Alexander v. Sandpiper Properties

• Court: Court of Appeals of Tennessee
• Decided: February 24, 1999
• Docket: 03A01-9804-CH-00125
• Status: Published

Opinion

IN THE COURT OF APPEALS OF TENNESSEE FILED AT KNOXVILLE February 24, 1999

Cecil Crowson, Jr. Appellate C ourt Clerk

GINA CHANDLER ALEXANDER, ) C/A NO. 03A01-9804-CH-00125 ) Plaintiff-Appellant, ) ) ) ) v. ) APPEAL AS OF RIGHT FROM THE ) ROANE COUNTY CHANCERY COURT ) SANDPIPER PROPERTIES, INC. and ) JOSEPH R. ALEXANDER, ) WILLIAM R. SCANDLYN and ) FREDERICK D. HARVEY, as Directors ) of Sandpiper Properties, Inc. ) ) HONORABLE FRANK V. WILLIAMS, III Defendants-Appellees. ) CHANCELLOR

For Appellant For Appellee

CHARLES B. HILL, II CHARLES M. FINN Kingston, Tennessee Kramer, Rayson, Leake, Rodgers & Morgan Knoxville, Tennessee

O P I N IO N

AFFIRMED AND REMANDED Susano, J.

1 The plaintiff, Gina Chandler Alexander, seeks damages

for breach of an employment contract. The trial court granted

the defendants summary judgment and dismissed the plaintiff’s

suit. Plaintiff appeals, contending that there are genuine

issues of material fact that render summary judgment

inappropriate. We affirm.

I.

In 1990, the plaintiff and her husband, the defendant

Joseph R. Alexander (“Mr. Alexander”), incorporated Sandpiper

Properties, Inc. (“Sandpiper”) for the purpose of developing a

residential lakefront community known as Swan Harbour in Roane

County. Sandpiper prepared and issued to potential shareholders

a document entitled “Investment Brief,” which described the

development and set forth various and sundry information

regarding the project.

As a part of the development, the Alexanders formed a

limited partnership, Swan Harbour, L.P. (“the partnership”), with

Sandpiper as the general partner. The partnership was formed to

raise money for the development through the sale of limited

partnership units. A “Private Placement Memorandum” was prepared

in connection with the sale of the units. Both the Investment

Brief and the Private Placement Memorandum made reference to the

fact that the partnership would pay Sandpiper a monthly

management fee of $6,000 plus 3.5% of the partnership’s net

income. Payment of the monthly management fee was to commence as

2 soon as a certain level of investment had been secured through

the sale of the limited partnership units.

In April, 1994, the partnership secured the necessary

funding and began paying the monthly management fee to Sandpiper,

which in turn paid the fee to the management team composed of the

plaintiff and Mr. Alexander.

The plaintiff and Mr. Alexander were divorced in

December, 1994. Mr. Alexander subsequently lost interest in the

project and resigned from the Sandpiper management team; however,

he continued to own approximately 37% of the corporation’s common

stock.

In 1997, the Board of Directors of Sandpiper voted to

terminate the plaintiff’s employment. The plaintiff responded by

filing this suit1 against the corporation and its officers and

directors. She alleges that she had an employment contract with

Sandpiper by virtue of the documents published in connection with

the efforts of Sandpiper and the partnership to secure investors

for the development. She contends that her firing was a breach

of that employment contract.

The defendants filed a motion for summary judgment.

Their supporting material reflects that the plaintiff did not

1 The plaintiff’s complaint includes a shareholder’s derivative action against Sandpiper and its new Board of Directors under T.C.A. § 48-17-401. The trial court granted the defendants’ motion to dismiss as a matter of law for failure to state a claim upon which relief could be granted. This matter is not before us on this appeal.

3 have an employment contract for a definite term, but was,

instead, an at-will employee.

The plaintiff filed her affidavit, in which she

contends that the Investment Brief contains the following

statement:

An expected provision of Partnership, or other funding entity formed,2 is a monthly management fee of Six Thousand ($6,000.00) Dollars plus an amount equal to 3.5% of Net Income for that period to be paid to the Corporation for compensation of two of the Founders, J. R. and Gina C. Alexander. This fee is for management and administrative services and for the use of trade secrets agreements, and proprietary information used in managing the Sandpiper projects. The management fee shall be payable beginning on the date the partnership minimum offering level is attained, or in accordance with the alternate funding plan if so chosen, and will continue until the Sandpiper project is essentially completed.

(Emphasis added.) The plaintiff contends that this language

makes out a genuine issue of material fact on the question of

whether the plaintiff had an employment contract for a definite

term.

II.

Our standard of review of a grant of summary judgment

is well-settled. Our inquiry involves only a question of law,

with no presumption of correctness as to the trial court’s

2 This is obviously a reference to the later-formed limited partnership of Swan Harbour, L.P.

4 decision. Robinson v. Omer, 952 S.W.2d 423, 426 (Tenn. 1997);

McCarley v. West Quality Food Service, 948 S.W.2d 477 (Tenn.

1997); Bain v. Wells, 936 S.W.2d 618 (Tenn. 1997); Byrd v. Hall,

847 S.W.2d 208, 210 (Tenn. 1993); Hardesty v. Service Merchandise

Co., Inc., 953 S.W.2d 678, 684 (Tenn.App. 1997). The moving

party has the initial burden of producing competent, material

evidence reflecting that there are no genuine issues of material

fact and that it is entitled to summary judgment as a matter of

law. Byrd, 847 S.W.2d at 211. This burden may be met by

affirmatively negating an essential element of the nonmoving

party’s claim or by conclusively establishing an affirmative

defense. Id. at 215 n.5.

If the moving party successfully carries its burden,

the burden then shifts to the nonmoving party to establish that

there are disputed material facts creating at least one genuine

issue that must be resolved by a trier of fact. Id. at 215. The

nonmoving party may contradict the factual predicate of the

summary judgment motion by presenting competent and admissible

evidence by way of affidavits or discovery materials. Rule 56.06

Tenn.R.Civ.P.; Robinson, 952 S.W.2d at 426 n.4; McCarley, 948

S.W.2d at 479; Byrd, 847 S.W.2d at 215 n.6.

In evaluating the evidence in the summary judgment

context, we must view the evidence in the light most favorable to

the nonmoving party, and we must draw all reasonable inferences

in favor of that party. Byrd, 847 S.W.2d at 210-11. Summary

judgment is appropriate only when there are no genuine issues of

5 material fact and when the undisputed material facts entitle the

moving party to a judgment as a matter of law. Rule 56.04,

Tenn.R.Civ.P.; Byrd, 847 S.W.2d at 211.

6 III.

In this case, the material filed by the defendants in

support of their motion for summary judgment demonstrates that

the plaintiff was an at-will employee. As such, her employment

was subject to termination with or without cause. Forrester v.

Stockstill, 869 S.W.2d 328, 330 (Tenn. 1994); Bennett v. Steiner-

Liff and Metal Co., 826 S.W.2d 119, 121 (Tenn. 1992); Loeffler v.

Kjellgren, 884 S.W.2d 463, 468 (Tenn.App. 1994); Brock v.

Provident Life and Accident Ins. Co., C/A No. 03A01-9509-CV-

00297, 1996 WL 134943 at *4 (Tenn.App., E.S., filed March 27,

1996).

The defendants’ motion for summary judgment was

“properly supported.” Byrd, 847 S.W.2d at 215. By demonstrating

that the plaintiff’s employment was at-will, the motion negated

an essential element of the plaintiff’s claim; specifically, it

negated the plaintiff’s allegation that her employment was

covered by an employment contract for a definite term.

Therefore, the burden on the motion shifted to the plaintiff --

the nonmoving party-- to establish the existence of “a genuine

issue of material fact for trial.” Byrd, 847 S.W.2d at 211. The

plaintiff could have met this burden by submitting affidavits

and/or discovery material that set forth “such facts as would be

admissible in evidence....” Rule 56.06, Tenn.R.Civ.P.; See

Robinson, 952 S.W.2d at 426 n.4; McCarley, 948 S.W.2d at 479;

Byrd, 847 S.W.2d at 215 n.6.

7 In response to the defendants’ motion, the plaintiff

filed her affidavit, which specifically relies on the Investment

Brief as evidence that a contract existed between her and

Sandpiper. While a full copy of that document is not in the

record certified to us, it does appear that it was attached to

the defendants’ summary judgment motion and considered by the

trial court. The defendants urge us not to consider that portion

of the affidavit which purports to quote from the Investment

Brief. They correctly point out that the Investment Brief should

be considered in its entirety, cf. Aetna Casualty and Surety Co.

v. Woods, 565 S.W.2d 861, 864 (Tenn. 1978), something we cannot

do because of the deficiency in the record. However, in view of

the fact that the quoted language was the primary focus of the

trial court’s inquiry in deciding whether summary judgment was

appropriate, we have decided to overlook the deficiency in the

record. See Rule 2, T.R.A.P.

IV.

It is clear that employment for an indefinite term is

employment at will. Nelson Trabue, Inc. v. Professional

Management - Automotive, Inc., 589 S.W.2d 661, 663 (Tenn. 1979);

Hooks v. Gibson, 842 S.W.2d 625, 628 (Tenn.App. 1992); Bringle v.

Methodist Hospital, 701 S.W.2d 622, 625 (Tenn.App. 1985); Graves

v. Anchor Wire Corporation of Tennessee, 692 S.W.2d 420, 422

(Tenn.App. 1985).

Assuming, for the purpose of discussion, that the

quoted language from the Investment Brief is evidence of a

8 contract, we do not find that it is evidence of an employment

contract for a definite term between the plaintiff and Sandpiper.

It is true that the quoted language does provide the outer limit

of the period during which the management fee is to be paid --

i.e., “until the Sandpiper project is essentially completed.”

However, this language cannot reasonably be construed as a

contract between the plaintiff and Sandpiper, committing the

latter to an employment relationship with the former for a

definite period of time. There are a number of reasons for this.

First, if the Investment Brief is evidence of anything, it is

some proof of a contractual relationship between the partnership

and Sandpiper. While it refers to a payment “to [Sandpiper] for

compensation of...J. R. and Gina C. Alexander,” it does not

directly address the terms and duration of the employment

relationship between the plaintiff and Sandpiper. Second, even

if this language could be construed as an employment contract

between the plaintiff and Sandpiper, the period during which the

management fee is to be paid is not expressly stated to be the

same as the term of the employment relationship between the

plaintiff and Sandpiper. Finally, the period of the payment is,

in fact, indefinite. One cannot determine, from the language

employed, the specific date on which the obligation to pay the

fee terminates. This is because the date on which the “project

is essentially completed” cannot be ascertained with certainty.

Thus, the ending date of the management fee obligation is

indefinite, i.e., we do not know the specific calendar date when

it will end.

9 We find that the plaintiff’s affidavit, liberally

construed in her favor, does not make out a genuine issue of

material fact as to whether the plaintiff had an employment

contract for a definite term. Since the defendants’ factual

material establishes the lack of a definite-term employment

contract, summary judgment was and is appropriate.

V.

The defendants seek damages for a frivolous appeal.

This is not an appropriate case for such an award. Accordingly,

their motion for same is denied.

VI.

The judgment of the trial court is affirmed. Costs on

appeal are taxed against the appellant. This case is remanded to

the trial court for collection of costs assessed below, pursuant

to applicable law.

_________________________ Charles D. Susano, Jr., J.

CONCUR:

______________________ Houston M. Goddard, J.

_____________________ Herschel P. Franks, J.