McCall v. Focus Worldwide TV Network, Inc. - 2012-0742 ( La. App. 4 Cir 06/12/13), 119 So. 3d 876

Rule:

La. C.C. article 1770 states that a suspensive condition that depends solely on the whim of the obligor makes the obligation null. A resolutory condition that depends solely on the will of the obligor must be fulfilled in good faith.

Facts:

In 1988, Ms. McCall, a television journalist in New Orleans, Louisiana, began working as a volunteer with Focus Worldwide Television Network, Inc. ("Focus"), a Catholic television station and video production company founded by the late Archbishop Philip Hannan. Prior to her compensated employment, Ms. McCall volunteered her services and worked with Archbishop Hannan, starring in and producing faith-based documentaries, and ultimately hosting a faith-based television show, called "FOCUS," which dealt with topics relevant to the Roman Catholic community. On December 31, 1993, Ms. McCall entered into a formal employment contract with WLAE, a television station, and Focus Syndicate, Inc., signed by her and Archbishop Hannan. This contract states Ms. McCall’s salary, work schedule, and a provision that her insurance policy with an annual premium of $10,000 will be funded in her name and on her behalf. While the nature of the $10,000 annual premium identified in the first paragraph of the contract is disputed by the parties, the record establishes that Focus paid a $10,000 premium annually for a life insurance policy in Ms. McCall's name from 1994 until 1999, when Ms. McCall decided to surrender the policy and take receipt of its cash value according to the terms of the policy. According to Ms. McCall, when she decided to take the cash value of the insurance policy, Archbishop Hannan verbally agreed to continue paying $10,000 per year directly to her for her retirement. Focus made one $10,000 payment to her directly at the end of 1999, but she never received another $10,000 annual payment after that time. According to Ms. McCall, on March 20, 2003, the Board of Directors of Focus passed two resolutions, which are both at issue in this lawsuit. The resolutions are signed only by Ms. McCall and Archbishop Hannan. One of the purported resolutions states that as a member of the corporate membership and the board of directors, “she is in a position to continue in her present capacity as the Director of programming of Focus for as long as she desires.” The other purported resolution involves an agreement to sell and transfer ownership of equipment owned by Focus to Ms. McCall. Preceding the list of equipment to be transferred to Ms. McCall is the following language: “In consideration for the services you've rendered since 1988 and for the amount of one dollar and other valuable consideration, I [,] Philip M. Hannan [,] sell and transfer to you, Mary Lou McCall [,] the following and attached equipment free and clear of any liens and encumbrances of any type or nature.” Following the list of equipment subject to this purported resolution is the following language: “Notwithstanding the transfer of title and ownership of the above listed equipment to Mary Lou McCall, Mary Lou McCall hereby agrees to continue to produce programs for Focus under the same terms and conditions presently applicable, until such time as the Focus mission ceases to exist or until such time as mutually agreed upon.” Archbishop Hannan signed this document as President of Focus. The document was also signed by Ms. McCall and two witnesses.

On March 21, 2003, another Focus resolution purportedly removed Mr. Charles Read as a member of Focus, according to Ms. McCall. That resolution, which is also at issue in this lawsuit, was signed by Ms. McCall and Archbishop Hannan, and stated as follows: “Be it resolved that by a majority vote, Rusty Reed [sic] has been removed as an officer of the corporation of Focus Worldwide Network beginning on this day Friday March 21, 2003.” Ms. McCall relies on this resolution to support her position that Mr. Read should not have been allowed to vote at a Board of Directors' meeting held on May 8, 2007, which effectively removed Ms. McCall as a member, director and officer of Focus. By letter signed by Archbishop Hannan and dated May 2, 2007, Ms. McCall received notice that her employment and association with Focus was being terminated, effective immediately. At a Focus membership meeting held several days later, on May 8, 2007, a new slate of members, directors and officers was elected, and the slate did not include Ms. McCall's name. Ms. McCall filed suit in federal court on September 6, 2007 against Focus, Archbishop Hannan and Charlene Vance (an employee and director of Focus) for improperly terminating her employment with Focus. The lawsuit filed in federal court was dismissed on jurisdictional grounds on April 20, 2009. On September 17, 2009, Ms. McCall filed the instant lawsuit in Civil District Court for Orleans Parish, naming Focus and Ms. Vance as defendants, wherein she listed five counts, including breach of contract, defamation, and damages. A number of issues presented and raised on counter-claim were granted, including Focus’ exception of no cause of action as to Ms. McCall’s claim for tenured or lifetime employment. The remaining issues before the court were heard at a trial. Thereafter, the trial court rendered judgment dismissing all of the claims brought by Ms. McCall against Focus, including breach of contract, revendicatory claims for damages for royalties, ownership claims including Focus equipment and video library, the intellectual property of Focus, claims to market Focus videotapes in her own name or for her own benefit and all other claims. The court also dismissed all claims brought by Focus against Ms. McCall in its reconventional demand.

Issue:

Did the trial court err in granting Focus' exception of no cause of action as to Ms. McCall's claim for tenured or lifetime employment?

Answer:

No.

Conclusion:

The function of the peremptory exception of no cause of action is to question whether the law extends a remedy against the defendant to anyone under the factual allegations of the petition. An appellate court reviews the granting of an exception of no cause of action de novo because it involves questions of law. A review of Ms. McCall's petition does not support her argument that she stated a cause of action to exempt her from the general prohibition in Louisiana against lifetime employment contracts. Furthermore, because the purported agreement relied upon by Ms. McCall would allow her to continue her employment at Focus "for as long as she desires," this was a modification of the December 31, 1993 employment contract, in which she was obligated to perform certain work in exchange for compensation. La. C.C. article 1770 became effective in 1985; the comments thereto noted that the article, which reproduced the substance of former Civil Code articles 2024, 2034 and 2035, eliminated the expression "potestative condition," but did not change the law. Black's Law Dictionary (9th Edition) defines "potestative condition" as "[a] condition that will be fulfilled only if the obligated party chooses to do so." This definition is followed by the following note: "Louisiana no longer uses this term, instead providing that this type of condition will render the obligation null. " The purported agreement would give Ms. McCall the sole authority to decide how long she continued her employment at Focus. This is a condition that would be fulfilled only if she chose to do so. The purported agreement relied upon by Ms. McCall would create a suspensive condition dependent solely on her whim. An agreement with such a condition is a null obligation under La. C.C. article 1770.