O'NEAL v. Home Town Bank of Villa Rica

• Decision Date: 12 March 1999
• Docket Number: No. A98A2250.,A98A2250.
• Citation: 514 S.E.2d 669,237 Ga. App. 325
• Parties: O'NEAL v. HOME TOWN BANK OF VILLA RICA et al.
• Court: Georgia Court of Appeals

514 S.E.2d 669

237 Ga. App. 325

O'NEAL v. HOME TOWN BANK OF VILLA RICA et al.

No. A98A2250.

Court of Appeals of Georgia.

March 12, 1999.

Reconsideration Denied March 30, 1999.

Sutherland, Asbill & Brennan, Richard L. Robbins, Lisa C. Foster, Charles B. Jones III, Atlanta, for appellant.

Tisinger, Tisinger, Vance & Greer, David H. Tisinger, Steven T. Minor, Carrollton, for appellees. BEASLEY, Presiding Judge.

Banker Fred L. O'Neal originated the idea of a new community bank in Villa Rica and expended significant effort to organize it. In the course of his work he recruited organizers for the bank who allegedly promised and assured him repeatedly that he would be compensated with employment by the bank for at least three years. Near the time it was organized the bank hired O'Neal, without written agreement or formal board approval of a multi-year contract. Four months later and after Home Town Bank of Villa Rica was formed, the board voted to terminate O'Neal, as an employee at will. O'Neal sued the bank and the organizers (collectively "bank") in multiple counts: breach of contract, quantum meruit, fraud, conspiracy, breach of fiduciary duty, intentional and negligent infliction of emotional distress, attorney fees and costs, securities fraud, and defamation, both slander and libel.

O'Neal challenges the grant of summary judgment on each count. Summary judgment is authorized only when all undisputed facts and their reasonable inferences, viewed most favorably to the non-moving party, preclude a triable issue as to at least one essential element of the case.¹

1. O'Neal contends he had a three-year contract identical to the written contract of the chief financial officer, Laura Cross, with only the salary differing. The salary was to be $65,000 for the first year, $67,500 for the second, and $70,000 for the third. He deposed that the organizers promised to put the agreement in writing but never did. On the other hand, he conceded the organizers asked him to prepare a written contract, but he never presented one to them. O'Neal was hired on March 10, 1997, and was terminated on July 15.

There are two alleged agreements; O'Neal's agreement with the organizers that the bank would hire him, and his employment agreement with the bank. Neither is in writing. O'Neal's contract claim fails for three reasons: (1) the agreement to enter into a contract in the future is too vague to be enforced; (2) the employment agreement lacks consideration; and (3) the employment agreement violates the statute of frauds.

O'Neal testified inconsistently about the terms of the agreement with the organizers. He stated he was told he could "have a job here for three years or as long as you want to work here." He said stock options and benefits were to be "very similar to what Laura Cross would have." Although O'Neal also testified his stock options were to be the same as Cross's, at summary judgment self-contradictory statements are to be construed against the non-movant unless he offers a reasonable explanation for the contradiction.² He indicated that the amount of his salary and the structure of his compensation changed over time during the course of the discussions. Even his job description changed. Although he initially believed he would be the chief executive officer and a director, he was eventually hired as the business development officer, and he was not a director. No specific person ever negotiated the details of this proposed contract. He could not recall when an agreement with the organizers was finally reached, and the organizers never voted to approve any written agreement for O'Neal, as they had for the only other two officers with written contracts.

O'Neal's own actions contradict his claims. O'Neal and the other organizers approved the issuance of the bank offering circular on April 21, 1997, a time after he was hired as the business development officer. This document states that "the Organizers have agreed, ... to cause the Bank to enter into a five year employment contract with the President" and "have also executed an agreement to enter into an employment contract with the Chief Financial Officer." In sharp contrast, the next paragraph states: "Fred O'Neal, an organizer of the Bank, was hired effective March 10, 1997, to serve as the bank's business development planner at an annual salary of $65,000." Although both the president and the CFO had formal agreements, O'Neal had only an "annual salary." The law is that "documents referring to an annual salary merely establish the total amount payable during a twelve-month period and not the duration thereof."³

O'Neal's testimony is also vague as to the nature of the alleged commitment of the organizers. During his deposition, O'Neal characterized the commitment by saying (a) he "was assured that ... the bank would have employment contracts," (b) "the other understanding was I would have stock options and benefits very similar to what Laura Cross would have," (c) "what I was assured and what I was promised as the thing progressed... [was] `You can still be an employee,'" (d) "I was assured that [I would] have a place here," and (e) "my understanding, my promise was and the assurances was I would be compensated."

At best O'Neal's evidence supports a finding that leading up to the formation of the bank, O'Neal and the organizers repeatedly discussed that once it was formed the bank would hire O'Neal and give him a contract similar to that of the CFO. "Unless an agreement is reached as to all terms and conditions and nothing is left to future negotiations, a contract to enter into a contract in the future is of no effect. [Cits.]"⁴ Because the terms of the alleged three-year agreement were not nailed down, it is not enforceable.

Second, O'Neal testified that the consideration he gave in exchange for the three-year employment agreement was his past effort to organize the bank. In Bankers' Trust &c. Co. v. Farmers' &c. Bank,⁵ the Supreme Court responded to the following certified question: "`Is a contract entered into by a duly organized bank for the future payment of a salary to its fiscal agent lacking in consideration in so far as the recited consideration relates to "services already rendered and to be rendered in promoting and organizing said bank?"'" The answer is yes.⁶ The Court reasoned that past consideration generally will not support a subsequent promise, and the situation presented was no exception.⁷ This is so in part because the purported consideration was not rendered to the bank which had yet to be established when the promotion and organization took place.⁸ These services perhaps were rendered to benefit the organizers, but as shown above the agreement with the organizers is not enforceable.

Third, "a verbal contract for services to begin in the future and continue for a year [or more] is void under the Statute of Frauds."⁹ O'Neal argues his agreement is not void because it was either fully or partially performed and had been accepted by the organizers.¹⁰

As for full performance, O'Neal argues that his past promotional activities were fully completed and they constitute performance of his part of the agreement with the organizers. Again, the agreement with the organizers is too vague to be enforced, and the past consideration is inadequate to establish the alleged employment agreement with the bank.

O'Neal points to the four months he was employed as constituting partial performance sufficient to avoid the statute of frauds. But "oral employment contracts for longer than one year are unenforceable unless there has been part performance that is `consistent with the presence of a contract and inconsistent with the lack of a contract.' [Cit.]"¹¹ In Baxley Veneer the Supreme Court held that leaving one job to begin another and working for two years is not sufficient part performance to remove an oral employment contract from the operation of the statute of frauds.¹² The same underlying principle applies here.

2. O'Neal's claim of quantum meruit is illogical. O'Neal was paid his salary for the four months that he was employed as the business development officer and thus has no claim of quantum meruit for that time. He claims he is entitled to compensation from the other organizers for his year-long effort to organize the bank.

OCGA § 9-2-7 provides: "Ordinarily, when one renders service or transfers property which is valuable to another, which the latter accepts, a promise is implied to pay the reasonable value thereof." But

"[t]he law will not imply a promise to pay for services contrary to the intention of the parties. There can be no recovery for services rendered voluntarily and with no expectation at the time of the rendition that they will be compensated.... Under such circumstances no obligation ... is incurred. A subsequent change of intention by the parties performing the services does not alter the rule. [Cit.]"¹³

O'Neal takes credit for having the idea to form a new bank and for putting in the effort necessary to organize it. There is no evidence he had reason to believe he would be compensated for this voluntary undertaking. Baseless is an implied promise by the other organizers to compensate O'Neal for his organizational efforts, just as there is no basis for an implied promise that O'Neal or the bank would compensate the other organizers for their efforts.

O'Neal cannot say when the parties allegedly entered into an agreement with the organizers. The terms of any such agreement were in doubt at least as late as February 1997 when he learned that he could not be a director. Although he considered withdrawing at that time, he accepted a position as business development planner on March 10. The bank was incorporated on March 24. O'Neal has not identified any effort on his part to organize the bank subsequent to the formation of an implied agreement. Nor does the bank itself owe O'Neal for his...