Moody v. McLellan
| Decision Date | 19 October 1987 |
| Docket Number | No. 1121,1121 |
| Citation | 295 S.C. 157,367 S.E.2d 449 |
| Court | South Carolina Court of Appeals |
| Parties | Randy MOODY, Appellant, v. Ted McLELLAN, Geer Drug Company, and Alco Standard Corporation, Respondents. . Heard |
Terry E. Richardson, Jr., James H. Rion and Jane Matthews, of Blatt & Fales, Barnwell, for appellant.
G. Daniel Ellzey and Jonathan P. Pearson, of Ogletree, Deakins, Nash, Smoak & Stewart, Columbia, for respondents.
This is an action arising out of an alleged wrongful discharge from employment. Randy Moody, the employee, sued his employer, Geer Drug Company, a division of Alco Standard Corporation; his supervisor, Ted McLellan; and Alco. He asserted causes of action for (1) breach of contract; (2) tortious interference with a contractual relationship; (3) intentional infliction of emotional distress; and (4) defamation. The defendants raised affirmative defenses, including the exclusive remedy provision of the Workers' Compensation Act. The circuit court granted summary judgment to the defendants on all causes of action. Moody appeals. We reverse the granting of summary judgment on the breach of contract action. We affirm as to the other causes of action.
In March 1982, Geer hired Moody and his cousin, Ted McLellan, to help start and develop a new medical supply business named "Geer Health Services." Tucker Altman, a pharmacist in Charleston, originated the idea for the business and he did the hiring for Geer. Altman recruited Moody, McLellan, and other salesmen from Durr-Filauer, a competing medical supply house. During negotiations, they and Altman discussed a five-year guarantee of employment.
Before Moody accepted his position with Geer, Altman sent him a letter setting out the initial terms and conditions of his employment. Geer concedes the letter is a contractual document. Among other things, the letter states:
[A] five year period must elapse before Geer Health Care Services can be properly analyzed and deemed a success or failure.
Altman admitted the salesmen requested a five-year guarantee of employment during negotiations. When explaining the letter, he said:
Five years was mentioned, because in the conversation that we had earlier, five years was mentioned by the sales people who were being recruited. Otherwise, it would not have been in this letter.
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[T]he five years was mentioned in there by me, because they each wanted a five-year employment contract.... It might be ambiguous when it was written. But I wanted them, from the conversation and from the letter, to draw their own conclusions.
Viewing the evidence in the light most favorable to Moody, Altman knew Moody wanted a five-year contract. He also had reason to know Moody might interpret the letter as granting him five years of employment. Indeed, Altman put the reference to five years in the contract for the admitted purpose of encouraging Moody to attach his own meaning to it. In other words, the employer drafted the contract and tendered it to the employee with the knowledge that the latter expected a definite term of five years employment.
Since the language of the instrument is the employer's, the court must construe it, if its meaning is ambiguous, against the drafter. See Mid-Continent Refrigerator Co. v. Way, 263 S.C. 101, 208 S.E.2d 31 (1974). Moreover, as a matter of law, if at the time the contract was entered one party understood the agreement in a particular sense, and the other party knew it to be so understood, then the undertaking is to be taken in that sense, if it is compatible with the language used. See Street v. Chicago Wharfing and Storage Co., 175 Ill. 605, 41 N.E. 1108 (1895); Coney v. Rockford Life Ins. Co., 67 Ill.App.2d 395, 214 N.E.2d 1 (1966); United States Rubber Co. v. Silverstein, 229 N.Y. 168, 128 N.E. 123 (1920); Restatement (Second) of Contracts § 20(2) (1981). The evidence in this case presented genuine issues of fact regarding what meaning Moody attached to the five-year provision of the contract and whether Geer knew or had reason to know of that meaning. Therefore, the judge erred in granting summary judgment.
The circuit judge acknowledged there was evidence that Geer agreed to employ Moody for five years, although he apparently disbelieved it. However, he concluded this fact was immaterial, because the deposition testimony of Moody and Altman established, in his mind, that Moody was not reciprocally bound to render services to Geer for a like period. 1 He, therefore, held, as a matter of law, that Geer could terminate the contract at will. This holding was erroneous for at least three reasons.
First, in interpreting an ambiguous contract, the court should adopt a construction imposing mutuality of obligation in preference to an obligation which is unilateral. See Moran v. Standard Oil, 211 N.Y. 187, 105 N.E. 217 (1914). Thus, when a contract of employment obligates one party for a definite term, absent clear evidence that the parties intended differently, the other party is impliedly bound for a like term. Id.
Second, the parties may always terminate a contract voluntarily before the end of the term. The employee normally does this by offering his resignation, i.e., the surrender, relinquishment, or giving over of his employment. Young v. Minton, 49 Ga.App. 545, 176 S.E. 662 (1934). If the employer accepts, the contract is terminated. The fact that the contract is for a definite term does not prevent the employee from offering his resignation before the end of the term and he may do so without breaching the contract. See Lemlich v. Board of Trustees of Harford Community College, 282 Md. 495, 385 A.2d 1185 (Ct.App.1978).
Third, a contract may provide that it shall come to an end upon notice by one of the parties and such a stipulation, when fairly entered into, will be enforced. See Morrissey v. Broomal, 37 Neb. 766, 56 N.W. 383 (1893). There is no inconsistency between such a provision and an agreement granting employment for a definite term. See Van Horn Drug Co. v. Noland, 323 P.2d 366 (Okla.1958). The circuit judge simply erred in supposing the contract must bind both parties for the same length of time.
In this case, the evidence, viewed as a whole, created different reasonable inferences as to Moody's "right" to "quit" the job. The testimony singled out by the circuit judge may simply have referred to the "right" of any employee to offer his resignation from a definite term of employment. It might have meant the five-year contract was terminable upon notice by Moody before expiration of the full term. Or it might have meant, as Geer contends, that the parties agreed to an "at will" employment only. Given the ambiguous expressions of the parties, it was for the jury, not the judge, to decide which interpretation reflects their true intention at the time the contract was made.
Geer cites numerous cases, 2 dealing with employment at will, which it claims support the circuit judge's holding. Without exception, these authorities stand for the familiar rule that a contract for an indefinite or "permanent" employment is terminable at the will of either party. That rule does not apply where the employment is for a definite term, as Moody alleges in this case. Therefore, reliance on them is misplaced.
In summary, Moody's claim that he had a five-year contract with Geer presented a triable issue of fact. For this reason, it was error to grant summary judgment on the contract cause of action.
The circuit court dismissed Moody's cause of action for intentional infliction of emotional distress on two independent grounds: (1) the workers' compensation act provided Moody's exclusive remedy, which he had already successfully pursued; and (2) McLellan's actions were privileged, as a matter of law, so that no claim was stated.
The ruling that McLellan's actions were privileged is a sufficient ground to support summary judgment. See Richardson v. McGill, 273 S.C. 142, 255 S.E.2d 341 (1979). Moody takes no exception to that ruling. An alternative ruling of a lower court that is not excepted to constitutes a basis for affirming the lower court and is not reviewable on appeal. Folkens v. Hunt, 290 S.C. 194, 348 S.E.2d 839 (Ct.App.1986). Accordingly, we affirm without reaching the other issues the parties raise as to this...
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