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Read v. Willwoods Community

Supreme Court of Louisiana

March 14, 2015

MICHAEL O. READ
v.
WILLWOODS COMMUNITY

ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIFTH CIRCUIT, PARISH OF JEFFERSON

JOHNSON, Chief Justice

We granted this writ application to determine whether the lower courts erred in finding plaintiff, Michael O. Read, and defendant, Willwoods Community, entered into a fixed term employment contract for five years. For the reasons set forth below, we hold the evidence in the record does not provide a reasonable factual basis for the lower courts' findings. Further, based on our review of the record, the jury's findings were clearly wrong. We therefore reverse the ruling of the court of appeal.

FACTS AND PROCEDURAL HISTORY

Willwoods is a non-profit corporation subject to the precepts of the Roman Catholic Church providing ministries in affordable housing, faith and marriage, WLAE TV and Eucharistic Adoration. Willwoods is governed by a Board of Trustees. In January of 2009, John Becker was chairman of the Board and Patrick Veters was vice chairman. Numerous others served as board members, including Monsignor Christopher Nalty and Dr. Frank Schmidt. Father Thomas Chambers served as president of Willwoods. In early 2009, Willwoods established the position of "Executive Director" as part of a succession plan to eventually succeed Father Chambers, who was then 74 years old. At a board meeting on January 20, 2009, a search and hiring committee was appointed to fill the position of Executive Director. The hiring committee was chaired by Mr. Veters, who was joined by Mr. Becker, Dr. Schmidt, and Monsignor Nalty.

Later in January of 2009, Mr. Read had dinner with his wife, mother and Father Chambers, who was a family friend. Mr. Read learned from Father Chambers that Willwoods was conducting a search for his successor. Mr. Read expressed interest, noting that working for a non-profit was something he would like to do before retirement. Several days later, Mr. Becker contacted Mr. Read regarding his interest in the position and asked him to submit a curriculum vitae. At the time, Mr. Read was 65 years old and an employee of Capital One Bank for more than eight years.

On February 19, 2009, the search committee interviewed three potential candidates, including Mr. Read. All three candidates were considered extremely qualified. Mr. Read was already known to the committee members with varying degrees of familiarity. Because the Executive Director would work closely with Father Chambers, Mr. Read was considered an ideal candidate due to their friendship. Mr. Read asserts that during the interview Mr. Veters asked him if, given his age of 65, he was prepared to commit to a period of employment for five or six years, to which Mr. Read responded affirmatively. While the search committee members did not have a recollection of the specific questions asked during the interview, they were in general agreement that Willwoods was looking for a dedicated employee who would not leave the job after a few months, and they did not want to go through the search process again any time soon. The committee members also unanimously testified that they never discussed or contemplated offering a specific term of employment to any of the candidates. No offer of employment was made to any of the three candidates on that date.

The committee met some time later to discuss the candidates and unanimously chose Mr. Read for the Executive Director position. Mr. Read testified he was first informed of Willwoods' decision at the Willwoods Gala on March 28, 2009, when Mr. Becker pulled him aside and told him that he was selected by the committee and Mr. Veters would contact him to set up a meeting to discuss the details of the job. That meeting occurred on April 24, 2009, at which time Mr. Read was formally offered and accepted the job. At the meeting, the parties discussed specifics such as salary, benefits, starting date and that the Executive Director would serve on the Board and the Executive Committee. There was no discussion at that meeting regarding a specific term of employment. There was no written contract of employment.

Mr. Read began employment as Executive Director of Willwoods on June 1, 2009. In the Spring of 2010, it became apparent to the Board that there was an issue regarding Mr. Read's continued employment. Mr. Read testified that in late April of 2010 he learned from Mr. Becker that the committee was meeting to discuss his termination. Mr. Read further testified he had no prior knowledge that there was a problem. Mr. Read met with Mr. Becker and Mr. Veters on May 25, 2010, to discuss the situation at which time Mr. Read was advised his employment at Willwoods was "not going to work." Mr. Read did not receive any formal notice of termination at that time and he continued to work at the Willwoods office, testifying that he still hoped things could be worked out. There was testimony that Mr. Read was asked to submit a voluntary resignation, which Willwoods asserts was offered as a courtesy to Mr. Read. Mr. Read refused to resign. Although there is some dispute in the record regarding the exact day, Mr. Read last worked at the Willwoods office some time in June of 2010. On June 23, 2010, Willwoods' attorney sent a formal termination letter to Mr. Read.[1]

Mr. Read subsequently filed suit against Willwoods alleging it had breached their five-year employment contract, seeking damages consisting of the remainder of his salary and benefits for the five-year period. The matter was tried before a jury who found in favor of Mr. Read by a 9-3 vote. Nine jurors specifically found there was a limited duration employment contract between Mr. Read and Willwoods and the duration of that contract was five years. The trial court denied Willwoods' motions for judgment notwithstanding the verdict and new trial, and entered judgment on the jury's verdict. The trial court calculated damages based on a pre-trial stipulation of the parties and awarded plaintiff $510, 328.75 in damages, together with interest from the date of judicial demand and all costs of the proceeding. Willwoods appealed and the court of appeal affirmed.[2] Willwoods filed a writ application with this court, which we granted.[3]

DISCUSSION

The employer-employee relationship is a contractual relationship, and thus an employer and employee may negotiate the terms of an employment contract and agree to any terms not prohibited by law or public policy.[4] Louisiana law provides that employment contracts are either limited term or terminable at will. Under a limited term contract the parties agree to be bound for a certain period during which the employee is not free to depart without assigning cause nor is the employer at liberty to dismiss the employee without cause. When a contract does not provide for a limited term, an employer can dismiss the employee at any time and for any reason without incurring liability.[5] When the employer and employee are silent on the terms of the employment contract, the Civil Code provides the default rule of employment-at-will.[6]

A contract is formed by the consent of the parties established through offer and acceptance.[7] Thus, an enforceable contract requires a meeting of the minds.[8] Unless the law requires a certain formality, offer and acceptance can be made orally.[9]Because there is a presumption that employment is at will, Mr. Read, as the party seeking damages under an alleged contract of employment for a limited term, bears the burden of proving he had a meeting of the minds with Willwoods on the term of employment.[10]

When an employee is hired under a limited term contract and is terminated without cause, the employer is liable to the employee for the amount of salary due under the contract.[11] Mr. Read asserted damages consisting of the remainder of his salary and benefits under a five-year contract. Because Mr. Read is seeking enforcement of an oral contract for more than five hundred dollars, the Civil Code requires that the contract be proved by the testimony of "one witness and other corroborating circumstances."[12] In Suire, we explained that "[t]he plaintiff himself may serve as the witness to establish the existence of the oral contract. The 'other corroborating circumstances' need only be general in nature; independent proof of every detail of the agreement is not required. But, the other corroboration must come from a source other than the plaintiff."[13] We must determine whether Mr. Read sustained his burden of proving the existence of an oral contract for a limited term of five years pursuant to La. C.C. art. 1846.

The existence or non-existence of a contract is a question of fact, and the trial court's determination of this issue will not be disturbed unless manifestly erroneous or clearly wrong.[14] Similarly, the issue of whether there were corroborating circumstances sufficient to establish an oral contract is a question of fact.[15] When evaluating the evidence needed to establish the existence or non-existence of a contract, the trier of fact is allowed to make credibility determinations.[16] The standard of review we must apply to a trial court's or a jury's findings of fact is well settled. A reviewing court may not set aside a trial court's or a jury's finding of fact in the absence of "manifest error" or unless it is "clearly wrong."[17] This court has stated a two-part test for the reversal of a factfinder's determinations: 1) the appellate court must find from the record that a reasonable factual basis does not exist for the finding of the trial court, and 2) the appellate court must further determine that the record establishes that the finding is clearly wrong or manifestly erroneous.[18] We are cognizant of the fact that we must do more than merely review the record for some evidence that supports the lower court's finding.[19] Rather, the reviewing court must review the entire record before it and determine whether the jury's finding was clearly wrong or manifestly erroneous.[20] With the foregoing legal standards in mind, our review of the entire record compels us to conclude that it does not contain sufficient evidence from which a rational trier of fact could find that Mr. Read and Willwoods had a meeting of the minds regarding a five-year employment contract.

In affirming the jury's verdict, the court of appeal found Mr. Read met his burden of proving the existence of a limited term oral employment contract based on his own testimony, as well as other generally corroborative evidence. Specifically, the court pointed to Mr. Read's testimony that during his interview Mr. Veters "made a statement that the committee did not want to go through this procedure again anytime soon, and said that they were looking for someone to make a commitment for five to six years."[21] The court stated that it was not holding that Mr. Veters' single interview question, by itself, established the fixed-term employment contract.[22] Rather, the court reasoned that this question, in conjunction with other corroborating facts and circumstances, formed a factual basis from which the jury could reasonably infer a meeting of the minds between the parties concerning a five-year employment contract.[23] The court found Mr. Read's decision to leave "secure employment" with Capital One Bank for employment with Willwoods corroborated his claim that he only accepted Willwoods' offer of employment on the condition it would be for a fixed term.[24] The court further noted that testimony from the committee members indicating their interest in Mr. Read's future and his level of commitment, their expressed need for a commitment longer than one year, and Monsignor Nalty's admission that the succession plan was probably between five and ten years, generally corroborated Mr. Read's assertion that there was a meeting of the minds concerning a five-year employment contract.[25] We disagree.

For a mandatory term employment contract to exist, "the parties [must] have clearly agreed to be bound for a certain period of time during which the employee is not free to depart without assigning cause and the employer is not free to depart without giving a reason."[26] The evidence in the record falls far short of what is needed to establish a contract under which neither Mr. Read nor Willwoods were free to terminate their employment relationship for five years. The crux of the court of appeal's ruling, as well as Mr. Read's claim, are statements attributed to Mr. Veters during the interview on February 19, 2009, inquiring about Mr. Read's willingness to "commit to employment for five or six years" considering his age, and testimony from the other committee members regarding their desire to hire an employee willing to work for longer than a year. However, the relevant testimony fails to prove a clear agreement between Mr. Read and Willwoods regarding a limited term employment contract. Mr. Read testified about the interview:

Q: Would you call this a chit chat or a social occasion, or something else? How would you describe this?
A: This was a normal interview we were going through.

Mr. Read explained:

A: During the meeting, Pat Veters made a statement that the committee did not want to go through this procedure again anytime soon, and said they were looking for someone to make a commitment for five to six years. Pat was seated right across from me, and he looked at me, and he said, "Mike, given your age of 65, are you prepared to make such a commitment." And I told Pat that I was. I had a very secure position at Capital One. I'd been here as a Senior Vice President for over eight years. And I planned to retire there by staying there up through age 70. We also had, I had two special needs children…for whom [my wife] and I both provide financial and emotional support. So, when Pat asked the question are you prepared to commit for a period of five to six years that was pivotal in my decision to consider leaving Capital One, and to go to Willwoods.
Q: And how did you respond to Pat's ...

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