Stiles v. Skylark Meats, Inc.

• Decision Date: 21 April 1989
• Docket Number: No. 87-816,87-816
• Citation: 231 Neb. 863,438 N.W.2d 494
• Parties: , 113 Lab.Cas. P 56,138 Marvin E. STILES, Appellee, v. SKYLARK MEATS, INC., a Nebraska Corporation, Appellant.
• Court: Nebraska Supreme Court

Page 494

438 N.W.2d 494

231 Neb. 863, 113 Lab.Cas. P 56,138

Marvin E. STILES, Appellee, v.SKYLARK MEATS, INC., a Nebraska Corporation, Appellant.

No. 87-816.

Supreme Court of Nebraska.

April 21, 1989.

Syllabus by the Court

1. Contracts.Words in a contract are to be given their plain and ordinary meaning as reasonable persons would understand them.

2.Employment Contracts: Termination of Employment: Good Cause: Words and Phrases.In the context of employment contracts, "good cause" for dismissal is that which a reasonable employer, acting in good faith, would regard as good and sufficient reason for terminating the services of an employee, as distinguished from an arbitrary whim or caprice.

3.Employment Contracts: Breach of Contract: Proof.In an action for breach of a contract of employment, the burden of proving the existence of a contract and all the facts essential to the cause of action is upon the person who asserts the contract.

4.Employment Contracts: Breach of Contract: Termination of Employment: Proof: Good Cause.An employee who claims the breach of an employment contract has the burden of proving the employer breached that contract by firing him or her for other than good cause.

5.Employer and Employee: Termination of Employment: Proof: Good Cause.Once an employee has made a prima facie showing that the discharge was for other than good cause, the burden shifts to the employer to prove good cause existed for discharging the employee.

6.Employer and Employee: Termination of Employment.An employee may attack an employer's offered explanation for discharge as pretextual.

7.Contracts: Actions.A suit on a contract is an action at law.

8.Appeal and Error.In an action at law tried to the court, the trial court's factual findings have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong.

9.Judgments: Appeal and Error.In reviewing the trial court's judgment in an action at law tried to the court, the Supreme Court does not reweigh the evidence but, instead, considers the judgment in the light most favorable to the successful party, with conflicts resolved in favor of the successful party, who is entitled to the benefit of every inference which can be reasonably deduced from the evidence.

10.Trial: Evidence: Witnesses: Appeal and Error.In a bench trial, the judge sitting as the trier of fact is the sole judge of the credibility of the witnesses and the weight to be given their testimony, and we do not reweigh the evidence on appeal.

11.Employment Contracts: Breach of Contract: Master and Servant: Damages.The measure of damages in a suit for breach of an employment contract for personal services is the amount of salary agreed upon for the period involved, less the amount which the servant earned, or with reasonable diligence might have earned, from other employment.

12.Employment Contracts: Breach of Contract: Damages: Proof.In an action for the breach of an employment contract the burden rests with the employer to show that the exercise of reasonable diligence a discharged employee could have obtained other employment.

Russell S. Daub, Omaha, of Daub Haggart & Rebensdorf, for appellant.

Alan G. Stoler, Omaha, for appellee.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

CAPORALE, Justice.

Following a bench trial, the district court found that defendant-appellant, Skylark Meats, Inc., breached its contract of employment with plaintiff-appellee, Marvin E. Stiles, by discharging him without good cause, and entered judgment in favor of Stiles in the sum of $48,000.In this appeal from that judgment, Skylark Meats assigns five errors, which may be summarized as challenging the district court's findings that (1) there was no good cause for the discharge and (2) Stiles made a reasonably diligent effort to obtain other employment.We affirm.

Skylark Meats is a corporation in the business of preparing, packaging, and selling meat, fish, and poultry.Stiles began work for Skylark Meats in July 1977, managing its meat-processing room.After Stiles had been working for Skylark Meats for almost 2 1/2 years, the parties, on December 31, 1979, entered into a written employment agreement.The agreement provided in relevant part that Stiles was to serve as the manager of Skylark Meats' processing room at a salary of $46,800 per year and that Stiles could terminate his employment at any time upon notice, but that Skylark Meats could terminate Stiles' employment "only for breach of the terms [of the agreement] by Stiles or for other good cause."Stiles' salary was increased during the course of his employment, so that at the time of his discharge on February 12, 1986, he was earning $53,560 per year.

We begin by recalling that words with in a contract are to be given their plain and ordinary meaning as reasonable persons would understand them.Reeves v. Hill Aero, 231 Neb. 345, 436 N.W.2d 494(1989);Kreikemeier v. McIntosh, 223 Neb. 551, 391 N.W.2d 563(1986).In the context of employment contracts, "good cause" for dismissal is that which a reasonable employer, acting in good faith, would regard as good and sufficient reason for terminating the services of an employee, as distinguished from an arbitrary whim or caprice.Roach v. Consolidated Forwarding Co., 665 S.W.2d 675(Mo.App.1984).

In an action for breach of a contract of employment, the burden of proving the existence of a contract and all the facts essential to the cause of action is upon the person who asserts the contract.Smith v. City of Omaha, 220 Neb. 217, 369 N.W.2d 67(1985).Stiles thus had the burden of proving his contract of employment with Skylark Meats and that Skylark Meats breached that contract by firing him for other than good cause.The burden then shifted to Skylark Meats to prove good cause indeed existed for Stiles' discharge.SeeStoffel v. Metcalfe Construction Co., 145 Neb. 450, 17 N.W.2d 3(1945).See, also, Rasch v. East Jordan, 141 Mich.App. 336, 367 N.W.2d 856(1985);Pugh v. See's Candies, Inc., 116 Cal.App.3d 311, 171 Cal.Rptr. 917(1981);Rosecrans v. Intermountain Soap & Chem. Co., 100 Idaho 785, 605 P.2d 963(1980).According to Pugh v. See's Candies, Inc., supra, an employee may attack an employer's offered explanation as pretextual.

Little, if any, purpose would be served by burdening this opinion with a detailed recitation of the numerous conflicts in the evidence relating to the bases for Stiles' discharge.Suffice it to say that through its evidence, Skylark Meats attempted to convince the district court that Stiles was an incompetent manager unable to cope with Skylark Meats' growth (when he began his employment, Stiles supervised 7 to 10 people, whereas at the time of his discharge, he was supervising 35 to 40 people); that he was insubordinate; that he did not understand and could not apply U.S. Department of Agriculture regulations; that he kept inaccurate cost records; that he produced inferior products; and that he did not know how to package or present a product to existing or potential customers, as a consequence of which Skylark Meats lost sales.

On the other hand, Stiles adduced evidence which, if believed by the trier of fact, established that he was a capable manager; that he was not insubordinate but had conflicts with upper management because he sought to comply with USDA regulations as he should; that he kept as accurate cost records as the quality of meats and equipment he was given permitted; that he produced products as good as the meats and environment supplied him permitted; and that he made as good a...