Title: CAPSHAW v. WERCS

State: wyoming

Issuer: Wyoming Supreme Court

Document:

CAPSHAW v. WERCS2001 WY 6828 P.3d 855Case Number: 00-329Decided: 08/08/2001
 
APRIL TERM, A.D. 2001

 

                                                                                                            

 

MICHAEL 
R. CAPSHAW,

Petitioner,

 

v.

 

WERCS, a 
Wyoming corporation, d/b/a

WYOMING 
FINANCIAL GROUP,

Respondent.

 

 

 

Representing 
Petitioner:

            
Mark W. Gifford, Casper, Wyoming  

 Representing 
Respondent:

Harry G. 
Bondi of Harry G. Bondi Law Offices, P.C., Casper, Wyoming; and Courtney R. 
Kepler and Timothy M. Stubson of Brown, Drew & Massey, LLP, Casper, 
Wyoming  

 

 

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

  
            
KITE, Justice.

 

[¶1]      Michael R. 
Capshaw filed a petition for writ of review of a district court's grant of a 
motion in limine in his breach-of-employment contract case.  He sought reversal of an order 
precluding him from making any reference in opening statement or the 
presentation of evidence to his allegations of his employer's 
mismanagement.  We granted his 
petition and conclude the order would effectively prevent Mr. Capshaw from 
presenting his pretextual discharge theory.  We, therefore, reverse and remand for 
proceedings consistent with this decision.

 

 

 

[¶2]      Mr. Capshaw 
presents these issues:

 

1.  Whether 
the trial court abused its discretion in ruling that [Mr. Capshaw], who alleges 
that he was terminated on a pretext for criticizing [WERCS's] management, will 
not be allowed to mention in opening comments, nor to adduce any testimony from 
witnesses regarding allegations of [WERCS's] 
mismanagement.

 

2.  Whether 
[Mr. Capshaw] is materially prejudiced by the trial court's grant of a motion in 
limine which has the effect of gutting [his] case, prohibiting [him] from 
presenting the evidence that forms the very core of his 
claims.

 

WERCS, a 
Wyoming corporation doing business as Wyoming Financial Group, frames the issues 
as follows:

 

1.  Did 
the trial court abuse its discretion in granting [WERCS's] Motion In Limine 
restricting use of certain evidence relating to [Mr. Capshaw's] allegations of 
mismanagement on the part of [WERCS]?

 

2.  Is 
it premature for the Appellate Court to review a ruling that may be changed 
during the course of trial?

 

 

 

[¶3]      In March of 1995, 
Mr. Capshaw was hired as manager and ultimately became president of Wyoming 
Financial Properties, Inc., a subsidiary of WERCS.  He was terminated in June 1998 and filed 
suit against WERCS in July 1998 for breach of express contract, promissory 
estoppel, breach of implied covenant of good faith and fair dealing, retaliatory 
discharge in violation of public policy, and "wasting of corporate assets."  Mr. Capshaw contended he was employed as 
a contract employee dischargeable only for cause, the reasons cited for 
termination were a pretext, and WERCS's true motivation was to remove him due to 
his negative comments regarding management.  In discovery responses, WERCS asserted 
Mr. Capshaw was discharged for many reasons including that he had engaged in a 
campaign intended to disparage management.  
WERCS counterclaimed and, as is relevant to this review, in its fifth 
claim for relief stated in part:

 

26.  [Mr. 
Capshaw], without any reasonable basis in fact and with an intentional disregard 
for the truth, made a variety of statements concerning [WERCS], the management 
of [WERCS] and its personnel, including but not limited to, allegations (1) that 
[WERCS] was being mismanaged; paid exorbitant prices to acquire properties; paid 
for remodeling homes of corporate officers and family members of corporate 
officers; put members of officers' families on the payroll at exorbitant 
salaries; and was going broke and had excessive debt; (2) that the stock of 
[WERCS] was worthless; and (3)  that 
a corporate officer was "stealing" from [WERCS].  All of the statements referred to in the 
preceding sentence were made by [Mr. Capshaw] to other employees of [WERCS], to 
[WERCS's] accountants, and to shareholders of [WERCS].  Further, said statements were false, and 
Mr. Capshaw knew or should have known that such statements were false and were 
likely to damage [WERCS] with respect to recruiting employees, purchasing 
properties, attracting investors, and generally conducting its business 
affairs.

 

27.  During the period of time that [Mr. 
Capshaw] was intentionally engaging in a campaign of making false, disparaging, 
libelous, and slanderous statements about [WERCS], [WERCS] was unable to 
consummate a transaction for the acquisition of two insurance agencies, became 
involved in a series of lawsuits by disgruntled employees, lost contracts for 
property management, and otherwise suffered damages all, upon information and 
belief, as the result of [Mr. Capshaw's] actions. 

 

28.  [WERCS] is entitled to recover damages 
for lost opportunities, lost profits and other damages arising from [Mr. 
Capshaw's] misconduct. 

 

In 
discovery responses, WERCS stated multiple reasons for Mr. Capshaw's termination 
including:

 

(1)  [Mr. 
Capshaw] was an employee at will of [WERCS], subject to termination with or 
without cause or notice at any time.

 

. . . .

 

(4)  During 
his employment, [Mr. Capshaw] was actively engaged in a campaign to discredit 
[WERCS] and [WERCS's] management including, but not limited to, accusing 
corporate officers of mismanagement and theft.

 

WERCS 
filed a motion for summary judgment, which was granted in part, and the 
remaining claims of breach of contract and promissory estoppel and the 
counterclaim were scheduled for jury trial on October 23, 2000.1

 

[¶4]      On October 20, 
2000, the Friday before the Monday trial date, WERCS filed a motion in limine 
requesting, in part, the court exclude evidence related to the mismanagement 
allegations.  It contended those 
allegations were relevant only to the dismissed claimsbreach of implied 
covenant of good faith and fair dealing and retaliatory discharge in violation 
of public policy.  The district 
court heard the motion on the day trial was scheduled to begin, outside the 
hearing of the jury but prior to opening statements.  It granted Mr. Capshaw's request to 
continue the hearing to the following morning in order to receive additional 
briefing and argument.  Subsequent 
to these proceedings, an order was entered over Mr. Capshaw's written 
objections, which provided in relevant part:

 

[WERCS's] 
motions to preclude reference in opening comments and preclude evidence on such 
topics are hereby granted and [Mr. Capshaw] is prevented from mentioning in 
opening comments, and is prevented from adducing testimony from witnesses any 
reference to:

 

            
. . .

 

3.  Allegations 
of mismanagement of the Defendant WERCS; . . .

 

Mr. 
Capshaw filed a petition for writ of review pursuant to W.R.A.P. 13 from this 
portion of the order.  This court 
granted the petition.  

 

 

 

[¶5]      The standard of 
review for evidentiary determinations has been often 
cited:

 

The 
admission of evidence is left to the sound discretion of the trial court.  The trial court may exclude inadmissible 
evidence upon a motion in limine.  
Rule 402, W.R.E., provides in pertinent part that, "[E]vidence 
. . . which is not relevant is not admissible."  Rule 401, W.R.E., defines "relevant 
evidence" as follows:

 

"Relevant 
evidence" means evidence having any tendency to make the existence of any fact 
that is of consequence to the determination of the action more probable or less 
probable than it would be without the evidence.

 

Lindsey 
v. State, 725 P.2d 649, 654 (Wyo. 1986) (citations omitted); see also Robinson v. 
State, 11 P.3d 361, 367 (Wyo. 2000), cert. denied, 121 S. Ct. 1620 
(2001); Duran v. State, 990 P.2d 1005, 1011 (Wyo. 1999); Solis v. 
State, 981 P.2d 34, 36 (Wyo. 1999); Betts v. Crawford, 965 P.2d 680, 
685 (Wyo. 1998); Brown v. Michael Pryor, M.D., P.C., 954 P.2d 1349, 1350 
(Wyo. 1998); Wilder v. Cody Country Chamber of Commerce, 933 P.2d 1098, 
1107 (Wyo. 1997); Tennant v. State, 786 P.2d 339, 342 (Wyo. 
1990).

 

[¶6]      We have noted our 
"core inquiry"

 

must reach "the question of 
reasonableness of the choice made by the trial court." Vaughn v. State, 
962 P.2d 149, 151 (Wyo. 1998).  
"Judicial discretion is a composite of many things, among which are 
conclusions drawn from objective criteria; it means a sound judgment exercised 
with regard to what is right under the circumstances and without doing so 
arbitrarily or capriciously."  
Id. (quoting Byerly v. Madsen, 41 Wash. App. 495, 704 P.2d 1236, 1238 (1985)); Basolo, 907 P.2d [348,] 353 [(Wyo. 1995)]. We must 
ask ourselves whether the district court could reasonably conclude as it did and 
whether any facet of its ruling was arbitrary or 
capricious.

 

Carlton 
v. Carlton, 997 P.2d 1028, 1031 (Wyo. 2000).

 

Young v. 
HAC, LLC, 2001 
WY 50, ¶6, 24 P.3d 1142, ¶6 (Wyo. 2001).

 

 

 

[¶7]      Mr. Capshaw 
asserts the order granting the motion in limine prevents him from litigating his 
theory of the case.  He claims that 
he was dischargeable only for cause and the pretextual termination reasons cited 
did not satisfy the good cause standard.  
WERCS's counterclaim also put Mr. Capshaw's alleged campaign of 
disparaging management at issue and from the certified record does not appear to 
have been withdrawn or dismissed.

 

[¶8]      Relying on 
comments by the judge during the motion hearing, WERCS maintains the order was 
not conclusive and could have been expanded during the course of trial.  This is an interesting argument as WERCS 
prepared the order and chose unconditional language to implement the district 
court's oral ruling.  The order 
specifically provided:  "[Mr. 
Capshaw] is prevented from mentioning in opening comments, and is prevented from 
adducing testimony from witnesses any reference to . . . [a]llegations 
of mismanagement of . . . WERCS." This order language is 
definitive and unqualified in any manner which might suggest a more flexible 
application during trial.

 

[¶9]      Now WERCS appears 
to contend the order does not really mean what it plainly states.  This could be construed as an admission 
by WERCS that it failed to provide the court with a proposed order which 
accurately reflected its oral ruling. Nevertheless, the order was entered.  "[I]n the . . . case of 
McAteer v. Stewart, Wyo., 696 P.2d 72 (1985), we held that a court's 
signed written order takes precedence over a prior oral order."  Wheatland Cold Storage and Meat 
Processing, Inc. v. Wilkins, 705 P.2d 316, 319 (Wyo. 1985); see also 
Weisbrod v. Ely, 767 P.2d 171, 177 (Wyo. 1989).  Despite indications in the transcripts 
that some evidence might have been allowed in during trial, Mr. Capshaw was 
barred from presenting his theory and defenses in opening statement and was 
given every indication that no such evidence would be allowed.
 

[¶10]   The order effectively prohibits Mr. 
Capshaw from presenting his theory of the case to the jury.  The record is clear that Mr. Capshaw was 
openly critical of WERCS's management, and he contends he was fired to silence 
that criticism.  In essence, the 
employer agrees Mr. Capshaw was fired for his criticism characterizing it as 
"discrediting management."  Mr. 
Capshaw clearly has the right to argue and attempt to persuade the jury that his 
criticism of management was in good faith and his discharge was in violation of 
his contract requiring good cause for termination.  The only way he can succeed at trial is 
to convince the jury he had good reason for his criticism of management and 
problems did exist.  "A party should 
be allowed an appropriate opportunity to present and develop that evidence 
relevant to that party's theory of the case."  Stauffer Chemical Company v. 
Curry, 778 P.2d 1083, 1098 (Wyo. 1989).

 

Where 
the employer alleges that the employee was discharged for one reason 
. . . and the employee presents evidence that he was really discharged 
for another reason . . . the question also is one of fact for the 
jury. The jury is always permitted to determine the employer's true reason 
for discharging the employee.  

 

Toussaint 
v. Blue Cross & Blue Shield of Michigan, 292 N.W.2d 880, 896 (Mich. 1980) (emphasis added & footnote omitted); see 
also Worley v. Wyoming Bottling Company, Inc., 1 P.3d 615, 623 (Wyo. 
2000) ("Whether an employee has been terminated for cause is generally a 
question of fact and, thus, summary judgment is premature under these disputed 
facts.")  The only way for Mr. 
Capshaw to refute his employer's claim he was unjustifiably "discrediting 
management" is to prove he had sufficient reason for his criticism.  The verdict will be all but preordained 
if Mr. Capshaw is prevented from presenting evidence that the reasons given by 
his employer for his firing were only pretext.  W.R.E. 401.  This inevitable result leads us to the 
conclusion the district court abused its discretion in issuing the order 
granting the motion in limine and, therefore, the order must be 
reversed.

 

[¶11]   In addition, the precise language 
of the order granting the motion in limine appears to limit only Mr. Capshaw's 
presentation of his theory of pretextual discharge with no corollary effect on 
WERCS.  Therefore, it has the 
unfortunate potential to permit WERCS to raise the mismanagement issue in its 
opening and evidentiary presentation in support of its counterclaim while 
restraining Mr. Capshaw from responding in kind.  This circumstance alone raises concerns 
the order is arbitrary, capricious, and, hence, an abuse of 
discretion.

 

[¶12]   The hearing transcript reveals the 
district court was legitimately concerned with the potential for the trial to 
become unduly focused on the efficacy of the employer's management of the 
business.  We are not saying the 
court must allow any and all evidence the parties offer on the subject of 
mismanagement, but it must allow sufficient, admissible evidence to permit them 
to argue to the jury that Mr. Capshaw either did or did not have a good faith 
basis to criticize management.  
Ultimately, the judge has discretion to control the amount of evidence 
and the resulting length of the trial.  
Hall v. Hall, 708 P.2d 416, 421 (Wyo. 1985).

  

The 
trial court retains considerable latitude even with admittedly relevant 
testimony in rejecting evidence which is cumulative or in requiring that 
evidence be brought to the jury's attention in a manner least likely to cause 
confusion.  However, the litigant 
"is entitled to an opportunity to adduce relevant, competent evidence bearing on 
the issues to be tried."  Hamling 
v. United States, 418 U.S. 87, 125, 94 S. Ct. 2887, 2911-12, 41 L. Ed. 2d 590, 
reh'g denied 419 U.S. 885, 95 S. Ct. 157, 42 L. Ed. 2d 129 
(1974). . . . M. Graham, Handbook of Federal Evidence § 
403.1 at 179 (2d ed. 1986).

 

Kobos By 
and Through Kobos v. Everts, 768 P.2d 534, 546 (Wyo. 1989); see also Winterholler v. Zolessi, 989 P.2d 621, 629 (Wyo. 1999). 

  

[¶13]   Moreover, the multiple, complex 
questions presented by an employment termination case can be and have been 
managed in the past through proper jury instructions.  See Ormsby v. Dana Kepner Co. 
of Wyo. Inc., 997 P.2d 465 (Wyo. 2000).  This method accommodates the receipt by 
the trier of fact of all relevant evidence and, at the same time, permits the 
parties to fully litigate their case theories.

 

[¶14]   Reversed and remanded for further 
proceedings consistent with this decision. 

 

FOOTNOTES

1Mr. Capshaw withdrew his claim for 
"wasting of corporate assets" during oral arguments on the summary judgment 
motion.