Williams v. First Tennessee Nat. Corp.

• Decision Date: 24 January 2003
• Docket Number: No. 05-02-00215-CV.,05-02-00215-CV.
• Citation: 97 S.W.3d 798
• Parties: Charles WILLIAMS, Appellant, v. FIRST TENNESSEE NATIONAL CORPORATION, a Tennessee Corporation, and First Horizon Home Loan Corporation f/k/a FT Mortgage Companies, Appellees.
• Court: Texas Court of Appeals

97 S.W.3d 798

Charles WILLIAMS, Appellant, v. FIRST TENNESSEE NATIONAL CORPORATION, a Tennessee Corporation, and First Horizon Home Loan Corporation f/k/a FT Mortgage Companies, Appellees.

No. 05-02-00215-CV.

Court of Appeals of Texas, Dallas.

January 24, 2003.

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Vincent R. Kirst, Law Firm of Vincent R. Kirst, Irving, for Appellant.

Kelly S. Gooch, Frederick Lewis, Craig A. Cowart, Lewis, Fisher, Henderson, Claxton & Mulroy, LLP, Memphis, TN, Amanda S. Lewis, Strasburger & Price, L.L.P., Dallas, for Appellee.

Before Chief Justices THOMAS, CORNELIUS,¹ and BOYD.²

OPINION

Opinion by Chief Justice CORNELIUS(Retired).

Charles Williams appeals the summary judgment rendered in favor of his former employer, First Horizon Home Loan Corporation f/k/a FT Mortgage Companies, and its parent company, First Tennessee National Corporation (collectively, "First Horizon"). In two issues, Williams argues that summary judgment was improper because genuine issues of material fact exist with regard to his breach of contract and intentional infliction of emotional distress claims. We affirm the judgment.

In 1998, First Horizon hired Williams to help prepare the company's computers for potential Y2K problems. Although Williams feared the company would not need his services after the Y2K problems had been addressed and corrected, he accepted the job. Before Williams accepted the job, First Horizon sent him a letter describing the job, the salary, the benefits package, and a special severance package "in the event of a change in control." As to the severance package, the letter stated, "You will be covered by FT's special severance in the event of a change in control. I can provide details at your request." The letter also stated it was "an offer of employment and should not be construed as an employment contract." It requested Williams's signature if he agreed with the terms outlined in the letter. Williams signed the letter and started working for First Horizon. First Horizon issued Williams a company credit card, which Williams used for business and personal use, with the understanding that personal use was authorized so long as he paid the balances monthly. At one point, when Williams failed to pay the monthly balance, First Horizon Loss Prevention Officer David Scaff and Human Resources Supervisor Rhonda Lawson called Williams into a private office and, in the presence of another employee, Janice Smith, questioned him about his credit card use. Lawson then terminated Williams, and Smith escorted him to his office to retrieve his personal effects. Then, while escorting Williams out of the building, Smith stated in the presence of additional employees standing in an "open bull pen" area that Williams had been terminated and would not be eligible to be rehired.

Williams sued First Horizon for breach of contract and intentional infliction of emotional distress. The trial court granted First Horizon's motion for summary judgment, and Williams appeals.

The standard of review on appeal is whether the successful movant at the trial court level carried its burden of showing there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. See Gonzales v. City of El Paso, 978 S.W.2d 619, 621 (Tex.App.-El Paso 1998, no pet.) (citing Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991)). The question on appeal is whether the summary judgment proof establishes, as a matter of law, that there is no genuine issue of material fact as to one or more of the essential elements of the movant's cause of action or claim. Id. In resolving the issue of whether the movant has carried this burden, we take as true all evidence favorable to the nonmovant and resolve all doubts in the nonmovant's favor. See id. Where the defendants are the movants and they submit summary judgment evidence disproving at least one essential element of each of the plaintiffs' causes of action, summary judgment should be granted. Id. Furthermore, where, as here, the trial court's order granting summary judgment does not specify the ground or grounds on which it bases its ruling, summary judgment will be affirmed on appeal if any of the theories advanced in the motion for summary judgment is meritorious. Id.

In his first issue, Williams questions whether First Horizon proved as a matter of law that he could not establish a claim for breach of contract on either of two grounds: (1) failing to terminate in accordance with the company's own rules and procedures, and (2) failing to give Williams a severance package on his termination.

The elements of a breach of contract claim are: (1) the existence of a valid contract; (2) the plaintiff performed; (3) the defendant breached the contract; and (4) the plaintiff was damaged as a result of the breach. The question presented here is whether a valid contract existed. Texas follows the employment-at-will doctrine, and employment for an indefinite term may be terminated at will and without cause. Reyna v. First Nat'l Bank in Edinburg, 55 S.W.3d 58, 71 (Tex.App.-Corpus Christi 2001, no pet.). Absent a specific contract term to the contrary, this doctrine allows an employee to quit or be terminated without liability on the part of the employer or the employee, with or without cause. A discharged employee who asserts that the parties have contractually agreed to limit the employer's right to terminate the employee at will has the burden of proving an express agreement or written representation to that effect. To rebut the presumption of employment at will, an employment contract must directly limit in a "meaningful and special way" the employer's right to terminate the employee without cause. Id. In an employment-at-will situation, an employee policy handbook or manual does not, by itself, constitute a binding contract for the benefits and policies stated unless the manual uses language clearly indicating an intent to do so. Gamble v. Gregg County, 932 S.W.2d 253, 255 (Tex.App.-Texarkana 1996, no writ); see Vida v. El Paso Employees' Fed. Credit Union, 885 S.W.2d 177, 181 (Tex.App.-El Paso 1994, no writ). In those cases holding that personnel manuals may create contractual rights, there is either language in the manuals expressing contractual intent, or the manuals were complemented by oral agreements making the policy provisions binding. See Gamble, 932 S.W.2d at 255.

Here, Williams signed the personnel manual, acknowledging that he read and understood it. The manual's preface stated it did not constitute an employment contract. A disclaimer in an employee handbook, such as the one included in the preface, negates any implication that a personnel procedures manual places a restriction on the employment-at-will relationship. See Fed. Exp. Corp. v. Dutschmann, 846 S.W.2d 282, 283 (Tex.1993).

Even if the disclaimer had not existed, the manual's provision regarding termination did not limit in a "meaningful and special way" First Horizon's right to terminate an employee without cause. That provision stated that termination was appropriate where the employee's conduct was of such a serious nature as to warrant immediate dismissal. In such event, the employee's supervisor should recommend termination to the next level of management for approval and confer with the local personnel representative before advising the employee of the decision. This provision merely explained the termination procedure that the supervisor should employ. It did not limit the company's right to terminate an at-will employee. See Haynes v. City of Beaumont, 35 S.W.3d 166, 179 (Tex.App.-Texarkana 2000, no pet.) (handbook's detailed disciplinary regimen for employee termination did not expressly, clearly, and specifically modify at-will employment status). The manual in this case did not create a contract.

Furthermore, even if the parties had entered into a contract, First Horizon committed no breach by failing to give Williams severance pay. Williams accepted and signed a letter that stated the severance package was available to him "in the event of a change in control," and there is no evidence First Horizon experienced a change in control (CIC) as defined under the severance plan. First Horizon's CIC plan included examples such as where another person or company acquires at least twenty percent of FTNC stock, a change in the majority of FTNC's Board of Directors without the approval of the incumbent Board, or a merger where FTNC does not remain in control. "The CIC Plan goes into effect only if there is a CIC ... and within 36 months after CIC, employment is terminated by FTNC." Because Williams's termination did not fall within the terms of the CIC plan, he was not entitled to severance pay.

First Horizon's severance package is set out in detail in the company's personnel manual. In Williams's affidavit and deposition testimony supporting his response to First Horizon's motion for summary judgment, he said he sought additional information regarding the circumstances under which he would be entitled to severance pay and was referred to Stan Cain, a senior vice president of the company. He said Cain told him he would be entitled to severance benefits in the event he was...