Spanier v. TCF Bank Sav., C9-92-679

• Decision Date: 26 January 1993
• Docket Number: No. C9-92-679,C9-92-679
• Citation: 495 N.W.2d 18
• Parties: 126 Lab.Cas. P 57,505, 8 IER Cases 510 Orville J. SPANIER, a/k/a O.J. Spanier, Respondent, v. TCF BANK SAVINGS, fsb, Appellant.
• Court: Minnesota Court of Appeals

Page 18

495 N.W.2d 18

126 Lab.Cas. P 57,505, 8 IER Cases 510

Orville J. SPANIER, a/k/a O.J. Spanier, Respondent, v. TCF BANK SAVINGS, fsb, Appellant.

No. C9-92-679.

Court of Appeals of Minnesota.

Jan. 26, 1993.

Review Denied March 22, 1993.

Syllabus by the Court

1. The trial court erred in submitting an employee's promissory estoppel claim to the jury where, as a matter of law, the employee produced insufficient evidence of a "clear and definite" promise of permanent employment to overcome the presumption of at-will employment.

2. The trial court erred in submitting to the jury an employee's breach of covenant of good faith and fair dealing claim where the alleged offer of a unilateral contract for long-term employment was neither in definite form nor clearly evidenced by the employer's outward manifestations.

Owen L. Sorenson, Suzanne Wolbeck Kvas, Stringer & Rohleder, Ltd., St. Paul, for respondent.

David J. Duddleston, Mackall, Crounse & Moore, Minneapolis, for appellant.

Considered and decided by CRIPPEN, P.J., and LANSING and KLAPHAKE, JJ.

OPINION

KLAPHAKE, Judge.

Appellant, TCF Bank Savings (TCF Bank), appeals a jury verdict of $75,000 in favor of respondent Orville J. Spanier. TCF Bank terminated Spanier one year after he was hired. Claiming that he had been promised long-term employment, Spanier sued on the basis of promissory estoppel and breach of implied covenant of good faith and fair dealing, among other theories. We reverse.

FACTS

Spanier worked as a commercial lending officer for over 20 years at several different banks. In 1986, while Spanier was employed by the Capitol Bank as the executive vice-president, head of lending, TCF Bank interviewed him for a position as a commercial lending officer. Spanier had three meetings to discuss the job opportunity with Theodore R. Novak, TCF Bank's vice-president in charge of commercial lending in St. Paul. Spanier also met with Novak's supervisor, Robert T. Griffore. Novak offered Spanier a job and by letter confirmed a salary of $4,416 per month, three weeks vacation, and promised a review after 12 months. There was no written contract for employment or other documentation of the job offer other than the letter and TCF Bank's job application.

Spanier began working for TCF Bank in September 1986. On August 21, 1987, TCF Bank terminated his employment for poor performance and failure to generate enough business. Spanier obtained a position with a South St. Paul bank in February 1988, taking a salary reduction of almost $20,000. Thereafter, he transferred to another bank in St. Cloud. TCF Bank abandoned its regional commercial lending concept in November 1987 because of the credit quality of the existing real estate portfolio.

At trial, Spanier testified he believed that as long as he performed satisfactorily, he would have a permanent job with TCF Bank. He believed TCF Bank had made a long-term commitment to pursue the commercial lending business because Novak said TCF Bank wanted to become a "major player" in the commercial lending field, competing with Norwest Bank and Firstbank. Spanier assumed TCF Bank would need three to five years to develop its commercial lending business. Novak and Griffore did not promise permanent or long-term employment, did not discuss grounds for termination, nor did they make explicit statements about job security. However, Spanier believed he was guaranteed long-term employment.

The trial court denied TCF Bank's motion for a directed verdict. The jury found in Spanier's favor on the basis of promissory estoppel and breach of covenant of good faith and fair dealing. The trial court denied TCF Bank's motion for JNOV or a new trial and TCF Bank appeals.

ISSUES

1. Did TCF Bank's offer of employment to Spanier constitute a clear and definite promise sufficient to support a promissory estoppel claim?

2. Was there sufficient evidence of a definite offer creating a unilateral contract to support Spanier's claim of breach of implied covenant of good faith and fair dealing?

ANALYSIS

I. Promissory Estoppel

This court has de novo review of legal conclusions. Jadwin v. Minneapolis Star & Tribune Co., 367 N.W.2d 476, 483 (Minn.1985). Whether the evidence is sufficient to raise a fact question for the jury's determination is a question of law to be decided de novo by the reviewing court. Midland Nat'l Bank of Minneapolis v. Perranoski, 299 N.W.2d 404, 409 (Minn.1980) (directed verdict); Macho v. Mahowald, 374 N.W.2d 312, 314 (Minn.App.1985) (JNOV), pet. for rev. denied (Minn. Nov. 4, 1985).

TCF Bank claims Spanier was an at-will employee who was terminated for poor performance. TCF Bank claims the trial court erred by allowing Spanier to proceed to trial on his claim that TCF Bank broke its alleged promise of long-term employment.

A person hired for an indefinite time period is an "at-will" employee. Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn.1983). When an employee is employed at will, "the employer can summarily dismiss the employee for any reason or no reason, and * * * the employee * * * is under no obligation to remain on the job." Id. Even an offer of "permanent" employment implies at-will employment because "the term being indefinite, the hiring is merely at will." Skagerberg v. Blandin Paper Co., 197 Minn. 291, 294, 266 N.W. 872, 874 (1936).

Under the theory of promissory estoppel, however, an employee may recover damages when he leaves one job upon reliance on another employment offer, where the new employer revokes the offer before the employee can perform. See Grouse v. Group Health Plan, Inc., 306 N.W.2d 114, 116 (Minn.1981). Promissory estoppel may be applied where "no contract exists because due to the bilateral power of termination neither party is committed to performance and the promises are, therefore, illusory." Id. Section 90 of the Restatement (Second) of Contracts sets out the elements of promissory estoppel:

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee * * * and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.

Restatement (Second) of Contracts, § 90(1) (1981). However, to be enforceable, "the promise must be clear and definite." Cohen v. Cowles Media Co., 479 N.W.2d 387, 391 (Minn.1992).

It is undisputed that TCF Bank promised Spanier employment. TCF Bank should have known that Spanier, in reliance upon the job offer, would resign from his job with Capitol Bank. Whether TCF Bank's promise of employment must be enforced for a long duration to prevent injustice, however, "is a legal question for the court, as it involves a policy decision." See id. The Minnesota Supreme Court articulated the policy underlying the at-will employment rule in Pine River, where it emphasized the importance of the employer's discretion and independent judgment in employment decisions. Pine River, 333 N.W.2d at 627, 630; see also Hunt v. IBM Mid Am. Employees Fed. Credit Union, 384 N.W.2d 853, 858 (Minn.1986) (at-will employment rule reduces judicial intrusion on employer's discretion). Because the same policy governs in this case, we conclude the at-will employment rule applies to Spanier's claim.

The two Minnesota cases where promissory estoppel was applied in the employment context differ significantly from this case in the nature of the employer's promise and...