Taylor v. Zoltek Companies

• Decision Date: 23 May 2000
• Citation: 18 S.W.3d 541
• Parties: (Mo.App. E.D. 2000) . William Taylor, Appellant, v. Zoltek Companies, Inc., et al., Respondents. Case Number: ED76131 Missouri Court of Appeals Eastern District Handdown Date: 0
• Court: Missouri Court of Appeals

18 S.W.3d 541 (Mo.App. E.D. 2000)

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.

William Taylor, Appellant, v. Zoltek Companies, Inc., et al., Respondents.

Case Number: ED76131

Missouri Court of Appeals Eastern District

Handdown Date: 05/23/2000

Appeal From: Circuit Court of St. Louis County, Hon. James R. Hartenbach

Counsel for Appellant: Steven E. Dyer

Counsel for Respondent: Gerald M. Dunne and Richard B. Hein

Opinion Summary: William Taylor appeals summary judgment for Zoltek Companies, Inc., and Zsolt Rumy on Taylor's claims for breach of contract, tortious interference, and punitive damages.

AFFIRMED.

Division One holds: (1) Taylor was an employee at will. His employment relationship was not affected by his designation as a participant in Zoltek's long term incentive plan. Therefore, Zoltek had the right to demote or terminate him with or without cause. Although Rumy's Memo indicated that as a condition of remaining an employee, Taylor would have to forfeit his right under the Agreement to participate in the long term incentive plan, it did not alter or amend the terms of the plan. Because Zoltek, through its Chairman of the Board, President and Chief Executive Officer, Rumy, was exercising its rights as an employer in the employment relationship, the Memo did not alter the terms of the Plan, and since there was no dispute as to Zoltek's right to terminate Taylor, there was no breach of the Agreement. (2) Taylor has the burden of producing substantial evidence to establish the absence of justification, which is defined as "the absence of any legal right to take the actions complained of." As Chairman of the Board, President and Chief Executive Officer, Rumy had the authority and legal right to demote or terminate Taylor as Vice President of ESBU with or without cause and was therefore justified in doing so. Thus, there is no absence of justification, and Taylor's claim falls short.

Opinion Author: Paul J. Simon, Judge

Opinion Vote: JUDGMENT AFFIRMED. Gaertner, P.J., and J. Dowd, J., concur.

Opinion:

William Taylor, appellant, appeals the trial court's judgment granting respondents', Zoltek Companies, Inc. (Zoltek) and Zsolt Rumy (Rumy), motion for summary judgment on appellant's claims for breach of contract, tortious interference, and punitive damages.

On appeal, appellant contends that the trial court erred in sustaining respondents' motion for summary judgment because he presented material facts in dispute regarding: (1) Zoltek's anticipatory breach of appellant's long term incentive plan, thereby satisfying his burden to defeat Zoltek's and Rumy's motion for summary judgment.; and (2) Zolt Rumy's tortious interference with appellant's long term incentive plan, thereby satisfying his burden to defeat Zoltek's and Rumy's motion for summary judgment. We affirm.

Appellate review of a summary judgment is de novo. ITT Commercial Finance Corp., et al. v. Mid-America Marine Supply, 854 S.W.2d. 371, 376 (Mo.banc 1993). The record is viewed in the light most favorable to the non-moving party, according that party all reasonable inferences that may be drawn from the record. Id. Facts set forth by affidavit or otherwise in support of a party's motion are taken as true, unless contradicted by the non-moving party's response to the summary judgment motion. Id. at 376.

Summary judgment will be upheld on appeal if the movant is entitled to judgment as a matter of law and no genuine issues of material fact exist. Id. at 377. A defending party may establish a right to judgment by showing (1) facts that negate any one of the claimant's elements facts, (2) that the non-movant, after an adequate period of discovery, has not been able to produce, evidence sufficient to allow the trier of fact to find the existence of any one of the claimant's elements, or (3) that there is no genuine dispute as to the existence of each of the facts necessary to support the movant's properly-pleaded affirmative defense. Id. at 380.

The non-movant must show by affidavit, depositions, answer to interrogatories, or admissions on file, that one or more of the material facts shown by the movant to be above any genuine dispute is, in fact, genuinely disputed. Id. A "genuine issue" exists where the record contains competent materials that evidence two plausible, but contradictory, accounts of the essential facts. Id. at 382. A "genuine issue" is a dispute that is real, not merely argumentative, imaginary or frivolous. Id.

The record reveals that appellant began working for Zoltek in May 1978 as a salesperson. Over the years, he progressed steadily within the company and in 1991 Rumy, Chairman of the Board, President and Chief Executive Officer of Zoltek, promoted him to Vice President of the company's Equipment and Services Division, also known as ESBU. Appellant did not have an employment contract. On August 31, 1992, appellant and Zoltek entered into a Non-Qualified Stock Option Agreement (Agreement), which incorporated by reference Zoltek's Long Term Incentive Plan (Plan). The Agreement granted appellant the right to participate in Zoltek's Plan. Rumy and appellant signed the Agreement.

The preamble to the Agreement provides:

WHEREAS, [appellant] is now an officer or key employee of Zoltek, and Zoltek considers it desirable and in its best interest to give [appellant] an inducement to acquire a proprietary interest in Zoltek and thus to promote the future growth, development and continued success of Zoltek.

Paragraph 1 of the Agreement grants appellant the option to purchase a maximum of 50,000 shares of $.01 par value Common Stock in Zoltek at a price of $4.00 per share. Paragraph 2 provides that the term of the option lasts ten years, ending on August 31, 2002. Paragraph 3, governing the time of exercise of the option, provides:

This option shall become exercisable as to one-third of the total shares specified in Paragraph 1 hereof on the first anniversary of the date of grant, and thereafter as to the next one-third of the total shares specified in Paragraph 1 hereof on the second anniversary of the date of grant, and as to the remaining one-third of the total shares specified in Paragraph 1 hereof on the third anniversary of the date of grant, which amounts shall accumulate from year to year for the full term hereof to the extent not previously exercised, so long as [appellant] shall continue to be employed by Zoltek as of such dates. (emphasis added).

Section 16 of the Plan, entitled No Right to Employment, provides:

A Participant's right, if any, to continue to serve the Company and its subsidiaries as an officer, employee, or otherwise, shall not be enlarged or otherwise affected by his or her designation as a Participant under the Plan.

Section 17, entitled Duration, Amendment and Termination, provides in pertinent part:

...The Board of Directors may amend the Plan from time to time or terminate the Plan at any time. However, no action authorized by this paragraph shall reduce the amount of any existing Award or change the terms and conditions thereof without the Participant's consent...

While appellant included sections 15, 16, 17, 18, and 19 of the Plan in support of his reply to the motion for summary judgment, the full text of the Plan has not been made part of the record.

In October of 1994, appellant received a written "performance appraisal" from Rumy, which states in pertinent part:

...as a result I have decided the company cannot afford to let you continue in your current position without demonstrating a significant change in your attitude and approach. It is my decision that you will not be considered for the position of general manager for the ESBU for a long time, if ever. I feel it is the best for all concerned that you relocate to the McKelvey office on special assignment until you and I can come to terms of how or if you can handle the sales management of the ESBU.

On December 27, 1994, Rumy sent appellant an "Inter-Office Memo" (Memo) which states that he "decided that it is not in the Company' best interest to have [appellant] return to the ESBU in any management position." It further states that the "decision is final and it leaves few options for [appellant's] continued employment with Zoltek" and that "none of these options will offer the same salary or the continued participation in the incentive stock option plan." The options were as follows:

Option 1: If you wish to stay with Zoltek, I can offer you an interim assignment in the open territory that you have been covering until we can find a suitable outside salesman to take the territory or we find a general manager for the ESBU. After that time you would be assigned to the Flexigraf national sales position, reporting to the Sales Manager of the CFBU. This position would have a maximum salary of $50,000 and would not have a company car. Once the assignment is defined, we could design an incentive bonus plan similar to the ESBU sales territory.

* * *

If you elect this option, you will also forfeit the last third of your stock options. You will have to sign an agreement to this effect. On the positive side, the 33,333 shares you would still have would not have to be exercised immediately.

Option 2: If you elect to terminate your employment at this time, you will depart with a significant amount of money. You will have to sign the enclosed agreement, which is identical to the one John Huesman had to sign, and exercise the 33,333 share option within three months as the Incentive Stock Option Plan calls for.

The Memo asked appellant to make a decision as to which option he would elect by the end of the week.

Appellant discussed the Memo with Rumy sometime during the first week of January 1995. During the discussion, appellant stated that Option 2 was unacceptable to him and that though it was a tremendous burden on him, he would accept demotion, the $50,000 salary and the...