Title: John A. Russell Corporation. v. Bohlig

State: vermont

Issuer: Vermont Supreme Court

Document:

Russel Corp. v. Bohlig (98-014); 170 Vt. 12; 739 A.2d 1212

[Opinion Filed 27-Aug-1999]
[Motion for Reargument Denied 20-Sep-1999]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as  formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the  Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 No. 98-014

John A. Russell Corporation	                      Supreme Court

	                                              On Appeal from
     v.		                                      Rutland Superior Court

James W. Bohlig	                                      January Term, 1999

Silvio T. Valente, J.

       David Cleary and John R. Dean of Cleary Shahi Associates, P.C.,
  Rutland, for Plaintiff-Appellee.

       Alan P. Biederman of Biederman & Rakow, P.C., Rutland, for
  Defendant-Appellant.

PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.

       JOHNSON, J.  Former employee James Bohlig appeals from a jury verdict
  on his  counterclaim for breach of an employment contract by his former
  employer, the John A. Russell  Corporation.  Mr. Bohlig contends that the
  court erred by concluding that the employment  contract was ambiguous and
  thus by allowing the jury to construe its meaning.  He also claims  that
  the court erred by admitting evidence of his character in violation of
  V.R.E. 404, 405 and  608.  We agree in both respects, and thus, reverse and
  remand for a new trial on the  counterclaim. (FN1)  The Corporation
  cross-appeals the court's determination that it waived  prejudgment
  interest for the period prior to January 1, 1992.  We affirm the court's
  decision on  interest.

 

       In May 1989, Mr. Bohlig was hired as executive vice president and
  chief operating  officer by the John A. Russell Corporation, a general
  contracting company in Rutland, Vermont.  The parties entered into an
  employment contract for a term of three years on May 16, 1989.   Shortly
  after starting his job, Mr. Bohlig began renovating his house in Shrewsbury
  using  employees and equipment of the Corporation with the permission of
  the Corporation.  The cost  of the renovations eventually exceeded
  $600,000.  At trial, the Corporation claimed it gave Mr.  Bohlig notice in
  November 1991 that he was terminated effective December 31, 1991.  Mr. 
  Bohlig claimed he did not know of the termination until he returned to work
  in January 1992 and  found his belongings had been removed from his office. 
  The parties also disputed the reason for  the termination.

       Subsequently, the Corporation brought suit against Mr. Bohlig for
  breach of the  employment contract, alleging inappropriate self-dealing,
  breach of fiduciary responsibility, and  breach of employment obligations
  arising from the contract.  At trial, the Corporation maintained  that Mr.
  Bohlig was dishonest to the Corporation in representing the scope of his
  home  renovations and his ability to pay for the renovations.  It claimed
  that he still owed a balance of  $218,413.20 for the construction work. 
  Mr. Bohlig counterclaimed for breach of the  employment contract,
  maintaining that the amount he owed for construction work was offset by 
  the amount the Corporation owed him in unpaid benefits under the employment
  contract.   Specifically, he contended that the Corporation failed to pay
  him (1) a guaranteed bonus of  $20,000 per year, (2) relocation expenses of
  $129,938.62, and (3) twelve months of severance  pay and employment
  benefits in lieu of twelve months notice, amounting to over $110,000.	

       Mr. Bohlig's three claims for breach of contract were based on three
  provisions in the  parties' employment contract.  At trial, the parties did
  not dispute that, under paragraph 2 of the  contract, Mr. Bohlig was
  entitled to a minimum annual bonus of $20,000.00.  Mr. Bohlig  claimed that
  he was entitled to $10,000 for the half year he worked in 1989, $20,000 for
  1990,  $20,000 for 1991, and $20,000 for 1992 as part of his severance pay. 
  The Corporation 

 

  maintained, however, that Mr. Bohlig had waived his right to the bonus at
  meetings during 1989  and 1990 at which employees agreed there would be no
  bonuses because the company was not  doing well.

       The claim for relocation-expense reimbursement also arose under
  paragraph 2 of the  contract, which details the relocation expenses that
  the employer will reimburse and provides  further that it was the intent of
  the parties that the relocation would "be revenue-neutral to  Employee
  after payment of all income taxes on these reimbursements, except as to the
  relative  differences in the price of Employee's current and new
  residences."  At trial, the Corporation  maintained that it had paid Mr.
  Bohlig the moving expenses owed under paragraph 2 totaling  $7,136.00.  

       The claim for severance pay and benefits was based upon paragraph 4 of
  the contract,  which states:

     Termination:  Employer may terminate this contract after twenty 
     four (24) months or any renewal period hereof, upon twelve (12) 
     months written notice, (or pay and other benefits for a twelve 
     month period in lieu of said notice).  Employer may terminate this 
     Contract without said twelve month notice and with no further 
     obligation (other than wages and benefits earned but not paid) only 
     in the following instances:

     1) for Employee's dishonesty in the performance of his duties or 
     wanton disregard of his duties;

     2) at Employee's death; or

     3) after any disability has prevented Employee from performing his 
     duties for a period of six (6) consecutive months.

  Whether Mr. Bohlig was terminated in November 1991 or January 1992, he was
  terminated after  twenty-four months but before the three-year term of the
  contract expired.  At trial, Mr. Bohlig  maintained that, under paragraph
  4, he was entitled to twelve months' severance pay and benefits  because he
  did not get twelve months' notice.  The Corporation contended that, under
  paragraph  4, it could terminate Mr. Bohlig after twenty-four months with
  no notice or severance pay.  In  the alternative, the Corporation claimed
  that it was not obligated to give Mr. Bohlig notice or 

  

  severance pay because he was terminated for "dishonesty in the performance
  of his duties."

       The jury rendered a verdict in favor of the Corporation for
  $218,413.20.  It rendered a  verdict for Mr. Bohlig for $2,828.25. 
  Pursuant to the parties' stipulation, the court calculated  interest on
  each award from January 1, 1992, and awarded the Corporation $365,012.89,
  the  difference between the two awards with interest.  Mr. Bohlig does not
  appeal from the verdict  for the Corporation.  He appeals from the verdict
  on his counterclaim on several grounds.  We  reach the following issues:
  (1) whether the court erred in concluding the employment contract  was
  ambiguous and allowing the jury to construe it, (2) whether the court erred
  in instructing the  jury that adequate and sufficient grounds for
  termination was a defense to any alleged breach of  the employment
  contract, and (3) whether the court erred in admitting certain evidence of
  Mr.  Bohlig's character.  The Corporation cross-appeals from the court's
  decision that it is not entitled  to any prejudgment interest for the
  period before January 1, 1992.

                            I. Jury Instructions

                                     A.

       We first address Mr. Bohlig's claim that the court erred in concluding
  that paragraph 4 is  ambiguous, and thus in instructing the jury to
  construe it.  Whether the contract is ambiguous is  a matter of law to be
  decided by the court.  See Morrisseau v. Fayette, 164 Vt. 358, 366,