Court Opinion

ID: 9850595
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:59:44.789702+00
Date Added: 2024-06-11T09:20:40.101356
License: Public Domain

Utter, J.
(concurring in part, dissenting in part) — I concur in parts I, II, and IV of the majority opinion. I must, however, dissent to part III, which concerns the availability of emotional distress damages. Emotional distress damages should be recoverable for breach of an employment contract where the employee can demonstrate that the employer's conduct was wanton or reckless, and that emotional distress was a foreseeable result of the breach. *452This standard better protects an employee and his or her family from the damage caused by a wrongful discharge, and is a reasonable standard for an employer. This standard also reflects the evolution in the common law represented in the Restatement (Second) of Contracts (1981).
The majority maintains that Gaglidari should be limited to traditional contract damages because recovery for emotional distress is normally not allowed for breach of an employment contract. While the first Restatement of Contracts may support the majority's holding, the language of the second Restatement does not.
The original Restatement provided:
In actions for breach of contract, damages will not be given as compensation for mental suffering, except where the breach was wanton or reckless and caused bodily harm and where it was the wanton or reckless breach of a contract to render a performance of such a character that the defendant had reason to know when the contract was made that the breach would cause mental suffering for reasons other than mere pecuniary loss.
(Italics mine.) Restatement of Contracts § 341 (1932).
The second Restatement states:
Recovery for emotional disturbance will be excluded unless the breach also caused bodily harm or the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result.
(Italics mine.) Restatement (Second) of Contracts § 353 (1981). Thus, the first Restatement allowed recovery for emotional distress only where the nature of the contract was such that mental suffering was reasonably foreseeable. The second Restatement, however, allows recovery where the contract or the breach is of such a kind that serious emotional disturbance is a particularly likely result. Thus, the second Restatement has added an alternative scenario allowing recovery. Under the second Restatement, if the breach is of a certain nature, i.e., if emotional disturbance is a particularly likely result of the *453breach, recovery will be allowed. The majority's conclusion to the contrary ignores the revision of the Restatement.
The majority also neglects sound policy arguments for allowing recovery for emotional distress damages caused by wanton or reckless breaches of employment contracts. Although either party could traditionally terminate an employment contract at will, this rule has given way to several exceptions. Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 226-27, 685 P.2d 1081 (1984). In Thompson, we noted that the traditional employment at will doctrine left employees unprotected and gave employers unfettered control of the workplace. Thompson, at 226. Determining that certain employer conduct would no longer be tolerated, we elected to modify the traditional rule. Thompson, at 233.
We also modified the traditional rule where a termination violates public policy. In Cagle v. Burns & Roe, Inc., 106 Wn.2d 911, 919, 726 P.2d 434 (1986), we held that an employee can recover emotional distress damages where the termination violates public policy.
The reckless or wanton breach of an employment contract, like the breach of a promise of specific treatment made in an employer's policy manual or the termination of an employee in violation of public policy, is also conduct we should not tolerate. When such conduct causes emotional disturbance, we should allow the injured employee to recover her damages.
Allowing recovery for emotional distress damages also furthers economic efficiency. One purpose of contract damages is to discourage economically inefficient breaches. Note, Damage Measurements for Bad Faith Breach of Contract: An Economic Analysis, 39 Stan. L. Rev. 161, 163 (1986) (hereinafter Bad Faith Breach). An economically efficient breach is one where the breaching party's gains exceed the injured party's losses. Traditional contract damages deter economically inefficient breaches by fully compensating the injured party. Bad Faith Breach, at 168. Where traditional damages do not fully compensate the *454injured party, however, those damages do not adequately deter economically inefficient breaches. The majority opinion approves a system that fails to compensate adequately some injured parties, and by so doing undermines one of the main purposes of breach of contract damages.
As Justice Broussard notes in Foley v. Interactive Data Corp., 47 Cal. 3d 654, 765 P.2d 373, 254 Cal. Rptr. 211 (1988), "in many cases the employer is aware at the time of the contract that bad faith discharge will create great mental and emotional distress." Foley, at 702 (Broussard, J., dissenting). See also Foley, at 717 (Kaufman, J., dissenting) (arguing that there is a "special relationship" between employer and employee which includes elements of public interest, adhesion, and financial dependency which supports allowing tort remedies when discharge is willful or malicious). Recovery for emotional distress damages in a breach of employment contract action should be allowed where the plaintiff can demonstrate that the employer's conduct was wanton or reckless, and that emotional disturbance was a foreseeable result of the breach.
Had Gaglidari framed her cause of action as either a wrongful discharge claim or a negligent infliction of emotional distress claim she would have been able to seek recovery for emotional disturbance. Hunsley v. Giard, 87 Wn.2d 424, 553 P.2d 1096 (1976); Cagle v. Burns & Roe, Inc., 106 Wn.2d 911, 916, 726 P.2d 434 (1986). She should not be deified the opportunity to present her emotional distress claim to the jury solely because she arguably did not properly frame her cause of action. Instead, the only issues should be whether Denny's' actions were wanton and reckless, and whether emotional distress was a reasonably foreseeable result of the breach.
Gaglidari met the test of the second Restatement. The court instructed the jury to consider Gaglidari's mental pain and suffering in assessing her damages only if they found that Denny's wantonly or recklessly breached the contract and that at the time the contract was formed it *455was foreseeable that emotional distress would result from a breach. Clerk's Papers, at 472. Juries are presumed to follow jury instructions. Bordynoski v. Bergner, 97 Wn.2d 335, 342, 644 P.2d 1173 (1982). Because the jury awarded damages for emotional distress, it is evident that the jury concluded (1) that defendant's breach was wanton or reckless, and (2) that emotional distress was a foreseeable result of the breach. The jury determined that the manner by which Denny's breached its contract with Gaglidari was such that she was entitled to recover damages for the emotional injury she suffered. That determination follows the second Restatement's analysis. Therefore, the jury's damage award should be affirmed.
This holding accords with that of the Colorado courts. Colorado courts recognize two exceptions to the general rule that recovery for emotional distress is not allowed. The first exception identified by the Colorado courts relates to the type of contract. Recovery is allowed when the contract is of such a personal or special nature that emotional damages were foreseeable at the time of the contract's formation. Trimble v. City & Cy. of Denver, 697 P.2d 716, 731 (Colo. 1985). The second exception relates to the breaching party's conduct. "[A] non-breaching party to a contract may recover damages for mental anguish alone when the breach is accompanied by willful and wanton conduct." Adams v. Frontier Airlines Fed. Credit Union, 691 P.2d 352, 355 (Colo. Ct. App. 1984); see also Trimble, at 731. These exceptions are consistent with the language of the second Restatement.1
Over 14 years ago in Summers, Individual Protection Against Unjust Dismissal: Time for a Statute, 62 Va. L. Rev. 481 (1976), the author accurately summarized the *456then state of the law regarding the powers of an employer to dismiss an employee. He noted, at page 532:
The primitive legal rule that an employer could deprive an employee of his job for any reason or no reason has been repudiated in social legislation for more than forty years. A body of arbitration law protecting against unjust discipline has existed for thirty years. But the harsh legal rule continues to leave a majority of employees vulnerable to the most arbitrary, oppressive, and vindictive actions. We have been so preoccupied with conflict and collective accommodation that we have not seen the instances of individual injustice. We have arbitrated tens of thousands of discipline cases, finding nearly half to be instances of injustice, but we have closed our eyes to the tens of thousands of cases of unjust discipline suffered by employees who have no adequate forum for obtaining justice. . . .
Since that article, the Restatement (Second) of Contracts § 353 (1981) has provided the scholarly support for the expansion of the common law.
The evolution of the common law on this subject depends upon courts being persuaded that recognition of a cause of action for emotional distress is more beneficial to society than holding the parties to the limits of traditional contract damages. See R Fitzgerald, Salmond on Jurisprudence 64 (12th ed. 1966) ("But what interests there are in a society and which of these are, and which should be, the subject of legal recognition are questions partly for sociology, partly for law and partly for ethics; and the reconciliation of conflicts between competing interests is in a broad sense part of the problem of justice.").
In Mauk, Wrongful Discharge: The Erosion of 100 Years of Employer Privilege, 21 Idaho L. Rev. 201, 255 (1985), the author notes:
The common law is characterized by its resilient capacity for providing remedies for new kinds of injuries. Thus, as political, economic, and social conditions have changed, it is evident that the at-will doctrine must give way. Inasmuch as the doctrine is a creature of the common law, it is appropriate that the newly recognized exceptions to its application should come from judicial decisions. What is apparent from these decisions is the dynamic machinery of the common law, endeavoring to reconcile the changing expectations of an *457unprotected work force with principles of law which have all but lost their relevance in contemporary labor relations.
For the reasons stated, the common law should provide for recovery in this case pursuant to the Restatement (Second) of Contracts § 353 (1981).

Other courts also recognize that section 353 of the second Restatement represents a change in the common law. See, e.g., Keltner v. Washington Cy., 310 Or. 499, 800 P.2d 752 (1990) (recognizing that the second Restatement has a "different approach" than the first Restatement); Asuncion v. Columbia Hosp. for Women, 514 A.2d 1187 (D.C. 1986) (recognizing that second Restatement reflects a change in the law, but declining to adopt it on the facts of this case).