Vance v. Huff
| Decision Date | 31 August 1990 |
| Citation | 568 So.2d 745 |
| Parties | Victor E. VANCE and Mildred Vance v. John T. HUFF, Jr., et al. 89-744, 89-745. |
| Court | Alabama Supreme Court |
James B. Sprayberry, Auburn, for appellants.
Samuel H. Franklin of Lightfoot, Franklin, White & Lucas, and Jay D. Clair of Bradley, Arant, Rose & White, Birmingham, for appellees.
This Court has consolidated appeals from two summary judgments 1 that were entered in favor of numerous defendants and against the plaintiffs, Victor and Mildred Vance, in a case involving allegations of promissory fraud, breach of contract, wrongful ouster from a partnership, and a number of other claims. The facts giving rise to the Vances' various claims are complex. Therefore, the basic facts surrounding this case will be set out, with a more detailed exposition of the pertinent facts to be supplied as each issue is addressed.
In 1986 John Huff, Victor Vance, and Kiefer Hobby formed a business association for the purposes of developing and managing a manufacturers' outlet shopping center in Opelika and for developing or managing similar centers in other parts of the State. No written agreement was executed by these parties, and there is a dispute as to whether they intended to form a partnership or to form a different type of business organization. Notwithstanding that dispute, it is clear that Huff was to provide the capital needed for the association's projects and that Vance and Hobby were to provide labor and services.
Vance's primary responsibilities were to obtain the necessary land, promote the outlet center, and secure tenants. Hobby was to oversee construction of the center. In return for their services, Huff was to receive 85% of any profits; Vance was to receive 10%; and Hobby was to receive 5%. However, Hobby left the association before construction began, and Vance contends that he was promised Hobby's 5% of the profits by Huff. Vance also contends that he was promised a position as manager of the center, for which he was to receive an annual salary of $52,000. In September 1986, Stephen Lowitz and Roberto Boltt joined the association. Their primary function was to provide additional capital, but they withdrew from the association in November 1986.
It is difficult to determine from the record what type of business organization the parties intended to form. There was no written partnership agreement, certificate of limited partnership, or evidence of incorporation. Huff contends that the parties agreed to wait and determine what type of organization would best fit their needs, but that, due to Vance's departure from the association, that choice was never made. Vance argues that they formed a partnership, and his position is supported by Hobby's deposition testimony. Lowitz and Boltt were named as defendants but have not submitted briefs to this Court, and their involvement is minimal. 2 However, a review of their deposition testimony seems to support Huff's position that no definite type of organization was agreed on.
For the purposes of determining the propriety of the summary judgments, this Court concludes that Vance presented substantial evidence that a partnership was formed, albeit an informal one. The parties agreed to pursue the common goal of developing an outlet center, agreed to share profits, and shared management responsibilities. There is no settled test for determining the existence of a partnership. That determination is made by reviewing all the attendant circumstances, including the right to manage and control the business. Ala.Code 1975, § 10-8-20; McCrary v. Butler, 540 So.2d 736 (Ala.1989).
Mildred Vance also formed a partnership with Huff, known as H & V Investment Company ("H & V"). H & V was formed to manage a shopping center called the Market Place, which was located in Baldwin County. They executed a written agreement, stating that Huff was to receive 85% of any profits, with the remaining 15% going to Mildred. In order to finance the renovation and the operation of the center, Huff and Mildred borrowed money from a savings and loan association, giving a promissory note in exchange.
Victor Vance and Huff began to have disagreements over the way their alleged partnership was being run and, according to Vance, over his share of the management responsibilities and his future duties. In March 1987, Vance tendered a letter to Huff expressing a desire to leave the partnership. Soon after that letter was written, Vance's involvement with the partnership ended. Vance argues that he was wrongfully forced out of the partnership, but Huff contends that he voluntarily abandoned it. Also in early 1987, Mildred Vance and Huff executed a document wherein Mildred assigned her 15% interest in H & V to Huff. In May or June 1987, Huff and Vance unsuccessfully attempted a reconcilation, and in December 1988 Victor and Mildred filed a multi-count complaint against Huff and a number of other defendants. The trial court entered summary judgment in favor of all of the defendants on all of the counts.
At the outset, we note that the Vances' complaint was filed after June 11, 1987, the effective date of Ala.Code 1975, § 12-21-12. Therefore, the standard of review on the motions for summary judgment was the "substantial evidence rule." Posey v. Posey, 545 So.2d 1329, 1333 (Ala.1989). Substantial evidence is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the facts sought to be proved." Thomas v. Principal Financial Group, 566 So.2d 735, 738 (Ala.1990); West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989).
Vance alleged that Huff and other members of the partnership promised him lifetime employment as the manager of the outlet center and then breached that "contract." There are no written offers of employment in the record, and Vance's allegation is based on the following statements that he contends were made to him by members of the alleged partnership:
However, Vance conceded during his deposition that there was never any discussion among the partnership's members of an employment contract. In addition, Vance's deposition testimony reveals that he was not entirely sure of the nature of the promises that he alleges were made:
As this Court noted in Harrell v. Reynolds Metals Co., 495 So.2d 1381, 1385-86 (Ala.1986):
"In the commercial context, contracts of permanent (lifetime) employment are unusual, extraordinary, [and] relatively rare...."
In a case applying Alabama law, the Eleventh Circuit Court of Appeals recognized that the burden on a plaintiff claiming that he was promised permanent or lifetime employment is unusually heavy:
"[A]n offer for lifetime employment must be expressed in clear and unequivocal terms before a court will conclude that an employer intended to enter into such a weighty obligation."
Chastain v. Kelly-Springfield Tire Co., 733 F.2d 1479, 1484 (11th Cir.1984), citing Alabama Mills, Inc. v. Smith, 237 Ala. 296, 186 So. 699 (1939), and other cases.
After reviewing the alleged promises relied on by Vance, this Court concludes that those statements cannot be construed as "clear and unequivocal" offers of lifetime or permanent employment. Chastain, supra. Instead, they appear to have been assurances that Vance's prospective job as the manager of the outlet center and his involvement with the partnership would be lucrative. As such, they are not "substantial evidence" in support of his claim, and the entry of summary judgment was proper as to this issue.
Vance also alleged that he was wrongfully forced out of the partnership that he had formed with Huff and Hobby and was therefore entitled to: (1) rescind the partnership agreement; (2) receive an accounting; and (3) petition the court for an order of dissolution. As stated earlier, this Court has concluded that Vance presented evidence showing the formation of a partnership. However, he did not produce substantial evidence that supports his claim that he was forced out of the partnership against his will.
With his motion for summary judgment, Huff attached a letter given to him by Vance dated March 11, 1987. In that letter Vance stated that he believed that his ability to contribute to the partnership was deteriorating, and he expressed a desire to withdraw. In addition, Vance testified during his deposition that during this period he discussed the possibility of employment with Lowitz after Lowitz had also withdrawn from the association:
"I just told him that I was leaving the USA Outlet Center project, that Mr. Huff and I had difficulty...."
This evidence supports Huff's assertion that Vance voluntarily abandoned the partnership.
Under Ala.Code 1975, § 10-8-44, a partner can rescind a partnership contract if another party to the contract is guilty...
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