Ohanian v. Avis Rent A Car System, Inc.

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: Before KEARSE and CARDAMONE, Circuit Judges and WYATT; CARDAMONE; WYATT
• Citation: Ohanian v. Avis Rent A Car System, Inc., 779 F.2d 101 (2nd Cir. 1985)
• Decision Date: 25 November 1985
• Docket Number: Nos. 1385,1466,D,s. 1385
• Parties: 121 L.R.R.M. (BNA) 2169, 121 L.R.R.M. (BNA) 2229, 105 Lab.Cas. P 55,604, 1 Indiv.Empl.Rts.Cas. 1102, 19 Fed. R. Evid. Serv. 1106 Robert S. OHANIAN, Plaintiff-Appellee, Cross-Appellant, v. AVIS RENT A CAR SYSTEM, INC., Defendant-Appellant, Cross-Appellee. ockets 85-7284, 85-7330.

Page 101

779 F.2d 101

121 L.R.R.M. (BNA) 2169, 121 L.R.R.M. (BNA) 2229,

105 Lab.Cas. P 55,604,

1 Indiv.Empl.Rts.Cas. 1102,

19 Fed. R. Evid. Serv. 1106

Robert S. OHANIAN, Plaintiff-Appellee, Cross-Appellant, v. AVIS RENT A CAR SYSTEM, INC., Defendant-Appellant, Cross-Appellee.

Nos. 1385, 1466, Dockets 85-7284, 85-7330.

United States Court of Appeals Second Circuit.

Argued June 27, 1985.

Decided Nov. 25, 1985.

David I. Goldblatt, New York City (Barry G. Felder, Proskauer Rose Goetz & Mendelsohn, New York City, of counsel) for defendant-appellant-cross-appellee.

Patrick M. Wall, New York City (Oren Root Jr., New York City, of counsel) for plaintiff-appellee-cross-appellant.

Before KEARSE and CARDAMONE, Circuit Judges and WYATT, District Judge. ^*

CARDAMONE, Circuit Judge:

Defendant Avis Rent A Car System (Avis) appeals from a judgment entered on a jury verdict in the Eastern District of New York (Weinstein, Ch.J.) awarding $304,693 in damages to plaintiff Robert S. Ohanian for lost wages and pension benefits arising from defendant's breach of a lifetime employment contract made orally to plaintiff. The jury also awarded Ohanian $23,100 in bonuses and moving expenses that did not depend on the oral contract. Avis argues that the alleged oral contract is barred by the statute of frauds, is inadmissible under the parol evidence rule and, in any event, that the evidence is insufficient to establish a promise of lifetime employment. Plaintiff cross-appeals seeking a new trial solely on the issue of damages claiming that jury confusion in the damage calculation resulted in a miscarriage of justice. Unpersuaded by defendant's arguments on its appeal and plaintiff's on his cross-appeal, we affirm.

I BACKGROUND

Plaintiff Ohanian began working for Avis in Boston in 1967. Later he was appointed District Sales Manager in New York, and subsequently moved to San Francisco. By 1980 he had become Vice President of Sales for Avis's Western Region. Robert Mahmarian, a former Avis general manager, testified that Ohanian's performance in that region was excellent. During what Mahmarian characterized as "a very bad, depressed economic period," Ohanian's Western Region stood out as the one region that was growing and profitable. According to the witness, Ohanian was directly responsible for this success.

In the fall of 1980, Avis's Northeast Region--the region with the most profit potential--was "dying." Mahmarian and then Avis President Calvano decided that the Northeast Region needed new leadership and Ohanian was the logical candidate. They thought plaintiff should return to New York as Vice President of Sales for the Northeast Region. According to Mahmarian, "nobody anticipated how tough it would be to get the guy." Ohanian was happy in the Western Region, and for several reasons did not want to move. First, he had developed a good "team" in the Western Region; second, he and his family liked the San Francisco area; and third, he was secure in his position where he was doing well and did not want to get involved in the politics of the Avis "World Headquarters," which was located in the Northeast Region. Mahmarian and Calvano were determined to bring Ohanian east and so they set out to overcome his reluctance. After several phone calls to him, first from then Vice President of Sales McNamara, then from Calvano, and finally Mahmarian, Ohanian was convinced to accept the job in the Northeast Region. In Mahmarian's words, he changed Ohanian's mind

On the basis of promise, that a good man is a good man, and he has proven his ability, and if it didn't work out and he had to go back out in the field, or back to California, or whatever else, fine. As far as I was concerned, his future was secure in the company, unless--and I always had to qualify--unless he screwed up badly. Then he is on his own, and even then I indicated that at worst he would get his [severance] because there was some degree of responsibility on the part of management, Calvano and myself, in making this man make this change.

Ohanian's concerns about security were met by Mahmarian's assurance that "[u]nless [he] screwed up badly, there is no way [he was] going to get fired ... [he would] never get hurt here in this company." Ohanian accepted the offer and began work in the Northeast Region in early February 1981.

In April 1981 Ohanian told Fred Sharp, Vice President of Personnel, that he needed relocation money that had been promised, but not yet received. Sharp subsequently sent two form letters to Ohanian: one from Sharp to Ohanian and the other, prepared by Avis, from Ohanian to Sharp. The second letter was a form with boxes for Ohanian to check to signify his choice of relocation expense plans. Ohanian checked one of the boxes, signed the form, and returned it to Sharp.

The following language appeared on the form that Ohanian signed and returned:

I also hereby confirm my understanding that nothing contained herein or in connection with the change in my position with Avis shall be deemed to constitute an obligation on the part of Avis to employ me for any period of time, and both the company and I can terminate my employment at will.

There are no other agreements or understandings in respect of my change in position with Avis or the moving of my residence except as is set forth or referred to herein, and in your confirmation letter to me dated April 21, 1981, and the agreements and undertakings set forth therein cannot be modified or altered except by an instrument in writing signed by me and by an executive officer of Avis.

At trial, Ohanian said that he did not believe he read the letter other than to check the relocation plan he desired. He testified that he did not intend this letter to be a contract or to change the terms of his prior agreement with Avis.

Seven months after Ohanian moved to the Northeast Region, he was promoted to National Vice President of Sales and began work at Avis World Headquarters in Garden City, New York. He soon became dissatisfied with this position and in June 1982, pursuant to his request, returned to his former position as Vice President of Sales for the Northeast Region. A month later, on July 27, 1982, at 47 years of age, plaintiff was fired without severance pay. He then instituted this action. Within three months of termination, plaintiff obtained a job as Vice President of Sales for American International Rent A Car. His first year's salary at American International was $50,000 plus a $20,000 bonus. When Ohanian was fired by Avis, his yearly salary was $68,400, and the jury found that he was owed a $17,100 bonus that he had earned before being fired.

At the close of the evidence, the trial judge instructed the jury that to find for plaintiff it had to find that Ohanian's conversations with Mahmarian amounted to an oral contract that plaintiff would not be fired except for just cause, and that he would be paid severance pay no matter what the reason for termination. The judge also instructed the jury that if it found the letters exchanged between Sharp and Ohanian were a contract, it must find in favor of defendant. The jury was further instructed that if it found a contract not to terminate except for just cause, it had to determine if defendant had proved that the termination had been for just cause. If the termination was not for just cause, then the jury should decide if Ohanian was entitled to lost wages and benefits and, if so, in what amount. If the jury decided that termination was for just cause or that it was not for just cause but Ohanian was not entitled to lost wages and benefits, it would have to determine if plaintiff was entitled to severance pay and, if so, in what amount. The jury was given a special verdict sheet so that the court would know its answers to all of the above questions.

If the jury found that plaintiff was entitled to lost wages and benefits, it was instructed to compute them by first multiplying plaintiff's yearly salary by the number of years he would have remained at Avis had he not been fired. The jury was then directed to add to that amount the amount of pension benefits Ohanian would have received. From that total amount, the amount plaintiff had earned and would earn from other employment and the pension benefits from other employment was to be deducted. The sum reached was then to be reduced to its present value.

The jury returned with a verdict in which it found:

(1) That Ohanian had proven that Avis agreed to employ him until he retired unless he was terminated for just cause;

(2) That Avis had not proven that Ohanian was terminated for just cause;

(3) That Ohanian had proven that he was entitled to lost wages and pension benefits;

(4) That the present value of Ohanian's lost wages was $245,409;

(5) That the present value of Ohanian's lost pension benefits was $59,284;

(7) That Ohanian proved he was entitled to an award representing a $17,100 bonus; and

(8) That Ohanian proved he was entitled to an award representing incidental relocation expenses of $6,000.

Finally, to obviate the need for a new trial in the case of a judgment N.O.V. or a reversal on appeal, the trial court instructed the jury to deliberate on the amount of severance to which plaintiff would have been entitled if the jury had so found. The jury found that Ohanian would have been entitled to a three-month severance package.

Avis does not challenge the jury's finding that it had not proved that plaintiff was terminated for just cause. Neither has it appealed the awards for the bonus and relocation expenses. Both parties agree that New York law applies.

II DISCUSSION

A. The Statute of Frauds

Defendant's principal argument is that the oral contract that the jury found existed is barred under the statute of frauds, Sec. 5-701 (subd. a, para. 1) of the General Obligations Law. Section 5-701 provides in relevant part:

Every agreement, promise or undertaking is void, unless it or some note...