BIRMINGHAM-JEFFERSON COUNTY TRANSIT AUTHORITY
v.
Jack ARVAN.
Supreme Court of Alabama.
*826 John C. Falkenberry and David W. Long of Sirote & Permutt, P.C., Birmingham, for appellant.
Thomas E. Baddley, Jr. and Jeffrey P. Mauro of Baddley & Crew, P.C., Birmingham, for appellee.
HOUSTON, Justice.
Thе 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 сause. 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:
*827 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 contrаct;
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 claimthat 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 еstablish 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 sеparate from the services to be rendered. Hoffman-La Roche, Inc. v. Campbell,
To establish conversion, a plaintiff must show a wrongful taking, an illegal assumption of ownership, an illegal use оr misuse of another's property, or a wrongful detention or interference with another's property. Huntsville Golf Development, Inc. v. Ratcliff, Inc.,
The third issuewhether the Authority was entitled to a new trial on the ground that the trial court failed to instruct the jury on the "substantial consideration" element of the contract claimwas not raised below and, therefore, was not properly preserved for appellate review. Rule 51, Ala.R.Civ.P.; Adriatic Ins. Co. v. Willingham,
As to thе fourth issuewhether 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 claimwe note that the evidence indicated that approximately a year after being discharged by the Authority, Arvan was hired by another transit system at an annual salary of $36,000, but without the benefits he had enjoyed while employed at the Authority. The Authority's attorney mentioned during his closing argument to the jury that Arvan had obtained other employment. The Authority requested that the following instruction be given:
"It is the duty of one damaged to exercise ordinary care to reduce his damages: he is bound to exercise such care as a reasonably prudent person would exercise under like circumstances to reduce or mitigate the damages. He can recover only such damages as would have been sustained had such care been exercised."
The trial court instructed the jury on the normal measure of damages recoverable for the breach of a contract, but it did not discuss mitigation of damages. See Alabama Credit Corp. v. Higgins,
"The Court: What's on your mind, David?
"[The Authority's attorney]: It's a charge on mitigation, Your Honor, that we think should be given out of [Alabama Pattern Jury Instructions, instruction 1.02].
"The Court: All right.
". . . .
"The Court: ... You want me to bring [the jury] back and talk about mitigation of the damages?
"[The Authority's attorney]: I think mitigation would be appropriate.
"The Court: What evidence is there that you're saying mitigated?
"[The Authority's attorney]: Well, I think just the standpoint in terms of what we've argued
". . . .
"The Court: I mean, tell me what evidence we have that there was a failure to mitigate that would justify giving it. I mean, that's a true statement of law in the abstract. I did not give it for that reason. But I'll be happy to call them back. Y'all decide whether y'all want me to call them back and fix anything." *829 Following this discussion, the Authority's attorney made no further comments with respect to the trial court's oral charge.
On appeal, the Authority presents a two-sentence argument, without citation to any authority, that "the court's failure to charge the jury on Arvan's duty to mitigate his damages warrants a new trial." After carefully reviewing the record and the briefs, and with more than a little concern as to the adequacy of the argument made by the Authority both in the trial court and on appeal, we nonetheless conclude that although this issue is properly before us, no error was committed by the trial court. It is, of course, familiar law that in a jury case a party is entitled to have its case decided by a jury that is given the appropriate standard by which to reach its decision. A wrongful refusal of a requested jury instruction constitutes a ground for a new trial. CIT Financial Services, Inc. v. Bowler,
With respect to the fifth issue, we note that the parties have stipulated that the Authority is a "governmental entity" within the meaning of § 11-93-2. However, as Arvan correctly points out, this Court has held that the $100,000 limit on damages set out in that statute is applicable only to tort judgments involving claims for bodily injury, death, or damage to tangible property. See Macon v. Huntsville Utilities,
With respect to the sixth and final issue, we note that the evidence indicated that Arvan was 47 years old when he was discharged; that he was earning an annual salary at that time of approximately $50,000; that his pen and pencil set was valued at approximately $1,000; that his computer program, if marketed, was valued at between $2,000 and $8,000 per copy; and that he had suffered mental anguish as a result of his discharge. (The jury was instructed, without objection, that it could award damages for mental anguish if it found for Arvan on his contract claim.) Bаsed on this evidence, we conclude that the jury's award of compensatory damages was not unreasonable.
For the foregoing reasons, the judgment is affirmed.
AFFIRMED.
MADDOX, ALMON, SHORES, KENNEDY, and BUTTS, JJ., concur.
On Application for Rehearing
HOUSTON, Justice.
APPLICATION FOR REHEARING OVERRULED.
*830 MADDOX, ALMON, SHORES, KENNEDY, and BUTTS, JJ., concur.
COOK, J., dissents.
COOK, Justice (dissenting from the overruling of the application for rehearing).
Because the trial court should have granted the motion of Birmingham-Jefferson County Transit Authority ("BJCTA") for a directed verdict, I would grant the rehearing and reverse the judgment of the trial court. Thus, I disagree with the appellee, Jaсk Arvan, who contends that the record supports his breach-of-employment-contract claim against BJCTA under an agency theory. More specifically, he insists that the record substantially evidences either the (1) actual or (2) apparent authority of Phil Gary, BJCTA's general manager, to bind BJCTA to a contract of employment for life with Arvan. In the alternative, Arvan contends that the record substantially evidences BJCTA's ratification of his employment contract. I shall briefly address each of these contentions.
I. Actual Authority
The term "actual authority" encompasses the concepts of both express authority and implied authority. Birmingham News Co. v. Birmingham Printing Co.,
It is undisputed that Gary did not have actual, express authority to procure lifetime employment contracts on behalf of BJCTA. Moreover, the record contains no evidence of acts or conduct of the principal, BJCTA, from whiсh it could be inferred that Gary had actual, implied authority to procure such contracts. Thus, the existence of such authorityif discernible at allwas inferable only from Gary's own five-year employment contract. However, that contract authorized him merely to (1) "manage the properties and business"; (2) "sign and execute contracts and agreements necessary and proper for the performance of his duties"; and (3) "hire, fire, promote and demote all personnel within the bounds of law, contract and personnel policies."
But "[t]he law considers lifetime or permanent employment contracts to be extraordinary and not lightly to be implied. Alabama Mills, Inc. v. Smith,
II. Apparent Authority (Agency by Estoppel)
The principles underlying the doctrine of apparent agency, or agency by estoppel, were thoroughly discussed in Malmberg v. American Honda Motor Co.,
"The test for determining whether an agency existed by `estoppel' or by `apparent authority' is based upon the potential principal's holding the potential agent out *831 to third parties as having the authority to act:
"`While some suggestion has been made that a distinction exists between apparent authority and authority grounded on estoppel, ... our cases and authority generally base the two upon the same elements.
"`"`As between the principal and third persons, mutual rights and liabilities are governed by the apparent scоpe of the agent's authority which the principal has held out the agent as possessing, or which he has permitted the agent to represent that he possesses and which the principal is estopped to deny.'
"`"Such apparent authority is the real authority so far as affects the rights of a third party without knowledge or notice...." ...
"`"When one has reasonably and in good faith been led to believe, frоm the appearance of authority which a principal permitted his agent to exercise, that a certain agency exists, and in good faith acts on such belief to his prejudice, the principal is estopped from denying such agency...." ...
"`"The apparent authority of the agent is the same, and is based upon the same elements as the authority created by the estoppel of the principal to deny the agent's authority; that is to say, the two are correlative, inasmuch as the principal is estopped to deny the authority of the agent because he has permitted the appearance of authority in the agent, thereby justifying the third party in relying upon the same as though it were the authority actually conferred upon the agent."'
"Pearson v. Agricultural Insurance Co.,247 Ala. 485 , 488,25 So.2d 164 , 167 (1946) (citations omitted); see Wood v. Shell Oil Co., [495 So.2d 1034 , 1038 (Ala.1986)]. The doctrine of apparent authоrity is based upon the actions of the principal, not those of the agent; it is based upon the principal's holding the agent out to a third party as having the authority upon which he acts, not upon what one thinks an agent's authority might be or what the agent holds out his authority to be. See Automotive Acceptance Corp. v. Powell,45 Ala.App. 596 ,234 So.2d 593 (Ala.Civ.App. 1970), quoted with approval in Massey-Ferguson, Inc. v. Laird,432 So.2d 1259 (Ala.1983)."
Malmberg,
Apparently with these principles in view, Arvan contends that "Chairman of the Board, Jackie Davison, [was] present during [Arvan's] initial meeting with Phil Gаry whereby the terms of [Arvan's] employment were negotiated." Appellee's Response [Brief] to Appellant's Motion for Leave to File Response to Reply Brief of Appellee in Opposition to Petition for Rehearing, at 3. Had the record actually demonstrated that Gary unequivocally offered Arvan lifetime employment in the presence of the chairman of BJCTA's board of directors, and that the chairman assented, or utterly failed to object, to the offer, I might have construed the incident as substantial evidence of agency by estoppel. But that is not this case. On the contrary, the record demonstrates that Davison met Arvan only briefly in Gary's office, and, indeed, reveals that he was not present during any of the subsequent, substantive discussions. Consequently, I am compelled to conclude that BJCTA did nothing to justify Arvan in believing that Gary was authorized to рrocure lifetime employment contracts on its behalf.
III. Ratification
In Birmingham News Co. v. Birmingham Printing Co.,
"Intention, express or implied, to ratify an unauthorized act is a material fact in an inquiry of ratification vel non by an asserted principal; and the intent requisite may be inferred where there is evidence tending to show that the asserted principal, with adequate knowledge of the facts and circumstances, so conducted himself as to evince his purpose to confirm or adopt the unauthorized act of another."
(Emphasis added.) However, "no ratification can be [inferred] from a principal's acts or *832 conduct which is as consistent with an intent not to ratify as [with an intent] to ratify, or from the conduct of a principal which has been forced upon him by reason of his agent's acting contrary to his instructions." 2A C.J.S. Agency § 84 (1972); see also Evanston Bank v. Conticommodity Services, Inc.,
The record fails to demonstrate that BJCTA possessed either the requisite knowledge or the intent to ratify Gary's unauthorized act. First, although Gary had no authority to procure for BJCTA a lifetime employment contract with any prospective employee, he did have exрress authority to hire employees. For all the record reveals, this contract was the first and only contract procured by Gary that contained such a provision. Thus, the mere fact that Arvan was working at the instigation of Gary was insufficient to place BJCTA on such notice that it should have inquired whether Gary had exceeded his hiring authority.
Indeed, Arvan presented no evidence that any matter regarding the duration of his tеnure came to the attention of a member of BJCTA's board of directors until November 1992, following a significant altercation between Arvan and a union representative. Under these facts, BJCTA's mere acquiescence in Arvan's employment must be regarded as being "as consistent with an intent not to ratify as [with an intent] to ratify." 2A C.J.S. Agency § 84, supra (emphasis added).
Also significant is the fact that BJCTA's acquiescence in Arvan's employment cannot be construed as "truly voluntary in character." Rakestraw v. Rodrigues,
NOTES
Notes
[1] Battles v. Pierson Chevrolet, Inc.,