Monthly Archives: October 2013

An Unfortunate Analysis: Wallace v. St. Francis Medical Center, 2013 WL 5469137 (Mo. App. E.D. Oct. 1, 2013)

So, in Wallace, discussed previously when the case was pending, we now have in the decided opinion the following concerning compensation–and this is important–allegedly for services actually rendered before at-will employment was terminated:

Even accepting Wallace’s premise that the verbal offer and acceptance in 1983 plus the 2004 on-call posting created a contract, to satisfy the statute of frauds, an employment contract must contain all essential terms, including duration of the employment relationship. McCoy v. Spelman Mem’l Hosp., 845 S.W.2d 727, 730 (Mo.App.1993). No such term existed here. Absent a valid contract, Wallace’s breach of contract claim must fail.

This is, of course, unsound.  Although at formation there may be some indefiniteness in the terms of the bargain (such as when it will end), the parties’ performance can fill-in the missing component–the term.  The employee is entitled to bargained-for compensation for services the employee provides–the performance of the contract determines the term.

Is the authority cited by the Wallace court, McCoy, about recovery of bargained-for compensation for work previously provided under an at-will contract?  No.  It’s about seeking compensation for having been terminated before an alleged five-year term claimed to have been provided orally.

Is there Missouri authority allowing recovery of compensation of services actually rendered under a bargained-for under an at-will arrangement, when the employer sought to get away with paying less. Sure:

For the services which the plaintiff has performed, he himself admits he has been paid, with the exception of the $12.75, which have been deducted for his board bill, as he claims without authority.

We are of opinion that there is substantial evidence showing that the plaintiff is entitled to this amount with interest, and that to that extent, but no further, the verdict of the jury is supported by substantial evidence. As the cause has been repeatedly tried, and no other result can be accomplished by a re-trial, we will not remand it, but enter judgment here.

Evans v. St. Louis, I.M. & S. Ry. Co., 24 Mo.App. 114, 1887 WL 1749, at *3 (Mo. App. 1887).

Thus, for example, one will see that an at-will employee who has earned some performance bonus before the employer elects to terminate him is entitled to the bonus.  E.g., Wright v. Cofield, 730 S.E.2d 421 (Ga. App. 2012).

Wallace illustrates what happens when a court takes bromide out-of-context.  One hopes that this erroneous observation in Wallace gets a second look, in one forum or another.

Why Not a Duty to Read One’s Own Form? Woods of Somerset, LLC v. Developers Surety & Indemnity Co.

The typical case of a dispute as to an adhesion contract involves claims literal terms should not be binding on the recipient of the supplied form. A court may recite the bromide that one has a duty to read the contracts one signs.  Well, should not the party who is responsible for the form take responsibility for its own failure to read or understand its  own form?  In this man-bites-dog category falls Woods of Somerset, LLC v. Developers Surety & Indemnity Co., 2013 WL 5311922 (Mo. App. W.D. 2013).

More after the break …

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Conditions vs. Duties–Jackson v. Jamestowne Homeowners Ass’n T’ees

In a brief, at 2013 WL 5052261 (Mo. Ct. App. E.D.), that otherwise seems to provide a significant support for its position, the defendant homeowner’s appellate brief stumbles when it comes to discussing conditions:

Respondent’s argument of “substantial performance” is incompatible not only with the lack of evidence, but with the established precedent that “a board’s power to collect delinquent assessments is limited to the specific provision in a neighborhood indenture dealing with the collection of assessments.” DWC Enterprises v. Terre du Lac Association, 953 S.W.2d 127, 133 (Mo.Ct.App. E.D. 1997). In this case, the “specific provision” is section 3.17 of the Indenture, which spells out the notice that “shall be served.” Appendix p. 17 (Indenture p. 13)(emphasis added). It is the cases cited by Respondent that are distinguishable, in that none of them relate to a cause of action for violation of an indenture. See Phillips v. Authorized Investors Group, 625 S.W.2d 917, 921 (Mo.Ct.App. E.D. 1981). There are no reported Missouri cases applying the doctrine of “substantial performance” to such a situation. Rather, the case at bar involves “an express provision in the contract requiring literal compliance,” that is, certain prerequisites, such as the signatures or printed names of the trustees on the assessment, that had to be met prior to an assessment becoming due. See Gundaker v. Templer, 560 SW 2d 306, 309 (Mo.Ct.App. E.D. 1977).

The homeowner complains as to various defects in the notice of amounts due, such as to signatures.  How do we analyze it?

We have to determine whether delivery of the specified notice is a condition to the duty to pay the charge, or whether the association has merely promised to provide a complying notice.  In the latter case, we are not addressing constructive conditions of exchange, and substantial compliance with the performance promised by the association would suffice to satisfy the implied condition to the homeowner’s duty to pay.

Typically, courts are reluctant to find a condition where the language does not clearly give rise to a condition, because of the possibility of forfeiture (as could well happen in this case).  Whether there was an express condition is an interpretative matter, and the language of the contract, are not adequately described to allow one to reach a conclusion on the matter.

This author is not saying there was or was not substantial compliance. That’s a detail-intensive question not well-framed by the brief.  However, it is clear that if the homeowner’s duty to pay is not expressly conditional on receipt of a notice in a particular form, the ordinary treatment would be that only substantial compliance, which would include performance of notice requirements, would be required to mature the other’s duty to perform (with a right to damages for a breach of express requirement remaining available).