Gaydos v. White Motor Corp.

• Decision Date: 26 June 1974
• Docket Number: No. 2,Docket No. 17269,2
• Citation: 54 Mich.App. 143,220 N.W.2d 697
• Parties: , 1 IER Cases 50 John GAYDOS et al., Plaintiffs-Appellees, and Walter A. Jenson et al., Plaintiffs-Appellees, Cross-Appellants, v. WHITE MOTOR CORPORATION, a foreign corporation, Defendant-Appellant, Cross-Appellee
• Court: Court of Appeal of Michigan — District of US

Page 697

220 N.W.2d 697

54 Mich.App. 143, 1 IER Cases 50

John GAYDOS et al., Plaintiffs-Appellees and Walter A. Jenson et al., Plaintiffs-Appellees, Cross-Appellants, v. WHITE MOTOR CORPORATION, a foreign corporation Defendant-Appellant, Cross-Appellee.

Docket No. 17269.

Court of Appeals of Michigan, Division No. 2.

June 26, 1974.

Released for Publication Aug. 14, 1974.

Leave to Appeal Denied Oct. 2, 1974.

David C. Coey, Foster, Lindemer, Swift & Collins, Lansing, for defendant-appellant.

Eugene F. Townsend, Jr., Fraser, Trebilcock, Davis & Foster, Lansing, for plaintiffs-appellees.

Before BRONSON, P.J., and HOLBROOK and O'HARA,* JJ.

HOLBROOK, Judge.

The plaintiffs, numbering 135, in this action were former employees of defendant White Motor Corporation. They had been employed by defendant for a period of at least six months prior to July 1, 1971. They were employees of what was designated as the P.E.C. Unit, a part of the Diamond Reo Truck Division of defendant. That unit maintained facilities in Chicago, Illinois, and in Lansing, Michigan. Thirty-six of the plaintiffs were employed in Lansing and the remainder in Chicago.

On July 1, 1971, the P.E.C. Unit was sold by defendant to AM General Corporation. Included in the sale agreement was a provision that: 'Seller shall cooperate with Buyer to endeavor to persuade the employees of the P.E.C. Division to become employees of Buyer after the Closing Date.' The plaintiffs in this action continued to be employed at their same jobs, but as employees of AM General Corporation. Plaintiffs were salaried, non-union personnel. In accordance with the agreement to cooperate, defendant neither offered nor solicited other employment within White Motor Corporation to plaintiffs; ¹ such action would have necessitated 'bumping someone else'. A letter from defendant's personnel director was sent to all P.E.C. employees which provided:

'This is to advise you that the P.E.C. operation has been acquired by the AM General Corporation, effective July 1, 1971.

'As a result you will be employed by AM General, who will continue operations under the same general terms and conditions that are now in effect.

'You will be advised of further developments within a short period of time.' ²

At the time of closing, the plaintiffs were taken off the White Motor payroll. Herman Everhardus, Director of Personnel at the time of sale, testified that if any employees wished to stay with defendant corporation, they would have to come to him and request to so do.

By memo specifying the effective date to be July 15, 1966, the White Motor Corporation adopted a general office policy and procedure on severance pay. On April 11, 1967, A. A. Axline, Director of Personnel, dispersed to all the department heads a memo on severance pay which was, in effect, a somewhat shortened version of the previously promulgated general office policy on severance pay. On the day before, Axline had dispersed to all department heads the following general memorandum:

'The following severance pay policy has been approved for this Division:

'Severance pay is given to non-exempt non-union salary employees with more than six (6) months' service terminated at the Company's request. Severance pay is given the employee instead of two (2) weeks' termination notice. An employee who retires, resigns, is discharged for cause, or is terminated for any reason at age 65 or over does not receive severance pay.' ³

On August 9, 1971, plaintiffs filed suit against defendant based on contract for recovery of severance pay. With the exception of ten of the named plaintiffs, none testified personally. ⁴ Defendant contended that the severance pay contract was partially oral and that, as such, parol evidence should be admitted to supplement and facilitate interpretation of the written memorandum. The trial court held that the contract was complete and unambiguous and refused to admit parol evidence. At the conclusion of plaintiffs' case in chief and again at conclusion of trial, defendant moved for a directed verdict, which motion was denied on both occasions. The jury returned a verdict in favor of the plaintiffs. Defendant here appeals and asserts that it was entitled to a directed verdict as to all plaintiffs from whom nothing was heard as to the surrounding circumstances of their change of employment. Defendant argues that the trial court erred by excluding from the jury evidence of the application of its 'unilaterally promulgated policy'. Defendant further asserts as erroneous the court's refusal to give an instruction as requested, and that it was prejudiced due to the confusion arising from the trial court's refusal to permit evidence of defendant's conduct in similar circumstances while permitting argument thereon.

Twelve of the plaintiffs have taken a cross-appeal and contend that the verdict was erroneous in that their recovery should have been for a greater amount. They contend that the 'years of service' to be used in calculating the amount of severance pay should include that time spent with the Diamond Reo Company prior to its acquisition by White Motor in 1957. Their appeal is taken from denial of a judgment notwithstanding the verdict.

Defendant argues that while the plaintiffs' relationship with the defendant terminated there was no termination within the purview of the severance pay policy, I.e., the policy was inapplicable where employees did not become unemployed. Defendant, thus, contends that parol evidence of application of the policy in other instances should have been admitted to facilitate understanding by the jury of what, in effect, was a condition of the severance pay policy. In its answer to plaintiffs' complaint, defendant pled an affirmative defense that 'the defendant's policy concerning severance pay was merely an expression of desire or good intention, without any binding commitment for the benefit of the employees concerned'. ⁵ We cannot agree that the severance pay provision was merely a 'unilaterally promulgated policy' or a gratuity. The adoption of the described policy by defendant constituted an offer of a contract. Cain v. Allen Electric & Equipment Co., 346 Mich. 568, 579, 78 N.W.2d 296, 302 (1956). As the employees continued to work thereafter, consideration was supplied for a unilateral contract, upon which the employees had the right to rely. Cain, supra; Clarke v. Brunswick Corp., 48 Mich.App. 667, 211 N.W.2d 101 (1973); see, also, Anthony v. Jersey Central Power & Light Co., 51 N.J.Super. 139, 143 A.2d 762 (1958); Adams v. Jersey Central Power & Light Co., 36 N.J.Super. 53, 114 A.2d 776 (1955), aff'd 21 N.J. 8, 120 A.2d 737 (1956); Chinn v. China National Aviation Corp., 138 Cal.App.2d 98, 291 P.2d 91 (1955); Hunter v. Sparling, 87 Cal.App.2d 711, 197 P.2d 807 (1948); Hercules Powder Co. v. Brookfield, 189 Va. 531, 53 S.E.2d 804 (1949); Mace v. Conde Nast Publications, Inc., 155 Conn. 680, 237 A.2d 360 (1967); and, generally, 40 A.L.R.2d 1044, 1046--1048. In Willets v. Emhart Mfg. Co., 152 Conn. 487, 490--491, 208 A.2d 546, 548 (1965), the Supreme Court of Errors of Connecticut held that separation pay is not analogous to unemployment compensation but rather is 'a kind of accumulated compensation for past services and a material recognition of their past value'.

Thus, the focus of the case was interpretation of a unilateral contract. Only in cases of ambiguity in the terms of a written contract will courts resort to the use of extraneous evidence. Stott v. Stott Realty Co., 306 Mich. 492, 499, 11 N.W.2d 215, 218 (1943); 17 Am.Jur.2d, Contracts, § 273, p. 683. When the contract is clear and unambiguous, the conduct of the parties cannot be used to prove that the contract means something other than what appears on its face. 17 Am.Jur.2d, Supra, § 274, p. 688; 17A C.J.S. Contracts § 295, p. 59.

'While the construction placed on a contract by one of the parties may have bearing on the meaning to be accorded to the agreement, and a party's construction of his own language in a contract is the highest evidence of his own intention, the meaning of the contract cannot be established by the construction placed on it by one of the parties, or by only some of the parties, unless such interpretation has been made to and relied on by the other party or parties, or has been known to, and acquiesced in, by the other party or parties, or, according to some authorities, it is against the interest of the party making it.' 17A C.J.S. Contracts § 325(2), pp. 248--249.

Where parol seeks to change the clear scope, effect, and obligation of the written contract, it should be rejected. Jackson National Life Insurance Co. v. Bakaian, 16 Mich.App. 26, 32, 167 N.W.2d 462, 465 (1969). A onesided, self-serving interpretation is of no assistance in interpretation. Davis v. Kramer Brothers Freight Lines, Inc., 361 Mich. 371, 376, 105 N.W.2d 29, 31--32 (1960); W. J. Howard & Sons, Inc. v. Meyer, 367 Mich. 300, 308, 116 N.W.2d 752, 756 (1962). The allowance by the trial court of the evidence desired to be introduced by the defendant would have been erroneous in that it would have been a onesided, self-serving interpretation of the defendant's intention and construction of the contract. Moreover, the trial court possesses a great deal of discretion in ruling on the admissibility of evidence. Boyer v. Boyer, 30 Mich.App. 623, 626, 186 N.W.2d 842, 843 (1971); Battle Creek Food Co. v. Kirkland, 298 Mich. 515, 299 N.W. 167 (1941). We here find no abuse of discretion.

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