The Supreme Court of Louisiana has reversed an appellate court, thus reinstating the ruling of trial court, which had granted summary judgment to the University of Louisiana System (System) in a breach of contract case involving one of its former coaches.
In so ruling, the high court found that the System’s termination of its contract with Jerry Lee Baldwin, the plaintiff, was proper, pursuant to the “clear and unambiguous language of the contract.”
On December 11, 1998, Baldwin entered into a written agreement with the Board of Supervisors for the System (Board). Pursuant to the contract, the System employed Baldwin as the head football coach at the University of Southwestern Louisiana, now the University of Louisiana at Lafayette (UL). The contract provided that Baldwin’s employment with UL would last until January 31, 2003. By letter dated November 27, 2001, Baldwin was fired as UL’s head coach effective November 26, 2001, after winning only six of 27 games. Baldwin continued to receive his full monthly salary and other employee benefits from UL including health insurance, accrual of leave time, and accrual of retirement credits for the remainder of the contract term.
On July 21, 2003, Baldwin sued the Board and UL for breach of contract, alleging he was not given the notice required by Section 11 of the contract. Section 11 of the contract governs termination and provides:
“Either party may terminate this agreement without just cause prior to the expiration of its terms by giving thirty (30) days written notice to the other party. Should the University terminate this agreement without just cause, it shall be liable to Jerry Lee Baldwin for liquidated damages [Pg 3] in the amount of the remaining base salary at the time of termination under the terms of the agreement. Liquidated damages shall be computed as the number of months remaining under the terms of the agreement as specified in Section 2, times the amount of the monthly installments specified in Section 3. The University shall not be liable for any payment of contingent premium benefits or car allowance past the effective date of termination. Payments for liquidated damages shall be made monthly by the University.”
The passage continued:
“Should Jerry Lee Baldwin’s appointment as Head Football Coach at [UL] be terminated during the terms of this agreement, he shall make reasonable efforts to obtain suitable full time gainful employment in the Division I-A coaching profession. Should Jerry Lee Baldwin secure full time employment of any type, the liquidated damages described in this agreement shall be reduced by the amount of income received by him from said employment. Failure by Jerry Lee Baldwin to make reasonable efforts to secure full-time employment as described above shall be cause for the release of the University from any obligation to make further payments.
“Should Jerry Lee Baldwin’s employment be terminated for just cause, the University shall not be liable for any payment or benefits specified in this agreement past the effective date of termination. Just cause for termination shall include but not be limited to arrest or charges for violations of Federal, State or local laws, sanctions for violations of NCAA or Conference regulations, or violations of University policies and regulations.”
After the trial court granted summary judgment, Baldwin appealed. The appeals court reversed, finding that Baldwin “had set forth a legitimate claim for breach of contract based on the defendants’ failure to adhere to the notice provision in Baldwin’s employment contract.”
The defendants appealed to the Supreme Court, which also took aim at the alleged breach of the 30-day notice provision.
“Reading the provisions of the contract in its entirety, we, like the trial court, reject the idea that UL’s release of Baldwin from his duties as head coach resulted in a termination of the contract. Section 12 of the contract, titled ‘ACKNOWLEDGEMENTS,’ provides:
‘The parties specifically agree that the obligations assumed herein relate only to the obligations regarding payment and there is no guarantee or promise of continued employment for Jerry Lee Baldwin at the University of Southwestern Louisiana whether as head football coach or in any other employment capacity.
“Based on the parties’ ‘acknowledgements’ in Section 12, UL was ‘obligated regarding payment,’ but there was no ‘guarantee or promise of continued employment’ as head coach for the term of the contract. Consistent with Section 12, paragraphs three and four of Section 11 of the contract contemplate a distinction between the termination of his appointment as head coach and the termination of employment. Consequently, UL was free to relieve Baldwin of his head coaching duties without terminating the contract, so long as UL fulfilled its ‘obligations regarding payment.’ Absent a termination of the contract, the trial court correctly found that the notice provision found in paragraph one of Section 11 of the contract was never triggered. In finding that UL’s fulfillment of the payment obligation constituted an acknowledgement of its breach, the appellate court focused on Section 11 of the contract and disregarded the clear terms of Section 12.
“Furthermore, UL’s continued payment of Baldwin’s salary was also accompanied with other benefits of employment, such as health insurance, accrual of leave time, and accrual of retirement credits in accordance with Section 4 of the contract. Thus, Baldwin remained a paid employee of UL in a capacity other than as head coach as contemplated by Section 12. Had the contract been completely terminated, Baldwin would not have been entitled to receive employee benefits. By continuing to pay Baldwin as an employee of UL, defendants fulfilled the obligations under the contract.”
Jerry Lee Baldwin v. The Board of Supervisors for The University of Louisiana System, at al.; S.Ct. La.; NO. 2014-C-0827, 2014-0827 (La. 10/15/14); 2014 La. LEXIS 2248; 10/15/14
Attorneys of Record: (For applicant) Hon. James D. Caldwell, Attorney General, Stephen J. Oats, Lawrence Edward Marino, George Orvis Luce, Oats & Marino. (For Respondent) Marshall Joseph Simien, Jr., G. Karl Bernard, G. Karl Bernard & Associates.
