Harvey et al v. Walden
Filing
86
MEMORANDUM OPINION AND ORDER: It is ordered that the 47 Motion for Partial Summary Judgment is GRANTED on Count 1 and DENIED on Count II of the First Amended Complaint. Signed by Judge Jennifer B Coffman on 8/26/2011. (SCD)cc: COR
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
LEXINGTON
CIVIL ACTION NO. 10-200-JBC
NANCY HARNEY, ET AL.,
V.
PLAINTIFFS,
MEMORANDUM OPINION AND ORDER
JOHN WALDEN,
DEFENDANT.
***********
This matter is before the court upon Nancy Harney’s motion for partial
summary judgment (R. 47). Because John Walden has no right to lifetime
employment under Kentucky law, but genuine disputes of material fact exist
regarding his right to lifetime tenancy, the court will grant the motion in part and
deny it in part.
Walden claims that a November 2009 Agreement purportedly entered into
between Walden and Harney grants him both lifetime tenancy in a residence on
Stoner Mill Farm in Bourbon County, Kentucky, known as the Tree House (or Creek
House), and lifetime employment by Happy Tails Animal Sanctuary, LLC, and
Stoner Mill Farm. Harney maintains that the Agreement is a forgery; however, the
court necessarily accepts the validity of the Agreement for purposes of this motion.
See Hawkins v. Anheuser-Busch, Inc., 517 F.3d 321, 332 (6th Cir. 2008). Harney
therefore argues that summary judgment is warranted even if the Agreement is
deemed valid, because Walden has no rights under the Agreement to lifetime
employment or lifetime tenancy.
Harney is entitled to judgment as a matter of law on the issue of whether
Walden has a right to lifetime employment under the Agreement, because the
Agreement provides only for an at-will employment relationship. Numbered
paragraph 3 provides that:
Walden shall continue to be employed by Happy Tails Animal
Sanctuary, LLC and Stoner Mill Farm for as long as he shall live and
shall be entitled for as long as he lives to receive a salary of not less
than $65,000 per annum. He shall also receive in addition to his
salary health insurance benefits similar to those he is currently
receiving.
This provision is not supported by any separate consideration beyond Walden’s
continuing to work, see Edwards v. Ky. Utilities Co., 150 S.W.2d 916, 918 (Ky.
1941), and is therefore unenforceable as a contract for permanent employment. Id.
Rather, the language of the Agreement provides only for an at-will employment
relationship, terminable by either party at any time. Id. Parties may enter into an
employment agreement that provides the employee will be terminated only
pursuant to its express terms by clearly stating their intention to do so, see Shah v.
American Synthetic Rubber Corp., 655 S.W.2d 489, 492 (Ky. 1983), but that is
not the case here, as the Agreement provides no grounds for termination at all.
The termination of Walden’s employment is effective regardless of the validity of
the Agreement. Furthermore, because the Agreement’s provision of lifetime
employment is unenforceable, the provisions in numbered paragraph 3 that are
contingent upon it, including health insurance benefits and the obligation of
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Harney’s estate to create a trust to fund Walden’s continued employment and
health insurance, are also unenforceable. As there is no genuine dispute of
material fact on this issue, see FED. R. CIV. P. 56(a); Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986), the court will grant summary judgment.
Genuine disputes of material fact do exist on the issue of whether Walden is
entitled to lifetime tenancy in the Tree House, and summary judgment is therefore
inappropriate on that issue. Numbered Paragraph 1 of the Agreement provides that
in consideration for services previously rendered, “Walden shall be allowed to live
in the Creek House for the balance of his lifetime, without payment of any rent or
other compensation. All utilities, insurance and maintenance expenses for the
Creek House shall be paid by Harney or an entity of which is a principal.”
The
Stoner Mill property was owned in November 2009 by Geneva Jet Limited
Partnership. Harney, as a limited partner in that partnership, had no authority to
bind the partnership to such an arrangement, see KY. REV. STAT. ANN. § 362.2-302,
nor did she have apparent authority to bind the limited partnership under the facts
asserted by Walden. Walden has alleged only that Harney asserted her authority to
act on behalf of the partnership and that it did not counteract any of her decisions;
however, apparent authority arises only where the principal holds out an agent as
having such authority. See Mill Street Church of Christ v. Hogan, 785 S.W.2d
263, 267 (Ky. Ct. App. 1990). The Agreement makes clear that Harney was
acting in her personal capacity rather than under any authority from the
partnership, as it provides that “Harney shall use her best efforts to cause Geneva
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Jett, Inc. [sic] to honor her commitment to Walden that he will be allowed to reside
in the Creek House for the balance of his lifetime without any rent or other
compensation.”
That Harney had neither actual nor apparent authority to bind the partnership
is not dispositive, however, on the issue of Walden’s lifetime tenancy. The same
language which provides that Harney shall use her best efforts to cause the limited
partnership to honor the Agreement assigns a personal obligation to Harney to
ensure Walden’s continued right to tenancy in the Tree House. Even though she
could not bind the partnership, she was required by the Agreement to intercede on
his behalf with the partnership to the extent possible, if necessary. The partnership
deeded the Stoner Mill Farm property to Harney in January 2010. In the same
instrument, she deeded it to the Nancy Harney Declaration of Trust, of which she
is trustee. Thus, while Harney may have been without legal authority to bind the
partnership, she was in a position to ensure Walden’s lifetime tenancy once she
obtained full control over the property. Under these circumstances, the issue of
whether the Agreement provides Walden with a right to lifetime tenancy cannot be
resolved by merely deciding the issue of whether Harney had authority to bind the
partnership. As genuine disputes of material fact exist, the issue of Walden’s right
to lifetime tenancy cannot be decided on summary judgment. Accordingly,
IT IS HEREBY ORDERED that the motion for partial summary judgment (R.
47) is GRANTED on Count I and DENIED on Count II of the First Amended
Complaint.
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Signed on August 26, 2011
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