Fuselier, Ott & McKee, P.A. v. Moeller

Decision Date15 April 1987
Docket NumberNo. 55751,55751
Citation507 So.2d 63
CourtMississippi Supreme Court
Parties3 Indiv.Empl.Rts.Cas. (BNA) 197 FUSELIER, OTT & McKEE, P.A., Louis A. Fuselier, Emile C. Ott, and M. Curtiss McKee v. Armin J. MOELLER, Jr.

David W. Dogan, III, Charles L. Brocato, Heidelberg, Woodliff & Franks, Charles L. Brocato, Magruder, Montgomery, Brocato & Hosemann, Jackson, for appellant.

C. York Craig, Jr., Neville H. Boschert, Watkins, Ludlam & Stennis, Jackson, for appellee.

Before ROY NOBLE LEE, P.J., and ROBERTSON and GRIFFIN, JJ.

GRIFFIN, Justice, for the Court:

This case, concerning an employment contract, comes to the Court from the Chancery Court of the First Judicial District of Hinds County, Mississippi. The chancellor, sitting by special designation, entered a judgment for the appellee, Armin J. Moeller, Jr., in the amount of $150,413.66. We affirm in part and reverse in part.

On March 1, 1975, Armin Moeller began work with the labor law firm of Fuselier, Ott, McKee & Flowers. At this time, members of the firm told Moeller that, upon satisfactory performance, a partnership interest would be available in three years.

Delayed due to the partnership's incorporation, the firm offered Moeller four hundred shares of stock in the professional association, representing an ownership interest of somewhat less than 7.5%, during the Summer of 1978. To cover the purchase price of $16,880, Moeller borrowed funds from a Jackson bank. As a stockholder, Moeller was to receive the following benefits, documented at the time of the purchase: (1) a voice in the firm as a stockholder, (2) a recognized stake in the firm's success, (3) improved profit sharing, (4) trips to the A.B.A. Convention and Mid-Winter Meeting, (5) $8,694 in hard assets, (6) disability income with supplemental salary, and (7) $50,000 in life insurance with supplemental salary.

Consistent with his status as a stockholder, Moeller also became a contract employee of the firm. On August 1, 1978, he executed an Employment Agreement, which read in part:

11. Termination of Employment:

The Association may terminate this agreement without cause and at any time upon sixty days prior written notice to Employee and the Association shall only be obligated to continue to pay Employee the salary due him under this agreement up to the date of termination. Employee may terminate this agreement at any time upon sixty days prior written notice to the Association and the Association shall be obligated only to continue to pay Employee his said salary up to the date of termination. (emphasis added)

Throughout 1979 and 1980, discussions occurred within the firm concerning future stock purchases. Specifically, Moeller objected to the "serious problems" that he had encountered borrowing money at a high rate of interest. Since the stock's price was tied directly to the firm's annual billings, he also feared that, with inflation, its cost would become prohibitive. It was during this time that Moeller signed a second contract, called a Stock Redemption Agreement, providing:

2. Involuntary Termination.

a. In the event that a shareholder is involuntarily terminated by action of the Board of Directors or the Shareholders, his stock shall be immediately By the Fall of 1981, it was obvious that Moeller's views concerning the transfer of majority ownership to himself and other junior partners, differed substantially from those of the senior partners. As a result, relations within the firm soured, destroying morale, until the situation became "intolerable."

redeemed by the Association. If the shareholder is involuntarily terminated within the space of twelve (12) months from the date that he initially became a shareholder in the Association, such shares shall be redeemed by the Association by paying to the terminated shareholder the entire purchase price paid by him for the share of stock which he initially purchased. All shares owned by a shareholder involuntarily terminated after the initial twelve (12) months period of being a shareholder shall be redeemed by the Association at seventy-five percent (75%) book value (on the accrual basis in conformity with generally accepted accounting principles) existing on the date of termination.

On March 31, 1982, the firm acted, delivering to Moeller the following letter:

Dear Armin:

Pursuant to your employment agreement with Fuselier, Ott, McKee & Moeller, P.A., your employment is herewith terminated effective May 30, 1982.

The Association herewith exercises its rights of redemption over your shares of stock in the Association pursuant to the Stock Redemption Agreement.

Yours truly,

Fuselier, Ott, McKee

& Moeller, P.A.

Moreover, Moeller was told to leave the office immediately, surrendering all firm property. He was not to return to the office for personal effects without permission. Later that afternoon, the firm changed the locks on the office door. As a result, Moeller suffered an acute emotional response.

At trial, the chancellor awarded Moeller $150,413.66, for breach of the Employment Agreement and the Stock Redemption Agreement, basing the latter upon a finding that the two contracts were so "intertwined" as to be the equivalent of a single accord, and for the tortious nature of the appellants' acts. An itemized list of damages includes the following:

                I. Actual Damages for Breach of the
                 Employment Agreement and the
                 Stock Redemption Agreement
                A.  Two months' salary at $4,583.33
                    per month                           $ 9,166.66
                B.  Five weeks' accrued vacation          5,288.00
                C.  Price of Moeller's Stock             16,880.00
                D.  Interest paid by Moeller to
                    purchase stock                        8,778.00
                E.  Moeller's share of undistributed
                    $28,000.00 profit                    4,500.000
                F.  Loss of 30% uninvested portion
                    of pension and profit-sharing
                    plan                                  3,111.00
                G.  Pension and profit-sharing
                    contribution which was to have
                    been made for fiscal year ending
                    2/28/83                               6,400.00
                H.  Trips to ABA Convention and
                    Mid-Winter Meeting                    8,700.00
                I.  10% assessed value of Moeller's
                    stock for failure to allow Moeller
                    access to corporate books and
                    records                               1,688.00
                J.  Expense of relocating                   402.00
                                                        ----------
                                                        $64,913.66
                II. Damages for the Tortious Breach
                 of Contract and the Tortious Interference
                 with Business Relationships
                A.  Punitive damages                 $10,000.00
                B.  Attorney's fees and expenses
                    Incurred by attorneys             51,000.00
                C.  Loss of income suffered by
                    Moeller                           12,000.00
                D.  Damages for mental anguish
                    emotional distress, humiliation
                    and mental anxiety                20,000.00
                                                     ----------
                                                     $93,000.00
                

These amount to a sum of $157,913.66, minus $7,500.00 owed to the firm by Moeller, reflecting a promissory note and advance.

I. CONTRACT DAMAGES

The appellants first contend that Moeller's termination failed to breach the terms of his Employment Agreement, which specifically provided that the Association's only obligation to Moeller, upon involuntary termination, was payment of his Yet, the chancellor found that the effective date of termination was March 31, 1982, when the firm locked Moeller out of his office. Clearly, there is substantial evidence in the record to support the chancellor's finding. For example, immediately following March 31, 1982, the firm denied Moeller ready access to his office, refused him secretarial assistance, and dropped his name from the firm's sign as well as from the receptionist's identification of the firm over the telephone.

salary for the notice period. They deny that Moeller's termination preceded the expiration of the sixty days' notice period, pointing to the termination letter itself, which lists May 30, 1982, as the effective date.

Moreover, the firm refused to pay Moeller his salary for the sixty days' notice period, as provided by the terms of the Employment Agreement. 9 Williston, A Treatise on the Law of Contracts, Sec. 1017 (1967), states, "In general, where a contract of ordinary employment stipulates for, or where usage requires, a certain period of notice, the employment may be cancelled on shorter notice or with none at all, upon payment of wages or salary for the period of notice." In the present case, the firm failed to pay Moeller for the notice period, beginning on March 31, 1982. Also, in Louisiana Oil Corp. v. Bryan, 165 Miss. 157, 160, 147 So. 324, 325 (1933), this Court found a breach of contract where, as here, the termination occurred prior to the expiration of the notice term.

Based on the authorities above, the chancellor correctly found that the firm terminated Moeller's employment on March 31, 1982, thereby breaching the terms of the Employment Agreement, which required sixty days' prior written notice.

The appellants next object to the award of $9,166.66 for two months' salary, covering the sixty days' notice period. They point to Moeller's earnings of $840.00 in April and $3,229.00 in May, arguing that such should mitigate the award. In Batesville-Southwestern Railroad Co. v. Vick, 134 Miss. 480, 484, 99 So. 7 (1924), this Court limited the recovery of a wrongfully discharged employee to the "actual damages he sustained, which is the amount he would have received if he had been permitted to complete the contract less what he has earned in the meantime...." This is consistent with 5 Corbin on Contracts Sec. 1095 (1964), which states, "The damages that [an employee] can recover for a wrongful discharge ... are the total amount of the unpaid wages that were promised to him for his service, less the amount that he can earn by making reasonable effort to...

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