Hindle v. Morrison Steel Co.

• Decision Date: 25 July 1966
• Docket Number: No. A--472,A--472
• Citation: 223 A.2d 193,92 N.J.Super. 75
• Parties: Albert E. HINDLE, Jr., Plaintiff-Respondent Cross-Appellant, v. MORRISON STEEL CO., a body corporate of the State of New Jersey, Defendant-Appellant Cross-Respondent, and Samuel Hamelsky, Max Krafchik and John D. Wait, Defendants Cross-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 75

92 N.J.Super. 75

223 A.2d 193

Albert E. HINDLE, Jr., Plaintiff-Respondent Cross-Appellant, v. MORRISON STEEL CO., a body corporate of the State of New Jersey, Defendant-Appellant Cross-Respondent and Samuel Hamelsky, Max Krafchik and John D. Wait, Defendants Cross-Respondents.

No. A--472.

Superior Court of New Jersey, Appellate Division.

Argued Sept. 20, 1965.

Decided July 25, 1966.

Thomas James Tumulty, Jersey City, for defendant-appellant--cross-respondent (Spritzer & Spritzer, New Brunswick, attorneys).

Robert V. Carton, Asbury Park, for plaintiff-respondent--cross-appellant (Carton, Nary, Witt & Arvanitis, Asbury Park, attorneys).

Before Judges GOLDMANN, FOLEY and COLLESTER.

The opinion of the court was delivered by

COLLESTER, J.A.D.

Plaintiff Albert Hindle, Jr. brought an action in the Superior Court, Law Division, against defendant Morrison Steel Co. (Morrison) to recover damages resulting from a breach of his employment contract and his contractual rights under the company's retirement fund agreement. Plaintiff also sued to recover punitive and compensatory damages in a tort action based on an alleged conspiracy by Samuel Hamelsky, Max Krafchik and John Wait, officials of the company, to deprive him of money standing to his credit in the retirement fund. The jury returned a verdict in favor of plaintiff against the company for compensatory damages of $16,927.23, comprised of $6,300 for breach of the employment contract and $10,627.23 for the value of his interest in the retirement fund. A verdict of no cause for action was returned in the tort action. Morrison Steel Co. appealed and plaintiff cross-appealed from the adverse judgments.

This appeal raises two principal issues: (1) plaintiff's rights under his contract of employment, and (2) plaintiff's rights under the retirement fund agreement.

Hindle was employed by the company on November 17, 1952 as service manager at an annual salary of $5,200. No definite, fixed period of employment was expressly agreed upon at the time of the hiring. During the period of his employment plaintiff's job responsibilities varied. From May 1959, until his services were terminated, he served as plant superintendent at a salary of $9,000 a year. On February 26, 1960, he was discharged by Wait, the plant manager, who stated that he was dissatisfied with plaintiff's performance in the job.

On March 31, 1952 (prior to plaintiff's employment) the company created a retirement fund for the benefit of its employees. Under its terms the company contributes to a trust fund an amount equivalent to 15% Of the compensation paid annually to its employees. Employees do not contribute. The Irving Trust Company of New York is the trustee. The individual account of each employee is credited annually by the trustee with his share of the company's contribution.

The retirement fund agreement provides for the payment of pension benefits to an employee on retirement at age 65 or for disability, for certain payments on his credit balance if the employee quits of his own volition, and for payments if he is dismissed from service of the company through no fault of his own. The agreement also provides that if an employee is discharged for cause he shall forfeit all his rights in the fund and that money then standing to his credit shall be added proportionately to the credit balance of remaining employees.

Seven specific reasons are listed under section 19(a) of the agreement as constituting 'discharge for cause.' The only one pertinent to the instant case is as follows:

'(5) Failure to perform the work or services properly and reasonably assigned.'

Defendant Morrison predicates its first claim of error on the denial of its motions for judgment of involuntary dismissal made at the close of plaintiff's case, (R.R. 4:42--2(b)), and at the conclusion of the trial (R.R. 4:51).

Defendant argues that plaintiff's employment was at will and subject to termination with or without cause; that since plaintiff had been discharged he had no legal claim for damages for an alleged salary loss. It contends plaintiff failed to prove that his discharge was not for just cause, and consequently he had no actionable claim for breach of contract rights under the retirement fund agreement.

Plaintiff alleges that the evidence presented jury questions as to whether his employment was on a yearly basis; that even though the original hiring was for an indefinite period, a relationship developed which precluded defendant from discharging him without cause; that there was adequate evidence to show that plaintiff had been discharged without just cause which affected his rights in the retirement fund.

The court's function in ruling on such motions has been clearly defined. It must look at the evidence and the inferences which may reasonably be deduced therefrom in a light most favorable to the plaintiff, and if reasonable minds could differ the motion should be denied. Bell v. Eastern Beef Co., 42 N.J. 126, 129, 199 A.2d 646 (1964). Only if fair-minded men cannot honestly differ may the motions be granted. Kopec v. Kakowski, 34 N.J. 243, 244, 168 A.2d 23 (1961).

It is clearly evident that plaintiff's claim for loss of salary (which accounted for $6,300 of the resulting judgment) is not related to his claim for money credited to his name in the retirement fund. Article 8, paragraph 33, of the retirement fund agreement specifically provides that 'nothing in this agreement shall be construed to constitute a contract of employment for any eligible employee or participant hereunder.' Accordingly, we shall consider each claim of loss separately.

Our courts have held that in the absence of a contract, an employment, unless otherwise specified, is generally at will and subject to termination with or without cause. Jorgensen v. Pennsylvania R.R. Co., 25 N.J. 541, 554, 138 A.2d 24, 72 A.L.R.2d 1415 (1948); Savarese v. Pyrene Manufacturing Co., 9 N.J. 595, 600, 89 A.2d 237 (1952); Piechowski v. Matarese, 54 N.J.Super. 333, 334, 148 A.2d 872 (App.Div.1959). Plaintiff concedes that at the time he was employed there was no definite, fixed period of employment expressly set forth. Accordingly, he had the burden of proving his employment was changed from one at will to a contract for a fixed term.

Plaintiff argues that there are factors indicating his employment was not one at will but for a permanent period of at least one year--that he had been hired at an annual salary, and had been given yearly increases and bonuses. He relies heavily on words of encouragement voiced by the company president and vice-president when the steel strike was imminent in 1959.

It is undisputed that there was no express manifestation by the company changing plaintiff's employment to one for a fixed period. Where there is no fixed term consideration must be given to the surrounding circumstances to determine whether the parties intended that the employment be for a definite term. Dennis v. Thermoid Co., 128 N.J.L. 303, 25 A.2d 886 (E. & A. 1942). We are not impressed by plaintiff's testimony that he was hired at an annual salary. A hiring at a certain sum a year, no time being specified, unaccompanied by facts or circumstances from which a different intention may be inferred, is an employment for an indefinite time and not for a year. Nor do the pay increases and bonuses given to plaintiff indicate employment was for a fixed period. The increases were for varying amounts and given without regard to the beginning of a specific contract period. (In fact, no increase was given in 1958, and no bonuses in 1953 and 1956.) The increases can be construed only as increases in the rate of pay for a continuing noncyclical job. Bonuses were given around Christmas time, a practice widely followed in industry, and to numerous employees without regard to terms of employment. The words of encouragement given to plaintiff by company officials to 'keep up the good work--there are better things coming' cannot be construed to indicate a change in status of plaintiff's employment. Furthermore, there was no evidence indicating that plaintiff could be held for breach of an employment contract if he decided to quit his job.

In short, we find no evidence to show that plaintiff was hired by the year or for any definite period of time. It must be concluded on the undisputed facts that the hiring was one at will and that plaintiff could be discharged without cause. The trial court erred by submitting to the jury the question of plaintiff's employment status and his claim for loss of salary as an element of compensatory damages. These issues shown have been removed from the case on defendant's motion for judgment at the close of the testimony.

We consider next defendant's contention that the court erred in denying its motions to dismiss plaintiff's claim of damages for breach of his contractual rights under the retirement fund agreement.

We are satisfied plaintiff possessed enforceable rights under the agreement. It is undisputed that the pension plan was an inducement for his employment and that he had given seven years of service in reliance thereon. This constituted a valid consideration for the voluntary pension plan of the employer and established a contract. See Dolan v. Heller Brothers Co., 30...