Summary
construing a cessation of business provision in a contract involving a term of employment
Summary of this case from HOLMAN v. IMC MORTGAGE COMPANYOpinion
No. 4-86-2101.
July 15, 1987. Rehearing Denied September 3, 1987.
Appeal from the Circuit Court, St. Lucie County, Scott M. Kenney, J.
Glenn H. Mitchell of Mitchell Hanser, Schwartz Winkler, West Palm Beach, for appellant.
C.R. McDonald, Jr., Fort Pierce, for appellee-Montgomery.
This is an appeal from a final judgment in favor of appellee Ray Montgomery in the amount of $60,000 plus interest for breach of an employment contract. Pursuant to an employment contract dated February 1, 1983 appellee was employed by appellant Monte Carlo Development and Management Corporation. At the outset, the contract makes the following recitals:
1. Employer is engaged in the business of owning a private Country Club in Fort Pierce in the State of Florida, more particularly 3001 Johnston Road.
2. Employee has been engaged in and has had a great deal of experience in the above designated business, in particular as head golf professional at said club.
3. Employee is willing to continue to be employed by Employer and Employer is willing to continue to employ Employee, on the terms, covenants and conditions hereinafter set forth.
Under the terms of the contract, appellee's duties are described as follows:
2. Description of Employee's Duties:
Subject to the supervision and pursuant to the orders, advice and direction of Employer, the Employee shall perform all duties appropriate or necessary in connection therewith and such duties as are customarily performed by one holding such position in a business of the kind conducted by Employer. Employee shall additionally render such other and unrelated services and duties as may be assigned to him from time to time by Employer.
The term of employment under the contract is five years, from February 1, 1983 through January 31, 1988. Appellee's salary is specifically determined by the following provision:
6. Compensation: Reimbursement to Employee:
a. Salary:
In consideration of such service, Employer agrees to pay Employee compensation at the rate of $3000.00 per month beginning February 1, 1983, to be payable in equal installments at such times as is determined by Employer, but no less often than monthly. In addition, Employer will pay Employee 25% of the net cart rental fees, pro shop sales and bag storage and range income.
The contract also provides:
10. Discontinuance of Business as Termination of Employment:
Anything herein contained to the contrary notwithstanding, in the event that Employer shall discontinue its business operations, then this contract shall cease and terminate as the last day of the month in which operations cease with the same force and effect as if such last day of the month were originally set forth as the termination date thereof.
The contract concludes with the following provision:
20. Binding Effect of Agreement:
This contract shall be binding on and inure to the benefit of the respective parties and their respective heirs, legal representatives, successors and permitted assigns.
In August of 1984, in lieu of foreclosure, appellant agreed with its bank to transfer its interest and title to the golf course and clubhouse at Monte Carlo Country Club, as well as the inventory, furniture, fixtures and equipment located in the clubhouse, to Johnston Road Investments, a wholly owned subsidiary of the bank. Appellant conveyed the property for some "relatively nominal" consideration. When Johnston acquired title to the golf course, appellee was informed that an entity named Tournament Players Club would likely take over operations of the golf club. Meanwhile, Johnston hired a company named Fort Pierce Golf Course Management, Inc. to operate the country club. Appellee was employed by Johnston during the transition period, from August through December of 1984. When the Tournament Players Club assumed operations of the club in December of 1984, Johnston then terminated appellee. The last $3,000 payment received by appellee pursuant to the contract was in December, 1984.
Appellee sought compensation from Johnston, but Johnston denied having ever assumed the employment contract. Appellee then sued appellant and other defendants, who were later dismissed from the suit. After appellant transferred its interest in the country club, it continued to engage in business, but did not operate any other country club nor operate any business which would require a golf professional. Instead, appellant continued to own and develop real property within the overall Monte Carlo property development.
After a non-jury trial, the trial court entered a final judgment in favor of appellee and against Monte Carlo for $60,000 plus interest. The trial court specifically found:
It is also clear that Plaintiff was ready and willing to continue performance under the Contract, but was prevented from doing so when a new organization took over operation of Monte Carlo. No substantial evidence was presented to support Defendant's contention that Plaintiff was terminated for cause. Plaintiff mitigated his damages to the greatest extent possible by working for the successor owner of Monte Carlo after its conveyance by Defendant, until he was terminated by a new operational organization.
The trial court broadly interpreted the portion of the agreement regarding appellant's continued business operations and concluded that appellant's transfer of its interest did not terminate its obligations under the contract:
Paragraph 10 of the Contract called for it to terminate in the event Defendant ceased business operations. There is a reference in clause 1 of the "Recitals" in the Contract that Defendant was in the business of owning a private country club particularly located at 3001 Johnston Road, which, in fact, is the generalized location of the entire residential and golf club project known locally as "Monte Carlo."
While Estein testified that Defendant no longer operates a country club, both Estein and Vegosen testified that Defendant was still conducting business operations and Estein said those operations included residential lots in the overall "Monte Carlo" project. The Court also notes that Paragraph 2 of the Contract calls for specific golf professional duties, plus additional unspecified generalized duties as may be assigned to Plaintiff by Defendant.
Certainly the pertinent portions of the Contract on this issue contain some ambiguities. But when considering Defendant's business operations and Plaintiff's duties in their entire context and the rule of law that ambiguities in a contract should be construed against the preparer of the instrument, which in this case was Defendant's attorney, Vegosen, the Court finds that Defendant's transfer of Monte Carlo did not terminate its obligations under the Contract.
Appellant appealed, claiming the judgment was against the manifest weight of the evidence. We agree and reverse.
Construing the contract as a matter of law, we find that the plain terms of the contract provided that appellant's obligation would cease if appellant discontinued its business operations. Appellant's business is specifically described in the contract as "owning a private country club . . . more particularly 3001 Johnston Road." Since appellant was no longer in the business of owning a private country club, it was relieved of its obligations under the contract. We find it immaterial that the contract also contemplates appellee's performing "such other and unrelated services and duties as may be assigned to him from time to time" as there has been no showing that appellant ever assigned or attempted to assign any duties to appellee after the transfer of the country club to Johnston Road Investments. Moreover, any such duties must be reasonably related to the kind of duties contemplated in the employment contract. Since the only business which appellant continued to engage in was development of real property within the Monte Carlo project, it would be unreasonable to expect appellee's "unrelated services and duties" to encompass construction or development of such real property. The parties' understanding that appellant was no longer obligated under the employment contract is further evidenced by the fact that appellee collected his full salary from Johnston for four months following the transfer. It was not until Johnston terminated appellee's employment that appellee sought compensation, first from Johnston and then from appellant. Although appellee may have a claim against Johnston as a successor or assignee since the property was transferred for a "relatively nominal" consideration, Johnston is no longer involved in this suit and appellant cannot be held to answer for Johnston's obligations.
Accordingly, we reverse and remand for further proceedings consistent with this opinion.
DOWNEY, J., concurs.
GLICKSTEIN, J., dissents with opinion.
A district court of appeal will not disturb a determination of a trial judge sitting as trier of fact where there is substantial competent evidence in support of the judge's determination. Damiano v. Weinstein, 355 So.2d 819 (Fla. 3d DCA 1978).
The majority conceives a final judgment based upon a defense that the defendant corporation ceased operating a golf course which was never pled, and not mentioned by the defendant at the commencement of the trial, but that surfaced for the first time in brief testimony from the defendant's witnesses and was briefly argued by defendant's counsel in closing argument.
As a reviewing judge, I would affirm the trial court, which said in its final judgment:
In light of the fact that all Defendants named originally in this action have been dismissed, except the Defendant, Monte Carlo Management and Development Corporation, said Defendant is hereinafter simply referred to as the "Defendant".
At the time of trial Plaintiff abandoned all claims against Defendant except the $3,000.00 monthly payments claimed to be due under a certain Employment Contract dated February 1, 1983, admitted into Evidence as Plaintiff's Exhibit No. 2 (the "Contract"), which abandonment included claims for interest, reasonable attorneys' fees and future damages for anticipatory breach.
Further, at the time of trial, Defendant presented no testimony or evidence whatsoever in support of its Counterclaim and therefore the Court finds in favor of the Plaintiff and against the Defendant as to the Counterclaim.
As Defendant's counsel stated in closing arguments, the first issue for the Court to decide is whether from the testimony and evidence presented, the Contract in fact constituted a legally sufficient contract between the parties.
This court feels there was competent and substantial evidence presented to find that the terms of the Contract were indeed agreed to between the parties on or about its stated date of February 1, 1983, and they included those provisions initialed by both the Plaintiff and the Defendant, through its President, Leopold Estein ("Estein"). This finding is buttressed by the fact that the parties mutually operated under the Contract from on or about its stated inception date of February 1, 1983, up to the time that Johnston Road Investments, Inc., acquired title to the golf course, clubhouse and other related equipment and facilities of what is known as Monte Carlo Country Club ("Monte Carlo"), which occured [sic] in late summer or early fall of 1984. This mutual operation included, but was not limited to, work by the Plaintiff as the golf professional and regular monthly payments to Plaintiff from Defendant's account funded by Sunrise Savings and Loan Association ("Sunrise").
It is also apparent from the testimony of both Plaintiff and Estein that the proposed typed-in interlineations in the Contract on pages 4 and 5, came about after Estein discussed with Plaintiff the possibility that the Tournament Players Association or some other organization might be coming in to operate Monte Carlo and that Plaintiff's continued presence at the facility might be in jeopardy. All witnesses concurred this came about when various loans to Sunrise had become in default and "work-out" negotiations were taking place. All witnesses also concurred those negotiations took place during the summer of 1984, or about 1 1/2 years after the stated inception date of the Contract.
In light of the time between the inception date of the contract and the "work-out" negotiations which precipitated the proposed interlineations and the mutual operation under the other terms of the Contract during that period of time, the Court does not feel the proposed interlineations evidenced continued negotiations between the parties, so as to prevent a meeting of the minds between them as to the original terms of the Contract. It is clear the proposed interlineations were, in fact, proposed modifications to the existing Contract under which the parties had been operating for 1 1/2 years. Since the proposed modifications were not accepted by the Defendant, they did not become a part of the Contract and must simply be ignored.
It is also clear that Plaintiff was ready and willing to continue performance under the Contract, but was prevented from doing so when a new organization took over operation of Monte Carlo. No substantial evidence was presented to support defendant's contention that Plaintiff was terminated for cause. Plaintiff mitigated his damages to the greatest extent possible by working for the successor owner of Monte Carlo after its conveyance by Defendant, until he was terminated by a new operational organization.
The Court feels that adequate demand was made upon the Defendant by the Plaintiff and although there is some dispute as to when Defendant knew of the demand, unquestionably it received notice when its attorney, Dean Vegosen ("Vegosen") received a copy of a letter from Kenneth A. Treadwell, General Counsel to Sunrise, dated February 14, 1985, (Plaintiff's Exhibit No. 1), which discussed Plaintiff's demands and which occured [sic] almost immediately after his termination at Monte Carlo. From the circumstances surrounding this controversy the Court simply cannot conceive the Defendant did not know about or receive Plaintiff's demand.
The evidence is undisputed that Plaintiff received no payments under the Contract from Defendant after it transferred Monte Carlo to Sunrise's subsidiary, but continued to receive payments equal to those called for under the Contract through December 1984.
Therefore, the Court must consider whether there is any legal reason why Defendant did not have to continue payments to the Plaintiff.
Paragraph 10 of the Contract called for it to terminate in the event Defendant ceased business operations. There is a reference in clause 1 of the "Recitals" in the Contract that Defendant was in the business of owning a private country club particularly located at 3001 Johnson Road, which, in fact, is the generalized location of the entire residential and golf club project known locally as "Monte Carlo".
While Estein testified that Defendant no longer operates a country club, both Estein and Vegosen testified that Defendant was still conducting business operations and Estein said those operations included residential lots in the overall "Monte Carlo" project. The Court also notes that Paragraph 2 of the Contract calls for specific golf professional duties, plus additional unspecified generalized duties as may be assigned to Plaintiff by Defendant.
Certainly the pertinent portions of the Contract on this issue contain some ambiguities. But when considering Defendant's business operations and Plaintiff's duties in their entire context and the rule of law that ambiguities in a contract should be construed against the preparer of the instrument, which in this case was Defendant's attorney, Vegosen, the Court finds that Defendant's transfer of Monte Carlo did not terminate its obligations under the Contract.
Defendant also raises the defense that Plaintiff waived his right to continued payments when he continued to work at Monte Carlo after the Defendant transferred it. Not only was this not plead as an Affirmative defense, but it flies in the face of another Affirmative Defense plead by Defendant, which was failure to mitigate damages. Accordingly, it is rejected.
The Court finds no merit to the other defenses raised by Defendant.
Based upon the foregoing, it is thereupon
ORDERED AND ADJUDGED as follows:
1. Plaintiff, Ray Montgomery shall have and recover from the Defendant, Monte Carlo Development and Management Corporation, the sum of $60,000.00, for which let execution issue. This Judgment shall bear interest at the rate of 12% per annum until paid.
2. Defendant, Monte Carlo Development and Management Corporation, shall take nothing from the Plaintiff, Ray Montgomery, on its Counterclaim and go hence without day.
3. This Court reserves jurisdiction to tax costs in this action as may be proper, but requests the parties to consult with each other as to appropriate taxable costs, so as to avoid an unnecessary hearing.