Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-02142/USCOURTS-ca8-05-02142-0/pdf.json

Parties Involved:
Robert Baum
Appellant
Helget Gas Products
Appellee

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-2142

___________

Robert Baum, *

*

Appellant, * Appeal from the United States

* District Court for the

v. * Eastern District of Missouri.

*

Helget Gas Products, Inc., *

*

Appellee. *

___________

Submitted: December 15, 2005

Filed: March 16, 2006

___________

Before MELLOY, COLLOTON, and BENTON, Circuit Judges.

___________

BENTON, Circuit Judge.

Robert L. Baum sued his former employer, Helget Gas Products, Inc. ("HGP"),

claiming breach of a three-year employment contract, or negligent and fraudulent

misrepresentation of employment for three years. The district court granted HGP

summary judgment, holding that Baum did not have a contract for a term of years, and

alternatively, that HGP did not misrepresent the existence of a contractual guarantee.

Baum appeals. Having jurisdiction under 28 U.S.C. § 1291, this court affirms in part,

reverses in part, and remands.

I.

Appellate Case: 05-2142 Page: 1 Date Filed: 03/16/2006 Entry ID: 2021381
-2-

In January 2002, Baum met HGP's President, James F. Helget, and the St. Louis

branch manager, Kenneth Bromeier, to discuss a sales position. Baum was then

employed by a competitor, but worried it might soon stop operations. At the meeting,

Baum informed Helget and Bromeier that he needed an employment contract before

leaving his current position. He told Helget and Bromeier that he wanted a contract

for at least three years as job security before changing employers at age 59.

Throughout the meeting, Baum took detailed notes, itemizing the proposed salary,

benefits, and job duties in years 2002, 2003, and 2004. He gave this handwritten

paper to Helget at the end of the meeting. 

After further negotiations and an employment test, HGP hired Baum as a

salesman on February 25, 2002. Baum immediately reminded Helget that he needed

a written employment agreement as soon as possible. Helget said he would have

Baum's meeting notes typed up and signed. After a week's delay, Baum asked

Bromeier to sign the original meeting notes. Bromeier agreed. He and Baum signed

the paper on March 1, 2002, adding the words "contract with Helget Gas Products St.

Louis Mo. Market" at the top of the handwritten page. As St. Louis branch manager,

Bromeier had authority to sign for HGP. Although Baum and Bromeier drew a line

for Helget's signature, he never signed the paper. 

The final paper has three columns labeled 2002, 2003, and 2004. It says that,

in 2002, Baum's salary is $39,150 with an additional bonus of $2,000; in 2003, he

would receive a $43,150 salary and a $4,000 bonus; and in 2004, a $45,150 salary and

a $6,000 bonus. It also provides that Baum is due a $2,000 increase in bonus each

year after 2004, and that HGP would provide $9,600 each year to lease a vehicle and

cell phone. As to the vehicle, HGP is to pay for or buy-out the lease if Baum is

discharged "before contract expires." Finally, the paper provides for health insurance,

vacation and sick leave, paid holidays, funeral leave, and an expense account. 

Appellate Case: 05-2142 Page: 2 Date Filed: 03/16/2006 Entry ID: 2021381
-3-

Baum was the only salaried salesman at HGP in St. Louis. Baum testified he

never received any performance expectations or goals to justify his salary, but was

expected to service HGP's largest account (Anheuser Busch) and to bring in as many

new customers as possible. He also stated that his supervisor told him that he was

meeting HGP's expectations during his employment, as he was "doing everything he

was asked." 

Helget disagreed, pointing to another pre-employment document, a "letter of

agreement" where Helget specified that he expected Baum to produce at least $1,000

in new business each month in order to justify his compensation. Baum did not sign

the letter, and claimed never to have seen it. Helget testified he spoke with Baum

several times about his failing sales performance, which was consistently below his

monthly salary – far less than $1,000 new business each month. When Baum's sales

performance did not improve (according to Helget), HGP terminated him on

November 13, 2002.

Baum sued HGP for breach of contract, negligent misrepresentation, and

fraudulent misrepresentation. HGP moved for summary judgment, asserting that the

handwritten paper was not an employment contract for three years, and that HGP

never represented it was. HGP thus concluded that Baum was an at-will employee

subject to termination at any time. HGP also argued that no one told Baum he had a

guaranteed employment term, and that Baum understood he had to perform to HGP's

expectations in order to keep his job.

The district court granted HGP's motion, first holding that, while the

handwritten paper could be construed as a contract, it was not an employment contract

for a definite term of at least three years. Rather, the district court found that the paper

merely specified Baum's salary if employed through 2004. Because the district court

found the handwritten paper unambiguous, it refused parol evidence indicating

Baum's requirement and understanding of employment for at least three years.

Appellate Case: 05-2142 Page: 3 Date Filed: 03/16/2006 Entry ID: 2021381
-4-

Additionally, the district court concluded that no one at HGP promised Baum

employment for any period of time, defeating his negligent and fraudulent

misrepresentation claims. Baum appeals. 

 

II.

Baum first argues that the district court erred in granting summary judgment on

the breach-of-contract claim. This court reviews the grant of summary judgment de

novo, applying the same legal standards employed by the district court, and

considering whether the district court correctly followed the applicable substantive

law. See Midwest Oilseeds, Inc. v. Limagrain Genetics Corp., 387 F.3d 705, 710-11

(8th Cir. 2004). The district court is affirmed if, viewing the evidence favorably to the

non-moving party, there is no genuine issue of material fact and the moving party is

entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 255 (1986); Davis v. Hall, 375 F.3d 703, 711 (8th Cir. 2004). Summary

judgment is not appropriate if the non-moving party can set forth specific facts, by

affidavit, deposition, or other evidence, showing a genuine issue for trial. Grey v. City

of Oak Grove, 396 F.3d 1031, 1034 (8th Cir. 2004). This court reviews the district

court's interpretation of Missouri law de novo. See Erie R. Co. v. Tompkins, 304

U.S. 64, 78 (1938); Riordan v. Corp. of the Presiding Bishop of the Church of Jesus

Christ of Latter-Day Saints, 416 F.3d 825, 829 (8th Cir. 2005).

Under Missouri law, "in the absence of a contract for employment for a definite

term or a contrary statutory provision, an employer may discharge an employee at any

time, without cause or reason, or for any reason." Main v. Skaggs Cmty. Hosp, 812

S.W.2d 185, 187-88 (Mo. App. 1991), quoting Christy v. Petrus, 295 S.W.2d 122,

124 (Mo. banc 1956). Unless the contract specifies the duration of employment or

limits the reasons for discharge, either party may terminate the employment

relationship at any time, with no liability for breach of contract. See Luethens v.

Wash. Univ., 894 S.W.2d 169, 172 (Mo. banc 1995); McCoy v. Spellman Mem.

Appellate Case: 05-2142 Page: 4 Date Filed: 03/16/2006 Entry ID: 2021381
-5-

Hosp., 845 S.W.2d 727, 730 (Mo. App. 1993); Panther v. Mr. Good-Rents, Inc., 817

S.W.2d 1, 3 (Mo. App. 1991). 

Baum asserts that the signed, handwritten paper constitutes a valid three-year

employment contract. While conceding it does not limit the reasons for discharge, he

argues that it sets forth a duration of employment from February 2002 to December

2004. 

HGP responds, and the district court agreed, that the paper only establishes

Baum's projected salary and benefits over a three-year period, which is not a

"contractual undertaking" to employ Baum for three years. See Anselmo v. Mfrs. Life

Ins. Co. 595 F. Supp. 541, 547 (W.D. Mo. 1984), aff'd, 771 F.2d 417 (8th Cir. 1985).

HGP invokes the Missouri cases holding that, if an employment document does not

specify a duration, the relationship is at-will. See Sturgis Equip. Co. v. Falcon Indus.

Sales Co., 930 S.W.2d 14, 18 (Mo. App. 1996); Kaskowitz v. Commerce Magazine,

Inc., 793 S.W.2d 628, 631 (Mo. App. 1990) ("an indefinite hiring at so much per day,

or per month, or per year, is a hiring at will, and may be terminated by either party at

any time"), quoting Campbell v. Sheraton Corp., 253 S.W.2d 106, 110 (Mo. 1952).

Whether the district court erred depends on whether the handwritten paper is

ambiguous. Under Missouri law, summary judgment in a contract case is appropriate

only where the contract language is so clear and unambiguous that the contract's

meaning is readily apparent from the face of the document itself. See Family Snacks

of N.C., Inc. v. Prepared Prods. Co., 295 F.3d 864, 867 (8th Cir. 2002), quoting Mo.

Consol. Health Care Plan v. BlueCross BlueShield of Mo., 985 S.W.2d 903, 908

(Mo. App. 1999); E.O. Dorsch Elec. Co. v. Plaza Constr. Co., 413 S.W.2d 167, 172-

73 (Mo. 1967); MECO Sys., Inc. v. Dancing Bear Entm't, Inc., 948 S.W.2d 185,

190-91 (Mo. App. 1997). Where the contract is textually ambiguous, a question of

material fact exists as to the parties' intent, which is for a jury to resolve at trial.

Graham v. Goodman, 850 S.W.2d 351, 354-56 (Mo. banc 1993); Tuttle v. Muenks,

Appellate Case: 05-2142 Page: 5 Date Filed: 03/16/2006 Entry ID: 2021381
-6-

21 S.W.3d 6, 9 (Mo. App. 2000); Busch & Latta Painting Corp. v. State Highway

Comm'n, 597 S.W.2d 189, 198 (Mo. App. 1980). See Anderson, 477 U.S. at 247-48

(state substantive law identifies which facts are material for a motion for summary

judgment). 

The cardinal rule in contract interpretation is to ascertain and give effect to the

true intent of the parties. See Lyster v. Ryan's Family Steak Houses, Inc., 239 F.3d

943, 946 (8th Cir. 2001), quoting Speedie Food Mart, Inc. v. Taylor, 809 S.W.2d 126,

129 (Mo. App. 1991); J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d

261, 264 (Mo. banc 1973). Unless the contract is ambiguous, the parties' intent is

determined by the language of the contract alone, not extrinsic or parol evidence.

Armstrong Bus. Servs., Inc. v. H & R Block, 96 S.W.3d 867, 874 (Mo. App. 2002).

That the parties disagree about the contract's interpretation does not, by itself, create

an ambiguity. See Jim Carlson Constr., Inc. v. Bailey, 769 S.W.2d 480, 482 (Mo.

App. 1989). Rather, the test is "whether the disputed language, in the context of the

entire agreement, is reasonably susceptible of more than one construction giving the

words their plain and ordinary meaning as understood by a reasonable average

person." Speedie Food Mart, 809 S.W.2d at 129. See also Farmland Indus., Inc. v.

Frazier-Parrott Commodities, 111 F.3d 588, 590 (8th Cir. 1997), citing Coughenour

v. Bates, 785 S.W.2d 291, 297 (Mo. App. 1990). 

In this case, the contract language is reasonably susceptible to more than one

construction. While the handwritten paper itemizes Baum's salary and benefits for

2002, 2003, and 2004, it is also clearly labeled "contract with Helget Gas Products"

and contemplates HGP buying out the 39-month lease on Baum's company vehicle if

there is "discharge before contract expires." Additionally, it states that HGP will pay

Baum's "medical insurance for term of contract," and that Baum will receive "$2,000

each year after, increase in qtr. bonus after yr. 2004." Though HGP argues that these

clauses merely set forth estimated projections if Baum is employed through 2004, the

language is also susceptible to Baum's interpretation that it establishes a contract term

Appellate Case: 05-2142 Page: 6 Date Filed: 03/16/2006 Entry ID: 2021381
-7-

from February 2002 through December 2004. As the contract is textually ambiguous,

creating a genuine issue of material fact, the district court erred in granting summary

judgment to HGP. See Graham, 850 S.W.2d at 354-56. 

III.

Baum next argues that the district court erred in granting summary judgment

on the claims for negligent and fraudulent misrepresentation. Baum pled in the

alternative: (1) HGP knowingly led him to believe he had a three-year deal with no

intent to honor it, or (2) Bromeier negligently represented to Baum that HGP would

employ him for at least three years. Rejecting these arguments, the district court,

focusing on Baum's admissions, decided that he could not establish a

misrepresentation. This court reviews that decision de novo, applying the same legal

standards as the district court and viewing the evidence most favorably to Baum, the

non-moving party. See Koscielski v. City of Minneapolis, 435 F.3d 898, 900 (8th Cir.

2006).

To maintain a claim for negligent misrepresentation, Baum must establish that,

due to a failure to exercise reasonable care, HGP made false statements that he

justifiably relied upon to his detriment. See Collins v. Mo. Bar Plan, 157 S.W.3d

726, 734 (Mo. App. 2005), quotingColgan v. Wash. Realty Co., 879 S.W.2d 686, 689

(Mo. App. 1994); Hamra v. Magna Group, Inc., 956 S.W.2d 934, 939-40 (Mo. App.

1997). A negligent misrepresentation claim cannot arise solely from evidence that the

defendant did not perform according to a promise or statement of future intent. See

Urologic Surgeons, Inc. v. Bullock, 117 S.W.3d 722, 726 (Mo. App. 2003); Hoag v.

McBride & Sons Inv. Co., 967 S.W.2d 157, 174 (Mo. App. 1998) ("it is impossible

to be negligent in failing to ascertain the truth or falsity of one's own future

intentions"). 

Appellate Case: 05-2142 Page: 7 Date Filed: 03/16/2006 Entry ID: 2021381
-8-

The elements of fraudulent misrepresentation and negligent misrepresentation

are very similar, with two main differences. For fraudulent misrepresentation, Baum

must establish that HGP intentionally or recklessly made false statements in order to

induce his employment, which he reasonably relied upon to his detriment. See Volker

Court, LLC v. Santa Fe Apartments, LLC, 130 S.W.3d 607, 612 (Mo. App. 2004),

citing Gast v. Ebert, 739 S.W.2d 545, 547 (Mo. banc 1987). Unlike negligent

misrepresentation, "a promise accompanied by a present intent not to perform is a

misrepresentation sufficient to constitute fraud." Id., quoting Carlund Corp. v.

Crown Ctr. Redevelopment Corp., 910 S.W.2d 273, 279 (Mo. App. 1995); see also

Sofka v. Thal, 662 S.W.2d 502, 507 (Mo. banc 1983); O'Neal v. Stifel, Nicolaus &

Co., 996 S.W.2d 700, 704 (Mo. App. 1999).

The key to both misrepresentation claims is whether HGP made materially false

statements to Baum about the duration of his employment. While Baum asserts that,

during negotiations, both Helget and Bromeier led him to believe that HGP would

employ him for at least three years, he admitted in his deposition that the parties never

discussed how long his employment would last. He also affirmatively testified that

no HGP representative made a misrepresentation to him during the negotiations: 

Q: During the course of discussions that you had with Mr. Helget and

Mr. Bromeier prior to your beginning employment with Helget Gas

Products, do you believe that any representative of Helget Gas Products

lied to you or misrepresented anything to you?

A: Not to my knowledge.

Finally, Baum admitted that he had no reason to believe that HGP did not intend to

abide by the handwritten paper when it was negotiated or signed. 

These admissions are fatal to Baum's misrepresentation claims, as they establish

that no one at HGP made a materially false statement to Baum about the duration of

Appellate Case: 05-2142 Page: 8 Date Filed: 03/16/2006 Entry ID: 2021381
-9-

his employment – a necessity for both negligent and fraudulent misrepresentation. If,

as Baum admits, the parties never discussed the length of employment, HGP never

promised Baum a three-year employment guarantee during the course of negotiations

(other than in the ambiguous handwritten paper, as discussed above). See O'Neal, 996

S.W.2d at 702-03, citing Bernoudy v. Dura-Bond Concrete Restoration, Inc., 828

F.2d 1316, 1318 (8th Cir. 1987) ("A fraud claim is permitted only if it arises from acts

that are separate and distinct from the contract"). See also Deschler v. Brown &

Williamson Tobacco Co., 797 F.2d 695, 697 (8th Cir. 1986), citing Gen. Dynamics

Corp. v. Selb Mfg. Co., 481 F.2d 1204, 1216 (8th Cir. 1973) (same, applying Missouri

law). At best, Baum's evidence shows that the parties' negotiations implied a threeyear relationship, which HGP did not fulfill. This is insufficient to establish either

negligent or fraudulent misrepresentation. As Baum admits he believed HGP intended

to abide by the handwritten paper when it was negotiated and signed, and did not

believe that anyone at HGP lied to him during negotiations, he cannot establish the

requisite "promise accompanied by a present intent not to perform" for fraudulent

misrepresentation. See Volker Court, 130 S.W.3d at 612. Similarly, as to negligent

misrepresentation, the evidence shows only that HGP did not perform according to a

promise (if made), which is insufficient. See Urologic Surgeons, 117 S.W.3d at 726.

Accordingly, this court affirms the summary judgment to HGP on both

misrepresentation claims.

IV.

The judgment of the district court is affirmed in part, reversed in part, and the

case remanded. 

______________________________

Appellate Case: 05-2142 Page: 9 Date Filed: 03/16/2006 Entry ID: 2021381