8.3(A)(7). Hockelberg v. Farm Bureau Insurance Company, (1980) Ind.App., 407 N.E.2d 1160; Indiana Motorcycle Association v. Hudson, (1980) Ind.App., 399 N.E.2d 775.

DISCUSSION AND DECISION

Issue I. Substantial performance

Dove argues that the bonus agreement was implemented to (1) insure his presence on the construction site, and (2) cut the cost of construction through maximum production by workers. He next contends that Rose Acre got what it bargained for, that is, the completion of the project. He argues that he was present on the job, including the hours he worked late, at least 750 hours during the ten weeks, while regular working hours would amount to only 500 hours. Therefore, he concludes, there was substantial compliance with the agreement, and he should not be penalized because he failed to appear on the last two days because of illness. Rust disputes that Dove worked any significant amount of overtime.

Dove cites cases that are not employee bonus cases, which state the rule that ordinarily a party seeking enforcement of a contract must show that he has done everything the contract requires of him or that the party against whom he seeks relief received that to which the contract entitles him. 6 I.L.E. Contracts § 223; Kroeger v. Kastner, (1937) 212 Ind. 649, 10 N.E.2d 902; McFarlan Carriage Company v. Connersville Wagon Company, (1911) 49 Ind.App. 318, 96 N.E. 400. This rule is modified by the doctrine of substantial performance. See Drost v. Professional Building Service Corp., (1972) 153 Ind.App. 273, 286 N.E.2d 846; 6 I.L.E. Contracts § 228. Substantial performance applies where performance of a nonessential condition is lacking, so that the benefits received by a party are far greater than the injury done to him by the breach of the other party. Drost, supra; See Whitcomb v. Roll, (1907) 40 Ind.App. 119, 81 N.E. 106; Willis, Promissory and Non-Promissory Conditions 16 Ind.L.J. 349, 356 (1941). Dove cites no case applying the doctrine to bonus cases, and we have found few cases on point. See Squadrito v. Credito Italiano, (1948) 193 Misc. 34, 83 N.Y.S.2d 334; Magruder v. Hagen-Ratcliff and Co., (1948) 131 W.Va. 679, 50 S.E.2d 488; Kaiser v. Better Farms, Inc., (1946) 249 Wis. 302, 24 N.W.2d 621. In Squadrito, supra, it is not clear what conditions attached to the bonuses or how, if at all, the employees had failed to comply. In Magruder, supra, the evidence failed to show that the employee was aware of the contest rules, and it is not clear that he had failed to comply with any condition. The Kaiser case, supra, although factually similar to the case at bar, involved a bonus contract which was less specific than Rose Acre's. Furthermore, neither the bonus contract nor any surrounding circumstances clearly indicated that a single day's absence was intended to work a forfeiture. In the case at bar there is evidence that Dove violated an essential condition which was strictly enforced.

Investigation of authority in bonus situations reveals that a bonus arrangement is contractually enforceable where it is shown that an employee has done or has foregone something which he was not otherwise obligated to do or forego. Spickelmier Industries, Inc. v. Passander, (1977) 172 Ind.App. 49, 359 N.E.2d 563. See Colonial Mortgage Co. of Indiana v. Windmiller, (1978) Ind.App., 376 N.E.2d 529. However, Rose Acre does not contest the existence of a valid bonus contract. It defends its judgment on the grounds that the conditions designated in the contract were not fulfilled because Dove did not work five days a week for ten weeks. It is stated in 56 C.J.S. Master and Servant § 98:

"An employee is not entitled to a bonus until after the time...