Voitier v. Church Point Wholesale Bev. Co.

• Decision Date: 05 April 2000
• Docket Number: No. 99-1777.,99-1777.
• Citation: 760 So.2d 451
• Parties: William J. VOITIER v. CHURCH POINT WHOLESALE BEVERAGE CO., INC., et al.
• Court: Court of Appeal of Louisiana — District of US

760 So.2d 451

William J. VOITIER v. CHURCH POINT WHOLESALE BEVERAGE CO., INC., et al.

No. 99-1777.

Court of Appeal of Louisiana, Third Circuit.

April 5, 2000.

Rehearing Denied May 24, 2000.

COPYRIGHT MATERIAL OMITTED

J. Lee Wimberley, Jr., Vidrine and Wimberley, Church Point, LA, Mack E. Barham , Robert E. Arceneaux, Gail N. Wise, Barham & Arceneaux, New Orleans, LA, Counsel for Defendants/Appellants, Church Point Wholesale Co., Inc. and Monroe Wholesale Beverage Co., Inc.

William W. Stagg, Durio, McGoffin & Stagg, Lafayette, LA, Counsel for Plaintiff/Appellee, William J. Voitier.

(Court composed of Judge ULYSSES GENE THIBODEAUX, Judge OSWALD A. DECUIR and Judge ELIZABETH A. PICKETT).

THIBODEAUX, Judge.

William Voitier brought suit against his former employers, Church Point Wholesale Beverage Co., Inc. (hereinafter "Church Point") and Monroe Wholesale Beverage Co., Inc. (hereinafter "Monroe"), alleging wrongful termination under the terms of his employment contracts. The district court ruled in Mr. Voitier's favor, finding that his termination was not for cause as defined under the employment contract and awarded damages. We affirm the wrongful termination finding but reverse in part and amend in part the trial court's assessment of damages.

I. ISSUES

Church Point and Monroe present the following issues for review:

(1) whether the district court erred in holding that Mr. Voitier's termination was without cause:

(A) whether Mr. Voitier's employment by Baton Rouge Wholesale Beverage Co., Inc. (hereinafter "Baton Rouge") violated exclusivity provisions providing cause for terminating his employment contracts;

(B) whether Mr. Voitier's failure to disclose the full extent of his involvement with and duties for Baton Rouge constitute cause for terminating his employment contracts;

(C) whether the unauthorized loans to Baton Rouge constitute cause for terminating Mr. Voitier's employment contracts; and,

(D) whether the manipulation of corporate financial records constitutes fraud providing cause to terminate the employment contracts.

(2) whether the district court erred in determining that Mr. Voitier proved his entitlement to certain fringe benefits;

(3) whether the district court erred in awarding attorney's fees of $60,000; and,

(4) whether the district court erred in determining that the writ of attachment was properly issued.

II. FACTS

P. Roy Horecky incorporated three businesses in the 1960's, Church Point, Monroe and Baton Rouge Wholesale Beverage Co., Inc. All three corporations were engaged in the distribution of alcoholic beverages but for different territories. Church Point and Monroe have identical articles, by-laws and memberships. All shareholders are descendants of the founder. Baton Rouge is now solely owned by the Voitier branch of the family.

For approximately thirty years, all three corporations were managed by Robert Voitier, William Voitier's father. During this time, the shareholders wholly entrusted the management of the corporations to Mr. Voitier. No shareholder meetings were held nor did the corporations elect or appoint new members to their boards of directors.

William Voitier worked with his father in the management of the corporations. In 1982, he was named assistant general manager of Church Point and Monroe and Vice President of Baton Rouge. Upon his father's death in 1992, he assumed his father's duties as manager of the three corporations.

Mr. Voitier was informed by a shareholder, Charles Daigle, that the shareholders were interested in becoming more involved in running the corporations. Concerned that he would be discharged from his position as manager, Mr. Voitier solicited the remaining members of the original boards to secure his employment. Upon his request and the advice of their attorney, Paulina Arceneaux Harmon and Louis Arceneaux, the surviving members of the original boards of directors of Church Point and Monroe, held a special meeting on June 1, 1992 and appointed Julia Jacobs and Donald Hebert as new directors. On June 8, 1992, the reconstituted boards passed resolutions authorizing Louis Arceneaux to execute employment agreements with William Voitier. Accordingly, Mr. Voitier executed employment contracts to serve as general manager of both corporations. The employment contracts were practically identical.

Pursuant to the contracts, Mr. Voitier was to receive an annual salary of $30,000 plus commissions graded up to twenty percent of the corporations' year-end net profits. The contracts provided for a term of two years with automatic renewal for two additional successive two year terms. Anticipating that new boards of directors would soon be elected and that the new boards would not renew his contracts, Mr. Voitier asked the boards to extend his contracts for two additional terms. On January 13, 1994, the contracts were amended to allow for a maximum term of ten years (or two additional renewals).

Entirely new boards of directors were elected in March 1994. Some evidence was presented that these boards desired to sell Church Point, but perceived the employment contract with Mr. Voitier as an unattractive liability to potential purchasers. Shortly after it was reconstituted, the Church Point board filed suit seeking a declaratory judgment that the contracts were invalid and unenforceable because they were executed without proper authorization and/or in violation of Mr. Voitier's fiduciary obligation to the corporations or were unfair to the corporations. This Court ruled that the contracts were executed with the proper authorization and were enforceable. See Church Point Wholesale Beverage Co., Inc. v. Voitier, 97-650. (La.App. 3 Cir. 1/14/98); 706 So.2d 1015, writ denied, 98-379 (La.4/9/98); 717 So.2d 1145.

As the suit on the validity of the contracts progressed through the courts, the Church Point and Monroe boards placed Mr. Voitier on administrative leave and asked him to make a written disclosure of his employment with Baton Rouge. On December 5, 1996, Mr. Voitier provided written notice to the boards that he worked in essentially the same capacity for Baton Rouge as he did for Monroe and Church Point. On December 19, 1996, the Church Point and Monroe boards voted to terminate Mr. Voitier's employment with both companies. In a letter of December 26, 1996, the boards notified Mr. Voitier that his employment with Church Point and Baton Rouge was terminated due to his employment with Baton Rouge, concealing this employment, interfering with the board's attempts to gain information about company operations and attempting to prevent the shareholders from selling corporate assets.

Church Point and Monroe made further inquiry into Mr. Voitier's management after his termination. Their investigation revealed that he had made two interestfree $100,000 loans from their accounts to Baton Rouge without board authorization. It appeared that Mr. Voitier had concealed those loans by manipulating the corporations' financial records.

On February 5, 1997, Mr. Voitier filed suit against Church Point and Monroe seeking damages for wrongful termination and breach of contract. He sought a writ of attachment in order to seize $370,627.74, the proceeds of the sale of Church Point to Quality Brands. Church Point and Monroe answered the petition, alleging that Mr. Voitier was terminated for cause, noting the grounds set forth in the letter of December 26, 1996, e.g., violation of the exclusivity provisions, making unauthorized, unsecured, interest-free loans and for fraudulently concealing them. Church Point and Monroe reconvened against Mr. Voitier seeking damages for wrongful attachment and reimbursement of amounts paid by them in excess of Mr. Voitier's contractual salary.

The district court found that Mr. Voitier's termination was without cause as defined under his employment contracts and, thus, his termination was wrongful. The court also found that Mr. Voitier was required to return amounts paid in excess of his salary and denied his claim for penalty wages. The court awarded Mr. Voitier attorney fees and found the wrongful attachment issue moot because the parties had agreed that the funds should be deposited into an escrow account.

III.

LAW AND DISCUSSION

Standard of Review

A person may hire out his services for a limited time or for the performance of a certain enterprise. La.Civ. Code art. 2746. Under Louisiana law, employment agreements are a species of lease. "Lease or hire is a synallagmatic contract, to which consent alone is sufficient, and by which one party gives to the other the enjoyment of a thing, or his labor, at a fixed price." La.Civ.Code art. 2669 (emphasis in original); Adams v. Franchise Finance Corp. of America, 96-855 (La.App. 3 Cir. 2/5/97); 689 So.2d 572, writ denied, 97-604 (La.4/18/97); 692 So.2d 456. Contracts have the effect of law between the parties and may only be dissolved through the consent of the parties or on grounds provided by law. La. Civ.Code art.1983. Parties are obliged to perform contractual obligations in good faith. Id. Contracts are interpreted according to the common intent of the parties. L a.0 iv.0 od e art.2045. Courts are bound to venerate the clear and explicit language of contracts without further inquiry into the parties' intent when doing so does not lead to absurd consequences. La. Civ.Code art.2046; Amend v. McCabe, 95-316 (La.12/1/95); 664 So.2d 1183. "Whether the words of a contract are 'clear and explicit' or ambiguous is a question of law." Hebert v. Insurance Center, Inc., 97-298, p. 5 (La.App. 3 Cir. 1/7/98); 706 So.2d 1007, 1011, writ denied, 98-353 (La.3/27/98); 716 So.2d 888. Appellate courts apply the following standard of review when interpreting contracts:

Where factual findings are pertinent to the interpretation of a contract, those factual findings are not to be disturbed unless manifest error is shown. However, when appellate review is not premised upon any factual findings...