Elliott v. Fire

• Decision Date: 05 July 2011
• Docket Number: No. COA10–1219.,COA10–1219.
• Citation: 713 S.E.2d 132
• Parties: Steven Earl ELLIOTT, Plaintiff,v.ENKA–CANDLER FIRE AND RESCUE DEPARTMENT, INC., Defendant.
• Court: North Carolina Court of Appeals

713 S.E.2d 132

Steven Earl ELLIOTT, Plaintiff,

v.ENKA–CANDLER FIRE AND RESCUE DEPARTMENT, INC., Defendant.

No. COA10–1219.

Court of Appeals of North Carolina.

July 5, 2011.

OPINION TEXT STARTS HERE

Appeal by defendant from judgment entered 13 May 2010 and order entered 26 May 2010 by Judge James L. Baker, Jr. in Buncombe County Superior Court. Heard in the Court of Appeals 23 February 2011.

The Bidwell Law Firm, Asheville, by Paul Louis Bidwell and Jessica A. Waters, for plaintiff-appellee.

The Sutton Firm, P.A., Chandler, by April Burt Sutton, for defendant-appellant.

GEER, Judge.

Defendant Enka–Candler Fire and Rescue Department, Inc. appeals from the trial court's grant of summary judgment to plaintiff Steven Earl Elliott, a former employee of defendant. Defendant had entered into a contract with plaintiff that provided for a specific term of employment and continued payment of salary and benefits if defendant terminated the contract prior to the end of the contract term. Defendant primarily argues on appeal that the contract between the parties is unenforceable as a matter of law because (1) there was no consideration flowing from plaintiff to defendant, and (2) the contract violated public policy. We disagree.

Plaintiff, who had been employed at will by defendant, relinquished his at-will status when he agreed to work for defendant for a definite term. In making this promise, plaintiff gave up the right to terminate his employment at any time. This detriment to plaintiff constituted consideration for defendant's promise.

Additionally, because this contract secured plaintiff's services as Fire Chief for a specified period at a specified rate, we conclude that the employment contract served a public purpose and did not otherwise violate public policy. Since the contract was enforceable and since defendant did not present any evidence that plaintiff breached the contract, the trial court properly granted summary judgment to plaintiff. We also find defendant's remaining arguments unpersuasive and, therefore, affirm.

Facts

Plaintiff began working as Fire Chief for defendant in 1996 as an at-will employee. On 20 July 2004, the parties entered into an Employment Agreement. The Employment Agreement stated that “the parties desire to provide for a contract that runs from June 1, 2004 through October 31, 2008, for the retention of [plaintiff] as the Chief of [defendant] ....” Under the terms of the Employment Agreement, plaintiff would remain Fire Chief with his current salary and benefits. The Employment Agreement further provided that in the event defendant terminated plaintiff's employment, defendant would pay plaintiff the balance of his salary and provide all benefits through the end of the contract, as if plaintiff had remained a full-time employee.

Approximately two years later, on 17 April 2006, the parties executed an Extension Agreement. The Extension Agreement extended the termination date of the Employment Agreement from 31 October 2008 to 31 October 2013. All the other terms of the Employment Agreement were to remain in full force and effect under the Extension Agreement.

Defendant subsequently terminated plaintiff's employment as Fire Chief on 3 March 2008. On 15 April 2009, plaintiff filed suit against defendant alleging breach of contract based on defendant's failure to comply with the provisions of the Employment Agreement for payment of salary and benefits following termination. On 17 June 2009, defendant filed an answer and asserted several affirmative defenses, including unclean hands, accord and satisfaction, failure of consideration, and violation of public policy.

On 24 March 2010, defendant moved for summary judgment pursuant to Rule 56 of the Rules of Civil Procedure. Plaintiff later filed his own motion for summary judgment on 6 April 2010. The trial court heard the motions on 10 May 2010. In an order entered 13 May 2010, the trial court determined that there were no genuine issues of material fact as to plaintiff's claims against defendant, defendant's affirmative defenses, or the amount of damages to which plaintiff was entitled. The court concluded that plaintiff was entitled to summary judgment as a matter of law and entered an order (1) denying defendant's motion for summary judgment, (2) granting plaintiff's motion for summary judgment, and (3) awarding plaintiff $310,885.76 plus pre-judgment interest and costs.

On 14 May 2010, the day after summary judgment was entered, defendant filed, pursuant to Rules 59 and 60 of the Rules of Civil Procedure, a motion for relief from judgment or, in the alternative, to set aside the judgment and order a jury trial. The trial court entered an order denying defendant's motion on 26 May 2010. Defendant timely appealed to this Court from both the summary judgment order and the order denying defendant's motion for relief or a new trial.

I

Defendant first contends that the trial court erred in denying its motion and granting plaintiff's motion for summary judgment because the Employment and Extension Agreements are unenforceable for lack of consideration. Summary judgment is proper “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 any party is entitled to a judgment as a matter of law.” N.C.R. Civ. P. 56(c). When appropriate, summary judgment may be rendered against the moving party. Id.

“It is well established that in an action for breach of contract, [a party's] promise must be supported by consideration for it to be enforceable.” Labarre v. Duke Univ., 99 N.C.App. 563, 565, 393 S.E.2d 321, 323, disc. review denied, 327 N.C. 635, 399 S.E.2d 122 (1990). Consideration sufficient to support a contract consists of “ ‘any benefit, right, or interest bestowed upon the promisor, or any forbearance, detriment, or loss undertaken by the promisee.’ ” Lee v. Paragon Group Contractors, Inc., 78 N.C.App. 334, 337–38, 337 S.E.2d 132, 134 (1985) (quoting Brenner v. School House, Ltd., 302 N.C. 207, 215, 274 S.E.2d 206, 212 (1981)), disc. review denied, 316 N.C. 195, 345 S.E.2d 383 (1986). “Consideration is the ‘glue’ that binds parties together, and a mere promise, without more, is unenforceable.” Id. at 338, 337 S.E.2d at 134 (quoting In re Foreclosure of Owen, 62 N.C.App. 506, 509, 303 S.E.2d 351, 353 (1983)).

In this case, defendant first argues that there was no consideration flowing from plaintiff to defendant. Defendant points to the fact that plaintiff was working for defendant when the Employment and Extension Agreements were executed and that the Agreements provided for no change in plaintiff's duties, pay, or benefits.

Defendant, however, overlooks the critical fact that by entering into the Employment Agreement, plaintiff relinquished his status as an at-will employee. In North Carolina, “in the absence of an employment contract for a definite period, both employer and employee are generally free to terminate their association at any time and without any reason.” Salt v. Applied Analytical, Inc., 104 N.C.App. 652, 655, 412 S.E.2d 97, 99 (1991) (emphasis added), cert. denied, 331 N.C. 119, 415 S.E.2d 200 (1992). See also Still v. Lance, 279 N.C. 254, 259, 182 S.E.2d 403, 406 (1971) (holding that where employee's contract contained no provision concerning duration of employment or means by which it may be terminated, such contract was terminable at will of either party irrespective of quality of performance by other party); Gravitte v. Mitsubishi Semiconductor Am., Inc., 109 N.C.App. 466, 472, 428 S.E.2d 254, 258 (“[T]he general rule is that, absent an employment contract for a definite period of time, both employer and employee are generally free to terminate their association at any time and without reason.” (emphasis added)), disc. review denied, 334 N.C. 163, 432 S.E.2d 360 (1993).

Here, the uncontradicted evidence shows that, by entering into the Employment and Extension Agreements, plaintiff promised to work for defendant through 2008 and then through 2013. In making this promise—which he was not required to make—plaintiff gave up his right to leave his employment with defendant at any time, for any or no reason, without notice to defendant.

Although when discussing at-will employment, courts more typically focus on the benefits to the employer, at-will status can be of significant value to an employee as well. For example, employees with especially desirable skills or excellent reputations may be highly sought after by other employers. An employer, by entering into a contract for a specific term with such an employee, ensures that no other employer will be able to lure that employee away for higher pay or better benefits. On the other hand, the employee, by entering into the contract, foregoes the opportunity to accept other more lucrative job offers. Thus, the promise by plaintiff, in this case, to forego at-will employment constituted consideration. See Swenson v. Legacy Health Sys., 169 Or.App. 546, 552, 9 P.3d 145, 148 (2000) (“As a matter of law, the promise of an at-will employee to continue in an employer's service for some specified future period of time constitutes consideration for an additional benefit promised by the employer.”).

In reaching this decision, we find the case of Bennett v. Eastern Rebuilders, Inc., 52 N.C.App. 579, 279 S.E.2d 46 (1981), persuasive. In Bennett, the plaintiff was employed as a lead person on the defendant's production line. Id. at 580, 279 S.E.2d at 48. Her position fell under a union contract giving her substantial job security. Id. The defendant persuaded the plaintiff to accept a promotion, which would result in the loss of her union protection and resulting job security, in exchange for the defendant's promise that she would not be fired if she did not work out as a supervisor but would instead be demoted to her former position as a lead person. Id.

Although Benn...