IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

December 9, 2002 Session

EVAN J. ROBERTS v. MILLER INDUSTRIES, 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 appeal from the Chancery Court for Hamilton County the Appellants/Defendants, Miller

Industries, Inc. and Road One, Inc., contend that the Trial Court erred in awarding the Appellee/

Plaintiff, Evan J. Roberts, damages for breach of contract. The judgment of the Trial Court is

affirmed in part and reversed and vacated in part, and the cause is remanded for collection of costs

below.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed in Part

and Reversed and Vacated in Part; Cause Remanded

HOUSTON M. GODDARD, P.J., delivered the opinion of the court, in which CHARLES D. SUSANO,JR.

and D. MICHAEL SWINEY, JJ., joined.

William Alexander Blue, Jr., Nashville, Tennessee, for the Appellants, Miller Industries, Inc. and

Road One, Inc. 

John Tate Rice, Chattanooga, Tennessee, for the Appellee, Evan J. Roberts

OPINION

On July 31, 1998, RoadOne, Inc.(hereinafter “RoadOne”), a nationwide towing service

company and subsidiary of Miller Industries, Inc.(hereinafter “Miller” or “the Company”), offered

Mr. Roberts employment in the position of director of sales and marketing. Mr. Roberts accepted

this offer and on October 1, 1998, he began work as a full time employee of Road One with an

annual salary of $98,000.00. 

On September 30, 1998, just prior to the date Mr. Roberts’ full time employment with

RoadOne began, Miller issued a press release in which it announced it's employment of Goldman,

Sachs & Company to act as its financial adviser in connection with the process of exploring "various

strategic and financial alternatives to enhance shareholder value." Thereafter, Mr. Roberts received

a letter from Miller dated December 14, 1998, which stated as follows:
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Dear Evan:

As you know, Miller Industries, Inc. (the "Company") has hired Goldman,

Sachs & Co. to explore various strategic alternatives for the Company. This letter

is written to you in the context of the Company's continuing evaluation of those

alternatives. As of today, the Company has made no definitive decisions with

respect to which changes, if any, the Board of Directors will be recommending.

However, in this evaluation process, the Company is continuing to examine

alternatives which range from no significant changes to a change of ownership,

or a separation of the two primary operating units of the Company, or other such

material changes. In each of those alternatives that have been considered or are

being considered, a critical element is the continued operation of the Company's

business segments. Accordingly, key employees will continue to be important to

the Company's future.

In an effort to hopefully alleviate any concerns you may have regarding

future employment, I want to confirm on behalf of the Company, the Company's

commitment to you as a key employee in the following way. In the event that a

change in the Company, occurring in connection with the alternatives being

considered, results in the elimination of your position within six months after such

change, the Company or the Company's subsidiary with whom you are employed

would continue your then existing salary for a period of one year from the date of

your position being eliminated.

This undertaking by the Company would not be applicable in the context

of a failure in your performance or a comparable position with the Company being

offered to you as an alternative.

Thanks for all of your hard work in the past and your continued focus in

the future. I hope you and your family 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, Inc.

In a press release dated May 13, 1999, Miller announced the conclusion of its board of

directors’ “study of potential strategic and financial alternatives for the Company.” By letter dated

May 14, 1999, Miller terminated its employment of Goldman, Sachs & Company.

Trial testimony indicates that the Company was not fairing well financially or performing

well in the stock market when Goldman, Sachs & Company was hired. And, according to Mr.
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Roberts’ testimony, RoadOne was still not doing well during 1999 - ”We had lost money and were

continuing to lose money.” Mr. Roberts further 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 several years, including the extensive consideration of separating Road One from the Company’s

manufacturing operations.” Discussion then took place regarding “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 desirable to investigate further the potential values that some or all

of the Road One operations may have in the market. The Board also directed management to move

aggressively to reduce costs in order to rationalize the Road One operations in an effort to restore

those operations to profitability.” 

On or around June 30, 2000, one week after the above described meeting of Miller’s board

of directors, Mr. Roberts received a letter from RoadOne stating that his employment was being

terminated “due to reduction in force resulting from necessary economic organization restructuring.”

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 received from

Miller embodied the promise that, in the event that his job was eliminated, he would receive a

severance package consisting of continuation of his salary for a period of one year. The complaint

maintains that Mr. Roberts “continued to work and provided his loyalty to the defendants, to the

exclusion of any other possible offers or abilities to seek other offers” in consideration of the

promises made to him of his continuing employment and of the severance package in the event of

termination. The complaint further maintains that, upon demand, Miller and RoadOne have not

fulfilled these promises. The complaint also charges Miller and RoadOne with promissory fraud and

violation of the Tennessee Consumer Protection Act and requests that the case be tried by a jury.

Upon motion of Miller and RoadOne, the Trial Court dismissed Mr. Roberts’ claim of

violation of the Tennessee Consumer Protection Act. On October 24, 2001, the Trial Court denied

a motion filed by Miller and RoadOne to suspend local rules to allow for late filing of a motion for

summary judgment.

On November 7 and 8, 2001, the case was 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 issue of Mr. Roberts’ claim for breach of contract. The Trial Court granted the

motion for directed verdict as to promissory fraud, but declined to direct a verdict on the issue of

breach of contract. At the close of evidence Miller and RoadOne again moved for a directed verdict

on the breach of contract issue; however, the Trial Court did not rule upon this renewed motion.

Thereafter, the jury found that the letter of December 14, 1998, was a contract and that Miller and
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RoadOne had breached the agreement which it embodied. In consequence of this breach, the jury

also found that Mr. Roberts suffered damages in the amount of $128,000.00, plus ten per cent

interest as of July 1, 2000. In 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 November 8, 2001.

On December 31, 2001, Miller and RoadOne filed a motion requesting that the Trial Court

set aside the jury’s verdict as being against the weight of the evidence and further requesting that the

Trial Court grant the unaddressed motion for directed verdict 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 improper and prejudicial statements during trial. The Court sustained the motion for

remittitur and reduced the judgment to $98,000.00 plus ten percent interest. The other motions were

denied and this appeal followed.

Although several issues have been raised by the parties we find it necessary to address but

one of these issues and all other issues are pretermitted by our conclusions with regard to that issue

which is restated as follows:

Did the Trial Court err in entering a judgment in favor of Mr. Roberts because the jury’s

finding on which such judgment was based was not supported by material evidence?

In a case such as this one where a trial court has approved a jury’s verdict we may not set

aside the trial court’s judgment unless the record contains no material evidence to support the

verdict. If there is any material 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 letter of December 14, 1998, was a contract is apparently not

contested in this appeal. The sole matter addressed by this Court is how that contract should be

interpreted. 

Mr. Roberts asserts that the severance package of one year’s salary upon termination 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 paragraph of the letter as set forth above. “In

the event that a change in the Company, occurring in connection with the alternatives being

considered, results in the elimination of your position within six months after such change, the

Company or the Company’s subsidiary with whom you are employed would continue your then

existing salary for a period of one year from the date of your position being eliminated.”

Miller and RoadOne point out that the first sentence of the December 14, 1998, letter states

that Goldman, Sachs & Company has been hired “to explore various strategic alternatives for the

Company.” They apparently argue that the words “alternatives being considered” can only be

defined in the context of Millers’ engagement of Goldman, Sachs & Company and, therefore,
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“alternatives being considered” must refer exclusively to those alternatives suggested by Goldman,

Sachs & Company. They assert that no changes were ever made in connection with any alternatives

suggested by Goldman, Sachs & Company and that, in fact, their relationship with that entity was

terminated in May of 1999 - over a year prior to elimination of Mr. Roberts’ position. Accordingly,

they contend that the condition set forth in the agreement has not been met. 

Mr. Roberts argues that the words “alternatives being considered” should not be construed

to mean strictly those alternatives suggested by Goldman, Sachs & Company. In support of this

argument, he notes that at no point does the letter specifically state that the agreement is conditioned

solely upon implementation of a change prompted by a suggestion by Goldman, Sachs & Company.

He further notes that the letter refers to “alternatives that have been considered” indicating that the

agreement contemplates implementation of alternatives considered by Miller in the past, before it

engaged Goldman, Sachs & Company. Mr. Roberts also notes the letter’s use of the term “strategic

alternatives.” He argues that the Company considered “strategic alternatives” both before Goldman,

Sachs & Company was employed and after their employment ended as shown in the minutes of

meetings held by Millers’ board of directors. In this regard, Mr. Roberts presents the minutes of a

meeting on May 29, 1998, which refer to “consideration of strategic alternatives, 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. Miller then reviewed with the Board the investigation of strategic alternatives that had

been pursued by the Company over the last several years....” Under Mr. Roberts analysis it appears

that if, at any time, Miller were to implement a change based upon its consideration of a “strategic

alternative”, regardless of who may have suggested that alternative, 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 analyses of

both parties as to the condition under which the Company would be obligated to pay Mr. Roberts

his annual salary in event of the elimination of his job. It is our determination that the relevant

inquiry is whether Mr Roberts’ position has been eliminated as the result of the implementation of

an alternative being considered at the time the letter was written regardless of who might have

suggested such alternative. The words “alternatives being considered” are couched in the present

tense and necessarily refer to alternatives being considered by the Company at the time the letter was

written. They do not refer to alternatives which had been considered in the past but were no longer

being considered at the time of the letter. Nor do they refer to alternatives which might be

considered in the future but were not being considered when the letter was written. 

It is undisputed that Mr. Roberts job was terminated as part of a reduction in the workforce

which culminated in the elimination of all sales and marketing positions at RoadOne. Mr. Roberts

argues that such a reduction in workforce constitutes a material change and points out that the letter

states that “the Company is continuing to examine alternatives which range from no significant

changes to a change of ownership, or a separation of the two primary operating units of the

Company, or other such material changes.”( emphasis added) While we do not necessarily disagree
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that reduction in the workforce is a material change we find no proof in the record showing that it

was a material change being considered by Miller at the time the letter was written.

Because of the absence of any evidence showing that Miller was considering the alternative

of a reduction in its workforce when the letter of December 14, 1998, was written., it is our

conclusion that the Trial 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 foregoing reasons we affirm the judgment of the Trial Court to the extent that it

approves the jury’s finding that the letter of December 14, 1998, was a contract; however, we reverse

the judgment of the Trial Court to the extent that it approves the jury’s finding that Miller and

RoadOne breached such contract and vacate the Trial Court’s award of damages to Mr. Roberts.

Costs of appeal are adjudged against Evan J. Roberts. We remand the case to the Trial Court for

collection of costs below.

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HOUSTON M. GODDARD, PRESIDING JUDGE