### IN THE COURT OF APPEALS OF TENNESSEE AT KNOXVILLE Decem ber 9, 2002

Session EVAN J. ROBERTS v. MILLER INDUSTRI ES, INC., ET AL 

### . Appeal from the Chancery Court for Hamilton County No. 00-1035 W. Frank Brown, III, Chancellor

FILED APRIL 10, 2003
No. E2002-01726-COA-R3-CV

In this appe al from th

e Chancer y Court for Hamilton County the Appellants/Defendants, Miller Indu stries, Inc. and Road One, I nc., contend that the Trial Court erred in aw arding the Appellee/ Plai nt iff, Evan J. Robe

rts, dama ges for breach of contr act. The judgmen t of the Tr

ial Court is affirmed in part and reversed and vacate d in part, a nd the ca use is remanded for collection o f costs below. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in Part

and Rever

sed and Vacated in P

art; Ca use Remanded
H OUSTON M. G ODDARD , P.J., delive red the o pinion of t

he court , in which C HARLES D. S USANO , J R
. and D. M ICHAEL S WINEY , JJ., joined.
William Alexande

r Blue, Jr., Nashville, Ten nessee, for the A

ppella nt s, Miller Industries, I

nc. and Road One, Inc.
John Tate Ric e, Chatta

nooga, Tenness ee, for

the Appellee, Eva

n J. Roberts
OPINION
On July 31, 1998, RoadOne, I nc.(hereinafter “RoadOne” ), a nationwide towi ng serv ice company and subsidiary

of Miller Industries, I

nc.(hereinafter “Miller” or “the Company”) , offered Mr. Roberts employment in the position of director of sales and marketing. Mr. Roberts ac cepted this offer and on October 1, 1998, he beg an work as a f ull time employee of Road One with an annual salary

of $98,000.00.
On September 30, 1998, just prior to the date Mr. Rober ts’ full tim e employ ment with RoadOne began , Miller is sued a pr ess rele asein which it

announced it's employ

ment of Goldman, Sachs & Compan

y to act as itsfinancial adviser in connection with the process of exploring "various strategic and fina

ncial alt ernativ es to enhance shareholder value." Thereafter, Mr. Rober ts received a letter from Mille

r dated D ecembe

r 14, 1998 , which sta

ted as fo llows:-2-

Dear Evan:
As you know, Mille

r Ind ustries, Inc. (the "Company ") has hired Goldman, Sachs & Co. toexplore various strategic alternatives for the Company. This letter is written to you in the context of the Company 's continuing evaluation of those alterna tives. As of toda

y, t he Compan

y ha s made no d

efin itive d ecisionswith respect to whi ch chan ges, if

any, the Bo ard of D irect ors wi ll be r ecomm endin g. However, in this evaluation process, the Company is continui ng to ex amine alternatives which range from no significa nt changes to a change

o f owners hip, or a separation of thetwo primary oper ating units of

the Company, or other suc h mat eri al c han ges . In each of those alternatives that have been considered or are being considered, a critical element is theconti nued o perati on of t he Com pany's business segments. Ac co rd in gl y, key employ ees will c ontinue to

be importa

nt to the Company's f

uture.
In an effo rt to hopefully alleviate a ny conce rns you may

have regarding future employment, I

want to confirm on behalf of the Co mpany, th e Comp any's commitmentto you as a key employee in the following way. I n the event

that a change in the Company, occurr ing in connection with the alternatives being considered, results in

the elimin ation of y

our positio n within

six months after such change, the Company or the Company 's subsidiary with whom you are e mployed would continue your then existing salary for a period of

one yea r from the date of your position being e

liminated.
This underta

king by the Compan

y w ould not be

applica ble in the c onte xt of a failur e inyour perf

ormance or a comparable position with the Company being offered to y ou as an alternative. Thanks for all of y our hard work in the past and y

our continued focus in the future. I hope y

ou and your fa

mily have a happy

and safe holiday

season. The letter is signed by

Jeffrey I . Badgley

who was then president

and chief executive officer of Miller Industries, I

nc.
In a press release dated May 13, 1999, Miller announced the conclusion of its board of directo rs’ “study of potential strateg ic and financial alternatives for the Company.” By letter dated Ma y 14 , 1 99 9, Mi ll er te rm in at ed it s e mp lo yme nt of Go ld ma n, Sa ch s & Co mp an y. Trial testimony indicates that the Company was not fairing well financially or p er forming we ll i n the stock market when Goldman, Sachs & Company was hired. And, according to Mr.-3-

Roberts’ te st im on y, RoadOne was still not doing well during 1999 - ”We had lost money and were continuing to lose money.” Mr. Roberts fur ther testifies that profits were continuing to suffer during the first six months of 2000.
Minutes from a meeting of Miller’s board of directors on June 23, 2000, shows that the board reviewed “the investigation of

strategic alternatives that had been pursued by the Company

over the last severa l ye ars, in cludin g the extensive consideration of separating Road O ne from the Company’ s manufacturing operations.” Discussion then took place regar ding “the current

financial condition of Road One, its future prospects and the pressure being exerted by the Company ’s banks. The Board agreed that these factors made

it desira ble to inve stigate

further the poten tial value s that some

or all of the Road O ne opera

tions may have in th

e marke t. The Board

also directed management to move aggr essively to reduc e costs in

order to rationa lize the Roa

d One ope

rations in an effo rt to r estore those operations to profitability.”
On or around June 30, 2000, one week after the above descr ibed meeting of

Miller’s board of directors, Mr. Roberts received a letter fr om RoadOne s tating that his employment was be ing terminated“due to r

eduction in force resulting from nec essary

economic

organ izati on restruc turing.” When his employment with RoadOne ended Mr

. Roberts received $3,777.60 in severance pay and $2,833.20 for vacation time.
On September 22, 2000, Mr. Roberts filed a complaint in the Chancery Court for Hamilton County against Miller

and RoadOne asserting that the December 14, 1998, letter he rece ived from Miller embodied

the promis e that, in

the event that his job was eliminated, he would receive a severance packag e consist

ing of c ontinuatio n of his salary for a period of one year. The complaint m aintains that Mr. Roberts “continued to work and provided his loy alty to the defenda nts, to t h e exclusion of any other

possible offers or abilities to seek other offers” in consider ation of the promises made to him of his continuing employment a nd of the severance packag e in the event of termination. The complaint further maintains that, upon demand, Mille r and RoadOne have not fulfilled these pr

omises. Th

e compla int alsocharges Miller and RoadOne with promissory fraud and vi ol at io n o f t he Te nn es se e C on su me r P ro te ct io n A ct an d r eq ue st s t ha t t he ca se be tr ie d b y a j ur y. Upon motion of Miller and RoadOn e, the Trial Court dismissed Mr. Roberts’ claim of violation of the Tennessee Consumer Protection Act. On October 24, 2001, the T rial Court denied a motion filed by Miller and RoadOne to suspend local rules to allow for late filing of a motion for summary judgmen t.
On November 7 and 8, 2001, the case wa s tried before a jury . At the conclusion of Mr. Roberts’ case in chief Miller and RoadOne moved for a directed verdict on

the issue of promissory fraud and on the i ssue of Mr. Roberts’ claim for breach of contract. The Trial Court granted the motion for directed ver

dict as to p

romissory fraud, but declined to direct a ver dict on the

issu e o f breach of contract. At the close of evidence Miller a nd RoadOne again moved for a directed verdict on the breach of contract issue; however , the Trial Court did not rule upon this ren ewe d motion. Thereafter, the jury

found that the letter of December 14, 1998, wasa contract and that Miller and-4-

RoadOne had breached the ag reement which it embodied. In consequenc e of this breach, the jury also found that Mr. Roberts suff ered da ma ges in the amount of $128,000.00, plus ten per cent interest as of July 1, 2000. I

n accord with the jury’s verdict, on November 29, 2001, the Trial Court entered judgment in favor of Mr. Roberts in the amount of $145,359.10, representing the $128,00.00 plus ten per cent interest from July 1, 2000, to Novembe r 8, 2001.
On December 31, 2001, Miller and RoadOne filed a motion requesting that the Trial Court set aside the jury’sverdict as being against the we ight of the evidence

and further requesting that the Trial Court grant the unaddressed motion for directed ve rdict which was presented at trial. On that same date Miller and RoadOne also filed a motion for relief from judgment and for remittitur and a motion to set aside the verdict or for a new trial based upon the assertion that Mr. Roberts counsel had made impr

oper and prejudic ial state

ments dur

ing tr ial. The Court sustained the motion for remittiturand reduced the judgment to $98,000.00 plus ten pe

rcent in terest. The other motions were denied and this appeal followed. Although several issues have been raised by the pa

rties we findit necessary

to address but one of these issues and all other issues are pretermitted by our conclusions with regard to that issue which is r estated as follow s: Did the Tria l Court er r in ente ring a j udgmen

t in favor of Mr. Roberts becau se the jury’s finding on which such judgment was based wa s not supported by material e vidence?
In a case such as this one where a trial c ourt has approved a jury ’s ver dict we may not set aside the trial court’s judgment unless the record contains no mater ial evidence to support the verdict

. If th

ere is any materia

l evidence to support the verdict, we must affirm the judgment. Moss v. Sankey , 54 S.W.3d 296 (Tenn. Ct. App. 2001).
The jury ’s finding

that the le

tter of De cember 14, 1998, was a contract is appare ntly not conte sted in this appeal. The sole matter addressed by this Court is how that contract should b e interpreted.
Mr. Roberts asserts that the severance packa ge of one year’ s salary

upon term

ination of his employment

derives from a promise made to him by Miller in the letter

of December 14, 1998. That promise appears in the second

sentence of the second parag raph of the let ter as s et f ort h ab ove . “In the event that a change in t he Company , occurring in connection with the alternatives be ing considered, results in the elimination of your p os ition within six months after such change, the Company or th e C om pa ny’ s s ub si di ar y wi th wh om you ar e e mp lo ye d would continue your then existing salary for a

period of one y ear from the date of y our position being eliminated.”
Miller and RoadO ne point ou

t that the f

irst sentence of the December 14, 1998, letter states that Goldman, Sachs & Company h as been hired “to explore various strategic a lternatives for the Company.” They appa

rently arg ue that the words “alternatives being consider ed” can only

be definedin the con

te xt of Mille rs’ engagement of G oldman, Sachs & Company a nd, therefore,-5-

“alternatives being considered” must refer e xclusively to those alternatives suggested by Goldman, Sachs & Company. They

assert that no changes were e ver made in connection with any alternatives suggested by Goldman, Sa

chs & Comp any

and that, in fact, their relationship with that entity was terminatedin May of 1999 - over a yea r prior to elimination of

Mr . R ob er ts ’ p os it io n. Ac co rd in gl y, they contend that the c ondition set forth in the agreement has not been met.
Mr. Roberts a

rgues t hat the wo

rds “alte rnative s being c onsidered” should notbe construed to mean strictly those alter natives suggested by

Gol dman, Sac hs & Compa ny. In su pport of t his argume nt, he notes t

hat at no p oint does t

he letter specific ally

state that the agreement

is conditioned solely upon im pl em en ta ti on of

a c ha ng e p ro mp te d b y a s ug ge st io n b y Go ld ma n, Sa ch s & Co mp an y. He further notes that the letter refers to “alter natives that have been considered” indicating that the agreement

contempl ates imple

mentation of alter natives c onsidered by

Mi l ler in the

past, bef ore it engaged Goldman, Sachs & Company

. Mr. Roberts a lso notes th

e letter ’s use of

the term “ strategic alternatives.” He argues that the Company considered “strategic alterna tives” both before Goldman, Sachs & Company wa s employed and af ter the ir em ployment ended as shown in the minutes of meeti ngs held by Millers’ board of d ire cto rs. In this regard, Mr. Roberts presents the minutes of a meeting on May 29, 1998, which re fer to “ consider

ation of s trategic alter

natives, including

those that continued the status quo and those that could result in a change of control of a corporation.” Mr. Roberts also presents the previously referenced

minutes of the meeting held on June 23, 2000, which state “Mr. Mille

r then re viewed with the Bo ard the investig ation of s tr ategic alternatives that had been pursued by the Company over the last se

veral y ears... .” Under

Mr. Rober

ts analy sis it

appears that if, at any time, Miller were to implement a change base d upon its consideration of a “stra tegic alternative”, regardless of who may have suggested

that a lternative, he would be entitled to the severance package described in the letter if his job ended as a result of and within six month of such change.
Our review of the letter of

December 14, 1998, compels us to disagree with the analy ses of bothparties a s to the co ndition und er which the Compan

y w ould be obli gated t

o pay Mr. Rober

ts his annual sa

lary in event o f the elim

ination of his job. It is our determination that the relevant inquiry is whethe r Mr Rober

ts’ positio n has bee

n eliminat

ed as the result of the implementation of an alternative being considered at the time the letter was written regardless of whomight hav e suggested such alternative. The words “alternatives being considered” are couched in the present tense and necessarily

refer to alternatives being conside red by the Company

at the time the letter was written. They do not ref

er to alternatives which had been considered in the past but were no long er being consi dered at the time of the letter. Nor do they refer to alternatives which might be considered in the future but were not being c onsidered when the letter was written.
It is undisputed that Mr. Roberts job was terminated as part of a reducti on inthe workforce which culminated in the elimin ation of a ll sales a nd marke ting positions at Roa

dOne. Mr . Roberts argues that such a reduc tion in wor kforce constitute s a

material change and points out that the letter states th at “the Company is continuing to examine alternatives which range from no significa n t changes to a change of ownership, or a se paration of the two primary operating units of the Co mp an y, or other such material c hanges. ”( empha sis added) While we do not necessarily disa gree-6-

that reducti on inthe workforce is a material chang e we find no proof in the record showing that it was a material change be ing considered by

Miller at the time the letter was written.
Becau se of the absence of any evidence showing that Miller was considering the alternative of a reduction in its workforce when the letter of Dec ember 14, 1998, was written., it is ou r conclusion that the T

ria l Court erred in approving the jury ’s finding that Miller and RoadOne breached the agreement embodied in the letter of December 14, 1998.
For the foreg o ing rea sons we a ffirm the judgmen t of the Tr

ial Court to

the extent t

hat it approves the jury’s finding that the letter of December 14, 1998, was a c ontract; however, we reve rse the judgment of the Trial Court to the extent that it approves the jury’ s finding that Miller and RoadOne breached

such contract and vac ate the T rial Cour t’s awar d of dama

ges to Mr . Roberts. Costs of appeal are ad

judge d against Evan J. Roberts. We remand the case to the Trial Court for collection of costs below.

_________________________________________ HOUSTON M. GODDARD, PRESIDI NG JUDGE