ÿWPCÄ DZáY˰óBF±§ÌÍO\ Ô8äß,` Ô/{9•{nÈ"O¢ZÙ¯SØÅC£‡P S^Ã' ©Ñ¦x’ 2·û¿Q þAÎqmŒft që/{/ã ébŠä3M3œÙ-1tÀÕÓ[”V—¹€sŒ:-®½NçE ©‡äáÊ ½w]ÞCßÿ©NM‹1çFÉž:hìûæu×ôŠpø¼0¦ÿ»Ð~¶ìb7c¥È“åv>ê—úáGW#ÂÏo%"Óf§9¦Sì [kIJgW>Á'4"6 0(Emwu#ÁyUN: 0lˆ 0DôN8^ :F mHHHHHHHHHHHHUB_ %¡¡¡¡¡¡¡¡¡¡¡¡ B§eW+'ÔøÔô3|x($¡¡˜HP LaserJet 4Si,ü,,,,,ü0(ÈhH  Z ‹6Times New Roman Regular((3úÝ$¤¤Ý ƒ!ÝÝ  Ýà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó5›/' ÿU‹ÿÀÀÀ<þ6X9`(*Courier 12pt10cpiX dÝ ƒ!ÝÝ  ÝÔ_ÔѰÑÒܰÒÑ ý ÑÑTR[ì AØ'ÿ LegalXà3Ø' Letter  AØ'ÿ Legalÿ3Ø'TÑÑ8€(ÚXXdÈdÈ8ÑÔ€XæÙXXXÔÔ€ŠÑöˆXXæÙÔ€€€€à@j j ‚àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEˆÐ  ÐÌà@>>%‚àAT€KNOXVILLEˆÐ   Ðó óà 4 àà Œ àà ä àà < àà ” àà ì àà D àà œ àà ô àà L àÌà 4 àà Œ àà ä àà < àà ” àà ì àà D àà œ à€€€€€€Filed€Ð   Ðà 4 àà Œ àà ä àà < àà ” àà ì à€€€€€€€€€€€€€€€€€€€€€€€€€€€€€September€15,€Ô_Ô1999Ô_ÔÐ   ÐÌMICHAEL€PHILLIPS,à < àà ” àà ì à)€C/A€NO.€03A01„9901„CH„00030Ð  Ðà 4 àà Œ àà ä àà < àà ” àà ì à)Ð  Ðà 4 àPlaintiff„Appellant,à < àà ” àà ì à)€Ô_ÔUNICOIÔ_Ô€CHANCERYÐ   Ðà 4 àà Œ àà ä àà < àà ” àà ì à)Ð   Ðv.à 4 àà Œ àà ä àà < àà ” àà ì à)€HON.€THOMAS€J.€Ô_ÔSEELEYÔ_Ô,€JR.,Ð   Ðà 4 àà Œ àà ä àà < àà ” àà ì à)€CHANCELLORÐ   ÐÔ_ÔMORRILLÔ_Ô€ELECTRIC,€INC.,à ” àà ì à)Ð   Ðà 4 àà Œ àà ä àà < àà ” àà ì à)€VACATED€ANDÐ  Ðà 4 àDefendant„Appellee.à ” àà ì à)€REMANDEDÐ  ÐÌÌÌÌTONY€Ô_ÔSEATONÔ_Ô€and€LEE€Ô_ÔHERRINÔ_Ô,€LAW€OFFICES€OF€TONY€Ô_ÔSEATONÔ_Ô,€JohnsonÐ  ÐCity,€for€Plaintiff„Appellant.Ð  ÐÌWILLIAM€C.€Ô_ÔBOVENDERÔ_Ô€and€STEPHEN€M.€Ô_ÔDARDENÔ_Ô,€HUNTER,€SMITH€&Ð  ÐDAVIS,€Ô_ÔLLPÔ_Ô,€Johnson€City,€for€Defendant„Appellee.Ð  ÐÌÌÌÌÌÌà@%‚àò òòòO€P€I€N€I€O€Nóóó óˆÐ & ÐÌÌà 4 àà Œ àà ä àà < àà ” àà ì àà D àà œ àFranks,€J.Ð )þ!" ÐÌÌÓÓà 4 àà Œ àIn€this€action€for€breach€of€employment€contract,€the€defendant„Ð ,þ$% Ðemployer€was€granted€summary€judgment€by€the€Trial€Court,€and€plaintiff„employeeÐ .þ&' Ðhas€appealed.€€Ð 0þ() Ðà 4 àà Œ àOn€November€10,€1994,€plaintiff„employee€and€defendant„employerÐ 2þ*+ Ðentered€into€an€employment€agreement€providing€that€plaintiff€was€to€be€employed€forÐ 4þ,- Ða€term€of€five€years€as€a€Special€Assistant€to€the€President€of€the€company.€€TheÐ 6þ./ Ðagreement€contained€a€clause€regarding€termination€that€stated:Ð 8þ01 ÐÓÓà0 4 àà0Œ 4(#4(#àà ä à5.€€òòTermination€for€Causeóó:€For€good€and€sufficient€cause,Ð :þ23 ÐEmployer€may€terminate€this€Agreement€at€any€time€upon€giving€writtenÐ ;þ34ý Ðnotice€to€Employee€specifying€the€reasons€for€such€termination.€€TheÐ  Ðfollowing€specific€grounds,€while€not€exclusive,€shall€constituteÐ  ÐÔ_Ôsufficient€reasons€for€termination€of€this€Agreement€for€cause:Ð Œ (#Œ (# ÐÌà0 4 àà0Œ 4(#4(#àà ä àA.€€If€the€Employee€shall€engage€in€any€conduct€or€activity€whichÐ   Ðwould€be€a€material€breach€of€his€obligations€under€this€Agreement;€orÐ Œ (#Œ (# ÐÌà0 4 àà0Œ 4(#4(#àà ä àB.€€If€the€Employee€shall€be€convicted€of€any€offense€or€crimeÐ  Ðpunishable€as€a€felony€or€otherwise€involving€moral€turpitude;€orÐŒ (#Œ (# ÐÌà0 4 àà0Œ 4(#4(#àà ä àC.€€If€Employee€shall€engage€in€any€act€or€conduct€which€wouldÐ   Ðbe€a€violation€of€any€rule,€law€or€regulation€relating€to€the€conduct€ofÐ   ÐEmployerððs€business€and€which€would€subject€Employer€to€civil€orÐ   Ðcriminal€liabilities.Ð Œ (#Œ (# ÐÌÓÓà 4 àà Œ àDefendantððs€President,Giles€Morrill,€died€unexpectedly€on€May€22,Ð  Ð1997.€€Vice€President,€William€E.€ð ðBudðð€King,€assumed€the€role€of€President€of€theÐ  Ðcompany€and€King€began€to€restructure€the€company,€and€eliminated€several€positions,Ð  Ðincluding€that€of€Special€Assistant€to€the€President.€€He€stated€that€in€his€newÐ  Ðð ðorganizational€chartðð€there€was€no€place€for€an€Assistant€to€the€President,€regardlessÐ  Ðof€who€had€worked€in€that€capacity.€€He€reassigned€plaintiff€to€a€production€job€at€theÐ   Ðcompanyððs€Rocky€Fork€facility.Ð " Ðà 4 àà Œ àAfter€the€death€of€Morrill,€his€widow€and€daughter€approached€PaulÐ $ ÐFarnor€and€asked€him€to€become€a€member€of€the€Board€of€Directors.€€Mr.€Farnor€wasÐ & Ðelected€to€Chairman€of€the€Board€in€June€of€1997,€and€between€July€18,€1997,€andÐ (!! ÐAugust€18,€1997,€Farnor€evaluated€the€plaintiffððs€performance.€€He€reviewed€theÐ *## Ðdocuments€in€plaintiffððs€personnel€file€and€interviewed€co„workers€as€to€plaintiffððs€jobÐ ,%% Ðperformance.€€Farnor€concluded€that€plaintiff€was€making€no€contribution€to€theÐ .'' Ðcompany.€€Ð 0)) Ðà 4 àà Œ àOn€August€18,€1997,€Farnor€met€with€Phillips€and€asked€Phillips€toÐ 2++ Ðleave€the€company€ð ðquietlyðð€with€six€months€benefits€and€pay.€€He€told€plaintiff€thatÐ 4-- Ðhe€had€not€been€contributing€to€the€company,€and€that€he€ð ðhad€been€moved€around,ððÐ 6// Ðand€that€his€peers€were€giving€negative€feedback€about€him.€€Farnor€gave€plaintiff€aÐ 811 Ðcopy€of€the€notes€from€that€meeting.€€On€September€8,€1997,€Farnor€gave€Phillips€aÐ :33 Ðð ðseparation€notice.ðð€€This€notice€stated€that€Phillips€was€discharged€for€cause€ð ðbecauseÐ  Ðhe€engaged€in€conduct€and€activities€which€are€a€material€breach€of€his€obligationsÐ   Ðunder€his€employment€agreement.ðð€€Plaintiff€then€brought€this€action,€alleging€that€heÐ   Ðhad€been€wrongfully€terminated€in€violation€of€his€employment€contract,€and€that€heÐ   Ðdid€not€receive€adequate€notice€of€termination€in€accordance€with€the€employmentÐ  Ðagreement,€which€also€constituted€a€breach€of€the€agreement.€€This€appeal€ensued,Ð   Ðfollowing€the€Trial€Courtððs€grant€of€summary€judgment€to€defendant.Ð   Ðà 4 àà Œ àIn€evaluating€a€motion€for€summary€judgment,€a€trial€court€shouldÐ  Ðconsider€ð ð(1)€whether€a€factual€dispute€exists;€(2)€whether€the€disputed€fact€is€materialÐ  Ðto€the€outcome€of€the€case;€and€(3)€whether€the€disputed€fact€creates€a€genuine€issueÐ  Ðfor€a€trial.ðð€€òòByrd€v.€Hallóó,€847€S.W.2d€208,€214€(Tenn.€1993).€€When€reviewing€theÐ  Ðaction€of€the€Trial€Court,€this€Court€must€view€the€evidence€in€the€light€most€favorableÐ  Ðto€the€opponent€of€the€motion,€and€all€legitimate€conclusions€of€fact€must€be€drawn€inÐ  Ðfavor€of€the€opponent.€€òòGray€v.€Amosóó,€869€S.W.2d€925€(Tenn.€App.€1993).€€Ð ! Ðà 4 àà Œ àIn€an€action€for€wrongful€discharge€in€breach€of€contract,€the€burden€isÐ # Ðon€the€plaintiff€to€prove€all€facts€essential€to€his€cause€of€action.€€The€employeeÐ % Ðestablishes€a€òòprima€facieóó€case€by€proving€the€contract,€his€performance€thereof€up€toÐ '  Ðthe€time€of€his€discharge,€and€the€damage€resulting€from€the€discharge€that€is€in€breachÐ )"" Ðof€the€contract.€€30€C.J.S.€Employer„Employee€Relationship€ðð89(a)€(1992).€€Where€theÐ +$$ Ðcontract€requires€good€cause€for€a€discharge,€the€employer€has€the€burden€of€provingÐ -&& Ðsuch€good€cause.€€òòIdóó.€At€ðð89(b).Ð /(( Ðà 4 àà Œ àIt€is€plaintiffððs€position€that€he€was€discharged€due€to€the€restructuringÐ 1** Ðof€the€company,€and€therefore€was€not€discharged€for€cause€as€required€under€theÐ 3,, ÐEmployment€Agreement,€and€further€that€the€defendant€further€breached€theÐ 5.. ÐAgreement€by€not€giving€plaintiff€adequate€notice€of€his€termination€and€the€reasons.Ð 700 Ðà 4 àà Œ àPlaintiff€was€hired€to€the€specific€position€of€ð ðSpecial€Assistant€to€theÐ 922 ÐPresidentðð€with€such€duties€and€responsibilities€as€assigned€to€him€by€the€President€orÐ  ÐBoard€of€Directors.€€The€Employment€Agreement€states€that€initial€duties€will€includeÐ   Ðassistance€in€the€establishment€and€codification€of€corporate€policies€and€procedures,Ð   Ðand€also€to€formulate€and€provide€implementation€for€enhancement€of€manufacturingÐ   Ðproductivity.€€It€was€further€agreed€that€future€assignments€would€include€duties€andÐ  Ðresponsibilities€commensurate€with€a€senior€management€position€for€employer.€€TheÐ   Ðterm€of€employment€would€continue€through€November€27,€1999.Ð   Ðà 4 àà Œ àWhen€King€took€over€the€role€of€President€following€the€death€ofÐ  ÐMorrill,€he€vacated€plaintiff€from€his€position€and€reassigned€him€to€a€production€job,Ð  Ðwhich€plaintiff€described€as€work€on€the€production€line€and€ð ðhelping€with€departmentÐ  Ðassessments€and€review,€which€was€essentially€process€engineering€or€plantÐ  Ðengineering€kind€of€work.ðð€€He€also€stated€that€by€the€time€he€left€work€withÐ  Ðdefendant,€his€position€ð ðhad€been€reduced€five€levels.ðð€€Neither€his€pay€nor€benefitsÐ  Ðwas€cut€with€the€change€of€positions.Ð ! Ðà 4 àà Œ àWhen€an€employee€is€hired€to€fill€a€particular€position,€any€materialÐ # Ðdemotion€or€change€of€duties€constitutes€a€breach€of€the€contract,€unless€the€contractÐ % Ðcontemplates€a€change€in€rank€and€nature€of€job.€€30€C.J.S.€Employer„EmployeeÐ '  ÐRelationship€ðð52€(1992);€David€J.€Oliveiri,€Annotation,€òòReduction€in€Rank€orÐ )"" ÐAuthority€or€Change€of€Duties€as€Breach€of€Employment€Contractóó,€63€A.L.R.3d€539Ð +$$ Ð(1975).€€òòAlso€see€Smith€v.€American€General€Corporation,€NLTóó,€1987€WL€15144Ð -&& Ð(Tenn.App.€1987).€€òòÐ /(( Ðà 4 àà Œ àóóIn€òòMoore€Coal€Co.€v.€Brownóó,€64€S.W.2d€3€(Tenn.€1933),€involving€aÐ 1** Ðchange€of€duties€under€an€employment€contract,€the€parties€were€held€to€haveÐ 3,, Ðmodified€the€employment€agreement€resulting€in€no€breach.€€In€òòBalderacchie€v.€Ruthóó,Ð 5.. Ð256€S.W.2d€390€(Tenn.€App.€1953),€the€Court€held€that€modification€of€an€existingÐ 700 Ðcontract€cannot€be€accomplished€by€the€unilateral€action€of€one€of€the€parties.€€Rather,Ð 922 Ðthere€must€be€the€same€mutuality€of€assent€and€meeting€of€minds€as€required€to€make€aÐ  Ðcontract,€and€new€negotiations€cannot€affect€a€completed€contract€unless€they€result€inÐ   Ða€new€agreement.€€Moreover,€a€modification€of€an€existing€contract€cannot€arise€fromÐ   Ðan€ambiguous€course€of€dealing€between€the€parties€from€which€diverse€inferencesÐ   Ðmight€reasonably€be€drawn€as€to€whether€the€contract€remained€in€its€original€form€orÐ  Ðwas€changed.€òòId.óó€Ð   Ðà 4 àà Œ àThe€reassignment€of€plaintiff€to€a€job€ð ðfive€levelsðð€lower€than€the€job€forÐ   Ðwhich€he€was€hired€without€more,€would€constitute€a€breach€of€the€employmentÐ  Ðcontract.€€Plaintiff€was€hired€for€a€specific€position€of€Special€Assistant€to€theÐ  ÐPresident,€and€his€duties€were€described€in€the€employment€agreement€as€beingÐ  Ðcomparable€to€that€of€senior€management.€€While€his€salary€remained€the€same,€hisÐ  Ðduties€were€significantly€diminished€with€his€reassignment€to€a€production€job,€and€itÐ  Ðhas€been€held€that€such€a€demotion€can€be€characterized€as€a€discharge€of€theÐ  Ðemployee.€€òòSee€óó30€C.J.S.€Employer„Employee€Relationship€ðð52€(1992).€€TheÐ ! Ðdefendant€has€the€burden€of€showing€the€modification€of€the€contract€by€mutual€assentÐ # Ðor€of€establishing€facts€either€constituting€an€accord€or€forming€the€basis€of€anÐ % Ðestoppel.€€òòId.€óóÐ '  Ðà 4 àà Œ àA€contract€for€a€definite€term€may€not€be€terminated€before€the€end€ofÐ )"" Ðthe€term€except€for€cause€or€by€mutual€agreement,€unless€the€right€to€do€so€is€reservedÐ +$$ Ðin€the€contract.€30€C.J.S.€Employer„Employee€Relationship€ðð38.€€An€employer€has€aÐ -&& Ðright€to€discharge€an€employee€at€any€time€for€just€cause.€€The€fact€that€the€employerÐ /(( Ðbears€with€the€incompetency€or€irregularities€of€such€employee€for€a€time€does€notÐ 1** Ðestop€the€employer€from€discharging€the€employee€for€such€incompetency€if€itÐ 3,, Ðcontinues.€€òòLittle€v.€Federal€Container€Corp.óó,€452€S.W.2d€875€(Tenn.€App.€1969),Ð 5.. Ðòòcitingóó€òòGlasgow€v.€Hoodóó,€57€S.W.€162€(Tenn.Chan.App.€1900)€and€òòJackson€v.€TexasÐ 700 ÐCo.óó,€10€Tenn.App.€235€(Tenn.App.€1929).Ð 922 Ðà 4 àà Œ àThe€Trial€Judge€held€that€plaintiff€was€fired€for€good€cause,€and€thereÐ  Ðwas€no€genuine€issue€of€material€fact€as€to€the€cause€of€termination.€€Good€cause€forÐ   Ðdischarge€is€found€when€the€employee€acts€in€a€way€that€tends€to€injure€his€employerððsÐ   Ðbusiness,€interests,€or€reputation.€€30€C.J.S.€Employer„Employee€Relationship€ðð60.€Ð   ÐWhether€good€cause€exists€to€terminate€an€employment€contract€is€a€determinationÐ  Ðmade€on€a€case„by„case€basis,€and€exists€only€where€the€discharge€is€ð ðobjectivelyÐ   Ðreasonable.ðð€€òòVideo€Catalog€Channel,€Inc.€v.€Blackwelderóó,€1997€WL€581120Ð   Ð(Tenn.App.€1997)€òòcitingóó€30€C.J.S.€Employer„Employee€Relationship€ðð60€(1992).Ð  Ðà 4 àà Œ àThe€Trial€Judge€relied€heavily€on€an€admission€by€the€plaintiff€that€heÐ  Ðwas€fired€for€cause.€€When€asked€why€he€was€terminated€from€the€job€at€MorrillÐ  ÐMotors,€plaintiff€responded€ð ðfor€cause.ðð€€However,€this€statement€is€not€dispositive.€Ð  ÐPlaintiff€could€have€merely€been€repeating€the€reason€he€was€given€for€hisÐ  Ðtermination.€€This€may€evince€the€fact€that€plaintiff€knew€the€company€wasÐ  Ðdischarging€him€for€cause€and€not€for€some€other€reason.€€Nonetheless,€the€statedÐ ! Ðreason€for€termination€and€the€actual€reason€for€termination€may€not€coincide.Ð # Ðà 4 àà Œ àThere€are€disputed€issues€of€material€fact€as€to€the€true€cause€ofÐ % Ðplaintiffððs€termination.€€On€the€one€hand,€plaintiffððs€position€was€eliminated€in€theÐ '  Ðrestructuring€of€the€company,€and€on€the€other€hand€there€is€evidence€that€plaintiffððsÐ )"" Ðjob€performance€was€not€acceptable€to€the€defendant.Ð +$$ Ðà 4 àà Œ àSection€5€of€the€Employment€Agreement€states€that€ð ðfor€good€andÐ -&& Ðsufficient€cause,€Employer€may€terminate€this€Agreement€at€any€time€ò òupon€givingÐ /(( Ðwritten€noticeó ó€to€the€employee€ò òspecifying€the€reasons€for€such€terminationó ó.ððÐ 1** Ð(Emphasis€added).€€Plaintiff€contends€there€is€a€dispute€as€to€whether€he€receivedÐ 3,, Ðadequate€written€notice€for€the€reasons€for€his€termination.€€Ð 5.. Ðà 4 àà Œ àDefendant€points€to€three€written€documents€as€evidence€of€adequateÐ 700 Ðnotice€of€the€termination€and€the€reasons€therefor.€€First,€defendant€points€to€a€memoÐ 922 Ðdated€May€9,€1997,€reprimanding€plaintiffððs€job€performance.€€Next,€defendant€reliesÐ  Ðon€a€hand„written€copy€of€the€minutes€of€the€August€18,€1997€meeting,€that€wasÐ   Ðfurnished€to€plaintiff.€€Defendant€states€that€it€was€in€that€meeting€that€plaintiff€wasÐ   Ðterminated,€and€the€notes€contain€notice,€in€writing,€of€plaintiffððs€deficiencies.€€At€theÐ   Ðtime€plaintiff€was€advised€that€ð ðhe€was€simply€not€contributing€to€the€company,€and€heÐ  Ðhad€been€moved€around€and€his€peers€are€giving€negative€feedback€about€him.ðð€Ð   ÐPlaintiff€counters€that€in€the€meeting€ð ðthere€was€no€discussion€of€termination€forÐ   Ðcause.ðð€€However,€the€notes€from€the€meeting€indicate€that€plaintiff€was€beingÐ  Ðterminated€from€his€position.€€The€third€written€notice€to€plaintiff€was€the€separationÐ  Ðnotice€completed€on€September€8,€1997.€€This€stated€that€plaintiff€was€dischargedÐ  Ðbecause€ð ðhe€engaged€in€conduct€and€activities€which€are€a€material€breach€of€hisÐ  Ðobligations€under€his€employment€agreement.ððÐ  Ðà 4 àà Œ àPlaintiff€relies€upon€the€deposition€of€Farnor€to€support€his€position€thatÐ  Ðhe€was€not€given€adequate€notice€of€his€termination.€€Farnor€was€asked€if€he€had,€atÐ ! Ðany€time,€given€plaintiff€ð ðwritten€notice€specifying€the€reasons€for€his€terminationðð,Ð # Ðand€Farnor€responded€that€he€did€not.€€Farnor€was€then€asked€if€any€other€writtenÐ % Ðreprimands€in€plaintiffððs€file€specified€a€reason€for€termination,€to€which€Farnor€againÐ '  Ðreplied€ð ðno.ðð€€Farnor€further€stated€that€he€had€no€knowledge€of€anyone€else€in€theÐ )"" Ðcompany€giving€plaintiff€anything€in€writing€specifying€the€reasons€for€termination.Ð +$$ Ðà 4 àà Œ àThere€is€a€genuine€issue€of€fact€as€to€whether€any€of€the€writtenÐ -&& Ðdocuments€cited€by€the€defendant€satisfy€the€notice€requirement.€€While€defendantÐ /(( Ðargues€that€it€did€satisfy€this€requirement,€the€Chairman€of€defendantððs€Board€ofÐ 1** ÐDirectors€admits€that€he€never€gave€plaintiff€written€notice€of€the€reasons€for€hisÐ 3,, Ðtermination,€nor€knew€of€anyone€else€in€the€company€providing€such€notice.Ð 5.. Ðà 4 àà Œ àOn€this€issue,€an€employee€who€is€summarily€discharged€with€less€noticeÐ 700 Ðthan€specified€under€the€contract€may€recover€compensation€for€the€notice€period€only,Ð 922 Ðand€not€for€the€balance€of€the€contract€period.€€òòSeeóó€27€Am.Jur.2d,€òòEmploymentÐ  ÐRelationshipóó€ðð43€(1996).Ð   Ðà 4 àà Œ àThere€are€disputed€issues€of€material€fact€to€be€resolved,€and€weÐ   Ðtherefore€vacate€the€summary€judgment€and€remand€for€trial€on€these€issues.Ð   Ðà 4 àà Œ àWe€vacate€the€summary€judgment€and€remand€with€cost€of€the€appealÐ  Ðassessed€to€the€defendant.Ð   ÐÓÓÌÌÌÌÌà@‚‚+‚àòòˆà D àÌóóà 4 àà Œ àà ä àà < àà ” àà ì à__________________________Ð  Ðà 4 àà Œ àà ä àà < àà ” àà ì àHerschel€P.€Franks,€J.Ð  ÐÌÌCONCUR:Ð  ÐÌÌÌÌÌ___________________________Ð # ÐCharles€D.€Susano,€Jr.,€J.Ð $ ÐÌÌÌ___________________________Ð (!! ÐD.€Michael€Swiney,€J.Ð )"" Ð