Scot Swan v. Sherriff-Goslin Co

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
SCOT SWAN, UNPUBLISHED
January 23, 2020
Plaintiff/Counterdefendant-
Appellant,
v No. 344597
Calhoun Circuit Court
SHERRIFF-GOSLIN COMPANY, ROBERT C. LC No. 2016-002779-CK
SHERRIFF, WILLIAM TICKNOR, and
STEPHEN TICKNOR
Defendants/Counterplaintiffs-
Appellees.
Before: CAMERON, P.J., and SHAPIRO and SWARTZLE, JJ.
PER CURIAM.
In this employment action, plaintiff challenges on appeal the trial court’s rulings granting
defendants summary disposition of his claims for breach of contract, promissory estoppel, and
wrongful termination pursuant to MCR 2.116(C)(10). We affirm.
I. BACKGROUND
Defendant Sherriff-Goslin Company (SG) is a roofing and siding company with multiple
branches in Michigan, Ohio, and Indiana. Defendant William Ticknor (“Ticknor”) is SG’s
chairman. Defendant Robert C. Sherriff (“Sherriff”) is SG’s president. Defendant Stephen
Ticknor is SG’s treasurer and vice president. Plaintiff began employment with SG as a salesman
in Indiana in 1982. He was later promoted to branch manager in Dayton, Ohio, and on January
1, 2015, became a “branch operations trainer,” a position he occupied until his termination on
June 15, 2016. At issue in this appeal is whether plaintiff is entitled to compensation for the
yearly bonus 1% Manager Training Pay (“1% MTP”) he had been earning before his discharge,
and whether plaintiff was an at-will employee or could be fired only for just cause. The trial
court granted summary disposition in favor of defendants with respect to both issues.
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II. BREACH OF CONTRACT
Plaintiff first argues that the trial court erroneously ruled that there was no genuine issue
of material fact regarding his entitlement to continued 1% MTP payments after his discharge
from employment. We disagree.1
A court’s goal in interpreting a contract is to give effect to the intent of the parties, and
“[t]he words used in the contract are the best evidence the parties’ intent.” Kyocera Corp v
Hemlock Semiconductor, LLC, 313 Mich App 437, 446; 886 NW2d 445 (2015). However,
[c]ourts seek to find a fair reading of contract language—not a strict one—
because strict constructionism destabilizes the whole enterprise of contract law.
Scalia & Garner, Reading Law: The Interpretation of Legal Texts (St. Paul:
Thomson/West, 2012), pp 39-41 and 355-358. Brittle, hyperliteral interpretations
make agreements fragile and impractical. [Thiel v Goyings, ___ Mich ___, ___;
___ NW2d ___ (2019) (Docket No. 156708); slip op at 13.]
In addition, “[w]ords should not be construed in the void, but should be read together to
harmonize the meaning, giving effect to the [agreement] as a whole.” Id. at ___; slip op at 14
(quotations and citations omitted). “[W]here a term is not defined in a contract, we will interpret
such term in accordance with its commonly used meaning.” Bloomfield Estates Improvement
Ass’n, Inc v City of Birmingham, 479 Mich 206, 215; 737 NW2d 670 (2007). “In determining
what a typical layperson would understand a particular term to mean, it is customary to turn to
dictionary definitions.” Drouillard v American Alternative Ins Corp, 504 Mich 919; 929 NW2d
777 (2019).
The basis for the 1% MTP payments was a 1980 company bulletin in which the
company’s then president, Fred Sherriff, offered the compensation as an incentive for branch
managers to train salespeople to become branch managers. The bulletin, which was created by
Lansing Branch Manager Ed Hieftje III at Fred Sherriff’s instruction, stated, in pertinent part:
Getting paid for training Managers
I have talked to 3 Managers in the last week and all 3 did not understand
how they get paid if they train and put out a new Manager. He will receive 1% on
the total volume of the new Managers volume each year. This will go on even
1
We review a trial court’s decision on a motion for summary disposition de novo. Zaher v
Miotke, 300 Mich App 132, 139; 832 NW2d 266 (2013). In reviewing a motion brought under
MCR 2.116(C)(10), we consider the affidavits, pleadings, depositions, admissions, and other
evidence submitted by the parties in a light most favorable to the nonmoving party. Maiden v
Rozwood, 461 Mich 109, 119-120; 597 NW2d 817 (1999). “Similarly, whether contract
language is ambiguous is a question of law that we review de novo,” and “the proper
interpretation of a contract is also a question of law that we review de novo.” Klapp v United Ins
Group Agency, Inc, 468 Mich 459, 463; 663 NW2d 447 (2003).
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after you retire as long as the new Manager stays employed by us. I don’t think a
lot of our Managers know the significance of this in the amount of money it can
put in our pockets. We need new men and Mr. Sherriff is paying big bucks for
hiring and training. More on this in the coming months. If there are any
questions, call me and I’ll be glad to explain. [Emphasis added.]
The parties agree that the 1% MTP was made a company-wide policy in order to provide a
training incentive for branch managers, such as plaintiff, in return for the loss of other
compensation the managers would otherwise receive from sales made by trainees. Hiefjte
referred other managers to the bulletin and it was subsequently included in a binder of bulletins
and information that was given to every branch manager in the company. Plaintiff
acknowledged that he received the bulletin in his binder and read it during his first week as the
Dayton manager in 1983.
SG stopped paying the 1% MTP to plaintiff after his discharge. Plaintiff brought this
action, alleging claims for breach of contract and promissory estoppel. After discovery, the trial
court found that the parties’ agreement did not provide for continued payment, and the court
granted defendants’ motion for summary disposition with respect to plaintiff’s breach-of-contract
and promissory estoppel claims. The trial court reasoned that plaintiff did not qualify for
continued payment of the 1% MTP because he did not retire but rather was discharged.
“It is well settled under Michigan law that an employer’s statement of policy contained in
a manual or handbook can give rise to contractual obligations in certain circumstances.” Bodnar
v St John Providence, Inc, 327 Mich App 203, 213; 933 NW2d 363 (2019). Defendants concede
that the bulletin explaining the %1 MTP conferred a contractual benefit to branch managers.
Plaintiff argues that there is an implied-in-fact contract regarding the 1% MTP. “Courts,
however, may not imply a contract if the parties have an express contract covering the same
subject matter.” AFT Mich v Michigan, 303 Mich App 651, 660; 846 NW2d 583 (2014).
Accordingly, the bulletin describing the 1% MTP policy controls this dispute.
The only post-employment benefit contemplated by the bulletin concerns retirement.
“Retire” is not defined in the MTP bulletin. The parties argued below whether “retirement”
required that an individual either reach the age of 62, or be over 59½ years old and have 30 years
of service as set forth in the company’s profit sharing plan. However, we need not reach this
question given that plaintiff did not voluntarily retire from employment, but instead was
involuntarily discharged, i.e., fired.
Retirement is plainly different from being fired. Plaintiff does not argue that he retired or
that anyone ever specifically defined “retire”2 to him in such a manner that would cause him to
reasonably believe that he would continue to receive the 1% MTP even if he was discharged.
Nor does he allege that SG discharged him to avoid having to pay him that benefit in retirement.
Instead, plaintiff suggests that he is still entitled to the continued payments because, had Fred
2
Merriam-Webster’s Collegiate Dictionary (11th ed) defines “retire,” in pertinent part, as “to
withdraw from one’s position or occupation: conclude one’s working or professional career.”
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Sherriff wanted retirement to be the only way to qualify, he would have used language such as
“only if you retire” instead of “even after you retire” when he had Hieftje draft the bulletin.
Plaintiff is essentially requesting that we engage in a “[b]rittle, hyperliteral” construction of this
portion of the bulletin’s phrasing. See Thiel, ___ Mich at ___; slip op at 13. We decline to do so.
Even if the bulletin language is not controlling, plaintiff has presented no testimony or
other evidence to create a question of fact whether the parties agreed that the 1% MTP was
intended to continue for the trainer’s life, no matter the circumstances of the trainer’s departure
from SG. Plaintiff relies on a statement in Hieftje’s deposition testimony that the intention was
that the training manager would receive the 1% MTP pay for the manager’s whole life.
However, plaintiff ignores the balance of Hieftje’s testimony that “[w]hen you quit . . . you’re
done with the one percent” and that the 1% MTP would also not continue if the manager was
fired. Plaintiff also presented no other evidence in support of his proffered interpretation, such
as an example of another manager who continued to receive the 1% MTP after being fired from
SG. In contrast, defendants presented the example of another employee who did not continue to
receive the 1% MTP after he was fired.
In sum, even when viewed in plaintiff’s favor, the evidence supports the trial court’s
determination that under the agreement outlined in the 1980 bulletin there was no genuine issue
of material fact regarding plaintiff’s entitlement to continued 1% MTP payments. Accordingly,
the trial court did not err by granting defendants’ motion for summary disposition with respect to
plaintiff’s breach-of-contract and promissory estoppel claims.3
III. WRONGFUL TERMINATION
Plaintiff also argues that the trial court erred by dismissing his wrongful-termination
claim on the ground that there was no genuine issue of material fact with regard to whether
plaintiff could only be discharged for just cause. We disagree.
“Generally, and under Michigan law by presumption, employment relationships are
terminable at the will of either party.” Lytle v Malady (On Reh), 458 Mich 153, 163; 579 NW2d
906 (1998). Employment contracts for an indefinite period produce a presumption of
employment at-will absent distinguishing features to the contrary. Dolan v Continental
Airlines/Continental Express, 454 Mich 373, 383; 563 NW2d 23 (1997.) An employee whose
employment relationship is at-will can have his employment terminated at any time for any, or
no, reason. Suchodolski v Mich Consol Gas Co, 412 Mich 692, 694-695; 316 NW2d 710 (1982).
A promise to terminate only for just cause may overcome the presumption of at-will
employment, as can company policies that instill legitimate expectations of job security in
employees also may overcome the presumption. Dolan, 454 Mich at 383-384. There is a two-
step inquiry for evaluating legitimate-expectations claims:
3
Plaintiff does not provide an analysis of the elements of promissory estoppel or the court’s
dismissal of this claim and argues only that the parties had a contract that defendants breached.
Accordingly, he has abandoned this claim on appeal. See Innovation Ventures v Liquid Mfr, 499
Mich 491, 518-519; 885 NW2d 861 (2016).
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The first step is to decide “what, if anything, the employer has promised,”
and the second requires a determination of whether that promise is “reasonably
capable of instilling a legitimate expectation of just-cause employment . . . .”
[Lytle, 458 Mich at 164-165, quoting Rood v Gen Dynamics Corp, 444 Mich 107,
138-139; 507 NW2d 591 (1993).]
In this case, different versions of SG’s employee handbook contained specific language
providing for at-will employment. For example, the 1998 handbook provided:
EMPLOYMENT AGREEMENT
I recognize that my employment with Sheriff-Goslin is “at will” and may
be terminated either by myself or the Company at any time, with or without notice
and with or without cause. No modifications may be made to my “at will”
employment unless the specific terms are authorized in writing by the Chairman
and/or President of the Company.
The 2015 version of the handbook contains substantially similar language. Defendants
submitted documents showing that plaintiff was fully aware of these provisions.
In Lytle, the Supreme Court held that a claim of just-cause employment could not be
based on a statement in the employer’s handbook that “[n]o employee will be terminated without
proper cause or reason and not until management has made a careful review of the facts.” Lytle,
458 Mich at 166. The Court found that this language was insufficient to overcome the strong
presumption of at-will employment, particularly where the handbook provided that none of its
contents were intended to establish a contract between the employer and employees. Id. Given
Lytle, plaintiff cannot maintain a legitimate-expectations claim. The handbook clearly sets out
SG’s policy of at-will employment. The handbook also provides that any contract for just-cause
employment must be set out in writing and signed by either the president (Sherriff) or the
chairman (William Ticknor). Plaintiff has not shown that any such just-cause writing exists with
respect to his employment.
In addition, plaintiff fails to provide extrinsic evidence that would create a question of
fact whether he had a legitimate expectation of just-cause employment. In their depositions,
Sherriff and Ticknor both acknowledged that the official company policy was at-will
employment. Sherriff specifically testified that it was in his or Ticknor’s discretion whether to
use the at-will provision when deciding whether to discharge an employee. Despite the
acknowledgments by Sherriff or Ticknor that they preferred to fire employees only when there
was a good reason to do so, their contractual commitment to their employees did not extent
beyond a promise of at-will employment and so they were not legally required to prove just
cause in the event of a termination. Their statements that they would need a “good reason” to
fire an employee or wanted to treat their employees fairly is not a “clear” statement as to what is
being promised. See Lytle, 458 Mich at 164. And although Sherriff and Ticknor maintained that
they had not yet fired an employee without good reason, and they did not intend to do so, this did
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not give rise to a reasonably legitimate expectation that they could not do so, particularly in light
of the at-will provisions in the written handbook.4
For these reasons, the trial court did not err when it granted summary disposition in favor
of defendants with respect to plaintiff’s wrongful discharge claim.
Affirmed.
/s/ Thomas C. Cameron
/s/ Douglas B. Shapiro
/s/ Brock A. Swartzle
4
Plaintiff was fired from SG on June 15, 2016, amid allegations that he had misappropriated
rebates from SG’s suppliers.
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