Court Opinion

ID: 9480306
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:44:20.879537+00
Date Added: 2024-06-11T17:47:36.320047
License: Public Domain

WELLFORD, Circuit Judge,
dissenting:
I respectfully dissent from the affirmance of judgment in this case against the defendant-employer, Allstate Insurance Company (Allstate). I believe that there is ample authority in Michigan to support the universal rule that the plaintiff Turner has the initial, and remaining, burden qf proof to establish his stated claims in his complaint: (1) that he at all times performed his job as an insurance salesman “faithfully;” (2) that he “followed Defendant’s instructions;” (3) that he was told that he would “continue to be employed by defendant so long as he performed his assigned tasks satisfactorily and not be terminated except for good cause;” and (4) that defendant “breached the total employment contract by terminating” him.
The defendant denied that plaintiff was entitled to any recovery; denied that plaintiff performed faithfully his job duties; denied that plaintiff carried out the “responsibilities that he agreed to perform;” denied that it breached any employment agreement as alleged; and then stated affirmatively that it terminated plaintiff for “good cause,” claiming a breach of agreement and fraud on the part of plaintiff, and submitting a counterclaim for damages accordingly.
In light of the pleadings of both parties, it is clear to me that plaintiff had the burden to prove all of the four principal contentions herein set forth in order to establish a breach of agreement on the part of defendant Allstate. The latter, on the other hand, had to establish, by a similar burden, its claim, equivalent to fraud, for damages. The district court and the majority have confused the respective burdens imposed upon the parties on the pleadings and have prejudiced defendant by this error. In effect, plaintiff is claiming a “satisfaction” contract that he would be retained so long as he faithfully performed and carried out defendant’s instructions as a commission sales agent.
Under such an arrangement, whether plaintiff satisfactorily performed and carried out his part of the bargain “is a question to be determined by the defendant and not the jury” or the trier of fact. Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315, 317 (1937); see also Brown v. Chris Nelsen & Son, 10 Mich.App. 95, 158 N.W.2d 818, 820 (1968); Schroeder v. Dayton-Hudson Corp., 448 F.Supp. 910, 916 (E.D.Mich.1977). Plaintiff claimed, in essence, that he carried out his duties in a satisfactory manner — he has the burden of proving this. Defendant asked for an instruction that Turner “must prove that he was performing according to the terms of that contract up to the time of his termination.” I believe that is a proper instruction and should have been given. Instead, the district court refused this proffered instruction and charged the jury that since plaintiff had presented evidence of proper performance, “the burden then shifted to defendant to prove it had legal cause for the plaintiff’s discharge.” In this respect, I would find this instruction and shifting of the burden of proof to be prejudicial and reversible error.1 In sum, plaintiff pled a cause of action for defendant’s breach of contract by discharging him; defendant denied this and put plaintiff to his proof, claiming that plaintiff had indeed breached the employment agreement. Plaintiff had the continuing ultimate burden to prove the alleged breach of contract, essentially a question of satisfactory performance.
The majority relies first on Saari v. George C. Dates & Assocs., 311 Mich. 624, 19 N.W.2d 121 (1945), in support of its position. Saari held that plaintiff, who sued for breach of an employment contract, had failed to make out his claim in a non-*1216jury case; the Michigan Supreme Court affirmed. Saari made out a prima facie case on his proof, but the defendant produced evidence of unsatisfactory performance of duties. The court held:
“The general rule is that the burden of proof lies on the party who ‘makes the averment even though it be a negative one.’ ”
In a case tried by the circuit judge without a jury we do not reverse unless the evidence clearly preponderates in the opposite direction. On the record before us the defendant has justified the discharge of plaintiff under terms of their contract by sufficient proof of breach of its provisions by the plaintiff.
19 N.W.2d at 123.
The majority also relies upon Johnson v. Jessop, 332 Mich. 501, 51 N.W.2d 915 (1952). Citing Milligan v. Sligh Furniture Co., 111 Mich. 629, 70 N.W. 133 (1897), the Johnson court held that “the burden of proof was, of course, upon him [the plaintiff] to prove his [employment] contract and its performance up to that time [of discharge].” 51 N.W.2d at 917. Because the defendant made a “frank indication of the real reason why he terminated plaintiff’s employment”2 and did not show unsatisfactory performance, judgment for plaintiff was affirmed. Id. at 918.
I agree with the statement in Diggs v. Pepsi-Cola Metro. Bottling Co., 861 F.2d 914, 931 (6th Cir.1988), that an employer’s promise to retain an employee for so long as his performance is satisfactory “does not give rise to a ‘just cause’ contract.” (Krupansky, J., concurring and dissenting).3 Plaintiff here asserted that his contract was based on his faithful performance and following instructions, equivalent then to a satisfaction contract, and this is different from a “just cause” contract. Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980).
Plaintiff attached the contract to his complaint. It nowhere reflects this term, “good cause,” but rather refers to “unsatisfactory work” as a basis for termination subject to an opportunity of notice and review except in case of “falsification of any Company documents.” This latter exception, however, applied only to notice of unsatisfactory performance and review procedure. Allstate contended that what Turner did to gain commissions in granting unwarranted discounts was at least unsatisfactory performance. On this, I maintain, whether performance was or was not satisfactory, Turner had the burden of proof. On defendant’s further affirmative claim that it had just cause to terminate because of fraud and falsification, involving specific bad intent on plaintiff’s part, Allstate had the burden.
This vital distinction was not recognized by the trial court, nor is it recognized by the majority opinion. See Obey v. McFadden Corp., 138 Mich.App. 767, 360 N.W.2d 292 (1984); Duke v. Pfizer, Inc., 668 F.Supp. 1031 (E.D.Mich.1987), aff'd, 867 F.2d 611 (6th Cir.1989). I believe that Rasch v. City of East Jordan, 141 Mich.App. 336, 367 N.W.2d 856 (1985), is not to the contrary in requiring plaintiff to prove the contract and his satisfactory performance up to the time of termination.
I would reverse the verdict for plaintiff for the reason indicated on improper allocation of burden of proof. I also would grant a new trial because the district court improperly refused to permit defendant to introduce relevant and pertinent statistical evidence that was vital to a resolution of the issues in this seriously contested case. *1217The district court precluded Allstate from demonstrating that Turner, under highly questionable circumstances (in light of testimony of twelve of his customers that they did not qualify for a discount), was giving almost four times as many PDD discounts as the statewide average. This statistical evidence bore upon whether the performance of Turner was normal, reasonable, and satisfactory in relation to all other Allstate commission agents in Michigan. It certainly was relevant as to whether Turner might be, in effect, shorting his employer, Allstate, or even defrauding it. It was, in my view, an abuse of discretion and prejudicial to place a burden of proof upon Allstate and then deny it an opportunity + o present highly relevant proof in support of its position. The trial court was simply wrong in concluding that this evidence had “very little probative value” or that Allstate wanted it in for its “subjective aspect,” whatever that is, or that its value was “marginal at best.”
For these reasons, I would reverse and remand for a new trial.

. The instruction was not erroneous if given in respect to defendant’s counterclaim for fraud and resultant damages on which defendant had the burden of proof.

. The real reason: "that I [defendant] couldn’t lose any more money.” 51 N.W.2d at 918.

. I also agree with Judge Krupansky’s analysis that in this type of case the handling of a shifting burden (of persuasion, not of proof) is best accomplished by the means set out in Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), and in Duke v. Pfizer, Inc., 668 F.Supp. 1031 (E.D.Mich.1987). See Diggs, 861 F.2d at 933; see also Obey v. McFadden Corp., 138 Mich.App. 767, 360 N.W.2d 292, 296-97 (1984); Ross v. State Farm Ins. Co., 676 F.Supp. 781 (E.D.Mich.1987). The burden upon employers defending a wrongful discharge claim in Michigan surely should not be greater than in a discriminatory discharge claim.