Merrill v. Crothall-American, Inc., CROTHALL-AMERICA

• Decision Date: 03 March 1992
• Docket Number: INC,CROTHALL-AMERICA
• Citation: 606 A.2d 96
• Parties: 121 Lab.Cas. P 56,900, 7 IER Cases 781 Richard L. MERRILL, Plaintiff Below, Appellant, v., a Delaware corporation, and United Health Services, Inc., a Delaware corporation, Defendants Below, Appellees. . Submitted:
• Court: Supreme Court of Delaware

Page 96

606 A.2d 96

121 Lab.Cas. P 56,900, 7 IER Cases 781

Richard L. MERRILL, Plaintiff Below, Appellant, v. CROTHALL-AMERICAN, INC., a Delaware corporation, and United Health Services, Inc., a Delaware corporation Defendants Below, Appellees.

Supreme Court of Delaware.

Submitted: March 3, 1992.

Decided: April 21, 1992.

Affirmed in part. Reversed in part and remanded in part.

Gary W. Aber (argued), and Donald L. Gouge, Jr., Heiman, Aber & Goldlust, Wilmington, for appellant.

Richard G. Elliott, Jr. (argued), and Theodosia Price, Richards, Layton & Finger, Wilmington, for appellees.

Before HORSEY, WALSH and HOLLAND, JJ.

WALSH, Justice:

This is an appeal from the entry of summary judgment against plaintiff-below Richard L. Merrill ("Merrill"). Merrill brought this action against Crothall-American, Inc. ("Crothall"), his former employer, for wrongfully terminating his employment, claiming breach of contract, fraud and breach of an implied covenant of good faith and fair dealing. The Superior Court entered summary judgment against him on all counts, ruling that no material factual dispute existed on the record before it. We affirm that ruling as to the breach of contract and fraud counts. However, we hold that the record before the trial court posed a material issue of fact underlying Merrill's claim of breach of an implied covenant of good faith and fair dealing. We therefore reverse the Superior Court's summary disposition of Count III of Merrill's complaint and remand the case to that court for further proceedings.

I

The discovery record in the trial court, viewed from a perspective which favors Merrill as the non-movant, reflects the following events.

In the summer of 1986, Merrill was working as a store manager for a marina in southern Delaware. Apparently dissatisfied with that position, he answered a help wanted advertisement appearing in the Wilmington News Journal in August of that year. The advertisement was placed by Crothall and sought an individual, on a temporary basis, to aid in the development of a computerized preventive maintenance system. Merrill sent a background resume to the specified address.

In response to the resume, Crothall contacted Merrill and set up an interview for October 8. On that day Merrill arrived for the interview, completed an application for the temporary position and was interviewed by Charlie Collins, a Crothall employee. Their conversation lasted only fifteen to twenty minutes, however, after which Merrill was "taken across the hall" to speak with another Crothall employee, Bill Woomer ("Woomer"), about another position Crothall was attempting to fill. Unlike the advertised job this position was not temporary, but full-time. After meeting with Woomer, and later with Woomer's supervisor, Merrill was offered the full-time position in a telephone conversation on October 14, 1986. The proposed employment was that of Director of Plant Operations at King's Harbor Care Center ("KHCC"), a Crothall client located in New York City.

Crothall is a contract service organization which provides facilities management for institutions such as schools and hospitals. One of the duties Crothall contracts to perform is the hiring of management personnel. These personnel, though working at the client's facility, are in fact employees of Crothall. In the present case, the Superior Court found that Crothall had a contractual duty to provide KHCC, a health care facility, with a Director of Plant Operations by October 14, 1986, just six days after Merrill was first interviewed and the very day he was offered the position.

At the time of his interview with Woomer, Merrill expressed concern as to whether he was qualified for the KHCC position. Although he possesses a degree in chemical engineering and an MBA, Merrill had no experience in the health care field nor in plant maintenance. After being assured of adequate support and training, ¹ however, Merrill accepted the position without visiting the site. The agreement was formalized two weeks later by a letter from Woomer to Merrill dated October 29, 1986 and an employment contract between Crothall and Merrill dated October 27, 1986.

The relationship between Merrill and Crothall proved to be short-lived. Crothall claims that less than a month after Merrill accepted the position it began to receive complaints from KHCC about Merrill's performance. At one point, Woomer wrote to Merrill citing some of his shortcomings, including lack of interpersonal and managerial skills and failure to develop a specific program. Woomer informed Merrill that his position was "tenuous." On February 9, 1987, Crothall terminated Merrill's employment, citing numerous problems with his performance.

II

Merrill claimed in the trial court that the reasons asserted by Crothall for his termination are not the actual basis for his release. He contended that, from the very beginning of their relationship, Crothall intended that Merrill remain in the position only until Crothall could find a more qualified candidate. He argued that he was merely a "warm body" who satisfied Crothall's contractual duty to fill the Director's position at KHCC by October 14, 1986. He supported this assertion with documentation purporting to show that Crothall interviewed the person who eventually replaced him, John Blake, only two days after Merrill was offered the job. Furthermore, Merrill has produced an affidavit by K.C. Hoke, an award winning engineer employed by Crothall, which states, in part, that:

Mr. Woomer told me on several occasions that Dick Merrill was hired to fulfill the contract that was signed between Crothall-American and King's Harbor Care Center, until someone else could be hired. Woomer also told me that Crothall-American needed someone immediately because the contract had already been signed.

On the strength of this evidence Merrill posits three distinct theories of recovery. He claims that his discharge breached his employment contract because the offer he accepted on October 14, 1986 was for a "permanent" position. His fraud count is based on Crothall's false representation that his position would be "permanent" and that he would be adequately trained. Finally he asserts that by inducing Merrill to accept the position without informing him of its intent to replace him as soon as a "qualified" candidate could be obtained, Crothall acted in bad faith.

The Superior Court rejected all these claims. It reasoned that the only evidence Merrill had produced to support the permanent position representation were statements by Woomer made in February of 1987, well after the employment relationship had begun. It further noted that in his deposition Merrill admitted he knew from the very beginning that his employment could be terminated by Crothall at any time for any reason. Given this evidence, the court reasoned, Merrill had failed to make a showing that he could rebut the presumption under settled Delaware law that an employment contract is at-will. The trial court also ruled that this same knowledge of the indefinite nature of his employment precluded any assertion that Crothall fraudulently misled him to believe his employment was permanent.

In its grant of summary judgment, the Superior Court failed to address specifically the implied covenant claim. However, in its order denying certification of an interlocutory appeal to this Court, the Superior Court seemed to imply that there could be no breach of an implied covenant of good faith and fair dealing here because there could be no showing of fraud. After the remaining issues in the case were resolved, Merrill appealed to this Court.

III

This case comes from a trial court's grant of summary judgment following review of what is, essentially, a paper record. Applying the case dispositive provisions of Superior Court Civil Rule 56(c), the court ruled as a matter of law that Merrill was unable to prevail. This Court examines de novo questions of law decided by a lower court and we thus exercise plenary review. Fiduciary Trust Co. v. Fiduciary Trust Co., Del.Supr., 445 A.2d 927 (1982).

The purpose of summary judgment is to avoid the delay and expense of a trial where the ultimate fact finder, whether judge or jury, has nothing to decide. 6 Moore's Federal Practice p 56.04 (1992). Thus, entry of summary judgment is proper only where there are no material factual disputes. Moore v. Sizemore, Del.Supr., 405 A.2d 679, 680 (1979). If, however, there are material factual disputes, that is, if the parties are in disagreement concerning the factual predicate for the legal principles they advance, summary judgment is not warranted.

The role of a trial court when faced with a motion for summary judgment is to identify disputed factual issues whose resolution is necessary to decide the case, but not to decide such issues. U.S. v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962). In discharging this function, the court must view the evidence in the light most favorable to the non-moving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). This means it will accept as established all undisputed factual assertions, made by either party, and accept the non-movant's version of any disputed facts. Adickes, 398 U.S. at 158-59, 90 S.Ct. at 1609. From those accepted facts the court will draw all rational inferences which favor the non-moving party. Id.

In Fiduciary Trust Co. v. Fiduciary Trust Co., Del.Supr., 445 A.2d 927 (1982), this Court, in referring to the standard of review which governs appeals from the grant of summary judgment, indicated that it would defer to the factual findings of the trial court unless "clearly wrong." In that case, however, the trial court's decision had been rendered on cross-motions for summary judgment. In such a procedural posture the parties implicitly concede the absence of material factual disputes and acknowledge the...