Falls v. Virginia State Bar, 900212

• Decision Date: 09 November 1990
• Docket Number: No. 900212,900212
• Citation: 397 S.E.2d 671,240 Va. 416
• Parties: , 5 IER Cases 1540 John T. FALLS v. VIRGINIA STATE BAR, et al. Record
• Court: Virginia Supreme Court

Page 671

397 S.E.2d 671

240 Va. 416, 5 IER Cases 1540

John T. FALLS v. VIRGINIA STATE BAR, et al.

Record No. 900212.

Supreme Court of Virginia.

Nov. 9, 1990.

Jay J. Levit (Levit & Mann, Richmond, on briefs), for appellant.

Gregory E. Lucyk, Sr. Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., Gail Starling Marshall, Deputy Atty. Gen., on brief), for appellees.

Present: All the Justices.

WHITING, Justice.

In this case, the principal issue is whether a provision of the statute of frauds bars enforcement of an employment contract that was to continue as long as the employee's job performance was satisfactory. At the time the alleged contract was made, and when the case was tried, the applicable portion of the statute of frauds provided that "[n]o action shall be brought ... [u]pon any agreement that is not to be performed within a year ... [u]nless the ... contract ... or some memorandum or note thereof, be in writing and signed by the party to be charged thereby, or his agent." Code § 11-2(7) (1988 Repl.Vol.). ¹

On December 14, 1988, John T. Falls brought this action against the Virginia State Bar (the Bar) and Edward J. Mazur, Comptroller of the Commonwealth, ² to recover damages for breach of an employment contract. On November 20, 1989 concluding that the statute of frauds barred enforcement of Falls' contract, the trial court sustained the defendants' demurrer to Falls' amended motion for judgment, and dismissed the amended motion for judgment with prejudice. Falls appeals.

Because the case was decided on demurrer, the Bar "admits the truth of all material facts that are properly pleaded. According to this rule, the facts admitted are those expressly alleged, those which are impliedly alleged, and those which may be fairly and justly inferred from the facts alleged." Elliott v. Shore Stop, Inc., 238 Va. 237, 240, 384 S.E.2d 752, 753 (1989). Consistent with this principle, we summarize the material portions of Falls' motion for judgment and its attachment, incorporated by reference in the motion for judgment.

In March 1986, prior to his employment by the Bar, Falls was employed by a third party. His salary, tenure, and job benefits in that position were not disclosed in the pleadings. In negotiations leading to his employment as the Bar's Director of Administration, authorized representatives of the Bar interviewed Falls and assured him that if he accepted the job, his employment would continue as long as his performance was satisfactory. During these negotiations, Falls was given a copy of the Bar's personnel manual, upon which he relied as further evidence of his job security. Relying upon these oral assurances and the personnel manual, Falls resigned his existing employment and, effective April 1, 1986, accepted employment by the Bar.

Although his work was satisfactory, Falls was discharged without cause on January 4, 1988, effective February 19, 1988. A Bar representative told Falls that he was being discharged because the Bar could hire "lower-line employees" to perform his duties at lower cost.

On appeal, Falls makes several arguments to support his claim that the trial court erred in its application of the statute of frauds. At the outset, Falls argues that we need not consider the merits of the statute of frauds' defense because the defendants are estopped from pleading the statute. However, the State Bar, as an administrative arm of the Court, Code § 54.1-3910, is a state agency. Goldfarb v. Virginia State Bar, 421 U.S. 773, 789-90, 95 S.Ct. 2004, 2014-15, 44 L.Ed.2d 572 (1975). Because it is a state agency in the performance of a governmental function, estoppel does not apply to the State Bar. See Gwinn v. Alward, 235 Va. 616, 621, 369 S.E.2d 410, 413 (1988).

Therefore, we turn to Falls' remaining contentions. First, he argues that the statute is inapplicable because his employment contract was capable of being fully performed within its first year upon the occurrence within that period of any one of the following events: his death, resignation, or discharge for cause. We referred to these contingencies in Silverman v. Bernot, 218 Va. 650, 239 S.E.2d 118 (1977). Silverman involved an oral contract of employment that provided for retirement benefits if a 41-year-old employee continued her employment (1) until she reached the age of 62, or (2) until the employer's death. There, because by its terms the contract would have been fully performed if the employer died within its first year, we held that it was not within the statute of frauds and, therefore, the employee could enforce the oral contract.

In deciding Silverman, we drew a distinction between termination of a contract by operation of law and its completion by performance:

"[I]n service cases it is generally recognized that termination of duty by operation of law is not identical with performance of a promise. The death of a party may terminate duty; but...