Daniel Adams Associates, Inc. v. Rimbach Publishing, Inc.Daniel Adams Associates, Inc. v. Rimbach Publishing, Inc.
These cross-appeals require that we review post-trial orders entered by the trial court in actions for breach of an employment contract and for malicious interference with the contract existing between a sales representative and his employer, the publisher of a trade magazine. Although the history of the proceedings is lengthy and complex, the underlying issues concern (1) the terms of the contract of employment and (2) whether the vice president of a corporate employer who discharges an employee can be held individually liable for interfering with the contract of employment between the employee and the corporate employer. To place these issues in context, we begin the arduous task of reviewing the proceedings which brought this matter before the Superior Court for review.
In 1972, the publishing firm was incorporated under the name of Rimbach Publishing, Inc. Rimbach’s son, Richard Rimbach, Jr., received fifty percent of the stock of the new corporation, was elected a director, and was named corporate vice president. In 1973, following incorporation, new contracts of employment were mailed to all sales representatives, including Adams. Accompanying the new contracts were transmittal letters requesting each sales representative to sign the contract and return it to the employer. The letter of transmittal stated that the contract would thereafter be executed by the corporate employer, who would mail an executed copy to each employee. Adams signed his contract and returned it to his employer. It was thereafter signed on behalf of the corporate employer by Richard Rimbach, Jr., the vice president. Adams denied ever receiving an executed copy of the agreement, although the employer’s evidence was that a copy had been given to Adams’ secretary. The provisions of this agreement called for the same commissions, i.e., twenty percent, and again permitted termination by either party upon written notice. By the terms of this agreement, however, if Adams were terminated by the employer, his recovery of commissions was limited to those accruing in the next edition of the publication to
In June, 1978, Adams’ contract was terminated, and written notice thereof was duly given. Adams contended that he had been discharged because he refused to discontinue doing work for Instrument Society of America, a competitor, who had previously recruited and taken from Rimbach a junior editor. The employer, on the other hand, premised Adams’ discharge upon a poor sales record. In any event, Adams was paid commissions in the amount of $18,085.49, which sum represented advertising sold by Adams for the next edition of the magazine published after his termination. A demand for an additional $16,000, which was alleged to be the amount of commissions accruing for the two succeeding editions of the publication, was rejected by the employer.
In 1979, Adams filed an action in assumpsit based on an alleged oral agreement of employment which he had made with Richard Rimbach, Sr. in 1968. In 1982, Adams filed a second action in which he alleged that the corporate employer had breached the writtеn agreement which had been executed in 1968. In a second count of the 1982 complaint, Adams alleged that Richard Rimbach, Jr. and his corporation were liable for wrongful discharge and for maliciously interfering with Adams’ contract of employment. The two actions were consolidated for trial. At trial, the court directed a verdict in favor of all defendants in the 1979 action
2
and on the second count of the 1982 action. The
I. MALICIOUS INTERFERENCE WITH CONTRACT
The cause of action for malicious interference with contract is defined in the Restatement (Second) of Torts § 766. This section of the Restatement, which was adopted by the Pennsylvania Supreme Court in
Adler, Barish, Daniels, Levin and Creskoff v. Epstein,
One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person by inducing or otherwise causing the third person not to perform the contract, is subject to liability to the other for the pecuniary loss resulting to the other from the failure of the third person to perform the contract.
Restatement (Second) of Torts § 766. Essential to a right of recovery under this sеction is the existence of a contractual relationship between the plaintiff and a “third person”
A corporation is a creature of legal fiction which can “act” only through its officers, directors and other agents.
Lokay v. Lehigh Valley Cooperative Farmers, Inc.,
In Raab v. Keystone Insurance Co., supra, James Raab sought recovery of no-fault insurance benefits from his insurer, Keystone Insurance Company, after he had been injured in a motor vehicle accident. Ed O’Keefe, a claims supervisor employed by the insurance company, was assigned to handle Raab’s claim. Although medical and work loss benefits were paid to Raab for a period of three months following the accident, no further payments were made. Raab and his wife brought suit against both the insurance company and O’Keefe, the claim supervisor. Two theories of recovery were asserted in the complaint: the first sought recovery for the physical and emotional injuries suffered by the plaintiffs because of the insurancе company’s negligent failure to pay benefits according to the contract; the second asserted O’Keefe’s alleged malicious interference with the contractual relationship between the insurance company and the plaintiffs. The trial court sustained preliminary objections in the nature of a demurrer and dismissed the complaint.
A divided panel of this Court affirmed. With respect to the claim for malicious interference with contract, the majority adopted the opinion of the trial court as follows:
In the instant matter, Plaintiffs would have this court view O’Keefe, a claims supervisor employed by the Defendant Company, as a third party who interposed himself between two parties to an agreement. However, Plaintiffs aver in the Complaint that O’Keefe “at allrelevant times was the agent, servant, and/or employee of the defendant, Keystone Insurance Company, at all times acting within the course of his employment and scope of his authority, under and subject to the direct and exclusive control and supervision of the defendant____” Inasmuch as Defendant Company can only act through its employees and O’Keefe is identified by Plaintiffs as the individual responsible for failing to authorize payments, the individual Defendant and the Company defendant are one and the same entity for purposes of this action. Consequently, there is no third party against who [sic] a claim of interference with contract can lie. Hence, Defendants’ demurrer tо Plaintiffs’ contention that O’Keefe’s conduct constituted malicious interference with a contractual relationship must be sustained.
Id.
Equally instructive are federal decisions interpreting Pennsylvania law and applying it to facts similar to those in the instant case. In
DuSesoi v. United Refining Co., supra,
an employee of the defendant corporation, who had been discharged by the corporation’s president, brought an action against both the president and the parent corporation for tortious interference with contractual relations. The United States District Court for the Western District of Pennsylvania dismissed the claim, holding that a corporation could not tortiously interfere with an agreement to which it was party.
Id.
at 1275. The court observed that the tort for malicious interference with contract, as defined in Section 766 of the Restatement (Second) of Torts, applied exclusively to interference caused by a third party.
Id.
Because a corporation may act only through its officers аnd agents, the court concluded, the actions of the officers in terminating contracts on behalf of the corporation could not be considered malicious interference by the individual officer or agent.
Id.
Similar reasoning was employed by the United States District Court for the Eastern District of Pennsylvania in
Vuksta v. Bethlehem Steel Co., supra,
where the plaintiff had asserted a claim for malicious
These decisions are analytically compelling. We conclude, therefore, that where, as here, a plaintiff has entered into a contract with a corporation, and that contract is terminated by a corporate agent who has acted within the scope of his or her authority, the corporation and its agent are considered one so that there is no third party against whom a claim for contractual interference will lie.
Adams’ reliance upon the decision by a panel of this Court in
Yaindl v. Ingersoll-Rand Co., supra,
is misplaced. There, the plaintiff had been employed by Ingersoll-Rand аt its Standard Pump-Aldrich Division (SP-AD) plant when he was fired by a plant officer. When the plaintiff attempted to obtain employment with another departmental division of Ingersoll-Rand, Turbo Products Division (Turbo), several officers of the SP-AD plant contacted the hiring personnel at the other division. As a result of information provided
There is another reason why the directed verdict on the malicious interference with contract claim was correct and should not have been disturbed. As we shall see, both the 1968 and the 1973 agreements permitted the employer to terminate Adams’ employment contract at will. When Rimbach acted to discharge Adams, whether because he had a poor sales record or because he was doing work for a
An almost identical fact pattern was presented to the Supreme Court in
Menefee v. Columbia Broadcasting System, Inc.,
The instant case is controlled by
Menefee.
As that decision makes clear, Rimbach Publishing had an absolute contractual right to terminate Adams’ contract and Rimbach, acting within the scope of his authority as its corporate officer, was privileged to exercise that right. Adams’ discharge by Rimbach on behalf of the publishing company, therefore, did not give rise to a claim by Adams for inten
II. WRONGFUL DISCHARGE
The trial court entered a directed verdict on the wrongful discharge claim in favor of the employer and denied Adams’ subsequent motion for new trial because, in the court’s judgment, Adams was an independent contractor whose contract was terminable at will upon written notice. We find it unnecessary to determine whether Adams was an employee of the publisher or аn independent contractor. In either event, it seems clear that his employment was at will and could be terminated upon notice. In this respect, the provisions of the 1968 and 1973 contracts were identical. Either contract could be terminated by the publishing company at any time upon written notice to Adams. There was no evidence from which the jury or the trial court could find any rights greater than those conferred by the written agreement. The directed verdict on the wrongful discharge claim was proper and will be affirmed. 3
III. BREACH OF CONTRACT
Whether Adams is entitled to recover commissions in excess of those already paid by the publishing company depends upon whether his rights are to be determined by the 1968 contract or the 1973 contract. The 1968 contract, it will be recalled, required the publishing company, in the event of terminating Adams’ contract, to pay him commis
It is not disputed that the initial agreement between Adams and the unincorporated publishing firm was executed in 1968. It is similarly undisputed that this contract was adhered to by the corporation аfter it had been formed in 1972. The corporate employer contended at trial and also contends on appeal that the 1968 contract was superseded by the 1973 contract between Adams and Rimbach Publishing, Inc.
“Parties to a written contract may show that it was subsequently abandoned in whole or in part, modified, changed or a new one substituted____”
Priester v. Milleman,
In the instant case, the corporate publishing company met this burden by showing that Adams had signed a new contract with the corporation in 1973. The fact that an individual has signed an apparently complete expression of the terms of a contract is strong evidence that he or she is thereby expressing his or her unconditional assent, and, unless there is some evidence to the contrary, it may be conclusive of his or her intention to be bound. See: 1 Corbin on Contracts § 31, at 117. Nevertheless, the trial court submitted the case to the jury to determine whether the contract had been executed by the corporation and whether an executed copy had been delivered to Adams prior to the time when he was discharged. This, we are constrained to conclude, was error.
A written contract which has not been signed by оne of the parties will nevertheless create a valid, binding agreement if both parties manifest their assent to its terms. See:
Sullivan v. Allegheny Ford Truck Sales,
The agreement signed by Adams in 1973 provided that it could be terminated upon written notice by either party. In the event it was terminated by the publisher, however, Adams was to be paid all commissions accruing from his customers for the next issue published after his termination. Adams was terminated in June, 1978, in accordance with the terms of the contract between the parties. The termination was not wrongful. He was entitled to receive thereafter those commissions which accrued from the next monthly installment of the trade publication. These commissions were paid and received by Adams. He had no cause of action for further damages.
Because Adams as a matter of law has failed to establish a cause of action for breach of contract against Rimbach Publishing, Inc. or Richard J. Rimbach, Jr., we find it unnecessary to review the trial court’s exercise of discretion with respect to the granting of remittitur. That issue has become moot.
The order of the trial court is affirmed in part and reversed in part as set forth in the foregoing opinion. The case is remanded to the trial court for the entry of judgment in favor of Rimbach Publishing, Inc. and Richard Rimbach, Jr.
Notes
. Both Adams and the publisher purported tо sign the contract on behalf of corporate entities. However, neither corporation had been formed at the time when the contract was executed. Because the parties have not questioned this apparent irregularity, we do not address this issue.
. The 1979 action had been filed by Adams against the defendants on his own behalf and on behalf of a corporation which allegedly succeeded to his business in 1971 to recover for the defendants’ asserted breach of аn oral agreement entered into by Adams and Rimbach’s father in 1968. Like the suit filed in 1982, the 1979 action was based upon Adams’ dismissal by Rimbach in 1978. Adams was dismissed as a plaintiff in the 1979 action because, the trial court held, his obligations under the alleged oral agreement had been assumed by his corporation. This decision was affirmed by the Superior Court, and the case was remanded for further proceedings. After the 1979 action had been consolidated and tried with the suit which Adams
. We may affirm the decision of the trial court if it is correct for any reason. See:
E.J. McAleer & Co. v. Iceland Products, Inc.,