Lead Opinion
OPINION
Case Summary
The appellant, Mark Hinkel, was hired to work for the appellee, Sataria Distribution and Packaging, Inc. ("Sataria"). Hinkel was allegedly promised a year's worth of salary and insurance coverage if he were ever terminated involuntarily, but his written employment contract did not provide for severance pay or post-employment benefits. Hinkel was soon terminated, and he did not receive the severance package he says he was promised. Hinkel sued for breach of contract and/or promissory estoppel. The trial court entered summary judgment in favor of Sataria. We hold that (1) Hinkel's written employment contract is a completely integrated agreement which precludes consideration of any prior or contemporaneous oral promises, (2) to the extent the severance agreements were made after the execution of the written contract, they were not supported by additional consideration, and (3) Hinkel is unable to sustain his claim of promissory estoppel. We affirm.
Facts and Procedural History
Hinkel was employed by Refractory Engineers, Inc. and Ceramic Technology, Inc. John Jacobs was the owner of Sataria. In late August or September 2005, Hinkel
Dear Mark,
This is written as an offer of employment. The terms are as described below:
. Annual Compensation: $120,000 >
. Work Location: Belmont Facility po
Initial Position: Supervisor Receiving Team go
. Start Date: . Paid Vacation: 08/19/2005 To be determined guge
. Health Insurance: Coverage begins 09/01/2005 pending proper Enrollment submission g
Please sign and return.
Id. at Ti. Hinkel signed the offer and resigned from his other employers. He began working at Sataria in September 2005. According to Hinkel, Jacobs reiterated the severance promise again in November 2005 and December 2005.
Sataria terminated Hinkel's employment involuntarily on January 23, 2006. Sataria paid Hinkel six weeks of severance thereafter. Hinkel brought this action for breach of contract and/or promissory es-toppel against Sataria. He claimed that Sataria owed him the severance package that Jacobs promised. Sataria moved for summary judgment. The trial court granted Sataria's motion. Hinkel now appeals.1
Discussion and Decision
The law of summary judgment is well established. The purpose of summary judgment under Indiana Trial Rule 56 is to terminate litigation about which there can be no factual dispute and which may be determined as a matter of law. Bushong v. Williamson, 790 N.E.24 467, 474 (Ind.2003). On appeal, our standard of review is the same as that of the trial court: summary judgment is appropriate only where the evidence shows there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Williams v. Riverside Cmty. Corrs. Corp.,
I. Breach of Contract Claim
According to Hinkel, Jacobs orally promised him a year's salary and insurance coverage if he were ever involuntarily terminated. Sataria argues that any alleged oral promises are barred from consideration by the parol evidence rule.
The parol evidence rule provides that "[wlhen two parties have made a contract and have expressed it in a writing to which they have both assented as the complete and accurate integration of that contract, evidence ... of antecedent understandings and negotiations will not be admitted for the purpose of varying or contradicting the writing." Dicen v. New Sesco, Inc.,
The first step when applying the parol evidence rule is determining whether the parties' written contract represents a complete or partial integration of their agreement. See Restatement (Second) of Contracts §§ 209, 210 (1981). If the contract is completely integrated, constituting a final and complete expression of all the parties' agreements, then evidence of prior or contemporaneous written or oral statements and negotiations cannot operate to either add to or contradict the written contract. Franklin v. White,
In addition,
The test of [parol evidence] admissibility is much affected by the inherent likelihood that parties who contract under the cireumstances in question would simultaneously make both the agreement in writing which is before the court, and also the alleged parol agreement. The point is not merely whether the court is convinced that the parties before it did in fact do this, but whether reasonable parties so situated naturally would or might obviously or normally do so.... The vast majority of courts assessing the admissibility of parol evidence at common law apply this test. This test is commonly known by the adverbs used by the courts which apply it, and might be variously called the "naturally" test, the "naturally and normally" test, the "ordinarily" test, or any of a host of words used by the courts to indicate that parties similarly situated might reasonably have believed it appropriate to keep the two agreements separate. Moreover the test can be stated in the affirmative or the negative; either way the key question is the same. Thus, one way to ask the question is whether the nature of the collateral agreement was such that, if the parties had agreed to it, they would naturally have included it in their writing. Asked in this way, if the answer is that they would have, and they did not, they engaged in "unnatural" behavior, and evidence of the alleged agreement is inadmissible.
11 Williston on Contracts § 38:25 (footnotes omitted); see also Steinke v. Sungard Fin. Sys., Inc.,
Here, Jacobs and Hinkel negotiated the terms of Hinkel's employment before completing their written contract. Jacobs allegedly promised Hinkel that he would receive one year of salary and benefits if he were ever terminated involuntarily. The parties then executed their written agreement. The written employment offer specified Hinkel's compensation, work location, title, start date, and the date on which his insurance coverage would begin. It did not provide that Hinkel would receive severance pay or benefits following termination. Hinkel signed the letter and began working at Sataria. In light of all the relevant evidence, we find as a matter of law that Hinkel's contract represented a complete integration of the parties employment agreement. Jacobs allegedly promised Hinkel a severance package, but the written contract enumerates both compensation and insurance coverage while saying nothing of post-employment salary and/or benefits. The offer leaves one term to be decided-paid vacation-but the contract imports on its face to be a complete expression with respect to salary and insurance. And since a lucrative severance provision would "naturally and normally" be included in an employment contract, its glaring omission here further supports the conclusion that Hinkel's written contract superseded any alleged prior oral promises. We hold that the written contract constituted a final representation of the parties' agreement, and any contemporaneous oral agreements that the parties made as to severance are not subject to interpretation.
To the extent Jacobs may have promised Hinkel a severance package after their written contract was executed, an additional question is whether Jacobs's promise could have constituted a valid contract modification. "The modification of a contract, since it is also a contract, requires all the requisite elements of a contract." Hamlin v. Steward,
Here, if Jacobs promised Hinkel a severance package after the written employment contract was executed, there is no evidence that Hinkel provided additional consideration in exchange for the promise. Hinkel argues that he had to agree "to continue working for Sataria" and "to not voluntarily resign his employment." Appellant's Br. p. 15. But Hinkel had assumed those duties and employment obligations as consideration for the original agreement. See Buschman v. ADS Corp.,
For the foregoing reasons, Hinkel has failed to raise a genuine issue of material fact on his breach of contract claim, and the trial court properly granted summary judgment in favor of Sataria.
II. Promissory Estoppel Claim
Hinkel has also alleged promissory estoppel as a basis for recovery in this case. The doctrine of promissory es-toppel provides that a "promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by the enforcement of the promise." Restatement (Second) of Contracts § 90(1); accord Jarboe v. Landmark Cmty. Newspapers of Ind., Inc.,
Hinkel claims that Jacobs's severance promise induced him to leave his previous employers and "give] up the security associated therewith." Appellant's Br. p. 17. But Hinkel was provided with a period of employment at Sataria, a substantial salary, and six weeks of severance. Hinkel has not shown an injury so independent and severe that injustice could only be avoided by enforcement of Jacobs's alleged promise. See Whiteco Indus., Inc. v. Kopani,
Affirmed.
Dissenting Opinion
dissenting.
I respectfully dissent because I disagree with the majority's conclusion that Jacobs's oral promise to Hinkel regarding a severance package is "barred from consideration by the parol evidence rule." Op. at 768. I do so for two reasons.
First, I believe that a genuine issue of material fact exists regarding whether the parties intended for Jacobs's written job offer to Hinkel to be completely integrated, i.e., a "final and complete expression of all the parties' agreements[.]
Second, the terms of the severance package do not vary from or contradict the terms of the written offer, but merely cover that which was not covered in the offer.
Notes
. The majority concedes that the offer "leaves one term to be decided" but paradoxically concludes that it "constituted a final representation of the parties' agreement[.]" Op. at 770. I fail to see how a contract can be
. The record before us contains no designated evidence contradicting Hinkel's assertion that Jacobs promised him "a year's worth of salary and insurance coverage if he were ever terminated involuntarily[.]" Op. at 767.