Sea-Land Service, Inc. v. O'Neal

• Decision Date: 03 December 1982
• Docket Number: No. 800856,SEA-LAND,800856
• Citation: 224 Va. 343,297 S.E.2d 647
• Court: Virginia Supreme Court
• Parties: , 115 L.R.R.M. (BNA) 4242 SERVICE, INC. v. Nancy O'NEAL. Record

Page 647

297 S.E.2d 647

224 Va. 343, 115 L.R.R.M. (BNA) 4242

SEA-LAND SERVICE, INC. v. Nancy O'NEAL.

Record No. 800856.

Supreme Court of Virginia.

Dec. 3, 1982.

John M. Ryan, Norfolk (Vandeventer, Black, Meredith & Martin, Norfolk, on briefs), for appellant.

William A. Young, Richmond (John F. Rixey, Norfolk, Alexander N. Simon, Richmond, Rixey & Heilig, Norfolk, Wallerstein, Goode & Dobbins, Richmond, on briefs), for appellee.

Before CARRICO, C.J., and COCHRAN, POFF, COMPTON, THOMPSON, STEPHENSON and RUSSELL, JJ.

CARRICO, Chief Justice.

In the court below, Nancy O'Neal (O'Neal) filed a motion for judgment seeking compensatory and punitive damages against Sea-Land Service, Inc. (Sea-Land), for its alleged breach of an employment contract and its alleged fraud in inducing O'Neal to resign from one position in return for a promise, never fulfilled, of employment in another. A jury awarded O'Neal $125,000 in compensatory damages but denied her any punitive award. Sea-Land has appealed.

The record shows that O'Neal was first employed by Sea-Land in 1970 as a teletype operator/messenger in its Portsmouth terminal. Through a series of promotions, she advanced to management level. At the time of the incidents in question, she occupied the position of sales representative in one of the company's divisions, earning in excess of $19,000 annually, with extensive fringe benefits. Her most recent performance appraisal was "excellent," and she intended to remain in Sea-Land's employ until retirement. ¹

In the performance appraisal form, a space was provided to indicate the "performance improvement plan" the "evaluator" and the employee agreed upon "for the next year." One of the suggestions listed in this space on O'Neal's appraisal form was that she "[a]ttend junior college--spring or summer 1978." It was O'Neal's desire to secure a college education that brought about the incidents in question.

Stated in the light most favorable to O'Neal, the evidence relating to these incidents shows that in late December, 1977, or the early part of January, 1978, O'Neal learned that her old job of teletype operator/messenger was or soon would be vacant. This position required less travel than the sales representative job, and she believed it would permit her to attend school at night while providing her with sufficient funds to support herself until a better-paying position at Sea-Land became available. ² She discussed the possibility of a transfer with James Chang, her immediate supervisor, with Ruby Porter, under whom she would work if transferred, and with Louis Nappi, the terminal manager whose approval of the transfer was necessary.

Chang, Porter, and Nappi all approved the transfer. They told O'Neal, however, that she would have to resign from her position as sales representative before "they could officially say that [she] had the teletype and messenger job." Nappi expressly stated to O'Neal that she "could have the other job" if she "turned the letter [of resignation] in." Accordingly, on Friday, January 13, O'Neal signed and delivered to Chang a letter in which she resigned as sales representative and accepted the teletype position. At an operational sales meeting held in the office the same day and attended by O'Neal, Chang announced that she was leaving his division and Nappi stated that she "would be taking the teletype and the messenger's job."

When O'Neal reported for work Monday morning, Nappi informed her she "could not have the job" as teletype operator/messenger because she was "over qualified [and] all he needed was somebody with two legs and a driver's license." When she asked him why he was "doing this," he replied that he "didn't have time to be bothered with [her]."

O'Neal then telephoned Charles Hauser, Chang's superior in Jacksonville, Florida, and asked whether she could retract her letter of resignation. He agreed to look into the matter, but told her afterward that "it was too late" to retract the letter. Hauser did tell her "not to worry about it," for there were "a couple other positions that might be coming open," and he would be "getting back to [her]." No other offers of employment with Sea-Land developed, however, and O'Neal's last day of work was March 10, 1978, after she had spent eight weeks training her replacement. At the time of trial, she was employed as a "sales representative" in a furniture store, working on a "straight commission" basis.

On appeal, Sea-Land assigns ten separate errors and condenses them into these four questions, as quoted from its brief:

I. Whether Nancy O'Neal had an employment contract with the defendant and if she did what was the nature of the contract?

II. Whether the evidence was sufficient as a matter of law to permit Nancy O'Neal's claim of fraud and deceit to go to the jury?

III. Whether the matter of damages was properly submitted to the jury under either the contract or the fraud and deceit theories?

IV. Whether, if either ... Nancy O'Neal's contract or tort claim is deficient, the rendering of a general verdict requires remand?

I.

With respect to the contract question, Sea-Land first complains of the trial court's failure "to require Mrs. O'Neal to identify and describe the contract which she alleged was breached by [Sea-Land]." Sea-Land points out that, in her motion for judgment, O'Neal alleged the breach of a "contract of employment," and later, in response to an interrogatory seeking the terms of the contract, she identified two contracts of employment, "# 1" being the contract covering her position as a sales representative, and "# 2" the agreement under which she "was to be" a teletype operator/messenger. When Sea-Land moved to compel O'Neal to provide "more specific answers as to the contract," the court deferred the motion to the date of trial. Then, at trial, Sea-Land claims, the court not only failed to require O'Neal to identify further the contract she relied upon but also permitted her to inject a third contract, viz, an "agreement to exchange one job for the other." This action of the court, Sea-Land maintains, was error.

We disagree with Sea-Land. It argued below that the contract O'Neal asserted at trial was not "the contract ... sued on," that the "suit speaks in terms of a contract of employment," and that O'Neal had changed her position "to say it's a contract to exchange jobs." We fail to see, however, why a contract to exchange jobs should not be considered a contract of employment; indeed, we do not believe it can logically be considered otherwise.

Furthermore, O'Neal's identification at trial of a contract to exchange jobs did not constitute the allegation of a third contract or even of a new theory. In her answers to interrogatories, O'Neal stated that, under position "# 2," she "was to be" a teletype operator/messenger, that this represented a "switch from management to [non-management] status," and that upon assuming her duties "under # 2 [she] was to relinquish [her] position under # 1." These statements were sufficient to apprise Sea-Land of O'Neal's theory of a contract based upon an exchange of positions.

But, Sea-Land argues, under all the alleged contracts, the "employments involved were terminable at the will of either plaintiff or defendant and thus were indefinite as to duration"; accordingly, "there was no contract whatsoever." O'Neal admitted at trial, Sea-Land says, that there were "no 'terms' as to the duration of her contract" of employment, either as a sales representative or as a teletype operator/messenger, and that there was "no limitation on [Sea-Land's] right to terminate her employment."

In a case cited by Sea-Land, we recognized that, where no specific time is fixed for the duration of employment, it is presumed to be an employment terminable at will, providing a dismissed employee no basis for recovery of damages against his erstwhile employer. Hoffman Company v. Pelouze, 158 Va. 586, 164 S.E. 397 (1932). We said, however, that "this presumption ... is rebuttable." Id. at 594, 164 S.E. at 399. We held that the presumption was rebutted in Hoffman by "the interpretation which the parties themselves placed upon the matter"; although the employer "undoubtedly had the right to terminate the contract at any time without more ado," it did not do so, but asked the employee by letter to submit his resignation and "threw out to him the gratuity of more than a month's salary as an inducement." This, we said, "does not import overmuch confidence in [the employer's] contention that the contract was of indefinite duration and so terminable at will." Id.

Here, as in Hoffman, although Sea-Land may have had the right to terminate O'Neal's employment at will either while she was still a sales representative or in the event she became a teletype operator/messenger, the company did not dismiss her this way. Instead, it promised her that, if she resigned from the one position, she would be employed in the other. This was an undertaking separate and apart from any contract covering the particular position involved and was not subject to any presumption of terminability at will that might have applied to such a contract. Once O'Neal performed her part of the bargain by resigning from the first position, Sea-Land became obligated to perform on its part and breached that obligation to her damage when it refused to employ her in the teletype operator/messenger position.

Sea-Land suggests, however, that this separate agreement was not supported by a valid consideration. Sea-Land cites Tow v. Miners Memorial Hospital Association, Inc., 199 F.Supp. 926 (S.D.W.Va.1961), aff'd, 305 F.2d 73 (4th Cir.1962), a case interpreting West Virginia law, which Sea-Land says is "closely analogous to the present matter." In Sea-Land's words, Tow stands for the proposition that "the surrender by the employee of former employment as a necessary incident to the acceptance of new employment is not such consideration as will...