Alexander v. Sandpiper Properties ( 1999 )

IN THE COURT OF APPEALS OF TENNESSEE
FILED
AT KNOXVILLE February 24, 1999
Cecil Crowson, Jr.
Appellate C ourt
Clerk
GINA CHANDLER ALEXANDER, ) C/A NO. 03A01-9804-CH-00125
)
Plaintiff-Appellant, )
)
)
)
v. ) APPEAL AS OF RIGHT FROM THE
) ROANE COUNTY CHANCERY COURT
)
SANDPIPER PROPERTIES, INC. and )
JOSEPH R. ALEXANDER, )
WILLIAM R. SCANDLYN and )
FREDERICK D. HARVEY, as Directors )
of Sandpiper Properties, Inc. )
) HONORABLE FRANK V. WILLIAMS, III
Defendants-Appellees. ) CHANCELLOR
For Appellant For Appellee
CHARLES B. HILL, II CHARLES M. FINN
Kingston, Tennessee Kramer, Rayson, Leake,
Rodgers & Morgan
Knoxville, Tennessee
O P I N IO N
AFFIRMED AND REMANDED Susano, J.
1
The plaintiff, Gina Chandler Alexander, seeks damages
for breach of an employment contract. The trial court granted
the defendants summary judgment and dismissed the plaintiff’s
suit. Plaintiff appeals, contending that there are genuine
issues of material fact that render summary judgment
inappropriate. We affirm.
I.
In 1990, the plaintiff and her husband, the defendant
Joseph R. Alexander (“Mr. Alexander”), incorporated Sandpiper
Properties, Inc. (“Sandpiper”) for the purpose of developing a
residential lakefront community known as Swan Harbour in Roane
County. Sandpiper prepared and issued to potential shareholders
a document entitled “Investment Brief,” which described the
development and set forth various and sundry information
regarding the project.
As a part of the development, the Alexanders formed a
limited partnership, Swan Harbour, L.P. (“the partnership”), with
Sandpiper as the general partner. The partnership was formed to
raise money for the development through the sale of limited
partnership units. A “Private Placement Memorandum” was prepared
in connection with the sale of the units. Both the Investment
Brief and the Private Placement Memorandum made reference to the
fact that the partnership would pay Sandpiper a monthly
management fee of $6,000 plus 3.5% of the partnership’s net
income. Payment of the monthly management fee was to commence as
2
soon as a certain level of investment had been secured through
the sale of the limited partnership units.
In April, 1994, the partnership secured the necessary
funding and began paying the monthly management fee to Sandpiper,
which in turn paid the fee to the management team composed of the
plaintiff and Mr. Alexander.
The plaintiff and Mr. Alexander were divorced in
December, 1994. Mr. Alexander subsequently lost interest in the
project and resigned from the Sandpiper management team; however,
he continued to own approximately 37% of the corporation’s common
stock.
In 1997, the Board of Directors of Sandpiper voted to
terminate the plaintiff’s employment. The plaintiff responded by
filing this suit1 against the corporation and its officers and
directors. She alleges that she had an employment contract with
Sandpiper by virtue of the documents published in connection with
the efforts of Sandpiper and the partnership to secure investors
for the development. She contends that her firing was a breach
of that employment contract.
The defendants filed a motion for summary judgment.
Their supporting material reflects that the plaintiff did not
1
The plaintiff’s complaint includes a shareholder’s derivative action
against Sandpiper and its new Board of Directors under T.C.A. § 48-17-401.
The trial court granted the defendants’ motion to dismiss as a matter of law
for failure to state a claim upon which relief could be granted. This matter
is not before us on this appeal.
3
have an employment contract for a definite term, but was,
instead, an at-will employee.
The plaintiff filed her affidavit, in which she
contends that the Investment Brief contains the following
statement:
An expected provision of Partnership, or
other funding entity formed,2 is a monthly
management fee of Six Thousand ($6,000.00)
Dollars plus an amount equal to 3.5% of Net
Income for that period to be paid to the
Corporation for compensation of two of the
Founders, J. R. and Gina C. Alexander. This
fee is for management and administrative
services and for the use of trade secrets
agreements, and proprietary information used
in managing the Sandpiper projects. The
management fee shall be payable beginning on
the date the partnership minimum offering
level is attained, or in accordance with the
alternate funding plan if so chosen, and will
continue until the Sandpiper project is
essentially completed.
(Emphasis added.) The plaintiff contends that this language
makes out a genuine issue of material fact on the question of
whether the plaintiff had an employment contract for a definite
term.
II.
Our standard of review of a grant of summary judgment
is well-settled. Our inquiry involves only a question of law,
with no presumption of correctness as to the trial court’s
2
This is obviously a reference to the later-formed limited partnership
of Swan Harbour, L.P.
4
decision. Robinson v. Omer, 952 S.W.2d 423, 426 (Tenn. 1997);
McCarley v. West Quality Food Service, 948 S.W.2d 477 (Tenn.
1997); Bain v. Wells, 936 S.W.2d 618 (Tenn. 1997); Byrd v. Hall,
847 S.W.2d 208, 210 (Tenn. 1993); Hardesty v. Service Merchandise
Co., Inc., 953 S.W.2d 678, 684 (Tenn.App. 1997). The moving
party has the initial burden of producing competent, material
evidence reflecting that there are no genuine issues of material
fact and that it is entitled to summary judgment as a matter of
law. Byrd, 847 S.W.2d at 211. This burden may be met by
affirmatively negating an essential element of the nonmoving
party’s claim or by conclusively establishing an affirmative
defense. Id. at 215 n.5.
If the moving party successfully carries its burden,
the burden then shifts to the nonmoving party to establish that
there are disputed material facts creating at least one genuine
issue that must be resolved by a trier of fact. Id. at 215. The
nonmoving party may contradict the factual predicate of the
summary judgment motion by presenting competent and admissible
evidence by way of affidavits or discovery materials. Rule 56.06
Tenn.R.Civ.P.; Robinson, 952 S.W.2d at 426 n.4; McCarley, 948
S.W.2d at 479; Byrd, 847 S.W.2d at 215 n.6.
In evaluating the evidence in the summary judgment
context, we must view the evidence in the light most favorable to
the nonmoving party, and we must draw all reasonable inferences
in favor of that party. Byrd, 847 S.W.2d at 210-11. Summary
judgment is appropriate only when there are no genuine issues of
5
material fact and when the undisputed material facts entitle the
moving party to a judgment as a matter of law. Rule 56.04,
Tenn.R.Civ.P.; Byrd, 847 S.W.2d at 211.
6
III.
In this case, the material filed by the defendants in
support of their motion for summary judgment demonstrates that
the plaintiff was an at-will employee. As such, her employment
was subject to termination with or without cause. Forrester v.
Stockstill, 869 S.W.2d 328, 330 (Tenn. 1994); Bennett v. Steiner-
Liff and Metal Co., 826 S.W.2d 119, 121 (Tenn. 1992); Loeffler v.
Kjellgren, 884 S.W.2d 463, 468 (Tenn.App. 1994); Brock v.
Provident Life and Accident Ins. Co., C/A No. 03A01-9509-CV-
00297, 1996 WL 134943 at *4 (Tenn.App., E.S., filed March 27,
1996).
The defendants’ motion for summary judgment was
“properly supported.” Byrd, 847 S.W.2d at 215. By demonstrating
that the plaintiff’s employment was at-will, the motion negated
an essential element of the plaintiff’s claim; specifically, it
negated the plaintiff’s allegation that her employment was
covered by an employment contract for a definite term.
Therefore, the burden on the motion shifted to the plaintiff --
the nonmoving party-- to establish the existence of “a genuine
issue of material fact for trial.” Byrd, 847 S.W.2d at 211. The
plaintiff could have met this burden by submitting affidavits
and/or discovery material that set forth “such facts as would be
admissible in evidence....” Rule 56.06, Tenn.R.Civ.P.; See
Robinson, 952 S.W.2d at 426 n.4; McCarley, 948 S.W.2d at 479;
Byrd, 847 S.W.2d at 215 n.6.
7
In response to the defendants’ motion, the plaintiff
filed her affidavit, which specifically relies on the Investment
Brief as evidence that a contract existed between her and
Sandpiper. While a full copy of that document is not in the
record certified to us, it does appear that it was attached to
the defendants’ summary judgment motion and considered by the
trial court. The defendants urge us not to consider that portion
of the affidavit which purports to quote from the Investment
Brief. They correctly point out that the Investment Brief should
be considered in its entirety, cf. Aetna Casualty and Surety Co.
v. Woods, 565 S.W.2d 861, 864 (Tenn. 1978), something we cannot
do because of the deficiency in the record. However, in view of
the fact that the quoted language was the primary focus of the
trial court’s inquiry in deciding whether summary judgment was
appropriate, we have decided to overlook the deficiency in the
record. See Rule 2, T.R.A.P.
IV.
It is clear that employment for an indefinite term is
employment at will. Nelson Trabue, Inc. v. Professional
Management - Automotive, Inc., 589 S.W.2d 661, 663 (Tenn. 1979);
Hooks v. Gibson, 842 S.W.2d 625, 628 (Tenn.App. 1992); Bringle v.
Methodist Hospital, 701 S.W.2d 622, 625 (Tenn.App. 1985); Graves
v. Anchor Wire Corporation of Tennessee, 692 S.W.2d 420, 422
(Tenn.App. 1985).
Assuming, for the purpose of discussion, that the
quoted language from the Investment Brief is evidence of a
8
contract, we do not find that it is evidence of an employment
contract for a definite term between the plaintiff and Sandpiper.
It is true that the quoted language does provide the outer limit
of the period during which the management fee is to be paid --
i.e., “until the Sandpiper project is essentially completed.”
However, this language cannot reasonably be construed as a
contract between the plaintiff and Sandpiper, committing the
latter to an employment relationship with the former for a
definite period of time. There are a number of reasons for this.
First, if the Investment Brief is evidence of anything, it is
some proof of a contractual relationship between the partnership
and Sandpiper. While it refers to a payment “to [Sandpiper] for
compensation of...J. R. and Gina C. Alexander,” it does not
directly address the terms and duration of the employment
relationship between the plaintiff and Sandpiper. Second, even
if this language could be construed as an employment contract
between the plaintiff and Sandpiper, the period during which the
management fee is to be paid is not expressly stated to be the
same as the term of the employment relationship between the
plaintiff and Sandpiper. Finally, the period of the payment is,
in fact, indefinite. One cannot determine, from the language
employed, the specific date on which the obligation to pay the
fee terminates. This is because the date on which the “project
is essentially completed” cannot be ascertained with certainty.
Thus, the ending date of the management fee obligation is
indefinite, i.e., we do not know the specific calendar date when
it will end.
9
We find that the plaintiff’s affidavit, liberally
construed in her favor, does not make out a genuine issue of
material fact as to whether the plaintiff had an employment
contract for a definite term. Since the defendants’ factual
material establishes the lack of a definite-term employment
contract, summary judgment was and is appropriate.
V.
The defendants seek damages for a frivolous appeal.
This is not an appropriate case for such an award. Accordingly,
their motion for same is denied.
VI.
The judgment of the trial court is affirmed. Costs on
appeal are taxed against the appellant. This case is remanded to
the trial court for collection of costs assessed below, pursuant
to applicable law.
_________________________
Charles D. Susano, Jr., J.
CONCUR:
______________________
Houston M. Goddard, J.
_____________________
Herschel P. Franks, J.
10