Janda v. Iowa Indus. Hydraulics, Inc.

• Decision Date: 24 November 1982
• Docket Number: No. 67351,67351
• Citation: 326 N.W.2d 339
• Parties: Donald F. JANDA, Appellee, v. IOWA INDUSTRIAL HYDRAULICS, INC., and Indag Iowa Incorporated, Appellants.
• Court: Iowa Supreme Court

Page 339

326 N.W.2d 339

Donald F. JANDA, Appellee, v. IOWA INDUSTRIAL HYDRAULICS, INC., and Indag Iowa Incorporated, Appellants.

No. 67351.

Supreme Court of Iowa.

Nov. 24, 1982.

John Cook, Jr., of Herrick, Ary, Cook & Cook, Cherokee, for appellants.

David A. Scott of Cornwall, Avery, Bjornstad & Scott, Spencer, for appellee.

Considered by REYNOLDSON, C.J., and HARRIS, LARSON, SCHULTZ, and CARTER, JJ.

REYNOLDSON, Chief Justice.

Defendants Iowa Industrial Hydraulics, Inc. (Iowa Industrial), and Indag Iowa Incorporated (Indag) appeal from a district court judgment awarding plaintiff Donald F. Janda damages allegedly arising out of an oral employment contract. We affirm in part, reverse in part, and remand with directions.

Iowa Industrial was an Iowa corporation that manufactured hydraulic products at Pocahontas, Iowa. Early in 1977 it decided to establish a marketing arm to sell a crane it had designed, and a line of German tractors. Janda, responding to Iowa Industrial's search for a sales and marketing manager, interviewed plant officials at Pocahontas on June 29, 1977. Janda later concluded he did not want to move his family from a larger Illinois town to Pocahontas, particularly in view of the limited housing available. In a telephone call initiated by Iowa Industrial's personnel manager, Janda declined the employment. However, the company's representative assured him that "[m]anagement has decided that they are going to open this new [sales] division in ... Spencer, and we'd like you to come back and have another interview." Upon Janda's return for the second interview, Iowa Industrial arranged for him and his wife to visit Spencer. The parties discussed Janda's proposed pay, benefits, and a "company car" for his use. He was assured the new venture in Spencer would be financed adequately by Iowa Industrial until it was self-supporting, estimated to take two or three years.

There was substantial evidence to support trial court's finding that Janda was persuaded to accept this employment by Iowa Industrial's promise to locate the new sales division in Spencer in the fall of 1977, and to furnish him a company car. July 16, 1977, Janda began working for Iowa Industrial and was provided a leased vehicle. He stayed at Pocahontas while searching for a Spencer house to purchase. October 15, 1977, Janda moved his family to their Spencer home. October 31, 1977, Iowa Industrial, complaining about the expense, took Janda's leased vehicle from him. Without this vehicle, Janda had to drive the family car to Pocahontas to work.

Iowa Industrial kept postponing the establishment of the separate sales office in Spencer. Indag was incorporated as a subsidiary in October 1977. It was owned by Iowa Industrial and was designed to perform "purely a marketing function." Indag's board of directors was comprised of the inside directors of Iowa Industrial. Indag had no assets of its own. Its presence in Spencer was limited to a Spencer phone number directly linked to Iowa Industrial at Pocahontas, and a Spencer mailbox. Iowa Industrial paid Janda's salary through May 1978. Thereafter his compensation was paid by Indag.

Iowa Industrial decided to terminate its sales venture early in 1979. Its president, however, admitted that when Janda inquired whether he should start looking for other employment, he was told he should "continue in working toward a marketing position with us." It was never suggested to Janda that he seek work elsewhere before his employment was terminated June 8, 1979.

Janda filed this action for various damages claimed to have been occasioned by Iowa Industrial's alleged breach of an oral employment agreement. Trial court disallowed all claims except those relating to Janda's transportation to Pocahontas, granting him judgment for $9140.20 "together with interest ... at the legal rate from the date of this judgment."

Janda filed a post-trial motion to modify the judgment interest, alleging that under Iowa Code section 535.8 (1981), judgment interest at the new rate should be computed from the date the petition was filed. Over defendants' resistance, trial court granted the motion and modified the judgment accordingly.

Appealing, Iowa Industrial and Indag assert trial court erred in several particulars, which may be consolidated into the following issues: (1) Are damages available to an employee at will as a result of a change in anticipated working location or other circumstances? (2) Should trial court have made both Iowa Industrial (primarily) and Indag (secondarily) responsible for the full amount of the judgment for Janda's damages? (3) When Janda's petition was filed before the effective date of Iowa Code section 535.3 (1981) but the judgment entered after the effective date, should trial court have awarded interest from the date of filing the petition?

This was a law action tried to the court. Thus trial court's findings of fact are binding here if supported by substantial evidence. Iowa R.App.P. 14(f)(1). "A finding of fact is supported by substantial evidence if the finding may reasonably be inferred from the evidence." Briggs Transportation Co. v. Starr Sales Co., 262 N.W.2d 805, 808 (Iowa 1978). In case of ambiguity the evidence is construed to uphold rather than to defeat trial court's judgment. Pillsbury Co. v. Ward, 250 N.W.2d 35, 38 (Iowa 1977).

I. Rights of an Employee at Will.

The oral employment contract before us was indefinite as to duration. Ordinarily the employment of an employee at will may be terminated by either party at any time. Abrisz v. Pulley Freight Lines, Inc., 270 N.W.2d 454, 455 (Iowa 1978); Harper v. Cedar Rapids Television Co., 244 N.W.2d 782, 791 (Iowa 1976); 53 Am.Jur.2d Master and Servant § 43, at 117-18 (1970).

Iowa Industrial and Indag argue that even if Janda was promised company transportation and his employment would be at Spencer, the employment contract, which was terminable at will, could be modified at any time. Janda's alternatives, they assert, were to accept the modifications or quit, and his decision to continue to work resulted in his acceptance of the modifications as a matter of law. There is substantial legal support for this general rule. See Gebhard v. Royce Aluminum Corp., 296 F.2d 17, 19 (1st Cir.1961); Moody v. Bogue, 310 N.W.2d 655, 661 (Iowa Ct.App.1981), and citations.

The facts of this case, however, take it out of the general rule. Commuting expense to Pocahontas was not a part of the initial oral employment contract because it was contemplated by both parties that the sales division would be located in Spencer as of "the fall" of 1977. Thus there was no "modification" of the original agreement in this regard. Nor was there any modification relating to the contemplated place of employment. Rather, the moving date simply was delayed, and meanwhile Janda was forced to use his own transportation to travel to Pocahontas. He testified without contradiction that Iowa Industrial and Indag officers told him "we will take care of it"; that they would take care of this expense "down the road."

In these circumstances we find trial court's ruling supported by the principle that an employee may recover for " 'extra services, even when of a character to come within the scope of the employment, upon proof of facts short of an express promise to pay therefor, but from which such a promise may be implied.' " Drake v. Block, 247 Iowa 517, 523, 74 N.W.2d 577, 581 (1956), (quoting McGuire v. Interurban Railway Co., 199 Iowa 203, 211, 200 N.W. 55, 59 (1924)); see 56 C.J.S. Master and Servant § 100, at 533 (1948) (promise to pay commuting expense may be implied). Here the officers of Iowa Industrial and Indag kept delaying the move to Spencer contrary to the representations made to Janda when he accepted the employment. Their actions in depriving him of company transportation and indicating to Janda he would be compensated for the use of his own car minimally permits the conclusion there was an implied promise to reimburse him for the reasonable expense incurred.

Such commuting expense might also be considered as Janda's damages for breach of the employment contract in failing to move the sales division to Spencer. In this regard the record discloses no clear-cut modification of the agreement that would invoke the general rule that Janda, by continuing to work, accepted a change in the contract as a matter of law.

Trial court's ruling makes it apparent that the total judgment of $9140.20 was comprised of $4825.60 for costs of actual mileage traveled between Spencer and Pocahontas at sixteen cents per mile, $1650 and $850 for two vehicles purchased, $1689.60 for repairs to the family car, and $125 for a car leased while another was being repaired. Janda had only one car for his family, and the evidence makes clear the two vehicles were purchased so that his family could have transportation, although each was sometimes used for his travel. Repair cost to the vehicles, and lease expense, clearly would be duplicative and excessive, over and above the flat mileage rate the parties agreed was the accepted rate for transportation expenses incurred for company business. We therefore hold the judgment can be sustained in the amount of $4825.60 only.

Iowa Industrial and Indag further seek to limit the judgment to the extent that Janda would have traveled to Pocahontas to report to company officers and other purposes. We find no evidence the implied promise was so limited. Iowa Industrial and Indag successfully objected to exhibits from which further refinements could be computed. We have held that persons damaged by a breach of contract

were not required to prove their damages with mathematical precision. It was their duty only to establish their claim with some reasonable measure of certainty and to show facts affording a reasonable basis for ascertaining the loss.

Conrad v. Dorweiler, 189 N.W.2d 537, 540 (Iowa 1971); see Palmer v. Albert, 310 N.W.2d...