COURT OF APPEALS DECISION DATED AND RELEASED October 22, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-3151
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
MARY K. FISCHER,
Plaintiff-Respondent,
v.
THE AMPACIS COMPANY,
Defendant-Appellant.
APPEAL from an order of
the circuit court for Milwaukee County:
GEORGE A. BURNS, JR., Judge. Affirmed.
Before Wedemeyer, P.J.,
Schudson and Curley, JJ.
PER
CURIAM. The AmPacis Company, a Minnesota-based corpora-tion
conducting business audits in Wisconsin, appeals from an order granting summary
judgment to Mary K. Fischer and awarding her $25,000 plus costs and fees in her
third-party beneficiary, breach-of-contract action against AmPacis. AmPacis argues that the trial court erred in
interpreting an employment contract between AmPacis and Mary's deceased son,
Scott Fischer, and concluding that as a matter of law: (1) the employment
contract required AmPacis to provide $25,000 in life insurance coverage for
Scott; and (2) Mary as beneficiary for the insurance coverage was entitled
to $25,000 in damages because AmPacis breached the employment contract when it
failed to provide such insurance coverage.
The trial court also found that there were no genuine issues of material
fact. After our de novo review
of the summary judgment materials, we agree with the trial court's conclusions;
accordingly we affirm.
I.
Background.
The facts are not
disputed. AmPacis hired Scott Fischer
as a full-time trainee employee on December 2, 1991. He died unexpectedly on March 1, 1992. Mary was listed as the sole beneficiary on his application for a
$25,000 life insurance policy through AmPacis.
AmPacis’s Policies and Procedures Employee Handbook indicated that for
new full-time trainee employees such as Scott, the first eligibility date for
corporate insurance programs “will be the first day of month following
completion of ninety (90) days continuous service as a full-time employee.”
AmPacis contracted with
Fortis Benefits for the life insurance coverage it provided its employees.[1] Under the specific language of this
contract, AmPacis full-time employees were not eligible for coverage until the
completion of a “three-month service requirement.” As the trial court noted, the problem in this case is that the
three-month requirement in the coverage contract is not the same as the
ninety-day requirement in the AmPacis employee handbook. Because 1992 was a leap year, Scott's
ninetieth day of employment was actually February 29, 1992; thereby, making
March 1, 1992, the day he died, the “first day of [the] month following completion
of ninety (90) days continuous service.”
Hence, when Scott died he had satisfied the ninety-day requirement, but
not the three month requirement.
It is undisputed that
Scott filled out an application for life insurance on the day he was employed,
December 2, 1991, and that a certificate of insurance was issued to Scott by
the Mutual Benefit Life Insurance Company with the policy becoming effective on
March 2, 1992—the day after he died.
Thus, no insurance was available from Mutual Benefit on the date he
died.
Mary
filed suit as third-party beneficiary to Scott's employment contract with
AmPacis. She alleged that AmPacis
breached its contract of employment with Scott, because it had “refused to pay
to [her] the $25,000 death benefit promised under the contract of employment
between” AmPacis and Scott.
In the summary judgment
materials, AmPacis admitted that it employed Scott for ninety days and that his
death occurred the first day of the month following the ninety days. AmPacis argued, however, that it promised to
pay only policy premiums for full-time employees who met outlined
requirements. Specifically, AmPacis
argued that Scott failed to: (1) meet minimum billing requirements that
qualified Scott for a full-time employee status; and (2) furnish evidence of
insurability to the insurer. Thus,
AmPacis sought summary judgment dismissal of Mary's complaint.
The trial court rejected
AmPacis's arguments and concluded in a memorandum decision that AmPacis:
[B]reached its contract with Scott
Fischer when it did not provide the benefit of insurance coverage on the date
that he became eligible. [Mary's]
measure of damages, as third-party beneficiary, is the dollar amount that she
would have received had the life insurance been in full force and effect as
promised.
Later,
the trial court issued an order adopting the above reasoning, granting Mary's
cross-motion for summary judgment, and awarding her $25,000, plus costs and
fees. This appeal follows.
II.
Analysis.
AmPacis argues that
Mary's right to any death benefits was subject to conditions precedent into the
employee contract between Scott and AmPacis.
It argues that these conditions precedent were not satisfied by Scott,
and that no binding contract regarding life insurance existed. AmPacis also contends that the trial court
erred because it did not enforce the employment contract as written, but
created a new contract by disregarding the conditions precedent. We reject AmPacis's arguments.
In summary judgment
cases, we employ the same methodology used by the trial court; this methodology
has been repeated many times and we need not do so here. E.g., Grams v. Boss, 97
Wis.2d 332, 338-39, 294 N.W.2d 473, 476-77 (1980). Further, we review the trial court's ruling de novo. Bay View Packing Co. v. Taff,
198 Wis.2d 654, 673, 543 N.W.2d 522, 528 (Ct. App. 1995).
The trial court
concluded that AmPacis's employee handbook unambiguously provided that Scott
was eligible for insurance on the first day of the month after he had been
employed ninety days. The court also
concluded that AmPacis's promise of insurance benefits as provided in the
handbook, by operation of law, became part of the employment contract between
AmPacis and Scott. We address each of
these conclusions separately.
The interpretation of a
contract is a question of law that we review de novo. Berg-Zimmer & Assoc., Inc. v.
Central Mfg. Corp., 148 Wis.2d 341, 345, 434 N.W.2d 834, 836 (Ct. App.
1988). We first must determine, as a
matter of law, whether the language of the contract is ambiguous; where no
ambiguity exists, we need only apply the contract terms as written. See Kremers-Urban Co. v.
American Employers Ins. Co., 119 Wis.2d 722, 736, 351 N.W.2d 156, 163
(1984).
We agree with the trial
court that the employee handbook was unambiguous on its face. Scott was eligible on March 1, 1992, for the
insurance coverage promised to AmPacis employees. Further, we agree that this promise for benefits, by operation of
law, became part of the employment contract between AmPacis and Scott. See, e.g., Jensen v. Janesville
Sand & Gravel Co., 141 Wis.2d 521, 526, 415 N.W.2d 559, 561 (Ct.
App. 1987) (stating promised pension plan is “part of a contract of
employment”). Accordingly, Mary, as
third-party beneficiary to these promised benefits could maintain an action
against AmPacis for its alleged breach of the employment contract. See id.
AmPacis argues that it
did not breach the employment contract because Scott did not satisfy all of the
conditions precedent necessary for him to receive insurance coverage through
AmPacis. AmPacis claims that in order
to be eligible for insurance he had to maintain full-time status by billing a
minimum of 25 hours a week and have an average productivity level of at least
$750 per week.
The trial court rejected
this claim, concluding that the summary judgment materials conclusively showed
that AmPacis applied for Scott's life insurance, and that this insurance was
set to become effective on March 2, 1992.
We agree with the trial court on this point. Although AmPacis argues that the conditions precedent were not
fulfilled, it is clear that AmPacis had already arranged to cover Scott
regardless of his fulfillment of the productivity standards. The trial court noted that the productivity
requirements were “illusory at best.”
We agree. The Employee Handbook
acknowledges that full-time trainee employees “are usually not able to produce
an adequate volume of completed work during their initial work weeks.” Thus,
AmPacis acknowledges that the productivity requirements are difficult to obtain
for trainee employees; these standards as conditions precedent to the
employment contract are illusory. Cf.
Hoglund v. Secura Ins., 176 Wis.2d 265, 270, 500 N.W.2d 354, 356
(Ct. App. 1993) (discussing illusory contracts). Finally, the issue of whether Scott had to provide evidence of
insurability as a condition precedent was never adequately addressed in his
argument to this court and, further, was rejected by the trial court as
meritless. We agree with the trial
court.
In sum, we conclude that
AmPacis breached the employment contract with Scott when it failed to provide
him with life insurance coverage on March 1, 1992. Mary, as third-party beneficiary to this contract was entitled as
a matter of law to $25,000 in damages, that amount of the life insurance to be
provided to Scott. The trial court
properly granted summary judgment to Mary.
By the Court.—Order
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.