Harvey v. JH Harvey Co.

• Citation: 276 Ga. 762,582 S.E.2d 88
• Decision Date: 02 June 2003
• Docket Number: No. S02G1713.,S02G1713.
• Parties: HARVEY v. J.H. HARVEY COMPANY.
• Court: Supreme Court of Georgia

582 S.E.2d 88

276 Ga. 762

HARVEY v. J.H. HARVEY COMPANY.

No. S02G1713.

Supreme Court of Georgia.

June 2, 2003.

Reconsideration Denied July 11, 2003.

Alston & Bird, Jay D. Bennett, Heather R. Peoples, Atlanta, for appellant.

Frank C. Jones, W. Daniel Knight Jr., J. Reese Franklin, King & Spalding, Benjamin F. Easterlin, IV, Cheri A. Grosvenor, Atlanta, for appellee.

CARLEY, Justice.

Joseph H. Harvey III entered into an employment contract with the J.H. Harvey Company (Company) for a term expressly stated as the "earlier" of his 65th birthday or death. Alleging that the Company breached the agreement, he brought suit. The trial court granted partial summary judgment in favor of the Company, ruling that Harvey could only recover wages payable up to the time of trial. The Court of Appeals affirmed that holding. Harvey v. J.H. Harvey Co., 256 Ga.App. 333, 335(1), 568 S.E.2d 553 (2002). We granted certiorari to review the affirmance of the trial court's grant of partial summary judgment.

OCGA § 10-6-37 provides that, when an employment contract is "for a year," and the employer wrongfully terminates the employee before the end of the term, the employee

may either sue immediately for any special injury from the breach of the contract, or, treating the contract as rescinded, may sue for the value of the services rendered, or he may wait until the expiration of the year and sue for and recover his entire wages.

Although expressed in terms of agreements "for a year," the statute nevertheless applies to all employment contracts for any definite duration, as opposed to those terminable at will. See Inter-Southern Life Ins. Co. v. Wilkinson, 147 Ga. 283, 284, 93 S.E. 406 (1917). See also Citizens Bank of Adrian v. Southern Securities and Financing Co., 143 Ga. 101, 84 S.E. 465 (1915) (five-year contract); Rosenstock v. Congregation Agudath Achim, 118 Ga.App. 443, 164 S.E.2d 283 (1968) (three-year contract); Georgia, Fla. & Ala. R. Co. v. Parsons, 12 Ga.App. 180, 76 S.E. 1063 (1913) (nine-and-one-half month contract). Thus, the election of remedies codified in OCGA § 10-6-37 "is applicable whether the contract of employment is for one year or less or for a longer term. [Cits.]" Rosenstock v. Congregation Agudath Achim, supra at 444, 164 S.E.2d 283.

By affirming the contract rather than rescinding it, Harvey rejected his option to seek recovery under a quantum meruit theory. Compare Silverthorne v. Arkansas Southeastern R. Co., 142 Ga. 194, 195(1), 82 S.E. 551 (1914). Likewise, he has not elected to pursue the "constructive service" remedy, whereby he would wait until the expiration of each contractual period and sue for his wages. See Cox, Hill & Thompson v. Bearden, 84 Ga. 304, 306(1), 10 S.E. 627 (1890).

Instead, he has elected to affirm the contract and bring an immediate suit for damages based upon the Company's alleged breach thereof. Under this option, he has the right "`to prove, and to recover for, all damages which may have accrued up to the date of the trial.'" (Emphasis supplied.) Georgia, Fla. & Ala. R. Co. v. Parsons, supra at 183(2), 76 S.E. 1063. See also Sandt v. Mason, 208 Ga. 541, 546(2), 67 S.E.2d 767 (1951); Roberts v. Rigden, 81 Ga. 440, 443(1), 7 S.E. 742 (1888); Roberts v. Crowley, 81 Ga. 429, 439(3), 7 S.E. 740 (1888). Limiting the discharged employee's recovery to such damages as have accrued at the time of trial is a minority rule which has been criticized by the commentators. See Anno., 91 ALR2d 682 (1963); 11 Williston on Contracts, § 1361A, pp. 318-319 (3d ed.1968). However, the same is also true with regard to the "constructive service" remedy. See Cox, Hill & Thompson v. Bearden, supra at 306-307(1), 10 S.E. 627; 11 Williston, supra at § 1361, p. 315. It is readily apparent that these two disfavored options are indispensable corollaries. If a wrongfully discharged employee could bring an immediate suit for damages and recover all future wages, then the "constructive service" remedy, which provides that wages can be recovered at the expiration of the contractual period, would be meaningless. Thus, the employee must elect between waiting to recover wages after he otherwise would have earned them, or suing immediately to recover the wages that he has lost and such other damages as he has suffered up to the time of trial. He may not bring suit and recover for future wages. The reason for this rule is that, until the contractual term has elapsed, the employee's damages are too uncertain and speculative. Roberts v. Rigden, supra at 443(1), 7 S.E. 742 ("Before the year expired [the damages] were, in part, only probable, and if the trial had taken place during the year, the whole damage would not have been capable of proof."). See also, Anno., supra at § 3, p. 694.

Even if the "constructive service" remedy is out of favor, the courts of this state are not at liberty to dispense with it, because of its codification in OCGA § 10-6-37. See Cox, Hill & Thompson v. Bearden, supra at 306-307(1), 10 S.E. 627. Likewise, we cannot now abandon the long-standing rule established by our case law that, as a necessary consequence of that statutorily mandated option, an employee who seeks immediate damages cannot recover his future wages.

"`[O]nce the court interprets the statute, "the interpretation ... has become an integral part of the statute." (Cits.) This having been done, (over a long period of history) any subsequent "reinterpretation" would be no different in effect from a judicial alteration of language that the General Assembly itself placed in the statute....' [Cit.]" [Cit.]

Abernathy v. City of Albany, 269 Ga. 88, 89, 495 S.E.2d 13 (1998). If OCGA § 10-6-37 is to be revised so as to eliminate the "constructive service" remedy and to authorize, instead, a present recovery of future earnings, the General Assembly, rather than the courts, must take that action. The Court of Appeals correctly held that "[t]he contract at issue is severable and not entire, and Harvey... may sue for each breach without waiting until the end of the term, which, in this case, is uncertain. [Cits.]" Harvey v. J.H. Harvey Co., supra at 339(1). However, his recoverable damages in this and in all successive suits will be limited to those which have accrued up to the time of each trial.

Judgment affirmed.

All the Justices concur, except FLETCHER, C.J., and SEARS, P.J., who dissent.

SEARS, Presiding Justice, dissenting.

In this action for breach of contract, the majority adheres to a rule that prohibits an employee from seeking damages at the time of trial for any uncompleted portions of his employment contract, and instead forces the employee to file an action for damages as each year of his contract expires. This rule is burdensome to the courts, is unfair to employees, and has been almost universally abandoned in other jurisdictions. Because I find no justification for following this rule, I dissent to the majority opinion.

1. The appellant, Joseph H. Harvey III (hereinafter "Harvey III"), alleges that he has been wrongfully discharged by the J.H. Harvey Company (hereinafter the "company"). The majority correctly recognizes that an employee like Harvey III may elect to sue immediately for damages for breach of contract or may elect to "wait until the expiration [of the term of the contract] and sue for and recover his entire wages."¹ The latter remedy is what is known as the doctrine of constructive service.

Although the majority correctly states that a wrongfully discharged employee may elect either one of these remedies, the majority incorrectly concludes that, in a breach of contract action, the employee may only sue for wages that he has lost to the date of trial.² The majority gives two reasons for this conclusion. One is that if employees are permitted to sue for future lost wages in an action for breach of contract, employees might not utilize the constructive service remedy, thereby rendering it meaningless.³ The other is that this State has traditionally limited the recovery of lost wages to those existing at the time of trial on the ground that damages extending beyond the date of trial are too speculative to recover as a matter of law. Neither of these reasons, however, justifies the rule of limiting the recovery of lost wages to those existing at the time of trial.

2. The first reason given by the majority—that the constructive service remedy will be rendered meaningless if an employee may sue for future lost wages in a breach of contract action—is flawed for several reasons. First, by its logic, the majority has rendered meaningless the breach of contract remedy.⁴ If an employee may not sue for future lost wages for breach of contract, but is instead limited to suing for wages for the portion of the contract that has expired at the time of trial, the employee will always be utilizing the constructive service remedy,⁵ as, in the majority's own words, he will be "waiting to recover wages after he ... would have earned them."⁶ Thus, the majority will not permit the recovery of future lost wages in a breach of contract action because it might render the constructive service remedy meaningless, but it, in turn, potentially renders the breach of contract remedy meaningless. As can be seen, the majority's "meaningless" analysis offers no justification for the limitation the majority places on the breach of contract remedy. Indeed, the majority offers no citation of authority for this rationale, and I have not been able to find any authority supporting it.

Moreover, and perhaps more importantly, the majority has simply misunderstood the nature of the two remedies. Under the constructive service remedy, an employee who has been wrongfully discharged may sue to recover his wages as they become due so long as he does not take other employment and makes himself available to return to work for the employer who wrongfully discharged him.⁷ For this reason, an action for...