Court Opinion

ID: 8896991
Source: CourtListenerOpinion
Date Created: 2022-11-27 00:13:54.406746+00
Date Added: 2024-06-11T17:07:33.676517
License: Public Domain

GODBOLD, Circuit Judge
(dissenting in part):
I would affirm the judgment on the breach of contract claim.
Under plaintiff’s written employment contract with Equitable, substantial renewal commissions on business that he had written became “vested” after he worked for 15 years. Equitable fired him after 13% years, making the “vesting” impossible. What happens to the substantial renewal commissions on business previously written by the plaintiff (for the fourth through the tenth policy years)?
The trial judge concluded that Equitable would owe plaintiff the renewal commissions if it fired him in bad faith, and would not owe him if it fired him for “good cause.” With respect to the intermediate situation — a discharge for neutral reasons or “no cause” — the trial judge, in this Florida diversity case, chose to follow the decision of this court in Coleman v. Graybar Electric Co., 195 F.2d 374 (CA5, 1952), a Texas diversity case. In Coleman this court, unable to find Texas authority and expressly basing its decision on general law (citing cases from several states and the Second Circuit), held that in the absence of language clearly contemplating and providing for such a result, a no-cause discharge did not result in a forfeiture of benefits. In the present case no one has been able to come up with precise Florida authority. In this situation I would give full deference to the experienced Florida trial judge’s selection of Coleman as the governing law. If the majority are unwilling to accept his view of what the Florida law is and are unable to show by Florida precedent that he erred — and indeed they are totally unable — then at a minimum the case should be certified to the Supreme Court of Florida.
The methodology employed in this decision is antithetical to the operation of our federal system. In diversity cases we attempt to discern the state law. If we cannot, we certify the question to the courts of the state if certification is available, or, on the basis of state policies and the state decisions nearest to being on point, do the best we can at predicting what the supreme court of the state would hold. None of these was done here. Let us see what was done.
When an employee is discharged without cause he forfeits such benefits as commissions, bonuses, stock options and *1120profit sharing if his contract clearly and specifically provides that they are forfeited. At least two general lines of authority have developed for the situation where there is a no-cause discharge and the contract does not provide for forfeiture. 81 A.L.R.2d 1078 — 82. Coleman, representing one line of authority, holds that the discharge without cause does not forfeit benefits unless the contract of employment contains express language “clearly contemplating and providing for such a result.”1 The opposing view is that benefits not distributed before the discharge are forfeited. The majority do not purport to have discovered that the latter line of authority is a part of Florida- jurisprudence. N<?r do they, after analysis, predict that the Florida Supreme Court, if faced with the issue, would adopt such a rule. The discussion contains one Florida citation, and it only relates to the employment contract’s being terminable at will. Rather the opinion strains on factual grounds to escape Coleman, and, with that effort completed, assumes that the “forfeit everything” rule fills the vacuum and is the law of Florida. Of course, as the majority say, we are not “technically bound to bring [Coleman] home to Florida jurisprudence.” Nor are we “technically bound” to do what has been done, which is “to bring home to Florida jurisprudence” the rule of forfeiture as a matter of law. What we are bound to do is to determine in the best way possible what the Florida law is or would be, on a reasoned basis and not on the likes of federal judges for one rule or another.
While I am greatly concerned at the erroneous methodology used in this case, I do not want to be misunderstood about my likes. I think Coleman expresses the better rule.2 Therefore, I turn to the merits of the march around Coleman. It would have been at least more direct for the majority to say that they simply do not like the decision. The major theme of their opinion is that Coleman really did not involve a “no-cause” discharge. But the trial court in Coleman directed a verdict on the basis that there was no proof of the employer’s bad faith, and we reversed and sent the case back for trial because:
We can not say that, considering the testimony in the light most favorable to the plaintiff in testing its sufficiency to withstand the motion for a directed verdict, the jury would not have been authorized to find that no cause for the discharge was shown. (Emphasis added.)
195 F.2d at 379. Judge Russell, writing for this court, spent most of page 377 analyzing the compensation plan and the related employment application to find if there was express language governing a discharge “without any cause.” Finding no such language, he concluded that the case must be remanded for a jury to decide whether the discharge was without cause. That judgment cannot be rewritten 25 years later by the speculations in the present majority opinion that it was “unlikely” that on remand of Coleman the jury would find a no-cause *1121discharge, and that “almost surely” the case did not present a no-cause discharge.
As I understand it, there is a second thesis (in the discussion following footnote 2 and again after footnote 7): that possibly the language of the present contract, by its own terms, may provide for a forfeiture. I do not so read the contract. But if the language is clear, certain and unambiguous, this court does not have the task of discerning the Florida law governing a situation where the language is not sufficiently clear, and, in that event, Coleman has nothing to do with this case and the effort to establish as the law of Florida a rule converse to that of Coleman is all beside the point.
Other distinctions, acknowledged to be minor, are no better. Obviously, whether the contract was oral (as in Coleman) or written (as here) makes not a particle of difference. The suggestion is made that Coleman is inapplicable because there the discharge was “eleventh hour.” Coleman had worked approximately 90% of the period of employment required for vesting — approximately I4V2 months of 16 months. The present plaintiff had worked I3V2 years of 15 years, or 90% of the period. If there is a distinction between 90%’s, I would think the law would protect the person who, like plaintiff, has lost part of the fruits of many years of work. In any event, the problem is not how long before the period will be completed but how much of the period plaintiff has already worked. As Professor Corbin points out, “substantial service” by the employee is what gives mutuality'of obligation to a situation in which the employee has made no promise to continue working. Corbin, Contracts, § 153.3
Finally, the majority speculate that on remand of this case the jury is not likely to find a “no-eause discharge.” Appellate fly-specking of a factual issue remanded for jury trial has no relation to discerning principles of Florida law.
Thus, in keeping with our usual deference to the views of district judges concerning the laws of their own states, I would affirm on the contract claim. As a second choice, I would certify the matter to the Florida Supreme Court to permit it to establish a rule for its state. I dissent to the majority’s unwillingness to follow either course.
I agree with the disposition of the slander action.

. See also: Corbin, Contracts, § 153, discussing the principle that the offer of an employer to pay bonus, pension, etc., to an employee who continues to serve for a stated period becomes irrevocable by the employee’s rendering substantial service, which services give mutuality to the arrangement.

. Coleman is a pragmatic approach to a question of intention of the parties. It recognizes in a common sense way that absent specific agreement an employee who performs services as the quid pro quo for future payment of bonuses, commissions, profit sharing, etc., would not intend that at any time before the benefits are formally “vested” or paid, his employer can fire him at its whim and by its own act enrich itself at his expense. Arguably, the question of what was intended is for the jury and not the court, and perhaps Florida might wish to have that rule. But I see nothing to recommend the rule that as a matter of law the employee loses his benefits.
It is worth noting that the Coleman principle now appears to be firmly enshrined in the jurisprudence of Texas. Miller v. Riata Cadillac Co., 517 S.W.2d 773 (Tex.1974); Haggar Co. v. Rutkiewicz, 405 S.W.2d 462 (Tex.Civ.App. 1966); Fujimoto v. Rio Grande Pickle Company, 414 F.2d 648 (CA5, 1969).

. In following and applying Coleman in a bonus case, Texas provides for pro rata damages, that is, a percentage of the bonus equal to the percentage of the bonus period that the employee worked before termination. Miller v. Riata Cadillac Co., 517 S.W.2d 773 (Tex.1974). In a percentage-of-profits case decided under Texas law, this court held that the employee was entitled to the agreed percentage on profits earned up to the date of termination. Fujimoto v. Rio Grande Pickle Company, 414 F.2d 648 (CA5, 1969).