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holding that an employment at will agreement is an enforceable contract until terminated by either party
Summary of this case from Physio GP, Inc. v. NaifehOpinion
No. 14-03-00365-CV
Memorandum Opinion filed May 27, 2004.
On Appeal from the 164th District Court, Harris County, Texas, Trial Court Cause No. 01-23225.
Affirmed in Part, Reversed and Remanded in Part.
MEMORANDUM OPINION
In this defamation and tortious interference case, appellant contends summary judgment was improperly granted in favor of appellee on all claims. Because all dispositive issues are clearly settled in law, we issue this memorandum opinion. See TEX. R. APP. P. 47.4. We reverse the trial court's judgment and remand as to the tortious interference with a contract claim. However, we affirm as to the tortious interference with a prospective business relationship and defamation-based claims.
I. BACKGROUND
Appellee, Mazda International ("Mazda"), is a manufacturer and distributor of automobiles. Mazda relies on independently owned and operated dealerships to sell these automobiles. Appellant, Richard Armijo, was employed as a general sales manager by Joe Myers Mazda, one such dealership. Appellant's employment was terminated after six months. Appellant claims Mazda representatives directed that appellant's employment with Joe Myers Mazda be terminated because he refused to testify falsely at a deposition in a case involving another Mazda dealership. He additionally claims the Mazda representatives made false statements to management personnel at the dealership about matters such as his professional incompetence and dishonesty. Appellant alleges these statements have prevented him from obtaining comparable employment at Mazda dealerships as well as other automobile dealerships. Appellant sued Mazda for intentional infliction of emotional distress, defamation, and tortious interference with existing and prospective business relationships. Mazda filed a motion for summary judgment based on both traditional and no-evidence grounds. The trial court granted the motion, but did not state the grounds on which it was doing so. Appellant has not challenged the dismissal of his intentional infliction of emotional distress claim on appeal.
Appellant also sued Joe Myers Mazda and Joe Myers, individually, but those claims were dismissed on appellant's motion.
II. DISCUSSION
A. STANDARD OF REVIEW
To prevail on a traditional motion for summary judgment, a movant must establish that there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). If a defendant conclusively negates at least one of the essential elements of each of the plaintiff's causes of action, or conclusively establishes all the elements of an affirmative defense, he is entitled to summary judgment. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). In deciding whether the summary judgment record establishes the absence of a genuine issue of material fact, we view as true all evidence favorable to the non-movant and indulge every reasonable inference, and resolve all doubts, in its favor. Nixon, 690 S.W.2d at 548-49.
In a no-evidence motion for summary judgment, a party asserts there is no evidence of one or more essential elements of the claims upon which the opposing party would have the burden of proof at trial. TEX. R. CIV. P. 166a(i); Lake Charles Harbor and Terminal Dist. v. Bd. of Trs. of the Galveston Wharves, 62 S.W.3d 237, 241 (Tex. App.-Houston [14th Dist.] 2001, pet. denied). Unlike a movant for traditional summary judgment, a movant for a no-evidence summary judgment does not bear the burden of establishing a right to judgment by proving each claim or defense. Lake Charles Harbor, 62 S.W.3d at 241. To defeat a no-evidence summary judgment motion, the non-movant must produce evidence raising a genuine issue of material fact. TEX. R. CIV. P. 166a(i). If an order granting summary judgment does not specify the grounds on which it was granted, the judgment will be affirmed if any one of the grounds is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
B. DEFAMATION
Appellant claims Mazda defamed him, and he asserted causes of action for slander, slander per se, libel, and libel per se. An element of each of these causes of action is the making of a defamatory statement. See TEX. CIV. PRAC. REM. CODE ANN. § 73.001 (Vernon 1997); Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995). Mazda moved for summary judgment on the ground that appellant had no evidence that anyone associated with Mazda made a defamatory statement. A defamatory statement is one that injures a person's reputation, exposing him to public hatred, contempt, ridicule or financial injury. Cecil v. Frost, 14 S.W.3d 414, 417 (Tex. App.-Houston [14th Dist.] 2000, no pet.). Appellant contends that certain portions of his affidavit and the affidavit of Kim Zaffino, an employee of Joe Myers Mazda, prove a Mazda representative made defamatory statements. However, the trial court sustained Mazda's objection to these portions of appellant's affidavit on the ground that the statements were based on hearsay. The trial court also sustained Mazda's objections to the pertinent portions of Zaffino's affidavit on the grounds that the statements were based on hearsay, they violated the Dead Man's statute, and they were vague. Appellant has not challenged these rulings on appeal. Accordingly, we may not consider these portions of the affidavits as evidence. See Larson v. Family Violence Sexual Assault Prevention Ctr. of S. Texas, 64 S.W.3d 506, 517 (Tex. App.-Corpus Christi 2001, pet. denied). Therefore, we hold the trial court properly granted Mazda's no-evidence motion for summary judgment on appellant's defamation claims. Because we find the no-evidence summary judgment was properly granted on these causes of action, we need not consider Mazda's additional grounds for summary judgment on these claims. See Carr, 776 S.W.2d at 569.
Joe Myers is deceased.
C. TORTIOUS INTERFERENCE
1. Prospective Relationship
Appellant also claims that Mazda tortiously interfered with his prospective business relationships. The elements of tortious interference with a prospective business relationship are (1) a reasonable probability of entering into a business relationship, (2) an independently tortious or unlawful act that prevented the relationship from occurring, (3) the defendant acted with a conscious desire to prevent the relationship from occurring, or the defendant knew the interference was certain or substantially certain to occur, and (4) actual harm or damages. Baty v. Protech Ins. Agency, 63 S.W.3d 841, 860 (Tex. App.-Houston [14th Dist.] 2001, pet. denied). In its motion for summary judgment, Mazda claimed appellant had no evidence of a reasonable probability of entering into any business relationship. Appellant failed to identify, or present any evidence of, any such prospective relationship. Accordingly, we find appellant presented no evidence on this element, and the trial court properly granted summary judgment on appellant's tortious interference with a prospective business relationship claim.
The elements of this cause of action changed after the Supreme Court's decision in Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711 (Tex. 2001). See Baty, 63 S.W.3d at 858-860 (discussing how the Sturges decision changed the elements of tortious interference with a prospective business relationship). Both parties to this appeal addressed the elements of this cause of action as they existed prior to Sturges. However, the element at issue here — the existence of a reasonable probability that the plaintiff would have entered into a business relationship — remained an element of this cause of action after Sturges. See id. at 860.
2. Existing Contract
Appellant also claims Mazda tortiously interfered with his then-existing employment contract with Joe Myers Mazda. The elements of tortious interference with an existing contract are (1) an existing contract subject to interference, (2) a willful and intentional act of interference with the contract, (3) that proximately caused injury, and (4) actual damages or loss. Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000). In its motion for summary judgment, Mazda specified the elements of tortious interference with a prospective business relationship on which appellant had no evidence, but it did not address the elements of tortious interference with an existing contract. See TEX. R. CIV. P. 166a(i) (requiring a no-evidence summary judgment movant to state the elements as to which there is no evidence). Therefore, we will not review the motion as a no-evidence motion for summary judgment on appellant's tortious interference with an existing contract claim. See Adams v. Reynolds Tile Flooring, Inc., 120 S.W.3d 417, 419-20 (Tex. App.-Houston [14th Dist.] 2003, no pet.) (presuming a movant sought traditional summary judgment where the non-movant did not receive notice the movant was seeking a no-evidence motion).
First, Mazda asserts that because appellant was an employee-at-will, there was not an existing employment contract between appellant and the Joe Myers dealership. Thus, Mazda reasons there is no employment contract with which it could have interfered.
Mazda's basic premise that there was no employment contract between appellant and the Joe Myers dealership is wrong. The courts for many years have considered an employment-at-will agreement to be a contract. Furthermore, they have also held that when a third party interferes with a terminable-at-will contract, it is no defense that the contract is an employment-at-will contract terminable at will. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 689 (Tex. 1989); Knox v. Taylor, 992 S.W.2d 40, 57 (Tex. App.-Houston [14th Dist.] 1999, no pet.).
Mazda also claims it conclusively proved the affirmative defense of justification. See Prudential Ins. Co., 29 S.W.3d at 77-78 (noting justification is an affirmative defense to tortious interference with a contract). A party is privileged to interfere with a contractual relationship if (1) it acts in the bona fide exercise of its own rights, or (2) it has an equal or superior right in the subject matter to that of the party to the contract. Sterner v. Marathon Oil, Co., 767 S.W.2d 686, 691 (Tex. 1989). Although Mazda denies interfering with appellant's employment, it contends the interference that appellant claims occurred — ordering appellant's termination — would have been justified as a bona fide exercise of its own rights.
Mazda claims because it has bona fide rights in its relationship with the Joe Myers dealership and a financial interest in how the dealership is operated, it could insist that appellant be fired. See Lee v. Levi Strauss Co., 897 S.W.2d 501, 505-06 (Tex. App.-El Paso 1995, no writ.) (holding a company may act in a bona fide exercise of its rights by insisting substandard employees of a company with which it has an ongoing relationship be fired). Mazda submitted evidence that appellant's gross sales figures while he was employed at Joe Myers Mazda did not meet expectations, and this was the reason his employment was terminated.
However, in his affidavit, appellant made the following claim: Mazda employee Bob Lochner instructed him to testify falsely in a deposition in a case involving another Mazda dealership because Mazda did not want negative publicity. He further swore that Lochner told appellant that not testifying falsely could "result in bad things happening to everyone." Appellant stated that he testified truthfully at his deposition. He stated after his deposition was taken, he observed Lochner and at least one other Mazda employee meeting with Joe Myers. Shortly thereafter he was fired. Appellant claims that prior to his involvement with the litigation, he had exhibited good work performance. This evidence favors appellant. A fact issue is raised concerning whether appellant was terminated because of his poor job performance or his refusal to give false testimony as suggested by Mazda personnel. Evidence that an employee was not fired because of work performance constitutes some evidence that the company that directed his termination was not acting in a bona fide exercise of its own rights. Sterner, 767 S.W.2d at 691. Accordingly, we hold that Mazda did not conclusively prove that it was acting in a bona fide exercise of its own rights. Because fact issues exist on Mazda's affirmative defense to appellant's tortious interference with an existing contract cause of action, we hold the trial court erred in granting summary judgment on this claim.
III. CONCLUSION
We reverse the judgment of the trial court to the extent it dismissed appellant's tortious interference with an existing contract claim, and we sever and remand this claim for further proceedings consistent with this opinion. We affirm the trial court's judgment dismissing appellant's tortious interference with a prospective business relationship and defamation-based claims.