Hance v. United Family Life Ins. Co., 1073

• Citation: 725 S.W.2d 680
• Decision Date: 09 October 1986
• Docket Number: No. 1073,1073
• Parties: Samuel B. HANCE, Plaintiff-Appellee, v. UNITED FAMILY LIFE INSURANCE COMPANY, Defendant-Appellant. 725 S.W.2d 680
• Court: Tennessee Court of Appeals

Page 680

725 S.W.2d 680

Samuel B. HANCE, Plaintiff-Appellee, v. UNITED FAMILY LIFE INSURANCE COMPANY, Defendant-Appellant.

No. 1073

725 S.W.2d 680

Court of Appeals of Tennessee Eastern Section.

Oct. 9, 1986.

Permission to Appeal Denied by

Supreme Court Jan. 20, 1987.

Shannon D. Faulkner, III, with Poore, Cox, Baker, Ray & Byrne, Knoxville, for defendant-appellant.

Ward S. Whelchel, with Whelchel & Attanasio, Knoxville, for plaintiff-appellee.

OPINION

SANDERS, Judge.

The Defendant has appealed from a judgment for the cost of an incentive trip award offered to its employees while Plaintiff was employed by the company.

The Defendant-Appellant, United Family Life Insurance Company, is engaged in the business of writing life insurance in the state of Tennessee. The policies are primarily burial insurance policies. It pays its agents a commission on the policies they sell. It is not clear in the record but it appears that some type of bonus is also paid. In addition to the monetary compensation for its agents the company offers a free, all-expense-paid trip each year to attend the president's annual sales conference, to the agents who meet a certain quota of increased sales during a twelve-month period. The purpose of the free trip is an inducement for greater production by the agents and to recognize them for outstanding achievement.

In 1982 and 1983 the Plaintiff-Appellee, Samuel B. Hance, was in the employ of the Defendant as one of its agents. During that period of time the company was offering a free trip to the president's sales conference consisting of a Caribbean cruise for each agent and his or her spouse who met a given sales quota between June, 1982, and July, 1983. By January, 1983, the Plaintiff had met the required quota for the trip and in August the vice-president of the company sent him a letter inviting him to the 1983 presidential sales conference to be held aboard the S.S. Emerald Seas, leaving Miami on October 3.

In the interim, between January and August, the Plaintiff's sales had decreased very substantially and he was informed that unless his sales were improved his employment would be terminated. His sales did not improve and he was terminated on September 9. Because his employment was terminated he was not permitted to attend the conference, and that precipitated this litigation.

In his complaint he alleged that since he had qualified for the trip and was not permitted to take it, he was entitled to recover the cost of the trip.

The Defendant, for answer, said the Plaintiff had no contractual right to attend the conference. Attendance at the conference was a gratuity extended to its salesmen and being in the employment of the company at the time of the conference was a prerequisite to eligibility to attend.

Upon the trial of the case the court found the issues in favor of the Plaintiff and awarded him $2,092 plus interest of $418.40.

The Defendant has appealed, saying the court was in error, and we agree.

At the time the Plaintiff was designated as agent of the Defendant they entered into a written contract which pertained to such things as duties, compensation, termination of the contract, bond, etc., but there was nothing mentioned about attending the president's annual sales conference or other gratuities of the company. We are therefore dependent on the testimony of the witnesses as to what the requirements were for an agent to be eligible to take the trip and there is no dispute in the testimony as to what the requirements were. The first requisite was for the agent to make a given quota in sales. The Plaintiff met this requirement. A second prerequisite was that the agent had to be in the employment of the company at the time the conference was held. The Plaintiff did not meet this requirement. If an agent who was qualified for the trip but for some reason did not take the trip, he was not entitled to be compensated in lieu of taking the trip.

Although the Plaintiff did not allege the Defendant acted in bad faith in terminating his employment, it appears this was the basis of the court's decision. In his determination of the case the court's only comment was, "If this plaintiff's performance was so poor from February for the next six months that they write him a letter on the 4th of August and it says, 'Congratulations. You are invited to attend the conference.' And then less than five weeks later he's canned, conveniently three weeks before this trip. The odor is overwhelming, gentlemen."

We fail to find that the proof would support a finding of bad faith on behalf of the Defendant. The undisputed proof shows that during the period of June, 1982, to January, 1983, the Plaintiff was one of the company's leading salespersons, but during the last six months of his employment the total increase in sales over...