Case Title: GATES v LIFE OF MONTANA INS CO

Citation: 

Docket Number: 81-219

State: montana

Court: Montana Supreme Court

Date: 1982-01-05T00:00:00Z

Document:
No. 81-219 IN TEE SUPREME COURT OF THE STATE OF MONTANA 1981 MARLENE S. GATES, Plaintiff and Appellant, LIFE OF MONTANA INSURANCE COMPANY, a Montana Corporation, Defendant and Respondent. Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin Honorable W . W. Lessley, Judge presiding. Counsel of Record: For Appellant: Wellcome and Frost, Bozeman, Montana A1 Frost argued, Bozeman, Montana For Respondent: Landoe, Brown, Planalp, Kommers & Lineberger, Bozeman, Montana Gene I. Grown argued, Bozeman, Montana Submitted: September 23, 1981 Decided : JRN ti ?!B2 Filed: M r . Chief J u s t i c e Frank I. H a s w e l l d e l i v e r e d t h e Opinion of t h e C o u r t . Marlene G a t e s a p p e a l s from a summary judgment e n t e r e d by t h e District C o u r t , G a l l a t i n County, i n f a v o r of L i f e of Montana I n s u r a n c e Co., on h e r claims f o r r e l i e f a r i s i n g from t h e ter- m i n a t i o n of h e r employment. Gates commenced employment as a c a s h i e r w i t h d e f e n d a n t on J u l y 29, 1976, under an oral c o n t r a c t of i n d e f i n i t e d u r a t i o n . On October 1 9 , 1979, Gates was c a l l e d i n to meet w i t h h e r s u p e r v i s o r , Roger Syverson, and w i t h o u t p r i o r warning s h e was g i v e n t h e o p t i o n of r e s i g n i n g or being f i r e d . She a l l e g e s t h a t w h i l e i n a d i s t r a u g h t c o n d i t i o n and under d u r e s s s h e signed a l e t t e r of r e s i g n a t i o n which was handed t o h e r by Syverson. She t h e n went home and d i s c u s s e d t h e s i t u a t i o n w i t h h e r husband who a d v i s e d h e r t o g e t t h e l e t t e r back and to t e l l Syverson t h a t she was n o t r e s i g n i n g . Gates states t h a t she immediately c a l l e d Syverson and demanded t h e l e t t e r be r e t u r n e d and t h a t he promised t o do so. H e r a t t o r n e y also s e n t a letter demanding a r e t u r n of t h e letter of r e s i g n a t i o n . I n h i s d e p o s i t i o n , Syverson denied t h a t Gates or h e r a t t o r n e y demanded a r e t u r n of t h e l e t t e r . H e t e s t i f i e d t h a t G a t e s r e q u e s t e d a photocopy of t h e l e t t e r . When Gates a p p l i e d f o r unemployment compensation b e n e f i t s , h e r claim was denied on t h e ground t h a t she v o l u n t a r i l y r e s i g n e d . She a l l e g e s t h a t r e s p o n d e n t ' s a c t i o n s i n o b t a i n i n g t h e letter of r e s i g n a t i o n from h e r by d u r e s s and f a i l i n g to r e t u r n t h e l e t t e r upon demand w r o n g f u l l y d e p r i v e d h e r of unemployment b e n e f i t s . The r e s p o n d e n t i s s u e d an employee handbook i n ~ u l y or August, 1978, which included a s e c t i o n on d i s c h a r g e of employees as f o l l o w s : "The v i o l a t i o n of c e r t a i n r u l e s of conduct are [ s i c ] s u b j e c t t o reprimand or d i s m i s s a l w i t h p r i o r warning. Such in£ r a c t i o n s i n c l u d e : "1. C a r e l e s s n e s s " 2. Incompetency " 3 . I n s u b o r d i n a t i o n " 4. I r r e g u l a r a t t e n d a n c e " 5. Continued t a r d i n e s s "Dismissal w i t h o u t p r i o r warning : "1. Dishonesty " 2 . D i s c l o s u r e of con£ i d e n t i a l i n f o r m a t i o n .I1 Respondent's r e p r e s e n t a t i v e s t e s t i f i e d t h a t Gates was n o t g u i l t y o f d i s h o n e s t y or d i s c l o s u r e of con£ i d e n t i a l i n f o r m a t i o n , b u t t h a t s h e was careless, incompetent, i n s u b o r d i n a t e , and e x c e s s i v e l y a b s e n t . Gates t e s t i f i e d she was t o l d h e r a t t i t u d e w a s bad b u t t h a t s h e was never t o l d h e r performance was s u b s t a n d a r d or t h a t s h e would be t e r m i n a t e d i f she d i d n o t improve. Syverson t e s t i f i e d t h a t he had informed Gates a t an eva- l u a t i o n meeting i n A p r i l or May of 1979 t h a t she was t o o slow, s h e had a bad a t t i t u d e and s h e was n o t g e t t i n g along w i t h o t h e r s . H e s t a t e d t h a t he d i d n o t warn h e r t h a t she would be f i r e d i f s h e d i d n o t improve, b u t he r e p e a t e d l y t o l d h e r s h e needed to improve. J o b e v a l u a t i o n forms i n d i c a t e h e r performance was f a i r to poor i n a l l c a t e g o r i e s r a t e d . Syverson t e s t i f i e d t h a t t h e meeting on October 19 was calm and unemotional and t h a t Gates d i d n o t a p p e a r u p s e t . Gates t e s t i f i e d t h a t she was " r a t h e r d i s t u r b e d " and "kind o f i n shock." She s t a t e d t h a t she signed t h e letter of r e s i g n a - t i o n because s h e t h o u g h t it would be b e t t e r f o r h e r r e c o r d and because Syverson t o l d h e r he would g i v e h e r a l e t t e r of recommendation. Syverson t e s t i f i e d t h a t a l l he would s a y i n t h e l e t t e r of recommendation would be t h a t Gates was employed t h e r e f o r t h r e e y e a r s . Employees of r e s p o n d e n t p a r t i c i p a t e d i n a r e t i r e m e n t pen- s i o n p l a n by which each employee c o n t r i b u t e d a c e r t a i n p e r c e n t of h i s s a l a r y . B e n e f i t s v e s t e d a f t e r t h e employee completed f o u r y e a r s of s e r v i c e w i t h t h e r e s p o n d e n t . I f an employee l e f t t h e com- pany p r i o r to t h a t , h i s c o n t r i b u t i o n s were shared among t h e s u r - v i v i n g employees. Gates a l l e g e s t h a t t h e r e s p o n d e n t wrong f u l l y d e p r i v e d h e r of r e t i r e m e n t b e n e f i t s . Gates f i l e d h e r o r i g i n a l c o m p l a i n t on December 6, 1979, a l l e g i n g t h a t she had been w r o n g f u l l y d i s c h a r g e d from h e r employment w i t h L i f e of Montana and s e e k i n g damages under s e v e r a l t h e o r i e s . The r e s p o n d e n t ' s motion f o r summary j udgment was o r i g i - n a l l y d e n i e d by t h e t r i a l c o u r t , b u t a f t e r a second amended c o m p l a i n t w a s f i l e d t h e renewed motion was g r a n t e d . E i g h t claims f o r r e l i e f were d e t a i l e d i n t h e second amended c o m p l a i n t , as f o l l o w s : 1) b r e a c h of employment c o n t r a c t , breach of implied cove- n a n t of good f a i t h and f a i r d e a l i n g ; and t h e tort of wrongful d i s c h a r g e ; 2 ) v i o l a t i o n of Employee R e t i r e m e n t Income S e c u r i t y A c t of 1974, 29 U.S.C. $ 1 0 0 l r e t seq.; 3 ) i n t e n t i o n a l in£ l i c t i o n of emotional d i s t r e s s ; 4 ) v i o l a t i o n of s e c t i o n 39-2-503, MCA, b y f a i l i n g to g i v e n o t i c e p r i o r to d i s c h a r g e ; 5 ) v i o l a t i o n of s e c t i o n 39-51-3204, MCA, by f a i l i n g to d i s c l o s e material f a c t s to t h e Unemployment Compensation D i v i s i o n ; 6 ) f r a u d and d e c e i t i n p r o c u r i n g t h e letter of r e s i g n a t i o n ; 7 ) v i o l a t i o n of s e c t i o n 28-1-201, MCA; 8 ) f r a u d and d e c e i t i n f a i l i n g to r e t u r n t h e letter of r e s i g n a t i o n . The t r i a l c o u r t found t h a t Gates had f a i l e d to show any v i o l a t i o n of p u b l i c p o l i c y to s u p p o r t h e r a c t i o n f o r wrongful d i s c h a r g e , c i t i n g K e n e a l l y v. Orgain ( 1 9 8 0 ) , Mont . I 606 P.2d 127, 37 St.Rep. 154. The i s s u e on a p p e a l is whether t h e t r i a l c o u r t e r r e d i n g r a n t i n g summary judgment i n f a v o r of t h e r e s p o n d e n t on a l l claims. A motion f o r summary judgment is p r o p e r l y g r a n t e d i f t h e r e are no genuine i s s u e s of material f a c t and t h e movant is e n t i t l e d t o judgment as a matter of l a w . Rule 5 6 ( ~ ) , M.R.Civ.P. While t h e i n i t i a l burden is on t h e movant, t h e burden s h i f t s where t h e r e c o r d d i s c l o s e s no genuine i s s u e s of material f a c t . The p a r t y opposing t h e motion must t h e n p r e s e n t s p e c i f i c f a c t s r a i s i n g a f a c t u a l i s s u e . Rule 56 ( e ) , M.R.Civ. P. Conclusory or s p e c u l a t i v e s t a t e m e n t s are i n s u f f i c i e n t and t h e trial c o u r t h a s no d u t y to a n t i c i p a t e p o s s i b l e p r o o f . Barich v. O t t e n s t r o r ( 1 9 7 6 ) , 170 Mont. 38, 550 P.2d 395; Harland v. Anderson ( 1 9 7 6 ) , 169 Mont. 447, 548 P.2d 613. Each of t h e a p p e l l a n t ' s claims f o r r e l i e f must be exa- mined i n t h e l i g h t of t h e above r u l e s . A t t h e o u t s e t it must be noted t h a t i n t h i s case a l l of Gates' t h e o r i e s f o r r e c o v e r y depend upon an i n v o l u n t a r y ter- m i n a t i o n of employment. The employer m a i n t a i n s t h a t she volun- t a r i l y r e s i g n e d . Thus t h e r e is a t h r e s h o l d f a c t u a l i s s u e which s h o u l d be submitted to a j u r y or f a c t f i n d e r . Molinar v. Western E l e c t r i c Co. (1st C i r . 1 9 7 5 ) , 525 F.2d 521, c e r t . d e n i e d 424 U.S. 978; and P i e r c e v. Ortho p h a r m a c e u t i c a l Corp. ( 1 9 8 0 ) , 84 N.J. 58, 417 A.2d 505. For h e r f i r s t claim, Gates a l l e g e s t h a t h e r t e r m i n a t i o n was wrongful i n t h a t t h e employer breached t h e c o n t r a c t u a l t e r m s of h e r employment as set f o r t h i n t h e employee handbook or t h a t t h e employer breached t h e implied covenant of good f a i t h and f a i r d e a l i n g c o n t a i n e d i n h e r c o n t r a c t of employment. The r e s p o n d e n t i s s u e d an employee handbook which s t a t e d t h a t p r i o r to d i s m i s s a l f o r u n s a t i s f a c t o r y performance a warning would be g i v e n to t h e employee. There are f a c t u a l d i s p u t e s as to whether t h e conduct of t h e employer p r i o r to Gatest t e r m i n a t i o n c o n s t i t u t e d a p r i o r warning and whether G a t e s w a s terminated f o r t h e c a u s e s included i n t h e employee handbook. I f t h e employer f a i l e d to f o l l o w its employee handbook, d o e s t h i s f a i l u r e g i v e rise to a c l a i m f o r r e l i e f ? The employee handbook w a s n o t d i s t r i b u t e d u n t i l a b o u t t w o y e a r s a f t e r Gates w a s h i r e d . It c o n s t i t u t e d a u n i l a t e r a l state- ment of company p o l i c i e s and p r o c e d u r e s . Its terms were n o t b a r g a i n e d f o r , and t h e r e was no meeting of t h e minds. The p o l i - cies may be changed u n i l a t e r a l l y a t any t i m e . The employee hand- book was n o t a p a r t of Gates1 employment c o n t r a c t a t t h e t i m e s h e w a s h i r e d , n o r could it have been a m o d i f i c a t i o n to h e r c o n t r a c t because t h e r e was no new and independent c o n s i d e r a t i o n f o r its terms. S e c t i o n 28-1-1601, MCA; Reiter v. Yellowstone Co. ( 1 9 8 1 ) , Mont. , 627 P.2d 845, 38 St.Rep. 686. An employee hand- book d i s t r i b u t e d a f t e r t h e employee is h i r e d does not become a p a r t of t h a t employee's c o n t r a c t . Johnson v. N a t i o n a l Beef packing Co. ( 1 9 7 6 ) , 220 Kan. 52, 551 P.2d 779. T h e r e f o r e t h e handbook r e q u i r e m e n t of n o t i c e p r i o r to t e r m i n a t i o n is n o t e n f o r - c e a b l e a s a c o n t r a c t r i g h t . Gates n e x t c o n t e n d s t h a t h e r employer owed h e r a d u t y to act i n good f a i t h w i t h r e s p e c t t o h e r d i s c h a r g e . The d o c t r i n e of i m p l i e d covenant of good f a i t h i n employment c o n t r a c t s h a s been n e i t h e r adopted n o r r e j e c t e d by t h i s Court, a l t h o u g h it w a s d i s c u s s e d i n R e i t e r v. Yellowstone County, s u p r a . Reiter is d i s t i n g u i s h a b l e i n t h a t t h e i s s u e t h e r e was whether an employee a t w i l l had a p r o p e r t y i n t e r e s t i n c o n t i n u e d employment and was e n t i t l e d to p r o c e d u r a l due p r o c e s s p r i o r to t e r m i n a t i o n . In Reiter we d i d n o t reach o r d e c i d e t h e i s s u e p r e s e n t e d h e r e . A g e n e r a l p r i n c i p l e of good f a i t h and f a i r d e a l i n g h a s been r e c o g n i z e d i n commercial t r a n s a c t i o n s by t h e Uniform Commercial Code, s e c t i o n 30-1-203 MCA, and i n i n s u r a n c e c o n t r a c t s , F i r s t S e c u r i t y Bank of Bozeman v. Goddard ( 1 9 7 9 ) , 1 8 1 Mont. 407, 593 P.2d 1040. Recent d e c i s i o n s i n o t h e r j u r i s d i c t i o n s lend s u p p o r t t o t h e p r o p o s i t i o n t h a t a covenant of good f a i t h and f a i r d e a l i n g is implied i n employment c o n t r a c t s . Fortune v. N a t i o n a l Cash R e g i s t e r Co. ( 1 9 7 7 ) , 373 Mass. 96, 364 N.E.2d 1251; Monge v. Beebe Rubber Co. ( 1 9 7 4 ) , 114 N.H. 130, 316 A.2d 549. These cases emphasize t h e n e c e s s i t y of b a l a n c i n g t h e i n t e r e s t s of t h e employer i n c o n t r o l l i n g h i s work f o r c e w i t h t h e i n t e r e s t s of t h e employee i n job s e c u r i t y . I n adopting t h e d o c t r i n e of good f a i t h i n employment c o n t r a c t s t h e c o u r t s d i d n o t seek t o i n f r i n g e upon t h e i n t e r e s t s of t h e employer, b u t recognized t h a t : " . . . an employer is e n t i t l e d to be motivated b y and t o s e r v e its own l e g i t i m a t e b u s i n e s s i n t e r e s t s ; t h a t an employer must have wide l a t i - t u d e i n d e c i d i n g whom it w i l l employ i n t h e f a c e of t h e u n c e r t a i n t i e s of t h e b u s i n e s s world; and t h a t an employer needs f l e x i b i l i t y i n t h e f a c e o f changing c i r c u m s t a n c e s ." Fortune v. N a t i o n a l Cash R e g i s t e r C o . , s u p r a , 364 N.E.2d a t 1256. Y e t t h e employee is e n t i t l e d to some p r o t e c t i o n from i n j u s t i c e . The c i r c u m s t a n c e s of t h i s case are t h a t t h e employee e n t e r e d i n t o an employment c o n t r a c t t e r m i n a b l e a t t h e w i l l of e i t h e r p a r t y a t any t i m e . The employer later promulgated a hand- book of p e r s o n n e l p o l i c i e s e s t a b l i s h i n g c e r t a i n p r o c e d u r e s w i t h r e g a r d to t e r m i n a t i o n s . The employer need n o t have done so, b u t presumably sought to s e c u r e an o r d e r l y , c o o p e r a t i v e and l o y a l work f o r c e by e s t a b l i s h i n g uniform p o l i c i e s . The employee, having f a i t h t h a t s h e would be t r e a t e d f a i r l y , then developed t h e peace of mind a s s o c i a t e d w i t h job s e c u r i t y . I f t h e employer h a s f a i l e d t o f o l l o w its own p o l i c i e s , t h e peace of mind of its employees is s h a t t e r e d and an i n j u s t i c e is done. W e hold t h a t a covenant of good f a i t h and f a i r d e a l i n g was implied i n t h e employment c o n t r a c t of t h e a p p e l l a n t . There remains a genuine i s s u e of material f a c t which p r e c l u d e s a sum- mary judgment, i.e. whether t h e respondent f a i l e d to af f o r d a p p e l l a n t t h e p r o c e s s r e q u i r e d and i f so, whether t h e r e s p o n d e n t t h e r e b y breached t h e covenant of good f a i t h and f a i r d e a l i n g . A s to a l l o t h e r claims a g a i n s t t h e r e s p o n d e n t , however, summary j udgment was p r o p e r l y e n t e r e d . The ~ i s t r ict Court c o r r e c t l y concluded t h a t a p p e l l a n t ' s claim i n tort f o r wrongf u l d i s c h a r g e is unsupported by any showing of a v i o l a t i o n of p u b l i c p o l i c y as r e q u i r e d under K e n e a l l y v. O r g a i n , s u p r a . The c o m p l a i n t f u r t h e r a l l e g e d t h a t t h e r e s p o n d e n t v i o l a t e d t h e p r o v i s i o n s of t h e Employee R e t i r e m e n t Income S e c u r i t y A c t of 1974, 29 U.S.C. S 1001 e t s e q . , by i n t e r f e r i n g w i t h o r p r e v e n t i n g t h e e x e r c i s e of h e r r i g h t s under t h e r e p o n d e n t ' s r e t i r e m e n t p l a n . Under t h e terms of t h e p l a n , a t t h e t i m e of h e r t e r m i n a t i o n a p p e l l a n t had no v e s t e d r i g h t s i n r e t i r e m e n t b e n e f i t s . A p p e l l a n t a r g u e s t h a t a f a c t u a l i s s u e e x i s t s as to whether she was d i s c h a r g e d i n o r d e r to p r e v e n t h e r from o b t a i n i n g h e r b e n e f i t s , p o i n t i n g o u t t h a t t h e amounts she paid i n t o t h e p l a n would a c c r u e t o o t h e r employees and p r i m a r i l y t o t h e p r e s i d e n t of t h e company. However, she h a s p r e s e n t e d no e v i d e n c e from which an i n f e r e n c e may r e a s o n a b l y be drawn t h a t t h e employer d i s c h a r g e d h e r w i t h an i n t e n t o r motive to d e p r i v e h e r of b e n e f i t s . H e r claim for coer- c i v e i n t e r f e r e n c e under 29 U.S.C. § 1141 is p u r e l y s p e c u l a t i v e and c o n j e c t u r a l w i t h o u t any e v i d e n t i a r y f o u n d a t i o n . Gates' c l a i m f o r i n t e n t i o n a l in£ l i c t i o n of emotional d i s t r e s s must also f a i l . The u n c o n t r a d i c t e d f a c t s show t h a t s h e was " r a t h e r d i s t u r b e d " and "kind of i n shock." Under any known s t a n d a r d t h e s e a l l e g a t i o n s are i n s u f f i c i e n t to e n t i t l e h e r to r e c o v e r . K e l l y v. Lowney & W i l l i a m s , Inc. ( 1 9 4 2 ) , 1 1 3 Mont. 385, 126 P.2d 486; Helton v. Reserve L i f e I n s u r a n c e Co. (D.Mont., A p p e l l a n t a r g u e s t h e r e s p o n d e n t v i o l a t e d s e c t i o n 39-2-503, MCA, b y f a i l i n g to g i v e n o t i c e p r i o r to t e r m i n a t i o n . That s t a t u t e , however, d o e s n o t r e q u i r e p r i o r n o t i c e . Reiter v. Yellowstone Co . , s u p r a . W e need n o t d i s c u s s i n d e t a i l t h e o t h e r c l a i m s f o r r e l i e f which are l i s t e d above. The a p p e l l a n t f a i l e d to meet h e r burden o f p r e s e n t i n g e v i d e n c e which raises a g e n u i n e i s s u e of material f a c t f o r d e t e r m i n a t i o n a t a t r i a l . The summary judgment is a£ firmed i n p a r t and r e v e r s e d i n p a r t and t h e c a s e is remanded f o r f u r t h e r p r o c e e d i n g s i n accor- d a n c e w i t h t h i s o p i n i o n . Chief J u s t i c e W e concur: /"\ J u s t i c e Fred J. Weber s p e c i a l l y concurs: I concur with t h e holding of t h e foregoing majority opinion i n a l l r e s p e c t s . In a d d i t i o n , I would p o i n t o u t t h a t i n t h e course of f u r t h e r proceedings t h e employee handbook would be properly admissible a s evidence t o be considered in determining whether t h e respondent had breached t h e covenant of good f a i t h and f a i r dealing owing t o t h e a p p e l l a n t . J u s t i c