Thoma v. Wolverine World Wide, Inc.

• Court: U.S. District Court — Eastern District of Pennsylvania
• Writing for the Court: WEBER
• Citation: Thoma v. Wolverine World Wide, Inc., 352 F.Supp. 580 (E.D. Pa. 1972)
• Decision Date: 15 December 1972
• Docket Number: Civ. A. No. 71-345.
• Parties: Warren C. THOMA, Plaintiff, v. WOLVERINE WORLD WIDE, INC., Defendant.

352 F. Supp. 580

Warren C. THOMA, Plaintiff, v. WOLVERINE WORLD WIDE, INC., Defendant.

Civ. A. No. 71-345.

United States District Court, W. D. Pennsylvania.

December 15, 1972.

Thomas J. Godlewski, Greensburg, Pa., David Ross Gray, Latrobe, Pa., for plaintiff.

Stephen A. George, Buchanan, Ingersoll, Rodewald, Kyle & Buerger, Pittsburgh, Pa., for defendant.

OPINION

WEBER, District Judge.

This is a diversity suit over an employment contract to be performed in Michigan. There appears to be no dispute that the contract of employment was to be performed by the plaintiff working out of defendant's home office in Rockford, Michigan, and that as a condition of employment defendant required plaintiff to reside at or near this place of employment, and that plaintiff as a fact did reside in the State of Michigan during his period of employment. Under these circumstances we hold that Michigan is the state of most significant contact and under the controlling law of this forum, the law of Michigan must be applied in interpreting the contract. Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 1964; Neville Chemical Company v. Union Carbide Corp., 422 F.2d 1205 3rd Cir.1970.

Plaintiff was an employee of the defendant in Pennsylvania when he was offered a new position at higher pay and responsibility at the defendant's corporate headquarters in Michigan. In his original complaint plaintiff alleged that on the 5th day of December 1966, plaintiff and defendant, through defendant's authorized agent, entered into an oral contract whereby the defendant agreed to promote the plaintiff to the capacity of "Regional Sales Manager of the Eastern Region" at an annual salary of $25,000 per year, plus a bonus of at least ten percent, but not exceeding fifty percent of said salary, if the company operations are such that a "Team Bonus" is paid, the exact amount to be determined by his immediate supervisor and the President. The original complaint further avers that on January 3, 1967, this contract was confirmed in writing by a letter from defendant's officer. The original complaint alleged that plaintiff started work under the new contract on January 1, 1967 and was discharged on September 17, 1967. He demanded damages for the amount of stated salary from September 17, 1967 until April 8, 1968 when he found other employment and for the year-end bonus, and for the loss suffered on the sale of his house in Michigan when he left Michigan after the discharge.

On defendant's motion for judgment on the pleadings the motion was granted on December 10, 1971 on the grounds that under Michigan law the contract stated to be at an annual rate of compensation is a contract for an indefinite period, terminable at the will of either party. 17A C.J.S. Contracts § 398; Harbor Land Co. v. Grosse Ile Twp., 22 Mich.App. 192, 177 N.W.2d 176 1970.

Plaintiff filed an amended complaint which alleged an oral contract of employment entered into between plaintiff and defendant's officer on December 5, 1966, between plaintiff and defendant's authorized agent at an annual salary of $25,000 per year, plus the bonus under the same terms. The amended complaint alleged that "the term or duration of that contract was for a period of one year". The amended complaint alleges that the terms of the oral contract were confirmed in writing by the letter of January 3, 1967. Plaintiff avers that he sold his home in Pennsylvania, moved to Michigan, and bought a home there and began his services under the new contract on January 1, 1967 and served until the time of his discharge on September 17, 1967. The plaintiff's amended complaint claims damages for the salary for the remainder of the year 1967, plus the bonus, plus the loss of the sale of his residence in Michigan.

The defendant then engaged in discovery and took the plaintiff's deposition and now moves for summary judgment supported by the deposition material and an affidavit. The grounds of the motion for summary judgment are:

(1) Under Michigan law a contract which cannot be fully performed within one year must be in writing to be enforceable.

(2) The evidence produced by plaintiff's own testimony taken on deposition does not establish a contract of employment for any definite term, but rather employment at will.

In the alternative, defendant moves for partial summary judgment on the damages claimed with respect to:

(1) The claim for the year-end bonus, and

(2) The claim for damages for loss suffered on the sale of plaintiff's house.

With respect to the claim for bonus the defendant has produced an affidavit of the Treasurer of defendant corporation, made upon personal knowledge, and showing affirmatively that the defendant is competent to testify to the matters stated therein which show that no year-end bonus was in fact paid to any of the employees at the end of the year 1967. Plaintiff can produce no evidence to counter this statement of fact and therefore under the provisions of Fed.R.Civ.P. 56(d) the court finds that this fact is established without substantial controversy and partial summary judgment in favor of defendant is granted as to the claim for damages on the bonus issue.

With respect to defendant's motion for partial summary judgment on the claim for damages for loss suffered on the sale of plaintiff's house we can find no authority for allowing such an item of damages to be claimed as a matter of law. While plaintiff claims that his new position required him to move to Michigan he produces no evidence to show that he was required to buy a particular house or any house in Michigan or to pay any particular price, or to sell at any particular time or price. The evidence produced on plaintiff's own deposition shows that he bought the type of property suited to his own particular desires and needs and that alterations were made to the house which may have affected its value on resale and that plaintiff chose to sell the house and move to another location after his discharge by the defendant. Under the circumstances the purchase of the house in Michigan was only an incident to enable the plaintiff to accept the employment. Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315 1937; Adolph v. Cookware Co. of Amer., 283 Mich. 561, 278 N.W. 687 1938. Under the evidence produced we cannot find sufficient to enable plaintiff to sustain his claim as a matter of law and partial summary judgment for defendant on this claim is accordingly granted.

We believe that the Michigan statute of frauds Mich.C.L.1948, § 566.132 (Stat.Ann.1953 Rev. § 26.922) which requires that a contract must be in writing to be enforceable, including:

"1. Every agreement that, by its terms, is not to be performed in 1 year from the making thereof,"

bars this action.

Plaintiff's complaint and his testimony on deposition establishes that the oral contract was made on December 5th or 6th, 1966, that he was to begin performance on January 1, 1967, and that the contract was to endure until December 31, 1967. The confirming letter which plaintiff has produced also recites that "starting January 1, 1967. . .". Thus, between the making of the contract on December 6th, 1966 and the completion alleged by the plaintiff on December 31, 1967 more than one year will expire. Under such circumstances the Michigan courts have held that a similar contract is governed by the statute of frauds. Carroll v. Palmer Mfg. Co., 181 Mich. 280, 148 N.W. 390 1914:

"Was the contract within the statute of frauds? The contract having been made in

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