Case Title: Blubaugh v. Turner

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1992-12-07T00:00:00Z

Document:
Blubaugh v. Turner1992 WY 166842 P.2d 1072Case Number: 92-112Decided: 12/07/1992Supreme Court of Wyoming
R. Michael BLUBAUGH and Mary J. Blubaugh, husband and wife, 
Appellants (Plaintiffs),

v.

Ken W. TURNER and Schlumberger 
Well Services, a Division of Schlumberger Technology Corporation, aTexas corporation, Appellees 
(Defendants).

Appeal from District Court, UintaCounty, John D. Troughton, 
J.

 Mark W. 
Harris of Harris, Morton and Cowan, P.C., Evanston, for appellants.

V. 
Anthony Vehar and Sharon M. Rose of Vehar, Beppler, Lavery, Rose & Boal, 
P.C., Evanston, 
for appellees.

 Before MACY, C.J., and THOMAS, CARDINE, URBIGKIT 
and GOLDEN, JJ.

MACY, Chief 
Justice.

 [¶1.]     This is an appeal from 
an order granting a summary judgment in favor of the appellees, Ken W. Turner 
and Schlumberger Well Services, upon the court's conclusion that, as a matter of 
law, the circumstances surrounding the signing of a receipt and release 
agreement by the appellant, R. Michael Blubaugh, which released Schlumberger 
Well Services from liability resulting from Mr. Blubaugh's termination of 
employment, did not rise to a level of duress sufficient to void the 
release.

 [¶2.]     We 
affirm.

 [¶3.]     The appellants present 
the issue for review in this generic fashion:

I.

Did the 
district court err in granting summary judgment to appellees and dismissing 
appellants' causes of action against appellees?

A. Did 
the district court err in finding that appellants failed to establish as a 
matter of law the facts which constitute a factual issue of 
duress?

B. Did 
the district court err in finding that there was no genuine issue of material 
fact relating to the appellant's claim of duress?

 [¶4.]     The material facts are 
not in dispute. On November 30, 1988, Mr. Blubaugh was summoned to Schlumberger 
Well Services' Denver, Colorado, office and told that either he could resign or 
he would be terminated from his district manager position at Schlumberger Well 
Services' Evanston, 
Wyoming, office. Mr. Blubaugh was 
presented with an agreement entitled "Receipt and Release," which provided, 
among other things, that he would resign on December 1, 1988, and release 
Schlumberger Well Services from any and all claims in consideration of the 
payment of $35,943, which included his normal separation pay plus $4,560.78. As 
additional consideration, Mr. Blubaugh was to, and did, receive outplacement 
counseling. The release agreement also provided that, in return for the 
consideration offered, which was accepted "in full compromise, settlement, [and] 
satisfaction of all claims," Mr. Blubaugh agreed to "Release and forever 
Discharge" Schlumberger Well Services, its employees, servants, agents, and 
representatives from any and all liability, claims, or causes of action, if any, 
arising out of or relating to his employment, resignation, or termination, 
including claims arising from alleged unlawful and/or discriminatory employment 
practices, breach of contract, and tortious actions which Schlumberger Well 
Services may have allegedly committed.

 [¶5.]     Prior to leaving the 
Denver office to return to his home in Evanston, Mr. Blubaugh met 
with an outplacement counselor provided by Schlumberger Well Services. On 
December 1, 1988, Mr. Blubaugh signed the receipt and release agreement and 
delivered it to the Evanston office along with his letter of 
resignation. Several months after Mr. Blubaugh signed the agreement, he 
contacted Schlumberger Well Services and requested, and received, additional 
compensation for his moving expenses.

 [¶6.]     On September 4, 1990, 
the appellants filed their complaint, alleging several causes of action and 
seeking damages for Mr. Blubaugh's termination. The appellees responded with 
motions to dismiss and for a summary judgment on the grounds that the 
appellants' assertions against Ken Turner, as a co-employee, failed to state a 
claim upon which relief could be granted and that the appellants' claims were 
barred by virtue of the release agreement, payment, and accord and satisfaction. 
The appellants sought to avoid the release by claiming that it was the product 
of duress and violative of Article 19, Section 7 of the Wyoming Constitution. 
Mr. Blubaugh stated in his affidavit in resistance to the appellees' motions 
that he was advised that, if he did not resign and sign the release, he would be 
fired and would loose the opportunity to receive outplacement counseling and the 
additional $4,560.78 separation pay. Mr. Blubaugh also stated that he was not 
given an opportunity to negotiate any of the terms of the release agreement and 
that at that time he was in a state of shock and distraught from being told that 
either he could resign or he would be fired.

 [¶7.]     On April 28, 1992, the 
court entered its order granting a summary judgment in favor of the appellees. 
The court concluded that Article 19, Section 7 of the Wyoming Constitution 
forbids employee/employer releases only for personal injuries occurring during 
the course of employment and that the appellants' complaint and supporting 
affidavits did not constitute duress and were insufficient as a matter of law to 
invalidate the release.

 [¶8.]     On appeal, the 
appellants do not question the court's decision concerning the claim against Mr. 
Turner or its determination that the release was not voidable on constitutional 
grounds. Accordingly, we will confine this opinion to the issue of whether the 
undisputed material facts in the record on appeal constitute such duress as to 
invalidate the release agreement between Mr. Blubaugh and Schlumberger Well 
Services as a matter of law.

 [¶9.]     The appellants assert 
that, under the circumstances of this case, their claim of duress must be 
measured by the concept of economic duress. Whether particular facts are 
sufficient to constitute economic duress is a question of law. Whether these 
circumstances exist is a question of fact. Gruver v. Midas International 
Corporation, 925 F.2d 280 (9th Cir. 1991). The Tenth Circuit Court of Appeals, 
when applying Wyoming law to a duress defense to avoid the 
enforcement of an agreement, said:

The 
Wyoming test 
for duress is not inconsistent with the test for economic duress developed in 
those states which have expressly recognized economic duress as grounds for 
avoiding a settlement agreement.

Applied 
Genetics International, Inc. v. First Affiliated Securities, Inc., 912 F.2d 1238, 1242 (10th Cir. 1990). This Court, however, has not directly had the 
opportunity to adopt what is commonly known as the "economic duress" doctrine. 
We take this opportunity now to do so and embrace the three-prong test employed 
by many courts to determine whether economic duress exists. Under this test, 
economic duress occurs when (1) a party involuntarily accepts the terms of 
another, (2) circumstances permit no other alternative, and (3) such 
circumstances are the result of coercive acts of the other party. Zeilinger v. 
Sohio Alaska Petroleum Company, 823 P.2d 653, 657 (Alaska 1992); Totem Marine Tug & Barge, Inc. v. 
Alyeska Pipeline Service Company, 584 P.2d 15, 21 (Alaska 1978). Economic 
duress does not exist, however, unless a person has been the victim of a 
wrongful act and has no reasonable alternative but to agree with the terms of 
another or be faced with a serious financial hardship. Totem Marine Tug & 
Barge, Inc., 584 P.2d  at 21. What constitutes a coercive act or reasonable 
alternative is a question of fact depending upon the circumstances of each case. 
First National Bank of Cincinnati v. Pepper, 454 F.2d 626, 632-33 (2d 
Cir. 1972), appeal after remand, 547 F.2d 708 (2d Cir. 1976); Austin Instrument, 
Inc. v. Loral Corporation, 29 N.Y.2d 124, 324 N.Y.S.2d 22, 24, 272 N.E.2d 533, 
535 (N.Y.Ct.App. 1971). Ordinarily, those people who are claiming coercion are 
attempting to avoid the consequences of a modification or breach of a contract 
or a settlement and release of a contract, as in this case. A person may not 
have a reasonable alternative or remedy when the delay in pursuing the remedy 
would cause immediate or irreparable serious loss or financial ruin. Applied 
Genetics International, Inc., 912 F.2d 1238; Centric Corporation v. 
Morrison-Knudsen Company, 731 P.2d 411 (Okla. 1986).

 [¶10.]  A summary judgment is appropriate when no 
genuine issue of material fact exists to preclude disposition of a case as a 
matter of law. W.R.C.P. 56. A genuine issue of material fact exists when a 
disputed fact, if proved, would have the effect of establishing or refuting an 
essential element of the cause of action or defense asserted by the parties. 
Allmaras v. Mudge, 820 P.2d 533, 535 (Wyo. 1991). The party moving for summary 
judgment bears the initial burden of establishing a prima facie case for a 
summary judgment. If the movant carries this burden, the party opposing the 
summary judgment must come forward with specific facts to demonstrate that a 
genuine issue of material fact does exist. Boehm v. Cody Country Chamber of 
Commerce, 748 P.2d 704, 710 (Wyo. 1987).

 [¶11.]  When the appellees supported their 
motions to dismiss and for a summary judgment with competent evidence that Mr. 
Blubaugh signed a release discharging Schlumberger Well Services and its 
employees from any and all liability for terminating his employment, they 
carried the burden of establishing a prima facie case for a summary judgment. In 
an effort to avoid the effect of the release, Mr. Blubaugh stated in his 
affidavit in opposition to Schlumberger Well Services' motion for a summary 
judgment that (1) the only alternative he had to signing the release was to be 
fired and lose the $4,560.78 additional separation pay and the opportunity to 
have outplacement counseling, (2) he did not have the opportunity to negotiate 
the terms of his release, (3) he was in shock and distraught, (4) he was not 
told that he had a right to file a grievance, and (5) he was not told that he 
had a right to consult with an attorney.

 [¶12.]  After considering the parties' briefs and 
materials submitted in support of and in opposition to the motions, and after 
hearing oral arguments on the motions on two separate occasions, the court found 
and concluded in part:

Defendants' 
actions in offering Plaintiff R. Michael Blubaugh the alternative of resigning 
and executing the Receipt and Release agreement did not rise to such a level 
that Plaintiff R. Michael Blubaugh was deprived of the exercise of his free 
will. To constitute legal duress Plaintiff R. Michael Blubaugh must have acted 
against his will, and have had no other viable alternative. But that was not the 
case. Plaintiff R. Michael Blubaugh could have allowed Defendant Schlumberger to 
fire him and then sought relief from the courts or Plaintiff R. Michael Blubaugh 
could have resigned, obtained the severance pay to which he was entitled in any 
event without signing any release and then sought relief from the 
courts.

     It cannot be 
maintained, and Plaintiffs have not presented any evidence whatsoever, that 
walking away with $31,382.22 as opposed to $35,943.00 placed such an economic 
hardship on Plaintiffs as to obliterate Plaintiff R. Michael Blubaugh's ability 
to exercise his free will. Nor is the fact that Plaintiff R. Michael Blubaugh 
was upset, or in what he terms as shock, a sufficient basis to invalidate the 
receipt and release.

     Plaintiffs' 
allegations of duress as contained in their affidavits simply do not constitute 
duress and are insufficient as a matter of law to invalidate the 
release.

. . . 
.

     With regard to 
Plaintiffs' claim against the co-employee defendant, . . . such co-employee 
defendant was protected by the language of the Receipt and Release agreement and 
pursuant to the provisions of that agreement, Plaintiff R. Michael Blubaugh 
released all claims against the co-employee defendant.

 [¶13.]  Even assuming arguendo that Mr. Blubaugh 
was wrongfully discharged from his employment and that he was coerced into 
signing the receipt and release agreement, circumstances must be present which 
would permit no other alternative to satisfy the third element of economic 
duress. In Totem Marine Tug & Barge, Inc., the Alaska Supreme Court 
held:

     Economic duress does 
not exist, however, merely because a person has been the victim of a wrongful 
act; in addition, the victim must have no choice but to agree to the other 
party's terms or face serious financial hardship. Thus, in order to avoid a 
contract, a party must also show that he had no reasonable alternative to 
agreeing to the other party's terms, or, as it is often stated, that he had no 
adequate remedy if the threat were to be carried out.

584 P.2d  at 22.

 [¶14.]  We agree with the learned and perceptive 
judge who entered the order granting the summary judgment on the basis that the 
appellants failed to present specific facts which rise to the level of economic 
duress sufficient to invalidate the receipt and release agreement. The 
appellants wholly failed to present anything which would in any way indicate 
that, if they did not sign the agreement, they would face such immediate 
financial ruin that they could not seek a remedy to provide redress to them for 
the alleged wrongful termination. The mere fact that an agreement is entered 
into when a person is in shock and distraught is not sufficient to constitute 
economic duress. Emotional distress is not the equivalent of duress. Horgan v. 
Industrial Design Corporation, 657 P.2d 751 (Utah 1982).

 [¶15.]  Mr. Blubaugh also complains that he was 
not told that he had a right to consult with an attorney or negotiate the terms 
of the receipt and release agreement. Negotiations through counsel are not the 
sine qua non of a valid contract, Oglesby v. Coca-Cola Bottling Company of 
Chicago/Wisconsin, 620 F. Supp. 1336, 1343 (N.D.Ill. 1985), nor does the failure 
to be able to negotiate the terms of a release amount to duress. Horgan, 657 P.2d 751. Mr. Blubaugh was not compelled by duress to sign the release against 
his will.

 [¶16.]  The facts of this case are not unlike 
those in Horgan, wherein the Utah Supreme Court stated in its concluding 
remarks, which are applicable in this case:

     To constitute legal 
duress defendant must have acted against his will, and have had no other viable 
alternative. But that was not the case, as plaintiff could have sought relief 
from the courts or perhaps have obtained his termination compensation without 
signing a release. What we apparently have here is someone who was initially 
satisfied with his settlement, but who, upon subsequent reflection, concludes 
that he could have gotten more out of the deal and therefore attempts to renege 
on it. However, it is well settled that the mere fact of an improvident or bad 
bargain or a feeling of latent discontent is not a sufficient basis to avoid the 
effect of an otherwise valid release.

657 P.2d  at 754.

 [¶17.]  We hold that the undisputed material 
facts in the record on appeal do not constitute such duress as to invalidate the 
receipt and release agreement between Mr. Blubaugh and Schlumberger Well 
Services and that the appellees are, therefore, entitled to a summary judgment 
as a matter of law.

 [¶18.]  Affirmed.