Master Collision Repair, Inc. v. Waller

• Decision Date: 03 November 2021
• Docket Number: No. 1D20-3566,1D20-3566
• Citation: 330 So.3d 577
• Parties: MASTER COLLISION REPAIR, INC. d/b/a Gerber Collision, Appellant, v. Michael WALLER, Appellee.
• Court: Florida District Court of Appeals

330 So.3d 577

MASTER COLLISION REPAIR, INC. d/b/a Gerber Collision, Appellant,

v.Michael WALLER, Appellee.

No. 1D20-3566

District Court of Appeal of Florida, First District.

November 3, 2021

Rehearing Denied December 6, 2021

Jeffrey B. Jones and Nicole Dunlap of Littler Mendelson, P.C., Orlando, for Appellant.

T.A. "Tad" Delegal, James C. Poindexter, and Alexandra Elizabeth Underkofler of Delegal & Poindexter, P.A., Jacksonville, for Appellee.

Roberts, J.

In this employment appeal, Master Collision Repair, Inc. d/b/a Gerber Collision ("Employer") seeks review of a final judgment awarding damages to Michael Waller ("Mr. Waller") for improper termination. Employer asks this Court to reverse the final judgment because it properly terminated Mr. Waller under the terms of his Employment Agreement. We agree and reverse.

Facts

Employer hired Mr. Waller as a market manager for its automotive collision repair business, which meant Mr. Waller was responsible for the operational management of several locations under Employer's umbrella. On March 7, 2018, Mr. Waller was in Employer's Palatka store to conduct fit testing for respiratory masks certain employees had to wear when performing tasks like sanding and painting. While there, Mr. Waller repeatedly referred to the respiratory mask as a "KKK hood." Mr. Waller then asked a black employee who worked in the front office and was not part of the fit test group ("the office employee") if he would be offended if the mask was referred to as a "KKK hood" and if he wanted to try it on.

By the next day, senior management and human resources ("HR") were aware of employee complaints about Mr. Waller's behavior. HR immediately began an investigation wherein the Palatka store's general manager confirmed Mr. Waller asked employees taking the fit test to put on the "KKK hood." Mr. Waller admitted he referred to the mask as a "KKK hood" and admitted he asked the office employee to try it on, but claimed he was joking. A few days later, the office employee tendered a resignation letter detailing Mr. Waller's conduct and the distress it had caused him.

HR presented its findings to senior management who determined the complaints against Mr. Waller were substantiated and determined his conduct violated Employer's policies.^* On March 13, 2018, senior management notified Mr. Waller he was terminated for cause under section 5.2.4 of the Employment Agreement, effective immediately.

Mr. Waller sued Employer for breach of contract, arguing he was improperly terminated because he had not received written notice and a thirty-day cure period under the terms of the Employment Agreement. After a bench trial, the circuit court entered final judgment in favor of Mr. Waller and awarded him damages of severance pay and health benefits for a six-month period. This appeal followed.

Standard of Review

We review the circuit court's interpretation of the Employment Agreement de novo . See Korkmas v. Onyx Creative Grp. , 298 So. 3d 690, 693 (Fla. 1st DCA 2020) (citing Rose v. Steigleman , 32 So. 3d 644, 645 (Fla. 1st DCA 2010) ). As with any contract, when the language of an employment agreement is clear and unambiguous, it must be interpreted and enforced in accordance with its plain meaning. See Crapo v. Univ. Cove Partners, Ltd. , 298 So. 3d 697, 700 (Fla. 1st DCA 2020) (citing CitiMortgage, Inc. v. Turner , 172 So. 3d 502, 504 (Fla. 1st DCA 2015) ).

Analysis

Mr. Waller's Employment Agreement provided, in relevant part:

5.2.4 TERMINATION FOR CAUSE. EMPLOYER has the right, at any time during the Term or any renewal thereof, exercisable by serving written notice, effective in accordance with its terms, to terminate EMPLOYEE's employment under this Agreement for "Cause" (as hereinafter defined). If such right is exercised, EMPLOYER'S obligation to EMPLOYEE shall be limited to the payment and/or satisfaction of unpaid Base Compensation and Benefits accrued up to the effective date specified in EMPLOYER'S notice of termination. As used in this Section 5, the term "Cause" shall mean:

a. the willful failure and/or gross negligence of EMPLOYEE in the performance of his duties hereunder ... or the material breach by EMPLOYEE of the terms and conditions of this Agreement, which willful failure and/or gross negligence, failure or breach, as the case may be, has not been cured within thirty (30) days after EMPLOYEE'S receipt of written notice thereof from EMPLOYER, specifying in reasonable detail the facts and circumstances constituting such gross negligence, failure or breach, as the case may be; or

b. the determination by EMPLOYER, in good faith and in exercise of its reasonable judgment, that EMPLOYEE has committed an act or acts, which constitute:

1. a felony or misdemeanor involving bodily harm, or

2. dishonesty, disloyalty or fraud with respect to Employer, excluding for this purpose an isolated and inadvertent action not taken in bad faith by Employee and which is remedied by Employee promptly after Employer has delivered written notice thereof to Employee;

3. a violation of the terms and conditions of this Agreement.

"The law is ... well-settled that courts are required ‘to read provisions of a contract harmoniously in order to give effect to all portions thereof.’ " Holmes v. Fla. A & M Univ., 260 So. 3d 400, 405 (Fla. 1st DCA 2018) (quoting City of Homestead v. Johnson , 760 So. 2d 80, 84 (Fla. 2000) ).

To "harmonize" section 5.2.4, the circuit court stated:

In order to give effect to both sections 5.2.4(a) and 5.2.b(3), either the contract may be interpreted to require [Employer] to exhaust the requirements contained in section 5.2.4(a) before it can terminate [Mr. Waller] for cause pursuant to section 5.2.4(b)(3), or the requirements of section 5.2.4(a) may be deemed incorporated into section 5.2.4(b)(3).

The court concluded Employer improperly terminated Mr. Waller without first providing section 5.2.4(a)’s notice and opportunity to cure. This was error. The court's interpretation ignores the plain language of the Employment Agreement, which contains an "or" between subsections (a) and (b). In other words, the Employment Agreement plainly defines "cause" to mean conduct in (a) or conduct in (b)(1)–(3). The court's interpretation allows sections 5.2.4(b)(1) and 5.2.4(b)(2) to remain untouched while cleaving section 5.2.4(b)(3) from section 5.2.4(b) and transferring it into section 5.2.4(a). Clearly, the Employment Agreement provides two separate avenues for Employer to terminate an employee for "cause" based upon a violation of the terms and conditions of the...