Forstmann v. Culp

• Decision Date: 28 November 1986
• Docket Number: Civ. A. No. C-85-1014-G.
• Citation: 648 F. Supp. 1379
• Court: U.S. District Court — Middle District of North Carolina
• Parties: Gunther FORSTMANN, Plaintiff, v. Robert G. CULP, Jr., and Culp, Inc., Defendants.

648 F. Supp. 1379

Gunther FORSTMANN, Plaintiff, v. Robert G. CULP, Jr., and Culp, Inc., Defendants.

Civ. A. No. C-85-1014-G.

United States District Court, M.D. North Carolina, Greensboro Division.

November 28, 1986.

David M. Clark, Greensboro, N.C., for plaintiff.

David C. Wright, III and A. Ward McKeithen, Charlotte, N.C., for defendants.

MEMORANDUM OPINION

GORDON, Senior District Judge:

This matter comes before the court on defendants' motion for summary judgment.

STATEMENT OF FACTS

Gunther Forstmann (plaintiff) asserts several claims growing out of a meeting and conversation with Robert Culp, president of Culp, Inc. (defendants), on 1 March 1985. Plaintiff alleges that he initiated the meeting to discuss the possibility that defendant might purchase Baxter-Kelly, Inc., a textile business in Anderson, South Carolina. Plaintiff asserts that defendant agreed, at this meeting, to the following: (1) to pay plaintiff $2000 per week for two weeks to conduct a study and prepare a report on whether it would be viable for defendant to purchase Baxter-Kelly, (2) to hire plaintiff to manage Baxter-Kelly in the event that defendant decided to purchase that facility, and (3) to give plaintiff an ownership interest in Baxter-Kelly in the event that defendant decided to purchase the facility. Defendant agrees that plaintiff was hired for two weeks at $2000 per week to conduct a study of Baxter-Kelly and plaintiff admits that defendant has paid for this service. Defendant, however, denies plaintiff's other allegations. Plaintiff brings suit on the following legal theories: (1) breach of contract, (2) promissory estoppel, (3) quantum meruit, (4) fraud, and (5) RICO. Defendant moves for summary judgment on each of these claims.

DISCUSSION

Rule 56 of the Federal Rules of Civil Procedure provides that 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 the moving party is entitled to judgment as a matter of law." The summary judgment mechanism thus allows courts to "smoke out if there is any case, i.e., any genuine issue as to any material fact, and, if there is no case, to conserve judicial time and energy by avoiding an unnecessary trial and by providing a speedy and efficient summary disposition." Bland v. Norfolk & Southern Railroad Co., 406 F.2d 863, 865 (4th Cir.1969). The summary judgment standard, however, is strict; "the moving party ... has the burden of showing the absence of a genuine issue as to any material fact." Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). See also Thomas v. Petro-Wash, 429 F.Supp. 808, 816 (M.D.N. C.1977) (noting that "the defendants must prove that the undisputed facts entitle them to summary judgment"). Yet, "the movant may discharge his burden by demonstrating that if the case went to trial there would be no competant evidence to support a judgment for his opponent." 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2727 at 130 (1983). See Celotex Corp. v. Catrett, ___ U.S. ___, ___, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265, 273 (1986); Anderson v. Liberty Lobby, Inc., ___ U.S. ___, ___, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202, 213 (1986).

I. CONTRACT CLAIM

It is a fundamental legal tenet that the law will subject no person to a contractual obligation unless the character of the obligation is definitely fixed by an express or implied agreement of the parties. General Motors Corp. v. Keener Motors, Inc., 194 F.2d 669, 676 (6th Cir.1952). To be binding, an agreement must be definite and certain as to its terms and requirements and must spell out the essential commitments assented to by the parties. North Carolina law recognizes and follows these maxims regarding the degree of definiteness and certainty a promise must exhibit before it can form the basis of a contractual obligation. Accordingly, in the area of employment contracts, the longstanding North Carolina rule is that a personal service contract requires certainty as to the nature and extent of the services to be performed, the place where and the person to whom services are to be rendered, and the compensation to be paid before a court will enforce the contract. Humphrey v. Hill, 55 N.C.App. 359, 361, 285 S.E.2d 293, 295 (1982) (citing Croom v. Lumber Co., 182 N.C. 217, 108 S.E. 735 (1921)). See 53 Am.Jur.2d Master & Servant § 16 (an essential element of a binding contract of employment includes definiteness as to compensation).

In the present action, this court cannot enforce the alleged contract because the parties did not reach an agreement as to the salary defendant would pay to the plaintiff. The defendant vehemently denies that any agreement as to salary was reached:

Q. Did you not, in fact, Mr. Culp, expressly or impliedly, tell Gunther Forstmann that if Baxter-Kelly were purchased as a result of his recommendations that, in fact, he would run the plant at a salary of $60,000.00 and would have an equity position?

A. No, sir, Mr. Clark. That's a figment of his imagination.

Culp dep. p. 85. More importantly, plaintiff's account of the parties' discussion regarding compensation also clearly fails to demonstrate that the parties agreed as to the salary to be paid to Mr. Forstmann in that defendant did not assent to plaintiff's proposed salary:

Mr. Culp asked me whether I could run that, which I assured him of. And he asked me what I would expect as a salary. I mentioned, at that time, $60,000.00 a year. Mr. Culp then said that was how much he was making. And I said, "That is not what I heard."

And he smiled and said, "Well, the rest was all bonuses." And I told him I would be quite prepared to accept bonuses too.

Forstmann dep. p. 81. It is thus clear that plaintiff and defendant never reached a mutual understanding as to the compensation to be paid by defendant to plaintiff. There simply was no meeting of the minds. Under these circumstances, summary judgment is proper.¹ The Supreme Court recently noted that "the plain language of Rule 56(c) mandates the entry of summary judgment ... against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, ___ U.S. ___, ___, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265, 273 (1986). In this regard, the Court continued, the "standard for granting summary judgment mirrors the standard for a directed verdict under Federal Rule of Civil Procedure 50(a)." Id. (citing Anderson v. Liberty Lobby, Inc., ___ U.S. ___, ___, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202, 213 (1986)). In turn, Rule 50(a) mandates that the trial judge direct a verdict if, under the governing law, there can be but one reasonable conclusion as to the verdict. Brady v. Southern Ry. Co., 320 U.S. 476, 479-80, 64 S.Ct. 232, 234-35, 88 L.Ed. 239 (1943).

On the facts this case presents, defendant is entitled to judgment as a matter of law on plaintiff's contract claim because the plaintiff has failed to show an essential element of his case—the amount of compensation defendant was to pay plaintiff— with respect to which plaintiff has the burden of proof. The only evidence plaintiff offers of an agreement as to salary is the above quotation from plaintiff's own deposition and the only reasonable conclusion one can reach from this evidence is that the parties did not reach an agreement as to compensation. Accordingly, the court concludes that plaintiff's claim for breach of contract fails because the alleged contract lacks sufficient definiteness for a court to enforce.

The soundness of the rule requiring definiteness as to essential terms before a promise is enforceable as a contract becomes readily apparent when one views the situation presented by this case. The parties herein are, by their own admission, experienced in business. And their conduct illustrates that both parties know how to make a legally binding contract. The undisputed facts show that plaintiff and defendant entered into a contract whereby plaintiff would conduct a study and prepare a report on the status of Baxter-Kelly and defendant would pay plaintiff a fee of $2000.00 per week for two weeks. This contract is specific as to the nature and extent of the services to be performed, the compensation to be paid, and the duration of the contract. The specificity of the terms makes it evident that the parties intended to form a binding contract. In stark contrast, the alleged contract about which plaintiff complains herein establishes neither the compensation to be paid nor the duration of the contract. The lack of specificity as to material terms clearly signifies that the parties did not mutually agree to bind themselves in this particular instance.

Assuming arguendo that an agreement definite enough for a court to enforce existed between plaintiff and defendant, defendant's refusal to employ plaintiff would nonetheless be noncompensable. North Carolina adheres to the rule that where a contract of employment contains no provision as to duration, the contract is terminable at the option of the employer ("at will"), without regard to cause. Nantz v. Employment Securities Commission, 290 N.C. 473, 226 S.E.2d 340 (1976); Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E.2d 282, 79 A.L.R.3d 651 (1976); Malever v. Kay Jewelry Co., 223 N.C. 148, 25 S.E.2d 436 (1943). Indeed, even where the parties enter into a contract for "permanent employment," the contract is an indefinite general hiring terminable at will in the absence of an additional expression as to duration. Roberts v. Wake Forest University, 55 N.C.App. 430, 286 S.E.2d 120, review denied, 305 N.C. 586, 292 S.E.2d 571 (1982). The alleged contract herein was clearly at will as the plaintiff admits in his deposition:

Q. No discussion or

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