Patillo v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 22 April 1993
• Docket Number: Docket No. 126992
• Citation: Patillo v. Equitable Life Assur. Soc. of U.S., 502 N.W.2d 696, 199 Mich.App. 450 (Mich. App. 1993)
• Parties: Dorris PATILLO, Plaintiff-Appellee, v. EQUITABLE LIFE ASSURANCE SOCIETY OF the UNITED STATES and Leethel Neal, jointly and severally, Defendants-Appellants.
• Court: Court of Appeal of Michigan

Page 696

502 N.W.2d 696

199 Mich.App. 450

Dorris PATILLO, Plaintiff-Appellee, v.EQUITABLE LIFE ASSURANCE SOCIETY OF the UNITED STATES and Leethel Neal, jointly and severally, Defendants-Appellants.

Docket No. 126992.

Court of Appeals of Michigan.

Submitted Aug. 11, 1992, at Detroit.

Decided Dec. 28, 1992.

Approved for Publication April 22, 1993, at 9:15 a.m.

Released for Publication July 30, 1993.

Kelman, Loria, Downing, Schneider & Simpson by Michael L. Pitt, Detroit, for plaintiff-appellee.

Miller, Canfield, Paddock & Stone by Walter B. Connolly, Jr., Jerome R. Watson, and John H. Willems, Detroit, for defendants-appellants.

Before NEFF, P.J., and GRIBBS and SHEPHERD, JJ.

PER CURIAM.

Defendants Equitable Life Assurance Society of the United States and Leethel Neal appeal by leave granted from the denial of their motion for summary disposition on February 28, 1990, and from the March 14, 1990, granting of plaintiff's motion to file an amended complaint in this wrongful discharge case.We affirm in part and reverse in part.

Plaintiff began working for Equitable in 1972, as a trainee insurance agent.Plaintiff initially worked under the "12th Edition Agreement," a written contract that provided for compensation, in part, on a salary basis.In 1973, plaintiff became licensed to sell life insurance in the State of Michigan.

On February 1, 1976, plaintiff and Equitable entered into the "14th Edition Agents Agreement" that established plaintiff as an independent contractor paid solely on a commission basis.

Defendants contend that the trial court erred in denying their motion for summary disposition pursuant to MCR 2.116(C)(10) because the employment agreement was terminable at will.We agree.

The parties' employment agreement provided the following regarding termination of employment:

XIII.Terminations.

A.This Agreement shall be terminable forthwith if the Agent shall enter under contract with or into the service of any other insurance company or if the Agent shall fail to comply with any of the provisions or conditions of this Agreement, or if the Agent shall violate any law in force in the territory in which the Agent is doing business.

B.If this Agreement is terminated by reason of violation of Paragraph X or Subparagraphs A and B of Paragraph XIV, or if after termination of this Agreement the Agent engages in acts or practices proscribed by Paragraph X or Subparagraphs A and B of Paragraph XIV, the Agent shall forfeit all commission interest that he might otherwise have acquired under any agreement with The Equitable.

C.Unless otherwise terminated, this Agreement may be terminated by either party by a notice in writing delivered personally, or mailed to the other party at the last known address, at least thirty days before the date therein fixed for such termination.

Giving the benefit of reasonable doubt to plaintiff, we find that a record could not be developed that would cause reasonable minds to differ regarding whether plaintiff's employment was at will.Hutchinson v. Allegan Co. Bd. of Road Comm'rs (On Remand), 192 Mich.App. 472, 480, 481 N.W.2d 807(1992).Although the 14th Edition Agreement does not expressly state that plaintiff's employment is at will, its provisions clearly support this presumption.Paragraph A of § XIII provides that an agent may be terminated if the agent services another insurance company, if the agent fails to comply with any of the agreement's provisions, or if the agent violates any law in force in the agent's territory.Paragraph B provides that if plaintiff is terminated for certain reasons, he will forfeit all commission interest.Paragraph C provides that "[u]nless otherwise terminated," the agreement may be terminated by either party by notice delivered at least thirty days before termination.Contracts for permanent employment are for an indefinite period of time and are presumptively construed to provide employment at will.Rowe v. Montgomery Ward & Co., Inc., 437 Mich. 627, 636, 473 N.W.2d 268(1991).Clearly, the language of § XIII of the 14th Edition Agreement supports the presumption that the plaintiff's employment is at will because each party has the power to terminate the agreement by giving thirty days' notice.

Defendants also contend that the trial court erred in failing to grant their motion for summary disposition with regard to the defamation claim because truth is an absolute defense to defamation.Plaintiff's complaint alleged that defendants made defamatory statements suggesting that plaintiff was fired because of insubordination.Defendants argue that plaintiff admitted in a deposition that he was insubordinate.We find defendants' claim to be without merit.Although plaintiff admitted that he stormed out of defendant Neal's office, this does not amount to an admission on plaintiff's behalf that he was insubordinate.

Defendants next claim that even if the statements were defamatory, they were made under a qualified privilege.We disagree.An employer has a qualified privilege to defame an employee by making statements to other employees whose duties interest them in the subject matter.Gonyea v. Motor Parts Federal Credit Union, 192 Mich.App. 74, 78-79, 480 N.W.2d 297(1991).In Sias v. General Motors Corp., 372 Mich. 542, 548, 127 N.W.2d 357(1964), our Supreme Court held that no privilege extended to the defendant corporation when it called in fellow employees to explain the circumstances of the plaintiff's separation.A corporate representative explained to the employees that the plaintiff had been released for misappropriation of company property.The Court found that these men were not supervisors, personnel department representatives, or company officials, but merely fellow employees in identical work.The Court held that although the company was interested in restoring morale and quieting rumors, the privilege did not extend to the employees.

In the instant case, fellow agents may have had an interest in the corporation's standard of conduct and grounds for termination, but they did not have a duty that would interest them in knowing the reason for plaintiff's termination.In other words, the fellow agents were not supervisors, personnel department representatives, or other company officials.Therefore, the statements made by Neal were not made under a qualified privilege.Defendants could have simply communicated to these agents the company's policy regarding proper conduct and grounds for termination without indicating the reason for plaintiff's release.

Next, defendants contend that the trial court erred in granting plaintiff leave to amend his complaint because the amendment did not relate back to the original complaint and was time-barred.We disagree.

Plaintiff's original complaint alleged defamation against Neal and Equitable, claiming that Neal told other agents that plaintiff was guilty of insubordination, that plaintiff made racial remarks, and that plaintiff sold fraudulent policies.During discovery, plaintiff deposed Pam Bargon, another agent, who stated that District ManagerDarryl Patterson made similar remarks to the agents on the same day that Neal allegedly defamed plaintiff.Approximately sixteen months after the original complaint was filed, plaintiff moved for leave to amend his complaint to indicate that he was also defamed by Patterson.Plaintiff's motion was granted.

A court should freely grant leave to amend a complaint when justice so requires.MCR 2.118(A)(2);Taylor v. Detroit, 182 Mich.App. 583, 586, 452 N.W.2d 826(1989).The rules pertaining to the amendment of pleadings are designed to facilitate amendment except when prejudice to the opposing party would result.Amendment is generally a matter of right rather than grace.Ben P. Fyke & Sons v. Gunter Co., 390 Mich. 649, 659, 213 N.W.2d 134(1973);Boje v. Wayne Co. General Hosp., 157 Mich.App. 700, 709, 403 N.W.2d 203(1987).Thus, a motion to amend should ordinarily be denied only for particularized reasons.Fyke, ...