No. 84-128 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1984 

SHIRLEY CRENSHAW, 

Plaintiff and Respondent, 

BOZEPllAN DEACONESS HOSPITAL, EDWLN E. DAHLBERG, 

Administrator and RUSSELL NIELSEN, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Eighteenth Judicial District 

In and for the County of Gallatin, 

The Honorable Thomas Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Berg, Coil, Stokes & Tollefsen; Ben E. Berg, Jr. 

argued, Bozeman, Montana 

For Respondent: 

Goetz, Madden & Dunn; James Goetz argued, Rozeman, 

Montana 

- 

Submitted: September 27, 1984 

Decided: December 6, 1984 

. . 

Filed: ,..84 

Clerk 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

Bozeman Deaconess Hospital appeals from a judgment on a. 

jury verdict entered by the District Court of the Eighteenth 

Judicial District of the State of Montana, in and for the 

County of Gallatin, in favor of respondent, Shirley Crenshaw, 

on her claims for relief from the termination of her 

employment. 

On December 1, 1981, Crenshaw commenced employment with 

the Hospital as a respiratory therapist. Prior to that time, 

she had been employed by an independently operated 

respiratory therapy department which contracted services to 

the Hospital. The department was purchased by the Hospital 

on December 1, 1981. Crenshaw worked for the Hospital until 

January 8, 1982, at which time she took a leave of absence 

until February 8, 1982. After returning to work, Crenshaw 

was employed until March 12, 1982, when she was discharged. 

Subsequent to the take-over of the respiratory 

department by the Hospital, two orientation meetings were 

held with employees of the respiratory therapy department. 

The employees were given information regarding salaries, 

benefits and formal orientation. The employees were given a 

personnel policy manual. A provision in the manual provided: 

"You are on probation during the first 500 hours of 

employment. Any employee may be discharged without notice 

during the probationary period." Both parties concur that 

Crenshaw had not completed the 500 hours of probationary 

status at the time of her discharge on March 12, 1982. 

The immediate dispute began in the late hours of March 

11, 1982. Three nurses on duty in the intensive care unit. 

complained to their supervisor, Terry Knohle. A meeting was 
held between Terry Knoble, the three nurses, Russell Nielsen, 

the personnel director, and Bill Kirtley, the acting head of 

the respiratory therapy department. Following the meeting, a 

discharge memorandum was prepared directing Crenshaw's 

discharge. The discharge document charged Crenshaw with: 

"Insubordination; 

"disrupting the continuity of care; 

"continually getting in the way of 

patient care; 

"disorderly conduct; 

"unsatisfactory work performance; 

"violation of safety and/or health rules; 

and 

"breach of confidentiality." 

The testimony reveals, on the night of March 11, 1982, 

Crenshaw was not at home when the Hospital attempted to reach 

her at 10:30 p.m. That evening Crenshaw had been visiting a 

former patient. Crenshaw's husband telephoned her to tell 

h.er that the Hospital had called. Crenshaw telephoned the 

Hospital and was told that she would be needed at the 

Hospital later that evening. Crenshaw immediately departed 

to the Hospital. The former patient's daughter, Berna-Dean 

Hennessey, drove her to the Hospital. Hennessey remained at 

the Hospital for a number of hours. Related to Hennessey's 

presence, the discharge document charged Crenshaw with 

"breach of confidentiality." The Hospital contends a breach 

of confidential information resulted when Hennessey 

accompanied Crenshaw to the Hospital lab. While Crenshaw ran 

a separate errand, Hennessey waited for a blood-gas report 

and delivered it to the ICU. Crenshaw contends the report 

was not readily comprehensible to a lay person. Hennessey 

testified: 
" (a) she did not examine the contents of 

the slip, (b) that upon arriving at the 

intensive care unit she put her hand 

inside the curtain and handed the slip to 

someone tending to patient care, and (c) 

that she did not at any time view the 

patient. " 

The "insubordination" charge stemmed from the nurses' 

allegation that Crenshaw attempted to perform ABG's (arterial 

blood gases). This fact is disputed not only by Crenshaw, 

but by the nurses and doctors present. There is question as 

to whether or not Hospital policy forbid respiratory 

therapists from doing ABG's. 

The discharge document also accused Crenshaw of not 

performing "the respiratory therapy task of suction as 

needed." Again there was a dispute as to whether suctioning 

was called for. The nurses testified that the suctioning 

should have been performed for the sake of appearance of the 

patient. However, one of the physicians testified that 

suctioning was not required "that it could have been a waste 

of time . . . with the disconnection of the ventilator 

necessary to suction the patient." 

The three nurses present during the shift, also charged 

that Crenshaw was disrupting the continuity of patient care. 

As a. result, Crenshaw was accused of "endangering pa.tient 

well-being." The nurses testified that Crenshaw repeatedly 

answered the telephone, read electrocardiogram monitors and 

distracted the nurses by commenting on the irregular cardiac 

display on the monitors. The testimony regarding this 

allegation is in conflict. Two physicians present during the 

controversial shift testified that th.ey found nothing 

deficient about Crenshaw's performance. Also, one of the 

nurses in attendance during part of the shift, confirmed that 

there was no misbehavior on Crenshaw's part. Finally, the 

discharge document states that Crenshaw had been subject to 
previous verbal counselings. It was established at the 

trial, however, that this was false and that Crenshaw had not 

been subject to previous disciplinary action by the Hospital. 

The following morning, Crenshaw was called into the 

Hospital. Crenshaw was given the disciplinary discharge 

document and was advised to see the administrator the 

following Monday. On Monday, March 15, 1981, Crenshaw met 

with the administrator, Edwin Dahlberg. He informed her that 

he would review the matter, the administrator conducted 

interviews of those present in the intensive care unit during 

the morning in question. The administrator affirmed the 

discharge in a letter to Shirley Crenshaw, dated March 15, 

1981. Crenshaw contends that the administrator failed to 

interview all of the staff members, even though he was aware 

that they had been present during the controversial shift and 

that the charges were strongly contested. 

After her discharge, Crenshaw applied for unemployment 

compensation benefits. Crenshaw alleges the Hospital 

informed the Bozeman Job Service indicating that she had been 

discharged for unsatisfactory performance and for endangering 

patient well-being. As a result, Crenshaw was unable to 

procure employment in the medical community in Rozeman. She 

encountered difficulties because of a lack of references from 

her previous employer. In January, 1983, she and her husband 

were forced to close his construction business and move to 

Spokane. After two months of job seeking, she has been 

employed part-time and full-time at various jobs. 

Crenshaw contends the Hospital acted with malice: (1) 

by lodging and sustaining false charges against her; and (2) 

by tampering with her personnel file. Crenshaw claims a 

certificate authorizing her to perform arterial blood gases 

was removed from the file. 
Crenshaw filed the present action on December 10, 1982, 

alleging that she had been wrongfully discharged from her 

employment with Bozeman Deaconess Hospital and sought damages 

under several theories. Crenshaw alleged the Hospital 

breached the implied covenant of good faith and fair dealing. 

She further alleged the actions of appellants were negligent 

and were malicious and/or in wanton and/or in willful 

disregard of her rights entitling her to exemplary damages. 

The complaint was amended to include a fourth count alleging 

a separate tort in violating the duty of good faith owed to 

her. A jury trial was held on November 28, 1983. The jury 

found for Crenshaw and awarded her $125,000 in compensatory 

damages and exemplary damages in the amount of $25,000. 

The issues raised on appeal are as follows: 

(1) Whether an at-will probationary employee is covered 

by the implied covenant of good faith and fair dealing. 

12) Whether the record sustains a separate action based 

on negligence. 

(3) Whether the trial court abused its discretion in 

permitting an expert witness to testify on the question of 

breach of duty on either wrongful discharge or fair dealing. 

(4) Whether the award of punitive damages upon a 

finding of negligence and/or breach of implied covenant of 

good faith and fair dealing was proper. 

The Hospital submits that the covenant of good faith 

and fair dealing does not apply to a probationary employee, 

a.nd that the trial court erred in giving an instruction as 

such. 

The court gave the following instruction over the 

Hospital's objection: 

"Instruction 14. You are instructed that 

Bozeman Deaconess Hospital, . . . may 

classify certain of its employees as 
probationary employees and these 

employees may be discharged if they do 

not measure up to the Hospital standards 

during the probationary period. However, 

even these employees are owed a duty of 

good faith and fair dealing and the 

Hospital must comply with its written 

policies concerning these employees." 

The court refused the Hospital's proposed instructions no. 41 

and no. 42 which consecutively stated: 

"Instruction 41. You are instructed that 

plaintiff Shirley Crenshaw was a 

probationary employee of defendant 

Bozeman Deaconess Hospital and tha.t the 

purpose of a probationary status is to 

provide a brief period in which to 

measure the employee's ahility to perform 

her job before granting her a degree of 

job security. If the employer feels that 

the employee is not measuring up during 

this probationary period, it can dismiss 

that employee without procedural due 

process. 

"Instruction 42. You are instructed that 

if you find from the evidence that 

plaintiff Shirley Crenshaw was a 

probationary employee of defendant 

Bozeman Deaconess Hospital and that the 

purpose of a probationary status is to 

provide a brief period in which to 

measure the employee's ability to perform 

her job before granting her a degree of 

job security, then you are instructed 

that if the employer feels that the 

employee has not measured up during the 

probationary period, it can dismiss that 

employee without any procedural due 

process. " 

The doctrine of implied covenant of good faith and fair 

dealing in employment contracts was established in Gates v. 

Life of Montana (1982), 196 Mont. 178, 638 P.2d 1063, (Gates 

- I) , brhere this Court stated: "A covenant of good faith and 

fair dealing was implied in employee contracts." This Court 

went a step further in Gates v. Life of Montana (Mont. 1983), 

668 P.2d 213, 40 St.Rep. 1287, (Ga.tes - 11) holding that the 

covenant arises out of the employment relationship and it 

exists "apart from, and in addition to, any terms agreed to 

by the parties." 
The Hospital argues to the Gates rule there should be 

an exception, and the probationary employee is the exception. 

The Hospital states the doctrine of good faith and fair 

dealing has the purpose of enhancing job security for the 

employee. But the probationary employee has little prospect 

of job security until his trial period has elapsed and 

attains the status of a permanent employee. The Hospital 

proposes that the final answer to this issue is found in 

Storch v. Board of Directors (1976), 169 Mont. 176, 545 P.2d 

644. In Storch, the plaintiff was a probationary State 

employee. The court held the purpose of the probationary 

status is to provide the employer with a trial period in 

which unsatisfactory employees may be dismissed without 

procedural due process. 

In light of the Storch decision, the hospital submits 

it was clear error to instruct the jury that even 

probationary employees are owed a duty of good faith and fair 

dealing. We find the Storch decision cannot withstand the 

scrutiny of the good faith and fair dealing mandate. It was 

Gates - I and not the Storch decision which gave rise to the 

doctrine of implied covenant of good faith and fair dealing. 

Furthermore, Storch does not even mention the implied 

covenant of good faith and fair dealing. The 

plaintiff-employee in Storch protested his discharge on the 

grounds of constitutional due process and right to privacy, 

not on lack of good faith and fair dealing as is the case in 

the present ma.tter. Accordingly, we hold even in 

probationary employment relationships, the employer still 

owes his employee a duty of good faith and fair dealing under 

Gates - I. 

In a recent decision, Dare v. Montana Petroleum 

Marketing Co. (Mont. 19841, P.2d , 41 St.Rep. 1735, 
Justice Weber defined the parameters of the covenant of good 

faith and fair dealing doctrine: 

"Whether a covenant of good faith and 

fair dealing is implied in a particular 

case, depends upon objective 

manifestations by the employer giving 

rise to the employee's reasonable belief 

that he or she has job security and will 

be treated fairly. . . the implied 

covenant protects the investment of the 

employee who in good faith accepts and 

maintains employment reasonably believing 

their job is secure so long as they 

perform their duties satisfactorily, such 

an employee is protected from bad faith 

or unfair treatment by the employer." 

We find the following testimony from the record 

constitutes objective manifestations by the Hospital giving 

rise to Crenshaw's belief that she had job security: 

"1. That Crenshaw had worked for the 

respiratory therapy department under Dr. 

Shaw since approximately April, 1980. 

"2. That all of her respiratory therapy 

work had been done during that period at 

Sozeman Deaconess Hospital, and her 

duties, salary, and procedures remained 

essentially unchanged when the Hospital 

finally took over the Department. 

"3. That Crenshaw was led to believe that 

she and. other long-term staff would come 

on board with permanent full-time status. 

"4. That the Hospital provided permanent, 

full-time employees with the privilege to 

join the Hospital group health insurance 

pr0gra.m. Since the Hospital considered 

Crenshaw qualified for a health insurance 

program which only permanent employees 

could join, the Hospital must have 

considered her a permanent employee. In 

addition, the Hospital had. a policy of 

allowing permanent employees a ten 

percent discount for medical services at 

the Hospital. Crenshaw received surgical 

treatment at the Hospital in January, 

1982, and she received a ten percent 

permanent employee discount. 

"5. That the Hospital personnel policy 

requires an evaluation meeting between 

the probationary employee and his 

supervisor at the end of the 500 hour 

probationary period. Crenshaw and two 

other employees testified that they had 

no such evaluation meeting at the end of 
500 hours after the merger with Bozeman 

Deaconess Hospital. 

"6. That there was no reference to her 

probationary status in either the 

discharge memorandum or in the 

Administrator's letter sustaining the 

discharge." 

Crenshaw had reason to believe her job was secure. As an 

employee she was entitled to the protection of good faith and 

fair dea1in.g by the Hospi.ta1. 

Appellant next claims error by the court's refusa-l of 

section 39-2-503, MCA, instruction of the "at will" statute. 

That instruction stated: 

"You are instructed that section 

39-2-503, MCA provides that employment 

having no specified term may be 

terminated at the will of either party on 

notice to the other. You are further 

instructed that the foregoing statute 

does not require notice prior to 

termination." 

The Hospital- contends that the Gates - I1 decision of 

good faith and fair dealing is abrogated by the enactment of 

the "at will" statute. The Hospital primarily relies on a 

decision rendered by this Court in 1981, Reiter v. 

Vellowstone County, Montana (Mont. 1981), 627 P.2d 845, 39 

St.Rep. 686, where we held that an implied employment 

contract cannot circumvent the at-will statute. In Ga.tes 7 

I, 

Reiter was clearly distinguished, ". . . the issue there, [in 

Reiter], was whether an employee at-will had a property 

interest in continued employment and was entitled to 

procedural due process prior to termination. . . We did not 

reach or decide the good faith and fair dealing issue 

presented, here. . . " Gates v. Life of Montana Ins. Co., 

supra, 638 P. 2d at 1066. The same holds true in the present 

case, as Crenshaw is alleging a breach of covenant of good 

faith and fair dealing. 
We hold that the "at-will" sta-tute, section 39-2-503, 

MCA, is very much alive. The Gates I decision does not - 

preempt the statute. There is no legitimate precedent for an 

exception for probationary employees. Therefore, Crenshaw 

even as a probationary employee was owed a duty of good faith 

under the mandate of Gates I. This requirement of good faith - 

and fair dealing does not conflict with section 39-2-503, 

MCA, but merely supplements it. Employers can still 

terminate untenured employees at-will and without notice. 

They simply may not do so in bad faith or unfairly without 

becoming liable for damages. The Hospital's notification to 

the Bozeman Job Service of Crenshaw's unsatisfactory work 

performance deprived her of employment in the 1oca.l medical 

community. This was an act of bad faith. The charges and 

a.llegations in the discharge memorandum were false. The 

charges were serious and resulted in Crenshaw losing her 

employment as well as jeopardizing her career. This was an 

act of bad fa-ith. The record shows that Crenshaw's discharge 

was motivated by bad faith and warrants recovery for breach 

of implied covenant of good faith and fair dealing under 

Gates - I. 

We therefore uphold, instruction 14 that stated 

probationary employees " . . . may be discharged if they do 

not measure up to the hospital standards during the 

probationary period. However, even these employees are owed 

a duty of good faith and fair dealing. . . " was properly 

given by the District Court. 

The Hospital next claims error by the trial court 

refusing to give defendant's proposed instruction involving 

wrongful discharge: "It is only when public policy has been 

violated in connection with the wrongful discharge that the 

cause of action arises. " The Hospital contends that 
violation of public policy is a necessary element of the 

doctrine of good faith and fair dealing which the jury should 

have been allowed to consider. In support of this 

contention, the Hospital cites Nees v. Hocks (Or. 1975), 536 

P.2d 512; Peterman v. International Brotherhood of Teamsters 

(1959), 174 Cal.App.2d 184, 344 P.2d 25. 

The Hospital is correct that this Court adopted the 

concept of implied covenant of good faith and fair dealing 

from the New Hampshire Supreme Court decision of Monge v. 

Beebe Rubber Co. (1974), 114 N.H. 130, 316 A.2d 549. The 

decision in Monqe was later limited by the New Hampshire 

Supreme Court to situations where the termination violated 

public policy. Howard v. Door Woolen Co. (1980), 120 N.H. 

295, 414 A.2d 1273. However, the Hospital may not assume 

that by adopting the earlier New Hampshire decision, this 

Court will accept the imposed limitation as well. 

We have repeatedly stated that a showing of public 

policy violation is required only to sustain an action for 

wrongful discharge. "It is only when public policy has been 

violated in connection with the wrongful discharge that the 

cause of action arises . . . " Keneally v. Orgain (Nont. 

1980), 606 P.2d 127, 37 St.Rep. 154; See also Dare v. 

Montana Petroleum Marketing Co., supra. The present case is 

not a case which involves an allegation of "wrongful 

discharge." The central issue here, is whether there was a 

breach of duty of good faith and fair dealing. By virtue of 

Gates - I and Gates - 11, this Court recognizes that liability is 

not limited to those cases in which a public policy violation 

has been alleged. 

The Hospital next claims error by the trial court's 

instruction defining negligence. The Hospital arques that 

negligence is not an issue in the breach of a covenant of 
good faith and fair dealing. That negligence is not 

synonymous with bad faith. Thompson v. State Farm Mutual 

Automobile Insurance (1972), 161 Mont. 207, 505 P.2d 423; 

also Gram v. Liberty Mutual Insurance Co. (Mass. 1981), 429 

N.E.2d 21. 

Crenshaw responds the Hospital's failure to interview 

all of the witnesses present on the night in question wads 

negligent as a theory separate and distinct from the theory 

of breach of good faith and fair dealing. Crenshaw offered 

evidence which raised the question of the Hospital's 

negligence: 

(1) the former acting director testified lze had not 

interviewed all of the appropriate witnesses; 

(2) the administrator admitted that he had failed to 

interview key witnesses and that he was not sure he had 

interviewed a physician before sustaining the discharge; and 

(3) Doctor Vinton, Crenshaw's expert on personnel 

management, conceded that "when the discharge was made . . . 

the allegation had not been properly investigated by the 

Hospital administrator." 

In light of the foregoing, we find the Hospital's 

conduct showed a "want of attention to the nature or probable 

consequence of the act or omission" and that their conduct 

fell below the "standard established by 1-aw for the 

protection of others against unreasonable risk." Flansberg 

v. Montana Power Co. (1969), 154 Mont. 53, 460 P.2d 263; Mang 

v. Eliasson (1969), 153 Mont. 431, 458 P.2d 777. The 

allegation of negligence was clearly established in 

respondent's complaint. We hold the trial court committed no 

error in issuing the instruction to the jury. 
The Hospital raises as its next issue $or appeal, the 

testimony of Crenshaw's expert on personnel management, Dr. 

Karen Vinton. Dr. Vinton testified to the following: 

"1. That there were serious weaknesses in 

the actions taken by the Hospital in 

discharging Shirley Crenshaw; 

"2. She testified as to the importance of 

giving an accused employee the 

opportunity to defend herself in a non 

stressful situation; of following 

established disciplinary procedures for 

investigation and appeal; of carefully 

documenting disciplinary matters; and of 

maintaining the appearance as well as the 

reality of fairness; 

"3. That the Hospital failed to properly 

investigate the charges against her; 

"4. That Ms. Crenshaw would have 

difficulty finding subsequent employment; 

"5. That in her opinion, the discharge of 

Ms. Crenshaw was unjustified." 

The qualifications of the expert are well-documented in 

the record. Dr. Vinton received her Nasters in Business 

Administration and her PH.D in Human Resource Management and 

Organizational Behavior. She is Assistant Professor of 

Business Administration at Montana State University. She is a 

member of the American Associates of Personnel 

Administrators. Her experience is extensive. She has acted 

as a consultant to business and research firms. She has 

taught human resource management to hospital management. 

The Hospital moved to exclude her testimony on two 

grounds: (1) the issue was not the proper subject to expert 

opinion; and (2) her testimony would constitute comment and 

argument going to the ultimate issue of this action. 

The Hospital contends the testimony of Dr. Vinton has 

invaded that field of common knowledge to the severe 

prejudice of the defendants. The employer-employee 

relationship is within the common knowledge of the average 
layman. The Hospital goes on to state all persons have been 

exposed to such a relationship. 

The Hospital primarily relies on Ployhar v. Board of 

Trustees of Missoula (1980), 187 Mont. 363, 603 ~,2d 1226. 

There, parents of a son killed in a heavy equipment operation 

accident brought a negligence action against school board. 

An expert testifying for the defendant was allowed to give 

his opinion as to the cause of the industrial accident. We 

affirmed the trial court order, stating: "opinion evidence 

concerning the cause of an accident is admissible only if the 

subject matter is beyond the ordinary understanding of the 

jury." We held there was no need for such testimony. In 

Ployhar, the accident was simple. The evidence was 

sufficient to allow the jury to make an independent judgment 

as to the ultimate cause of the accident. The instant case 

is not a scenario of simple fa.cts. Fault arising from breach 

of implied covenant of good faith a.nd fair dealing is not 

easily comprehensible to the average person. Dr. Vinton's 

testimony was based on professional expertise and experience 

which the individual jury members were unlikely to possess. 

Her testimony assisted the trier of fact by providing the 

jury with information and a prospective beyond the common 

experience of a lay juror. State of Montana v. Howard (Mont. 

1980), 623 P.2d 1226, 38 St.Rep. 1980, see also Demarais v. 

Johnson (1931), 90 Mont. 366, 3 P.2d 283. 

The admissibility of expert testimony is governed by 

Rule 702, Montana Rule of Evidence: 

"If scientific, technical, or other 

specialized knowledge will assist the 

trier of fact to understand the evidence 

or to determine a fact in issue, a 

witness qualified as an expert by 

knowledge, skill, experience, training, 

or education may testify thereto in the 

form of an opinion or otherwise." 
Contrary to the Hospital's reading of this rule, Rule 702 

does not exclude expert testimony on all matters about which 

jury members have any knowledge or experience. This Court 

has long passed the days of when only experts in the field of 

medicine were allowed to testify. We must continue with the 

spirit of the new rules of evidence and recognize individuals 

in other fields, especially the complex domain of labor 

relations are a new legion of experts. In Barmeyer v. 

Montana Power Co. (Mont. 19831, 657 P.2d 594, 40 St.Rep. 23, 

this Court stated: 

" . . . Rule 705, Mont. R. Evid. , mandates 

that the opinion of a qualified expert is 

admissible, and if opposing counsel 

believe the opinion is not founded on 

sufficient data, cross-examination is the 

shield to guard against unwarranted 

opinions . . . Stewart v. Casey (1979), 

182 Mont. 185, 595 P.2d 1176." 

The Hospital's counsel vigorously cross examined Dr. Vinton 

to determine the extent of her knowledge with respect to 

hospital management, j-n particular, personnel policy 

governing probationary employees. 

"Q. [By Mr. Berg] Well now, 1-et's take it 

in general, do you know is there a 

distinction, generally speaking, between 

the procedure for dismissal of a 

probationary as distinguished from a 

permanent employee? 

"A. It usua.11~ depends on the company's 

written procedures, but frequently 

probationary employees are not afforded 

as much as permanent full-time employees 

in the discipline procedures. 

"Q. Would it be fair to say that a 

probationary employee may be discha.rged 

without reason? 

"A. There are companies that do that, 

yes. 

"Q. I see. Do you know what the policy of 

the Bozeman Deaconess Hospital is with 

regard to that policy? 

"A. As I read it, in the personnel 

policy, it stated that probationary 
employees can be discharged without 

notice. 

"Q. I see. So, in Rozeman Deaconess 

Hospital, that's one of the institutions 

that make it clear, distinguishes between 

probationary and permanent employees? 

"A. I don't think they make it a very 

clear distinction -- 

"8. They do with notice? 

"A. As far as notice, yes. 

"Q. Well, they do as far as notice is 

concerned. 

"A. As far as notice, yes. 

"Q. Do you know what an at will employee 

is? 

"A. Yes. 

"Q. What is an at will employee? 

"A. Well, at will the term at will was 

developed through some legal people 

basically it means that an employee or an 

employer can terminate an employment 

agreement at any time for any reason with. 

no notice." 

The trier of fact's experience does not extend to Hospital 

disciplinary guidelines, much less the ability to evaluate 

the propriety of such guidelines. We find Dr. Vinton's 

perspective assisted the jury to understand the evidence and 

ultimately the breach of implied covenant of good faith and 

fair dealing question at issue. Further, the Hospital's 

counsel moved in limine to exclude Dr. Vinton's testimony. 

The argument was presented to the trial judge. The trial 

court in its broad discretion admitted the expert testimony. 

The trial court's order will not be disturbed on appeal in 

the absence of a clear showing of a manifest abuse of 

discretion. Yerkich v. Opsa (1978), 176 Mont. 272, 577 P.2d 

857; Tigh v. College Pa.rk Realty Co. (1967), 149 Mont. 358, 

427 P.2d 57; Ployhar v. Board of Trustees (1980), 187 Mont. 

363, 609 P.2d 1226, We find no abuse of discretion here. 
This Court recognized for the first time that the 

breach of an implied covenant of good faith and fair dealing 

was a tort for which punitive damages may be awarded. In 

Gates v. Life of Montana (Mont. 1983), 668 P.2d 213, 40 

St.Rep. 1287 we stated: "Breach of the duty owed to deal 

fairly and in good faith in the employment relationship is a 

tort for which punitive damages can be recovered if 

defendant's conduct is sufficiently culpable." The Hospital 

submits it was clear error to instruct the jury on punitive 

damages. Crenshaw was discharged on March 12, 1982. The 

Gates - I1 decision was decided by this Court August 5, 1983. 

The Hospital advamces it was error to assess punitive damages 

for tortious conduct that was an unknown cause of action at 

the time of plaintiff's discharge. We disagree. We 

established the duty of good faith and fair dealing arising 

out of an employment agreement in Gates - I. The Hospital was 

put on notice to deal in good faith at the time the alleged 

incident took place. Moreover, negligence on the part of the 

Hospital's investigation was yet another basis of Crenshaw's 

cause of action. Section 27-1-221, MCA, provides: 

"In any action for a breach of an 

obligation not arising from contract 

where the defendant has been guilty of 

oppression, fraud or malice, actual or 

presumed, the jury, in addition to the 

actual damages, may give damages for the 

sake of example and by way of punishing 

the defendant. " 

Under this statute, it is necessary to prove more than 

ordinary negligence; such willful disregard of duty amounting 

to actual or implied malice must be shown. Spackman v. Ralph 

M. Parsons Co. (1966), 147 Mont. 500, 414 P.2d 918; Cashin v. 

Northern Pacific Ry. Co. (1934), 96 Mont. 92, 28 P.2d 862. 

Crenshaw asserts the maliciousness of the Ilospital's 

conduct stemmed from the Hospital removing the "arterial 
blood gas" certificate from her personnel file and 

fabricating charges against her. The record sustains that 

the Hospital failed to properly investigate the charges. In 

a medical community such as Bozeman, charges of such a nature 

should not have been raised without careful consideration of 

the consequences to one's professional livelihood and 

reputation. This, we hold, is the degree of culpability the 

Gates - 11, decision was to prevent. 

We find the evidence set forth by Crenshaw presented an 

issue of punitive damages. The issue was properly submitted 

to the jury. 

The judgment of the District Court is affirmed. 

We concur: i 

3~4 4 .pd& ~~J 

Chief Justice 

Justices 

Mr. Justice L. C. Gulbrandson: 

I specially concur in the result. 

/I 

I 

Justice