Albert Z. Hodge v. Evans Financial Corporation

823 F.2d 559, 262 U.S. App. D.C. 151, 2 I.E.R. Cas. (BNA) 395, 1987 U.S. App. LEXIS 9188
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 2, 1987
Docket84-5224
StatusPublished
Cited by20 cases

This text of 823 F.2d 559 (Albert Z. Hodge v. Evans Financial Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Albert Z. Hodge v. Evans Financial Corporation, 823 F.2d 559, 262 U.S. App. D.C. 151, 2 I.E.R. Cas. (BNA) 395, 1987 U.S. App. LEXIS 9188 (D.C. Cir. 1987).

Opinions

Opinion for the Court filed by Chief Judge WALD.

Opinion dissenting in part and concurring in part filed by Senior Circuit Judge MacKINNON.

WALD, Chief Judge:

After a jury verdict awarding appellee Albert Z. Hodge $175,000 for breach of an employment contract, appellant Evans Financial Corporation (“Evans”) seeks review of the District Court’s denial of its motions for judgment n.o.v. and a new trial. Hodge claimed that he had been discharged from his position as general counsel of Evans in violation of an oral agreement by Evans to employ him permanently. The District Court denied Evans’ motion for a directed verdict and refused to instruct the jury on the statute of frauds defense asserted by Evans. Following the jury’s verdict, Evans’ motions for judgment n.o.v. and new trial were also denied. In this appeal, Evans again argues that the oral employment contract is unenforceable under the District [561]*561of Columbia statute of frauds and makes several other objections to the jury’s verdict. Although we reject most of these challenges, we agree with Evans that the trial court erred in allowing Hodge to present to the jury evidence concerning two items of damages to which he was not entitled. We therefore affirm the judgment of the District Court on condition that the appellee remit the portion of the award which might be attributable to those items.1

I. Background

On two occasions in 1980, Hodge met with Jon Tilley, president and chief operating officer of Evans Financial Corporation, to discuss Hodge’s possible employment by Evans. Hodge was at that time assistant counsel and assistant secretary of Mellon National Corporation and Mellon Bank of Pittsburgh. According to Hodge’s trial testimony, Tilley asked Hodge at the second meeting what his conditions were for accepting employment with Evans. Hodge replied, “No. 1, the job must be permanent. Because of my age, I have a great fear about going back into the marketplace again. I want to be here until I retire.” Trial Transcript (“Tr.”) at 109. Hodge testified that Tilley’s response was “I accept that condition.” Tr. at 110. Hodge subsequently accepted an offer of employment as vice president and general counsel of Evans. He moved from Pittsburgh to Washington, D.C. in September, 1980, and worked for Evans from that time until he was fired by Tilley on May 7, 1981.

Hodge then brought this diversity action in the District Court, alleging that his termination violated Evans’ promise of permanent employment. The District Court initially granted summary judgment for Evans, ruling that all employment contracts for an indefinite period of time are terminable at will as a matter of law. Hodge v. Evans Financial Corp., No. 81-2726, slip op. at 6-7 (D.D.C. Apr. 15, 1982). This court reversed and held that “[t]hough the classic assumption of the law is that the parties intend a contract of indefinite term to be terminable at will, basic principles of contract law inform us that the parties can contract otherwise.” Hodge v. Evans Financial Corp., 707 F.2d 1566, 1568 (D.C. Cir.1983). The court concluded that Hodge was entitled to an opportunity to demonstrate that the employment contract between Evans and Hodge was intended to be of indefinite duration and terminable only for cause and remanded to the District Court. Id. at 1570. The case was then tried to a jury, which found for the plaintiff and awarded him $175,000 in damages.

II. Analysis

A. Enforceability of the Agreement Under the District of Columbia Statute of Frauds

Evans argues that the oral employment agreement between Evans and Hodge is unenforceable under the statute of frauds as enacted in the District of Columbia, which provides, in relevant part, that:

An action may not be brought ... upon an agreement that is not to be performed within one year from the making thereof, unless the agreement upon which the action is brought, or a memorandum or note thereof, is in writing ... and signed by the party to be charged therewith or a person authorized by him.

D.C.Code § 28-3502. Because the agreement here contemplated long-term employment for a number of years, Evans argues that the statute requires it to have been in writing in order to be enforceable.

Despite its sweeping terms, the one-year provision of the statute has long been construed narrowly and literally. Under the prevailing interpretation, the enforceability of a contract under the statute does not depend on the actual course of subsequent events or on the expectations of the parties. Instead, the statute applies only to those contracts whose performance could not possibly or conceivably be completed within one year. The statute of frauds is thus inapplicable if, at the time [562]*562the contract is formed, any contingent event could complete the terms of the contract within one year. See, e.g., Restatement (Second) of Contracts § 130 comment a (1979); 2 Corbin on Contracts § 445, at 542-43 (1950 & Supp. 1984) (“It makes no difference how improbable it is that the condition will occur within a year; if there is any possibility that it may so happen, the statutory provision is not applicable.”); 3 Williston on Contracts § 495, at 577-83 (3d ed. 1960) (same).

This interpretation of the statute has been adopted by the District of Columbia courts. The District of Columbia Court of Appeals recently stated that if a contract is “by its terms capable, possible, or susceptible of performance within one year, the statute of frauds does not apply and an oral agreement may suffice.” Launay v. Launay, Inc., 497 A.2d 443, 449 n. 4 (D.C.1985) (citing Snyder v. Hillegeist, 246 F.2d 649, 651 (D.C.Cir.1957)); see also Coan v. Orsinger, 265 F.2d 575, 578 (D.C.Cir.1959) (“If the contingency which fulfills and completes the terms of the contract happens or could possibly happen within a year, the contract is not within the statute.”).

Hodge argues that, under this interpretation of the statute of frauds, a permanent or lifetime employment contract does not fall within the statute because it is capable of full performance within one year if the employee were to die within the period. Hodge’s view of the statute’s applicability to lifetime or permanent employment contracts has, in fact, been accepted by an overwhelming majority of courts and commentators. See Restatement (Second) of Contracts § 130 illustration 2 (1979) (“A orally promises to work for B, and B promises to employ A during A’s life at a stated salary. The promises are not within the one-year provision of the Statute, since A’s life may terminate within a year.”); Restatement (First) of Contracts § 198 illustration 2 (1930) (same); Restatement (Second) of Agency § 414 comment a (1958) (same); 2 Corbin on Contracts § 446, at 549 & n. 35 (1950 and Supp.1984) (“A contract for ‘permanent’ employment is not within the one-year clause for the reason that such a contract will be fully performed, according to its terms, upon the death of the employee.”); E. Farnsworth, Contracts § 6.4, at 394 (1982) (same); 3 Williston on Contracts § 495, at 579-81 & n. 8 (3d ed. 1960) (same); 72 Am.Jur.2d Statute of Frauds

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Albert Z. Hodge v. Evans Financial Corporation
823 F.2d 559 (D.C. Circuit, 1987)

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823 F.2d 559, 262 U.S. App. D.C. 151, 2 I.E.R. Cas. (BNA) 395, 1987 U.S. App. LEXIS 9188, Counsel Stack Legal Research, https://law.counselstack.com/opinion/albert-z-hodge-v-evans-financial-corporation-cadc-1987.