Kantor v. Boise Cascade Corp.

• Decision Date: 06 December 1985
• Citation: 75 Or.App. 698,708 P.2d 356
• Parties: , 27 Wage & Hour Cas. (BNA) 1001 Emil KANTOR, Respondent--Cross-Appellant, v. BOISE CASCADE CORPORATION, a Delaware corporation, Appellant--Cross-Respondent. A8210-06200; CA A32360.
• Court: Oregon Court of Appeals

Page 356

708 P.2d 356

75 Or.App. 698, 27 Wage & Hour Cas. (BNA) 1001

Emil KANTOR, Respondent--Cross-Appellant, v. BOISE CASCADE CORPORATION, a Delaware corporation,

Appellant--Cross-Respondent.

A8210-06200; CA A32360.

Court of Appeals of Oregon,

In Banc.

Argued and Submitted Jan. 15, 1985.

Resubmitted In Banc Aug. 15, 1985.

Decided Oct. 16, 1985.

Reconsideration Denied Dec. 6, 1985.

Gregory R. Mowe, Portland, argued the cause for appellant--cross-respondent. On the briefs were Charles F. Adams, Christine Kitchel, and Stoel, Rives, Boley, Fraser & Wyse, Portland.

Richard O. Thomas, Portland, argued the cause for respondent--cross-appellant. With him on the brief were Linda K. Eyerman and Gaylord & Thomas, P.C., Portland.

RICHARDSON, Judge.

Plaintiff brought this action against defendant, his employer, to collect pension benefits allegedly owed to him. The action was brought in two counts, the first for breach of contract and the second for unpaid wages. The case was tried to a jury. The court directed a verdict against plaintiff on the second count and submitted the case to the jury on the first. The jury returned a verdict for plaintiff, and the trial court entered a judgment accordingly. Defendant appeals that judgment, and plaintiff cross-appeals the directed verdict on the second count. We affirm on the appeal and reverse and remand for a determination of plaintiff's attorney fees on the cross-appeal.

Plaintiff's claims were based on an alleged agreement with defendant that defendant would credit him with continuous service from 1938 for purposes of calculating his pension benefits.

In 1938, plaintiff began working for the Minnesota and Ontario Paper Company, which defendant purchased in 1964. By 1965, plaintiff had been promoted to the top hourly paid position for which he was qualified, and he anticipated no openings in the salaried positions for which he might qualify. He therefore left defendant's employ in September, 1965, and began working for a different paper company. He became disenchanted with that job and later learned of an opening in a salaried position as an instrument supervisor at defendant's St. Helens mill.

Around June or July, 1966, he visited the mill for an interview. Platt was the plant engineer; Webber was the mill manager and Platt's superior. Platt interviewed and recommended persons for employment, but Webber had the ultimate authority to hire. Plaintiff first met informally with Platt. He told Platt that, if he took the job, he wanted to be credited with continuous service since 1938 for the purposes of calculating employe benefits. He asked that his ten-month break in employment with defendant be disregarded when calculating the benefits.

The following day, plaintiff toured the mill and had lunch with Platt, Webber and another employe. When plaintiff's request for continuous service was raised, Webber asked Platt to meet him in his office after lunch to discuss it. At that meeting, involving only Platt and Webber, Platt recommended that plaintiff be hired and that he be credited with continuous service since 1938. Platt testified that he understood that to do so meant that plaintiff's break in employment would be disregarded and his 1938 hire date would be used to calculate his benefits, including his pension. Both Platt and Webber recall discussing vacation benefits at the meeting, but neither recalls specifically discussing pensions. Webber approved plaintiff's request, and Platt relayed that approval to plaintiff and offered him the job. Platt does not recall telling plaintiff that approval would be required from defendant's headquarters in Boise, but he may have said that headquarters would be notified. Plaintiff testified similarly. He accepted the job offer and was rehired, effective July 11, 1966.

Under the pension plan then in effect for salaried employes, benefits were calculated on the basis of years of service. Employes who were rehired after having been terminated before becoming eligible for benefits would be considered new employes and would not receive credit for previous periods of employment with the company. Under the vacation policy for salaried employes then in effect, employes with 20 or more years of continuous service were entitled to four weeks of paid vacation. Those with ten years or more were entitled to three weeks, and those with less were entitled to either one or two weeks. The vacation policy provided that employes who were rehired after leaving the company's employ would be entitled to vacation on the basis of their most recent hiring date.

After plaintiff returned to work in July, 1966, he began to receive four weeks' paid vacation, the amount he was entitled to if he were credited with continuous service since 1938. Other employes asked him why he was entitled to four weeks' vacation, and he told them about his agreement with Platt and Webber. He became concerned about their questions and that the agreement was not in writing. He discovered that neither the personnel office in St. Helens nor defendant's headquarters had any record of the agreement. Apparently in response to his inquiry, defendant's pension administration office sent him a memorandum in February, 1974, stating that his rehire date of July 11, 1966, would be used to calculate his pension benefits. The memorandum did not mention the agreement with Platt and Webber. On January 30, 1976, plaintiff wrote to the pension administration office concerning the agreement:

"* * * On July 8, 1966 I rejoined Boise Cascade as Instrumentation Supervisor at St. Helens. At that time, Mr. Don Platt, Plant Engineer, answered my question on vacations and retirement as, yes, we can grant four weeks vacation, but retirement is handled by Headquarters and we will work on it. I have enjoyed the four weeks vacation each year, but unfortunately and regretfully, did not follow up on the pension and little, if any, work was done on it."

Defendant's response did not mention the agreement or directly state that the agreement would not be honored, but it did indicate that plaintiff's pension benefits were, at that point, being calculated on the basis of his rehire date. In March, 1976, plaintiff received a computer printout concerning his pension benefits, which showed that his benefits were being calculated on the basis of his rehire date.

Plaintiff worked for defendant until April, 1982, when he retired at age 62. He applied for pension benefits, indicating a hire date of 1938. Defendant refused to honor the alleged agreement on the ground that Platt and Webber had no authority to make any agreements concerning pensions and, therefore, as provided in the pension plan then in effect, calculated his pension from his rehire date.

The first assignment of error raises the issue of whether plaintiff's action is barred by the time limitation of ORS 12.080(1), which provides, as relevant, that "[a]n action upon a contract or liability, express or implied, * * * shall be commenced within six years." The Statute of Limitations begins to run when the cause of action accrues. ORS 12.010. Defendant argues that, if a valid agreement existed, it was breached as early as February, 1974, and no later than March, 1976, because during that period it had notified plaintiff that his pension benefits would be based on the 1966 rehire date, thus showing that it had not credited him with continuous service. The limitation period would have expired no later than March, 1982, and plaintiff's October, 1982, action would be untimely.

Essentially, defendant argues that there was a breach of the contract or an anticipatory repudiation of the agreement by March, 1976, and the cause of action accrued at that time. It is evident, however, that plaintiff's cause of action did not accrue until he retired and defendant refused to pay him benefits on the basis of his 1938 hire date. A cause of action for breach of contract accrues when the contract is breached. See Hollin v. Libby, McNeill & Libby, 253 Or. 8, 13, 452 P.2d 555 (1969). A breach of contract is nonperformance of a duty due under a contract. Restatement (Second) Contracts § 235(2) (1979). The claimed agreement was that defendant would credit plaintiff with continuous service from 1938 for the purpose of calculating his employe benefits. The question is, what performance on defendant's part was required under the contract? Merely crediting plaintiff with continuous service in the abstract by making an entry in the company's records that the pension would be based on the 1938 hire date and assuring him that, when he retired, payments would be calculated on that basis would not have constituted complete performance if defendant were not also ultimately to pay plaintiff his benefits on the basis of the 1938 hire date. Defendant was required actually to pay plaintiff his benefits to complete its performance, which was not due to begin until plaintiff retired and became eligible to receive payments. Therefore it did not breach the contract until April or May, 1982, when it first paid him pension benefits calculated on the basis of the 1966 rehire date. Plaintiff's action was timely.

Although not directly in point, Davis v. Alabama Power Company, 383 F.Supp 880 (N.D.Ala.1974), aff'd 535 F.2d 657 (5th Cir.), aff'd on other grounds 542 F.2d 650 (5th Cir.1976), aff'd on other grounds 431 U.S. 581, 92 S.Ct. 2002, 52 L.Ed.2d 595 (1977), supports our conclusion. The plaintiff, a World War II veteran who had temporarily left the defendant's employ to serve in the armed forces, brought an action to require the defendant, pursuant to the Military Selective Service Act, to consider the time he spent in the military as "accredited service" for the purpose of computing his pension benefits under the defendant's pension plan. He originally had worked for the defendant for seven years, then served in the military for approximately two and one-half years and then returned to...