Mann v. Ben Tire Distributors, Ltd.

• Decision Date: 23 October 1980
• Docket Number: No. 16194,16194
• Citation: 411 N.E.2d 1235,89 Ill.App.3d 695,44 Ill.Dec. 869
• Parties: , 44 Ill.Dec. 869 M. Kenneth MANN, Plaintiff-Appellant, v. BEN TIRE DISTRIBUTORS, LTD., a corporation, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 1235

411 N.E.2d 1235

89 Ill.App.3d 695, 44 Ill.Dec. 869

M. Kenneth MANN, Plaintiff-Appellant, v. BEN TIRE DISTRIBUTORS, LTD., a corporation, Defendant-Appellee.

No. 16194.

Appellate Court of Illinois, Fourth District.

Oct. 23, 1980.

Rehearing Denied Nov. 18, 1980.

Harlan Heller, Harlan Heller, Ltd., Mattoon, for plaintiff-appellant.

Ralph D. Glenn, James R. Covington, III, Glenn & Logue, Mattoon, for defendant-appellee.

WEBBER, Justice:

This appeal lies from a suit for breach of an employment contract being tried to a jury in the circuit court of Coles County. At the conclusion of the plaintiff's evidence, the trial court directed a verdict for the defendant. Plaintiff appeals, and we affirm.

The evidence disclosed that plaintiff had been continuously employed by defendant as a sales manager from August 1967, until his termination in March 1975. While not all the documents are in the record, those which are indicate that each year the parties executed an employment agreement. These tend to be informal, but each of them sets up a definite term, generally of one calendar year, and the bulk of the writing is concerned with plaintiff's salary and bonus arrangements. There was evidence that these documents were not always executed prior to the beginning of a new calendar year and at least once, for the year 1974, the document was not executed until April of that year.

On December 1, 1974, a new general manager for defendant was appointed and on December 11, 1974, he presented to plaintiff the document which is at the root of this litigation. It was in the form of an in-house memorandum from the general manager to plaintiff and commenced, "This letter is to set forth the details of salary and bonus arrangement for you for the period 1-1-75 through 12-31-75." Then followed a detailed statement of such salary and bonus. The concluding paragraph read, "In 1975 the emphasis must be placed very heavily on an increase in units and dollars of profit. Our overall unit budget objective is an increase of 8% over 1974. This new approach for 1975 has been directly reflected in the computation of your 1975 compensation program."

Plaintiff indicated to the general manager his dissatisfaction and suggested changes in the document on several occasions from December 13 to December 29, 1974. On December 30, 1974, the general manager wrote back to plaintiff and indicated that he had reviewed plaintiff's suggested changes and did not agree with them. The concluding paragraph of that letter reads

"Ken, there are job salary limitations on all jobs based on productivity, total sales, profits, etc. At this time, with the sales we had in 1974 and with our projections for 1975, your compensation plan is in my opinion fair and equitable. I will be glad to review your total compensation program at the end of 1975, for 1976; but this year's program is now firm."

Plaintiff received this letter sometime during the first week of January 1975, and then indicated that he was willing to continue to work. For the months of January, February and March 1975, he was compensated in accordance with the schedule contained in the December 11, 1974, memorandum.

On March 28, 1975 plaintiff was terminated and the parties adjusted their accounts at that time. Plaintiff received his salary for the last two weeks of March, two weeks' vacation pay, one week severance pay and the balance of his 1974 bonus. He refunded to defendant amounts advanced on his 1975 bonus, and also certain sums owed to defendant for materials used in furtherance of his duties as sales manager.

Other evidence was concerned with plaintiff's employment since his termination with defendant, business conditions of defendant during pertinent times and methods of calculating bonus. Defendant introduced plaintiff's prior employment and salary arrangement documents.

After argument for directed verdict, the trial court held as a matter of law that the document dated December 11, 1974, was an employment agreement terminable at will and directed a verdict in favor of defendant.

Plaintiff on appeal makes a dual claim: first, that the document of December 11, 1974, is an employment contract for one year on its face; alternatively, that if not plain on its face, the document can be so construed with the aid of extrinsic evidence.

The rule of long standing in Illinois is that a hiring at a monthly, or even an annual salary, if no period of duration be specified, is at will. (Atwood v. Curtiss Candy Co. (1959), 22 Ill.App.2d 369, 161 N.E.2d 355.) Nowhere in any of the documents in the record, especially in the one of December 11, 1974, and in the general manager's reply to plaintiff's suggestions, is there any indication of the duration of the arrangement or of any other terms and conditions of employment. Nothing is stated, nor debated, except salary and bonus arrangements. When no duration is stated, either party may terminate at will. Palmateer v. International Harvester Co. (1980), 85 Ill.App.3d 50, 40 Ill.Dec. 589, 406 N.E.2d 595. In construing the documents plaintiff makes two arguments, neither of which we find persuasive. He first maintains that since the bonus was to be calculated on an annual basis, the contract must be for one year. In our view, the date is specified only to determine on a rational basis whether any bonus at all is due. The bonus was to be calculated on two bases, gross profit increase and attainment of unit objective over a base of 65,000 units. Neither of these could be ascertained on a period of time less than one year. A time span for financial reckoning is not to be equated with duration of employment, although it may be fractionalized in determining any pro rata portion of bonus which might become due for the period of actual employment.

Plaintiff also argues that the general manager's promise of an annual review indicates that the contract was for a year. In this connection plaintiff relies on Grauer v. Valve and Primer Corp. (1977), 47 Ill.App.3d 152, 5 Ill.Dec. 540, 361 N.E.2d 863. However, the record in Grauer revealed that the defendant had guaranteed the plaintiff a minimum of $22,500. This, taken with the statement of annual review, convinced the court of a year's contract. No such language of guaranty is present in the instant case. The promise of annual review is only one element to be considered in reviewing the entire transaction.

Plaintiff's alternate argument that the contract may be construed with the aid of extrinsic evidence militates against his position in our view. The evidence discloses a fundamental change in approach in December of 1974. A new general manager had just been employed by the defendant. The document prepared by him and handed to plaintiff had a conspicuous omission, namely, duration of arrangement, which had been present in all prior arrangements. Such a significant alteration apparently escaped plaintiff's notice, since his replies were concerned only with dollars, not with duration.

In our opinion, whether the document is examined within its own four corners or with the aid of surrounding circumstances, only one conclusion can be reached: it was an employment arrangement terminable at will by either party.

As indicated above, plaintiff may have had a potential claim for a pro rata bonus, calculated from the beginning of the year to the date of termination. However, the record does not sustain any such claim with accuracy. Plaintiff's ad damnum, never amended, asks for $9,900 which figure is substantially less than his salary alone, without any bonus, would have been for the remainder of the year. Additionally, at the time of settlement plaintiff refunded to defendant advancements on his bonus to the date of termination. By way of interrogatories plaintiff asked defendant for financial information in an apparent attempt to calculate the pro rata share of bonus. The answers...