Appeal
from Lauderdale Circuit Court (CV-15-900394)
MITCHELL, JUSTICE.
Lonnie
Beal sued his former employer, Shoals Extrusion, LLC, an
aluminum-extrusion business in Florence, after his employment
there was terminated in November 2015. Beal alleged that
Shoals Extrusion breached the terms of his employment
agreement by refusing to give him severance compensation and
benefits to which he claims he was entitled. The Lauderdale
Circuit Court entered a summary judgment in favor of Beal and
awarded him $80, 800. This appeal followed. We reverse the
summary judgment and remand the cause for further
proceedings.
Facts
and Procedural History
In late
2014, Beal was working at an extrusion business in Florence
when his supervisor, Wilbur Craven, asked him if he would be
interested in becoming the plant manager for Shoals
Extrusion, a new business Craven and other individuals were
starting.[1] Beal responded in the affirmative, and, in
early 2015, he began formal discussions with Craven and Wade
Gilchrist, another owner of Shoals Extrusion, about the new
business and what the terms of his employment would be. After
an agreement was reached in principle, Beal requested that
Shoals Extrusion prepare a written employment agreement
memorializing the agreed-upon terms.
On
March 27, 2015, Beal and Craven executed a five-year
employment agreement that obligated Shoals Extrusion to pay
Beal a $20, 000 signing bonus and a first-year salary of $70,
000. Shoals Extrusion also agreed to pay Beal's
health-insurance premiums. In return, Beal agreed that
"[t]he work week shall be [a] 40 plus hour work week and
the days and the time shall be as set by [Shoals
Extrusion]." The agreement further provided that, if
Shoals Extrusion terminated Beal's employment during the
five-year term of the agreement, it would pay Beal his
"wages and benefits for the term of [one] year."
For his part, Beal agreed that, if he chose to leave Shoals
Extrusion before the five-year term of the agreement expired,
he would pay back the $20, 000 signing bonus within 30 days
of leaving the employ.
On
April 1, 2015, Beal began working for Shoals Extrusion. In
July 2015, Shoals Extrusion opened its facility and started
production with one shift beginning at 7:00 a.m. and
continuing for approximately 8 to 10 hours, depending on the
volume of orders. In August 2015, Shoals Extrusion began
operating a second shift. According to Craven, the employees
voted to move the start time of the first shift up to 6:00
a.m. so the second shift did not have to work as late. Beal,
however, refused to change his schedule and continued to
arrive at the facility at 7:00 a.m. or later.
Craven
and Gilchrist spoke with Beal on multiple occasions about
Beal working additional hours to increase production at the
facility. Craven and Gilchrist stated, however, that Beal
repeatedly indicated that he was not willing to work more
hours than he was working unless he received an ownership
interest in Shoals Extrusion. They stated that Beal further
told them that he would, in fact, reduce the hours he was
working unless he received the ownership interest he was
seeking. Craven stated that he eventually learned that Beal
was also telling certain individuals in the industry that
Shoals Extrusion was having financial problems. Shoals
Extrusion subsequently decided to terminate Beal's
employment.
On
November 23, 2015, Craven and Gilchrist met with Beal and
terminated his employment with Shoals Extrusion. During the
meeting, they asked Beal to execute a "severance and
general release agreement" that would, by its terms,
obligate Shoals Extrusion to pay Beal's salary through
December 31, 2015, in return for Beal's releasing any
claims he might have against Shoals Extrusion. Beal declined
to sign the proposed severance agreement. Shoals Extrusion
thereafter made no further payments to Beal, despite his
demand that it owed him one year's salary plus benefits
under the terms of the severance-pay provision in his
employment agreement.
On
December 18, 2015, Beal sued Shoals Extrusion, asserting a
breach-of-contract claim based on Shoals Extrusion's
failure to pay him severance benefits following the
termination of his employment. On February 17, 2016, Beal
moved for a summary judgment on his claim. Shoals Extrusion
filed a response opposing the motion, and the trial court
conducted a hearing to consider the parties' arguments.
On
April 7, 2016, the trial court granted Beal's
summary-judgment motion, reasoning that Shoals Extrusion was
effectively arguing that it had terminated Beal's
employment for cause despite the absence of a provision in
the employment agreement authorizing termination for cause.
The trial court noted Shoals Extrusion's defense that
Beal had breached the implied duty of good faith by
threatening to reduce his working hours unless he was given
an ownership interest in the company, but the trial court
found there was no evidence indicating that Beal had actually
followed through on that threat. Although the trial court
granted Beal's summary-judgment motion and held that
Shoals Extrusion had breached the severance-pay provision in
the employment agreement, the court did not assess damages,
and no final judgment was entered at that time.
On July
20, 2016, Beal amended his complaint to add Gilchrist as a
defendant and to assert additional claims. The parties
subsequently engaged in discovery related to those claims. On
January 5, 2018, the trial court dismissed all the claims
Beal had added in his amended complaint, leaving the amount
of damages to be assessed on Beal's breach-of-contract
claim against Shoals Extrusion as the only remaining issue
before the court. On March 23, 2018, the trial court entered
a final judgment reaffirming its April 7, 2016, order in
which it held Shoals Extrusion liable for breaching the
severance-pay provision in Beal's employment agreement
and assessing damages in the amount of $80, 800 -- $70, 000
for one year of salary and $10, 800 for one year of
health-insurance premiums. Shoals Extrusion thereafter filed
a timely notice of appeal to this Court.
Standard
of Review
Shoals
Extrusion seeks the reversal of the summary judgment awarding
Beal $80, 800 on his breach-of-contract claim. We review a
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