Short v. Columbus Rubber and Gasket Co., Inc., 58045

• Decision Date: 30 November 1988
• Docket Number: No. 58045,58045
• Citation: 535 So.2d 61
• Parties: Roger L. SHORT v. COLUMBUS RUBBER AND GASKET COMPANY, INC.
• Court: Mississippi Supreme Court

Page 61

535 So.2d 61

Roger L. SHORT v. COLUMBUS RUBBER AND GASKET COMPANY, INC.

No. 58045.

Supreme Court of Mississippi.

Nov. 30, 1988.

Rehearing Denied Dec. 28, 1988.

Timothy C. Hudson, Sams & Kesler, Columbus, for appellant.

Hunter M. Gholson, Katherine S. Ferguson, Gholson, Hicks & Nichols, Columbus, for appellee.

Before HAWKINS, P.J., and ROBERTSON and SULLIVAN, JJ.

ROBERTSON, Justice, for the Court:

I.

This is a suit by a former corporate president for breach of an alleged one year contract of employment. The trial court granted summary judgment for the corporate employer. Our review convinces us that plaintiff president has established genuine issues of material fact on (a) the existence of the contract for a one year term and (b) whether he breached fiduciary duties to the company. Judgment was summary and premature and must be reversed.

II.

A.

Roger L. Short was first employed by Columbus Rubber & Gasket Company as a warehouse clerk in March of 1975. By September of 1982 he had risen to the office of president of the company. At each annual meeting for the next three years the board of directors reelected Short to the office of president. At each of these annual meetings, Short was also elected to serve as a director of the corporation.

The text of the 1985 resolution which assumes some importance was as follows:

The President then opened the floor for nomination for officers for the ensuing year. Whereupon, the following were elected by acclamation:

It was further resolved, that the annual salary be paid to the President to the corporation in the amount of $72,000.00; ....

In March, 1986, Short was fired. The shareholders resolution removing Short as director and president explains:

Robert H. Griner informed the other stockholders that he had just received information that Roger L. Short, President of the corporation, was attempting to leave the corporation to enter a competing business and was attempting to entice the present employees of the corporation away and to hire them for the new corporation of which he was to be president.

Robert H. Griner further informed the stockholders that he had discovered that the corporation had financially declined steadily over the last few months to the point that the creditors of the corporation were placing it on C.O.D. basis and that its debts had increased dramatically to the detriment of the corporation. Robert H. Griner further informed the other stockholders that there was perhaps other matters that would cause the other officers and directors of the corporation to doubt the ability of Roger L. Short to effectively serve as president of the corporation.

After discussion it was on motion duly made, seconded and carried:

RESOLVED, that Roger L. Short be terminated as President of the corporation and he be removed as a Director of the corporation effective as of the date of this meeting.

B.

This civil action was commenced on April 30, 1986, when Short filed his complaint in the Circuit Court of Lowndes County, naming Columbus Rubber & Gasket Company as defendant. Short alleged that the company had breached his one-year employment contract. Short prayed for damages in the amount of his salary for the unexpired term of his contract. Short also claimed that the company had failed to pay his salary for services rendered in his capacity as president from March 15 (the date of his last paycheck) through March 24, 1986 (the date of his termination).

In answering, the company denied the existence of any employment contract and further denied that Short was entitled to any past or future salary. The company further alleged, by way of counterclaim, that Short had breached his fiduciary duty to the corporation and prayed for damages in the amount of $500,000.00.

In due course thereafter, the company filed a motion for summary judgment and on November 14, 1986, the Court granted the motion. The Circuit Court ruled that the corporate by-laws and Board resolutions of Columbus Rubber & Gasket Company established that Short's employment contract was terminable at will. The Court further found that Short was guilty of a breach of his fiduciary duty to the company.

Short now appeals to this Court.

III.

This Court conducts de novo review of a lower court's grant of summary judgment. Pearl River County Bd. of Supervisors v. South East Collections Agency, Inc., 459 So.2d 783, 785 (Miss.1984). "The general standard that an appellate court applies in reviewing the grant or denial of a summary judgment motion is the same as that employed by the trial court initially under Rule 56(c)." 10 Wright, Miller & Kane Federal Practice and Procedure Sec. 2716 (1983 and Supp.1988).

The law governing the grant or denial of a motion for summary judgment is familiar and well established. Fruchter v. Lynch Oil Co., 522 So.2d 195, 198 (Miss.1988). In Dennis v. Searle, 457 So.2d 941 (Miss.1984), we explained:

The trial court must review carefully all of the evidentiary matters before it--admissions in pleadings, answers to interrogatories, depositions, affidavits, etc. The evidence must be viewed in the light most favorable to the party against whom the motion has been made. If in this view the moving party is entitled to judgment as a matter of law, summary judgment should forthwith be entered in his favor. Otherwise the motion should be denied.

Issues of fact sufficient to require denial of a motion for summary judgment obviously are present where one party swears to one version of the matter in issue and another says the opposite.

457 So.2d at 944.

In addition, the burden of demonstrating that no genuine issue of fact exists is on the moving party. That is, the non-movant should be given the benefit of every reasonable doubt. Smith v. Sanders, 485 So.2d 1051, 1054 (Miss.1986).

IV.

A.

The doctrine of employment at will remains afloat in this state though its waters be troubled here and elsewhere. Perry v. Sears Roebuck & Co., 508 So.2d 1086, 1088 (Miss.1987); Shaw v. Burchfield, 481 So.2d 247 (Miss.1985); Kelly v. Mississippi Valley Gas Co., 397 So.2d 874, 875 (Miss.1981). Short makes no attack on that doctrine. Rather, his claim hinges upon his assertion that his employment was for a definite term.

Oral employment contracts for a definite term of less than fifteen months are wholly enforceable at law. Miss.Code Ann. Sec. 15-3-1(d) (1972); Williams v. Luckett, 77 Miss. 394, 396, 26 So. 967 (1899). The case of Lee v. Hampton, 79 Miss. 321, 30 So. 721 (1901), demonstrates the rather casual way that such contracts may come into existence. Hampton claimed that he had served Lee as a plantation manager for eight years pursuant to a series of oral contracts (eight distinct one-year contracts based upon the calendar year). The method of the formation of the one-year contract in dispute was as follows:

Hampton, on the 2nd of January, 1900, or before, applied to know whether Lee desired him to manage his plantation for the year 1900, and that Lee replied, "You can stay if you wish;" That Hampton asked if he would increase his wages, and Lee replied he would not; that this was, in substance, the method of making all previous contracts of service between them ...

79 Miss. at 325, 30 So. at 721.

The Court held that the substance of this discussion was of a sufficiently definite nature to create an express one-year contract for employment and affirmed a jury verdict in the employee's favor.

Ross v. Fair, 145 Miss. 18, 22, 110 So. 841, 842 (1927) and Smith Enterprise Co., Inc. v. Lucas, 204 Miss. 43, 50, 36 So.2d 812, 814 (1948) are to like effect.

The claim for a breach of an oral contract for a definite term, if with a basis in fact, takes the case outside the operation of the at will presumption. At the very least, controverted testimony regarding the contemplated length of employment creates an issue of fact as to the existence of an oral contract for a definite term vel non, precluding summary disposition. See Producers Gin Association v. Beck, 215 Miss. 263, 269, 60 So.2d 642, 643 (1952) ("the issue was submitted to the jury on the question whether there was such [an oral one-year] contract"); Magnolia Miss Dress Co., Inc. v. Zorn, 204 Miss. 1, 6, 36 So.2d 795, 796 (1948) (existence of an oral contract for services on a month-to-month basis is a question for the jury); Dyle v. Griffin, 122 Miss. 828, 835, 85 So. 93 (1920) (same); Harris v. Williams, 43 So.2d 364, 365 (Miss.1949) ("whether there exists a certain oral agreement raises an issue of fact"). At a minimum a party claiming under such a contract must prove (a) the length of the contract and (b) the amount of the salary for the term. See Atlanta Stove Works v. Hamilton, 83 Miss. 704, 35 So. 763 (1901) (enforcing such a written contract; treating additional terms as surplusage).

We recognize treatise authority for the position that enforceable employment contracts need only be stated in a skeletal fashion:

A resolution of the board of directors immediately following the election of a general manager that "the salary of the general manager for the ensuing year is fixed at $2,000.00, payable in monthly installments" is a contract of employment for one year.

2 Fletcher Cyc. Corp. Sec. 337 (Perm.Ed.1982).

In the instant case, the resolution of the Board of Directors of Columbus Rubber & Gasket Co. dated September 9, 1985, upon which Short relies as evidence of his oral contract, states that Short was elected president "for the ensuing year." A resolution immediately following this election reflects that the Board "further resolved, that an annual salary be paid to the president of the corporation in the amount of $72,000.00." ¹ In addition, Short alleges that he had received oral assurances from board members, contractual in nature, setting his term as president of the company for one year.

Short has made out a genuine issue of material fact on the matter of the existence vel non of a one year oral contract of...