Hodge v. Evans Financial Corp.

Decision Date03 December 1985
Docket NumberNo. 84-5224,84-5224
Citation250 U.S.App.D.C. 173,778 F.2d 794
Parties121 L.R.R.M. (BNA) 2088, 250 U.S.App.D.C. 173, 103 Lab.Cas. P 55,543, 1 Indiv.Empl.Rts.Cas. 1814 Albert Z. HODGE v. EVANS FINANCIAL CORPORATION, Appellant.
CourtU.S. Court of Appeals — District of Columbia Circuit

Lee A. Rau, with whom Daniel A. Maser and Loren Kieve, Washington, D.C., were on brief, for appellant.

Albert Z. Hodge, pro se, with whom Gary Ethan Klein, Washington, D.C., was on brief, for appellee.

Before TAMM * and WALD, Circuit Judges, and MacKINNON, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge MacKINNON.

Dissenting opinion filed by Circuit Judge WALD.

MacKINNON, Senior Circuit Judge.

Following an adverse jury verdict involving a breach of an employment contract, Appellant Evans Financial Corporation ("Evans") seeks review of the district court's denial of its motions for directed verdict, judgment n.o.v. and new trial. Hodge, the Plaintiff-Appellee, prevailed on his claim that Evans breached their oral contract for permanent, long-term employment which Hodge claimed was terminable only for cause. The district court denied Evans' motion for a directed verdict and refused to instruct the jury on the Statute of Frauds (the "Statute") defense, and the jury awarded Hodge $175,000 in damages. Appellant's motion for judgment n.o.v. or new trial was also later denied. Evans alleges that the court's rulings constituted reversible error. Brief of Evans at 41. We conclude that the motion for a directed verdict should have been granted on the basis of the theory advanced by plaintiff's own testimony and reverse the district court with instructions to grant the motion for judgment n.o.v.


Appellee Albert Z. Hodge was in 1980 54 years of age and Assistant Counsel and Assistant Secretary of Mellon National Corporation and Mellon Bank of Pittsburgh. In that position he found there were "insurmountable ... obstacles" "to [Hodge's] genuinely ventur[ing] into executive management," and he "had a strong desire to leave the Mellon Bank" (Record Excerpts (RE) 90-91). He had moved part of his family to Pittsburgh in 1976 but desired to return to Washington where some of his children were in school and where his mother lived (RE 81-82). On April 10, 1980 and July 24, 1980, Hodge met in Washington, D.C. with Mr. Jon Tilley, President and Chief Operating Officer of Evans Financial Corporation, the Appellant. After their second meeting, Tilley orally offered Hodge the job of Vice President and General Counsel of Evans Financial Corporation; Hodge orally accepted about July 31, 1980, after Tilley had orally agreed to certain conditions orally presented by Hodge. Hodge moved from Pittsburgh to Washington, D.C. in September, 1980 and began working. But by May 7, 1981, Tilley was so dissatisfied with Hodge's work that he fired him. Hodge brought this action before the district court alleging diversity of citizenship and claimed that by firing him Tilley breached his employment contract (RE 12-15), which included, he claimed, an oral promise that the employment was to be "permanent," and according to his testimony that it was to last until retirement at about age 65 (Trial Transcript (Tr.) 109-10, 114-15).

On April 15, 1982, after limited discovery, the trial court granted Evans summary judgment on the ground that "contracts of an indefinite nature are terminable at the will of either party." Hodge v. Evans Financial Corp., No. 81-02726, slip op. at 6 (D.D.C. Apr. 6, 1982). This court, however, noting it was obviously possible for parties to construct an agreement that was not terminable at will and yet for an indefinite term, reversed the district court's order. Hodge v. Evans Financial Corp., 707 F.2d 1566 (D.C.Cir.1983). The case was remanded and the district court was instructed to permit the plaintiff to prove that such an agreement existed, if he could.

The case was then tried to a jury, which, following the trial court's denial of defendant's motion for a directed verdict (Tr. 645-52), and its refusal to charge on the Statute of Frauds (Tr. 663), found for the plaintiff and awarded him $175,000 in damages. One ground relied upon for Evans' motion for a directed verdict was the Statute of Frauds and our decisions in Prouty v. National Railroad Passenger Corp., 572 F.Supp. 200 (D.D.C.1983), and Gebhard v. GAF Corporation, 59 F.R.D. 504 (D.D.C.1973), were cited in support thereof. Evans' motion for judgment n.o.v. and new trial also relied upon the court's failure to instruct the jury on the Statute of Frauds defense. The motions were all denied (Tr. 645-52), and Evans now appeals from the resulting judgment.


The terms of the contract into which Hodge contends he entered with Evans are set out in Hodge's testimony. He testified that the contract of employment upon which he relies was entered into principally in oral conversation with Tilley, the President of Evans Financial Corporation. We set forth below Hodge's critical testimony concerning his oral contract negotiations with Tilley. First, Hodge expressed certain "conditions" with respect to the term of the contract and the terms of his employment:

Q [By Mr. Klein, Hodge's Attorney] What if any conditions did you present to Mr. Tilley at that time?

A [Hodge] I said, No. 1, the job must be permanent. Because of my age, I have a great fear about going back into the marketplace again. I want to be here until I retire [Tr. 109] [emphasis added].

[Hodge's later testimony, in response to his "intention as to how long [he] planned to continue to work" under the contract, indicated that by his testimony as to "permanent," and "until I retire," he meant retirement at about age 65. His specific testimony was that he "really questioned if [he] was going to go much beyond 65." (Tr. 115) ].

Tilley's reply, according to Hodge's testimony:

He [Tilley] said "I accept that [No. 1] condition." (Tr. 110) (emphasis added). Hodge's brief indicates that this testimony around Tr. 109 "contained the specific framework of the contractual arrangement and other of its terms.... [These and the] contractual provisions, the words surrounding 'permanent' are [not ] merely suggestions or ideas." Brief of Hodge at 5 (emphasis added).

Hodge enumerated three other conditions, not here relevant (Tr. 110-11).

[Tilley] said "I accept [all] those [Hodge's] conditions and we have an agreement on all but one important item [money]."

(Tr. 111). At the end of the meeting with Hodge, Tilley "said":

"We have an agreement on everything except the one issue [money] and Bob Holtzman will be contacting you on that."

(Tr. 114). The money issue was subsequently worked out. On this term of the contract Hodge testified that his

... initial salary [was to] be at the annual rate of $47,500.... In addition, a minimum bonus of $6,000 is guaranteed for 1981 payable January, 1982.

(Tr. 230-31, 318) (emphasis added). The "bonus" feature of the "permanent" contract was confirmed in a letter from Tilley to Hodge dated July 31, 1980, which Hodge introduced into evidence. The letter stated:

Your position will be Vice President and General Counsel of Evans Financial Corp. This position is a Grade 63 and initial salary will be at the annual rate of $47,500. In addition, a minimum bonus of $6,000 is guaranteed for 1981 (payable January, 1982).

(Appendix of Hodge (App.) at 140-41) (emphasis added). Hodge accepted Tilley's offer (Tr. 119-20) to start work September 2, 1980 (App. at 140). The contract Hodge alleged and to which he testified was thus for a fixed period of about 11 years, since he was 54 when the employment contract was made (Tr. 114 (Hodge), App. 41), and he stated it was his intent under the contract to retire when he was about 65 (Tr. 115).

By any reasonable interpretation of Hodge's testimony, in which he expressed his interpretation of the "contractual provisions" as to its length, the agreement he entered into, as he understood it, was that his employment would be permanent until he retired at about 65, and that he would be paid "annually " a salary of $47,500 plus a bonus. The parties also specifically agreed, according to Hodge's testimony and evidence, that he would begin work on September 2, 1980 and would work until January, 1982, at which time he would be paid "a minimum bonus of $6,000 ... for 1981."


If the oral contract with Hodge was for "permanent," long-term employment until retirement at about age 65, as Hodge expressed it, it was unenforceable under the Statute of Frauds. See Brief of Evans at 34ff. We rely on Hodge's testimony and evidence as to the terms of the contract and find that Evans' claim has merit.

The District of Columbia Statute of Frauds, 28 D.C.Code Sec. 3502 (1981), provides:

An action may not be brought ... upon an agreement that is not to be performed within one year from the making thereof, unless the agreement upon which the action is brought, or a memorandum or note thereof, is in writing, which need not state the consideration and signed by the party to be charged therewith or a person authorized by him.

The theory of Hodge's complaint apparently is that the oral employment agreement alleged by him contemplated multi-year, long-term employment until retirement at about age 65. The critical terms of that alleged agreement, including duration, however, were not reduced to writing. Hodge testified: "I really questioned if I was going to go much beyond 65." (Tr. 115). His testimony, upon which this opinion is based, was that his employment was to be until retirement, (Tr. 109 (Hodge), App. 36), not until he died, and that he intended to retire at 65 or perhaps later (Tr. 114-15 (Hodge) App. 42-43). This is the most probative testimony as to the fixed term of the contract, and this is Hodge's personal testimony. There is persuasive authority that such a contract is not enforceable under the District of Columbia Statute of Frauds. See...

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