Court Opinion

ID: 4100800
Source: CourtListenerOpinion
Date Created: 2016-11-21 21:09:54.791274+00
Date Added: 2024-06-11T14:37:01.430592
License: Public Domain

SECOND DIVISION
                               BARNES, P. J.,
                           BOGGS and RICKMAN, JJ.

                   NOTICE: Motions for reconsideration must be
                   physically received in our clerk’s office within ten
                   days of the date of decision to be deemed timely filed.
                               http://www.gaappeals.us/rules

                                                                 November 15, 2016

In the Court of Appeals of Georgia
 A16A1459. COBB BEAUTY COLLEGE, INC. v. SCAMIHORN.

      RICKMAN, Judge.

      Randall “Randy” Scamihorn, former Director of Cobb Beauty College, Inc.

(“CBC”), filed a breach of contract action against CBC after the college released him

within his first year of employment and informed him that it did not intend to renew

his contract. The trial court granted summary judgment to Scamihorn after concluding

that CBC breached a provision of the employment agreement governing contract

renewal, which the court held unambiguously provided that Scamihorn’s initial term

of employment was three years, and that CBC’s right of renewal (or nonrenewal) did

not accrue until that time. On appeal, CBC contends that the trial court erred in its

interpretation of the paragraph governing renewal, and further argues that it was
entitled to terminate Scamihorn for cause under a separate provision of the

employment agreement.

      We agree with the trial court that the renewal provision of the contract

unambiguously sets forth an initial three-year term, and therefore affirm the trial

court’s ruling as to that issue. We nevertheless conclude that a genuine issue of

material fact remains as to whether CBC was entitled to terminate Scamihorn’s

employment for cause, and therefore reverse the trial court’s grant of summary

judgment in favor of Scamihorn on his breach of contract claim. We remand for

proceedings consistent with this opinion.

            To prevail at summary judgment, the moving party must
      demonstrate that there is no genuine issue of material fact and that the
      evidence and all reasonable inferences and conclusions drawn
      therefrom, viewed in the nonmovant’s favor, warrant judgment as a
      matter of law. We review de novo the trial court’s ruling on a motion for
      summary judgment.

(Citation and punctuation omitted.) Hart v. Sirmans, 336 Ga. App. 212 (784 SE2d 67)

(2016).

      So viewed, the evidence shows that Scamihorn and CBC entered into an

employment agreement on May 11, 2010. The employment agreement contained two

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provisions relevant to this action, one in paragraph three and one in paragraph five.

These provisions provided that:

             3. Term of Employment. This Agreement shall remain in
             effect for 3 years from the effective date, renewed automatically
             on a year-to-year basis unless either party gives the other party
             60 days’ prior written notice before the anniversary date of
             the initial term or any one-year renewal term. Employee shall
             begin said term of employment on the 1st day of July 2010.

             5. Termination of Employment. This Agreement and the
             employment by CBC of Employee hereunder shall terminate
             upon the occurrence of any of the following events: . . . (c) upon
             written notice of termination of employment for cause given
             by CBC. “Cause” shall mean (i) theft; or wrongful appropriation
             by Employee; (ii) falsification of records by Employee; (iii)
             dishonest acts by Employee; (iv) negligence of Employee; (v)
             incompetence of Employee; (vi) insubordination of Employee; (vii)
             disloyalty of Employee to CBC; (viii) breach of Employee’s duty
             of care or duty of loyalty to CBC, (ix) Employee’s willful neglect;
             or (x) Employee’s violation of any law, rule or regulation. In
             the event of a proposed termination for cause, CBC will give
             Employee notice of the facts and circumstances surrounding
             the alleged cause and provide Employee with an opportunity to
             present his response to the alleged reason for cause. . . .

      On March 31, 2011, approximately nine months into his employment,

Scamihorn was given a letter drafted by counsel for CBC informing him that CBC did

not intend to renew his contract. The letter requested that Scamihorn remove all of

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his personal belongings the same day or no later than two days later. Scamihorn was

given 60-days severance pay and asked not to return to CBC. The letter did not detail

any reason CBC was releasing Scamihorn from its employment, and Scamihorn

subsequently retained counsel who sent CBC’s counsel a letter asserting that CBC

breached the employment agreement by its effort not to renew it within the initial

three-year term, and demanding that Scamihorn be paid the remainder of his three-

year salary and additional damages. The letter from Scamihorn’s counsel also rejected

CBC’s position that the release from employment was for cause.

      In requests for admission filed by Scamihorn and answered by CBC, CBC

admitted that it did not provide written notice of cause relating to Scamihorn’s release

from employment. However, CBC denied that it had failed to provide any facts and

circumstances surrounding the alleged cause; denied that it had failed to give

Scamihorn an opportunity to respond to the alleged cause before terminating the

employment agreement; and denied that CBC did not have cause to terminate the

employment agreement. CBC also filed a motion to relieve the parties of the

mediation requirement, in which it also set forth various allegations against

Scamihorn that it asserted gave it cause to terminate Scamihorn’s employment. CBC

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further argued that Scamihorn was terminated for cause in a pleading titled “pre-trial

brief.”

      In response to Scamihorn’s motion for summary judgment, CBC submitted the

affidavit of CBC’s owner,1 who had executed the agreement with Scamihorn on

behalf of CBC. The owner’s affidavit detailed many ways in which she alleged that

Scamihorn breached paragraph five of the employment agreement, thus authorizing

his termination for cause.2

      1
       Scamihorn alleges that this affidavit and the documents attached to it are
inadmissable.

      However, even if these complaints had merit, [Scamihorn] made no such
      arguments about the affidavit below, either in an objection to the
      affidavit, in a motion to strike the affidavit, or in his summary judgment
      brief. Objections to affidavits such as an objection to the affiants’
      lacking personal knowledge will not be entertained for the first time on
      appeal where such affidavits were considered by the trial judge, without
      objection, in ruling on motions for summary judgment.

(Citation, punctuation, and footnote omitted). Formaro v. Suntrust Bank, 306 Ga.
App. 398, 399-400 (1) (702 SE2d 443) (2010).
      2
       No deposition transcripts, if such exist, are in the record on appeal. However,
we may look to the pleadings, documents, and affidavits in the record in order to
determine if issues of fact were raised. See Collins v. Byrd, 204 Ga. App. 893, 894
(420 SE2d 785) (1992).

                                          5
      Focusing on CBC’s initial letter in which it stated its intention not to renew

Scamihorn’s contract, the trial court granted summary judgment to Scamihorn.

Specifically, it held that paragraph three of the employment agreement

unambiguously set forth an initial three year term, and the option not to renew did not

arise until 60 days prior to that three year date. CBC contends that the trial court’s

interpretation of the renewal provision contained in paragraph three of the

employment agreement was erroneous and, further, that it had an independent right

to terminate Scamihorn for cause under paragraph five. We agree with the trial court’s

interpretation of paragraph three of the employment agreement and, therefore, affirm

its ruling on that issue. Nevertheless, because there is a genuine issue of material fact

as to whether CBC had cause to terminate Scamihorn’s employment, we reverse the

grant of summary judgment to Scamihorn.

      1. CBC contends that the trial court’s interpretation of the renewal provision

contained in paragraph three of the employment agreement was erroneous.

             Construction of a contract, at the outset, is a question of law for
      the court. And such construction involves three steps: first, the trial
      court must decide whether the language is clear and unambiguous. If it
      is, the court simply enforces the contract according to its clear terms; the
      contract alone is looked to for its meaning. Next, if the contract is
      ambiguous in some respect, the court must apply the rules of contract

                                           6
      construction to resolve the ambiguity. Finally, if the ambiguity remains
      after applying the rules of construction, the issue of what the ambiguous
      language means and what the parties intended must be resolved by a
      jury.

(Punctuation and footnotes omitted.) Holcim (US), Inc. v. AMDG, Inc., 265 Ga. App.

818, 820 (596 SE2d 197) (2004).

      The trial court correctly held that the language in paragraph three of the

employment agreement that it “shall remain in effect for 3 years from the effective

date” and would renew automatically unless notice was given 60 days before the

“anniversary date of the initial term” unambiguously set forth an initial three-year

term before CBC had the option of nonrenewing. As noted by the trial court, CBC’s

interpretation of the employment agreement–that it was subject to annual renewal

even within the first three years–would render meaningless the language providing

for an initial three year term. See Brazeal v. Newpoint Media Group, LLC, 331 Ga.

App. 49, 53 (769 SE2d 763) (2015) (“[A] contract should not be construed in a

manner that would render any of its provisions meaningless or mere surplusage.”)

(citation and punctuation omitted).

      Citing Wheeler v. Rebel Truck Rental Inc., 125 Ga. App. 431 (188 SE2d 155)

(1972), CBC argues that the term “anniversary date” in paragraph three of the

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agreement must be construed to mean that CBC had the option to not renew

Scamihorn’s contract every year. In Wheeler, however, the contract at issue provided

that the “[c]ustomer may cancel this agreement . . . on any anniversary of the effective

date.” Id. at 431; emphasis supplied. Here, on the other hand, the contract at issue

does not refer to “any” anniversary date, but to the anniversary date of the initial

three-year term. Such language is capable of only one reasonable interpretation, and

CBC’s attempt to create an ambiguity where none otherwise exists must fail. See

Wilson v. Southern General Ins. Co., 180 Ga. App. 589, 590 (349 SE2d 544) (1986)

(“We cannot permit appellant to create ambiguity by lifting a clause or portion of the

contract out of context. The natural, obvious meaning is to be preferred over any

curious, hidden meaning which nothing but the exigency of a hard case and the

ingenuity of a trained and acute mind would discover.”) (citation and punctuation

omitted).

      (2) Nevertheless, our inquiry does not end there. Scamihorn was not entitled

to summary judgment on his claim for breach of contract if, as CBC contends, there

is a genuine issue of material fact as to whether CBC was authorized to terminate him

                                           8
for cause under paragraph five of the employment agreement.3 See Odem v. Pace

Academy, 235 Ga. App. 648, 654 (1) (510 SE2d 326) (1998).

      In Savannah College of Art & Design v. Nulph, 265 Ga. 662- 663 (1) (460

SE2d 792) (1995), the Georgia Supreme Court explained that

            An employer’s failure to follow contract procedures in dismissing
      an employee does not “cause” the termination. If the employer were
      justified in terminating the employee under the contract, then the
      termination would have occurred even if the employer had followed the
      proper procedures. Thus, procedural flaws in the manner in which the
      termination was carried out will not warrant damages to compensate for
      losses that naturally result from a justified termination. On the other
      hand, when an employment contract requires that termination be ‘for
      cause’ only, and the employer fires the employee without cause, a
      substantive breach occurs, and the employee would be entitled to seek
      full compensatory damages.

(Footnotes omitted).

      3
        We disagree with Scamihorn that CBC failed to preserve its argument that
genuine issues of material fact exist as to whether it had cause to terminate
Scamihorn. In pleadings and at least one motion filed in the trial court, CBC made
numerous references to its having cause to terminate Scamihorn. Further, during the
hearing on Scamihorn’s motion for summary judgment, CBC maintained that it had
cause to terminate Scamihorn.

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      Here, if the finder of fact determined that CBC had cause to terminate

Scamihorn, then CBC would not be liable for damages to him. See Odem, 235 Ga. at

654 (1) (“[T]he elements for a breach of contract claim in Georgia are merely the

breach and the resultant damages to the party who has the right to complain about the

contract being broken. . . . [W]here we have determined that [the employer] had

authority under the contract to terminate [the employee’s] employment, no breach of

contract occurred . . .”) (citation and punctuation omitted). This is true, even if CBC

failed to follow the procedural requirements of the contract.

       [P]rocedural flaws in the manner in which the termination was carried
      out will not warrant damages to compensate for losses that naturally
      result from a justified termination. On the other hand, when an
      employment contract requires that termination be “for cause” only, and
      the employer fires the employee without cause, a substantive breach
      occurs, and the employee would be entitled to seek full compensatory
      damages.

(footnotes omitted) Savannah College of Art & Design, 265 Ga. at 662-663 (1).

      Because CBC raised an issue of material fact as to whether or not it had cause

to terminate Scamihorn, both by affidavit and by factual disputes in the pleadings, the

trial court erred in granting judgment as a matter of law to Scamihorn. See Savannah

                                          10
College of Art & Design, 265 Ga. at 662 (3); see also Botterbush v. Preussag Intl.

Steep Corp., 271 Ga. App. 190, 194 (1) (b) (609 SE2d 141) (2004).

      Judgment affirmed in part and reversed in part and case remanded. Barnes,

P. J., and Boggs, J., concur.

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