Farrell v. Automobile Club of Michigan

• Decision Date: 02 February 1987
• Docket Number: Docket No. 82916
• Citation: 399 N.W.2d 531,155 Mich.App. 378
• Court: Court of Appeal of Michigan — District of US
• Parties: Bruce FARRELL, Plaintiff-Appellee, v. AUTOMOBILE CLUB OF MICHIGAN, Defendant-Appellant. 155 Mich.App. 378, 399 N.W.2d 531, 1 Indiv.Empl.Rts.Cas. (BNA) 1437

Page 531

399 N.W.2d 531

Bruce FARRELL, Plaintiff-Appellee, v. AUTOMOBILE CLUB OF MICHIGAN, Defendant-Appellant.

Docket No. 82916.

155 Mich.App. 378, 399 N.W.2d 531,

1 Indiv.Empl.Rts.Cas. (BNA) 1437

Court of Appeals of Michigan.

Submitted Jan. 7, 1986.

Decided Oct. 8, 1986.

Released for Publication Feb. 2, 1987.

[155 MICHAPP 380] Schenk, Boncher & Prasher by Gary P. Schlenk and Fred D. Hartley, Grand Rapids, for plaintiff-appellee.

Fox & Grove by Kalvin M. Grove and Steven L. Gillman, Chicago, Ill., and Finkel, Whitefield & Selik by Robert J. Finkel, Southfield, for defendant-appellant.

Before MAHER, P.J., and ALLEN and LAMB, ^* JJ.

PER CURIAM.

In this breach of employment contract case, defendant appeals as of right from a November 30, 1984, judgment entered pursuant to a $150,000 jury verdict in favor of plaintiff.

Plaintiff is a former sales representative employed by defendant and compensated by commissions in Grand Rapids since October, 1976. He was required to sell defendant's insurance products and serve the company's customers. On May 21, 1982, plaintiff's employment was terminated by defendant for failure to fulfill the company's minimum[155 MICHAPP 381] production requirements for sales employees paid by commissions. Prior to termination, he received a number of warnings informing him that his level of production was unacceptable. Upon termination, he was offered a salaried sales position with defendant as a member advisor, but he rejected it on the grounds that it was a demotion because the position paid less and the hours were more structured as compared with his former sales representative position.

On October 8, 1982, plaintiff filed the instant suit against defendant, alleging that the termination of his employment constituted a breach of his employment contract with defendant. ¹ Plaintiff also alleged that he was evaluated by defendant in a negligent fashion. He claimed that the terms of his employment contract with defendant only allowed defendant to terminate his employment for good cause. He alleged that the termination was not for good cause because his employment contract never contemplated that he would have to adhere to a minimum production level as a condition of continued employment. Rather, he alleged that a written sales manual given to him upon commencement of his employment and oral representations made to him during the course of his employment established the terms of his employment contract and only required him to service his "book" of insurance policies and to sell "some" additional insurance.

Defendant claimed that it had the right to impose additional requirements on its employees as a condition of continued employment. It argued that the imposition of a minimum production level upon plaintiff in September, 1981, constituted a [155 MICHAPP 382] valid term of plaintiff's employment contract. Defendant has contested plaintiff's breach of contract suit on the grounds that it had good cause for terminating plaintiff's employment because plaintiff failed to meet required production levels.

Following a three-day jury trial, a jury verdict was entered in favor of plaintiff in the amount of $150,000. Defendant made post-trial motions for a new trial, judgment notwithstanding the verdict, and remittitur, all of which were denied by the trial court.

Defendant first claims on appeal that the trial court erred in denying its motions for a directed verdict and judgment notwithstanding the verdict. At the close of plaintiff's proofs at trial, defendant raised a motion for directed verdict on both plaintiff's breach of contract claim and negligent evaluation claim. Defendant contended that under Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980), it had the right to unilaterally change its employment contract with plaintiff. The trial court granted defendant's motion for a directed verdict with regard to the negligent evaluation claim, but determined that, viewing the breach of contract claim in a light most favorable to plaintiff, there were sufficient facts to present plaintiff's claim to the jury. The trial court subsequently denied defendant's post-trial motions for a new trial and judgment notwithstanding the verdict on the same grounds.

In reviewing a trial court's refusal to grant a defendant's motion for a directed verdict or judgment notwithstanding the verdict, this Court properly examines the evidence and all legitimate inferences that may be drawn therefrom in the light most favorable to the plaintiff. Matras v. Amoco Oil Co., 424 Mich. 675, 681, 385 N.W.2d 586 (1986). See also, Caldwell v. Fox, 394 Mich. 401, [155 MICHAPP 383] 407, 231 N.W.2d 46 (1975), aff'd on other grounds 395 Mich. 903 (1975). If this Court determines that reasonable jurors could honestly have reached different conclusions, the motion should have been denied by the trial court. If reasonable jurors could have disagreed, neither the trial court nor this Court has the authority to substitute its judgment for that of the jury. Matras, supra, 424 Mich. p. 682, 385 N.W.2d 586.

Plaintiff presented four pieces of evidence at trial to support his claim that defendant's written and oral representations to him had established an employment contract in which defendant agreed not to impose enforceable minimum production levels upon plaintiff.

The first piece of evidence consisted of the parties' stipulation that prior to 1981 defendant had not enforced any sales quotas on its sales representatives and had not dismissed or demoted any of its sales representatives for failure to achieve quotas or production standards. Secondly, plaintiff presented evidence that his branch manager, Mr. Fennech, had informed him at the time he was hired that his responsibility was to sell some insurance and to make his "book" of insurance grow. According to plaintiff, Fennech told him at the time of his hiring that he need only handle his book of business, sell some insurance and he would be set financially for the rest of his life if he worked at it for three or four years. Thirdly, plaintiff established at trial that at the time of his hiring Fennech handed him a Sales Rules Manual which provided that he was required to sell some insurance as a condition of continued employment, but which did not refer to a quota or minimum level of sales that he was required to meet. Plaintiff testified that the only requirements imposed by the Manual were that he produce some new business, memberships and insurance. Finally, plaintiff [155 MICHAPP 384] also presented evidence to the effect that at the time defendant's employee union in Detroit was negotiating with defendant, regarding a new contract with defendant which included minimum sales production requirements, the regional manager, Mike Mallott, informed plaintiff that he need not be concerned about the union contract because it would not apply to the Grand Rapids employees. According to plaintiff, Mallott told him that if the union contract contained something better than what the employees currently had, the Grand Rapids employees would also be benefitted, but if it contained something worse, it would not affect them.

Regarding the union negotiations, plaintiff also contends in his supplemental brief on appeal that defendant instituted a policy requiring its sales staff to meet a monthly sales quota only after negotiations had stalemated with its employee union in the metro-Detroit area. Plaintiff points to the case of Bullock v. Automobile Club of Michigan, 146 Mich.App. 711, 381 N.W.2d 793 (1985), lv. gtd., 425 Mich. 872 (1986). As discussed infra, Bullock is similar in its facts to the instant case. The plaintiff in Bullock was hired by the same defendant as here as a commissioned sales person. When he did not fullfil sales quotas imposed upon him following the union negotiations stalemate, his employment was terminated.

Based upon the above four pieces of evidence, plaintiff claimed that the 1981 minimum production requirements were not part of plaintiff's employment contract with defendant because defendant had previously agreed that it would not impose quota requirements upon plaintiff.

We will address defendant's counter-arguments to plaintiff's evidence individually. First, defendant claims that manager Fennech's remarks were improperly[155 MICHAPP 385] relied upon by the jury because they were void under the statute of frauds, not based upon any consideration and exceeded Fennech's authority as a manager. It is well-settled that where an oral contract may be completed in less than one year, even though it is probable that the contract will extend for a period of years, the statute of frauds is not violated. M.C.L. Sec. 566.132(a); M.S.A. Sec. 26.922(a); Cowdrey v. A.T. Transport, 141 Mich.App. 617, 367 N.W.2d 433 (1985). Neither plaintiff nor defendant has claimed that the employment contract was one for a definite term. Although Fennech stated that if plaintiff performed satisfactorily for three to four years he would be set for life, there is no indication that the employment contract could not have been terminated during plaintiff's first year of employment if plaintiff had not performed satisfactorily. Hence, the agreement between the parties must be construed as one for an indefinite term not falling within the statute of frauds. Toussaint, supra, 408 Mich. p. 612, 292 N.W.2d 880; Rowe v. Noren Pattern & Foundry Co., 91 Mich.App. 254, 257, 283 N.W.2d 713 (1979), lv. den. 409 Mich. 880 (1980).

Regarding the Sales Rules Manual, defendant cites other provisions contained within the manual which state that the sales representatives must maintain an acceptable ratio of new business and comply with the rules established by defendant's agents. According to defendant, this establishes that the jury unreasonably relied upon the provisions of the Sales Rules Manual that plaintiff pointed to as evidence in reaching its verdict....