Ronald B. Paul v. Farmland Industries, Inc.

37 F.3d 1274, 1994 WL 502500

• Court: Court of Appeals for the Eighth Circuit
• Decided: October 26, 1994
• Docket: 93-3681
• Status: Published

Opinions

BEAM, Circuit Judge.

Ronald B. Paul appeals an adverse judgment m tMs action for age discrimination in employment, fraud and breach of contract. We affirm.

I. BACKGROUND

Paul was hired by Farmland in 1987 as Vice-President and Chief Information Officer and was terminated less than two years later. He filed this action allegmg age discrimination in employment under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621, and breach of contract and fraud under Missouri law. At the close of the evidence, after a nine-day trial, the district court entered judgment as a matter of law in favor of Farmland on Paul’s fraud and breach of contract claims. The age discrimination claim was submitted to the jury and the jury returned a verdict in favor of Farmland.

On appeal, Paul asserts that the district court erred in entering judgment as a matter of law on the fraud and breach of contract claims and erred with respect to the ADEA claim in receiving certain documents from Paul’s personnel file from a former employer. He asserts that the improper evidence requires reversal of the jury verdict.

II. DISCUSSION

We review the district court’s interpretation of state law de novo. Salve Regina College v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 1221, 113 L.Ed.2d 190 (1991). In reviewing the district court’s grant of judgment as a matter of law, we apply the same standard as the district court. Jacobs Mfg. Co. v. Sam Brown Co., 19 F.3d 1259, 1263 (8th Cir.1994). We consider the evidence and the reasonable inferences that may be drawn from the evidence in the light most favorable to Paul. Id.

A. Breach of Contract

We agree with the district court that Paul did not present a submissible breach of contract claim. Paul relies on several documents to create an ostensible contract of employment for a term of three years.¹ These include a letter from the President of Farmland offering Paul the position and a long-term management incentive plan referenced in the letter. Nowhere in these documents do we find any expression, or even intimation, that either party contemplated employment for a term of years. The three-year management incentive plan merely outlines a component of Paul’s compensation package. Under Missouri law, absent an employment contract to the contrary, an employee may be discharged for cause or without cause and the employee has no cause of action for wrongful discharge as a matter of law. Johnson v. McDonnell Douglas, Corp., 745 S.W.2d 661, 662 (Mo.1988) (en banc). Because Paul has presented no evidence of a contract for a term of years, the district court properly entered judgment on his breach of contract claim.

B. Fraud

Similarly, Paul did not prove a submissible case of fraud. Paul’s fraud claim is premised on the contention that he was induced to leave another job and induced to work for Farmland by the false promise of Mr. James Rainey, Farmland’s President, that Paul would have a contract of employment for three years. The district court found that an employee “may not assert a fraud claim that is essentially a cloaked contract claim.” Paul v. Farmland Indus., Inc., No. 90-0594-CV-W-1, Order at 7 (W.D.Mo. Sept. 27, 1993) (citing Hanrahan v. Nashua Corp., 752 S.W.2d 878, 883 (Mo.Ct.App.1988)).

Under Missouri.law, when a tort action arises from the breach of a contract, a plaintiff is precluded from maintaining both a breach of contract and a fraud claim against an employer. Bernoudy v. Dura-Bond Concrete Restoration, Inc., 828 F.2d 1316, 1318 (8th Cir.1987). A fraud claim is permitted only if it arises from acts that are separate and distinct from the contract. Id. We need not resolve the issue of whether Paul presented a “cloaked” contract claim or a fraud claim based on separate and distinct acts, because we find, in any event, that Paul did not present a submissible case of fraud.²

Under Missouri law,

the elements of common-law fraud are: “(1) a representation, (2) its falsity, (3) its materiality, (4) the speaker’s knowledge of its falsity or ignorance of its truth, (5) his intent that it should be acted on by the hearer and in the manner reasonably contemplated, (6) the hearer’s ignorance of its falsity, (7) his reliance on its truth, (8) his right to rely thereon, (9) and his consequent and proximate injury.”

Washburn v. Kansas City Life Ins. Co., 831 F.2d 1404, 1411 (8th Cir.1987) (quoting Heitman v. Brown Group, Inc., 638 S.W.2d 316, 319 (Mo.Ct.App.1982)). Each of these elements must be established to make a submis-sible case of fraud, and failure to establish any one is fatal to recovery. Id.

The critical element in a .fraud case based on a statement of present intent is proof that the speaker, at the time of the utterance, actually did not intend to perform consistently with his . words. Craft v. Metromedia, Inc., 766 F.2d 1205, 1219 (8th Cir.1985), cert. denied, 475 U.S. 1058, 106 S.Ct. 1285, 89 L.Ed.2d 592 (1986). Absent such an inconsistent intent there is no misrepresentation of fact or state of mind but only a breach of promise or failure to perform. Id. It is not enough that for any reason, good or bad, the speaker changes his mind and fails or refuses to carry his expressed intention into effect. Id. Whether the facts and circumstances justify a conclusion that a defendant knows a representation is false when made is ordinarily a question for the jury. Jacobs, 19 F.3d at 1263. Intent not to perform cannot be shown solely by nonperformance, it must be shown by other evidence. Id.

Here, Paul presented no facts or circumstances which, if believed, would allow a jury to find that Farmland knew its representations, if made, were false when made. Paul relies only on the testimony of Rainey to establish his fraud claim. Having carefully reviewed the testimony of Rainey in the light most favorable to Paul and giving Paul the benefit of all favorable inferences, we conclude that there is insufficient evidence for a reasonable jury to have found that Rainey’s expressed desire to establish a long-term employment relationship with Paul was false when it was made. The evidence points to nothing more than a later “change of mind” by Rainey when Paul did not live up to the company’s expectations as Chief Information Officer. Because Paul faded to produce any evidence that Rainey did not intend to perform consistently with his words, the district court properly dismissed the fraud claim. See, e.g., Washburn, 831 F.2d at 1412 (affirming entry of directed verdict on fraud claim for failure of proof under Missouri law).

C. Admission of Evidence

Paul further asserts that improper admission of his personnel file from a former employer requires reversal of the jury’s age discrimination verdict. We give great deference to a district court’s rulings on admissibility of evidence and will reverse only if the court has committed a clear abuse of discretion. United States v. Jackson, 914 F.2d 1050, 1053 (8th Cir.1990). We find no abuse of discretion here. Paul “opened the door” with respect to the personnel file by introducing evidence of his work record at his former employer. The evidence refuted Paul’s contention that he could have continued working for his former employer..

Moreover, a jury’s verdict will not be disturbed absent a showing that the evidence was so prejudicial as to require a new trial which would be likely to produce a different result.. O’Dell v. Hercules, Inc., 904 F.2d 1194, 1200 (8th Cir.1990). Given Paul’s weak age discrimination case—Paul was over fifty when he was hired; he was terminated at age fifty-two by the same people who hired him, all of whom were older than he was—it is unlikely that the result would have been different if the evidence had been excluded. There was ample evidence that Paul was terminated because of poor performance and inability to achieve goals within the cost constraints placed upon him. Under the circumstances, we are unable to find that the evidence, even if improper, was so prejudicial that its exclusion would change the outcome of the trial.

III. CONCLUSION

Accordingly, the judgment of the district court is affirmed.

1 . The dissent seems to be confused about one of the basic questions in this appeal. The issue is not whether Paul was terminated for "cause." The dispute is over "a guaranteed period of employment until July 31, 1990,” a three-year term. Appellant’s brief at 3. Nothing stated by Farmland executive Rainey with reference to the incentive plan, quoted by the dissent, advances Paul’s theory of a three-year contract. Similarly, Paul’s testimony on his purported interpretation of the incentive plan, also quoted by the dissent, proves nothing. Interpretation of unambiguous language in a document such as this is for the court, not the plaintiff. Also, contrary to the implication of the last sentence of the dissent, there was a trieil and the Judgment as a Matter of Law was entered after the court heard nine days of testimony.

2 . Both sides cite Bemoudy v. Dura-Bond Concrete Restoration, Inc., 828 F.2d 1316, 1318 (8th Cir.1987) in support of their opposing positions on the issue of whether Missouri law allows a “cloaked" contract claim and whether this case fits that mold. In Bemoudy, we held that fraud in the negotiation of an employment contract can amount to a separate cause of action for fraud under Missouri law. Id. at 1318. We are inclined to believe that the present case is more akin to Deschler v. Brown & Williamson Tobacco Co., 797 F.2d 695, 697 (8th Cir.1986), a case wherein we held the misrepresentations dealing with duration of employment were intimately related to an at-will employment contract thus barring suit for fraud. Here, the purported misrepresentations at the heart of the fraud claim are the same statements that form the basis of the alleged contract (as memorialized in the confirmatory letter).