Levine v. Loma Corp.

• Decision Date: 08 December 1983
• Docket Number: No. 2-83-043-CV,2-83-043-CV
• Citation: 661 S.W.2d 779
• Parties: Irving N. LEVINE, Appellant, v. LOMA CORPORATION and Lancaster Colony Corporation, Appellees.
• Court: Texas Court of Appeals

Page 779

661 S.W.2d 779

Irving N. LEVINE, Appellant, v. LOMA CORPORATION and Lancaster Colony Corporation, Appellees.

No. 2-83-043-CV.

Court of Appeals of Texas,

Fort Worth.

Dec. 8, 1983.

McLean, Sanders, Price, Head & Ellis and Kenneth L. McAlister, Fort Worth, for appellant.

Coke & Coke and Barry F. McNeil, Dallas, for appellees.

Before JORDAN, BURDOCK and HILL, JJ.

OPINION

JORDAN, Justice.

Appellant filed suit in the trial court against appellees alleging an oral contract between the parties under which appellant, who for many years prior to July 1, 1980, had been president of Loma Corporation, would be hired as a consultant by appellees and paid the sum of $2000.00 per month until he reached the age of sixty-five (65), and $1000.00 a month thereafter for the remainder of his life. He also sued in the alternative on common law fraud.

Appellees urged the Statute of Frauds as a defense to both the contract and fraud actions, asserting that the contract, under the Statute, must have been in writing to be enforceable and that the action for fraud was nothing more than a reassertion of the contract action.

The trial court granted appellees' motion for summary judgment.

We affirm.

Appellee, Lancaster Colony Corporation, manufactures a wide variety of consumer products through corporate divisions and wholly owned subsidiaries, one of which is appellee Loma Corporation. Appellant Levine, referred to for the sake of brevity as "Levine," was president of Loma from the time it was acquired by Lancaster Colony Corporation in 1971 until June 30, 1980. On June 29, 1980, John Gerlach, President of Lancaster Colony Corporation, the parent corporation, having become dissatisfied with Loma's financial record and with Levine's personal performance, met with Levine in Dallas and terminated his services as president of Loma Corporation. Levine was replaced by a new president on July 1, 1980.

Levine contends in his suit against the two corporations that at the June 29, 1980 meeting at which he was terminated, Gerlach promised, on behalf of Lancaster Colony Corporation, to hire Levine as a consultant, paying him $2000.00 per month until he became sixty-five (65) years of age, and then $1000.00 per month for the rest of his life. Levine also alleged that in addition to the monetary compensation, Gerlach promised him the Lincoln Continental company car which Levine had been using, and that Lancaster Colony would continue paying for life and health insurance for Levine and his wife.

Gerlach and the appellees deny any such agreement with Levine. Gerlach, instead, testified by deposition that he told Levine that he and Lancaster Colony would like to have Levine available for consulting services if the new Loma president desired such services, in return for which they would pay him a reasonable amount for his time and out-of-pocket expenses.

Levine alleged in his suit that Gerlach promised to put the alleged oral agreement for the payment of lifetime salary in writing, soon after their June 29, 1980 meeting, but the agreement was never reduced to writing. Appellees rely on the Statute of Frauds as a defense to Levine's action.

In his first point of error appellant contends that there was summary judgment evidence that Gerlach, acting for the appellees, promised to reduce the oral agreement to writing and that the appellees are therefore estopped from denying the enforceability of the oral agreement under the Statute of Frauds.

The alleged oral agreement was an employment contract which could not be performed within one year. TEX.BUS. & COMM.CODE ANN. sec. 26.01 (Vernon Supp.1982-1983) provides that "an agreement which is not to be performed within one year from the date of making the agreement" is not enforceable, unless the promise is "in writing and signed by the person to be charged with the promise or agreement ...."

There is no question that the oral agreement here is unenforceable because of the Statute of Frauds unless, as Levine argues, the doctrine of promissory estoppel is applicable. Before the equitable doctrine of promissory estoppel may be applied, the one relying thereon (in this case Levine) to avoid the consequences of the Statute of Frauds, must show first, that there was a promise to put the oral agreement into writing, and second, that the party seeking enforcement of the oral contract relied on the promise to put the agreement in writing to his detriment. Put another way, the promise to put the oral agreement in writing must have been made by one party specifically to induce action or forebearance by the other party, and the second party must have relied on the promise in taking the action or forebearance. See "Moore" Burger, Inc. v. Phillips Petroleum Company, 492 S.W.2d 934 (Tex.1972); Cooper Petroleum Co. v. LaGloria Oil and Gas Co., 436 S.W.2d 889 (Tex.1969); Wheeler v. White, 398 S.W.2d 93 (Tex.1965).

In "Moore" Burger, Inc., supra, the City of Austin had leased a tract of land to Moore Burger, which had built a restaurant on the property and had conducted business there for years. As the lease was about to expire, the City decided to sell the property at public auction. Moore Burger, intending to buy the land, was told by a Mr. Craus that if Moore Burger would refrain from bidding on the land, Craus would purchase the land and lease it to them for ten years. A lease between Craus and Moore Burger was negotiated and written up, with Craus promising to sign the lease once he purchased the property. Craus' promise to sign the lease was made for the specific purpose of inducing Moore Burger not to bid. Craus bought the property, then refused to sign the lease and instead sold it to Phillips Petroleum. The Supreme Court held that those facts rendered the doctrine of promissory estoppel applicable so as to preclude summary judgment.

In Cooper Petroleum, supra, the defendant promised to sign a guaranty (as he had in the past) if the plaintiff (LaGloria) would sell petroleum products to a third party, I.M.I. LaGloria sold the products in reliance on the defendant's promise to sign the guaranty, but the defendant later refused to sign the guaranty. The Supreme Court, invoking the doctrine of promissory estoppel, said:

The promise in this instance was given for the purpose of inducing and it did induce LaGloria to continue making sales on credit to I.M.I. On the present record it is clear that injustice can be avoided only by enforcing the promise.

In the case before us, Levine has totally failed to introduce any summary judgment proof to the effect that he relied on Gerlach's alleged promise to put the employment agreement into writing. He testified in his deposition that he had business cards printed, incurred medical expenses between June 30 and August 1, 1980, and "declined certain employment" which would have conflicted with his position as consultant for appellees. However, he did not allege or prove that he had the business cards printed or incurred the medical expenses in reliance on Gerlach's promise to reduce the alleged agreement to writing. With respect to "declining certain employment", it is clear from his deposition testimony in the record that he did not decline any specific offers of employment because he did not look or ask for any.

There is simply no evidence that Levine relied on any promise to reduce the agreement to writing, and accordingly, his theory that appellees are estopped to rely on the Statute of Frauds must fail. Appellant's first point of error is overruled.

Appellant next urges, in his second point of error, that under the...