Lee-Wright, Inc. v. Hall, LEE-WRIGH

• Decision Date: 20 August 1992
• Docket Number: No. 01-91-00899-CV,INCORPORATED,LEE-WRIGH,01-91-00899-CV
• Citation: 840 S.W.2d 572
• Parties: 7 IER Cases 1215 , d/b/a Professional Flooring Supply Company, Appellant, v. Frank HALL, Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 572

840 S.W.2d 572

7 IER Cases 1215

LEE-WRIGHT, INCORPORATED, d/b/a Professional Flooring Supply Company, Appellant, v. Frank HALL, Appellee.

No. 01-91-00899-CV.

Court of Appeals of Texas Houston (1st Dist.).

Aug. 20, 1992.

S. Mitchell Glassman, Elene B. Glassman, Houston, for appellant.

Jim Tatum, Houston, for appellee.

Before OLIVER-PARROTT, C.J., and WILSON and DUNN, JJ.

OPINION

OLIVER-PARROTT, Chief Justice.

This is an appeal from a jury verdict in a breach of contract action for wrongful termination of employment. We affirm.

Background

On November 5, 1987, Frank Hall, appellee, and Lee-Wright, Incorporated (Lee-Wright), appellant, entered into a contract for the sale of the corporate assets of Hall's floor covering business, Carpet and Flooring Supplies, Inc. located in Houston. Lee-Wright, which is principally located in Fort Worth, approached Hall because it wanted to open a branch office in Houston. The contract for sale included an agreement that Lee-Wright would employ Hall to manage the Houston branch for a salary of $2,000 per month for a period of five years, hospital benefits, and 10% of the net profits of the Houston branch. The contract specifically provided that Lee-Wright, Inc. d/b/a Professional Flooring Supply Co. of Texas, does hereby agree to employ Frank E. Hall, in accordance with standard company policies. In addition Lee-Wright, Inc. agrees to pay to Frank E. Hall a salary of $2,000 per month. Furnish hospitalization and major medical insurance as provided to all other company employees. In addition, pay a sum equal to 10% of the net profit before taxes for the prior quarter of the Houston, Harris County, Texas, branch of this company. Standard calendar quarters shall be used and payment shall be made by the 17th of the month following the end of a quarter. This agreement shall be for a period of five (5) years beginning October 1, 1987 and ending September 30, 1992, and can be extended beyond the expiration date with written agreement of both parties. This agreement shall become null and void should Frank E. Hall leave the company.

When the contract was signed by the parties, the only modifications made to this provision of the contract were to increase the base salary from $1,400 per month to $2,000 per month and to strike the end of the last sentence, which provided that the agreement would become null and void "should Frank E. Hall in any way be unable to fulfill his job responsibilities." These modifications were initialed by both parties.

Hall's specific job duties were not outlined in the agreement. Mr. James Lee, chairman and chief executive officer of Professional Flooring Supply, however, testified that he was aware that Hall, being an older individual, wanted to retire in five years and that the contract provided that Hall would continue to receive his salary, profits, and benefits under the contract so long has he did not leave the company. Hall also testified that the possibility that he might become disabled during the term of the contract was taken into account and that the parties agreed that the only cause for terminating the contract would be if Hall quit or left the company.

Hall testified that on March 16, 1988, he injured his shoulder on the job. The next day, Hall informed James Lee of his injury, who completed and filed a worker's compensation report. ¹ In May of 1988, Hall informed, Dan Lee, the president of Lee-Wright, via an office memorandum, that his injury would require surgery, that he would be admitted to the hospital on June 10, that he expected to be would be away for four to five days, and that he would then know how long he would be unable to work. Hall also telephoned Dan Lee on June 9, 1988, and reiterated what he had explained in the memorandum he sent in May.

Hall was admitted to the hospital from June 10, 1988, through June 13, 1988; then re-admitted on July 11, 1988, for three days; and was again re-admitted on July 18, 1988, for four days. It is undisputed that the only communications between the parties after June 9, 1988, was a letter dated July 14, 1988, informing Hall that his employment with Professional Flooring Supply Company had been terminated.

The jury was asked if Hall was discharged by Lee-Wright without good cause. If the jury answered yes to this question, it was then asked to determine what sum of money would reasonably compensate Hall for lost wages, if any, resulting from the discharge. The jury found that Hall had been discharged without good cause, and awarded $75,000 for past damages and $30,000 for future damages. After reducing the jury award by a stipulated credit of $3,500 and future damages to their present cash value, the trial court entered judgment for a total of $99,591.01.

Jury charge

In its first point of error, Lee-Wright argues the trial court erred in entering judgment for damages in favor of Hall because the contract for employment was as a matter of law, terminable at will. Lee-Wright asserts, because no cause was required to terminate Hall's employment under the employment-at-will doctrine, the trial court erred in submitting a jury question regarding good cause. ²

Submission of questions to the jury is a matter within the discretion of the trial court. Ked-Wick Corp. v. Levinton, 681 S.W.2d 851, 855 (Tex.App.--Houston [14th Dist.] 1984, no writ). The trial court's discretion is subject only to the requirement that the questions submitted must: (1) control the disposition of the case; (2) be raised by the pleadings and the evidence; and (3) properly submit the disputed issues for the jury's determination. Baker Marine Corp. v. Mosely, 645 S.W.2d 486, 488-89 (Tex.App.--Corpus Christi 1982, writ ref'd n.r.e.); TEX.R.CIV.P. 277, 278.

Lee-Wright contends that Hall's employment contract contains no language requiring that termination be for good cause or language that otherwise limits the application of the employment-at-will doctrine. Lee-Wright argues the provision in the contract, which provides that the agreement "shall become void and null should Frank E. Hall leave the company," leaves the term of service to the discretion of Hall and allows Hall to terminate the contract at will and without liability. Accordingly, Lee-Wright asserts because Hall could terminate the contract at will, it also had the right to terminate the contract at will and without good cause. The preliminary issue then is whether Hall's employment relationship with Lee-Wright is controlled by the employment-at-will doctrine.

Texas has long adhered to the employment at will doctrine, which states that when the term of service is left to the discretion of either party, or the term is left indefinite, or determinable by either party, either may put an end the employment at will and without cause. McClendon v. Ingersoll-Rand Co., 779 S.W.2d 69, 70 (Tex.1989); East Line & R.R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99, 102 (Tex.1888). In the absence of special circumstances, however, Texas also follows the general rule in England, which dictates that a hiring at a stated sum per week, month, or year, is definite employment for the period named and may not be arbitrarily concluded. Dallas Hotel Co. v. Lackey, 203 S.W.2d 557, 561 (Tex.Civ.App.--Dallas 1947, writ ref'd n.r.e.).

A discharged employee who asserts that the parties have contractually agreed to limit the employer's right to terminate the employee-at-will has the burden of proving an express agreement or written representation to that effect. Totman v. Control Data Corp., 707 S.W.2d 739, 744 (Tex.App.--Fort Worth 1986, no writ). To establish a cause of action for wrongful termination, Hall was required to prove that (1) he and Lee-Wright had a contract that specifically provided that Lee-Wright did not have the right to terminate the employment contract at will, and that (2) the employment contract was in writing (if the contract is to exceed one year). Lumpkin v. H & C Communications, Inc., 755 S.W.2d 538, 539 (Tex.App.--Houston [1st Dist.] 1988, writ denied); Webber v. M.W. Kellogg Co., 720 S.W.2d 124, 126 (Tex.App.--Houston [14th Dist.] 1986, writ ref'd n.r.e.). It has been held that the writing must, "in a meaningful and special way," limit the employer's right to terminate the employment at will. Benoit v. Polysar Gulf Coast, Inc., 728 S.W.2d 403, 406 (Tex.App.--Beaumont 1987, writ ref'd n.r.e.) (emphasis in original). A hiring based on an agreement of an annual salary limits in a meaningful and special way the employer's prerogative to discharge the employee during the dictated period of employment. Winograd v. Willis, 789 S.W.2d 307, 310 (Tex.App.--Houston [14th Dist.] 1990, writ denied).

The record is clear that Lee-Wright entered into a written contract to acquire the assets of Hall's business. Lee-Wright was to take over the operations of Hall's business and acquire Hall's customer base in Houston. As part of the consideration for the purchase of the business, Lee-Wright also agreed to hire Hall as an employee. The employment provision of the contract provides the dates of employment, Hall's monthly compensation, and a stated term of employment of five years. A hiring at a stated sum per week, month, or year, is a definite employment for the period named and may not be arbitrarily concluded. Dallas Hotel Co., 203 S.W.2d at 561. Thus, the contract between Hall and Lee-Wright limited in a meaningful and special way Lee-Wright's right to discharge Hall for the stated term of five years. Accordingly, the employment at will doctrine is inapplicable, and Lee-Wright was required to show good cause for terminating Hall's employment.

When the contract of employment is for a term, as opposed to "at will," the employer has the burden of showing good cause for the discharge. Watts v. St. Mary's Hall, 662 S.W.2d 55, 58 (Tex.App.--San Antonio 1983, writ ref'd n.r.e.). Thus, the trial court properly submitted the question because (1) whether Hall was...