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08/18/95 BIRMINGHAM-JEFFERSON COUNTY TRANSIT

August 18, 1995

BIRMINGHAM-JEFFERSON COUNTY TRANSIT AUTHORITY
v.
JACK ARVAN



Appeal from Jefferson Circuit Court. (CV-93-5960). Arthur J. Hanes, TRIAL JUDGE.

Application Overruled November 3, 1995.

Houston, Maddox, Almon, Shores, Kennedy, and Butts, JJ., concur.

The opinion of the court was delivered by: Houston

HOUSTON, JUSTICE.

The defendant, Birmingham-Jefferson County Transit Authority ("the Authority"), appeals from a judgment entered on a general jury verdict for the plaintiff, Jack Arvan. We affirm.

Arvan sued the Authority for damages, alleging breach of an employment contract and conversion. Specifically, Arvan alleged that the Authority had contracted with him for "permanent" or lifetime employment and that it had later terminated his employment without just cause. In connection with his conversion claim, Arvan alleged that the Authority had failed to return to him certain items of personal property, including an expensive pen and pencil set and a computer program that he had been developing for future marketing within the mass transit industry. The trial court denied the Authority's motions for a directed verdict and submitted the claims to a jury. The jury awarded Arvan $685,000 in compensatory damages and $400,000 in punitive damages. As to the punitive damages award, the trial court granted the Authority's motion for a judgment notwithstanding the verdict. The granting of that motion is not at issue on this appeal. The trial court denied the Authority's motion for a new trial.

This appeal presents the following issues:

1) Whether the Authority was entitled to a judgment as a matter of law or to a new trial with respect to Arvan's claim alleging breach of a lifetime employment contract;

2) Whether the Authority was entitled to a judgment as a matter of law or to a new trial with respect to Arvan's conversion claim;

3) Whether the Authority was entitled to a new trial on the ground that the trial court failed to instruct the jury on a necessary element of Arvan's breach of contract claim -- that he had to provide substantial consideration for the contract separate from the services to be rendered;

4) Whether the Authority was entitled to a new trial on the ground that the trial court failed to give a written requested jury instruction on mitigation of the damages sought under the contract claim;

5) Whether the $100,000 statutory limit on damages applicable to governmental entities (Ala. Code 1975, § 11-93-2) was applicable under the facts of this case; and

6) Whether the damages award was supported by the evidence.

With respect to the first issue, we note that three elements must be shown to establish that an employment contract is not terminable at will: 1) that there was a clear and unequivocal offer of permanent employment, i.e., lifetime employment or employment of a definite duration; 2) that the hiring agent had the authority to bind the principal to a permanent employment contract; and 3) that the employee provided substantial consideration for the contract separate from the services to be rendered. Hoffman-La Roche, Inc. v. Campbell, 512 So. 2d 725 (Ala. 1987). The evidence, and the inferences that could reasonably be drawn from the evidence, were conflicting in the present case. Without reciting that evidence in great detail, suffice it to say that there was evidence that, when viewed most favorably toward Arvan, see Carter v. Henderson, 598 So. 2d 1350 (Ala. 1992) (discussing both the "sufficiency of the evidence" standard applicable to the review of a motion for a directed verdict or for a judgment notwithstanding the verdict, and the "weight of the evidence" standard applicable to the review of a motion for a new trial), indicated 1) that Arvan was experienced in the management of maintenance departments within mass transit systems; 2) that the Authority was in need of a manager to resolve certain problems within its maintenance department; 3) that the Authority's general manager made a written offer to Arvan to provide him with "full-time permanent employment" (see Harrell v. Reynolds Metals Co., 495 So. 2d 1381 (Ala. 1986), stating that this Court has interpreted the term "permanent employment," as used in employment contracts, to be synonymous with lifetime employment); 4) that the general manager offered Arvan employment under very generous terms in order to entice Arvan to go to work for the Authority; 5) that the general manager orally promised Arvan that, if he would "take [the] job and ... straighten [the maintenance department] out," he would "guarantee [him] a job for life"; 6) that the general manager answered only to the Authority's board of directors and that he "[had] the authority or consent of [his] superiors" to make the particular offer that he made to Arvan (see Harrell v Reynolds Metals Co., supra, discussing the authority necessary for an agent to bind the principal to a lifetime employment contract); 7) that Arvan gave up a job opportunity in California in order to accept the Authority's offer (see Bates v. Jim Walter Resources, Inc., 418 So. 2d 903 (Ala. 1982), stating that the relinquishment of prior employment may constitute sufficient consideration for a lifetime employment contract); 8) that Arvan performed satisfactorily in his position with the Authority and that at the time of his discharge he was ready, willing, and able to continue to perform his duties there; 9) that his discharge occurred ...


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