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Pine River State Bank v. Mettille

Supreme Court of Minnesota

April 29, 1983

No. C8-82-543


 [*624]  An employee hired for an indefinite, at-will term claims his discharge was in breach of his employment contract as subsequently modified by an employee handbook. A jury awarded the employee damages and the employer appeals from a denial of its post-trial motions. We affirm.

In early 1978 respondent Richard Mettille, then unemployed, nearly 48 years of age, married and living in St. Paul, sent his resume to the appellant Pine River State Bank. After an interview, the bank offered Mettille a job at a salary of $1,000 a month or $12,000 a year. Mettille accepted, moved to Pine River, and started work as a loan officer on April 10, 1978. The employment agreement was entirely oral. Nothing was said as to the position being permanent or for any specific term. Mettille conceded that he felt free to leave the bank and to take a better job elsewhere if he wished to do so.

Mettille survived his 6-month probationary [**3]  period and was shortly given the title of loan officer. His duties were to lend, procure insurance on loan collateral, file UCC financing statements, and prepare reports on student loans.

Late in 1978 the bank distributed to its employees, including Mettille, a printed Employee Handbook. The handbook had been drafted by the bank's president, E. A. Griffith, who relied heavily on a model handbook he had received at a recent seminar on employee relations sponsored by the Minnesota Bankers Association. The handbook contained information on the bank's employment policies, including such matters as working hours, time off, vacations, and sick leave. With respect to employee responsibilities, the handbook discussed such matters as punctuality, confidentiality of the work, personal appearance and conduct, and telephone courtesy. The handbook also contained sections on "job security" and "disciplinary policy." According to Griffith, the handbook was intended as a source of information for employees on bank procedures and as a guideline within the bank so that people would know when vacations would be available and how many days the employee would be allowed for vacations. Griffith testified [**4]  that he never intended the handbook to become part of an employee's employment contract with the bank.

In April 1979 Mettille received his annual performance review and with it a 7% raise. Apparently, about this time he also took out a home improvement loan with the bank. The following September state bank officials conducted an unannounced examination of the Pine River State Bank, and after reviewing the loan portfolio, reported to Griffith that some "technical exceptions" existed, i.e., failures to comply with the applicable law and regulations. Griffith then ordered his own independent review of the 85 files noted in the examiner's report. This investigation disclosed that 58 of the 85 files contained "serious" technical exceptions and that Mettille was responsible for the serious technical exceptions in 57 of these 58 files. Thus, 28 files showed no vehicle certificate of title; 33 files showed  [*625]  no insurance covering the secured collateral; 4 files showed inadequate insurance; 6 files showed failure to record financing statements properly (although here the bank disagreed with the examiner that the financing statement filings had been improper); and 4 files showed [**5]  expired financing statements. Characterization of these deficiencies as "serious" was made by the bank officers, because those errors created possible loss to the bank. They testified that the defective files involved loans totaling over $600,000.

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333 N.W.2d 622 *; 1983 Minn. LEXIS 1135 **; 115 L.R.R.M. 4493

Pine River State Bank, Appellant, v. Richard E. Mettille, Sr., Respondent

Prior History:  [**1]   Appeal from District Court, Cass County; Hon. John A. Spellacy, Grand Rapids 55744, Judge.

Disposition: Affirmed.


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Business & Corporate Compliance, Contract Formation, Acceptance, General Overview, Labor & Employment Law, Employment Relationships, Employment Contracts, Formation & Letter Agreements, Contracts Law, Types of Contracts, Unilateral Contracts, Commercial Law (UCC), Sales (Article 2), Form, Formation & Readjustment, Offers, At Will Employment, Conditions & Terms, Duration of Employment, Contract Conditions & Provisions, Definition of Employers, Duration of Employment, Contracts Law, Standards of Performance, Discharge & Termination, Wrongful Termination, Breach of Contract, For Cause Standard, Consideration, Mutual Obligations, Sufficient Consideration