Opinion
Case No. 4D02-5111.
Opinion filed May 5, 2004.
Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County George A. Brescher, Judge, L.T. Case No. 99-020570 CACE 25.
Robert D. Soloff of Robert D. Soloff, P.A., Fort Lauderdale, for appellants.
Michael J. Kennedy of Boose, Casey, Ciklin, Lubitz, Martens, McBane O'Connell, West Palm Beach, for appellee.
Heather Dulin sued her employer, J.R.D. Management, for breach of contract, and J.R.D. and Robert Wiener, a J.R.D. principal, for fraud in the inducement. A jury found that an enforceable employment agreement existed between the parties, that J.R.D. breached the agreement by terminating Dulin without good cause, that Dulin was entitled to $15,000 in damages under the severance provision of the agreement, that J.R.D. did not fraudulently induce Dulin, but that Wiener did fraudulently induce Dulin entitling her to $31,875 in damages where she properly mitigated those damages. J.R.D. and Wiener appeal. We agree with J.R.D. that the employment agreement was not enforceable, and agree with Wiener that Dulin did not state a claim for fraudulent inducement. As a result, we conclude that the trial court erred by failing to grant J.R.D. and Wiener's joint motion to dismiss Dulin's complaint. Therefore, we reverse.
Before the alleged employment agreement between the parties to this case was signed, Dulin was employed by another property management company and served as the property manager of the Class-A Windsor Apartments. When J.R.D. decided to enter the South Florida real estate market, Wiener visited the Windsor and met with Dulin. J.R.D. decided to purchase the Windsor and considered continuity in management to be important because J.R.D. had never previously owned a Class-A property. Wiener then began discussing employment opportunities with Dulin.
Despite the fact that J.R.D. was held in a blind trust and Wiener was prohibited from active management of the corporation by a credit agreement, he invited Dulin to New York to discuss employment opportunities and meet J.R.D. management. A period of negotiations ensued, culminating in an August 3, 1999 letter written by Dulin. In that letter, Dulin set her salary at $75,000 per year, allowed for the structuring of a bonus package of up to $25,000 per year, stated her titles as Regional Marketing Manager — South Florida and Property Manager — Windsor, and provided for car, cell phone, and laptop computer allowances. The letter also included a severance provision that provided: "If I am terminated for any reason other than good cause at any time during the first twelve months I will be given a severance payment of $15,000." Other than the severance provision, the letter contained no provision setting out time frames or stating a definite term of employment. The letter did not include a severability clause.
Wiener signed the August 3 letter, which was subsequently ratified by J.R.D. Dulin then discontinued employment negotiations with Associated Estates Realty, which was offering a package including a $48,000 per year salary and up to $30,000 per year in bonuses for Dulin to manage an apartment complex.
Soon after Dulin commenced working for J.R.D., disputes arose between her and members of J.R.D. management regarding operations at the Windsor. During this same time, Dulin sent a string of letters to Wiener expressing her dissatisfaction with her work responsibilities given her titles and the fact that a bonus package had not been negotiated. After forty-five days of friction, several members of J.R.D. management visited the Windsor and terminated Dulin's employment. To avoid further dispute, J.R.D. offered to pay Dulin $15,000 in exchange for her execution of a general release. Dulin rejected the offer and filed suit.
In Count I of her complaint, Dulin alleged breach of employment agreement. Dulin requested damages and attached a copy of the August 3 letter, the purported employment agreement.
In Count II of the complaint for fraud in the inducement, Dulin alleged that J.R.D. and Wiener made representations to Dulin during the negotiations process that they did not intend to honor, that these representations were made to induce Dulin to accept employment with J.R.D. rather than Associated Estates, that without the representations Dulin would have accepted employment with Associated Estates, and that as a result of the representations, Dulin was damaged.
J.R.D. and Wiener filed a joint motion to dismiss both counts of the complaint contending that the August 3 letter was not an enforceable employment agreement for lack of a definite term of employment. They contended that Dulin was an at-will employee unable to bring a breach of contract or fraud in the inducement claim. We agree with J.R.D. and Wiener that the trial court erred by denying the joint motion to dismiss.
"A motion to dismiss a complaint is solely to determine whether the complaint has alleged a cause of action upon which relief can be granted." Gamma Dev. Corp. v. Steinberg, 621 So.2d 718, 719 (Fla. 4th DCA 1993). As a result, when considering a motion to dismiss a complaint, the trial court's "gaze is limited to the four corners of the complaint, including the attachments incorporated in it, and all well pleaded allegations are taken as true." U.S. Project Mgmt., Inc. v. Parc Royals E. Dev., Inc., 861 So.2d 74, 76 (Fla. 4th DCA 2003) (emphasis added).
We conclude that the August 3 letter, which was attached to Dulin's complaint, clearly did not include a definite term of employment, making the agreement unenforceable and Dulin an at-will employee. The existence of a valid and enforceable contract is a question of law for the trial court reviewed de novo by this Court. See Glatzmayer v. State, 789 So.2d 297, 301 n. 7 (Fla. 2001); Acumen Constr., Inc. v. Neher, 616 So.2d 98, 99 (Fla. 2d DCA 1993). In Florida, "an employment contract which does not provide for a definite term of employment is terminable at the will of either party" and "no action may be maintained for breach of the employment contract." Vienneau v. Metro. Life Ins. Co., 548 So.2d 856, 859 (Fla. 4th DCA 1989);see also DeMarco v. Publix Super Mkts., Inc., 384 So.2d 1253, 1254 (Fla. 1980).
In the case at bar, the only reference to a period of time in the employment agreement is the severance provision stating: "If I am terminated for any reason other than good cause at any time during the first twelve months I will be given a severance payment of $15,000." We conclude that this is not an expression of a definite term of employment. See Martin v. Golden Corral Corp., 601 So.2d 1316 (Fla. 2d DCA 1992) (employment letter that "established an investment program in which Martin was able to purchase one five percent joint venture interest in certain Golden Corral stores during each of the first two years of employment and two such interests during each subsequent year" did not contain a definite term of employment despite reference to years of employment); see also Murry v. Zynyx Mktg. Communications, Inc., 774 So.2d 714 (Fla. 3d DCA 2000) (providing an example of clear language that establishes a definite term of employment — "The initial term of [Murry's] employment by Zynyx shall be for a period of (1) year ("Initial Term") effective March 1, 1994 through March 1, 1995"); Story v. Culverhouse, 727 So.2d 1128 (Fla. 2d DCA 1999) (providing example of clear language that establishes a definite term of employment — "For a period of one (1) year beginning on the Settlement Closing Date, Stephen F. Story shall continue to fulfill all his duties as manager of the Trust").
The fact that the August 3 letter did not contain a definite term of employment was apparent on the face of the complaint where the letter was attached. As a result, the trial court erred by failing to grant J.R.D. and Wiener's joint motion to dismiss.See McKey v. D.R. Goldenson Co., 763 So.2d 409, 410 (Fla. 2d DCA 2000) (citing Shelton v. Eisemann, 79 So. 75 (1918)) (stating that "if an attached document to a complaint negates the pleader's cause of action, then dismissing the complaint is appropriate.").
Contrary to the dissent's suggestion, we do not set forth a rule that "at-will employees and their employers [are] barred from making . . . severance pay agreements." It is indeed cognizable that even an at-will employee and her employer could enter into a contract providing for severance remuneration for termination without good cause. However, in this case, Dulin did not allege a breach of the severance pay provision itself in the complaint, nor did she oppose the motion to dismiss on the ground that she was only seeking relief under the severance pay provision. In fact, she did not argue a breach of the severance pay provision as a claim until after the close of evidence at trial. Thus, the contention that she was seeking relief only for breach of the severance pay provision, and not for breach of the entire contract, first occurred after the motion to dismiss the complaint for failure to state a claim on its face. As such, we merely apply the longstanding rule that a party must plead a claim for which a party seeks to recover. See, e.g., Elmore v. Fla. Power Light Co., 760 So.2d 968, 971 (Fla. 4th DCA 2000) (noting that to state a claim for breach of contract, one must allege that breach); City of Coral Springs v. Fla. Nat'l Props., Inc., 340 So.2d 1271, 1272-1273 (Fla. 4th DCA 1976) (recognizing that a complaint must state the cause of action and cannot be augmented by subsequent testimony so as to avoid dismissal).
We now address Count II of the complaint alleging fraud in the inducement against Wiener. We agree with Wiener's contention that the trial court erred by failing to dismiss the complaint for failure to state a claim as to Count II. Because Dulin was an at-will employee, it follows that she was not injured by any misrepresentations that induced her to enter an unenforceable employment contract. We base this conclusion on the holding inDewachter v. Scott, 657 So.2d 962 (Fla. 4th DCA 1995), barring fraud in the inducement claims where they serve to "circumvent the bar to a breach of contract action based on an oral contract terminable at will." Id. at 962-963. In the case at bar, we recognize that a written rather than oral agreement was at issue, but conclude that the rationale behind Dewachter equally applies where a writing fails to set forth a definite term of employment. To hold otherwise would allow recovery for misrepresentations related to a contract that is not itself enforceable.
In sum, we conclude that Dulin did not state a claim for breach of employment contract because the August 3 letter lacked a definite term of employment, and thus, Dulin was an at-will employee. Where at-will employment existed the fraud in the inducement claim could not be maintained. As a result, we conclude that the trial court erred by not dismissing the complaint. Consequently, we do not reach the remaining issues raised in this appeal, as those issues would not have arisen if J.R.D. and Wiener's joint motion to dismiss had been properly granted. Because the case should have been dismissed and never submitted to the jury, we reverse the final judgment and damages awards against J.R.D. and Wiener.
REVERSED AND REMANDED for further proceedings consistent with this opinion.
TAYLOR, J., concurs.
FARMER, C.J., dissents with opinion.
One of the hoariest principles of contract interpretation is the rule of validity. Succinctly stated, this canon holds that in the interpretation of transactions alleged to be contracts, judges will presume that the parties intended a binding, valid agreement, at least in some respect, even if not in all respects that a party may claim. See James v. Gulf Life Ins. Co., 66 So.2d 62, 63 (Fla. 1953) ("Where the language of an agreement is contradictory, obscure, or ambiguous, or where its meaning is doubtful, so that it is susceptible of two constructions, one of which makes it fair, customary, and such as prudent men would naturally execute, while the other makes it inequitable, unusual, or such as reasonable men would not be likely to enter into, the interpretation which makes a rational and probable agreement must be preferred."); Foster v. Jones, 349 So.2d 795, 799 (Fla. 2d DCA 1977) ("If the language of a contract is contradictory, obscure, or ambiguous, or its meaning is doubtful, so that it is susceptible of two constructions, one of which makes it fair, and such as a prudent man would naturally execute, while the other makes it inequitable, unnatural, or such as a reasonable man would not be likely to enter into, then the reasonable, logical, and rational interpretation should be adopted."); Bacon v. Karr, 139 So.2d 166 (Fla. 2d DCA 1962) (contracts duly executed for a lawful purpose should, if legally possible, be upheld); City of Orlando v. Murphy, 84 F.2d 531 (5th Cir. 1936) (when possible, contract should receive such construction as will uphold it, rather than render it nugatory). The assumption is that an agreement is made for some lawful, enforceable purpose, and the court will not apply a strained or unusual meaning so as to render it unlawful or unenforceable. Diversified Enters. Inc. v. West, 141 So.2d 27 (Fla. 2d DCA 1962).
I am afraid that today the court casts aside this elemental canon of contract law to reverse a jury verdict finding a breach. In doing so, the court applies a reading to the language used by the parties that is difficult to understand and thereby concludes that the contract lacked a fatal provision as to its term. I do not agree.
As the court's opinion quotes the contract text accurately, I repeat it from the opinion:
"If I am terminated for any reason other than good cause at any time during the first twelve months I will be given a severance payment of $15,000."
Frankly I do not understand how this text fails to state any essential condition of an agreement, much less a term or period — even assuming that one were really needed for this provision. Doesn't "twelve months" refer to a limited period as to the liability for severance pay? If not, why not? What, I wonder, is indefinite or unclear about that?
I recognize the Florida rule making this an "at-will" employment state. See Savannah, F. W.R. Co. v. Willett, 31 So. 246, 247 (Fla. 1901) ("No action can be maintained for the breach of a contract to employ unless there is some stipulation as to the length of time for which the employment shall continue. If a term of employment be discretionary with either party, or be indefinite, either party may terminate it at any time."); Kundsen v. Green, 156 So. 420, 242 (Fla. 1934) ("An agreement to serve and be served at so much per month, with no stipulation as to the term of the services, is determinable at the end of any month at the pleasure of either party to the contract, because a contract for employment fixing an amount to be paid at stated intervals, but with no time limit for its ending, must be construed as a contract terminable at the end of any month by either party at pleasure."); DeMarco v. Publix Super Mkts., Inc., 384 So.2d 1253, 1254 (Fla. 1980) ("[W]here the term of employment is discretionary with either party or indefinite, then either party for any reason may terminate it at any time and no action may be maintained for breach of the employment contract.") (quoting DeMarco v. Publix Super Markets, Inc., 360 So.2d 134, 136 (Fla. 3d DCA 1978)); Smith v. Piezo Tech. Prof'l Adm'rs, 427 So.2d 182 (Fla. 1983) ("The established rule in Florida relating to employment termination is that `[W]here the term of employment is discretionary with either party or indefinite, then either party for any reason may terminate it at any time and no action may be maintained for breach of the employment contract'."). As DeMarco shows, it is only an action for breach of employment that is barred when employment is terminable at will. In the present case, the damages were awarded for breach of the severance pay clause, not for the termination, as such, of employment. I do not believe the at-will rule is pertinent to the issue of severance pay.
Why is the at-will rule deemed apposite anyway? Why does it have any bearing on severance pay? Why isn't an agreement that an employer shall be bound to pay an at-will employee severance pay, if terminated during a stated period, legally clear enough to be an enforceable contract with a definite term? What is there about the at-will doctrine that would prevent an employer from agreeing to pay severance damages if the company should exercise that right? There are no answers in the court's opinion to these questions.
The unstated premise of the rule the court applies to this case is that at-will employees and their employers seem to be barred from making such severance pay agreements. But such agreements in no way affect the legality or viability of the at-will rule. An employee without a specific term of employment is still an at-will employee. The only effect of this clause is that the employer engages to pay severance pay if a dismissal occurs as specified. This kind of provision, I dare say, not only makes at-will employment fairer to employees but also makes it easier for employers to attract qualified, talented employees under the at-will doctrine. Why, I wonder, isn't that enough to save this clause?
I do not read the record to support the majority's conclusion that plaintiff failed to plead a breach of the severance pay clause and raised this breach for the first time during trial and thus too late. According to her pleading, she alleged the failure to pay severance pay as one of the breaches of the agreement she sued upon. Count one of the complaint alleges breach of contract. This count alleges that her termination was made without good cause and that no cause was stated for her termination, an allegation uniquely related to the severance pay claim. It further alleges that her termination was a breach. In her prayer for relief she asks for judgment:
"for all damages sustained as a result of these breaches of the Employment Agreement, including but not limited to severance compensation per the Employment Agreement. . . ." [e.s.]
I have no idea what the majority conceives is lacking in this pleading so as to render it insufficient to claim breach of the severance pay claim. I think it is clearly sufficient for that purpose on its face. See Fla. R. Civ. P. 1.110(a) (forms of action and technical forms for seeking relief in pleadings are abolished), and Fla.R.Civ.P. 1.110(g) (party may set up two or more statements of same cause of action in one count; all pleadings shall be construed to do substantial justice). There is nothing procedurally improper about a plaintiff simply abandoning some alternative claims or theories of the same cause of action during trial and relying solely on the one she believes has the best chance of succeeding. Winnowing claims is what trials are all about.
I would affirm the verdict in all respects. If employment under this provision was fraudulently induced, as the jury found here, the fraud claim properly affords damages to plaintiff not covered by the breach of contract claim.