Earl v. St. Louis University

• Decision Date: 03 May 1994
• Docket Number: No. 63480,63480
• Citation: 875 S.W.2d 234
• Parties: 91 Ed. Law Rep. 425, 9 IER Cases 882 Dennis EARL, Respondent, v. ST. LOUIS UNIVERSITY, Appellant.
• Court: Missouri Court of Appeals

Page 234

875 S.W.2d 234

91 Ed. Law Rep. 425, 9 IER Cases 882

Dennis EARL, Respondent, v. ST. LOUIS UNIVERSITY, Appellant.

No. 63480.

Missouri Court of Appeals,

Eastern District,

Division Four.

May 3, 1994.

Dennis C. Donnelly, Peter H. Harris, St. Louis, for appellant.

Patrick J. Hagerty, St. Louis, for respondent.

CARL R. GAERTNER, Judge.

This appeal arises from an action on a contract between the plaintiff, Dennis Earl, and his former employer, St. Louis University.

In 1983 Earl was employed as Chief Financial Officer for St. Louis University Hospital. He worked for the University for six years. During these six years, many changes were made in the hospital structure and personnel. Throughout these changes, several employees had their positions eliminated. Eventually Earl's position with the University was also eliminated. In April of 1989, Dr. Arthur Baue, Vice President of the Medical Center, informed Earl that his position was not being budgeted for the next fiscal year. Earl asked Dr. Baue if he would receive any assistance from the University while he attempted to find other employment. Dr. Baue told Earl to write a proposal for such assistance and to base the proposal on previous severance agreements which the University had entered with former employees. Earl based his proposal on a severance agreement which the University had entered with Dr. Richard Stensrud.

When Earl first arrived at the University, Dr. Stensrud was his supervisor. Dr. Stensrud left the University in August of 1987. Upon leaving the University, Dr. Stensrud negotiated a severance agreement with the University. Earl was involved in these negotiations. Earl retained a copy of this agreement and used it as guideline in drafting his proposed agreement.

Earl submitted his proposed severance agreement to Dr. Baue. Dr. Baue sent the document to one of the University's legal counsel. It was returned with few alterations. On April 17, 1989, Dr. Baue and Earl signed the agreement. Essentially the agreement provided Earl with eight months of severance pay and an incentive bonus payment. He was also allowed to buy at depreciated value the automobile which the University had provided him during his employment.

Father Lawrence Biondi, the President of St. Louis University, did not learn of the agreement until after it was negotiated and signed. After reviewing a copy of the document, Father Biondi met with Dr. Baue and told him that the agreement was unacceptable. Dr. Baue then told Earl that Father Biondi would not accept the agreement. Earl then brought an action against the University for breach of contract.

At trial the jury found for Earl and returned a verdict of $70,000. The University had requested a directed verdict at the end of the plaintiff's evidence. After the jury returned its verdict, the University moved for a judgment notwithstanding the verdict or in the alternative a new trial. Earl requested the trial court to invoke its power of additur to conform the verdict to the contract amount or to grant a new trial on damages only. The trial court denied each of these motions, except for Earl's request for a new trial on damages only. The University appealed. For the reasons set forth below, we affirm the judgment of the trial court.

I

In its first point on appeal, the University claims the severance agreement was not supported by any consideration; because Earl did not establish that the agreement was supported by legally sufficient consideration, he failed to present a submissible case of breach of contract. Therefore, the trial court erred when it denied the University's motion for judgment notwithstanding the verdict. The University also argues that this error was compounded when the trial court itself determined the agreement was supported by consideration and withheld this issue from the jury. In both instances we disagree.

Consideration is a necessary element for establishing the existence of a valid contract. Ennis v. McLaggan, 608 S.W.2d 557, 561 (Mo.App.1980). The burden of showing legally sufficient consideration rests on the party relying on the contract. Ennis at 561. Consideration sufficient to support a contract may be either a detriment to the promisee or a benefit to the promisor. In re Estate of Weinsaft, 647 S.W.2d 179, 183 (Mo.App.1983). The detriment to the promisee may consist of doing anything which he is not legally bound to do or refraining from doing anything which he has the legal right to do. Weinsaft at 183.

In the present case, the University argues that there was no detriment to Earl in exchange for the University's performance under the agreement. The agreement states, as consideration for the University's promised performance, Earl agreed to: (1) release the University from all claims he might have as a consequence of his employment and termination, (2) waive his right to a service letter pursuant to § 290.140 RSMo. (1986), (3) cooperate with the University in concluding projects and matters in which he was involved, and (4) continue working until July 1, 1989, or until he obtained other employment. The University attacks Earl's release of the University from claims arising out of his employment and termination. The University argues that Earl had no right to bring any action against the University because any claim he might have brought would have been baseless. Therefore, this alleged release could not act as consideration for the severance agreement.

We need not determine whether Earl's release of the University could support the severance agreement. We find, instead, that the waiver of the service letter and Earl's continued employment were legally sufficient. If two considerations are given for a promise, one of them being legally sufficient to support a promise and the other not sufficient the promise is enforceable. 1 Corbin on Contracts, § 126 (1963). It is enough that there is one sufficient consideration. Id. Since Earl's waiver of the service letter and agreement to continue working were legally sufficient considerations, any determination regarding the alleged waiver of claims would not effect the disposition of this issue.

Earl was legally entitled to request a service letter. See § 290.140 RSMo. (1986). Refraining from exercising this right acted as a detriment to Earl and as consideration for the severance agreement. Additionally, Earl was an employee-at-will. He was free to leave the University at any time. After learning that his position was being eliminated for the next fiscal year, Earl agreed to continue working at the University until July 1, 1989, or until he obtained other employment. He agreed to conclude projects in which he was involved. A promise to continue working by an employee who is under no obligation to remain supplies adequate consideration for a contract with the employer. Reed, Roberts Associates, Inc. v. Bailenson, 537 S.W.2d 238, 241 (Mo.App.1976). Both Earl's waiver of a service letter and his continued work were legally sufficient consideration to support the severance agreement.

The University does not actually dispute Earl's right to request a service letter. Nor does the University argue that Earl was under any obligation to continue working. Instead, the University's argument seems to be levelled at the disparity in value between the detriment to Earl--waiver of a service letter and continued work at his regular salary--and the benefit he received from the University under the agreement. However, the law is well settled that a consideration, though small, is adequate to support a contract, and that inadequacy of consideration, in the absence of fraud, does not constitute any defense. Hathman v. Waters, 586 S.W.2d 376, 385 (Mo.App.1979). This principle rests upon the policy of letting the parties weigh the benefits pro and con and make whatever contract between themselves that they please. Hathman at 385. The University did not plead or argue fraud. Therefore, the inadequacy of the parties' proffered considerations was a matter for the parties to determine before entering into the agreement.

The University also claims that the trial court erred when it failed to submit the question of lack of consideration to the jury. The University objected to this omission during the instruction conference. The University contends that it is entitled to a new trial because the jury should have been instructed on this issue since it was in dispute.

Whether consideration was sufficient to establish a contract is normally a question of law for the court and not a question of fact for the jury. Vondras v. Titanium Research & Development Co., 511 S.W.2d 883, 887 (Mo.App.1974). Of course, if this determination necessarily turns on disputed facts, then the jury, as the arbiter of facts, must decide the issue. See Bredel v. Parker-Russel Min. & Mfg. Co., 21 S.W.2d 932, 935 (Mo.App.1929). The agreement between Earl and the University recited the consideration upon which the agreement was based. The recitation of consideration in an agreement is prima facie evidence that consideration to support the agreement was present; it creates a presumption that the recitals are true, a presumption which continues unless overcome by evidence to the contrary. Landmark N. County Bank v. National Cable Training, 738 S.W.2d 886, 891 (Mo.App.1987). If a plaintiff presents prima facie evidence on a particular issue, then the evidence is, at the least, sufficient to go to the jury on that issue. Nishwitz v. Blosser, 850 S.W.2d 119, 122 (Mo.App.1993). Such evidence compels a finding for the plaintiff if the defendant produces no evidence to rebut it. Nishwitz at 122.

The University did not present any evidence that Earl was not entitled to the service letter he waived. Nor did the University present evidence that Earl had any obligation to continue his employment. Because these items were contained in the recitals of consideration in the agreement and because the...