Rice v. Rent-A-Center of America, Inc.

• Decision Date: 28 May 1987
• Docket Number: No. S85-187.,S85-187.
• Parties: Rodger RICE, Plaintiff, v. RENT-A-CENTER OF AMERICA, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Indiana

664 F. Supp. 423

Rodger RICE, Plaintiff, v. RENT-A-CENTER OF AMERICA, INC., et al., Defendants.

No. S85-187.

United States District Court, N.D. Indiana, South Bend Division.

May 28, 1987.

Fred R. Hains, South Bend, Ind., for plaintiff.

Richard W. Morgan, South Bend, Ind., Kenneth T. Kopatka, Daniel J. King, Chicago, Ill., for defendants.

MEMORANDUM AND ORDER

MILLER, District Judge.

This cause comes before the court on the motion to dismiss filed by defendant Rent-A-Center of America, Inc. On July 19, 1985, the court converted that motion to a summary judgment motion, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. The parties have briefed the issues extensively, and the motion is more than ripe for ruling.

The original complaint contained three counts: one based on a theory of intentional misrepresentation; a second alleging a breach of contract; and a third claiming damages for tortious infliction of emotional distress. Through the submission of briefs and additional exhibits, plaintiff Rodger Rice seems to have attempted to raise a claim based on a theory of promissory estoppel, as well. The parties have treated Mr. Rice's alternative claim for equitable relief as though it had been contained in the complaint and have fully addressed the issues presented by that claim. Accordingly, the court will also address the merits of Mr. Rice's promissory estoppel argument.

This is an action for damages resulting from Mr. Rice's termination of employment with Rent-A-Center on November 5, 1984. The cause, originally filed in the St. Joseph Superior Court, was removed to this court pursuant to 28 U.S.C. § 1441(a). Jurisdiction is based on the parties' diversity of citizenship. 28 U.S.C. § 1332.

In a summary judgment motion, the movant must first demonstrate, by way of the pleadings, depositions, answers to interrogatories, admissions on file, and affidavits, if any, that (1) no genuine issues of material fact exist for trial, and (2) the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(e); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Munson v. Friske, 754 F.2d 683 (7th Cir.1985). If the motion's opponent would bear the burden of proof at trial on the matter that forms the basis of the summary judgment motion, the burden of proof shifts to the motion's opponent if the movant makes its initial showing, and the motion's opponent must come forth and produce affidavits, depositions, or other admissible documentation to show what facts are actually in dispute. Celotex Corp. v. Catrett, 106 S.Ct. at 2548; Klein v. Trustees of Indiana University, 766 F.2d 275, 283 (7th Cir.1985). Summary judgment should be granted only if no reasonable jury could return a verdict for the motion's opponent. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Federal Deposit Ins. Corp. v. Meyer, 781 F.2d 1260 (7th Cir. 1986); Munson v. Friske, 754 F.2d at 690; Weit v. Continental Illinois National Bank & Trust Co., 641 F.2d 457, 461 (7th Cir.1981), cert. denied 455 U.S. 988, 102 S.Ct. 1610, 71 L.Ed.2d 847 (1982).

When the parties dispute the facts, the parties must produce proper documentary evidence to support their contentions. The parties cannot rest on mere allegations in the pleadings, Posey v. Skyline Corp., 702 F.2d 102 (7th Cir.), cert. denied 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983), or upon conclusory statements in affidavits. First Commodity Traders v. Heinold Commodities, 766 F.2d 1007, 1011 (7th Cir. 1985); Hall v. Printing and Graphics Art Union, 696 F.2d 494, 500 (7th Cir.1982). Any permissible reasonable inferences from the documentary evidence must be viewed in the light most favorable to the motion's opponent. Matsushita Electronics Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Munson v. Friske, 754 F.2d at 690; Mintz v. Mathers Fund, Inc., 463 F.2d 495, 498 (7th Cir.1972). A party need not try its case by affidavit, but it must set forth some facts from which the court can reasonably infer that the party would be able to produce some evidence at trial to support its theory. Matter of Morris Paint and Varnish Co., 773 F.2d 130 (7th Cir.1985).

From January 1, 1984 until October 18, 1984, Mr. Rice was employed by Rent-A-Center as a store manager and as a district manager in Mishawaka, Indiana. Due to a problem with inventory, Mr. Rice and his zone manager, Jordan Tuttle, were demoted. Mr. Rice was removed as district manager on October 18, 1984, but was retained as manager of the Mishawaka store. Mr. Rice contends that, at the time of his demotion, the new zone manager, Mr. Jerry Burum, told him that "no one is to be fired as a result of the chaos and turmoil created in the operation under the leadership of Jordan Tuttle", and that Mr. Rice could and probably would receive his district manager's position back after a short period of time. Mr. Rice was terminated on November 5, 1984.

I. Breach of Contract

Well-settled law governs oral and written employment contracts in Indiana. To be enforceable, such contracts "must be for a definite period or there must be executed consideration other than the promise by the employee to render service". Ryan v. J.C. Penney Co., Inc., 627 F.2d 836, 838 (7th Cir.1980). The measure of damages for breach of a term employment contract generally is "the contract price for the unexpired term less what the employee has earned, or by reasonable diligence in mitigation of damages could have earned in other employment since the discharge". Mead Johnson and Company v. Oppenheimer, 458 N.E.2d 668, 670 (Ind.App. 1984); see also Indiana State Symphony Society, Inc. v. Ziedonis, 171 Ind.App. 292, 359 N.E.2d 253 (1976); Rochester Capital Leasing Corporation v. McCracken, 156 Ind.App. 128, 295 N.E.2d 375 (1973).

If the term of employment cannot be ascertained from the terms of the contract, or if the contract is unsupported by consideration from the employee to the employer, the contract is one at will that either party may terminate at any time. Ryan v. J.C. Penney Co., Inc., 627 F.2d at 837; Mead Johnson and Company v. Oppenheimer, 458 N.E.2d at 670; Pepsi-Cola General Bottlers, Inc. v. Woods, 440 N.E.2d 696, 697, 699 (Ind.App.1982). "An employee at will may be discharged by his employer for any cause whatever, or for no cause, without giving rise to an action for damages." Miller v. Review Board of Indiana Employment Security Division, 436 N.E.2d 804, 807 (Ind.App.1982). There is, however, a recognized exception to this doctrine, and an "action will lie if the plaintiff-employee demonstrates he was discharged in retaliation for having exercised a statutorily conferred personal right or having fulfilled a statutorily imposed personal duty". Miller v. Review Bd. of Indiana Employment Security Division, 436 N.E.2d at 807 (citing Frampton v. Central Indiana Gas Company, 260 Ind. 249, 297 N.E.2d 425 (1973)); see also McClanahan v. Remington Freight Lines, Inc., 498 N.E.2d 1336, 1339 (Ind.App.1986) ("an employee cannot be discharged solely for refusing to breach a statutorily imposed duty"); Campbell v. Eli Lilly Company, 413 N.E.2d 1054 (Ind.App.1980); Martin v. Platt, 179 Ind.App. 688, 386 N.E.2d 1026 (1979).

Mr. Rice contends that he had a term employment contract, relying upon statements made by Rent-A-Center's zone manager, Jerry Burum, and provisions contained in Rent-A-Center's stock-option plan and employee's manual. Mr. Rice's theories as to the term of this alleged contract are, however, inconsistent and without support either in the facts of this case or in Indiana law.

On October 18, 1984, Jerry Burum stated to Mr. Rice that "no one is to be fired as a result of the chaos and turmoil created in the operation under the leadership of Jordan Tuttle the former zone manager", and that Mr. Rice "could and probably would receive his District Manager's position back after a short period of time". Mr. Rice interprets these statements to be a promise by Rent-A-Center that his job would be secure, and that he would receive his old job back in time, together with the requisite increase in salary and bonuses. Mr. Rice argues that this promise entailed job security and continued employment for a definite term until April 16, 1988 which, according to Mr. Rice, represents the "anticipated employment period as a result of Defendants' pro-offered stock option plan".

The stock option plan to which Mr. Rice refers offered him the opportunity to purchase Rent-A-Center's stock from April 18, 1984 until April 16, 1988. Rent-A-Center, however, asserts that the plan is not the Rent-A-Center's stock-option plan, but rather an Incentive Stock Option Agreement ("the Agreement") that incorporates by reference the Rent-A-Center's 1983 Incentive Stock Option Plan ("the Plan").

By its provisions, the Agreement is subject to the terms and conditions of the Plan, which states in pertinent part as follows:

Nothing in this Plan shall be construed to give anyone the right to be granted an Option, and neither the Plan nor the granting of an Option or the taking of any other action under the Plan shall constitute or be any evidence of any agreement or understanding, express or implied, that the Company will employ an option holder for any period of time or in any position or at any particular rate of compensation.

1983 Incentive Stock Option Plan, ¶ 2, pp. 2-3. This language undercuts any argument that Rent-A-Center intended for the Plan to be used as the basis for a term employment contract. Mr. Rice cannot rely on the Agreement as a source for the term of his alleged employment contract. Neither Jerry Burum's statements to Mr. Rice nor the terms of either the Agreement or the Plan provide the...