Nicholas J. Kleinberg,
Appellant,

vs.

Kleinberg Protective Agency, Inc., et al.,
Respondents.

Hennepin County District Court
No. 98-1106

Todd C. Pearson, 700 Lumber Exchange Building, 10 South Fifth Street, Minneapolis, MN 55402 (for appellant)

Alfred H. Edwall, Jr., Ricardo Figueroa, 1790 North Lexington Avenue, Roseville, MN 55113 (for respondents)

Considered and decided by Kalitowski, Presiding Judge, Amundson, Judge, and Holtan, Judge.[*]

AMUNDSON, Judge

Appellant challenges the district court’s directed verdict and denial of a motion for a new trial, arguing that an oral contract with his brother was made entitling him to lifetime employment, a share of the company’s profits, and an opportunity to purchase the company.

In 1988, appellant Nicholas J. Kleinberg began working for his brother Eric Kleinberg at Kleinberg Protective Agency (KPA) as a guard, with an added responsibility to market the business. Eric Kleinberg is the sole shareholder of the private security corporation.

Nicholas asserts that his acceptance of employment with KPA was contingent upon his receiving: (1) permanent employment; (2) a share of KPA’s profits; and (3) an option to acquire 50% of KPA’s stock. He also asserts that his brother Eric orally agreed to all of these terms and that they comprised the terms of his employment contract. Eric contends that he only agreed to share KPA’s profits with his Nicholas.

In 1997, the parties discussed selling the business, and in May, Nicholas asserts that he accepted Eric’s offer to sell KPA for $250,000. According to Nicholas, the parties then met on May 15, 1997 to sign the sales contract, but Eric refused to sign and instead terminated Nicholas’s employment.

The district court found that in January 1997, pursuant to the profit-sharing agreement, Nicholas received $4,100 in profits for 1996 and 1997, but that he was not paid profits during the previous years of his employment. Nicholas claims that his share of profits was reduced due to Eric’s misuse of corporate funds. Eric denies any agreement or discussion relating to permanent employment and asserts that Nicholas was terminated because of poor work performance.

After his termination, Nicholas brought an action against his brother. At the close of the case, the district court granted Eric’s motion for a directed verdict. Nicholas brought a motion for a new trial, which was denied by the district court. This appeal followed.

The propriety of a directed verdict is a question of law that is subject to de novo review. Nemanic v. Gopher Heating & Sheet Metal, Inc., 337 N.W.2d 667, 669 (Minn. 1983). A directed verdict is warranted only when, in light of the entire evidence, the district court would have a duty to set aside an opposing verdict as manifestly contrary to the evidence or the law. Claflin v. Commercial State Bank, 487 N.W.2d 242, 247 (Minn. App. 1992), review denied (Minn. Aug. 4. 1992). In considering a motion for a directed verdict, the district court must construe the evidence in the light most favorable to the non-moving party. Id. An appellate court reviews the grant of a directed verdict to determine whether the evidence could reasonably sustain a contrary verdict. Northwestern State Bank v. Gangestad, 289 N.W.2d 449, 453 (Minn. 1979).

Nicholas asserts that Eric breached the employment contract by failing to follow through on his guarantee of: (1) lifetime employment at an executive level position; (2) profit sharing in the company; and (3) sale of half the company stock.

Nicholas’s lifetime employment argument fails as a matter of law. See Aberman v. Malden Mills Indus., Inc., 414 N.W.2d 769, 771 (Minn. App. 1987) (former employee "cannot rely on his own subjective belief that [he] had a lifetime employment contract" but must show objective evidence that the employment contract was more than the at-will presumption of either party). Nicholas based his contention that an offer for permanent employment was made on a statement made by Eric, telling his brother that he

was going to be the guy that was going to turn this company around and whatever [Nicholas] got out of turning it around was going to be [his] forever.

He claims that this language was sufficient to entitle him to permanent employment. But in Minnesota, a contract for employment of indeterminate duration is terminable at the will of either party, even where the employment is characterized as permanent or lifetime. Skagerberg v. Blandin Paper Co., 197 Minn. 291, 294-95, 266 N.W. 872, 874 (1936). Oral representations more definite than those alleged by Nicholas have been found to be insufficient to create an offer for lifetime employment as a matter of law. See, e.g., Degen v. Investors Diversified Servs., Inc., 260 Minn. 424, 428, 110 N.W.2d 863, 866 (1961) (assurances made to employee that his position was a "career position" was insufficient to establish permanent employment contract); Aberman, 414 N.W.2d at 771-72 (employer’s statements to employee that "I will always take care of you," "we are offering you security," and "[you will be a] lifetime sales representative" were too general to create a contract for lifetime employment).

Minnesota courts maintain a strong presumption against alleged permanent employment contracts and consistently require that the employee prove that the parties clearly intended to alter the at-will employment relationship. See generally Degan, 110 N.W.2d at 866; Aberman, 413 N.W.2d at 771. Even when viewing the evidence in a light most favorable to Nicholas, he has failed to prove the existence of a permanent employment contract.

Nicholas additionally argues that he was entitled to half of KPA’s stock and to a share of the yearly profits. To determine whether a unilateral employment contract exists: (1) there must be an offer that is definite in form and communicated to the employee; (2) the employee must accept the offer; and (3) the employee must furnish consideration for the offer. Pine River State Bank v. Mettille, 333 N.W.2d 622, 626-27 (Minn. 1983). In determining whether an oral statement constitutes a contractual offer, courts have refused to accept the subjective expectations of the employee and, instead, have looked to the objective outward manifestations of the parties. Dumas v. Kessler & Maguire Funeral Home, Inc., 380 N.W.2d 544, 547-48 (Minn. App. 1986).

Looked at in the light most favorable to Nicholas, Eric’s statements do not establish a clear intent to create a contract assigning Nicholas half of KPA’s stock. While Eric admits that he agreed to share KPA’s profits, that agreement did not create a binding employment contract. First, the employment offer was made by Nicholas, not Eric, and therefore was not communicated by the employer to the employee. Second, the offer was not definite in form. According to Nicholas’s own testimony, the offer, although definite in amount, was never definite in time and was never reduced to writing. In fact, Nicholas testified:

Q. And this deal that – in 1990 or thereabout, this deal that you had with Eric Kleinberg with respect to permanent employment and the option to purchase, and the share of profits, you thought it would be a good idea to put that in writing, right?

A. At what time?

Q. On or about 1990?

A. Yes.

Q. And Eric refused to put any such deal in writing, is that right?

A. I don’t know that he refused. He just didn’t respond.

Q. Well, he didn’t put it in writing, did he?

A. No.

Even if the offer could be made by the employee and accepted by the employer, it still must be accepted and definite. In Pine River, the supreme court explained:

Not every utterance of an employer is binding. It remains true that the employer’s prerogative to make independent, good faith judgments about employees is important in our free enterprise system.

Pine River, 333 N.W.2d at 627, 630 (quotation omitted). Again when looked at in the light most favorable to Nicholas, the parties did not consider themselves bound by the employment contract.

Nicholas was never given an executive position, allegedly a requirement to his accepting the job. He never had any knowledge of how the profit sharing was going to work, he never complained that he did not receive monies prior to 1996 and 1997 and he admitted that Eric was owed a substantial amount for the personal loans he made to the business. In fact, in regard to the profits he stated that they "never talked about it much," and "[a]ll I knew is there was no profits." Nicholas also admitted at trial that he didn’t know what happened when there were losses. Additionally, it became necessary for Eric to require Nicholas to report all his expenses on a weekly basis or forfeit reimbursement because of the perception that Nicholas was using his business account improperly. Finally, there is no discussion of a sale of the business or of any stock as a part of a prior agreement. These outward manifestations do not support Nicholas’s assertions regarding his share of profits or sale of the business.

The language Nicholas contends was spoken between he and his brother is insufficient and too indefinite to create a binding employment contract, the district court’s directed verdict is upheld.

The decision to grant a new trial lies within the sound discretion of the trial court and will not be disturbed absent a clear abuse of that discretion. Halla Nursery, Inc. v. Baumann-Furrie & Co., 454 N.W.2d 905, 910 (Minn. 1990). A new trial should be granted only where the verdict is

so contrary to the preponderance of the evidence as to imply that the jury failed to consider all the evidence or acted under some mistake or from some improper motive, bias, feeling, or caprice, instead of honestly and dispassionately exercising its judgment.

Lamb v. Jordan, 333 N.W.2d 852, 855-56 (Minn. 1983).

A party can obtain a new trial where the verdict is not justified by the evidence. Minn. R. Civ. P. 59.01(g). On appeal from a denial of a motion for a new trial, the verdict must stand unless it is manifestly and palpably contrary to the evidence, viewed in a light most favorable to the verdict. ZumBerge v. Northern States Power Co., 481 N.W.2d 103, 110 (Minn. App. 1992), review denied (Minn. Apr. 29, 1992).

For the same reasons stated above, we conclude the district court did not err in denying Nicholas’s motion for a new trial, since the verdict was not manifestly contrary to the evidence.

Because we affirm the directed verdict we also affirm the denial of the motion for a new trial on the same grounds, and we need not reach Nicholas Kleinberg’s additional misrepresentation and a quantum meruit arguments.