Frichter v. National Life & Acc. Ins. Co.
| Decision Date | 17 September 1985 |
| Docket Number | Civ. A. No. 83-0665. |
| Citation | 620 F. Supp. 922 |
| Court | U.S. District Court — Eastern District of Louisiana |
| Parties | George FRICHTER v. NATIONAL LIFE & ACCIDENT INSURANCE CO., et al. |
George N. Bischof, Jr., Chalmette, La., for plaintiff, George Frichter.
Howard Shapiro, Robert K. McCalla, McCalla, Thompson, Pyburn & Ridley, New Orleans, La., for defendant, National Life & Acc. Ins. Co.
This matter came before the Court on July 31, 1985 on motion of counsel for defendants, National Life & Accident Insurance Company and William O. Horne, seeking summary judgment pursuant to Rules 12(b)(6) and Rule 56 of the Federal Rules of Civil Procedure on the grounds that plaintiff's complaint fails to state a claim upon which relief can be granted; and further that there is no genuine issue of material fact and the defendants are entitled to judgment as a matter of law.
Wherefore, after a careful consideration of the arguments of counsel, the submitted memoranda, the relevant facts and the applicable law, this Court will GRANT defendants' motion for summary judgment.
The instant matter arises out of an action brought by George Frichter against National Life & Accident Insurance Company (hereinafter "National") and William O. Horne for damages arising out of the alleged wrongful termination of plaintiff in December 1981. Plaintiff filed the instant petition on January 17, 1983. The case was removed by defendant National to this Court on grounds of diversity jurisdiction.
The affidavits and deposition testimony show that plaintiff was employed by defendant National in various capacities including manager from 1959 until he was allegedly terminated in December of 1981.
Under the employment relationship that existed, plaintiff did not have a contract of employment for a fixed period of time. The evidence shows, however, that plaintiff was compensated pursuant to a District Manager's Compensation Agreement which also did not set forth a fixed period of employment. The agreement provided in part for termination "by action of myself plaintiff or of the company, with or without cause ..." More specifically, this simply meant that plaintiff's employment was terminable at will by plaintiff or his employer.
Plaintiff has also filed suit against William O. Horne, a regional manager of defendant National, who at the time of the alleged termination was plaintiff's supervisor. Plaintiff contends that Horne tortiously interfered with his employment relationship by firing him.1 For purposes of deciding this motion for summary judgment, the Court must carefully analyze the allegations of plaintiff's complaint.
Plaintiff's allegations can be broken into three component parts: (1) wrongful termination allegations; (2) compensation allegations; and (3) plaintiff's allegations concerning Horne's interference with his employment relationship. The Court will discuss each in turn.
In Paragraph II of the Complaint, plaintiff alleges that he was wrongfully terminated. Plaintiff further states wrongful termination claims in Paragraph V, wherein he alleges that he was forced to violate state law under threat of termination of his employment. Paragraph VI of the Complaint includes a demand for damages for "mental anguish, pain and suffering."2
In Paragraphs III and IV of the Complaint, plaintiff challenges the structure of his compensation package, and complains of certain company procedures. Fairly read, these allegations indicate plaintiff disapproved of National's procedures for calculating commissions. These allegations also demonstrate plaintiff's disagreement with National's alleged practice of requiring sales agents to make repeated call backs on clients having expired or cancelled policies.
In Paragraphs IX-XI of the Complaint, as amended, plaintiff alleges that Horne engaged in activities causing plaintiff to be wrongfully terminated. In effect, plaintiff alleges that Horne tortiously interfered with plaintiff's employment relationship with National. These claims against Horne are analogous to claims of tortious interference with an alleged contract or tortious inducement to breach an alleged contract and will be discussed later. First, however, the Court will discuss each component of plaintiff's allegations separately.
With regard to his allegations concerning wrongful termination, the deposition testimony of plaintiff confirms that he did not have an employment contract with National for a fixed period of time. In his deposition, plaintiff answered:
See Exhibit D-3, Plaintiff's Deposition at p. 22.
The record reflects that the contracts plaintiff alludes to are not contracts of employment; they are merely compensation agreements. On December 3, 1981, plaintiff executed a District Manager's Compensation Agreement. The compensation agreement, erroneously referred to in deposition testimony as a contract of employment for a fixed period, is the only signed document controlling plaintiff's conditions of employment. The compensation agreement does not contain a promise of employment for a fixed term.3 Moreover, the compensation agreement specifically provides:
In consideration of the payment by the Company to me of Level Pay and subsequent total compensation referred to above, I agree that upon the termination of this Agreement, which may be by reason of my death, or by action of myself or of the Company, with or without cause, the Company's liability to me under this agreement shall end with the payment to me of such compensation for the last week during which I shall actively pursue my duties as District Manager; and further, that any amounts accumulated on my behalf during my service as District Manager shall be divested from me upon my termination date, unless specifically stated otherwise in writing by the Company; and further, that any and all parts of my compensation basis are subject to modification by the Company following notice thereof to me. I understand and agree that any and all prior compensation agreements between the Company and me are hereby terminated.
The Court can find no language within the agreement which states that plaintiff is hired for a definite period. It was this same compensation agreement that plaintiff executed on two separate occasions: April 11, 1977 and December 3, 1981. The agreements further provided the basis for compensation was subject to modification by the company. Although plaintiff argues otherwise, there is no question that the compensation agreement does not constitute a contract of employment. Thus, National could fire plaintiff at any time, without cause. What remains at this point is for the Court to apply the law governing this compensation agreement.
Because a federal court exercising diversity of citizenship jurisdiction is bound to apply the substantive law of the state, Louisiana law is applicable to the case sub judice. Thus, under Louisiana law, for an employment contract to exist, there must be a promise of employment for a fixed term. Aldahir v. Mobil Oil Exploration and Producing Southeast, Inc., 420 So.2d 714 (La.App. 4th Cir.), cert. denied, 423 So.2d 1147 (La.1982). Absent a contract for a fixed period of time, an employee is terminable at will, at any time, for any cause, or for no cause. See La.Civ.Code Art. 2747; Pechon v. National Corp. Service, Inc., 234 La. 397, 100 So.2d 213, 216 (1958) (); Jackson v. East Baton Rouge Parish School Board, 393 So.2d 243, 245 (La.App. 1st Cir.1980) ); see also Hoover v. Livingston Bank, 451 So.2d 3, 4-5 (La.App. 1st Cir. 1982); Bramblett v. Wilson, 413 So.2d 600, 602 (La.App. 1st Cir.1982); Griffith v. Sollay Foundation Drilling, Inc., 373 So.2d 979, 981 (La.App. 3d Cir.1979); Freeman v. Elbilco, Inc., 338 So.2d 967 (La.App. 4th Cir.1976). The material facts undeniably demonstrate that plaintiff had no contract of employment for a fixed term. Therefore, plaintiff was an at-will employee who could be terminated by National with or without cause. LSA-C.C. art. 2747.
Moreover, the only agreements executed by plaintiff and National were District Manager's Compensation Agreements. (See Exhibits D-1, D-2). Under Louisiana jurisprudence, such compensation agreements cannot be construed as contracts of employment for a fixed period. See Weaver v. Purple Shield Life Insurance Company, 356 So.2d 519, 521 (La.App. 1st Cir. 1977) (); Baynard v. Guardian Life Insurance Company of America, 399 So.2d 1200, 1203 (La.App. 1st Cir.1981) ()
In the instant matter, even assuming arguendo that the District Manager's Compensation Agreement could possibly be construed as an employment contract for a definite term, the terms of the agreement clearly demonstrate that either National or plaintiff could...
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