Forzley v. AVCO Corp. Electronics Div., s. 85-5942

• Citation: 826 F.2d 974
• Decision Date: 08 September 1987
• Docket Number: Nos. 85-5942,85-6053,s. 85-5942
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Parties: Alfred A. FORZLEY, Plaintiff-Appellee, v. AVCO CORPORATION ELECTRONICS DIVISION, a Delaware Corp., Defendant-Appellant. Alfred A. FORZLEY, Plaintiff-Appellee, Cross-Appellant, v. AVCO CORPORATION ELECTRONICS DIVISION, a Delaware Corp., Defendant-Appellant, Cross-Appellee.

Page 974

826 F.2d 974

Alfred A. FORZLEY, Plaintiff-Appellee, v. AVCO CORPORATION ELECTRONICS DIVISION, a Delaware Corp.,

Defendant-Appellant.

Alfred A. FORZLEY, Plaintiff-Appellee, Cross-Appellant, v. AVCO CORPORATION ELECTRONICS DIVISION, a Delaware Corp.,

Defendant-Appellant, Cross-Appellee.

Nos. 85-5942, 85-6053.

United States Court of Appeals, Eleventh Circuit.

Sept. 8, 1987.

Ramon Martinez, Jr., Naphin, Banta & Cox, Chicago, Ill., and Jeffrey B. Lathe, Blackwell, Walker, Fascell & Hoehl, Miami, Fla., for AVCO Corp. Electronics Div.

E. Hugh Chappell, Jr. and Richard A. Beauchamp, Chappell & Brandt, P.A., Ft. Lauderdale, Fla., for Alfred A. Forzley.

Appeals from the United States District Court for the Southern District of Florida.

Before VANCE and ANDERSON, Circuit Judges, and WISDOM ^*, Senior Circuit Judge.

WISDOM, Senior Circuit Judge:

AVCO Corporation, Electronic Division, defendant/appellee, employed Alfred A. Forzley, plaintiff/appellant, under a two-year agreement, to work on a construction project in Saudi Arabia. Forzley's appeal raises three dispositive issues. 1) Does the termination of the employment agreement before its expiration because of Forzley's absence from work for more than ninety consecutive days for medical reasons constitute a breach of that agreement? 2) Is Forzley's claim for retroactive overtime pay barred by the applicable statute of limitations? 3) Is Forzley entitled to a service award upon termination of the agreement before the expiration of its two year term under either Exhibit "A" of the agreement or Article 87 of the Saudi Arabia Workmen and Labor Law? After oral argument on cross-motions for summary judgment, the district court held that AVCO wrongfully terminated the employment agreement and, after a trial to the bench on the issue of damages, rendered final judgment against AVCO in the amount of $80,427.04 plus interest. This figure included sums for a service award under Exhibit "A" of the agreement as well as an award for retroactive overtime pay. The court denied Forzley's request for attorney's fees.

We reverse the judgment of the district court except as to the denial of Forzley's request for attorney's fees, and hold that AVCO did not breach the employment agreement. We also hold that Forzley is entitled to both service awards, and remand for calculation of the amount of service award he is entitled to receive under the Saudi Arabia Workmen and Labor Law, and for a recalculation of the amount of service award to which he is entitled under Exhibit "A" of the agreement. As is explained below, any service award due under Exhibit "A" shall be reduced by the amount due under Article 87 of the Saudi Arabia Workmen and Labor Law.

I.

On November 10, 1982, Alfred A. Forzley entered into a two year employment agreement with AVCO Corporation. The agreement required Forzley to render his full-time services to AVCO as a "field site engineer" within The Kingdom of Saudi Arabia. ¹ In exchange for full time services rendered, Forzley was to receive a monthly base salary of $3,201.12 or $38,413.44 a year.

The agreement provides for various employee benefits including sick leave, which is to be computed in accordance with the Saudi Arabia Labor and Workmen Law ("The Saudi Labor Law" or "the Labor Law"). ² Exhibit "A" of the agreement "EMPLOYEE FRINGE BENEFITS ", provides that a service award equal to fifteen percent (15%) of the employee's annual base salary shall be paid upon the satisfactory completion of the first year of employment, and twenty percent (20%) of the employee's annual base salary upon satisfactory completion of the second year. If the employment agreement is terminated "without cause", the service award is to be pro-rated to the date of termination. If the employment agreement is terminated "with cause", the employee is not entitled to any portion of the service award.

Paragraph 9 of the agreement, "TERMINATION ", permits termination at any time "without cause" or "with cause" as defined in paragraphs 9(A)(1) and 9(B)(2), respectively. Neither of these paragraphs explicitly provide for termination of the agreement in the event Forzley should become ill for an extended period. The Saudi Labor Law, incorporated into the agreement under paragraph 19, does contain an explicit provision for this circumstance.

Paragraph 19, "APPLICABLE LAW ", provides that the agreement and all of its terms shall be governed by and construed in accordance with the Saudi Labor Law, and that, in the event a conflict should arise between the terms of the agreement and the Labor Law, the Labor Law shall supersede those contractual terms. Article 82 of the Labor Law provides, among other things, that the employment agreement "shall ... come to an end upon ... [the employee's] illness resulting in his absence from work for a period of not less than ninety consecutive days". Article 82 of the Labor Law requires the employer to pay the employee the full service award computed in accordance with Article 87 when the employee is terminated for medical reasons. See Kingdom of Saudi Arabia, Ministry of Labour and Social Affairs, Labour Affairs Agency, Labor and Workmen Law and Attached Procedures 30; 32-33 (Jeddah 1969). Article 151 of the Saudi Labor Law provides that overtime pay shall be paid at the rate of 150 percent of the employee's usual wage. ³ Id. at 50.

The essential facts are not in dispute. Forzley arrived in Saudi Arabia about November 10, 1982, after completing several weeks of training with pay at AVCO headquarters in Huntsville, Alabama. In the first week of January 1983, Forzley began inspecting and testing cables and conduits connecting a master computer control system to various remote multiflex terminals. The cables and conduits were miles long and were stretched across land in walled off sections underground so that, after inspecting one segment of the cable, Forzley would have to climb out and go on to the next manhole, climb down into that manhole, and inspect the next segment of cable and so on until all of the cable was inspected. Forzley had access to the cables and conduits only by his lifting, with the assistance of a four-foot hook, manhole covers weighing between 300 to 1,000 pounds. After lifting a cover, Forzley and a co-worker would then lower a ladder and he would descend. During the first week of lifting these manhole covers, Forzley felt pain in his right side. Although he suspected that he had developed yet another hernia, ⁴ Forzley did not seek medical attention, nor did he fill out an accident report documenting the occurrence of his suspected injury.

On February 11, 1983, one day after completing his three month probationary period, ⁵ ] Forzley left Saudi Arabia on a three day company-approved leave to Cairo, Egypt. He started to have pains shortly after he arrived in Cairo. He then immediately purchased a ticket to return home to the United States on a flight departing Egypt the next day. Forzley did not notify AVCO of his intention to leave Egypt.

Forzley arrived at his home in Florida late in the evening of February 13, 1983. That day or the next, he telephoned AVCO representatives in Huntsville, Alabama, to report what had happened and to say that he would get back in touch with them after seeing his physician.

On February 17, 1983, Forzley was examined by his personal physician, Dr. Motta. Dr. Motta confirmed Forzley's suspicion; he had another hernia requiring surgical repair. On February 24, 1983, Dr. Motta certified that Forzley had been under his care for a recurrent right inguinal hernia. On April 11, 1983, Dr. Motta certified that Forzley's hernia condition required surgery. AVCO granted Forzley medical leave on March 23, 1983, effective February 17, 1983.

Forzley did not undergo surgery until June 23, 1983. He postponed surgery until first receiving authorization for its payment from AVCO's worker's compensation insurer. According to AVCO, its worker's compensation insurer delayed authorizing payment because of Forzley's initial failure to report the injury in Saudi Arabia in accordance with AVCO policy. Thus, the compensation insurer had no documentation of an on-the-job injury that would be compensable. Forzley had other medical insurance; it is unclear, therefore, why he postponed the surgery until the compensation insurer authorized payment. In any case, AVCO paid Forzley his full salary for the first thirty days of his medical leave, and three-quarters of his full salary for the next sixty days of medical leave, in accordance with Article 158 of the Saudi Labor Law. Avco's compensation insurer eventually paid for Forzley's surgery and hernia-related medical costs.

In a note dated July 28, 1983, Dr. Moreno, Dr. Motta's associate, certified that Forzley could return to work subject to a restriction on heavy lifting. On July 29, 1983, Forzley wrote AVCO requesting a written statement as to his employment status and attached Dr. Moreno's certification to his letter. On September 3, 1983, AVCO informed Forzley that it terminated the employment agreement, effective that day. The stated reason for the termination was AVCO's determination that, based upon Dr. Moreno's statement and Forzley's "past and current history", Forzley would be unable to perform the duties assigned to him in Saudi Arabia. ⁶

II.

Forzley filed this diversity action in Florida, the state of his domicile. In a diversity case, of course, a federal court must apply the conflict of laws doctrine of the state in which it sits. Klaxon Co. v. Stentor Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). Under Florida law, "[W]hen the parties to a contract have indicated their intention as to the law which is to govern, it will be governed in accordance with the intent of the parties". Department of Motor Vehicles v. Mercedes-Benz of North America, Inc., 408 So.2d 627, 629 (Fla.Dist.Ct.App.1981) (citing Hirsch v. Hirsch, 309 So.2d 47 (Fla.Dist.Ct.Ap...