James I Adams v. Institute of Comnty Servs

IN THE COURT OF APPEALS
OF THE
STATE OF MISSISSIPPI
NO. 97-CA-00786 COA
JAMES I. ADAMS APPELLANT
v.
INSTITUTE OF COMMUNITY SERVICES, INC. APPELLEE
DATE OF JUDGMENT: 05/23/97
TRIAL JUDGE: HON. R. KENNETH COLEMAN
COURT FROM WHICH APPEALED: MARSHALL COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: CHARLES VICTOR MCTEER
J. KEITH PEARSON
BENNIE LE NARD RICHARD
ATTORNEY FOR APPELLEE: WILLIAM F. SCHNELLER
LESTER F. SUMNERS
NATURE OF THE CASE: CIVIL - OTHER
TRIAL COURT DISPOSITION: TRIAL COURT SET ASIDE $80,000 VERDICT IN FAVOR
OF APPELLANT, GRANTING APPELLEE JNOV.
DISPOSITION: AFFIRMED - 11/24/98
MOTION FOR REHEARING FILED: 12/7/98
CERTIORARI FILED: 2/9/99
MANDATE ISSUED: 4/29/99
BEFORE THOMAS, P.J., DIAZ, AND SOUTHWICK, JJ.
THOMAS, P.J., FOR THE COURT:
¶1. James I. Adams appeals the circuit court's grant of a JNOV to the Institute of Community Services,
Inc., raising the following issues as error:
I. THE CIRCUIT COURT ERRED IN GRANTING A JNOV TO THE INSTITUTE OF
COMMUNITY SERVICES, INC. BECAUSE AN EMPLOYEE WITH AN UNWRITTEN
EMPLOYMENT CONTRACT FOR AN INDEFINITE PERIOD MAY PURSUE A
CLAIM FOR WRONGFUL DEMOTION OR DISCHARGE AGAINST AN EMPLOYER
WHO REPRESENTS OR ACKNOWLEDGES A DUTY OF GOOD FAITH AND/OR
FAIR DEALINGS IN EMPLOYMENT TO SAID EMPLOYEE.
II. THE CIRCUIT COURT ERRED IN HOLDING THAT EVIDENCE AND
REASONABLE INFERENCES SUPPORTING THE PLAINTIFF'S CLAIMS WERE SO
LACKING THAT NO REASONABLE JUROR COULD FIND FOR PLAINTIFF
CONSIDERING ALL THE FACTS HEREIN IN THE LIGHT MOST FAVORABLE TO
PLAINTIFF AND DISREGARDING EVIDENCE PRESENTED BY DEFENDANT IN
CONFLICT WITH THE EVIDENCE FAVORABLE TO PLAINTIFF.
III. THE CIRCUIT COURT ERRED IN GRANTING A JNOV TO THE INSTITUTE OF
COMMUNITY SERVICES, INC. BECAUSE REASONABLE JURORS COULD FIND
THE DEFENDANT DID NOT ACT IN GOOD FAITH OR FAIR DEALING WITH
ADAMS BASED UPON THE TESTIMONY OF ADAMS AND OTHERS.
IV. THE CIRCUIT COURT ERRED IN GRANTING A JNOV TO THE INSTITUTE OF
COMMUNITY SERVICES, INC. CONSIDERING ADAM'S TESTIMONY THAT HIS
DEMOTION AND TERMINATION WERE UNFAIR AND WITHOUT JUST CAUSE.
¶2. Finding no error, we affirm.
FACTS
¶3. The Institute of Community Services, Inc. (ICS) is a private nonprofit organization which operates Head
Start programs and whose primary purpose is to provide comprehensive child development services for
poor children and families. ICS is funded by the federal government. James I. Adams was hired by ICS in
1969 to serve as the chief financial officer for the organization at the request of Executive Director Arvern
Moore. Adams resigned from his position of ten years as a school teacher with a local school district to
take the position with ICS. There was no written employment contract.
¶4. In 1982, Moore took a leave of absence from ICS for a full year. Moore chose Adams to serve as
acting executive director during this time. Upon Moore's return to ICS, the relationship between Moore and
Adams progressively deteriorated. Moore began grading Adams poorly on evaluations, and Adams was
criticized by Moore for various delinquencies in his job performance.
¶5. At the behest of Moore, a reorganization of ICS was begun in February 1990. The position of chief
financial officer was eliminated, and the business and field operations were combined. Adams was
reassigned to the position of parent involvement coordinator at a salary of $22,000 per year. As chief
financial officer, Adams was paid $35,069 per year. Under the reorganization of ICS none of ICS's other
400 employees experienced a pay cut except Adams. Adams unsuccessfully appealed this demotion
through ICS's appeal process.
¶6. Under the new position, Adams no longer reported directly to Moore. However, Adams's new
supervisor began making complaints about Adams. Adams protested that he was not allowed to carry out
his new job duties for he was barred from visiting all the Head Start centers. Furthermore, Adams
complained he was forced to do a variety of manual labor tasks not listed on his job description, including
cleaning commodes and lawn work. Effective July 1991, the position of parent involvement coordinator
was eliminated, and Adams was not offered other employment with ICS. After leaving ICS, Adams taught
school earning approximately $24,000 per year.
¶7. In May 1991, Adams filed suit alleging that ICS and Moore had wrongfully demoted and discharged
him. ICS and Moore answered the complaint, and in so doing, admitted they owed Adams a duty of good
faith and fair dealing in his employment with ICS. On the first day of trial, ICS and Moore tried to amend
their answer claiming they did not owe Adams a duty of good faith and fair dealing. However, this motion
was denied. ICS and Moore pursued a pretrial motion for summary judgment and a motion for directed
verdict at the close of the case, but both were denied by the trial court. After deliberations, the jury returned
a verdict for Adams in the amount of $80,000. ICS and Moore then filed a motion for a judgment
notwithstanding the verdict. This motion was granted and judgment entered for ICS and Moore. From this
decision Adams appeals.
ANALYSIS
I.
THE CIRCUIT COURT ERRED IN GRANTING A JNOV TO THE INSTITUTE OF
COMMUNITY SERVICES, INC. BECAUSE AN EMPLOYEE WITH AN UNWRITTEN
EMPLOYMENT CONTRACT FOR AN INDEFINITE PERIOD MAY PURSUE A
CLAIM FOR WRONGFUL DEMOTION OR DISCHARGE AGAINST AN EMPLOYER
WHO REPRESENTS OR ACKNOWLEDGES A DUTY OF GOOD FAITH AND/OR
FAIR DEALINGS IN EMPLOYMENT TO SAID EMPLOYEE.
II.
THE CIRCUIT COURT ERRED IN HOLDING THAT EVIDENCE AND REASONABLE
INFERENCES SUPPORTING THE PLAINTIFF'S CLAIMS WERE SO LACKING THAT
NO REASONABLE JUROR COULD FIND FOR PLAINTIFF CONSIDERING ALL THE
FACTS HEREIN IN THE LIGHT MOST FAVORABLE TO PLAINTIFF AND
DISREGARDING EVIDENCE PRESENTED BY DEFENDANT IN CONFLICT WITH
THE EVIDENCE FAVORABLE TO PLAINTIFF.
III.
THE CIRCUIT COURT ERRED IN GRANTING A JNOV TO THE INSTITUTE OF
COMMUNITY SERVICES, INC. BECAUSE REASONABLE JURORS COULD FIND
THE DEFENDANT DID NOT ACT IN GOOD FAITH OR FAIR DEALING WITH
ADAMS BASED UPON THE TESTIMONY OF ADAMS AND OTHERS.
IV.
THE CIRCUIT COURT ERRED IN GRANTING A JNOV TO THE INSTITUTE OF
COMMUNITY SERVICES, INC. CONSIDERING ADAM'S TESTIMONY THAT HIS
DEMOTION AND TERMINATION WERE UNFAIR AND WITHOUT JUST CAUSE.
¶8. Adams argues that Mississippi has always asserted an employment-at-will relationship can be modified
by an acknowledged duty or privilege afforded an employee by an employer. Perry v. Sears, Roebuck &
Co., 508 So. 2d 1086, 1086 (Miss. 1987). In Perry, according to Adams, the Mississippi Supreme Court
held that a written contract can be modified by a policy handbook which then becomes part of the contract,
but only where the contract expressly provides that it will be performed in accordance with the policies,
rules, and regulations of the employer. Perry, 508 So. 2d at 1088. Furthermore, Adams points out that the
Mississippi Supreme Court has emphatically stated, "We hold the employer to its word." Bobbitt v. The
Orchard, Ltd., 603 So. 2d 356, 361 (Miss. 1992).
¶9. Adams acknowledges that in this case there was no specific written employment contract specifying the
length of employment. However, Adams points to the fact that ICS admitted an express duty of good faith
and fair dealing. Adams contends that an admitted express duty or privilege, similar to a personnel manual in
Perry, "can create contractual obligations, even in the absence of a written agreement." Perry, 508 So. 2d
at 1088. Under these unique circumstances, Adams maintains that ICS and Moore had a duty to be fair
and honest in all their dealings with him.
¶10. Therefore, Adams asserts that it was improper of the trial court to set aside the jury verdict because
sufficient evidence existed showing that (1) ICS and Moore breached their duty to Adams; (2) ICS's and
Moore's decision to terminate Adams was unfair; (3) the charges levied against Adams were untrue; (4)
Adams was not provided a fair opportunity to perform his job tasks in the new position; (5) Adams was
unfairly assigned menial job tasks outside of the framework of the job description; (6) Adams was the
victim of bad intent of ICS and Moore; and (7) Moore engaged in a plan to rid himself of Adams, a person
whom he believed to be an eventual competitor for the executive director's job.
¶11. "A Motion for JNOV tests the legal sufficiency of the evidence supporting the verdict." Tharp v.
Bunge Corp., 641 So. 2d 20, 23 (Miss. 1994) (citing Goodwin v. Derryberry Co., 553 So. 2d 40, 42
(Miss. 1989)); Stubblefield v. Jesco, Inc., 464 So. 2d 47, 54 (Miss. 1984)). The movant asks the trial
court to hold, as a matter of law, that the verdict cannot stand. Id. "The trial court must consider the
evidence of the non-moving party in the light most favorable to the non-moving party and give that party the
benefit of all favorable inferences that reasonably may be drawn." Id. The motion for a JNOV must be
denied if the evidence is sufficient to support a verdict in favor of the non-moving party. Id. (citing
Goodwin, 553 So. 2d at 42-43). "On appeal from a judgment notwithstanding the verdict, we consider the
evidence in the light most favorable to the plaintiffs, disregard evidence on the part of defendant in conflict
with that favorable to plaintiffs, and if the evidence and reasonable inferences to be drawn therefrom would
support a verdict for plaintiffs, the jury verdict must be reinstated." Gast v. Rogers-Dingus Chevrolet,
585 So. 2d 725, 727 (Miss. 1991) (citations omitted).
¶12. It is undisputed in this case that Adams had no written contract of employment and that his
employment was for an indefinite term. Time and again our supreme court has delineated that:
Mississippi follows the common law rule that a contract of employment for an indefinite term may be
terminated at the will of either party. The employee can quit at will; the employer can terminate at will.
This means either the employer or the employee may have a good reason, a wrong reason, or no
reason for terminating the employment contract.
Bobbitt, 603 So. 2d at 360 (quoting Kelly v. Mississippi Valley Gas Co., 397 So. 2d 874 (Miss. 1981))
.
¶13. Adams had no written contract and was hired for an indefinite period of time, and therefore, he was an
"at will" employee subject to termination for "a good reason, a wrong reason, or no reason." Nevertheless,
Adams insists that ICS's and Moore's answer to his complaint afforded him good faith and fair dealing
preventing his discharge under the circumstances of this case, and thus entitled him to damages for lost
wages. Adams bases his argument on a reading of Perry and Bobbitt. The cases cited by Adams,
however, deal with specific detailed written policy handbooks or manuals, which became part of the
employee contract, and thus created obligations for the employer. Adams does not base his claim on any
right to administrative remedies pursuant to ICS's policy manual, but instead bases his entire claim on ICS's
and Moore's admitted duty to treat him fairly. Such a duty does not create a tenure or create any right to a
specific term of employment.
¶14. It appears that Adams is trying to recover damages for breach of the covenant of good faith and fair
dealing. As our supreme court observed in Perry:
Wrongful discharge actions, not founded on some theory of contract essentially sound in tort, although
some of the theories have attributes associated with both contract and tort. Of these hybrids, the most
prominent, (though as yet a small minority view), is the theory of the implied covenant of good faith
and fair dealing. Any breach of this implied covenant by malicious termination or harassment is said to
give the victim a tort action for wrongful discharge. This seems to be the theory most closely
resembling the posture of appellant's brief, which lays great emphasis on the malice of Porter's
conduct towards Perry.
Perry, 508 So. 2d at 1089.
¶15. Our supreme court in Perry rejected adopting such a rule. Id. Adams emphasized in his brief the fact
that he was the victim of malice and hostility from Moore. He insists that ICS's and Moore's expressed duty
to treat him fairly was breached when they began treating him badly with the intent to get rid of him resulting
in his demotion and eventually termination. However, what Adams fails to realize is that our supreme court
has held that "every contract contains an implied covenant of good faith and fair dealing." Merchants &
Planters Bank v. Williamson, 691 So. 2d 398, 405 (Miss. 1997) (quoting UHS-Qualicare v. Gulf
Coast Com. Hosp., 525 So. 2d 746, 757 (Miss. 1987)). Such a covenant has never precluded our
supreme court from holding that an "at will" relationship means that "either the employer or the employee
may have a good reason, a wrong reason, or no reason for terminating the employment contract."
Empiregas, Inc. of Kosciusko v. Bain, 599 So. 2d 971, 974 (Miss. 1992) (citing Kelly v. Mississippi
Valley Gas Company, 397 So. 2d 874, 875 (Miss. 1981)).
¶16. Our supreme court has never adopted the claim of right which Adams now asserts, and we are
constrained to follow its precedent. Adams was an at will employee and therefore ICS had every right to
discharge him at any time. Even considering all evidence in the light most favorable to Adams, the verdict by
the jury cannot stand. These issues are without merit.
¶17. THE JUDGMENT OF THE CIRCUIT COURT OF MARSHALL COUNTY IS
AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
BRIDGES, C.J., COLEMAN, DIAZ, HERRING, HINKEBEIN, KING, PAYNE, AND
SOUTHWICK, JJ., CONCUR. McMILLIN, P.J., NOT PARTICIPATING.