Coon v. Anadrill/Schlumberger, Ltd.

640 So. 2d 705, 93 La.App. 3 Cir. 1480, 1994 La. App. LEXIS 1695, 1994 WL 234213
CourtLouisiana Court of Appeal
DecidedJune 1, 1994
DocketNo. 93-1480
StatusPublished
Cited by1 cases

This text of 640 So. 2d 705 (Coon v. Anadrill/Schlumberger, Ltd.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Coon v. Anadrill/Schlumberger, Ltd., 640 So. 2d 705, 93 La.App. 3 Cir. 1480, 1994 La. App. LEXIS 1695, 1994 WL 234213 (La. Ct. App. 1994).

Opinion

JjGUIDRY, Chief Judge.

In this action for breach of contract, plaintiff, Virgil W. Coon, appeals a judgment of the trial court dismissing his suit. We affirm.

[706]*706 FACTS

The facts in this case are not in dispute. In June 1971, Virgil W. Coon, who was then president, chairman of the board of directors and the majority shareholder of Formation Specialties, Inc., executed a “Deferred Compensation Contract” with said corporation. That contract provides, in pertinent part, as follows:

NOW, THEREFORE, in consideration of the mutual promises of the parties and the mutual benefits they will gain by the performance thereof, the parties hereto agree as follows:
1. The Employee agrees to continue in the Corporation’s service until he attains age Sixty-Five (65). Until then, the Corporation shall employ him in an executive capacity and pay him a salary of at least $12,000.00 a year. The Employee, until he reaches age 65, shall devote all hisjjtime, skill, and effort to said employment, and shall promptly and faithfully perform all such work pertaining to said employment as the Corporation may require of him.
2. Beginning with the first month after the Employee reaches age 65, the Corporation shall pay him $405.00 a month for Sixty (60) months, subject to the conditions in Section 5 and Section 6 hereof....
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4. In event the Employee, before he attains age 65, voluntarily leaves the Corporation’s service or is discharged for proper cause, all payments under Section 2 and Section 3 hereof (whether payable to him or his widow or his widow’s heirs) shall be forfeited.
5. Payments under Section 2 hereof shall be subject to the following condition:
Such payments shall cease in event the Employee, without the Corporation’s consent, accepts any employment by, makes any substantial financial investment in, becomes actively interested in, takes part in the affairs of, or gives advice and counsel to, any competing company or firm.
6. This contract shall be binding upon the parties hereto, their heirs, executors, administrators, successors, and assigns.
Neither the Employee nor his spouse, however, shall assign any part of his or her rights under this contract, unless the Corporation agrees thereto in writing. In event of a merger, consolidation, or reorganization involving the Corporation this contract shall continue in force and become an obligation of the Corporation’s successor or successors.

Over the next several years Formation Specialties underwent several ownership and name changes resulting from purchases, mergers, etc. By 1975 what was once Formation Specialties was operating as The Analysts, Inc. and was owned by a holding company, Petro Serve.

In 1975, Schlumberger Ltd. purchased 27% of the outstanding shares of Petro Serve and, in 1977, Schlumberger Technology Corporation, a wholly-owned subsidiary of Schlumberger, Ltd., purchased the remainder of Petro Serve stock.

Plaintiffs’ Deferred Compensation Contract was accepted by The Analysts in the 1972 merger with Formation Specialties and was also recognized by Schlumberger in its acquisition of |3The Analysts (via a purchase of Petro Serve) in 1977. During this entire period Virgil Coon remained in an executive position, first with Formation Specialties and then with The Analysts.

On February 1, 1979, Coon was reassigned to the position of “Special Sales Representative”, a position he held until he left the company. On June 2, 1980, Coon submitted the following letter to his employers:

Gentlemen, please accept this, my letter of resignation from The Analysts.
In accordance with The Analysts, Inc. Patent and Confidential Information Agreement, Paragraph 7, this letter will constitute sixty days notice.
My sincere wishes for the continued success of the company.

And, in a June 20, 1980 memorandum to employees of The Analysts, he stated:

... After serious consideration, I have reached a definite decision to resign from the company. I feel it is time for me to do some other things. To quote Thoreau:
[707]*707“Let everyone endeavor to be what he was made”.

Sometime after Coon left The Analysts, its name was changed to Anadrill/Sehlumberger.

Early in 1991, Coon contacted Anad-rill/Schlumberger informing them that he would reach his sixty-fifth birthday on November 6th of that year and seeking to collect the benefit provided for in paragraph two of the 1971 Deferred Compensation Contract. Anadrill/Sehlumberger refused Coon’s demand stating that Coon’s voluntary retirement in 1980 operated to forfeit this benefit (see paragraph four of Deferred Compensation Contract, supra). This suit followed.

LAW AND DISCUSSION

Defendants responded to plaintiff’s suit with an exception of prescription. The trial judge found that the contract had been breached in 1980 either voluntarily by Coon when he resigned or by defendants if they had indeed forced his early retirement by refusing to continue to employ him in an executive | capacity. In either case, the trial court concluded that Coon’s cause of action was a personal action governed by La.C.C. art. 3499 which provides for a liberative prescription of ten years and as such had prescribed. Plaintiff appealed.

Appellant, Virgil Coon, makes a two pronged argument. First, he argues that his resignation in 1980 was not voluntary, but forced by Anadrill/Schlumberger’s (then The Analysts) refusal to continue to employ him in an executive capacity, but rather expecting him to accept demotion to sales representative. Secondly, appellant argues that his Deferred Compensation Contract is a conjunctive contract (see La.C.C. art. 1807) and that any action he had for Anadrill/Sehlumber-ger’s breach of paragraph one of his contract was separate and distinct from his action against them for their alleged breach of paragraph two, and that prescription on each of these separate causes of action only began to run from the breach of that particular obligation. Therefore, he argues that while any rights he had to sue because of his “forced resignation” under paragraph one prescribed in 1990, prescription on his cause of action under paragraph two, defendants’ refusal to pay deferred compensation benefits, did not begin to run until Anadrill/Sehlumberger refused to honor its obligation under paragraph two when he reached the age of 65 in the year 1991. We disagree.

The basis of contract interpretation was discussed by our Supreme Court in Lambert v. Maryland Casualty Company, 418 So.2d 558 (La.1982), where the court explained:

Contracts must be construed in such a way as to lead to logical conclusions and to give effect to the obvious intention of the parties. St. Ann v. American Insurance Companies, 182 So.2d 710 (La.App. 4th Cir.1966). They must be interpreted in a common-sense fashion, according to the words of the contract their common and usual significance. LSA-C.C. Art. 1946.

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Bluebook (online)
640 So. 2d 705, 93 La.App. 3 Cir. 1480, 1994 La. App. LEXIS 1695, 1994 WL 234213, Counsel Stack Legal Research, https://law.counselstack.com/opinion/coon-v-anadrillschlumberger-ltd-lactapp-1994.