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BUTTS v. OCE-USA

June 5, 1998

JAMES BUTTS, Plaintiff,
v.
OCE-USA, INC., Defendant.



The opinion of the court was delivered by: BARKER

ENTRY GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

 This matter comes before the Court on Defendant's Motion for Summary Judgment on Plaintiff's breach of contract and tortious interference with prospective business advantage claims. For the following reasons, Defendant's Motion for Summary Judgment is GRANTED.

 I. BACKGROUND

 Plaintiff James Butts ("Butts") began his employment with Defendant Oce-USA, Inc. ("Oce") in September, 1991, as a salesperson based in Indianapolis, Indiana. (Butts Depo. at 16.) As a salesperson, Butts was employed at-will and did not have an employment contract with Oce. (Id.) In July, 1994, he changed positions within the company and became a distributor sales manager. (Id. at 17.)

 Approximately two months later, on September 24, 1994, Oce and Ikon Office Solutions ("Ikon") entered into a Purchase and Distribution Agreement. (James Boysen Aff. at P 3.) Among other things, the parties agreed not to solicit or hire each other's employees. (Id.) The most recent Agreement provides:

 
SECTION 16. NON-SOLICITATION
 
Neither party shall, without the express consent of the other party, while this Agreement is in effect and for a period of one year after any termination of this Agreement, directly or indirectly solicit for employment or employ any person who is either a current employee, or who within the preceding six months was an employee of the other party or its permitted assigns. The party breaching this Section 16 shall be liable to the non-breaching party in the amount of 300% of the gross annual income . . . of each involved employee, as liquidated damages.

 (Exhibit A of Boysen Aff.) The Agreement between Ikon and Oce in effect at the time of Butts' employment contained the same provision although it was embodied in two documents. (Boysen Aff. at PP 4-7.)

 In early 1996 Butts learned that his position with Oce was going to be eliminated company-wide. (Id. at 78.) In anticipation of the job cuts, he began looking for other employment both within and outside of Oce. (Id. at 79-86.) In the summer of 1996, while Butts was still employed at Oce, Ikon offered him a position in Dallas, Texas on the condition that Oce provide Ikon with the written permission necessary to hire one of its employees. (Id. at 91.) Oce refused to provide such permission, causing Ikon to withdraw its offer of employment to Butts. (Id. at 94, 109.)

 Soon thereafter, in August, 1996, Oce offered Butts a position as its district sales manager for the Dallas/Fort Worth Region. (Id. at 19.) This offer was confirmed in a letter to Butts from Larry Kleuser, then the Region Director of Oce-Office Systems, dated August 6, 1998. (Defendant's Exhibit 2.) Butts immediately accepted Oce's offer and agreed to relocate to Dallas. (Butts Depo. at 24.) Thereafter, on October 28, 1996, Oce sent Butts a relocation budget for his move to Dallas and a copy of Oce's Employee Relocation Policy and Procedures Manual ("Relocation Manual"). (Butts Depo., Exhibits 5-7.)

 Butts did not officially begin his new position until January 12, 1997. (Butts Depo. at 19-20.) However, during the Fall of 1996, Butts began assuming some of the duties of his new position by commuting to Dallas from his home in Indianapolis. (Id.) During that time, Butts incurred numerous relocation-related expenses, including house-hunting trips to Dallas for himself and his wife. (Id. at 44.) Because Butts did not move to Dallas, he also incurred work-related expenses connected with his commute between Indianapolis and Dallas. (Id. at 21.) All of these expenses were reimbursed by Oce. (Id.)

 In January, 1997, Butts withdrew his children from school in Indianapolis and moved the family to a temporary apartment in Dallas. (Id. at 42-43.) Meanwhile, Butts was trying to negotiate payment by Oce of an additional $ 25,000 above the appraised value of his Indianapolis home. (Id. at 53-54.) Butts sought this sum for additional improvements he allegedly made to his home in preparation to sale. (Id. at 56.) Oce, however, refused to compensate Butts for the alleged additional value of his home, pointing out that the Relocation Manual did not provide for such expenses. (Id. at 143.)

 At the same time, Butts was close to exceeding the amount of relocation expenses budgeted by Oce and was concerned that Oce would not continue to reimburse his temporary housing in Dallas. (Id. at 142.) Accordingly, without Oce's permission, Butts and his family moved back to Indianapolis, where he continued to work out of his home. On February 26, 1997, Oce sent Butts a memorandum, which stated:

 
Jim, you need to make a career decision to be the Manager in the Dallas/Ft. Worth office. Either, [sic] you return to the Dallas/Ft. Worth sales team by February 28th and complete the relocation, or failure to return to Dallas by that time means that you have officially tendered your resignation effective February 28, 1997.

 (Defendant's Tab 2.) Butts did not return to Dallas. *fn1" On February 28, 1997, his voice mail was disconnected and he was sent letters indicating that he no longer was an Oce employee. (Butts Depo. at 148, 150.) In June 1997, Butts accepted a position with Danka Company. (Id. at 74.) He filed this lawsuit July 2, 1997.

 II. SUMMARY JUDGMENT STANDARDS

 Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.Pro. 56(c). A genuine issue of material fact exists if there is sufficient evidence for a jury to return a verdict in favor of the non-moving party on the particular issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986); Methodist Med. Ctr. v. American Med. Sec., Inc., 38 F.3d 316, 319 (7th Cir. 1994).

 In resolving a motion for summary judgment, a court must draw all reasonable inferences in the light most favorable to the non-movants. Patel v. Allstate Ins. Co., 105 F.3d 365, 366 (7th Cir. 1997); Spraying Sys. Co. v. Delavan, Inc., 975 F.2d 387, 392 (7th Cir. 1992). However, we must not "ignore facts in the record merely because they are unfavorable. . . . [A non-movant] gets the benefit of the doubt only if the record contains competent evidence on both sides of a factual question." Patel, 105 F.3d at 366. Thus, if genuine doubts remain, and a reasonable fact-finder could find for the party opposing the motion, summary judgment is inappropriate. Shields Enters., Inc. v. First Chicago Corp., 975 F.2d 1290, 1294 (7th Cir. 1992); Wolf v. City of Fitchburg, 870 F.2d 1327, 1330 (7th Cir. 1982).

 III. DISCUSSION

 Defendant moves for summary judgment on Plaintiff's breach of contract and tortious interference with prospective business advantage claims.

 A) BREACH OF CONTRACT CLAIM

 Plaintiff claims that Defendant breached its employment contract with him by terminating him without good cause and failing to reimburse all of his moving expenses. Defendant moves for summary judgment on that claim, contending that (1) Butts could be terminated without cause because he was an at-will employee, and (2) even if he were not an at-will employee, Butts' failure to report to work provided just cause to terminate his employment. Plaintiff rejoins that (1) he had an employment contract with Oce for a definite term, and (2) Oce had no just cause to terminate his employment.

 Indiana law recognizes two basis forms of employment: (1) employment for a definite or ascertainable term, and (2) employment at-will. Orr v. Westminster Village North Inc., 689 N.E.2d 712, 717 (Ind. 1997).

 
If there is an employment contract for a definite term, and the employer has not reserved the right to terminate the employment before the conclusion of the contract, the employer generally may not terminate the employment relationship before the end of the specified term except for cause or by mutual agreement. If there is no definite or ascertainable term of employment, then the employment is at-will, and is presumptively terminable at any time, with or without cause, by either party.

 Id.; see also Wior v. Anchor Industries, Inc., 669 N.E.2d 172, 175 (Ind. 1996). In Indiana, there is a strong presumption that employment is at-will. Id.

 Was Butts an at-will employee or an employee under contract for a definite term? Plaintiff maintains that the August 6, 1996 letter from Larry Fleuser, Region Director of Oce, to Butts constitutes Butts' employment contract for a definite term. That letter provides:

 
Dear Jim,
 
I am pleased to confirm our offer of employment as District Sales Manager of our Dallas/Ft. Worth office with Oce-Office Systems. We would anticipate your start date to be August 5, 1996.
 
Details regarding our offer effective August 5, 1996 are as follows:
 
*Base Salary: Paid at the rate per pay period of $ 2,576.92 (every two weeks or 26 per year) equals $ 67,000 per year.
 
*Incentive Guarantee: Paid at the rate per pay period of $ 923.07 (every two weeks or 26 per year). This incentive guarantee would be for a period from August 5, 1996 through December 31, 1996.
 
*Once you start your assignment in the Dallas/Ft. Worth branch, you will be guaranteed this incentive compensation for a period of six months at 100% i.e. October, 1996 to March 31, 1997. Any ...

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