Payne v. AHFI/NETHERLANDS, BV
| Decision Date | 12 November 1980 |
| Docket Number | No. 79 C 1108.,79 C 1108. |
| Citation | 522 F. Supp. 18 |
| Parties | Donald E. PAYNE, Plaintiff-Counterdefendant, v. AHFI/NETHERLANDS, B. V., et al., Defendants-Counterclaimants, v. David M. EDWARDS, et al., Additional Counterdefendants. |
| Court | U.S. District Court — Northern District of Illinois |
COPYRIGHT MATERIAL OMITTED
I. Peter Polansky, Baum, Sigman & Gold Ltd., Chicago, Ill., for plaintiff-counterdefendant.
Gary Elden, Philip Stahl, Mark Sableman, Reuben & Proctor, Chicago, Ill., for defendants-counter-claimants.
This action involves (1) claims by plaintiff Donald E. Payne ("Payne") charging breach of contract and fraud by defendants American Hospital Supply Corporation ("American") and AHFI/Netherlands, B. V. ("AHFI") relating to Payne's now-terminated employment relationship with defendants and (2) counterclaims by defendants against Payne and additional counter-defendants Daniel C. Lee ("Lee") and David M. Edwards ("Edwards") charging conspiracy, extortion, conversion and breach of fiduciary duties. Defendants have moved for summary judgment on Payne's complaint. For the reasons stated in this memorandum opinion and order, defendants' motion for summary judgment is granted.
On October 1, 1975 Payne was hired by the predecessor of AHFI, which is a wholly-owned subsidiary of American. Initially Payne was to work for AHFI on a project in Saudi Arabia. Though he commenced work there, the position for which he had been hired was terminated, and he was reassigned with his consent to AHFI headquarters in Illinois.
In early 1976 Payne was reassigned to the Korean team of the Seoul National University Hospital ("SNUH") equipping project. On that project his duties were to coordinate distribution of catalogues and handle correspondence relating to mechanical, electrical and architectural equipment.
Edwards and Lee were hired by AHFI in January and February 1976 to work on the SNUH project. Edwards served as director of the Korean-based AHFI team and Lee as a coordinator for architectural changes. After brief trips to Korea in early 1976, Payne, Edwards and Lee moved there permanently in about August 1976.
Payne's original assignment to the Saudi Arabian project was evidenced by an October 1, 1975 letter from AHFI executive Vansant. Among other provisions, the letter set Payne's salary "at an annual rate of 10,000£ ($20,850)" and stated that AHFI would pay Payne's airfare home "in the unlikely event of termination of your employment with us." When Payne was reassigned to the Korean project a 20-page document captioned "Expatriate Foreign Assignment" was executed by AHFI and delivered to Payne in about June 1976. As Payne's memorandum in opposition to defendants' motion states:
This document sets forth all the pertinent terms and conditions of Payne's employment on the Korean assignment and describes the term of said assignment.
In the latter respect the "Expatriate Foreign Assignment" ("EFA") document stated:
It is expected that the employee will remain in the foreign post for duration of project which is expected to be approximately two (2) years. In some cases because of certain circumstances the EFA may be shorter or longer. There are many factors that would cause a shortening or lengthening of the EFA such as individual performance, economic conditions, foreign or domestic, AHFI's business plans, etc.
In addition the EFA document stated:
Donald E. Payne's employment arrangement will be in compliance with the labor laws of thw (sic) State of Illinois and subject to all of that State's laws and regulations in all disputes arising out of this employment arrangement.
Payne claims that before delivery of the EFA document his conversations with Vansant dealt with the terms of his employment, including a statement that the SNUH project would last not less than two years. At his deposition Payne was asked "whether Mr. Vansant phrased what he said about two years in terms of a prediction or in terms of a promise." Payne replied, "I cannot remember exactly what he said." Upon further questioning Payne said, "Corwin Vansant stated that in his opinion the project would be not less than two years and he never indicated to me that I would be required for a less period than that." Payne could remember no more about what he characterizes as the "oral promise" by Vansant. Vansant's memorandum of his conversations with Payne, which Payne admitted covered the "essence" of the talks, mentions termination as one of Payne's options but does not mention any specific term of employment.
Although the SNUH project in fact lasted more than two years, Payne was terminated as of September 30, 1977, exactly two years after he was hired by AHFI. We turn then to the circumstances leading to termination.
Before any of Payne, Edwards and Lee had been hired, American issued a corporate policy on August 15, 1975 (the "1975 Policy") prohibiting contributions or gifts to governmental officials, candidates or political party officials. In late December 1976, after all three had been employed, American entered into a consent decree (the "Consent Decree") with the SEC in which American, while not admitting allegations that it had made illegal foreign payments, agreed to take stringent steps to see that no such payments occurred in the future. As part of the Consent Decree, American agreed to "institute and maintain enforcement and control measures to assure compliance" with the Consent Decree and its new Business Ethics Code of Conduct (the "1976 Code"), which embodied and added to the 1975 Policy. Under the 1975 Policy and the 1976 Code, American asked managerial employees, including those working for its controlled subsidiaries such as AHFI, to sign "certificates of compliance" and to note on them, where appropriate, exceptions to complete compliance.
Edwards and Lee signed certificates of compliance in mid-1976. Payne was not asked to sign a certificate at that time.
During January 1977 Edwards, as SNUH project director, held a meeting for Payne, Lee and all other members of the Korean project team to distribute, discuss and explain the Consent Decree and 1976 Code. Payne received copies of both and understood that he and other AHFI employees were covered by the Consent Decree, that violations of that Decree were violations of law and that a violation of the 1976 Code would be a violation of the Consent Decree. Payne read the provisions of the 1976 Code that appropriate AHFI employees would periodically be required to certify compliance, as well as the portion that required employees to report knowledge of any violations of the Code to their superiors (and Payne understood that provision to apply to him).
During January and February 1977 Payne and Edwards told American and AHFI officials about rumors of improper payments in connection with the SNUH project. As soon as those were reported, Edwards and Payne were flown to Illinois to be questioned by company officials and attorneys on the matter. They were encouraged to report specific evidence of wrongdoing to American's audit committee and special counsel.
In June-August 1977 Payne, Edwards and Lee were asked to sign the annual certificates of compliance. They considered the matter for a while and then refused, instead sending a telex to defendants demanding more than $375,000 in return for their silence on undisclosed matters involving alleged wrongdoing by defendants. At meetings in September 1977 they again refused to sign the certificates, even though they were told and admittedly understood that they could state as "exceptions" to the certificate any suspicion or knowledge of wrongdoing. They also refused suggestions by defendants that they go to governmental authorities with their claimed knowledge. Those refusals resulted in disputes, refusals to cooperate and finally termination of Payne, Edwards and Lee effective September 30, 1977.
As to Payne's written employment contract, the startlingly similar case of Buian v. J. L. Jacobs & Co., 428 F.2d 531 (7th Cir. 1970) is completely controlling. In Buian the corporate defendant had also hired an employee for an overseas job and sent him a letter stating the terms of employment. For convenience the duration language of the Buian letter and Payne's EFA document are juxtaposed below:
Buian Payne
It is scheduled that your assignment It is expected that the employee
in Saudi Arabia will remain in the
will continue for a period foreign post for the duration
of eighteen (18) months. of the project which is
expected to be approximately
two (2) years
Similarly, where the EFA document referred to "many factors that would cause a shortening or lengthening of the EFA such as individual performance, economic conditions, foreign or domestic, AHFI's business plans, etc.," the Buian letter stated that the employment abroad was subject to contingencies such as satisfactory service by the employee, good business conditions and no interruption of the foreign projects.
In Buian our Court of Appeals found it "clear on its face that the agreement does not guarantee any specific term of employment" (428 F.2d at 533), so that the agreement was held terminable at will under Illinois law. It held that the phrase stating that the employment was scheduled to last for eighteen months was "merely one of expectation and not sufficient to insert any ambiguity into an otherwise customary employment relationship terminable at will" (id.). Indeed the parallel is made even more striking by the specific use in Payne's agreement of the term "expected," tracking even more directly with the Buian concept of "expectation" as negating a binding contract for a term certain.
Accordingly, as in Buian ...
To continue reading
Request your trial
-
Zewde v. Elgin Community College
...stated a claim for relief for breach of an implied contract, even if such a contract had been created. See also Payne v. AHFI/Netherlands B.V., 522 F.Supp. 18, 23 (N.D.Ill. 1980) (rule in Illinois is that employment at-will relationship is terminable for any reason, good or VI. The Wrongful......
-
Straka v. Francis
...contract. Id. at 637, 617 N.E.2d at 1358. See also, Buian v. J.L. Jacobs and Co., 428 F.2d 531 (7th Cir.1970); Payne v. AHFI/Netherlands, B.V., 522 F.Supp. 18 (N.D.Ill.1980). In contrast to Johnson, Executive Flight fails to allege specific facts evidencing a clear and definite promise or a......
-
Lamaster v. Chicago & NE Ill. DC of Carpenters
...as long as he complied with all lawful directions of defendants. See also Brudnicki, 535 F.Supp. at 87; Payne v. AHFI/Netherlands, B.V., 522 F.Supp. 18 (N.D.Ill.1980). Although the terms of these contracts specified that the contracts would end if the conditions came to pass, the contingenc......
- Caton v. Canal Zone Government