Mayer v. King Cola Mid-America, Inc. - 660 S.W.2d 746 (Mo. Ct. App. 1983)

Rule:

Mo. Rev. Stat. § 432.010 (1978) provides in part: No action shall be brought upon any agreement that is not to be performed within one year from the making thereof, unless the agreement upon which the action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person by him thereto lawfully authorized.

Facts:

Plaintiff Theodore Mayer was employed by Pepsi Cola International for many years, and worked abroad setting up and managing soda franchise operations. In 1978, he returned to the United States and eventually was employed by Double Cola as Vice President of Marketing. After Mr. Mayer resigned from Double Cola, in January 1980, he was contacted by Linda Leary, then secretary and later president of defendant King Cola Mid-America, Inc. She inquired as to his interest in a position as general manager of a new soda franchise in St. Louis. On February 2, 1980, Mayer met with Ms. Leary. A three-year employment contract was discussed with compensation to be set at $40,000 the first year and $45,000, and $50,000 in each succeeding year, plus an additional commission based on sales. In addition, King Cola Mid-America promised to pay Mayer’s moving expenses up to $5,000. Mayer agreed to work for King Cola Mid-America, and moved from his home in Chattanooga, Tennessee to St. Louis. He began work for King Cola Mid-America in February, 1980; and in accordance with the negotiations, he awaited a written contract. No written agreement, however, was executed. The relationship between Mayer and King Cola Mid-America deteriorated in the months that followed. In late April, or early May, Ms. Leary informed Mayer that he was not going to be given a contract. A few weeks later, Mayer was asked to resign; when he refused, he was terminated. The circuit court awarded judgment and damages for his moving expenses but directed a verdict for King Cola Mid-America on the three-year contract damages.

Issue:

 Did the circuit court err in directing a verdict for King Cola Mid-America in connection with the enforcement of the employment contract?

Answer:

No.

Conclusion:

The contract upon which Mayer sued is clearly one contemplated by the Statute of Frauds. Mayer’s theory was that his was a contract of employment for a term of three years with annual increases in base compensation with an additional commission of undetermined amount. Although a formal document memorializing the agreement was prepared by one of King Cola Mid-America’a attorneys, it was never signed by Mayer or a representative of King Cola Mid-America. As Mayer correctly argued, the absence of signatures on one such document is not fatal in and of itself. It was not essential that the memorandum be contained in a single document. The essential elements may be contained in a series of writings or documents. When separate documents are relied on to establish the existence of an agreement, they must be connected by express reference to one another or by clear implication established through their respective contents. To meet such requirements, Mayer introduced a number of "writings." They included Mayer’s own notes taken during his initial meeting with Ms. Leary, King Cola Mid-America’a corporate minutes showing Mayer’s election to the board of directors and appointment as vice-president of the corporation, and King Cola Mid-America’s payroll record Showing Mayer’s annual salary to be $40,000. All they indicate was that, at the times in question, Mayer was an employee-at-will. None of the documents refers to the formal contract prepared by King Cola Mid-America’s attorney, none spelled out the essential terms of the contract. The requirements of the Statute of Frauds were not met by the "other writings" in this case.

Mayer did not have a "promise" in the contractual sense. In view of the evidence concerning many unsettled matters to be embodied in the written contract, particularly the potentially very substantial item of plaintiff's commission, the relationship here would be more properly characterized as an "expectation of a promise" rather than an accomplished fact. If the final form of the written contract tendered to Mayer had not been satisfactory to him in such matters, for example, as the commission or covenant not to compete, he could have abandoned the relationship with impunity. Moreover, even if it could be said that a promise existed here, Mayer’s action in reliance thereon constituted no detriment to him. At the time Mayer was contacted by Ms. Leary, he was unemployed; he did not forego continued employment. Although he moved from Chattanooga, Tennessee to St. Louis in order to commence his duties, he recovered judgment for his moving expenses in the court below. Finally, he was compensated at the "contractual" rate of $40,000 per year by King Cola Mid-America through the time of his termination. Thus, adherence to the mandate of the Statute of Frauds would work no injustice.