Title: Farnum v. Brattleboro Retreat, Inc.

State: vermont

Issuer: Vermont Supreme Court

Document:

FARNUM_V_BRATTLEBORO_RETREAT.94-102; 164 Vt 488; 671 A.2d 1249

[Opinion Filed 22-Nov-1995]

[Motion for Reargument Denied 22-Nov-1995]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                     No. 94-102


Richard R. Farnum, Jr.                                 Supreme Court

                                                       On Appeal from
    v.                                                 Windham Superior Court

Brattleboro Retreat, Inc.                              September Term, 1995



Richard W. Norton, J.

       Herbert G. Ogden, Jr., of Harlow Liccardi & Crawford, P.C., Rutland,
  for plaintiff-appellee

       David A. Gibson, Brattleboro, June K. Mills, Guilford (On the Brief)
  and Richard T. Cassidy of Hoff, Curtis, Pacht, Cassidy and Frame, P. C.,
  Burlington, for defendant-appellant


PRESENT:  Allen, C.J., Dooley, Morse and Johnson, JJ., and Skoglund, D.J.,
          Specially Assigned

       ALLEN, C.J.   Defendant Brattleboro Retreat, Inc. appeals a jury
  verdict awarding plaintiff Richard Farnum, Jr. damages for wrongful
  discharge, intentional infliction of emotional distress, and quantum
  meruit.  The Retreat argues that (1) as a matter of law, the Retreat's
  employee handbooks did not create an implied employment contract obliging
  the Retreat either to follow certain progressive disciplinary steps or to
  fire plaintiff only for serious misconduct; (2) the court erred in
  permitting the jury to substitute its judgment for that of the Retreat as
  to whether plaintiff had committed serious misconduct; (3) there was
  insufficient evidence to support the jury's determination that plaintiff
  was not fired for cause; (4) as a matter of law, plaintiff failed to show
  that the Retreat's conduct in firing him was extreme and outrageous; (5)
  the jury failed to follow the court's instructions regarding plaintiff's
  quantum meruit claim; (6) the verdict should be reversed because of juror
  misconduct; and (7) the trial court erred in awarding interest on the
  damages from the date of the filing of plaintiff's complaint.  We reverse

 

  the jury award for intentional infliction of emotional distress; in
  all other respects, we affirm the verdict.

                                         I.

       Plaintiff began part-time work at the Retreat in 1972 when he was
  seventeen years old. In 1980, he transferred from the engineering
  department to the boiler room to become Lead Power Technician, a position
  he held until he was discharged in 1988.  Sometime in 1984, at the
  suggestion of his supervisor, plaintiff bought a small dump truck, which he
  leased to the Retreat for various jobs.  Over the ensuing years, this
  sideline became a lucrative business for plaintiff, involving an
  ever-growing number of trucks and other equipment.  While plaintiff
  continued to receive a salary at the Retreat and to obtain private jobs
  involving his trucking company, the Retreat paid him over one-half million
  dollars between 1984 and 1988 for the use and rental of his equipment.

       In October 1987, an upper-level manager at the Retreat, Richard Sarle,
  observed plaintiff supervising a Retreat employee, who was operating
  Retreat equipment to dig a foundation for the new home of the Retreat's
  Chief Executive Officer (CEO), Dr. William Beach, Jr.  Sarle immediately
  called plaintiff's direct supervisor, Ralph Pecorrelli, who then went to
  the work-site and told plaintiff and the other Retreat employee to cease
  what they were doing.  Shortly after the incident, Sarle sent plaintiff the
  following memorandum:

     On Tuesday I was very disappointed to observe a hospital
     employee and hospital bucket loader being utilized on Upper
     Dummerston Road to dig a portion of the foundation hole for Dr.
     Beach's new home.

     . . . .

     It is very important that employees know that there is a separation
     between hospital projects and private personal projects.

     I informed Ralph of this problem and he has assured me that you
     were informed to stop and use your own equipment and own
     employee.

     Such confusion cannot continue as it should be perfectly clear that

 

     Retreat employees are not to do private work while being paid by
     the Retreat.  If this continues it would be grounds for disciplinary
     action.

       The next day, plaintiff wrote Sarle a letter stating that the Retreat
  employee was on his lunch hour and that plaintiff had never charged the
  Retreat for its use of his bucket loader, which at the time of the incident
  was being operated at the Retreat gravel pit.  Sarle then checked the
  Retreat records and noted that plaintiff had billed the Retreat for a full
  day's use of the equipment he had seen at the site of Dr. Beach's new home. 
  Confronted with this information, plaintiff's wife wrote Sarle a letter
  stating that she had erred in billing the Retreat rather than Dr. Beach;
  accordingly, she refunded $575 to the Retreat.

       In November 1987, Sarle wrote a memorandum to Dr. Beach detailing the
  above facts and recommending that plaintiff be placed on probation for six
  to nine months, and that the Retreat terminate its relationship with
  plaintiff's trucking company.  As Sarle testified at trial, Dr. Beach
  decided not to follow through on Sarle's recommendation.  The following
  year, Dr. Beach's ties to the Retreat were severed, and Sarle took over as
  the Retreat's CEO in August 1988.

       In February 1988, a new employee, Frank Johnson, was hired to work
  directly under plaintiff at the Retreat.  According to his trial testimony,
  Johnson became very uncomfortable working for plaintiff because, on a
  number of occasions, plaintiff had Johnson do plaintiff's private work on
  Retreat time.  Johnson eventually reported these incidents, and in November
  1988, three months after Sarle took over as CEO, plaintiff was fired for
  misuse of Retreat resources.

       In April 1991, plaintiff sued the Retreat, claiming damages for
  wrongful discharge, intentional infliction of emotional distress, and
  quantum meruit for the loan of a tank truck. Following a six-day trial, the
  jury awarded plaintiff $90,000 on the wrongful discharge claim, $50,000 on
  the intentional-infliction-of-emotional-distress claim, and $5850 on the
  quantum meruit claim.  Defendant now appeals the judgment order entered
  upon the jury's verdict and the court's refusal to grant his motions for
  judgment notwithstanding the verdict and for new trial.

 

                                        II.

       The Retreat first challenges the jury's award on plaintiff's wrongful
  discharge claim.  In response to the court's special interrogatories, the
  jury found that (1) an employment contract arose between plaintiff and the
  Retreat; (2) the employment was on an at-will basis; (3) the employment was
  modified so that the Retreat was not permitted to discharge plaintiff
  without good cause; (4) the Retreat did not fire plaintiff for good cause;
  and (5) as a result of his termination, plaintiff suffered damages in the
  amount of $90,000.

                                     A.

       The Retreat argues that the court erred in permitting the jury to find
  that the Retreat's handbook provisions, which included disclaimers in the
  two most recent handbooks, created an employment contract that required the
  Retreat either to fire plaintiff only for serious misconduct or to issue a
  series of warnings before firing him for lesser misconduct or for poor
  performance.

       Three handbooks were admitted into evidence at trial.  Under the
  heading, "Performance Problems," the 1982 handbook states as follows:

     If after a reasonable time your performance does not improve, or
     if you have violated a Retreat rule or regulation, in most cases you
     are given a verbal warning.  Continuing failure to improve, or
     subsequent violations, result in written warnings.  Three written
     warnings are considered cause for dismissal.  Cases of serious
     misconduct may call for immediate action, including the possibility
     of termination, without the above process of counseling and
     warnings.

       Under the same heading, the 1986 handbook states as follows:

     In most cases, a system of progressive warnings is used.  You
     will usually receive an oral warning.  Continuing failure to
     improve, or subsequent violations, result in written warnings.
     Three written warnings will result in dismissal.

     In some cases, you may be placed on probation with or without
     previous warnings.  Probation is for a specified length of time
     during which you'll have the opportunity to improve your
     performance.  An employee on probation may be terminated
     without warning.

     Cases of serious misconduct or poor performance call for

 

     immediate action, including the possibility of termination, without
     the above warning process.

  This handbook then provides "examples of some, but not all, conduct
  which may subject [an employee] to disciplinary action, including
  suspension with or without pay, or immediate discharge."  One of the
  examples provided is the misappropriation, misuse, or destruction of
  Retreat supplies, material, or equipment.  In the same section, the
  handbook states: "All judgments about termination are made at the Retreat's
  discretion."

       In another section entitled "Employment," under a subheading entitled
  "Employment At Will," the 1986 handbook states that "[a]ll employment is at
  will," and that "termination may occur by either party at any time."  The
  1988 handbook includes essentially the same relevant provisions as those
  contained in the 1986 handbook.  Plaintiff signed acknowledgments for both
  the 1986 and 1988 handbooks stating that (1) he had received a copy of the
  handbook, (2) he understood that he was responsible for becoming familiar
  with its contents, and (3) he understood "that the Handbook does not
  constitute a contract of employment."

       Plaintiff surmises that the jury probably relied on the 1982 handbook
  in finding that his at-will employment had been modified to require good
  cause for termination.  He argues that such reliance is justified because
  the Retreat failed to prove that it provided additional consideration for
  the disclaimers added to the later handbooks, or that plaintiff consented
  to modification of the employment contract embodied in the 1982 handbook. 
  Plaintiff also argues that, even if the later handbooks apply, the
  disclaimers they contain are not sufficiently conspicuous to alter the
  implied employment contract he had with the Retreat.  The Retreat contends
  that, as a matter of law, the later handbooks apply and effectively
  disclaim any implied contract created by the provisions contained therein. 
  Thus, according to the Retreat, the court erred by allowing the jury even
  to consider whether the handbooks created an implied employment contract.

       Given the contents of the handbook provisions, we conclude that it
  was, at best from the

 

  Retreat's perspective, a jury question as to whether the handbooks
  created an implied contract. Assuming the later handbooks apply, see In re
  Certified Question,