Labor & Employment – Breach of Contract – Damages – Salary – Civil Practice – Pleadings – Supplementation – Relation Back

Panos v. Timco Engine Center, Inc. (Lawyers Weekly No. 12-16-0186, 11 pp.) (Cheri Beasley, J.) Appealed from Guilford County Superior Court. (Catherine C. Eagles, J.) N.C. App. Unpub. Click here for full-text opinion.

Holding: The parties’ employment contract provided that, if defendant fired plaintiff without cause, defendant would be required to pay plaintiff’s salary for a year following his termination. When plaintiff filed his complaint, only three months had passed. Even though more than three years had elapsed when plaintiff moved to amend his complaint to seek the other nine months’ worth of salary, the amendment related back under N.C. R. Civ. P. 15.

We affirm judgment for plaintiff.

In Williams v. Freight Lines, 10 N.C. App. 384, 179 S.E.2d 319 (1971), we held that  supplemental pleadings alleging a slander per quod claim did not relate back “because at the time the suits were instituted no actionable damages existed, nor did the claims alleged become actionable within the time provided by statute for the instituting of suits in slander actions.”

However, in Burcl v. Baptist Hospital, 306 N.C. 214, 293 S.E.2d 85 (1982), our Supreme Court held that “for relation back purposes, we shall treat supplemental pleadings filed pursuant to Rule 15(d) the same as amendments filed pursuant to other sections of  Rule 15.” In so holding, the Supreme Court recognized that older cases answered this question differently, and overruled the holdings of such cases.

Thus, the only question is whether plaintiff’s supplement to his complaint meets the requirement for relating back articulated in Rule 15(c), which is that the original pleading “give notice of the transactions, occurrences, or series of transactions or occurrences, to be proved pursuant to the amended pleading.” We find that plaintiff’s original complaint gave defendant notice that he intended to seek recovery for the entire year’s worth of severance payments as plaintiff requested damages equal to his yearly salary. Therefore the supplement relates back to the original complaint. Plaintiff’s recovery is accordingly not barred by the statute of limitations.

Defendant also challenges the trial court’s jury charge as to defendant’s claim that plaintiff breached the parties’ contract. However, contrary to defendant’s argument, the trial court only stated that soliciting new employment alone is not enough to constitute cause for dismissal, but it could be enough when combined with other factors. Here, defendant’s entire argument was not only that plaintiff sought other employment, but that he did so using a company-issued computer during business hours, and that in doing so, he revealed defendant’s confidential personnel and financial information. Based on the trial court’s instruction, the jury certainly could have found that the combined circumstances constituted just cause for terminating plaintiff. Thus, assuming the instruction was erroneous, defendant did not suffer any prejudice. The decision as to whether plaintiff’s actions amounted to just cause for his termination remained within the jury’s province.

Finally, the trial court did not abuse its discretion when it denied defendant’s motion for attorney’s fees under the Wage and Hour Act. When plaintiff filed his complaint in 2006, alleging defendant violated the N.C. Wage and Hour Act by failing to pay the severance due under the employment agreement, Sawyer v. Market Am., Inc., 190 N.C. App. 791,  661 S.E.2d 750 (2008) (the N.C. Wage and Hour Act does not provide a civil action for a nonresident who neither lived nor worked in N.C.), had not been decided. Moreover, although we ultimately ruled in a prior appeal of this case (Panos v. Timco Engine Ctr., Inc., 197 N.C. App. 510, 677 S.E.2d 868 (2009)) that Sawyer controlled, the court in Panos did recognize the “distinguishing fact” that the out-of-state plaintiff in this case “participated in almost daily conference calls with Defendant’s Greensboro, North Carolina office….” Based on the foregoing, and regardless of the outcome of plaintiff’s appeal in Panos, we do not believe the trial court abused its discretion in determining that plaintiff’s attempt to distinguish Sawyer was not frivolous.

Affirmed.