Opinion
Case No. 2:02CV473 DAK
December 19, 2003
MEMORANDUM DECISION AND ORDER
This matter is before the court on Defendant Robert L. Christensen's Motion for Summary Judgment. The court held a hearing on the motion on December 16, 2003. Plaintiffs were represented by Conrad B. Houser, and Defendant was represented by Scott A. Call. The court took the motion under advisement. The court has carefully considered all pleadings, memoranda, and other materials submitted by the parties. The court has further considered the law and facts relevant to Defendant's motion. Now being fully advised, the court enters the following Order.
BACKGROUND
Plaintiffs brought this action pursuant to an employment agreement they entered with "Thrifty Nickel" that was effective January 1, 1992 ("Employment Agreement"). The Employment Agreement states that "Thrifty Nickel" is Plaintiffs' employer and is located at 712 South State Street, Orem, Utah. The three signatories of the agreement were Plaintiffs Jose Salazar and Mildred Salazar and Tim Taylor for Thrifty Nickel.
At the time they entered the Employment Agreement, Plaintiffs worked for Thrifty Nickel Want Ads, Inc., located at 812 South State Street, Orem, Utah. Tim Taylor was the President of Thrifty Nickel Want Ads, Inc. at that time.
Defendant argues that there is no legal entity known as just "Thrifty Nickel." Rather, there are numerous separate and independent entities located in various geographic locations that publish and distribute weekly want-ad periodicals using the name "Thrifty Nickel." Plaintiffs assert that the Employment Agreement uses the term Thrifty Nickel so that it would be vague enough to refer to different Thrifty Nickel entities for which they might work.
Under the Employment Agreement, Plaintiffs were to perform as distribution managers, which included logging routes, hiring drivers, distributing the publication, getting new locations, maintaining indoor and outdoor racks, dealing with the printer, etc. In return for these services, the employment agreement provided that Plaintiffs would receive weekly compensation in the amount of $700 each, paid vacation after one year of employment, medical and dental insurance after one year of employment, retirement benefits after one year of employment, and severance pay after five years of employment.
Defendant is not a signatory of the Agreement nor is he mentioned in the Agreement. Plaintiffs testified in their depositions that they never discussed the Agreement with Defendant. Plaintiffs did not allege in their Complaint what Defendant's position was with any of the Thrifty Nickel publications. However, at the hearing on this motion, Plaintiffs' counsel stated that they learned at Defendant's recent deposition that Defendant is a part owner of most entities that publish and distribute Thrifty Nickel periodicals.
After signing the Employment Agreement, Plaintiffs continued to work for Thrifty Nickel Want Ads, Inc. in Orem through 1993. Plaintiffs then worked for other entities that publish and distribute Thrifty Nickel want-ad periodicals in West Valley City and Salt Lake City, Utah. Plaintiffs assert that their assignments would cross over from one Thrifty Nickel operation to another. The last entity Plaintiffs worked for that distributed Thrifty Nickel want-ad publications was Southern Cross, Inc. Plaintiffs began working for Southern Cross, Inc. in 1999 and were laid off in April 2000.
During Plaintiffs' employment at Thrifty Nickel Want Ads, Inc. and various other companies that distribute a Thrifty Nickel publication, Plaintiffs were not compensated according to the terms of the Employment Agreement. Plaintiffs never demanded that they receive compensation pursuant to the Employment Agreement until they sought the retirement benefits provided in the Agreement after their employment at Southern Cross terminated in 2000. Plaintiffs claim, however, that although they were not compensated as stated in the Agreement during their employment with Thrifty Nickel entities, they were compensated in other ways that satisfied them that the terms of the Agreement were being honored.
Plaintiffs filed an initial complaint in August of 2000 in state court. Plaintiffs filed another complaint in state court on May 2, 2002, which was removed to this court by Defendant based on diversity jurisdiction.
DISCUSSION Motion for Summary Judgment
Defendant moves for summary judgment arguing that the Employment Agreement is not a valid contract because Thrifty Nickel is not a legal entity, and even if it is, Defendant cannot be held individually liable under the Agreement.
First, Defendant argues that there is no overarching legal entity known as "Thrifty Nickel" and the Employment Agreement lacks the necessary elements of a binding contract because it fails to have a second party with the capacity to contract. The Employment Agreement refers to "Thrifty Nickel" as the contracting party. Plaintiffs argue that Thrifty Nickel is a legal entity because it is a "dba" for most of the American Classified subsidiaries and that Thrifty Nickel is "in each state where it is registered, on the internet, and by general intimation, a legal entity." However, Plaintiffs themselves admit that they worked for several different companies that distribute a Thrifty Nickel publication. Moreover, none of these arguments provide evidence that there is a legal entity known as "Thrifty Nickel" that has the capacity to contract on behalf of the several different entities that publish and distribute Thrifty Nickel periodicals.
However, there is evidence that at the time the parties entered the Employment Agreement, Plaintiffs' employer was Thrifty Nickel Want Ads, Inc. The address of Thrifty Nickel Want Ads, Inc. is also the address listed for the contracting entity. Furthermore, the signatory on behalf of Thrifty Nickel was Tim Taylor, who was a director of Thrifty Nickel Want Ads, Inc. Therefore, the evidence clearly shows that the contracting party was Thrifty Nickel Want Ads, Inc.
Plaintiffs argue that the Employment Agreement was to apply to several different Thrifty Nickel entities. However, there is no evidence in the record to support such an assertion. There is a reference in the Employment Agreement that Plaintiffs may need to perform work in different areas in the State, but there is no reference to any other entity that distributes a Thrifty Nickel publication. There is no signatory for other entities, nor is there a signatory with the ability to sign on behalf of other entities. Plaintiffs claim that Defendant is a part owner of most of the Thrifty Nickel entities, but Defendant did not sign the Employment Agreement. The court concludes that there is no basis for a finding that the Employment Agreement was meant to apply to any entity other than Thrifty Nickel Want Ads, Inc.
Therefore, assuming that the Employment Agreement is a valid contract with Thrifty Nickel Want Ads, Inc., Mr. Christensen cannot be held liable under the contract because any claim arising from the Agreement is barred by the statute of limitations, Mr. Christensen is not a party to the Agreement, the Agreement is unenforceable under the statute of frauds, and Plaintiffs abandoned the contract.
Plaintiffs claim for breach of the Employment Agreement is governed by Utah's six-year statute of limitation for a written contract. Utah Code Ann. § 78-12-24. Because the Employment Agreement was a contract with Thrifty Want Ads, Inc., the statute of limitation began to run when Plaintiffs terminated their employment with Thrifty Nickel Want Ads, Inc. in 1993. Plaintiffs did not file their Complaint in this action until May 2, 2002.
Plaintiffs contend that each time they received a partial payment from any entity that distributes a Thrifty Nickel publication, the statute began to run. However, this argument presumes that the other entities were bound by the Employment Agreement. The other entities were not parties to the Employment Agreement and there is no evidence that the other entities had any knowledge that the Employment Agreement existed. Plaintiffs testified in their depositions that they never spoke to anyone at any of the other entities about the Employment Agreement.
The court concludes that the applicable six-year statute of limitation began to run when Plaintiffs were not compensated correctly under the Employment Agreement or, at the latest, when Plaintiffs terminated their employment with Thrifty Nickel Want Ads, Inc. in 1993. Therefore, the present action is time-barred.
Furthermore, Defendant is not directly liable under the Employment Agreement because he is not a party to the agreement. Defendant has no contractual relationship with Plaintiffs, therefore, they cannot seek a contractual remedy from him. "As a general rule, none is liable upon a contract except those who are parties to it." Shire Dev. V. Frontier Inv., 799 P.2d 221, 223 (Utah Ct.App. 1990). Defendant did not sign the Agreement, he is not mentioned in the Agreement. Plaintiffs also testified that they never spoke about the contract with Defendant.
Plaintiffs contend that although Mr. Christensen is not a signatory to the Employment Agreement, he can be held liable because Plaintiffs allege he is the alter ego of the Thrifty Nickel organization. However, Defendant's motion for summary judgment is based on direct liability, not vicarious liability. Accordingly, Defendant cannot be held personally liable for any contractual remedies under the contract.
In addition, the statute of frauds bars Plaintiffs' claims against Defendant because he is not a party to the agreement and the statute of frauds voids any agreement "to answer for the debt, default, or miscarriage of another" unless the agreement is in writing and "signed by the party to be charged with the agreement." Utah Code Ann. § 25-5-4 (1996). Therefore, Defendant cannot be held personally liable as a guarantor of any "Thrifty Nickel" entity because he is not a signatory to the Employment Agreement.
Finally, the evidence in this case demonstrates that Plaintiffs abandoned any rights they had under the Employment Agreement because, during their years of employment with different Thrifty Nickel entities, Plaintiffs acted inconsistent with the existence of the contract. Dean Witter Reynolds, Inc. v. Fleury, 138 F.3d 1339, 1342 (11th Cir. 1998). "A contract may be rescinded or discharged by acts or conduct of the parties inconsistent with the continued existence of the contract, and mutual assent to abandon or rescind a contract may be inferred from the attendant circumstances and conduct of the parties. Parduhn v. Bennett, 61 P.3d 982 (Utah 2002).
In this case, the Employment Agreement states that Plaintiffs were each entitled to a weekly salary of $700, but Mr. Salazar was never paid more than $450 per week and Ms. Salazar testified that she never received anything close to $700 per week, Plaintiffs' depositions indicate that they understood that under the Agreement they were entitled to far more compensation and benefits than they received. However, prior to the filing of the first lawsuit pertaining to the Employment Agreement, Plaintiffs never made a demand on anyone to provide them with the consideration promised in the Agreement. Plaintiffs assert that they objected when they thought it was proper, while remaining loyal servants to the company. However, they specifically testified that they did not speak to anyone about the Employment Agreement. Plaintiffs continued in their employment with other companies for over eight years after signing the Employment Agreement without ever mentioning the Agreement or being compensated according to its terms. Accordingly, Plaintiffs did not act consistent with the fact that an Employment Agreement was in place. Therefore, Plaintiffs acquiesced to the abandonment of the Employment Agreement and cannot now bring a claim to enforce it against Defendant.
Plaintiff Mildred Salazar provided an Rule 56(f) Affidavit stating that they need to discover information as to Defendant's relationship with Thrifty Nickel. Rule 56(f) allows more time for the nonmoving party to meet its burden in opposing summary judgment. However, since the filing of that Affidavit, Plaintiffs have deposed Defendant. Therefore, the court finds the Rule 56(f) request moot. To the extent that Plaintiffs may not consider their request for additional discovery to be mooted by the deposition of Defendant, the Affidavit states only that more information regarding Defendant's relationship with the various Thrifty Nickel entities was needed. However, facts about Defendant's involvement with the various entities that publish a Thrifty Nickel newspaper to establish a claim for alter ego are not relevant to the present motion. Defendant has moved on theories of direct liability, which are necessary to establish before vicarious liability on alter ego grounds need be considered. Therefore, Plaintiffs' request for additional time to oppose summary judgment is denied.
III. CONCLUSION
For the reasons stated above, Defendant's Motion for Summary Judgment is GRANTED. Accordingly, this case is dismissed in its entirety, each party shall bear his or her own costs.