Lessley v. Hardage

• Decision Date: 31 October 1986
• Docket Number: No. 58337,58337
• Citation: 727 P.2d 440,240 Kan. 72
• Parties: Dean R. LESSLEY, Appellee, v. Samuel A. HARDAGE, Hardage Enterprises, Inc., Hardage Development Corporation, and Hardage Construction Corporation, Appellants.
• Court: Kansas Supreme Court

Page 440

727 P.2d 440

240 Kan. 72

Dean R. LESSLEY, Appellee, v. Samuel A. HARDAGE, Hardage Enterprises, Inc., Hardage Development Corporation, and Hardage Construction Corporation, Appellants.

No. 58337.

Supreme Court of Kansas.

Oct. 31, 1986.

Syllabus by the Court

1. Summary judgment is proper if no genuine issue of fact remains, giving the benefit of all inferences which may be drawn from the admitted facts to the party against whom judgment is sought.

2. When summary judgment is challenged on appeal, this court will read the record in the light most favorable to the party who defended against the motion for summary judgment.

3. In ruling on a motion for a directed verdict, the trial court is required to resolve all facts and inferences reasonably to be drawn from the evidence in favor of the party against whom the ruling is sought, and, where reasonable minds could reach different conclusions based on the evidence, the motion must be denied and the matter submitted to the jury. This rule must also be applied when appellate review is sought of a ruling on a motion for a directed verdict.

4. It is the general rule that in order for an agreement to be binding it must be sufficiently definite as to its terms and requirements to enable a court to determine what acts are to be performed and when performance is complete. The court must be able to fix definitely the legal liability of the party.

5. Absolute certainty is not required in contracts--only reasonable certainty is necessary.

6. The mere existence of a discretionary duty does not render a contract unenforceable.

7. The law implies that contractual provisions requiring the exercise of judgment or discretion will be honestly exercised and faithfully performed.

8. The obligation of honest judgment implied in contracts where the exercise of judgment or discretion is involved cannot be used as a shield to prevent recovery by the plaintiff.

9. An employer is not required, in making every business decision, to take into consideration the possible and ultimate effects of such decision upon each of his employees.

Richard C. Hite, of Kahrs, Nelson, Fanning, Hite & Kellogg, Wichita, argued the cause, and Marc A. Powell, of the same firm, was with him on the brief, for appellants.

G. Gordon Atcheson, of Hall, Turner and Pike, Chartered, Wichita, argued the cause, and was on the brief, for appellee.

MILLER, Justice:

This is an action for breach of an employment contract. Dean R. Lessley, plaintiff, recovered a judgment against defendants Samuel A. Hardage and three Hardage corporations following a jury trial in Sedgwick District Court. Defendants appealed, and we ordered the case transferred to this court pursuant to K.S.A. 20-3018(c). Defendants contend that the trial court erred in overruling defense motions for summary judgment and directed verdict. Involved therein are the questions of whether there was an enforceable contractual obligation upon defendants to pay plaintiff cash bonuses and, if so, whether under the evidence plaintiff is entitled to recover on claims arising out of the Wichita Royale and the Beacon Building projects.

It is a familiar rule that when the sufficiency of the evidence to support the judgment is challenged on appeal, we review the evidence in the light most favorable to the party who prevailed at trial. Long v. Deere & Co., 238 Kan. 766, 715 P.2d 1023 (1986); Tice v. Ebeling, 238 Kan. 704, 708, 715 P.2d 397 (1986); Ratterree v. Bartlett, 238 Kan. 11, 707 P.2d 1063 (1985); Toumberlin v. Haas, 236 Kan. 138, Syl. p 5, 689 P.2d 808 (1984).

The rules governing the consideration of a motion for summary judgment are no less familiar. Summary judgment is proper if no genuine issue of fact remains, giving the benefit of all inferences which may be drawn from the admitted facts to the party against whom judgment is sought. A trial court, in ruling on motions for summary judgment, should search the record to determine whether issues of material fact do exist. When summary judgment is challenged on appeal, this court will read the record in the light most favorable to the party who defended against the motion for summary judgment. Olson v. State Highway Commission, 235 Kan. 20, Syl. p 1, 679 P.2d 167 (1984).

Similarly, in ruling on a motion for a directed verdict, the trial court is required to resolve all facts and inferences reasonably to be drawn from the evidence in favor of the party against whom the ruling is sought, and, where reasonable minds could reach different conclusions based on the evidence, the motion must be denied and the matter submitted to the jury. This rule must also be applied when appellate review is sought of a ruling on a motion for a directed verdict. Turner v. Halliburton Co., 240 Kan. 1, Syl. p 1, 722 P.2d 1106 (1986); E F Hutton & Co. v. Heim, 236 Kan. 603, 609, 694 P.2d 445 (1985). Accordingly, we will review the facts and state them in the light most favorable to the plaintiff.

Samuel Hardage started his original real estate development company, Contemporary Mobile Home Corporation, in Los Angeles in 1969. The corporate name was changed several years later to U.S. Communities, Inc. He also had one or two wholly owned subsidiaries for management or construction. Apparently, Hardage's and his corporations' major experience, from 1969 to 1975, was in the construction and development of over thirty mobile home parks. In 1973, company headquarters was moved from Los Angeles to Wichita. Hardage Enterprises, Inc., was formed in 1975. Its first project was a mobile home park in Lincoln, Nebraska. This included construction of the pads that the mobile homes sit on; a clubhouse; a swimming pool; sewer, water, gas, and electric service; and paving and grading. This was the only project completed by defendants in the period 1975-1979. At the end of 1979, Hardage became interested in the development of office buildings. (The defendant corporations are all closely held and interrelated, and the parties stipulated that judgment against any defendant shall constitute judgment against all defendants. We will not attempt to distinguish between the acts of Hardage, individually or as a corporate officer, and the several Hardage corporations, defendants herein.)

Dean Lessley graduated from Colorado State University with a degree in finance and economics, and then received a master's degree in business administration from the University of Denver in 1967. Following graduation, he was employed or connected with various real estate development and consulting firms. He had wide experience in the design, construction, and finance of commercial buildings. His last position, before joining Hardage, was as the chief operating officer of United Research Systems, a publicly traded company. During his tenure with that firm, it would typically have 150 active projects going on at the same time in perhaps 35 or 40 states. In December 1979 and January 1980, he was contacted by at least three executive recruitment firms, all of whom expressed an interest in his background. Each felt that Lessley would fill the requirements of clients who had open positions. One of these recruitment firms called plaintiff and discussed a position with Hardage Enterprises. Lessley was planning to take the position of executive vice president with a San Francisco firm which is the largest architectural landscaping firm in the United States when, due to the urging of an executive recruitment firm employee, Lessley flew to Wichita for an interview with Hardage.

During that interview, which occurred on March 4 or 5, 1980, Hardage described his firm, its prior experience in building mobile home parks, and his hopes and aspirations for the company in the field of real estate development in the future. Hardage described generally the salaries and fringe benefits offered to key employees and he also described a plan by which key employees in the company would share in company projects. He called this his "golden handcuffs" plan, by which he hoped to keep key employees with him. Later that evening, Lessley returned to Colorado where he was vacationing. No agreement was reached.

On March 7, 1980, Hardage, who by that time was also vacationing in Colorado, called Lessley and the two had a lengthy telephone conversation. Both parties agreed that Hardage would pay Lessley an annual salary of $55,000, would provide Lessley with executive fringe benefits, including life insurance and health insurance, and would provide Lessley with a company car. Lessley was promised a salary review after six months. The controversy over the terms of employment centers around additional benefits that Lessley claims Hardage promised. During the negotiations, Hardage described to Lessley a plan by which key employees of his company would share in company projects. There is no dispute that there was a discussion about this plan. Lessley testified that Hardage promised that 10% of each project on which the company worked would be set aside for key employees. This would then be distributed to the key employees based upon a determination by Mr. Hardage of the percentage that each key employee would receive. This percentage was to be based upon the quantity and quality of each employee's work. Where Hardage retained an interest in the project, 10% of that interest would be set aside for key employees and, once each employee's percentage of interest was determined (based on quality and quantity of work), that percentage would vest in the individual employee at the rate of 20% per year so that at the end of five years the individual employee's percentage interest in the project would be completely vested. There is no dispute over Hardage's promise to set aside 10% of retained equity for key employees. The dispute is over key employees' participation in cash income, where there is no retained equity. Lessley testified that Hardage told him that he would share in cash proceeds...