Morgan v. Clinton State Bank

Court of Appeals of Arkansas

Morgan v. Clinton State Bank

900 S.W.2d 216, 50 Ark. App. 67, 1995 Ark. App. LEXIS 366

CourtCourt of Appeals of Arkansas

DecidedJune 28, 1995

DocketCA 94-429

StatusPublished

This text of 900 S.W.2d 216 (Morgan v. Clinton State Bank) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Morgan v. Clinton State Bank, 900 S.W.2d 216, 50 Ark. App. 67, 1995 Ark. App. LEXIS 366 (Ark. Ct. App. 1995).

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Opinions

John E. Jennings, Chief Judge.

Robert R. Morgan was employed as the CEO and chairman of the board of Clinton State Bank. The written contract provided that he would be employed for a period of five years beginning March 1, 1987. On October 15, 1989, Morgan was fired.

On January 29, 1990, some two years before the expiration of the employment contract, Morgan brought suit for damages for breach in Pulaski County Chancery Court. The chancellor held that Mr. Morgan was entitled to damages for breach incurred through the date of trial and awarded $89,000.00 for wrongful termination and directed the bank to repurchase Mr. Morgan’s home for $85,500.00 within thirty days of the date of entry of the judgment. No appeal was taken from that order.

On November 25, 1992, Mr. Morgan filed a second complaint in Pulaski County Chancery Court seeking damages for the balance of the term of the employment contract. The case was subsequently transferred to circuit court and the circuit court granted Clinton State Bank’s motion to dismiss.

The issue on appeal is whether, after having filed suit for damages for breach of employment contract prior to the expiration of the term of the contract, Mr. Morgan can then file a second lawsuit seeking damages for breach related to the balance of the term. The circuit judge held that he could not and we agree.

The question is one of law. In Van Winkle v. Satterfield, 58 Ark. 617, 25 S.W. 1113 (1894), Justice Battle said:

A servant who has been wrongfully discharged by his employer before the time for which he was hired has expired has these remedies: “First, he may consider the contract as rescinded, and recover on a quantum meruit what his services were worth, deducting what he had received for the time during which he had worked. Second, he may wait until the end of the term, and then sue for the whole amount, less any sum which the defendant may have a right to recoup. Third, he may sue at once for breach of the contract of employment.” He, however, can adopt only one. [Emphasis added and citations omitted.]

To the extent that the language in Van Winkle is dicta, it is venerable dicta. It has also been cited with approval as recently as 1989. See Jim Orr and Associates, Inc. v. Waters, 299 Ark. 526, 773 S.W.2d 99 (1989). In Waters the supreme court quoted extensively from Van Winkle, recognized that it was probably the minority view, but expressly declined to overrule it. While it is true that the issue in Waters was the measure of damages when the employee brings the suit prior to the expiration of the term of the contract, and not whether a subsequent action could be brought, we nevertheless are persuaded that the decision there is controlling. The same policy considerations relating to the multiplicity of lawsuits which underlie the doctrine of res judicata mitigate against permitting one or more successive actions to recover damages for breach of an employment contract. If the rule in Van Winkle is to be changed it would seem preferable, perhaps, to change it on the front end, i.e., to permit recovery for future damages in an action brought prior to the expiration of the time. The court in Waters declined to do so and we are bound by that decision.

For the reasons stated, the decision of the circuit judge is affirmed.

Affirmed.

Mayfield, J., concurs. Robbins, J., dissents.

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John E. Jennings, Chief Judge.

Robert R. Morgan was employed as the CEO and chairman of the board of Clinton State Bank. The written contract provided that he would be employed for a period of five years beginning March 1, 1987. On October 15, 1989, Morgan was fired.

On January 29, 1990, some two years before the expiration of the employment contract, Morgan brought suit for damages for breach in Pulaski County Chancery Court. The chancellor held that Mr. Morgan was entitled to damages for breach incurred through the date of trial and awarded $89,000.00 for wrongful termination and directed the bank to repurchase Mr. Morgan’s home for $85,500.00 within thirty days of the date of entry of the judgment. No appeal was taken from that order.

On November 25, 1992, Mr. Morgan filed a second complaint in Pulaski County Chancery Court seeking damages for the balance of the term of the employment contract. The case was subsequently transferred to circuit court and the circuit court granted Clinton State Bank’s motion to dismiss.

The issue on appeal is whether, after having filed suit for damages for breach of employment contract prior to the expiration of the term of the contract, Mr. Morgan can then file a second lawsuit seeking damages for breach related to the balance of the term. The circuit judge held that he could not and we agree.

The question is one of law. In Van Winkle v. Satterfield, 58 Ark. 617, 25 S.W. 1113 (1894), Justice Battle said:

A servant who has been wrongfully discharged by his employer before the time for which he was hired has expired has these remedies: “First, he may consider the contract as rescinded, and recover on a quantum meruit what his services were worth, deducting what he had received for the time during which he had worked. Second, he may wait until the end of the term, and then sue for the whole amount, less any sum which the defendant may have a right to recoup. Third, he may sue at once for breach of the contract of employment.” He, however, can adopt only one. [Emphasis added and citations omitted.]

To the extent that the language in Van Winkle is dicta, it is venerable dicta. It has also been cited with approval as recently as 1989. See Jim Orr and Associates, Inc. v. Waters, 299 Ark. 526, 773 S.W.2d 99 (1989). In Waters the supreme court quoted extensively from Van Winkle, recognized that it was probably the minority view, but expressly declined to overrule it. While it is true that the issue in Waters was the measure of damages when the employee brings the suit prior to the expiration of the term of the contract, and not whether a subsequent action could be brought, we nevertheless are persuaded that the decision there is controlling. The same policy considerations relating to the multiplicity of lawsuits which underlie the doctrine of res judicata mitigate against permitting one or more successive actions to recover damages for breach of an employment contract. If the rule in Van Winkle is to be changed it would seem preferable, perhaps, to change it on the front end, i.e., to permit recovery for future damages in an action brought prior to the expiration of the time. The court in Waters declined to do so and we are bound by that decision.

For the reasons stated, the decision of the circuit judge is affirmed.

Affirmed.

Mayfield, J., concurs. Robbins, J., dissents.

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900 S.W.2d 216, 50 Ark. App. 67, 1995 Ark. App. LEXIS 366, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morgan-v-clinton-state-bank-arkctapp-1995.

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