Case Title: LIFE CARE CENTERS OF AMERICA v. DEXTER

Citation: 

Docket Number: 02-42

State: wyoming

Court: Wyoming Supreme Court

Date: 2003-03-17T00:00:00Z

Document:
LIFE CARE CENTERS OF AMERICA v. DEXTER2003 WY 3865 P.3d 385Case Number: 02-42Decided: 03/17/2003
OCTOBER 
TERM, A.D. 2002

 

                                                                                                
    

 

LIFE 
CARE CENTERS OF AMERICA,

INC., 
d/b/a Westview Health Care Center,

 

Appellant(Defendant),

 

v.

 

MARGO 
DEXTER,

 

Appellee(Plaintiff).

 

 

Appeal 
from the District Court of Sheridan County

The 
Honorable John C. Brackley, Judge

 

Representing 
Appellant:

            
Kate M. Fox and Kathleen G. Healy of Davis & Cannon, Cheyenne, 
Wyoming  

 

Representing 
Appellee:

            
Barbara A. Baker, Sheridan, Wyoming  

 

 

Before 
HILL, C.J., and GOLDEN, LEHMAN,* KITE, and VOIGT, JJ.

 

*Chief 
Justice at time of expedited conference

 

 

 

            
KITE, Justice.

 

[¶1]      Life Care Centers 
of America, Inc. d/b/a Westview Health Care Center (Life Care) appeals from a 
judgment entered in favor of Margo Dexter after a trial to the court on her 
claims for breach of employment contract and breach of the implied covenant of 
good faith and fair dealing.  We 
hold the trial court incorrectly applied Sanchez v. Life Care Centers of 
America, Inc., 855 P.2d 1256 (Wyo. 1993), to find the employee handbook 
created an implied contract as a matter of law.  However, under the circumstances of this 
particular case and for purposes of deciding the other issues presented, we will 
assume the trial court made a factual finding that the employee handbook was an 
implied contract.  

 

[¶2]      We further hold 
the trial court's findings were insufficient to support its determination that 
Life Care breached the employment contract.  The judgment contains no finding on the 
issue of whether cause existed to terminate Ms. Dexter's employment without 
following the progressive discipline procedures.  Under the terms of the implied contract, 
that finding was essential for a determination on the breach of contract 
claim.  Therefore, we remand for 
additional findings on that issue.  
Finally, we hold there was insufficient evidence of a special 
relationship of trust and reliance to support judgment for Ms. Dexter on the 
breach of implied covenant claim and reverse that portion of the trial court's 
judgment.

 

 

ISSUES

 

[¶3]      Life Care 
presents the following issues:

 

(1)  Applying 
correct principles of interpretation of an ambiguous contract to an employee 
handbook with an inconspicuous disclaimer, is the contract of employment 
at-will?

 

(2)  Was 
the trial court's finding that cause for termination did not exist clearly 
erroneous?

 

(3)  Was 
there any basis for finding a breach of the covenant of good faith and fair 
dealing when (a) there was no special relationship and (b) the plaintiff was not 
deprived of any benefits to which she was entitled?

 

Ms. 
Dexter restates the issues as follows:

 

1.  Whether 
a contract for employment existed.

 

2.  Whether 
sufficient evidence was presented for the fact finder to determine that the 
contract for employment had been breached by the employer.

 

3.  Whether 
sufficient evidence was presented for the fact finder to determine that the 
employer breached the implied covenant of good faith and fair 
dealing.

 

 

FACTS

 

[¶4]      Life Care 
employed Ms. Dexter as the activities director in its nursing center in Sheridan 
for nearly six years.  When Ms. 
Dexter was hired, Life Care gave her a copy of its employee handbook containing 
personnel policies, practices, and procedures for the nursing center.  The handbook was identical to the one 
considered in Sanchez, 855 P.2d 1256.  On June 30, 2000, Life Care terminated 
Ms. Dexter's employment.

 

[¶5]      Ms. Dexter filed 
a complaint against Life Care alleging claims for breach of contract and breach 
of the implied covenant of good faith and fair dealing.  She claimed the handbook created a 
contract, giving her the right to continuing employment unless her employment 
was terminated for cause and in accordance with the progressive discipline 
procedures.  She claimed Life Care 
breached the contract and the implied covenant of good faith and fair dealing by 
terminating her employment without cause and in violation of the progressive 
discipline procedures.

 

[¶6]      Life Care 
answered the complaint and, after conducting discovery, moved for summary 
judgment claiming Ms. Dexter was an at-will employee; there was no contract 
because Ms. Dexter did not read or rely on the handbook; and, even if there was 
a contract, there was no breach of contract and no breach of the implied 
covenant of good faith and fair dealing.  
After a hearing, the trial court denied Life Care's motion finding issues 
of fact existed on both the breach of contract claim and the claim for breach of 
the implied covenant.  The case 
proceeded to trial on October 18 and 19, 2001, and, on November 7, 2001, the 
trial court issued a decision letter finding Life Care had breached Ms. Dexter's 
employment contract and the implied covenant of good faith and fair dealing and 
awarding $24,276 in damages to Ms. Dexter.  
The trial court entered judgment on November 26, 2001, in accordance with 
its decision letter.  

 

 

STANDARD 
OF REVIEW

 

[¶7]      We review the 
trial court's conclusions of law de novo.  Principal Life Insurance Company v. 
Summit Well Service, Inc., 2002 WY 172, ¶20, 57 P.3d 1257, ¶20 (Wyo. 2002); 
Polo Ranch Company v. City of Cheyenne, 969 P.2d 132, 136 (Wyo. 
1998).  The trial court's findings 
of fact are subject to the clearly erroneous standard:

 

The 
factual findings of a judge are not entitled to the limited review afforded a 
jury verdict.  While the findings 
are presumptively correct, the appellate court may examine all of the properly 
admissible evidence in the record.  
Due regard is given to the opportunity of the trial judge to assess the 
credibility of the witnesses, and our review does not entail re-weighing 
disputed evidence.  Findings of fact 
will not be set aside unless they are clearly erroneous.  A finding is clearly erroneous when, 
although there is evidence to support it, the reviewing court on the entire 
evidence is left with the definite and firm conviction that a mistake has been 
committed.

 

Fremont 
Homes, Inc. v. Elmer, 
974 P.2d 952, 958 (Wyo. 1999) (citations omitted); see also Jessen v. Jessen, 2002 WY 33, ¶7, 41 P.3d 543, ¶7 (Wyo. 
2002).  Also, in reviewing a 
trial court's findings of fact, 

 

we 
assume that the evidence of the prevailing party below is true and give that 
party every reasonable inference that can fairly and reasonably be drawn from 
it.  We do not substitute ourselves 
for the trial court as a finder of facts; instead, we defer to those findings 
unless they are unsupported by the record or erroneous as a matter of 
law.

  

Kendrick 
v. Barker, 
2001 WY 2, ¶12, 15 P.3d 734, ¶12 (Wyo. 2001).  We affirm the trial court's findings if 
there is any evidence to support them.  
Capshaw v. Schieck, 2002 WY 54, ¶27, 44 P.3d 47, ¶27 (Wyo. 2002). 

 

 

DISCUSSION

 

A.        
Breach of Contract

 

1.         
Existence of a contract

 

[¶8]      Life Care alleges 
error in the trial court's application of Sanchez.  In Sanchez, the employee appealed 
from an order granting summary judgment for the employer based on the finding 
that the disclaimer contained in the same handbook at issue here was 
conspicuous.  Reversing the summary 
judgment, this court said:  "[W]e 
determine that the disclaimer was not physically conspicuous and its contents 
were ambiguous in that there was language that inferred that Life Care intended 
to modify the at-will employment to an employment which could only be terminated 
for cause."  855 P.2d  at 1259.  We said further:

 

The 
meaning and effect of the employment relationship in this case, a mixed question 
of law and fact, remains unresolved.  
Therefore, we must reverse summary judgment.  The case is remanded to the trial court 
for determination of whether the employee handbook modified the employment  relationship from one terminable at will 
to one terminable only for cause.

 

Id. 
at 
1259-60.  Despite this court's 
holding that the handbook was ambiguous, making it subject to an interpretation 
allowing termination only for cause and in accordance with specified procedures, 
Life Care made no changes to the handbook after Sanchez was decided.1  Thus, under Sanchez and 
subsequent cases,2 the question of whether the 
handbook at issue in this case created an implied contract was factual and was 
to be resolved by the trier of fact.  
The trial court's initial task in the present case was, therefore, to 
make a factual finding as to whether, given the ambiguity created by the 
inconspicuous disclaimer, the handbook created an implied in fact employment 
contract providing employees could be discharged only for cause and in 
accordance with the progressive discipline procedure.  

 

[¶9]      Life Care asserts 
that, contrary to this court's directive that interpretation of the handbook was 
a question of fact, the trial court in this case interpreted Sanchez as 
holding the handbook was an implied contract as a matter of law.  Thus, Life Care contends the trial 
court's conclusion that the handbook was a contract was reached without the 
independent analysis or fact-finding required by Sanchez.  Life Care's contentions are borne out by 
the trial court's findings of facts pertaining to Sanchez and the implied 
contract issue: 

 

5.  [The] 
Wyoming Supreme Court has had the occasion to rule on the sufficiency of this 
same Defendant's "disclaimer" language in the handbook given to Plaintiff in 
Sanchez v. Life Care Centers, 855 P.2d 1256 (Wyo. 1993).  The case held the Employee Handbook 
(same as the language herein) ". . . disclaimer was not physically conspicuous 
and its contents were ambiguous in that there was language that inferred that 
Life Care intended to modify the at-will employment to an employment which could 
only be terminated for cause."  (p. 
1259).

 

6.  Plaintiff's 
Employee Handbook herein (Ex. I) thus created an expectation that employment 
will not be terminated except for cause and resulted in an implied contract of 
employment that overcame the at-will employment presumption of this 
state.

 

From 
these findings, it appears the trial court incorrectly read Sanchez as 
holding the handbook created an implied contract as a matter of law.  That was not the holding in 
Sanchez, and the trial court's finding to that effect was in error.  However, under the particular 
circumstances of this case and for purposes of deciding the remaining issues 
raised on appeal, we will assume the trial court made a factual finding that the 
handbook created an implied employment contract.  See Springer v. Blue Cross and Blue 
Shield of Wyoming, 944 P.2d 1173, 1176 (Wyo. 1997), for a similar 
outcomethe trial court assumed, without deciding, that the handbook was a 
contract; on appeal, this court began its consideration of the breach of 
contract issue from that same premise.  

 

2.         
Breach of contract

 

[¶10]   Life Care alleges the trial court 
found there was no cause for termination and that finding was clearly 
erroneous.  In reviewing the 
decision letter and the judgment, we note the trial court made no finding on 
whether Life Care had cause to terminate Ms. Dexter's employment.  The only findings appearing in the 
judgment on the issue of cause are:  

 

13.  Plaintiff's 
"Termination Report" (Exhibit A1) listed "Lack of effort/unsatisfactory 
performance" as the reason for discharge.

 

14.  Plaintiff's 
"personnel file" that existed at the time of her termination did not contain 
certain documentation Defendant claims supports "for cause" termination 
including Exhibits A5, A10, A15-A17, A45, A82 and A83.[3]  
Zerwas admitted items were inserted into the file after the termination 
but also testified the items were created before Plaintiff's 
termination.

 

15.  Exhibits 
A3 and A4[4] were not discussed with 
Plaintiff prior to termination.  
(Zerwas testimony).

 

16.  Defendant 
did not prove by a preponderance of [the] evidence that Plaintiff falsified any 
records.  (Zerwas and Horton 
testimony).

 

17.  Trial 
evidence does not allow the Court to conclude that the high turnover rate in 
Plaintiff's department was Plaintiff's fault.  (Exhibit B).

 

18.  Defendant 
did not follow its policies regarding "progressive stages of disciplinary 
procedures" when terminating Plaintiff (see Exhibit I, Employee Handbook 
sections on Discipline and Termination and Disciplinary Procedures).  Hence, Defendant breached the implied 
covenant of good faith and fair dealing.

 

Thus, 
although the trial court made a finding that Life Care did not follow the 
progressive discipline procedures in terminating Ms. Dexter's employment, it did 
not make a similar finding on whether cause existed for the 
termination.

 

[¶11]   Ordinarily, in implied employment 
contract cases, a breach of contract is established by the employer's failure to 
follow the procedures contained in the handbook, by a showing there was no cause 
for termination, or by both.  In 
this case, the terms of the handbook made a factual finding on cause 
essential.  The "Disciplinary 
Procedures" provision of the Life Care handbook provided as 
follows:

 

The 
nursing center has no desire to discipline any associate.  Good management, however, demands that 
certain procedures are followed to correct or eliminate problems, since they can 
and do affect patient care.  It is 
our assumption that most offenses are committed without forethought or 
destructive intent.  However, a 
series of minor infractions suggests a continuing problem, and must be viewed as 
a source of major concern.  The 
nursing center may, depending on the severity of the offense terminate an 
associate after the first offense.  
Generally, though, an associate will be subject to the following stages 
of progressive discipline:

 

1.  First 
written warning.

 

2.  Second 
written warning.

 

3.  Suspension 
without pay, documented in file pending investigation.  If investigation revealed no such 
offense occurred, the associate will be paid for the suspension period, will 
receive a formal apology from administration, and will have the third offense 
and notice of suspension stricken from his/her personnel 
file.

 

4.  [Same 
as 3 except "fourth offense" plus the following:] If the investigation 
substantiates the offense, the associate will be 
terminated.

 

This 
will be our usual and preferred process for administering 
discipline.  However, conduct of any type which 
causes the center to lose confidence in your ability to perform adequately your 
assigned job may result in immediate discharge. 

 

 (Emphasis added.)  

 

[¶12]   Given these provisions, upon 
finding Life Care failed to follow the progressive discipline procedures, the 
trial court had to determine whether there was cause for immediate discharge 
under the terms of the employment contract.  That is, the trial court had to 
determine whether the evidence supported a determination that Life Care complied 
with the contract terms when it discharged Ms. Dexter without following the 
usual steps of progressive discipline under the lost confidence provision of the 
policy.  The trial court made no 
such factual finding, and, without it, the judgment cannot stand.  Therefore, we remand the case to the 
trial court for additional findings of fact on whether, under the terms of the 
handbook, Life Care had cause to terminate Ms. Dexter's employment without 
following the progressive discipline procedures. 

 

[¶13]   In making additional findings, the 
trial court will need to consider the terms of the handbook in light of the 
evidence presented by Life Care that it had concerns about Ms. Dexter besides 
those related to falsification of records and high turnoverthe two concerns the 
trial court addressed in its findings of fact.  Life Care presented evidence that Ms. 
Dexter failed to promptly deliver medical records; exhibited poor management 
skills; failed to improve after being counseled for poor work performance; and 
treated residents, their families, and other employees rudely.  The trial court's findings addressed 
none of these concerns, making it difficult for this court to determine whether 
the findings supported a conclusion that Life Care did not have cause to 
terminate Ms. Dexter's employment under the terms of the handbook and thereby 
breached the employment contract.  

 

[¶14]   Against the evidence presented by 
Life Care, the trial court will need to weigh the evidence presented by Ms. 
Dexter to support her claims that the reasons given for her discharge were 
pretextual and Life Care's executive director took a personal dislike to her, 
terminated her employment without cause, and attempted to justify these actions 
by later adding supporting documentation to her personnel file.  The trial court also will need to 
consider the evidence presented by Ms. Dexter that the complaints lodged against 
her were not credible and, in some instances, were not discussed with her.  Only with factual findings as to these 
matters can the trial court determine whether Life Care had cause to terminate 
Ms. Dexter's employment under the terms of the handbook without following the 
progressive discipline procedures. 

 

[¶15]   In addition to applying the terms 
of the handbook in determining whether there was cause for termination, we also 
ask the trial court to apply the good faith standard for review of employer 
firing decisions applied by the majority of other jurisdictions that have 
addressed the issue.  Cotran v. 
Rollins Hudig Hall International, Inc., 948 P.2d 412 (Cal. 1998); Almada 
v. Allstate Insurance Co., Inc., 153 F. Supp. 2d 1108 (D. Ariz. 2000), 
aff'd, 285 F.3d 798 (9th Cir. 2002); 
Southwest Gas Corporation v. Vargas, 901 P.2d 693 (Nev. 1995).  Under this standard, the question to be 
resolved by the fact finder is not, "Did the employee in fact commit the 
act leading to dismissal?'"  
Cotran, 948 P.2d at 421-22; see also Almada, 153 F. Supp. 2d  at 1114.  Rather, it is, "Was 
the factual basis on which the employer concluded a dischargeable act had been 
committed reached honestly, after an appropriate investigation and for reasons 
that are not arbitrary or pretextual?'"  
Id.  "Cause" is 
defined under this standard as

 

fair 
and honest reasons, regulated by good faith on the part of the employer, that 
are not trivial, arbitrary or capricious, unrelated to business needs or goals, 
or pretextual.  A reasoned 
conclusion, in short, supported by substantial evidence gathered through an 
adequate investigation that includes notice of the claimed misconduct and a 
chance for the employee to respond.

 

Cotran, 
948 P.2d  at 422.  Wyoming has not 
previously adopted this standard for reviewing employer termination 
decisions.  We do so now, with one 
slight variation.  Under the 
standard applicable in Wyoming, notice and an opportunity to respond must be 
shown in implied employment contract cases only when the express terms of the 
implied contract so provide.  
Recognizing that there may be circumstances where notice and an 
opportunity to respond are not practicable, we decline to impose such a 
requirement in all termination cases arising out of an implied employment 
contract.  

  

[¶16]   If, in applying this standard to 
the evidence presented, the trial court finds that Life Care did not have fair 
and honest reasons for terminating Ms. Dexter's employment but rather its 
reasons were trivial, arbitrary or capricious, unrelated to business needs, 
pretextual or unsupported by substantial evidence gathered through an adequate 
investigation and, if required by the contract, after notice to Ms. Dexter and 
an opportunity for her to respond, judgment for Ms. Dexter on the breach of 
contract claim must stand.  If, 
however, the trial court finds, based upon the evidence, that Life Care had fair 
and honest reasons for the termination and those reasons were supported by 
substantial evidence gathered through an adequate investigation that included, 
if required by the handbook, notice to Ms. Dexter of the claimed misconduct and 
a chance for her to respond, judgment for Ms. Dexter on the breach of contract 
claim cannot stand.

 

[¶17]   Because we remand to the trial 
court for additional findings on whether cause existed to support the 
termination, it is necessary to address two other claims presented by Life Care 
which have relevance to the breach of contract claim.  First, Life Care contends error occurred 
when the trial court improperly placed the burden on the employer to prove Ms. 
Dexter falsified records.  The trial 
court found:  Life Care "did not 
prove by a preponderance of evidence that [Ms. Dexter] falsified any 
records."  

 

[¶18]   In an employment contract case, the 
plaintiff has the burden of proving the employer breached the employment 
contract.  In this case, Ms. Dexter 
had the burden of proving Life Care terminated her employment without cause and 
without following the handbook procedures.  
Once she met that burden, the burden shifted to Life Care to present 
contrary evidence showing that, in fact, there was cause for termination, 
including evidence to support its contention she was fired for falsifying 
documents.  Although the trial 
court's finding may be inartfully worded, suggesting Life Care had the initial 
burden of proof on the issue of cause for termination, that finding could 
likewise be read to mean Life Care failed to come forward with evidence 
rebutting Ms. Dexter's evidence, thus allowing her to carry her burden of 
proof.  We find any error in this 
regard harmless under the circumstances.

 

[¶19]   Life Care also contends error 
occurred when the trial court refused to allow testimony concerning complaints 
from other employees and residents to establish Ms. Dexter's performance was 
unsatisfactory.  Finding substantial 
evidence of employee complaints concerning Ms. Dexter was introduced despite the 
trial court's ruling on the hearsay objection, we hold any error in that ruling 
was harmless.  During 
cross-examination of Jean Zerwas, Life Care's executive director, the following 
exchange occurred:

 

Q   . . . You 
mentioned that Ms. Dexter had a negative attitude.  Was she rude?

 

A   It 
was frequently reported to me that Margo was rude.

 

Q   And 
you received complaints -- did you receive complaints from activity staff that 
Margo Dexter was rude to them?

 

A   Yes, 
I did. . . .

 

Q   Who 
did you receive those complaints from?

 

A   Bev 
Patterson.  I'm drawing a 
blank.  Are those names -- is that 
list in here that I could look at?

 

At 
this point, a list containing the names of eleven women who worked as aides in 
the activity department was admitted into evidence.  The witness read the names listed on the 
exhibit, and the following exchange occurred:

 

Q   They 
all complained to you about Margo's treatment?

 

A   Yes.

 

[Hearsay 
objection sustained.]

 

Q   Did 
you receive complaints from [Life Care]'s activity staff about Margo's 
abrasiveness?

 

            
A   Yes, I did.

 

            
. . . .

 

            
Q   Did you receive this letter?

 

A   Yes, 
I did.  And when I went to talk to 
her about it, she just said, "Margo doesn't like me."

 

[Hearsay 
objection sustained.]

 

Q   Did 
you speak to Rosa about this -- the incident that's documented in A-43, 42 and 
43?

 

A   Yes, 
I did.

 

Q  And 
did she believe that Margo was rude to her?

 

            
[Hearsay objection sustained.]

                        

Q   I'd 
like you now, please, to turn to Exhibit A-46.

 

Do 
you recognize that document?

 

A   Yes, 
I do.

 

Q   What 
is it?

 

A   It's 
a letter that was written to me by Valerie Whyard, who was activity aide.  And I received this in the mail after 
she had terminated her employment.

 

Q   Is 
it fair to say that the substance of this complaint was that Ms. Whyard thought 
that she was being given inconsistent directions by her 
supervisor?

 

A   Yes.

 

. . . .

 

Q   Did 
you receive complaints from the staff members outside of the activity department 
about Margo?

 

A   Yes.

 

Q   Did 
Kenny Custis ever complain to you about Margo?

 

[Hearsay 
objection overruled.]

 

            
A   Yes.

 

            
Q   And what was the substance of his 
complaint?

 

            
[Hearsay objection sustained.]

 

Q   Did 
Carla Blatchford complain to you about Margo Dexter?

 

A   Yes.

 

Q   Did 
Nita Hoffer complain to you about Margo Dexter?

 

A   Yes.

 

Q   Did 
John Johnston [complain] to you about Margo Dexter?

 

A   Yes.

 

Q   Did 
all of these staff members complain to you about Margo Dexter's treatment of 
them?

 

A   Yes.

 

 [¶20]  In addition to this testimony, there was 
other testimony from Ms. Zerwas concerning alleged complaints by residents or 
other employees about Ms. Dexter.  
Life Care also was allowed to introduce exhibits documenting complaints 
from others concerning Ms. Dexter.  
Finally, Life Care called five witnesses to testify concerning their 
experiences in working with Ms. Dexter.  
Under these circumstances, any error that occurred in the trial court's 
refusal to allow the proposed testimony was harmless.         

 

B.        
Breach of the Implied Covenant of Good Faith

 

[¶21]   The trial court also found Life 
Care breached the implied covenant of good faith and fair dealing by failing to 
follow the progressive discipline procedures contained in the handbook when 
terminating Ms. Dexter's employment.  
"[A]ll contracts of employment contain an implied covenant of good faith 
and fair dealing."  Wilder v. 
Cody Country Chamber of Commerce, 868 P.2d 211, 220 (Wyo. 1994).  However, a duty giving rise to tort 
liability for breach of the implied covenant exists only in rare and exceptional 
cases.  Id. at 221.  In order for a duty to arise, there must 
be a showing of a special relationship of trust and reliance between the 
employee seeking to recover and the employer.  Id.  "Trust and reliance may be found by the 
existence of separate consideration, common law, statutory rights, or rights 
accruing with longevity of service."  
Id. 

 

[¶22]   As evidence of a special 
relationship, Ms. Dexter points to the fact that she was employed with Life Care 
for nearly six years.  In Terry 
v. Pioneer Press, Inc., 947 P.2d 273, 278 (Wyo. 1997), the court held 
longevity of service for nearly six years, without more, was insufficient to 
establish a special relationship.  
Usually, when a special relationship  based on long-term employment is found 
sufficient to support a cause of action, it is coupled with a discharge 
calculated to avoid employer responsibilities to the employee, such as payment 
of benefits.  Trabing v. Kinko's, Inc., 2002 WY 171, 
¶23, 57 P.3d 1248, ¶23 (Wyo. 2002); Terry, 947 P.2d  at 278.  Ms. Dexter does not claim, nor does the 
evidence suggest, her discharge was calculated to avoid payment of benefits owed 
to her.  Absent such a claim, and 
without proof of any other factors giving rise to a special relationship, Ms. 
Dexter's claim must fail.  Without a 
special relationship, no duty exists on Life Care's part, and, without a duty, 
there can be no breach.  
Springer, 944 P.2d  at 1178.  

 

[¶23]   Just as Ms. Dexter's six years of 
service is insufficient to establish a claim for breach of the implied covenant, 
so is the trial court's finding insufficient that Life Care failed to follow the 
progressive discipline procedures when terminating Ms. Dexter's employment.  Regardless of whether policies were or 
were not followed, there must be proof of a special relationship of trust and 
reliance to proceed on a claim for breach of the implied covenant.  The claim that a contract existed and it 
was breached, without more, is insufficient to establish the required special 
relationship.  Therefore, the trial 
court's conclusion that Life Care breached the implied covenant of good faith 
and fair dealing was clearly erroneous.

 

 

CONCLUSION

 

[¶24]   We hold as 
follows:

 

1.  The 
trial court incorrectly applied Sanchez as holding that the Life Care 
handbook created an implied contract as a matter of law.  Whether the handbook created an implied 
contract is, under Sanchez, a question of fact.  For purposes of resolving this appeal, 
however, we have assumed the trial court made a factual determination that the 
handbook created an implied contract.  

 

2.  The 
trial court's findings of fact were insufficient to support the determination 
that Life Care breached the employment contract.  We remand to the trial court for 
additional findings of fact on whether there was cause for termination.  In making these findings, the trial 
court must apply the terms of the handbook and the good faith standard for 
review of employer termination decisions adopted herein.

 

3.  Regardless 
of the outcome on the breach of contract claim, the judgment in favor of Ms. 
Dexter on the claim for breach of the implied covenant of good faith and fair 
dealing is reversed.

 

[¶25]   Reversed and 
remanded.

 

FOOTNOTES

1It is of some concern to this court that Life Care did nothing to resolve 
the ambiguity after Sanchez, thereby leaving open the possibility of 
future litigation surrounding the meaning of its handbook and the employment 
relationship.  Had Life Care amended 
the handbook to clarify employment was at will, if that is what it intended, 
this case likely would not be before us. 

  

2See, e.g., Ormsby v. Dana Kepner Co. of Wyo. Inc., 997 P.2d 465 
(Wyo. 2000), where the court held the question of whether an ambiguous handbook 
results in an implied contract of employment is one of fact and not of 
law.

3Exhibit A5 is a request to schedule a doctor's appointment for a resident 
with a handwritten note by Life Care's executive director, Jean Zerwas, at the 
bottom indicating Ms. Dexter failed to make the appointment until three weeks 
after the request was made.  Exhibit 
A10 is an application for employment with a handwritten note by Ms. Zerwas 
stating Ms. Dexter hired a dietary employee without discussing it with the 
dietary supervisor.  Exhibits 
A15-A17 concern the resignation of an employee over alleged falsification of 
records by Ms. Dexter.  Exhibit A45 
documents an employee's resignation over promises allegedly made and not kept by 
Ms. Dexter concerning the employee's work schedule.  Exhibits A82 and A83 concern a grievance 
filed by Ms. Dexter about an incident with another 
employee.

  

4Exhibit A3 is a comment form reflecting Ms. Dexter failed to deliver 
medical records to physicians' offices.  
Exhibit A4 documents allegations of inappropriate behavior by Ms. Dexter 
toward a former employee and a resident.