Garry W. Fenno v. Russell L. Jacobe

Appellee, a physician specializing in ear, nose and throat, entered an employment contract with Dr. D. J. Durcan, for a "maximum" term of one year, January 7, 1973, to January 7, 1974. Appellees "regular" compensation was set by the contract at $2,000 per month, plus "additional" compensation of one-half of cash proceeds earned by his labor in excess of $4,000 each month. During the contract term, appellant and Dr. Durcan formed a partnership that assumed liability for appellees employment contract. At the end of the one-year term, appellee continued his employment with the partnership, performing the same duties and being paid the "regular" compensation of $2,000 per month. The parties were simultaneously negotiating a partnership interest for appellee; however, no agreement was ever reached, in part because the partnership had cash flow problems. The cash flow problem made appellee realize that he would have to delay receiving any part of his "additional", i.e., percentage compensation. Nevertheless, the parties continued the employment relation for a second full year, i.e., all of 1974, at the end of which appellee resigned and demanded payment for all of his "additional" compensation, that is, one-half the proceeds attributable to his labor in excess of $4,000 per month, which was earned during the second year of the contract, 1974. Appellant and Dr. Durcan refused payment, claiming that the contract ended after the "maximum" term of one year and was never renewed. They claimed that appellees employment thereafter was not governed by the written contract, but was simply employment at will, at a salary of $2,000 per month, which had been fully paid. Appellee sued appellant and Durcan for cash proceeds they received in excess of $4,000 per month earned by him during 1974. He won a partial summary judgment against appellant and Durcan on the issue of liability. The damage issue was tried by jury resulting in a judgment for damages against appellant and Durcan in the amount of $39,769.94, plus attorneys fees of $19,000, and prejudgment interest of $17,219.82. Only Dr. Fenno has appealed.