Sang v. Jefferson County Board of Education

Citations: 652 So. 2d 310; 1994 Ala. Civ. App. LEXIS 615; 1994 WL 701122Docket: AV93000514

Court: Court of Civil Appeals of Alabama; December 15, 1994; Alabama; State Appellate Court

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Herb A. Sang entered into an employment contract with the Jefferson County Board of Education on July 17, 1989, which was extended until June 30, 1994. An amendment on August 21, 1991, shortened his employment term to August 31, 1991, in exchange for a payment of $350,000 and an additional $5,614.08 for hospitalization insurance premiums. The amended contract stipulated that these payments would fully settle the Board's obligations to Sang, except for regular compensation and benefits due until August 31, 1991. Sang received the agreed payments and the Board continued to provide certain benefits, including life insurance premium payments and contributions to a tax-deferred annuity plan.

Sang later claimed entitlement to payment for accrued but unused sick leave and vacation days as part of his regular compensation and benefits. In response, the Board filed a declaratory judgment action, asserting that it owed no further payments. Sang counterclaimed for $23,096.99 for the accrued leave. Both parties moved for summary judgment, but the trial court denied Sang's motion, ruling that "regular compensation and benefits" was ambiguous and required an evidentiary hearing for clarification.

Following a hearing, the trial court ruled in favor of the Board, concluding it was not required to compensate Sang for unused sick leave or vacation days under the amended contract's provisions. Sang appealed, raising issues regarding the ambiguity of the term "regular compensation and benefits," potential errors in handling parol evidence, and whether the ambiguity should be construed against the Board as the drafter of the contract.

Sang's three legal issues stem from the trial court's ruling that the amended contract was ambiguous and required judicial interpretation. The determination of contract ambiguity is a legal question for the trial court, with ambiguity defined as a term open to multiple reasonable interpretations. The original employment contract specified that upon termination, Sang would be compensated for unused sick leave and vacation days, but these terms were only included in provision nine. In the amended contract, provision two outlined a new compensation structure for Sang, including a lump sum payment and benefits, while provision four indicated that this compensation settled all obligations except for “regular compensation and benefits” due until August 31, 1991. The trial court found this phrase ambiguous, noting that while sick leave and vacation days could be considered benefits, the contract did not explicitly require payment for them upon termination. After reviewing the evidence, the trial court concluded that multiple interpretations of "regular compensation and benefits" were possible, thus affirming its ambiguity. The court stated that, once a contract is deemed ambiguous, the true meaning becomes a factual question for resolution. Following an ore tenus proceeding, the trial court determined that the Board was not obligated to pay Sang for any unused sick leave or vacation days.

Sang met with Tim Hicks, President of the Board, and Kevin Walsh on August 19, 1991, to negotiate the termination of his contract. He calculated his annual compensation and fringe benefits at $151,322.93, translating to a monthly figure of $12,610.24. Over the remaining thirty-four months of his employment contract, from September 1, 1991, to June 30, 1994, this amounted to a total of $428,748.16, which Sang used as his negotiating figure. He did not include potential compensation for accumulated sick leave and vacation days, which he valued at an additional $45,332.00 based on his entitlement of forty days per year over thirty-four months. Sang had not used any sick or vacation days during his nearly two years of employment, and he explained his omission by stating that he had not yet "earned" those days. During the trial, the court questioned Sang on why he did not factor in these benefits when calculating his losses. Sang acknowledged that including them would have increased his negotiating figure to $474,000. He maintained that he only considered benefits he had already earned, indicating a misunderstanding of the calculation of future entitlements.

The court examined the omission of sick leave and vacation pay from Mr. Sang's claims related to his employment termination. Sang acknowledged he should have included these amounts in his calculations, which totaled $428,748.16 over thirty-four months. The court noted that while Sang included a $200 monthly estimate for automobile maintenance, this amount was not fixed per his contract, which required the Board to cover actual repair expenses for the leased vehicle. The court found that Sang's failure to include sick leave and vacation pay in his claims was not accidental, as he did not assert these claims during contract negotiations for his termination.

The termination agreement stipulated a payment of $350,000 in exchange for shortening Sang's employment, along with a payment of $5,614.08 for hospital insurance and use of the leased vehicle for up to sixty days. The court highlighted that the agreement included a clause stating this payment would fully settle the Board's obligations to Sang, except for regular compensation and benefits due until August 31, 1991. The key issue was whether "regular compensation and benefits" encompassed amounts for unused sick leave and vacation days.

The court deemed the term "regular compensation benefits" ambiguous, potentially referring only to periodic payments rather than amounts due at the contract's termination. Consequently, the court concluded that the intent of the parties did not include unused sick leave and vacation pay in the payment due on August 31, 1991. Affirming the trial court's judgment, the appellate court found no manifest error in the lower court's conclusions. Judges Thigpen and Yates concurred with the decision.