Majd Pour v. Basic American Medical, Inc.
1990 WL 77112, 555 N.E.2d 155, 1990 Ind. App. LEXIS 639 (1990)
Rule of Law:
Under Indiana Code 34-1-2-1.5, actions based on specific written terms within an employment contract fall under the written contract exception to the two-year statute of limitations, even if the broader employment relationship involves some oral terms. Furthermore, conflicting affidavits regarding the existence of oral terms create a genuine issue of material fact that precludes summary judgment.
Facts:
- On December 28, 1982, Joe Scott, Senior Vice President of Basic American Medical, Inc. (BAMI), sent a letter to Dr. Ezzat E. Majd Pour regarding his employment.
- The letter outlined specific terms, including that Majd Pour would practice medicine in Georgiana, Alabama, starting January 5, 1983.
- The letter expressly guaranteed Majd Pour a salary of $7,000 per month for the first year and stated BAMI would provide office space, personnel, and equipment at no cost.
- Majd Pour commenced his employment in Alabama as scheduled.
- On April 20, 1983, approximately three months into the employment, BAMI terminated Majd Pour's employment.
- A dispute arose regarding the terms of employment, with BAMI later claiming Majd Pour had agreed to additional oral obligations regarding hospital exclusivity and patient referrals.
Procedural Posture:
- Majd Pour filed a complaint for breach of contract against BAMI.
- BAMI filed a Motion to Dismiss based on the two-year statute of limitations for employment actions.
- The trial court granted the Motion to Dismiss.
- Majd Pour appealed to the Court of Appeals (First Appeal).
- The Court of Appeals reversed the dismissal and remanded the case.
- On remand, BAMI filed a Motion for Summary Judgment, submitting an affidavit claiming the contract contained oral terms.
- Majd Pour filed a counter-affidavit denying the existence of oral terms.
- The trial court granted summary judgment in favor of BAMI.
- Majd Pour appealed to the Court of Appeals of Indiana.
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Issue:
Does the two-year statute of limitations governing employment actions based on oral contracts bar a plaintiff's claim for breach of a written salary guarantee when the employer alleges, via affidavit, that additional oral terms existed which converted the agreement into a mixed oral-written contract?
Opinions:
Majority - Judge Sullivan
No, the claim is not barred, as the plaintiff is suing upon a written term of the contract and genuine factual disputes exist. The court reasoned that summary judgment was inappropriate because the parties submitted conflicting affidavits: BAMI claimed oral terms existed (making the contract 'oral' for limitation purposes), while Majd Pour denied any agreement outside the letter. This created a genuine issue of material fact for a jury to decide. Furthermore, the court interpreted I.C. 34-1-2-1.5 to mean that while actions relating to oral terms of employment must be brought within two years, actions based on written terms within a written contract are excepted from this short deadline. Since Majd Pour sued for breach of the written salary guarantee, the action falls within the written contract exception.
Analysis:
This decision is significant because it clarifies the application of the 'written contract exception' in employment litigation involving statutes of limitations. The court rejected an 'all-or-nothing' approach where the mere existence of any oral term converts the entire contract into an 'oral contract' subject to a shorter limitations period. Instead, the court adopted a claim-specific approach: if the specific term breached is in writing, the written contract statute of limitations applies. This protects employees with written offer letters or contracts from being time-barred by employers who later allege the existence of peripheral oral side-agreements. It also reinforces the standard for summary judgment, emphasizing that a court cannot weigh conflicting affidavits to determine if a contract is oral or written.
