Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-03314/USCOURTS-ca10-89-03314-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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FILED 

UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

United States Court of Appeals 

Tenth Circuit 

JUN 18 1990 

.ROBERT L. HOECKER. 

KERMIT E. LACKEY; WILLIAM A. SHIPLEY; 

and MURRAY F. TYSINGER, JR., 

Plaintiffs-Appellees, 

v. 

WHITEHALL CORPORATION, 

Defendant-Third-PartyPlaintiff-Appellant, 

v. 

WALLACE C. WILSON, 

Third-Party Defendant. 

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Clerk 

) No. 89-3314 

) (D.C. No. 85-2639-S) 

) ( D. Kan. ) 

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ORDER AND JUDGMENT* 

Before MOORE, BRIGHT,** and BRORBY, Circuit Judges. 

**Honorable Myron H. Bright, Circuit Judge, United States Court of 

Appeals for the Eighth Circuit, sitting by designation. 

This case comes to us on appeal after a trial to the court. 

The district court, applying Florida law, found that appellee 

Lackey's continued employment constituted consideration rendering 

appellant's promise to pay deferred compensation an enforceable 

* This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

Appellate Case: 89-3314 Document: 010110036220 Date Filed: 06/18/1990 Page: 1 
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contract. The only issue on appeal is whether the district court 

erred in this finding. 

The material facts in this case are not disputed. Sometime 

in late 1981, defendant-appellant Whitehall Corporation 

(Whitehall), determined to expand its previous business by 

entering and competing in the radio frequency crystals market. 

This business plan was to be carried out through Whitehall's 

Crystek Division headquartered in Fort Myers, Florida. In 

November 1981, Whitehall hired a team of key management personnel 

to develop and market the new products, offering deferred 

compensation arrangements as a hiring incentive. Whitehall 

extended the same offer of deferred compensation to other existing 

personnel, including plaintiff-appellee Kermit E. Lackey (Lackey). 

After the failure of the new marketing venture, Lackey and 

the other members of the marketing team resigned. When Whitehall 

and plaintiffs were unable to agree on the amount of the deferred 

compensation due them upon resignation, plaintiffs brought suit 

alleging violation of the Employee Retirement Income Security Act 

of 1971, as amended, 29 U.S. C. §1001 et seq. (ERISA), and breach 

of contract. The court found for Whitehall on the ERISA claim but 

concluded that plaintiffs had prevailed on the breach of contract 

claim. In so doing, the court found that Whitehall had offered 

the deferred compensation and that plaintiffs had accepted the 

offer. Memorandum and Order (Dec. 12, 1988) at 10. Specifically 

with regard to Lackey, the court found that, under Florida law, 

continued employment is consideration for a promise by an employer 

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of deferred compensation. Id. at 11. Whitehall only appeals that 

portion of the district court's order involving Lackey. 

The presence of consideration in an agreement is a question 

of law. See Harrington v. Harrington, 365 N.W.2d 552, 555 (N.D. 

1985); Keeter v. John Griffith, Inc., 241 P.2d 213, 214 (Wash. 

1952); 17A C.J.S. Contracts§ 613 (1963 & Supp. 1989). Questions 

of law are reviewed by this court de novo. See Boise City Farmers 

Coop. v. Palmer, 780 F.2d 860, 866 (10th Cir. 1985). 

In finding that an enforceable contract existed between these 

parties, the court relied on Tasty Box Lunch Co. v. Kennedy, 121 

So. 2d 52 (Fla. Dist. Ct. App. 1960), which held that in an 

employment at will situation, "the continued employment and 

agreement to pay commissions was consideration for the employee's 

agreement not to compete." Id. at 54. The payment of commissions 

by the employer in Tasty Box Lunch was part of the original 

employment arrangement, and there does not seem to have been any 

additional consideration given in return for the covenant not to 

compete. 1 

Whitehall cites other Florida cases in which continuing 

employment was coupled with other forms of consideration to create 

an enforceable contract. See Criss v. Davis, Presser & LaFaye, 

p. A. ' 494 So. 2d 525, 527 (Fla. Dist. Ct. App. 1986); Wright & 

Seaton, Inc. v. Prescott, 420 So. 2d 623, 626 (Fla. Dist. Ct. App. 

1982); Atlas Travel Serv., Inc. v. Morelly, 98 So. 2d 816, 817 

(Fla. Dist. Ct. App. 1957). While we acknowledge those cases, 

1 Indeed, the dissent complained that more than continuing 

employment may have been needed under Florida precedent . . Id. at 

54 (Horton, C.J., dissenting). 

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none of them indicate that their outcomes depended on the presence 

of consideration over and above continuing employment. We agree 

with the district court that Tasty Box Lunch remains the 

controlling law in Florida and conclude that it was properly 

applied in this case. 

The discussion in Whitehall's brief regarding recent 

criticism of Tasty Box Lunch and its progeny is also misplaced. 

In Wright & Seaton, Inc. v. Prescott, 420 So. 2d 623 (Fla. Dist. 

Ct. App. 1982), the court criticized Tasty Box Lunch and similar 

later cases, lamenting the fact that none of those cases discussed 

mutuality of obligation, a concept the court had previously 

distinguished from the concept of consideration. See id. at 628. 

Whitehall quotes selectively from Wright & Seaton and ignores 

later language in the case in which the court, referring to Tasty 

Box Lunch and its successors, states that "they represent the 

governing law in Florida on which employers and employees have 

relied for over twenty years and appellee has not provided us with 

argument sufficiently persuasive to disregard them." Id. We find 

the argument of Whitehall here to be similarly deficient. 

Because we have found that Lackey's continued employment is 

valid consideration for Whitehall's promise to pay him deferred 

compensation, it is unnecessary for Lackey to also demonstrate 

reliance. 

The judgment of the United States District Court for the 

District of Kansas is AFFIRMED. 

ENTERED FOR THE COURT 

PER CURIAM 

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