Johnson v. Allied Stores Corp.
| Decision Date | 15 March 1984 |
| Docket Number | No. 14330,14330 |
| Court | Idaho Supreme Court |
| Parties | , 122 L.R.R.M. (BNA) 2038, 27 Wage & Hour Cas. (BNA) 678, 104 Lab.Cas. P 55,576 Calvin C. JOHNSON, Plaintiff-Appellant, Cross-Respondent, v. ALLIED STORES CORPORATION, d/b/a The Bon Marche, Defendant-Respondent, Cross-Appellant. |
William L. Mauk, of Skinner, Donnelly, Fawcett & Mauk, Boise, for plaintiff-appellant cross-respondent.
Thomas V. Munson, and Richard C. Fields, of Moffatt, Thomas, Barrett & Blanton, Boise, for defendant-respondent cross-appellant.
In this case, both parties have appealed from a partial summary judgment granted by the district court. Appellant's original complaint contained two counts, each sounding in contract and based on appellant's termination from respondent's employ.
Count I stated a cause of action for respondent's denial of severance pay allegedly owed to appellant. Appellant appeals from the district court's dismissal of Count I on respondent's motion for summary judgment.
Count II stated a cause of action for respondent's denial of the executive discount privilege, also allegedly owed to appellant. Respondent cross-appeals from the district court's denial of respondent's motions for summary judgment and directed verdict on Count II.
In addition, appellant seeks review of the district court's award of costs to the parties.
We reverse the district court's dismissal of Count I, and remand this count for a determination of whether a contract existed and, if so, for a computation of the severance pay that appellant is entitled to receive, in accordance with this opinion. We affirm the district court's denial of summary judgment and directed verdict on Count II. Lastly, we remand the assessment of costs pertaining to Count I in accordance with our instructions herein.
Calvin Johnson (appellant) was an employee of Allied Stores Corporation, d/b/a The Bon Marche (respondent), continuously from March 1, 1949, until his termination on October 10, 1977. Based on his termination, appellant filed an action against respondent in August of 1979. Appellant's complaint contained two counts, both pertaining to particular benefits contained in respondent's policy manuals to which appellant claimed entitlement.
In Count I, appellant maintained that, as a part of the contract of employment with respondent, upon appellant's termination he was entitled to receive severance compensation at the rate of two weeks of his then average base salary for each year of service. Appellant claims that his entitlement is based on a personnel policy adopted by respondent in 1962, even though that policy was subsequently changed prior to appellant's termination.
In Count II, appellant alleged that respondent had wrongfully denied appellant use of the executive discount privilege. Pursuant to this privilege, qualified employees may purchase merchandise at respondent's stores at a reduced rate after retirement.
Respondent moved for summary judgment, alleging that (1) as to both counts, no contractual relationship existed between the parties which supported a claim of entitlement for either the severance pay, as computed by the 1962 policy manual, or for the executive discount privilege; (2) as to Count I, any contract which did exist was modified by later policy revisions; and, (3) Count I was barred by the six-month statute of limitation contained in I.C. § 45-608.
The district court granted respondent's summary judgment motion on Count I, holding that appellant's claim was barred by the six-month statute of limitation contained in I.C. § 45-608. However, the trial court denied summary judgment on Count II.
At the conclusion of trial on Count II, the jury specifically found in its special verdict that (1) there was a contract allowing for retention of the executive discount privilege upon appellant's termination; (2) appellant qualified for the privilege following his termination; (3) appellant was entitled to $6,889.00 for past loss of use of the privilege; and, (4) future losses that appellant would incur as a result of the prospective denial of the privilege could not be calculated. Thus, the district court awarded appellant's requested alternate relief, specific performance, whereby respondent was ordered to extend this privilege to appellant and his spouse. After trial on Count II, the district court denied (1) respondent's motions for a new trial, judgment notwithstanding the verdict, and attorney fees; and, (2) appellant's motion for attorney fees. The court apportioned costs between what it characterized as two prevailing parties, and denied appellant's request for discretionary costs.
Appellant appeals from dismissal of Count I and claims that the trial court's apportionment of costs and denial of his discretionary costs were erroneous. Respondent cross-appeals from the district court's denial of his motions for summary judgment and directed verdict on Count II. 1
The first question presented to this Court is whether Count I comes within the ambit of I.C. § 45-608 and, if so, which limitation period of that section applies. I.C. § 45-608 reads as follows:
We previously held in Thomas v. Ballou-Latimer Drug Co., 92 Idaho 337, 442 P.2d 747 (1968), that a claim for an employee bonus, which was calculated by reference to the net profit of the defendant company and paid yearly, was part of the compensation bargained for in the agreement of employment. Because the bonus was part of the bargained for compensation, we held that a bonus claim came within the parameters of I.C. § 45-608. By analogy, a claim for severance pay is also a component of the compensation in an employment agreement. Severance pay is not a mere gratuity. Owens v. Press Publishing Co., 20 N.J. 537, 120 A.2d 442 (1956). Thus, we hold that a claim for severance pay also comes within the parameters of I.C. § 45-608.
I.C. § 45-608 contains two periods of limitation. Therefore, it is necessary to determine which limitation period applies to the case at bar, and whether appellant's claim is barred by its application. Generally, an action to collect salary, wages, overtime compensation, penalties and liquidated damages provided by law or pursuant to a contract of employment, must be commenced within two years after the accrual of the cause of action. The statute then specifies that the action must be commenced within six months of the accrual of the cause of action, "in the event salary or wages have been paid to any employee and such employee claims additional salary, ... because of work done ... during his employment for the pay period covered by said payment." A careful reading of this language, convinces us that a claim made in the text of the above-quoted material, refers to a claim for additional salary for a specific pay period from which an employee has already received some payment of salary or wages. The introductory language to this section contained in the Idaho Session Laws specifically refers to a pay period in the context of the six-month limitation period as well. 1947 Idaho Sess. Laws ch. 36, pp. 36-7.
Contrary to respondent's assertion, the term pay period does not refer to the entire course of an employment relationship. Because severance pay is not attributed to, or earned in a specific pay period, but, is earned over the entire course of the employment relationship, the six-month limitation period is inapplicable to appellant's claim for severance pay. Rather, the two-year period is applicable.
A cause of action accrues under this section when an employee has a right to collect the salary or wages, etc., that are allegedly owed to him. In the present case, appellant had a right to collect his severance pay upon either his retirement or involuntary termination. Appellant was terminated from his employment on October 10, 1977, which is when the cause of action accrued. Appellant initiated this suit on August 21, 1979, which is less than two years from the accrual of this cause of action. Thus, appellant's claim is not barred by the two-year limitation period of I.C. § 45-608. Therefore, we reverse the district court's dismissal of Count I.
Our reasoning today is consistent with our previous holding in Anderson v. Lee, 86 Idaho 300, 386 P.2d 54 (1963), where we held that the six-month limitation period does not apply to a payment made on account, because no particular pay period was covered by such payments.
Because Count I is not barred by the two-year limitation period of I.C. § 45-608, it becomes necessary to determine the amount of severance pay that appellant is entitled to receive. The amount of severance pay that appellant is entitled to receive rests upon the resolution of two issues: first, whether the trier of fact determines that a contract existed between the...
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