Ott v. Buehler Lumber Co.

• Decision Date: 25 May 1988
• Citation: 541 A.2d 1143,373 Pa.Super. 515
• Parties: Arthur OTT, Appellee, v. BUEHLER LUMBER COMPANY, Appellant.
• Court: Pennsylvania Superior Court

Page 1143

541 A.2d 1143

373 Pa.Super. 515

Arthur OTT, Appellee, v. BUEHLER LUMBER COMPANY, Appellant.

Superior Court of Pennsylvania.

Argued Nov. 5, 1987.

Filed May 25, 1988.

James H. DeVittorio, Ridgway, for appellant.

William P. DeLaney, Erie, for appellee.

Before ROWLEY, DEL SOLE and MONTGOMERY, JJ.

DEL SOLE, Judge:

This direct appeal is taken from the judgment entered in the Court of Common Pleas of Elk County. The questions presented for review stem from the discharge of Appellee, Arthur Ott, by the Buehler Lumber Company while Appellee was under a five-year employment contract. ¹ For the reasons which follow, we reverse and grant Appellant a new trial.

Buehler Lumber Company, through its president, offered Mr. Ott a written employment contract for employment at its plant. Under the terms of this contract, Mr. Ott was to serve as Plant Maintenance Supervisor for electrical and mechanical maintenance problems for a period of five years. In addition to the recitation of salary and benefits, the contract outlined various preventative and corrective maintenance plans to be implemented by Ott. His work was characterized as instructing, supervising, and participating in plant maintenance functions. Ott accepted employment under these terms.

Approximately seven weeks later, Ott received a written notice from Buehler that he was being temporarily terminated due to a lack of orders. Six months thereafter, during which time Ott received no information regarding when he would be returning to work, he commenced an action in the Court of Common Pleas of Elk County alleging he had been discharged without just cause and in violation of his employment contract.

Buehler Lumber Company answered the Complaint and admitted that a lack orders was one of numerous factors which caused the layoff of several Buehler employees. However, it further stated that its ultimate decision not to recall Ott was reasonably based upon his failure to perform and persistent failure to fulfill the express duties outlined in his employment contract.

Following a trial before a jury, a verdict was returned in favor of Ott. Buehler then filed timely post-trial motions which were subsequently denied.

On appeal, Buehler Lumber Company maintains that the trial court erred when it instructed the jury that it must find both of the following circumstances as a condition precedent to a finding that Appellee's discharge by Appellant was justified: (1) that the employee's conduct was a breach of the employment contract, and (2) that an injury or loss to the business or a disorganization of the affairs of the business was likely to follow from such breachful conduct if it was permitted to continue. The contested charge in the instant appeal was given as follows:

I instruct you that, utilizing an objective standard, if from all the circumstances, you find that the Defendant Employer was justified in believing that the employee's conduct was in breach of the contract and was such that an injury or loss to the business or a disorganization of the affairs of the business was likely to follow from such breachful conduct if it is permitted to continue, the employer would then be warranted in discharging the employee. (emphasis added).

For the following reasons, we find this instruction to be erroneous.

Buehler's defense to the lawsuit for wrongful discharge was that the employee failed to perform specific duties enumerated in the parties' written employment contract. Notably, that he failed to stock, organize, maintain and inventory the maintenance rooms; he failed to keep daily or weekly records of the machines' down time, and he failed to implement a preventative maintenance program. In short, the Appellant defended the action on the basis that Ott breached numerous express, written promises contained in the employment agreement.

"When a formal written contract of employment has been entered into, courts historically have accepted the position that discharge of the employee before the end of the contract can give rise to liability under ordinary breach of contract principles." Employment Dismissal Law and Practice, 2d., § 4.1 p. 172. The general rule is that a party who has materially breached a contract may not complain if the other party refuses to perform his obligations under the contract. 17 Am.Jur.2d, § 365. A party also may not insist upon performance of the contract when he himself is guilty of a material breach of the contract. 17 Am.Jur.2d, § 425. See also: J. Murray, Murray on Contracts, § 215 (1974). Moreover, where the evidence to sustain the justification for discharge is disputed, the jury must pass on it. Bernstein v. Lipper Manufacturing Co., 307 Pa. 36, 160 A. 770 (1932). As such, the instruction for the jury should have simply focused upon whether Appellee's conduct amounted to a material breach of the employment agreement.

The charge given in the instant case is an incorrect statement of the law regarding the discharge of an employee for the breach of an express promise in an employment contract. The contested instruction created a two-step standard as a condition precedent to a finding of just cause. The portion of the charge requiring the findings that the employee's action be detrimental to the business is irrelevant where the discharge is based upon a breach of an express...