Hendler v. Manageable Information Systems, Inc.

• Decision Date: 15 September 1992
• Docket Number: No. 60180,60180
• Citation: Hendler v. Manageable Information Systems, Inc., 838 S.W.2d 486 (Mo. App. 1992)
• Court: Missouri Court of Appeals
• Parties: Stephen HENDLER, Respondent, v. MANAGEABLE INFORMATION SYSTEMS, INC., Appellant.

Page 486

838 S.W.2d 486

Stephen HENDLER, Respondent, v. MANAGEABLE INFORMATION SYSTEMS, INC., Appellant.

No. 60180.

Missouri Court of Appeals,

Eastern District,

Division Two.

Sept. 15, 1992.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Oct. 26, 1992.

Hugh R. Law, David J. Newburger, St. Louis, for appellant.

Joan M. Tanner, St. Louis, for respondent.

CARL R. GAERTNER, Judge.

Manageable Information Systems (MIS) appeals from the verdict and judgment in favor of plaintiff Stephen Hendler for damages resulting from MIS' breach of a one-year employment contract. We affirm in part and reverse and remand in part.

In the spring of 1985, Hendler was unemployed. He spoke with Joseph Mathews, a "headhunter" for Management Recruiters, Inc., who in turn suggested to MIS executives that Hendler would be suited for a vacant sales position with the company. Mathews then arranged an interview for Hendler in St. Louis with William Stillman, MIS' marketing development director. In May, MIS hired Hendler.

Hendler testified to the terms of his employment as communicated by MIS through Stillman to Mathews who then told Hendler. He was to receive a one-year contract with a $45,000 salary, a $15,000 nonrecoverable draw against his commissions, a $25,000 guaranteed year-end bonus, an automobile allowance, health benefits, legal and accounting expenses and moving expenses.

On May 22, 1985, Hendler began working for MIS as a salesman of computerized telephone equipment for hotels. Hendler devoted almost his entire time as an MIS employee to selling a particular phone system, the NEAX 2400, to the New York Penta Hotel. Despite his efforts, Hendler failed to make a single sale for MIS. In January 1986, MIS withdrew from marketing telephone equipment to hotels. On January 9, 1986, MIS fired Hendler. With MIS, Hendler received $28,125 in salary and a $9,375 draw against commissions. After his termination, Hendler received $1,182.60 in prorated salary and $1,730.76 in severance pay from MIS.

In late February 1986, Ameritech Communications, Inc., hired Hendler to sell telephone systems. From February 28 to May 22, 1986, Hendler received $9,205 in salary from Ameritech. Furthermore, in March he sold an NEAX 2400 phone system to the Penta Hotel and received a $46,000 commission.

Thereafter, Hendler filed suit against MIS for breach of contract. In his claim for damages, totaling $87,450, Hendler sought $35,000 in unpaid salary, $35,000 in unpaid commissions, $6,000 in moving expenses, $750 in uncovered medical costs, $2,800 in unpaid automobile allowance, and $7,905 in unreimbursed travel and entertainment expenses.

As an affirmative defense, MIS asserted that Hendler mitigated his damages by earning over $46,000 from Ameritech during the one-year term of his contract with MIS. Furthermore, MIS counterclaimed for damages on two promissory notes for loans it made to Hendler and on unauthorized charges Hendler made to a MIS credit card account.

MIS moved for partial summary judgment on its counterclaim for the promissory notes and Hendler's claim for $35,000 in unpaid commissions. The trial court overruled the motion on the notes but sustained it on Hendler's commission claim, thereby reducing his damages from $87,450 to $52,450. Thereafter, the trial court denied MIS' supplemental motion for partial summary judgment in which MIS argued Hendler had completely mitigated his damages.

At the close of the evidence, MIS moved for a directed verdict which the trial court denied except for MIS' counterclaim on one of the promissory notes. The jury returned verdicts in favor of Hendler for his damages claim in the amount of $65,105, in favor of MIS on its counterclaim for the remaining promissory note and in favor of Hendler on MIS' counterclaim for unauthorized credit card charges. The court denied both parties' motions for a new trial and MIS' motion for judgment notwithstanding the verdict and entered judgment in accord with the verdicts. MIS appeals from the trial court's judgment on Hendler's claim for damages and on MIS' counterclaim for unauthorized credit card charges. Hendler also filed a cross-appeal from the judgment against him upon the two promissory notes. However, he failed to perfect this cross-appeal and it has previously been dismissed.

I. Mitigation of Damages

In its first point on appeal, MIS contends Hendler failed to make a submissible case for recovery of damages because his earnings from Ameritech completely mitigated his claim for unpaid guaranteed compensation. Therefore, MIS argues, the trial court erred in overruling its motions for directed verdict and judgment notwithstanding the verdict.

Viewing the evidence in the light most supportive of the verdict, Minden v. Otis Elevator Co., 793 S.W.2d 461, 462 (Mo.App.1990), and overlooking MIS's evidence to the contrary, Hendler had a one-year oral employment contract with MIS, which guaranteed him $85,000 in compensation plus fringe benefits. In his petition Hendler measured his damages as the remainder due under the contract. However, the appropriate measure of damages for the breach of an employment contract is the contract price for services to be rendered minus the income the employee earned, or with diligence could have earned, during the contract term. Phipps v. School District of Kansas City, 645 S.W.2d 91, 105 (Mo.App.1982).

Following this formula, the tables below set forth Hendler's contract for services to be rendered to MIS and his income during the contract term:

A. CONTRACT FOR SERVICES 1
                Salary Claim                      $ 85,000.00
                Unpaid Car Allowance              $  2,800.00
                Unpaid Medical Benefit            $    750.00
                Travel and Entertainment Expense  $  7,905.18
                Moving Expense                    $  6,000.00
                ---------------------------------------------
                TOTAL COMPENSATION CLAIM          $102,455.18
                B. EARNINGS DURING CONTRACT TERM
                MIS Salary/Draw Payments          $ 40,413.36
                Ameritech Salary Payments         $  9,205.00
                Ameritech Commission Payment      $ 46,000.00

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