Hudson v. Village Inn Pancake House of Albuquerque, Inc.

2001 NMCA 104, 35 P.3d 313, 131 N.M. 308
CourtNew Mexico Court of Appeals
DecidedOctober 16, 2001
Docket20,646, 20,769
StatusPublished
Cited by8 cases

This text of 2001 NMCA 104 (Hudson v. Village Inn Pancake House of Albuquerque, Inc.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hudson v. Village Inn Pancake House of Albuquerque, Inc., 2001 NMCA 104, 35 P.3d 313, 131 N.M. 308 (N.M. Ct. App. 2001).

Opinion

OPINION

CASTILLO, Judge.

{1} In August of 1995, Paul Bronstein, chief executive officer (CEO) of Village Inn Pancake House of Albuquerque (Village Inn), and son of the sole shareholder of Village Inn, fired Tommy Hudson (Hudson), then president of Village Inn who had worked for the company almost continuously since 1963. This litigation ensued. After a bench trial, the court awarded Hudson damages for breach of an implied contract of employment. Village Inn raises three issues on appeal. First, Village Inn challenges the district court’s determination that the parties had an implied contract of employment under which Hudson could only be discharged for just cause following specific warnings and an opportunity to correct deficient performance. Second, Village Inn challenges the amount of damages awarded, and specifically argues that it was improper to include the annual bonus as part of Hudson’s income for the purpose of calculating damages. Finally, Village Inn asserts that the district court erred in awarding prejudgment interest because Hudson’s motion was untimely. We affirm.

I. Implied Contract of Employment

{2} First we will discuss the elements necessary to prove the existence of an implied contract of employment. Then we will review the court’s findings and the evidence presented to the district court. Lastly, we will discuss the findings of this case in the context of New Mexico law.

A. Standard of Review

{3} On appeal, Village Inn asserts that Hudson failed to overcome the presumption that his employment relationship was “at will” and that as a matter of law there was no sufficiently explicit promise of continued employment to support the district court’s finding of an implied contract of employment. See Hartbarger v. Frank Paxton Co., 115 N.M. 665, 673-76, 857 P.2d 776, 784-87 (1993) (holding that the evidence of oral and written statements, business practice of retaining employees for a long time, and retirement was not an offer or promise “sufficiently explicit to establish an implied contract”). Village Inn agrees, however, that whether an implied contract altering the “at will” relationship has been created is a question of fact. Id. at 669, 857 P.2d at 780. Consequently, the standard of review is whether the finding is supported by substantial evidence and as such this Court will view all the evidence in the light most favorable to the district court’s findings to make that determination. See id.

{4} While there are a number of New Mexico cases regarding implied contracts of employment, we rely primarily on Hartbarger because it contains a comprehensive summary of New Mexico law on implied contracts. When there is no written contract defining an employment relationship, the general rule is that the employment is considered “at will” and the relationship can be terminated at any time by either party for any reason with no liability. See id. at 668, 857 P.2d at 779. There are, however, two exceptions to this general rule: retaliatory discharge and implied employment contracts restricting the employer’s power to terminate the employment. See id. Implied employment contracts have been upheld “where the facts showed that the employer either has made a direct or indirect reference that termination would be only for just cause or has established procedures for termination that include elements such as a probationary period, warnings for proscribed conduct, or procedures for employees to air grievances.” Id. In this case, witness testimony, language in the Village Inn Pancake House Employee Handbook (the Handbook), and the contents of the forms used by Village Inn provide the factual basis supporting the district court’s decision that there was an implied employment contract between Village Inn and its employees.

B. The District Court’s Findings

{5} The following is a summary of the district court’s findings. Village Inn was owned by Ben Bronstein. Hudson, the president of Village Inn, had been employed with Village Inn for nearly thirty-two years when Ben Bronstein’s son, Paul Bronstein, fired Hudson without prior warning, notice, or explanation, written or otherwise. The district court made an explicit finding that the testimony of Village Inn’s CEO, Paul Bronstein, was not credible. The district court also found that Village Inn terminated Hudson’s employment without just cause, and Village Inn does not challenge this finding.

{6} Although Village Inn had no written contract of employment with Hudson, it did provide Hudson and its other employees with an employment handbook. The Handbook stated that no employee would be discharged without being given the chance to succeed, and it listed specific instances of misconduct that could result in discharge.

{7} Village Inn had a policy and practice of (1) providing employees with a warning prior to terminating employment for sub-par performance or misconduct; (2) documenting employee warnings in the course of disciplining any employee; (3) giving progressive warnings; and (4) discharging employees only for justifiable cause except where the employee’s conduct poses a serious threat to the safety of employees, customers, or property. The use of this policy resulted in significant reduction in the amount of unemployment compensation benefits Village Inn was required to pay and an increased employee morale. Hudson reasonably expected that he was not subject to termination except for justifiable cause after specific warnings and an opportunity to correct deficient performance.

C. The Evidence

{8} Although the evidence on the issue of the implied contract was conflicting, we review the evidence in the light most favorable to the decision below, resolving all conflicts in the evidence in favor of that decision and disregarding evidence to the contrary. Las Cruces Prof'l Fire Fighters v. City of Las Cruces, 1997-NMCA-044, ¶ 12, 123 N.M. 329, 940 P.2d 177. The fact that other evidence existed which would have supported different findings does not require reversal. It is the duty of the district court to resolve all the disputed factual issues. Roybal v. Morris, 100 N.M. 305, 311, 669 P.2d 1100, 1106 (Ct.App.1983). We will review the evidence in the light most favorable to the decision below. A synopsis of the essential portions of the evidence follows.

Patricia Phillips

{9} Patricia Phillips (Phillips), the comptroller and treasurer of Village Inn, testified that she was in charge of the weekly formal training for all assistant managers which included teaching company policies regarding hiring and firing. Phillips testified that she had taught the same policies at informal weekly managers’ meetings for twenty-seven years.

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Bluebook (online)
2001 NMCA 104, 35 P.3d 313, 131 N.M. 308, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hudson-v-village-inn-pancake-house-of-albuquerque-inc-nmctapp-2001.