Title: Jewell v. North Big Horn Hosp. Dist.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Jewell v. North Big Horn Hosp. Dist.1998 WY 11953 P.2d 135Case Number: 97-6Decided: 02/02/1998Supreme Court of Wyoming

Diane 
JEWELL, Appellant (Plaintiff),

v.

NORTH BIG HORN HOSPITAL DISTRICT, by and through its 
Board of Trustees; and Kent Kellersberger, Appellees 
(Defendants).

 

Appeal from the District Court, Big Horn County, 
Leonard McEwan, J.

 

S. Joseph Darrah and Joseph 
E. Darrah of Darrah & Darrah, P.C., Powell, for 
Appellant.

Michael K. Davis of Yonkee 
& Toner, Sheridan, for Appellees.

 

Before TAYLOR, C.J., and 
THOMAS, MACY, GOLDEN and LEHMAN, JJ. 

 

GOLDEN, Justice.

 [¶1] Appellant Diane Jewell was terminated from her 
position with Appellee North Big Horn Hospital District (hospital) and brought 
suit alleging contract and tort claims. The district court granted summary 
judgment to the hospital.

 

[¶2] We reverse in part and 
affirm in part.

 

ISSUES

 

[¶3] Jewell presents these 
issues for our review:

 

A. Was there a material question of fact as to 
whether an employment handbook disclaimer dated August 13, 1993 was promulgated 
during appellant's employment.

 

B. Was the purported disclaimer of the employee 
handbook dated August 13, 1993 valid as a matter of law.

 

C. Did the lower court err in dismissing the [claim 
of] breach of covenant of good faith and fair dealing.

 

D. Did the lower court err in dismissing the 
appellant's invasion of privacy claims.

 

          
E. Did the court err in dismissing the appellant's claim of the tort of 
deceit.

 

F. Did appellant present valid governmental claims in 
regard to the appellant's tort claims for deceit, breach of covenant of good 
faith and fair dealing and invasion of privacy.

 

G. Was appellant unfairly prejudiced by allowing 
appellee to assert the doctrine espoused in Mariano & Associates, P.C. v. 
Board of County Com'rs. of Sublette County, 737 P.2d 323 (Wyo. 1987) in its 
reply brief without giving appellant a full opportunity to present full evidence 
to establish issues of material fact.

 

[¶4] The hospital presents 
these issues:

 

1. Was the disclaimer involved in this case valid and 
enforceable as a matter of law, and more specifically:

 

a. 
Did the hospital have the legal right to modify or terminate an agreement of 
indefinite duration upon reasonable notice, without additional monetary 
consideration?

 

b. 
Did the disclaimer comply with the legal requirements of prominence and 
conspicuousness imposed by this Court?

 

2. If the Court determines that consideration is 
required for an employer to materially change its 
handbook:

 

a. 
Does the rule of Mariano and Associates apply where a decision to modify a 
handbook distributed during the term of a previous Board of Trustees was made by 
the hospital's CEO and Human Resources Director?

 

b. 
If the Mariano rule applies in this case, was Appellant prejudiced by the fact 
that the issue was not raised before Appellees' summary judgment reply 
brief?

 

3. Was there any genuine issue of material fact in 
the record as to whether Appellant actually received a disclaimer which caused 
her to be an at-will employee before the events leading to her 
resignation?

 

4. Did the trial court err in granting summary 
judgment on Appellant's claim for breach of an implied covenant of good faith 
and fair dealing when she was allowed to resign in order to obtain benefits that 
she would otherwise have lost through termination?

 

5. Did the trial court err in granting summary 
judgment on Appellant's "deceit" claim:

 

          
              
a. On the undisputed facts?

 

          
              
b. Under the Governmental Claims Act?

 

6. Regardless of the Court's decision concerning the 
hospital's liability, was there any factual basis for a claim against Appellee 
Kellersberger?

 

FACTS

 

[¶5] Until she was given a 
choice to resign or be discharged, Jewell worked at the hospital for thirty 
years without incident. Her last position was as laboratory director at the 
hospital which includes a nursing home. As a long term employee, she received 
high pay and benefits and, as a key employee, was subjected to a high call-back 
rate which resulted in overtime pay and generously increased her pay. Because of 
budgetary problems, Jewell's overtime and her requests for a scheduled raise had 
caused a conflict between her and Chief Executive Officer Kellersberger who had 
begun work at the hospital in April of 1993. Her overtime had also been the 
subject of discussion among Kellersberger's management team which viewed it as 
excessive and unwarranted. Jewell's employment was terminated on September 1, 
1993.

 

[¶6] Jewell brought suit 
against the hospital alleging that she had been fired from her position under 
the false pretext of patient abuse.  
The basis of this accusation was an incident which occurred on August 27, 
1993, when Jewell was in the nursing home drawing blood from a combative 
Alzheimer's patient being restrained by two nurse's aides. The blood was drawn 
from the patient in a room containing a whirlpool tub which remained on during 
the blood drawing procedure. The patient was seated in an elevated chair which 
placed her head above Jewell's. As Jewell withdrew the needle and began to place 
a cotton ball over the injection site, the patient leaned down and spit in 
Jewell's face. Jewell raised her hand to wipe away the spit and made contact 
with the patient's face.

 

[¶7] A nurse and the nurse 
aids gave statements that Jewell struck the patient. The nurse, Karen Anderson, 
reported the incident to management, and an intensive investigation followed. 
Jewell denied intentionally striking the patient and explained that contact 
occurred when she raised her hand to wipe away the spit while the patient 
thrashed about in the chair. Three other employees reported that Jewell admitted 
to slapping the patient. Jewell acknowledges the conversations occurred but 
denies that she admitted to patient abuse. Jewell was suspended until all of the 
statements were reviewed by Kellersberger.  
Kellersberger decided to terminate Jewell's employment unless she 
resigned. Following a conversation with the directors of personnel and nursing, 
Jewell decided to resign believing that a resignation would preserve her 
unblemished employment record, unemployment benefits, payment for all of her 
sick leave and other fringe benefits. Shortly afterwards, the nurse who reported 
the incident, Karen Anderson, was heard telling the new lab manager that he had 
her to thank for his job because she had gotten rid of Jewell. Others inside and 
outside of the hospital became aware that Jewell's employment had been 
terminated for patient abuse. Jewell was reported to a state agency for patient 
abuse. During discovery in this litigation, Jewell determined that other 
incidents involving allegations of patient mistreatment against other hospital 
personnel, many of which were serious, were handled according to a progressive 
disciplinary procedure.

 

[¶8] An employee handbook 
which the parties have agreed applies to Jewell was issued in 1989. It 
distinguishes between probationary and regular employees, advising that a 
probationary employee's employment may be terminated for any reason and advising 
that for regular employees, a disciplinary procedure existed which would 
progress from verbal warning to written warning, and then 
to

termination. The hospital 
claims that it issued a disclaimer to this handbook in August of 1993 which 
effectively modified Jewell's employment to an at-will status. Jewell and other 
employees dispute that the disclaimer was issued.

 

[¶9] Jewel claims that she 
resigned in exchange for Kellersberger's promise that the accusations would 
remain confidential and her professional reputation would be protected. She 
brought suit claiming breach of her employment contract and tort violations 
based upon the breach of promises made in exchange for her resignation. The 
district court granted summary judgment to the hospital, and this appeal 
followed.

 

DISCUSSION

 

 Employment Status

 

[¶10] In Wyoming, employment 
is at-will unless an express or implied contract establishes employment that may 
be terminated only for cause. Loghry v. Unicover Corp., 927 P.2d 706, 710 (Wyo. 
1996). An employee handbook may constitute an implied contract if it intends to 
create an expectation that employment will not be terminated except for cause. 
Id.; Leithead v. American Colloid Co., 721 P.2d 1059, 1062-63 (Wyo. 1986). Such 
intent may be found in terms that provide for termination only upon cause or 
provide a particular method for accomplishing terminations. Brodie v. General 
Chemical Corp., 934 P.2d 1263, 1265 (Wyo. 1997).

 

[¶11] The hospital concedes 
that the 1989 handbook constituted an agreement with the hospital that Jewell 
could be discharged only for good cause. It also concedes that there exists an 
issue of fact as to whether Jewell actually slapped a patient. The hospital, 
however, contends that the disclaimer generated at about the same time as 
Jewell's contemplated termination caused Jewell's employment status to change to 
at-will before she was discharged, and she could, therefore, be dismissed for 
any or no reason.

 

[¶12] Brodie established 
that an employer must give consideration when it modifies a handbook from an 
implied for cause contract to one of at-will employment. Brodie, 934 P.2d  at 
1268. The hospital acknowledges that it did not provide consideration, but 
contends that consideration is not required according to our decisions in Police 
Protective Ass'n of Casper v. City of Casper, 575 P.2d 1146, 1149 (Wyo. 1978), 
and Mariano and Associates, P.C. v. Bd. of County Comm'rs of Sublette County, 
737 P.2d 323 (Wyo. 1987). The hospital argues that in Wilder v. Cody Country 
Chamber of Commerce, 868 P.2d 211, 218 (Wyo. 1994), this Court stated that an 
implied handbook contract is one of indefinite duration that may be terminated 
by either party upon notice. In the hospital's view, Brodie did not address this 
aspect and has resulted in employers being bound by their handbook contracts in 
perpetuity which is forbidden by the decision of Police Protective 
Ass'n.

 

[¶13] Under Wyoming's 
employment jurisprudence, employment of indefinite duration is employment which 
may be terminated at the will of either party for any or no reason. Brodie, 934 P.2d  at 1265. Our employment handbook decisions modified the at-will employment 
rule for those situations in which it was determined that the employer intended 
to modify at-will employment by providing job security. Those decisions held 
that the at-will rule did not prohibit this Court from recognizing this intent 
and upholding the implied contract. Id.; McDonald v. Mobil Coal Producing, Inc., 
820 P.2d 986, 990 (Wyo. 1991). Brodie determined that the at-will rule would not 
prohibit this Court from applying the well-established contract principle that a 
contract cannot be unilaterally modified; bargained for consideration is 
required. Brodie, 934 P.2d  at 1267-68.

 

[¶14] The hospital's 
contention that our decisions mean that employers are held to the contract in 
perpetuity is not valid. Black's Law Dictionary defines perpetuity as 
"continuing forever." BLACKS LAW DICTIONARY 1141 (6th ed. 1990). In Police 
Protective Ass'n., the court reviewed a collective bargaining agreement and 
characterized it as continuing in perpetuity, binding two organizations forever. 
Police Protective Ass'n., 575 P.2d  at 1149. Organizations are immortal and can 
continue forever, whereas, humans are mortal. In the employment context, a valid 
and effective disclaimer can be distributed to new employees, and eventually an 
employer will only employ those with an at-will status. The difference between 
the two situations is obvious and demonstrates that an implied handbook contract 
of indefinite duration does not continue in perpetuity and is not void. The 
hospital also expresses concern that the rule of Brodie prohibits a reduction in 
force for justifiable economic reasons. Brodie does not address this issue and 
cannot be said to prohibit it.

 

[¶15] The hospital next 
contends that Mariano permits the hospital, as a governmental entity, to declare 
void contracts which were made during the term of a previous governing body and 
which are not reasonable and necessary to the entity. The hospital points out 
that the handbook here was distributed in 1989 and the disclaimer in 1993, and a 
new North Big Horn Hospital District Board was sworn in September of 1992. It 
contends that the new Board had the right, through its agents, to void any 
existing contracts which were not reasonable and of definable advantage to the 
hospital; it did so through Kellersberger; and Mariano does not require 
consideration be paid to support voiding contracts.

 

[¶16] The language of 
Mariano allowing challenge of a contract that is not reasonably necessary or of 
definable advantage to a governing body is not likely to extend to an implied 
employment contract for hospital employees of a public hospital. We do not have 
to reach that issue, however, because Mariano's holding is in terms of the 
governing body, not an administrator who does not show the Board's formal 
authorization for his actions. Mariano, 737 P.2d  at 331. Here, the governing 
body did not void the job security contract contained in the handbook; 
consequently, the 1989 handbook without the disclaimer is the applicable 
contract, and the hospital must show cause for 
termination.

 

[¶17] It is clear from the 
record that Jewell was terminated for patient abuse. She admits to contact with 
the patient, and whether that contact is described as tapping, bumping, or 
slapping, Jewell has maintained that the contact was inadvertent and not 
intended as abuse. These facts present a genuine issue of material fact as to 
whether Jewell was discharged for cause. Additionally, the contract provided for 
a disciplinary procedure that progressed from warnings to termination. Because 
Jewell was summarily dismissed, a genuine issue of material fact as to whether 
discharge was the appropriate discipline according to her contract is presented 
which must be decided at trial.

 

[¶18] The order of the 
district court granting summary judgment on the issue of breach of contract is 
reversed and remanded for trial.

 

 Breach of the Covenant of Good Faith and 
Fair Dealing

 

[¶19] The hospital contends 
that our previous decisions hold that longevity of employment alone is not 
enough to establish a tort claim for breach of the covenant of good faith and 
fair dealing. It argues that the motivation for Jewell's termination must have 
been to deprive her of either retirement benefits or some other benefits other 
than the loss of pay and benefits normal to any termination.  Pointing out that Jewell has not 
provided a record establishing such a motivation, the hospital contends there 
was not breach of the covenant as a matter of law and summary judgment must be 
affirmed. Jewell contends that a jury question is presented regarding the 
motivation for her termination.

 

[¶20] Wilder established 
that this particular tort required a showing that a special relationship of 
trust and reliance existed between the employer and the employee. Wilder, 868 P.2d  at 221. Wilder warned this standard applies rarely, and our previous 
decisions on the issue have all determined that the particular facts involved 
did not show that a special relationship existed as a matter of law. The 
existence of a special relationship, however, is a question of fact, not a 
question of law, and is to be decided by the trier of fact unless reasonable 
minds could not differ. See Foley v. Interactive Data Corp., 47 Cal. 3d 654, 254 Cal. Rptr. 211, 237, 765 P.2d 373, 399 (1988).

 

[¶21] In this case, the 
record establishes that a jury could reasonably decide that Jewell was 
improperly discharged for the purpose of denying her a scheduled pay raise and 
other possible benefits associated with her longevity and for which Jewell had 
remained with the hospital for thirty years. Wilder, 868 P.2d  at 221-22. The 
order of the district court granting summary judgment to the defendants on this 
issue is reversed and remanded for trial.

 

Other Tort 
Claims

 

[¶22] Jewell presents tort 
claims for deceit and invasion of privacy, contending that the hospital made 
misrepresentations to her to secure her resignation and released the 
confidential information that she had been fired for slapping a patient. In a 
recent decision, Townsend v. Living Centers Rocky Mountain, Inc., 947 P.2d 1297 
(Wyo. 1997), in an at-will employment context, we held that the available causes 
of actions for an employment termination were limited to contract actions and 
tort actions for breach of the implied covenant of good faith and fair dealing, 
retaliatory discharge, and intentional infliction of emotional distress. Id. at 
1299.

 

[¶23] Townsend was based 
upon a determination that issues arising out of the employment contract should 
be decided according to contract principles. In this case, Jewell's allegations 
of deceit and invasion of privacy directly result from events surrounding the 
manner of her discharge and, for these claims, we will extend Townsend to the 
forcause employment context. Because in Wyoming, a choice to resign or be fired 
is recognized as constructive discharge, Jewell has claims for breach of 
contract and breach of the implied covenant of good faith and fair dealing, but 
cannot pursue claims for deceit or invasion of privacy. Wilder, 868 P.2d  at 217; 
Townsend, 947 P.2d  at 1299.

 

[¶24] Summary judgment on 
the breach of contract and breach of the implied covenant is reversed and 
remanded for trial.