# FILED May 22, 1997 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COURT

OF APPEA LS OF TEN NESSEE WESTER N SECTION AT J ACKSON

______________________________________________________________________________ JIM VOSS, Shelby Circuit No. 33592 997 C.A. No. 02A0

1-9604-CV-0

0082 Plaintiff, Hon. W. B. Acree, Judge v. SHELTER MUTUAL INSURANCE COMPANY, SHELTER GENERAL INSURANCE COMPANY, and SHELTER LIFE I NSURANCE COMPANY OF CO LU MB IA M ISS

OU RI, Defendan ts. GERALD F. EASTER & KAREN R. CICALA, Memphis, Attorneys for Plaintiff. JAMES E. CONLEY and JOHN H. DOTSON, Thomason, Hendrix, Harvey, Johnso n & Mitchel l, Me mphis, Attorneys for Defe ndants. REVERSED AND DISMISSED Opinion filed:

______________________________________________________________________________ TOMLIN, Sr. J. Jim Voss (herei nafter

“Voss” or “Pla inti ff”) fil ed suitin the Ci rcuit Court of Shelby County agai nst Shel ter Mutual I nsurance Company, Shelt er General Insuranc e Com pany, and Shel ter Li fe Insur ance Company of Colum bia, Missouri, (herei nafter “Sh elter” o r “D efend ant”) s eekin g dam ages allege dly ca used by a b reach of co ntract,
wr ong ful te rm inati on o f ag enc y ag reem ent, r etalia tory disc har ge, a nd l ibel a nd s land er. The tri al court

granted s umm ary judgment i n favor of Shelter on all c laims exceptthat of retalia tory d ischar ge. T he ca se w as tried to a jury, w hich re sulted in a verd ict in favor of plaintiff in the am ount of $1 65,077.00 . The trial court ove rruled She lter’s Motion for a Judgment NOV, or In the Alt ernati ve, for a New Trial. Shel ter has rais ed two issues f or ou r con sidera tion on appe al: W hethe r the trial co urt (1) e rred in failing to grant i ts Motion fora Direct ed Verdictat the close of plaintiff ’s proof

as well as at the close of all the proof; and (2) i n fail ing to pr operly charge the j ury as t o the la w of retal iatory dischar ge. For the reasons hereina fterstat ed we reverse the judgment of the trial court and dismiss. Plaintiff started in the insurance business as a n em ployee o f Shelter in 198 2. In 1984 plaintiff

entere d into an a gency agreement with Shel ter, under which he2

kno win gly rem aine d an em plo yee -at-w ill thro ugh out the c our se o f his e m plo ym ent. In mid 1991 after

some conversati ons with fe llow Shelt er employees and af ter atte nding a sal es meeting i n his ar ea, Voss made a tel ephone call to the Tennes see De partm ent of I nsura nce a nd sp oke w ith an o fficial in tha t depa rtm ent. A t that tim e Voss voiced hi s complaints and object ions concerning the pot entia l incr eases of insurance rates by Shelter, along with som e man agem ent complaints. This conv ersation took place som e tim e in Ju ly, 199 1. La ter that m onth Da vid W ill iams, the i nsurance depa rtment off icia l with whom Voss talked, contact ed an employee of Shelt er and advi sed him of the det ails of thi s conversa tion. Several da ys later , Sh elter , thro ugh its T enn esse e sa les m ana ger , term inate d V oss ’s em plo ym ent. Th is su it w as file d so m e tw o ye ars la ter. I. The Directed Verdict Issue. Shelter moved for a directed verdic t at the close of plaintiff ’s proof, and i t was
over ruled. S helter re new ed its m otion a t the clo se of a ll the pro of. It w as ag ain overrul ed. These t wo rulings by the tri al court were preser ved by Shelte r in i ts Motion for Judgment NOV or in the Alt ernati ve, for a New Trial, where the tri al court once ag ai n r ul ed in fa vor

of pl ai nt if f. The pr in ci pa l i f n otso le ba si s o f e ac h of th e t wo motions was thatthere was no pr oof by plai ntif f of any i llega l act ivity on the part of Sh elter
. Our scope of re view is as foll ows, as st ated by the supreme court i n W ill iams v. Bro wn , 860 S.W .2d 854, 85 7 (Ten n. 1993):
On review of the g rant of a direc ted ve rdict on m otion o f a defe ndan t, it is not th e office of an appe llate cou rt to w eigh th e evid ence . Rath er, it must take the stronge st l egiti mate view of the evi dence in f avor of the plaintiff, indul ging in al l reas onable i nference s in hi s favor, and disre garding any e vidence t o the contrary. The tri al judge ’s act ion may be sustain ed on ly if there is no m aterial ev idenc e in the record that w ould support averdict

for the plai ntif

f, under any of the theories that he has advanced.
Both Voss and Shelt er in their r especti ve brief s before this court r ely upon the pro visio ns o f T.C .A. § 50- 1-3 04, o bvi ous ly d raw ing diffe ring con clus ion s the refro m . The pertine nt pro vision s of this s tatute, so m etim es refe rred to as “T he W histle3

Blower” statute, codifi ed as T.C.A. § 50-1-304, reads as follows: 50-1-304. Discharge for refusal to participate in or remain silent about illegal activities, or for legal use of agric ultural product—Damages—Fr ivolous lawsuits.— (a) No employee shallbe dischar ged or terminated sole ly for refusi ng to participa te in, or for r efusi ng to remain si lent about, i llega l activit ies. (b) As u sed in this section, “illegal activities” m eans activities wh ich are in viol ation of

the cri minal or ci vil code of thi s stat e or the Unit ed State s or any regul ation i ntended t o protect the publi c health, saf

ety or welf

are. (c) Any employee ter minated in vi olati on of subsection (a) shall have a cause of ac tion aga instthe employer f or ret alia tory di scharge and a ny other damages t o which the employee may be entitled. * * * *
This enact ment of a statutory caus e of act ion, whic h took plac e in 1990, embodies a comm on-law cause of acti on, ini tial ly recogni zed as an exception to the employee at-wil l doctrine in Clanton v. Cain-Sloan Co. , 677 S.W .2d 4 41 ( Te nn. 1 984 ). Our su prem e court prev iously cons idered this cause of action in its com m on-law form in both Chism v. Mid-South Milling Co. , Inc. , 762 S.W.2d 552, 555- 57 (Tenn. 1988) and short ly ther eafte r in W atson v. Cleveland Chai r Co. , 789 S.W.2d 538, 544 ( Tenn. 1989). The Chism court, while rec ognizing the cause of a ction f ound that there was none on the fa cts of

the case there pr esented. Both the Chism court and the W atson cour t show ed relu ctanc e, in ou r opin ion, to full y embrace this cause of ac tion. The Chism court s tate d the importa nce of basi ng the cause of ac tion upon publ ic poli cy clear ly “evi denced by an unambiguous consti tuti onal, statutory orregulat ory provi sion. ” Id. at 556. That courtnoted tha t publi c polic y guidance was neces sary becaus e a balance between the em ploy er’s righ t to term inate a n at-w ill em ploy ee ov er m anag em ent an d pu blic policy de cisi ons and the employee’ s right to be prot ected f

rom unlawful dis charge l ay at the hea rt of th e law of re taliato ry d isch arg e. Id. at 555. In W atson the court

refl ected i ts re lucta nce “to es tabli sh publi c polic y or adopt an excepti on to the c omm on-law by plac ing [i ts] i mprimatur thereon i n the absenc e of some constitutionalor legi slat ive prec edent. ” Id. at 54 4. In Merrym an v. Centr al Parki ng System, Inc. , 1992 WL 330404 (Tenn. App.4

1992) aft er anal yzing “the framework of analys is of acomm on-law wrongful or retal iatory dischar ge acti on”, t his cour t found f our elements were ne cessar y for the existen ce for a caus e of ac tion un der the Ac t: (1) the plaintiff’s s tatus as an em ploy ee of th e defe ndan t; (2) the plai ntif

f’s r efusal to participa te in, or to r emain sile nt about, ill egal activit ies; (3) the employer’s di scharge of the employee; (4) an exclu sive ca usal re lationsh ip betw een th e plain tiff’s refus al to participate in or rem ain silent about illegal activities and the em ployer’s terminat ion of the employee. Id. at pa ge 6
. See also Anderson v. St andard Regist er Co. , 857 S.W.2d 555, 585 ( Tenn. 1993). W hile no t releva nt to the issue b efore th is cou rt at this tim e, our s upre m e cou rt in the case of Mason v. Kenneth M. Setton, et al , No. 03S01-9606- CV-00061 slip op. (Tenn. April7, 1997) has held tha t thi s Act does notrequir e a showing that the emp loyer instructed the employee to refrain from reporting the ill egal activity. In so ruli ng the Mason court s tate d: “Remaining si lent i s the opposi te of s peaking out , and refusin g to rem ain silen t is the sam e as sp eakin g ou t. The clear m eanin g of th e statute is that em ploy ees h ave th e abs olute rig ht to sp eak o ut abo ut illegal a ctivities in th eir work places. ” Id. at

page 19. W e next turn to the fi rst element of plainti ff’s prima facie case, i .e. , whether he had engaged in pr otect ed acti vity. In that regard the Act provide s that“no employee sha ll be t erm inate d so lely f or . . . re fusin g to rem ain s ilent abo ut, ille gal a ctivi ties.” T.C.A. § 50-1- 304(a). “Ill egal activities” i s defi ned as “act ivities which ar e in viol ation of the criminal or c ivil code of thi s stat e or of the United Sta tes, or of any r egulat ion intende d to prot ect the public health, saf ety, or welfar e.” T.C. A. § 50-1-304(b) . The incide nt that

would have to ri se to this l evel t o sati sfy thi s defi niti on would of course be plaintiff ’s conver sati on about defe ndant, relat ed in a t elephone cal l to a member of the Ten nesse e Insu rance De partm ent. B oth p arties stipu lated th at the c onten ts of said
conv ersation we re spe cifically d etailed in the follo win g m em oran dum entere d into evide nce a t trial:5 TO: M ax D ills From: Lanny Barton David W ill iams of the Tennes see Insur ance Department cal led toda y concerni ng the st atus of an auto ra te fi ling. In the conve rsat ion he st ated Shel ter has an agent who is t rying t o get us “in a whole bunch of

troubl e”. The agent , Ji m V oss of Somervil le, Tennessee re centl y call ed David. David sa id the a gent was “mad, real mad”. David said the same agent als o call ed him last ye ar. David made the fol lowing comm ents about the phone conver sati on: -A gen t wa s ex trem ely u pse t wi th ra te inc reas es in all lin es. He stated Shel ter i s running hi m out of business because t he rates are so high. Agent stat ed the com pany is mak ing so mu ch m oney that we recouped all of 1990 losses in the first quarter of 1991. Agent s tate d he was sending David a c opy of a letter f

rom the Tennessee St ate Sal es Manager which include d this infor mation. -Agent st ated the company was “cleaning up”. Com pany managem ent is looking out only forthemselves, not the policyholders. -An employee was promoted to Presi dent only one to one and one-hal f years before r etir ement only so the employee could receive higher benefits. -Som eone sh ould be w atching ou t for this com pany. T here will be achange in pr esident s in the futur e and ithas alr eady been worked out as t o who will get the posit ion. David also s aid the agent mentioned he has the Secr etary of the Speaker of the Tennes see Senate (Wilder) i nsured. David suggest ed thatsomeone from Shelter might want t o talk t o the agent. David request ed thathis name not be used but he real ized that the ag en t wo ul d k no w wh er e the i nf or ma t i on ca me f

r om.
W hile there is other t esti mony by plainti ff i n the rec ord as t o what may have prompted plai ntif

f to cal l the I nsurance Department, ther e is nothing in the record t o the effe ct tha t plai ntiff to ld an y of this to the I nsu ran ce D epa rtm ent o fficia l. Plaintiff c onten ds tha t The Pub lic Prote ction A ct is a rem edial sta tute, in tha t it intr oduces regul ations conducive t o the publi c good, and as s uch should be cons trued liber ally a nd in fur theranc e of the s tatut e’s purpos e, ci ting Loftin v. Langsdon , 813 S.W .2d 475 (T enn. A pp. 1991 ). For the sake o f this opinion, w e will conc ur. How ever, we point out that in Loftin the middle se ction of this court s et forth sever al othe r long stand ing ru les of sta tutory c onstru ction th at are to be fo llow ed by the co urts of th is6

state. So m e of the se tried a nd tru e princ iples are as follo ws: In cons truing a statute it is the d uty of th e co urt to giv e ev ery wo rd a nd p hra se m ean ing
. United Canners, Inc. v. King , 696 S.W.2d 525, 527 ( Tenn. 1985). Questions i nvolving s tatut ory constructi on must be answered in l ight of reason, having in mind the objectof the s tatut e and the
m isch ief it a im s at. State v . Netto , 486 S .W .2d 72 5, 728 (Ten n. 197 2). Fu rtherm ore, in construing a st atute the int ention of the le gisl ature i s to be gathered fr om w ords it has
use d an d no t from wo rds it has cho sen not to in clud e. Dw yer v. P rog ress ive B ldg . & Loan Assoc. , 20 T enn. A pp. 16 , 94 S .W .2d 72 5, 729 (193 5). Th is statute, like all statutes, mu st be applied in it s present form unless doing so would result in “manifest injus tice .” Scarboro v. First Am erica n Bank , 619 F.2d 621 ( 6th Cir. 1980). And las tly,
we m ust t ake the words of this statute in their natural and or dinary s ense without forc ing a co nstru ction upo n th em wh ich w oul d lim it the ir m ean ing
. State v. Thomas , 635 S .W .2d 114 (T enn. 198 2). W hen we examine the content s of the sole conver sati on between plai ntif f and the offi cial of the Tennes see Insur ance Department, which by sti pulati on was admitted by plaintiff to be “re lati vely accur ate”, and to which pl ainti ff di d not seek t o add any content , we are of the opinion that pla inti ff fa iled t o intr oduce evidence of any “il legal acti viti es”—nam ely, acti viti es “descr ibed in vi olati on of any civi l or cr iminal code or regulations of this st ate or c ountry, intende d to prot ect the public health, saf ety or welfare. ” To the contr ary, the fir st par agraph the reof merely s tate s thatthe rat es being charged by Shelter were so high that it was adversely affecti ng his business. The thrust of the b alanc e of the com plaints in volv e only com plaints a bou t m anag em ent. Clearl y, the acti viti es thus r eported i n no way could be consi dered “i llega l acti viti es” withi n the meaning of the statute. In addition, i t was sti pulate d to by the parti es that

no ill egal activities on the part of defendanttook plac e in regard to the establ ishment of i nsurance r ates. In our opi nion thi s disput e involve d only a combination of

a corporat e managem ent dis pute coupl ed with a per sonal f inanci al problem of plai ntif

f. Pl ainti ff di d not report any il legal acti vity i n his t elephone conversation with the Insura nce Department. Ther e was no proof of a ny violation of any establ ished publ ic poli cy. Accordi ngly, this cour t is of the opi nion that the trial7

court erred in f

aili ng to grant

defendant s’ Motion forDirecte d Verdict a t the c lose of plaintiff ’s proof, on the ground that plaintiff fail ed to est ablis h a prima facie cas e. In li ght of ouropinion as to thi s iss ue, we pret ermit Shelt er’s s econd iss ue pertaining to the jury charge. Accordingly, the judgment of the trial court is
revers ed an d plain tiff’s suit is dis m issed. C osts in th is caus e on a ppea l are tax ed to plaintiff, forwhich executi on may issue if necessary.

________________________________________ TOMLIN, Sr. J.

________________________________________ FARMER, J. (CONC URS)

________________________________________ LILLARD, J. (CONC URS)