Mehling v. Dubois County Farm Bureau Co-op. Ass'n, Inc.

• Decision Date: 21 October 1992
• Docket Number: No. 19A01-9202-CV-45,19A01-9202-CV-45
• Citation: 601 N.E.2d 5
• Parties: Kathleen A. MEHLING, Appellant-Plaintiff, v. DUBOIS COUNTY FARM BUREAU COOPERATIVE ASSOCIATION, INC., and David L. Gingerich, Individually and in His Capacity as General Manager of the Dubois County Farm Bureau Co-Op, Appellees-Defendants.
• Court: Indiana Appellate Court

Page 5

601 N.E.2d 5

Kathleen A. MEHLING, Appellant-Plaintiff, v. DUBOIS COUNTY FARM BUREAU COOPERATIVE ASSOCIATION, INC., and David L. Gingerich, Individually and in His Capacity as General Manager of the Dubois County Farm Bureau Co-Op, Appellees-Defendants.

No. 19A01-9202-CV-45.

Court of Appeals of Indiana First District.

Oct. 21, 1992.

Michael C. Kendall, Kendall Law Office, Indianapolis, for appellant-plaintiff.

Mark W. Coy, Boring & Coy, P.C., Fountaintown, for appellees-defendants.

STATEMENT OF THE CASE

RATLIFF, Judge.

Kathleen A. Mehling appeals from a grant of summary judgment in favor of the Dubois County Farm Bureau Cooperative Association, Inc., and David L. Gingerich, individually and in his capacity as general manager of the Dubois County Farm Bureau Cooperative (collectively "Co-Op") in her action for damages arising out of her allegedly unjust dismissal from employment. We affirm.

ISSUES

We restate the issues on appeal as:

1. Did Kathleen present issues of material fact regarding the existence of an enforceable oral at will employment contract ("Contract") despite the mandate of the Statute of Frauds? ¹

2. Did Kathleen present issues of material fact regarding her claim of intentional or negligent misrepresentation in the formation of the Contract?

3. Did Kathleen present issues of material fact regarding breach of an implied covenant of good faith and fair dealing implicit in the Contract?

4. Did Kathleen present issues of material fact regarding her claim of intentional infliction of emotional distress as a result of her termination?

FACTS

Joseph Mehling, Kathleen's brother, hired Kathleen in 1977 to provide secretarial services for Ferdinand Farm Services ("Ferdinand"). Joseph was the principal owner of Ferdinand.

Co-Op purchased Ferdinand's assets and those of another business which Joseph owned, Dale Agricultural Supply ("Dale"), in March of 1988. At that time, Kathleen worked for both Ferdinand and Dale as office manager. After the transaction was concluded, both Kathleen and Joseph remained employees of Ferdinand and Dale, now owned by Co-Op. As part of the purchase agreement, Joseph was offered a written one-year employment contract. Kathleen did not request and was not offered a written employment contract.

As part of her employment with Co-Op, Kathleen was transferred to the Huntingburg facility in June of 1988. At the beginning of August of 1988, Kathleen was laid off during Co-Op's slow season, but was subsequently offered a new job at Co-Op with lower pay in late August of 1988. She refused to accept that offer.

In March of 1989, Kathleen filed suit against Co-Op, alleging various theories for recovery of damages from breach of the alleged Contract and emotional distress caused by her termination. Co-Op moved for summary judgment on October 29, 1990, which the trial court granted after hearings on January 9, 1992.

This appeal ensued. Other relevant facts will be stated in our discussion of the issues.

DISCUSSION AND DECISION

When reviewing the propriety of a ruling on a motion for summary judgment, this court applies the same standard applicable to the trial court. Houin v. Burger (1992), Ind.App., 590 N.E.2d 593, 596, trans. denied. We must consider the pleadings and evidence sanctioned by Ind.Trial Rule 56(C) without determining weight or credibility. Id. Only if such evidence shows that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law should summary judgment be granted. Id. The movant bears the burden of proving the propriety of summary judgment, and all facts and inferences to be drawn therefrom are viewed favorably to the non-movant. Id. Summary judgment will be affirmed on appeal if it is sustainable on any theory or basis found in the evidentiary matter designated to the court. T.R. 56(C).

Issue One

Initially, we must determine whether an enforceable oral employment contract existed between Kathleen and Co-Op, on which Kathleen may base her other claims. We find that no enforceable contract existed because of a failure to comply with the requirements of the Statute of Frauds ("Statute"), ² and Kathleen cannot avoid the Statute's requirements under any other theory.

Under the Statute, contracts which cannot be performed within one year must be in writing and signed by the party to be charged or his representative. IND.CODE Sec. 32-2-1-1. Kathleen stated that it was the parties' understanding that her Contract with Co-Op was to extend beyond one year, see Record at 115, which makes the Contract fit squarely within the Statute's coverage. See I.C. Sec. 32-2-1-1. Thus, Kathleen's claim would initially be barred under the Statute.

However, Kathleen urges that her claims may be taken out of the reach of the Statute for several reasons. Her arguments are similar to those advanced by the employees in Whiteco Industries, Inc. v. Kopani (1987), Ind.App., 514 N.E.2d 840, trans. denied. In Whiteco, employees sued their employer for breach of an oral employment contract. Id. at 842. The employees could not initially avoid the operation of the Statute, but they sought to circumvent its mandates by asserting several theories. Id. at 844-45. We reasoned that the factors the employees in Whiteco cited as requiring that we uphold the oral employment contracts under a theory of promissory estoppel, were merely the kind of adverse consequences which normally attend an involuntary termination of employment. Id. at 846. We held that neither the benefit of the bargain itself, nor mere inconvenience, nor incidental expenses, short of a reliance injury so substantial and independent that it constitutes unjust and unconscionable injury and loss was sufficient to remove the claim from the operation of the Statute. Id. at 845. Thus, the employees could not recover against their employer for the alleged breach of an oral employment contract. Id. at 846.

Like the employees in Whiteco, Kathleen worked for Co-Op under an oral employment contract which was to continue for more than one year. See Record at 115. She also argues that the Contract is not within the Statute because of the independent consideration she gave to Co-Op as a basis for the Contract, in the form of her "key-person, insider knowledge," see Appellant's Brief at 15, and because she accepted a transfer to Huntingburg, which involved commuting to work. We disagree. These facts do not provide the independent consideration which would work to remove the Contract from the ambit of the Statute, especially since the consideration which Kathleen asserts is not as compelling as the consideration shown by the employees in Whiteco. In Whiteco, for instance, the employees relocated to Indiana from other states and purchased homes in the area in which their new jobs were located, while Kathleen merely commuted an extra fifteen miles to her job-site. See Whiteco, 514 N.E.2d at 842; Appellant's Brief at 6 and 15. Moreover, the employees' high job performance in Whiteco, which was similar to Kathleen's alleged "key-person, insider knowledge," did not furnish adequate independent consideration to save the employees' claims from the mandates of the Statute. Further, Kathleen was also offered another position with Co-Op shortly after her termination, see Record at 132, which the employees in Whiteco did not receive. Therefore, Kathleen's initial claim that an enforceable employment contract existed is meritless because the Contract fails to comply with the Statute, and she cannot avoid the Statute by showing independent consideration to support the Contract. See Ryan v. J.C. Penney Co. (7th Cir.1980), 627 F.2d 836, 838 (in at will employment situation, without a promise of employment for definite term or consideration beyond employee's services rendered, no enforceable employment contract created; thus, employer entitled to summary judgment) (applying Indiana law); see also Ohio Table Pad Co. v. Hogan (1981), Ind.App., 424 N.E.2d 144, 146, trans. denied (moving household to new location and relinquishing existing job to accept new employment do not constitute independent consideration to impose requirement of good cause to terminate at will employment contract).

Additionally, notwithstanding lack of compliance with the Statute, the Contract was a contract at will, see id. at 847 (indefinite term of employment contract creates employment at will), which was terminable at will by either Kathleen or Co-Op. See Streckfus v. Gardenside Terrace Co-Op, Inc. (1987), Ind., 504 N.E.2d 273, 275 (under employment at will doctrine, employment contract of indefinite duration is presumptively terminable at will of either party). As discussed above, Kathleen has not shown the independent consideration required by an employee which would create a permanent employment contract requiring good cause for termination. See Hamblen v. Danners, Inc. (1985), Ind.App., 478 N.E.2d 926, 928 (discussing exceptions to terminable at will rule in at will employment context). Therefore, Kathleen fails in sustaining her initial burden of proving the existence of an enforceable employment contract, and the trial court properly granted summary judgment in Co-Op's favor on this basis. ³

Issue Two

Kathleen contends that she presented issues of material fact regarding her claims for intentional and negligent misrepresentation, and essentially argues that she was fraudulently induced to remain an employee of Ferdinand and Dale after Co-Op purchased them, rather than seek other employment. We disagree.

Notwithstanding that Kathleen has failed to show that an enforceable employment contract existed on which to base claims of fraud, these claims are meritless. The employees in Whiteco, 514 N.E.2d 840, also attempted to use fraud as a basis to avoid the application of the Statute. See id. at 844. The Whiteco court reasoned that to allow parties to circumvent the Statute's requirements by asserting fraud...