2017 UT App 105



### T HE 

### U TAH 

### C OURT O F 

### A PPEALS

C ANDIDA S. B AHNMAIER , Appell ant ,
v. N ORTHERN U TAH H EALTHCARE C ORPORATION AND

R ENEL R YTTING , Appell ees

. Opinion N o. 20160102

- CA Filed June 29, 2017

Third District Court, West Jordan Department The Honorable James D. Gardner

No. 140401429

April L. Hollingsworth
, Attorney for Appellant
Michael Patrick O’Brien, Mark D. Tolman, and Paul R. Smith
, Attorney s for Appellee s

J UDGE S TEPHEN L. R OTH authored th is Opinion
, in which J UDGES M ICHELE M. C HRISTIANSEN and K ATE A. T OOMEY concurred

.

ROTH
, Judge :

¶1 Candida S. Bahnmaier appeals the district court’s grant of summary judgment in favor of Northern Utah Healthcare Corporation (dba St. Mark’s Hospital) and R enel Rytting. We affirm.Bahnmaier v. Northern Utah Healthcare Corporation

20160102

- CA 2 2017 UT App 105 BACKGROUND 1

¶2 Bahnmaier was employed by St. Mark’s Hospital ( the Hospital ) as a surgical technician on the Hospital’s cardiovascular he art surgery team. The initial employment application B ahnmaier signed in 2005 included the following acknowledgment: “ I UNDERSTAND AND AGR EE THAT ANY EMPLOYEE HANDBOOK WH ICH I MAY RECEIVE WI LL NOT CONSTITUTE AN EM PLOYMENT CONTRACT
, BUT WILL BE MERELY A GRA TUITOUS STATEMENT OF FACILITY POLICIES .” (Emphasis in original .) While Bahnmaier was workin g for the Hospital, the Hospital adopted a for

- cause employment model, which permitted an employee to be terminated only for cause. Bahnmaier subsequently signed two separate employment agreements

— a retention bonus agreement in 2007 and an employee agreeme nt when she joined the Hospital’s heart surgery team in 2008

— each of which provided,

It is understood that all employment, including EMPLOYEE’S employment, with HOSPITAL is for an indefinite term and is terminable for cause. Cause is defined as a reason f or disciplinary action that is not arbitrary, capricious, or illegal that is based on facts the Hospital reasonably believes to be true. Nothing in this Agreement w ill be construed to obligate HO S P I T AL to employ EMPLOYEE for any particular time or under an y particular terms or conditions of employment.

¶3 The Hospital has a Substance Use P olicy, which prohibits employees from “[r]eporting to work, or being at work, while under the influence of or while impaired by alcohol.” The policy

1

. “Because this matter was decided on summary judgment, we recite the facts and inferences in the light most favorable to the nonmoving party.” Mountain W est Surgical Center, LLC v. Hospital Corp. of Utah , 2007 UT 92, ¶ 2, 173 P.3d 1276.Bahnmaier v. Northern Utah Healthcare Corporation

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- CA 3 2017 UT App 105 requires “leadership” to “conduct an investigation” “[u]pon notification that any person has a reasonable suspicion that an employee . . . is v iolating, or has violated” the Substance Use P olicy and to “take whatever action necessary to protect patients and employees.” The Hospita l’s Code of Conduct provides that “[r]eporting to work under the influence of . . . alcohol . . . may result in immediate termination” and that the Hospital “may use drug testin g as a means of enforcing” the Substance Use P olicy.

¶4 On May 12, 2011, Bahnmaier was issued a written warning for showing up to work under the influence of alcohol. The warning indicated that “[f]urther events will result in additional disciplinary action up to and including termination.” Bahnmaier signed the written warning and did n ot ch allenge it
or comment on its allegations at that time.

¶5 Less than a year later, o n March 29, 2012, Bahnmaier covered an on

- call shift for a co

- worker. She was called in for an emergency open

- heart surgery and reported for work at approximately 7:00 p.m. Suspecting that Bahnmaier was under the influence of alcoho l, Bahnmaier’s superviso r, Rytting, sent he r home and reported the incident to the Executive Director of Surg ical Services, Corbie Peterse n.

¶6 Rytting related the following information to Peterse n: W hen Bahnmaier came in to work, her “eyes looked glazed and dilated and she had dark makeup smeared under her eyes,” “[h]er speech was slurred, her eyes darted and she was staggering.” This led Rytting to believe that Bahnmaier “was under the influence of some substance.” Soon after, another surgical tech nician approached Rytting and told her he also believed Bahnmaier was under the influence. Rytting called Bahnmaier into her office and confronted Bahnmaier with her suspicions. According to Rytting, Bahnmaier initially denied being under the influence and insisted that she was safe to wor k. However, when Rytting gave her the option of taking a drug test or going home, Bahnmaier told Rytting, “I won’t pass the test, I know I won’t” and went home.Bahnmaier v. Northern Utah Healthcare Corporation

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- CA 4 2017 UT App 105 ¶7 The next day, o n March 30, while Bahnmaier was working a shift at Timpanogos Hospital

— an affili ate d hospital that sometimes traded nursing shifts with the Hospital

— the Hospital’s human resources director contacted the human resources director at Timpanogos Hospital , Kelly Brimhall, and requested that he arrange a drug test for Bahnmaier. The drug
te st came back negative.

¶8 Brimhall , however, related to Peterse n the following conversation he had with Bahnmaier while he waited with her for the drug screen ing company to arrive for the test :
[Bahnmaier] indicated that she was not originally

on

- c all the pre vious night, Thursday, but a co

worker called her and asked that she take his/her call for the evening. She agreed, but admitted that by then, she was drunk. During the same evening, she admitted to being called in for a case and showing up drunk to the ca se and having her supervisor realize that she was drunk and sent her home for t he evening without allowing her [to] work.

Relying on the reports of Rytting and Brimhall
, and “[i]n light of the prior Written Warning [she] ha d given to [Bahnmaier],” Peterse n “decided to terminate [Bahnmaier’s] employment with [the] Hospital . . . effective April 10, 2012.”

¶9 Bahnmaier filed suit against the Hospital a nd Rytting on February 6, 2014. The complaint asserted breach of contract and breach of the duty of good faith a nd fair dealing against the Hospital
, defamation against Rytting
, and negligence and interference with economic rel ations against both defendants.

¶10 In Bahnmaier’s deposition, she denied having been intoxicated and denied that she admitted to Rytting either that she was intoxicated or that she would fail a drug test. However, she also stated that she did not recall the details of herBahnmaier v. Northern Utah Healthcare Corporation

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- CA 5 2017 UT App 105 conversation with Rytting and admitted that she may have made a “smart aleck” comment that could have given Rytting the impress ion that she did not believe she would pass a drug test.

¶11 The Hospital and Rytting filed a motion for summary judgmen t

. The district court ruled that Bahnmaier’s negligence claim was “ barred by the economic loss rule because she ha [ d ] not alleged a duty ind ependent of any alleged contractual obligation.” Alternatively, the court held that no trier of fact could “reasonably find that Defendants breached any possible duty to Bahnmaier that may have arisen from the Hospital’ s Substance Use P olicy and its ‘for c ause’ employment termination policy.” The court further determined that “no trier of fact could reasonably conclude that Rytting knowingly or recklessly made a false statement about” Bahnmaier and ruled that Bahnmaier’s defamation claim was therefore unten able. Because Bahnmaier conceded that her interference with economic relations claim was based on the same facts as her defamation claim, the court also granted summary judgment on that claim. The court determined that Bahnmaier’s good faith and fair deali ng claim was identical to her contract claim because she alleged only a breach of express and implied contra ct terms. 2 The court ruled that Bahnmaier’s breach of contract claim failed because Bahnmaier had “not raised a genuine dispute of mat erial fact abo ut whether ” Petersen had a reasonable belief that there was good cause to te rminate Bahnmaier

. The court further

2

. Bahnmaier made no attempt to challenge the district court’s reasoning for rejecting her good faith and fair dealing claim in her opening brief, and so we do not address the court’s ruling in that regard

. See Allen v. Friel , 2008 UT 56, ¶ 7, 194 P.3d 903 ( “If an appellant fails to allege specific errors of the lower court, the appellate court will not seek out errors in the lower court’s decision.”); Eddy v

. Albertson’s, Inc. , 2001 UT 88, ¶ 21, 34 P.3d 781 (“It is well established that we will not consider matters raised for the first time in the reply brief.” (citation and internal quotation marks omitted) ).Bahnmaier v. Northern Utah Healthcare Corporation

20160102

- CA 6 2017 UT App 105 determined that Bahnmaier could not base a breach of contr act claim on the Substance Use P olicy because the Hospital had effectively disclaimed contractual liability for that policy and, alternatively, because the Hospital had not violated the policy. The district court therefore granted the defendants’ motion for summary judgment on all claims

. Bahnmaier appeals.

ISSUE AND STANDARD O F REVIEW

¶12 Bahnmaier challenges the district court’s summary judgment ruling in favor of the Hospital and Rytting . “We review a district court’s decision to grant summary judgment for correctness, giving no deference to the district court. Our review is limited to determining whether the district court correctly applied the summary judgment standard in light of the

u ndisputed material facts.” Raab v. Utah Ry. Co. , 2009 UT 61, ¶ 10, 221 P.3d 219.

ANALYSIS

I. Breach of Contract

¶13 Bahnmaier first asserts that the district court erred in determining as a matter of law that the Hospital did not violate either an implied contrac t based on its Substance Use Policy or its express employment contract with Bahnmaier

.
¶14 Bahnmaier argues that the Substance Use Policy constituted an implied contract and that the Hospital’s decision to terminate her employment without conducting a drug tes t violated that contract. Although employee manuals or statements of policy may be sufficient to create an implied contract, “Utah law allows employers to disclaim any contractual relationship that might otherwise arise from employee manuals.” Tomlinson v. NCR Corp. , 2014 UT 55, ¶ 25, 345 P.3d 523. “[A] clear and conspicuous disclaimer, as a matter of law, prevents employee manuals or other like material fromBahnmaier v. Northern Utah Healthcare Corporation

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- CA 7 2017 UT App 105 being considered as implied

- in

- fact contract terms.” Id. (citation and internal quotation marks omi tted). We agree with the district court that the Hospital effectively disclaimed any contractual liability for its Substance Use Policy and that
, even if it did not, the Hospital’s actions cannot be construed to have violat ed that policy.

¶15 Bahnmaier signed an employment application in 2005 which contained an acknowledgment stating
, “ I UNDERSTAND AND AGREE THAT ANY E MPLOYEE HANDBOOK WHI CH I MAY RECEIVE WILL NOT CONSTITUTE AN EMPLOY MENT CONTRACT
, BUT WILL BE MERELY A GRATUITOUS STATEMENT OF FACILIT Y POLICIES.” (Emphasis in original.) This clear and conspicuous disclaimer, as a matter of law, precluded the Substance Use Policy from being construed as an implied contract. See id. Nothing in the subsequent employment contracts Bahnmaier signed abrogated this discl aimer. In fact, those agreements reaffirmed that the Hospital was not required to employ her “under any particular term s or conditions of employment.”

¶16 In any event, there was nothing in the plain language of the Substance Use Policy that mandated a drug te st when an employee was suspected of a violation or that precluded termination in the absence of a drug test. See Peterson & Simpson v. IHC Health Services Inc. , 2009 UT 54, ¶ 13, 217 P.3d 716 (“[W]e determine what the parties have agreed upon by looking first to the plain language within the four corners of the document.”). The policy provided that “[u]pon notification that any person has a reasonable suspicion that an employee . . . has violated [] this policy, the leadership of the Facility shall conduct an investigation , ” and the Code of Conduct stated that the Hospital

“ may use drug testing as a means of enforcing” the Substance Use Policy. (Emphasis added.) A lthough the Substance Use Policy required employees to submit to testing “upon reasonable suspicion,” there was nothing requiring the Hospital itself to conduct a test as part of an investigation. And the Code of Conduct’s use of the word “may” meant that “drug testing” wasBahnmaier v. Northern Utah Healthcare Corporation

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- CA 8 2017 UT App 105 at the employer’s option. Holmes Dev., LLC v. Cook , 2002 UT 38, ¶ 25, 48 P.3d 895 (“The plain, ordinary, and accepted meaning of the word ‘may’ is ‘“permissive ” or “ discretionary, ”’ generally indicating that an individual is either ‘perm itted’ or ‘[h]as a possibility’ to do something.” (alteration in original) (quoting May , Black’s Law Dictionary 993 (7th ed. 1999))). Thus, even if the Substance Use Policy could be construed as an impli ed contract, it does not support Bahnmaier’s argument that the Hospital violated the policy when Rytting failed to have Bahnm aier submit to a drug test.

¶17 Bahnmaier next argues that her termination violated the “for cause” provisions of her employment contract. Bahnmaier’s employment agreement provided that sh e coul d be terminated only “for cause ” and defined “ca use” as “a reason for disciplinary action that is not arbitrary, capricious, or illegal that is based on facts the Hospital reasonably believes to be true.” B ahnmaier asserts that there is a dispute o f fact regarding whether Peterse n

— the director who ultimately terminated Bahnmaier’s employment

— reasonably believed t hat Bahnmaier had violated the Substance Use P olicy
, because no drug test was conducted on the night of the alleg ed violation and because Pet erse n’s investigation did not involve speaking to Bahnmaier or any co

- workers who saw her that night. However, it is undisputed that Peterse n received independent reports from Rytting and Brimhall indicating that Bahnmaier had admitted to them that she was intoxicated at the time of her s hift. It is also undisputed that less than a ye ar before this incident, Peterse n had disciplined Bahnmaier rega rding another violation of the S ubs tance Use P olicy. Further, as discussed above, the Hospital had no obligation to conduct a drug test as part of its investigation. While a positive drug test or additional investigation may have bolstered Peterse n’s belief that Bahnmaier had violated the policy on the night in question, the information Peterse n received from two in dependent sources that Bahnmaier he rself had admitted to being under the influence was sufficient on its own to support a reasonable belief in that regard

. Thus, we agree with the district court that “a trierBahnmaier v. Northern Utah Healthcare Corporation

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- CA 9 2017 UT App 105 of fact could not reasonably conclude that Pete rse n did not reasonably believe that Bahnmaier had viol ated the Substance Use Policy.”

¶18 Further, we agree with the district court that “a trier of fact could not reasonably conclude that Peterse n’s decision to terminate Bahnmaier’s employment for that reaso n was

a rbitrary .” The only evidence Bahnmaier presented to demonstrate the arbit rariness of her termination under these circumstances was personnel records that she claims indicate other similarly situated employees were treated more leniently

. 3 But the re cords do not support Bahnmaier’s argument.

¶19 In the first example case, the employee was suspended
, not terminated, because her job performance had deteriorated. She was orde red to take a drug test, but the record does not indicate the results of that test

. Moreover, the record does not show any evidence of substance abuse apart from her abrupt changes in behavior, which could have been caused by something other than drug use

. Conversely, in Bahnmaier’s case, two separate individuals reported that Bahnmaier had admitted to being under the influence while at work. There is also nothing in the record to indicate that the employee had been disciplined previously, as Bahnmaier had. Thus, Bahnmaier’s situation was not comparable to that of the employee in the firs t exampl e

. In another example case, an employee, who se termination was based on i mproper handling of narcotics, had received a previous warning for failing to properly chart and dispose of medications. The Hospital handled that situation the same way it ha ndled Bahnmaier’s

— it gave the employee a warning for her first violation of the Substance Use P olicy and terminated her when it received reports of a subsequent violation.

3

. The Hospital asserts that these records should be disregarded bec ause they were unauthenticated. For purposes of our decision, we assume that the re cords were properly before the
court.Bahnmaier v. Northern Utah Healthcare Corporation

20160102

- CA 10 2017 UT App 105 ¶20 Thus, the records Bahnmaier relies on do not support her claim that the Hospital’s decision to terminate her was arbitrary. Moreover, Bahnmaier worked on a heart surgery team , and a decision to terminate an employee for actions that could impair her skills and judgment under such circumstances , especially in light of the prior warning, w as not arbitrary

.
¶21 For these reasons, we conclude that the district court did
not err by granting summary judgment in favor of the Hospital on Bahnmaier’s implied and express contract claims.

II. Negligence

¶22 Bahnmaier ne x t challenges the district court’s ruling that her negligence claims against the Hospital and Rytting were barred by the economic loss rule. She argues both that the economic loss rule does not apply to employment cases and that her claim that she suffered emotional distress removes her case from the purview of that rule

.
¶23 However, we do not need to address the district court’s analysis of the economic loss rule because we affirm on the court’s alternative ground for rejecting Bahnmaier’s negligence claims

— that she has failed to demonstrate an issue of fact regarding whether either Rytting or the Hospital breached a duty to her. Bahnmaier h as no t alleged that the defendants breached any duties to her independent of those raised in her breach of contract action. Bahnmaier assert ed that the Hospital breached its duty by failing to adhere to its Substance Use Policy and by terminat ing her employment without cau se and that Rytting ’s breach also involved failure to adhere to the Substance Use Policy. As discussed in the previous section, the Substance Use Policy did not require drug testing to confirm an employee’s substance abuse
, and Bahnmaier ’s empl oyment was terminated for cause based on Petersen’s reasonable belief that Bahnmaier had violated the Substance Use Policy. Thus, Bahnmaier cannot establish that either the Hospital or Ryttin g breached any dut y to he r . Accordingly, the district court did n ot err in grantingBahnmaier v. Northern Utah Healthcare Corporation

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- CA 11 2017 UT App 105 summary judgment in favor of the defendants on Bahnmaier’s negligence claims.

III. Defamation and Interference with Economic Relations

¶24 Bahnmaier challenges the district court’s ruling on her defamation and interference with economic relations claim s . The parties agree that Rytting’s statements to Peterse n were subject to a qualified privilege. See Brehany v. Nordstrom, Inc. , 812 P.2d 49, 5 8 (Utah 1991) (“[A] qualified privilege protects an employer’s communication to employees and to other interested parties concerning the reasons for an employee’s discharge.”). This qualified privilege effectively precludes Bahnmaier from recovering damages for defamatory statements unless she can show an abuse of the privilege by demonstrating that Rytting “(1) made a defamatory statement knowing it to be false or (2) acted in reckless disregard as to its falsity.” See Ferguson v. Williams & Hunt, Inc. , 200 9 UT 49, ¶¶ 27

– 28, 221 P.3d 205.

¶25 Bahnmaier asserts that her deposition testimony that she did not tell Rytting she would not pass a drug test raises a question of fact as to whether Rytting either kn ew that her statement to Peterse n was false or acted in r eckless disregard of its falsity. However, Bahnmaier’s denial was fatally equivocal; she a dmitted that she did not actually recall the details of her conversation with Rytting and that she could have made a “smart aleck” comment that c ould have given Rytti ng the impression that she would not pass a drug test . We agree with the district court that no reasonable trier of fact could have concluded that Rytti ng knew her statement to Peterse n was false

or a cted with reckless disregard as to its falsity when Bahn maier herself admitted that she could have given Rytting the impression that she did not believe she would pass a drug test. Thus, the district court did not err in granting summary judgment on this claim.

¶26 Finally, b ecause Bah n maier concedes that the succe ss of her interference with economic relations claim hinges on theBahnmaier v. Northern Utah Healthcare Corporation

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- CA 12 2017 UT App 105 success of her defamation claim, we affirm the district court’s summary judgment ruling on the interference claim as well

.

CONCLUSION

¶27 We conclude that the Hospital’s Substance Use Policy di d not constitute an implied contract requiring the Hospital to conduct a drug test upon reasonable suspicion of an employee’s intoxication and that Bahnmaier failed to raise a genuine issue of fact as to whether the Hospital violated its “for cause” emplo yment contract with Bahnmaier . Thus, the district court did not err in granting summary judgment in favor of the defendants on Bahnmaier’s contract and negligence claims. Further, because Bahnmaier failed to raise a genuine issue of fact as to whether Rytt ing’s statement s to Peterse n were knowingly false or made with reckless disregard as to their falsity, the district court did not err in granting summary judgment to the defendants on Bahnmaier’s defamation and interference with economic relations claims. Accordingly, we affirm the district court’s ruling.