Court Opinion

ID: 9902204
Source: CourtListenerOpinion
Date Created: 2023-11-24 15:04:25.316066+00
Date Added: 2024-06-11T09:21:47.501370
License: Public Domain

RENDERED: NOVEMBER 17, 2023; 10:00 A.M.
                      NOT TO BE PUBLISHED

               Commonwealth of Kentucky
                         Court of Appeals

                            NO. 2022-CA-0575-MR

WILLIAM WINCHESTER                                                APPELLANT

              APPEAL FROM MCCRACKEN CIRCUIT COURT
v.            HONORABLE TIMOTHY KALTENBACH, JUDGE
                       ACTION NO. 20-CI-00326

THE SALVATION ARMY, A
GEORGIA CORPORATION; JOHN R.
HORTON; AND MONICA HORTON                                          APPELLEES

                                  OPINION
                                 AFFIRMING

                                 ** ** ** ** **

BEFORE: ACREE, DIXON, AND JONES, JUDGES.

ACREE, JUDGE: Appellant William Winchester was terminated from his

employment with The Salvation Army (TSA) and subsequently sued Appellees,

TSA, John Horton, and Monica Horton for wrongful termination, retaliation,

defamation, and promissory estoppel. He appeals the McCracken Circuit Court’s
April 8, 2022 Memorandum and Order granting summary judgment in favor of

Appellees. We affirm.

                                      BACKGROUND

               Appellant began working for TSA at its Paducah Corps1 as a “Corps

Accountant” on July 9, 2014. Appellees John and Monica Horton led the Paducah

Corps. The Paducah Corps’ operations include a church, a community center, a

food bank, and a thrift store.

               The TSA’s Southern Territory Employee Manual explicitly states that

all employees are at-will except for those employees with a written contract.

Section 2.2 of the manual provides:

               Employees voluntarily enter into their employment
               relationship with The Salvation Army, and accordingly are
               free to resign at any time, with or without cause or reason,
               with or without prior notice. Similarly, The Salvation
               Army may terminate an individual’s employment at any
               time, with or without cause or reason, with or without prior
               notice. This mutual relationship is called “employment at-
               will.” In accepting or continuing employment, employees
               agree that the relationship is and always has been strictly
               voluntary and at-will on both sides. Nothing in this
               manual, or in any other document issued by the Salvation
               Army or its representative(s), will alter this at-will
               relationship except a written contract for that express
               purpose, which is signed by both the employee and the
               Board of Trustees.

1
 As Appellant notes in his brief, TSA is organized using a quasi-military structure. Its Kentucky
and Tennessee division is subdivided into “corps,” and each corps is typically headed by a husband
and wife team.

                                               -2-
Further, Section 15 of the manual states that “[i]n order to preserve the at-will

options of the organization and each employee, it is understood that the

employment relationship may be terminated with or without cause, at any time by

either party.” Appellant signed an acknowledgement form reflecting his

understanding of the at-will nature of his employment.

             Section 3.14 of the manual, titled “Whistleblower Protections[,]”

states as follows:

             If an employee has knowledge of, or concern about, illegal
             dishonest, or fraudulent activity, the employee is to
             contact his/her immediate supervisor or the Human
             Resources Department. The Salvation Army has a policy
             in place to protect individuals who are considered
             “whistleblowers”; for more information about the
             protections provided to whistleblowers, please see this
             policy. Managers and supervisors who become aware of
             reports of illegal and dishonest activities and/or violations
             of this policy through any means are obligated to promptly
             report this information to their supervisor (or up the chain
             of command as appropriate for the circumstances) and the
             Human Resources Department.

             Appellant claims to have witnessed the Hortons violate Kentucky law

in multiple ways, including insurance fraud, fraudulent misrepresentation, theft by

deception, falsification of business records, and harassment. For instance, he

alleges the Hortons obtained an insurance check to make repairs after a hot water

heater ruptured and flooded the church and community center but did not use the

insurance funds to make repairs. He also alleges the Hortons obtained a grant for

                                         -3-
canteen repairs and for musical instruments but used most of the grant funds for

general operations. He claims John Horton regularly altered and falsified monthly

financial reports that Appellant had prepared in order to conceal the true financial

condition of the Paducah Corps, and that the Hortons took items donated to the

thrift store and sold the items for personal profit. He also alleges that management

at the thrift store helped halfway house residents smuggle stolen items into the

halfway house by generating false receipts for the stolen items.

             Appellant began addressing his concerns with TSA in February 2019,

primarily by email. Appellant sent emails expressing his concerns to Lisa

Thompson, the human resources director for the Kentucky and Tennessee division

of TSA, and Sally Love, the Kentucky and Tennessee Personnel Secretary Captain.

             On February 7, 2019, Appellant requested accommodations under the

Americans with Disabilities Act (ADA) based on his exposure to tobacco smoke.

Appellant and Thompson met in person regarding an unrelated matter and, during

that meeting, Appellant informed Thompson of his concerns regarding alleged

drug dealing, health and safety problems, and other issues. Thompson asked

Appellant to email her a list of the issues he raised. Appellant did so. He claims

he relied on the TSA Employee Manual’s protections for internal whistleblowers.

             Appellant alleges that, after he raised concerns with Thompson, John

Horton falsely attributed errors affecting an annual audit to Appellant. The

                                         -4-
minutes of an April 11, 2019 Advisory Board meeting reflect that John Horton

discussed the status of an audit with the Board, informing board members that

items on the audit’s exception list were the result of coding errors in the general

ledger and that none of the exceptions were major issues. Appellant believes this

statement was meant to impugn his professional abilities as the Paducah Corps’

accountant, despite Appellant’s name not appearing in the meeting minutes.

             He also alleges the Hortons lowered the “professional integrity” rating

in Appellant’s 2019 annual evaluation in retaliation for emailing Thompson.

However, Appellees note that, because Appellant’s score increased in a different

category of his annual evaluation, his overall score remained the same; Appellant

received a raise following his annual evaluation.

             Regardless, Appellant submitted a retaliation complaint against the

Hortons by email to Thompson and Love on August 2, 2019. Ultimately, TSA

determined the Hortons had not violated any TSA policies. Thereafter, Thompson

wrote Appellant a letter dated September 6, 2019, wherein she assured Appellant

that no adverse employment action would be taken against him because of his

retaliation complaint. Appellant says he made further reports after receiving the

letter in reliance on Love’s assurance.

             Appellant claims the Hortons initiated a campaign of further

retaliation against him after making his retaliation complaint. He also suspected

                                          -5-
further financial issues with the Paducah Corps, and so he began to compile

evidence of what he believed to show, among other things, falsification of business

records, fraud, and misappropriation of grant funds. He claims John Horton had

been altering or otherwise falsifying financial reports Appellant had created;

Appellant claims he sent the next financial report to John Horton in a format that

could not be altered, and that Horton made Appellant resend the report in a format

that John would be able to edit.

             The TSA paid for the Hortons to travel to Israel for two weeks in

February of 2020. They placed the Paducah Corps’ youth director in charge during

their absence. Appellant claims the youth director had a problem with an

employee and, after contacting John Horton about what to do, Appellant and the

youth director spoke with the employee in John Horton’s unlocked office. Also

during the Hortons’ trip, an incident occurred during a youth activity; the youth

director was injured and Appellant assaulted. Appellant created an incident report;

upon the Hortons’ return to the country, Appellant claims John Horton insisted

Appellant change his incident report to remove criticism of the Hortons, but

Appellant refused to do so.

             Appellant was terminated on March 23, 2020, with the stated reason

being “a violation of The Salvation Army policy – Ethics and Confidentiality.” He

claims the reasons for his termination – that he broke into John Horton’s office

                                         -6-
while the Hortons were in Israel and that he photocopied a confidential social

services client sign-in sheet – were pretextual. Appellant claims he was required to

enter the office in the past and that, at least twice, the Hortons instructed him to use

a screwdriver to open the locked office door. He also claims the office door was

not locked while the Hortons were abroad. He also claims that, although Appellees

say the sign-in sheet is confidential, it was hanging on a clipboard in a location that

anybody would be able to see it.

             Appellant sued TSA itself, alleging wrongful termination in violation

of public policy, retaliation, and wrongful discharge and retaliation under a

promissory estoppel theory. He also sued the Hortons for defamation, libel,

slander, and conversion. On February 19, 2022, Appellant listed the factual

allegations supporting his lawsuit in an affidavit. On April 8, 2022, the circuit

court granted summary judgment on all claims except for conversion, which the

parties later resolved and filed a stipulation of dismissal. Appellant now appeals.

                            STANDARD OF REVIEW

             A circuit court properly grants summary judgment “if the pleadings,

depositions, answers to interrogatories, stipulations, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to a judgment as a matter of

                                          -7-
law.” CR2 56.03. “An appellate court’s role in reviewing a summary judgment is

to determine whether the trial court erred in finding no genuine issue of material

fact exist[ed] and the moving party was entitled to judgment as a matter of law.”

Feltner v. PJ Operations, LLC, 568 S.W.3d 1, 3 (Ky. App. 2018). Thus, appellate

courts review a circuit court’s grant of summary judgment motions de novo. Cmty.

Fin. Servs. Bank v. Stamper, 586 S.W.3d 737, 741 (Ky. 2019). However, “where

the movant shows that the adverse party could not prevail under any

circumstances” summary judgment is appropriate. Steelvest, Inc. v. Scansteel Serv.

Ctr., Inc., 807 S.W.2d 476, 480 (Ky. 1991). “[A] party opposing a properly

supported summary judgment motion cannot defeat that motion without presenting

at least some affirmative evidence demonstrating that there is a genuine issue of

material fact requiring trial.” Hubble v. Johnson, 841 S.W.2d 169, 171 (Ky. 1992)

(citing Steelvest, 807 S.W.2d at 480).

                                         ANALYSIS

I. Wrongful Termination.

                Appellant first argues the circuit court erred in dismissing his public

policy wrongful termination claim. He claims the circumstances of his termination

exempt him from the general prohibition against wrongful termination claims

brought by at-will employees. “[O]rdinarily an employer may discharge his at-will

2
    Kentucky Rules of Civil Procedure.

                                            -8-
employee for good cause, for no cause, or for a cause that some might view as

morally indefensible.” Firestone Textile Co. Div., Firestone Tire & Rubber Co. v.

Meadows, 666 S.W.2d 730, 731 (Ky. 1983) (citations omitted). This is known as

the “terminable at-will” doctrine and is “a longstanding corollary to mutuality of

contract.” Gryzb v. Evans, 700 S.W.2d 399, 400 (Ky. 1985).

             The Kentucky Supreme Court in Firestone identified three limitations

on any exception to the terminable at-will doctrine. See Firestone, 666 S.W.2d at

731-33. The Supreme Court more clearly listed these limitations in Gryzb: first,

“[t]he discharge must be contrary to a fundamental and well-defined public policy

as evidenced by existing law”; second, “[t]hat policy must be evidenced by a

constitutional or statutory provision”; and third, “[t]he decision of whether the

public policy asserted meets these criteria is a question of law for the court to

decide, not a question of fact.” Gryzb, 700 S.W.2d at 401.

             The Supreme Court in Gryzb determined that two – and only two –

exceptions to the termination at-will doctrine exist where the “‘grounds for

discharging an employee are so contrary to public policy’” that a cause of action

exists even without “‘explicit legislative statements prohibiting the discharge.’”

Gryzb, 700 S.W.2d at 402 (quoting Suchodolski v. Michigan Consol. Gas Co., 316

N.W.2d 710, 711 (Mi. 1982)). Under the first – the refusal exception – the

employee must have been discharged because he failed or refused to violate the

                                          -9-
law while employed. Id. (quoting Suchodolski, 316 N.W.2d at 711). Under the

second – the protected activity exception – the employee must have been

discharged because of “‘the employee’s exercise of a right conferred by well-

established legislative enactment.’” Id. (quoting Suchodolski, 316 N.W.2d at 711).

             Further, there must be a causal connection between the employee’s

protected activity and his subsequent termination: “in a non-civil rights wrongful

discharge case, a plaintiff must show ‘at a minimum that he was engaged in a

statutorily protected activity, that he was discharged, and that there was a

connection between the “protected activity” and the discharge.’” Mitchell v.

Coldstream Lab’ys, Inc., 337 S.W.3d 642, 645 (Ky. App. 2010) (quoting Follett v.

Gateway Reg’l Health Sys., Inc., 229 S.W.3d 925, 929 (Ky. App. 2007)). To

demonstrate a connection between a protected activity and the discharge, a plaintiff

must “show the protected activity was ‘a substantial and motivating factor but for

which the employee would not have been discharged.’” Follett, 229 S.W.3d at 929

(quoting First Prop. Mgmt. Corp. v. Zarebidaki, 867 S.W.2d 185, 188 (Ky. 1993)).

“As there is rarely a case where a plaintiff has a ‘smoking gun’ to prove improper

motive, a plaintiff must frequently ‘rely on circumstantial evidence and the

inferences that can be drawn therefrom to make his or her case.’” Id. (quoting

Willoughby v. GenCorp., Inc., 809 S.W.2d 858, 861 (Ky. App. 1990)).

                                         -10-
                 In Follett, we determined the circuit court erred in granting summary

judgment because there were genuine questions as to whether Follett was engaged

in statutorily protected activity, and as to whether this activity was a substantial

and motivating factor but for which she would not have been terminated. Id. at

932. Follett reported to her supervisor her suspicion that a physician was under the

influence of alcohol at work in or around March 2002, and cooperated with

investigative efforts in April and December of that year. Id. at 930. Follett

encouraged her staff to report suspected billing irregularities in the emergency

department in or around January 2003, and Follett cooperated with subsequent

investigations. Id. at 931.

                Because KRS3 311.990(6) makes it a misdemeanor to impede a State

Board of Medical Licensure investigator in their administration of KRS Chapter

311, and because KRS 311.5954 empowered the Board to “suspend, limit, restrict,

or revoke the medical license of a licensee who either engages in unprofessional

conduct likely to harm the public, or becomes a chronic or persistent alcoholic[,]”

we determined there was a genuine question of material fact as to whether Follett’s

communication with the investigator was a statutorily protected activity; had she

3
    Kentucky Revised Statutes.
4
 The United States District Court held KRS 311.595 unconstitutional in Eubanks v. Stengel, 28
F. Supp. 2d 1024 (W.D. Ky. 1998). Regardless, it was effective at the time Follett was
published, and provides a helpful analogy to the present case.

                                             -11-
not done so, she would have impeded an investigation in violation of KRS

311.990(6). Id. at 929-30. A further genuine question existed as to whether Follett

had engaged in statutorily protected activity because KRS 205.8465(1) requires

any person to report suspected violations of KRS 205.8451 et seq. – Kentucky’s

Medicaid fraud and abuse statute – and because KRS 205.8465(3) prohibits an

employer from discharging an employee who, in good faith, makes a report

required by KRS Chapter 205. Id.

             In the case under review, Appellant avers in his affidavit that he

refused to falsify business records – conduct proscribed by KRS 517.050 – when

John Horton directed Appellant to modify an incident report to remove statements

critical of the Hortons. However, KRS 517.050 states that a person is only guilty

of falsifying business records where he exhibits “intent to defraud,” and the circuit

court concluded that the changes John Horton wanted Appellant to make would not

have constituted a violation of KRS 517.050 because the statute requires such

intent. We agree. Removal of references critical of the Hortons in an incident

report – a document internal to TSA – would not have demonstrated an intent to

defraud had Appellant actually modified the report at John Horton’s direction.

             Our review reveals no other instance where Appellant refused to

engage in purportedly illegal activity when his employer directed him to do so. He

alleges in his affidavit that grant money requested for canteen repairs and musical

                                        -12-
instruments was spent otherwise, that insurance proceeds obtained to repair a water

line were not spent on that repair, and that John Horton told Appellant he planned

to obtain a grant for renovations by providing a reason other than renovations in

order to more easily obtain the funds. None of these allegations demonstrate

Appellant actually refused to engage in any illegal activity. Appellant also states

that John Horton instructed him to provide financial reports in a format that Horton

could edit; even assuming that John Horton did so in order to fraudulently

misrepresent the financial state of the Paducah Corps, Appellant did, as he admits,

provide the reports to Horton in an editable format. Presuming, arguendo, the

activity was illegal, Appellant’s mere observation or acquiescence in the activity

will not satisfy the refusal exception.

             Regarding the protected activity exception, Appellant argues the

Kentucky Whistleblower Act, KRS 61.102 et seq., protects him from reprisal for

his internal complaints of suspected illegal or unethical actions at TSA. However,

“[t]he Kentucky Whistleblower Act protects public employees who report

perceived misconduct[,]” Workforce Development Cabinet v. Gaines, 276 S.W.3d

789, 791 (Ky. 2008) (emphasis added), and, therefore, does not apply to

Appellant’s employment with TSA. See also Vonderhaar v. AT&T Mobility

Servs., LLC, 372 F. Supp. 3d 497 n.16 (E.D. Ky. 2019), superseded by Vonderhaar

v. AT&T Mobility Servs., LLC, No. 2:17-CV-114 (WOB-CJS), 2019 WL 1120117,

                                          -13-
at *1 (E.D. Ky. Mar. 11, 2019), affirmed by Vonderhaar v. Waymire, 797 F. App’x

981 (6th Cir. 2020) (“Vonderhaar also lacks a right of action under Kentucky’s

whistleblower statute because that provision only covers public

employees, see KRS § 61.102, and the protection has not been extended to private

employees.”). The Kentucky Whistleblower Act is unlike the statutes in Follett

that granted Follett access to the protected activity exception because those statutes

encompassed Follett and her employment at the hospital. See Follett, 229 S.W.3d

at 929.

              Because Appellant did not engage in any protected activity or refuse

to engage in conduct at the direction of his employer which would constitute a

violation of the law, we need not evaluate any claimed improper motive of the

Hortons. We conclude, therefore, the circuit court did not err in granting summary

judgment in favor of Appellees on Appellant’s wrongful termination claim.

II. Retaliation.

              Second, Appellant challenges the circuit court’s summary judgment as

to his retaliation claim. Appellant invites us to expand the public policy exception

to wrongful termination, discussed supra, to include retaliatory conduct other than

outright termination. We decline this invitation. Further, we agree with Appellees

that, because Appellant did not present this argument to the circuit court, he failed

                                         -14-
to preserve this argument for this Court’s review. Accordingly, we will not disturb

the circuit court’s summary judgment on this issue.

III. Defamation.

             Appellant next argues the circuit court erred in granting summary

judgment as to his defamation claim. According to Appellant, the Hortons made

defamatory statements about him during an April 2019 meeting of the Paducah

Corps’ Advisory Board. During the meeting, John Horton updated the Board

about an ongoing TSA audit. The meeting minutes reflect John Horton informed

the Board that coding errors in the Corps’ general ledger caused items to appear on

the audit’s exception list. He also stated that none of the cited exception items

were major, and Horton never mentioned Appellant by name. Regardless,

Appellant argues John Horton attributed the errors to Appellant and, therefore,

impugned Appellant’s skills as an accountant.

             To prevail on a defamation claim, a plaintiff must establish each of

four elements: “‘(a) a false and defamatory statement concerning another; (b) an

unprivileged publication to a third party; (c) fault amounting at least to negligence

on the part of the publisher; and (d) either actionability of the statement

irrespective of special harm or the existence of special harm caused by the

publication.’” Toler v. Süd-Chemie, Inc., 458 S.W.3d 276, 282 (Ky. 2014)

(quoting RESTATEMENT (SECOND) OF TORTS § 558 (AM. L. INST. 1977)).

                                         -15-
             However, to merely imply that an individual may have erred in their

job does not constitute defamation. “Speech is defamatory if it tends to ‘(1) bring

a person into public hatred, contempt or ridicule; (2) cause[s] him to be shunned or

avoided; or, (3) injure[s] him in his business or occupation.’” Doe v. Coleman,

436 S.W.3d 207, 210 (Ky. App. 2014) (quoting Yancey v. Hamilton, 786 S.W.2d

854, 858 (Ky. 1989)). As far as the minutes of the Advisory Board meeting reveal,

nothing John Horton said at the meeting rises to the level of defaming Appellant,

especially considering Horton noted that the issues were not major and never

mentioned Appellant by name. We, therefore, find no error in the circuit court

granting summary judgment on Appellant’s defamation claim.

IV. Promissory Estoppel.

             Finally, Appellant argues the circuit court erred in granting summary

judgment on his promissory estoppel claim. Appellant asserts Appellees made

multiple promises that he would not experience negative consequences for

reporting perceived illegal or unethical acts. For instance, Appellant states in his

affidavit that Love told him he would experience no adverse employment

consequences for submitting his retaliation complaint. He also argues that the TSA

Employee Manual’s provisions safeguarding whistleblowers constitutes a promise

that he would not suffer reprisal for his internal reports.

                                          -16-
             Under the doctrine of promissory estoppel, “‘[a] promise which the

promisor should reasonably expect to induce action or forbearance on the part of

the promisee or a third person and which does induce such action or forbearance is

binding if injustice can be avoided only by enforcement of the promise.’” Meade

Const. Co. v. Mansfield Com. Elec., Inc., 579 S.W.2d 105, 106 (Ky. 1979) (quoting

RESTATEMENT (SECOND) CONTRACTS, § 90 (AM. L. INST. 1981)). In this case,

Appellant began reporting perceived impropriety in February 2019, which was

months before Love told Appellant he would not experience adverse consequences

because of expressing his concerns to Thompson. Appellant says in his brief that

when Appellant and Thompson met in person to discuss Appellant’s ADA request

and his other concerns, Appellant relied on the provisions of the TSA Employee

Manual as a promise that he would not experience adverse employment effects due

to his emails to Thompson or his retaliation complaint. However, we find no case

law demonstrating that an employee manual can constitute a promise for the

purpose of a promissory estoppel claim. This case will not be the first unless a

higher court makes it so.

             Thus, it cannot be said that any promise induced Appellant to act in a

manner he would not have acted otherwise. Accordingly, we find no error in the

circuit court’s decision to grant summary judgment on Appellant’s promissory

estoppel claim.

                                        -17-
                              CONCLUSION

           For the foregoing reasons, we affirm the McCracken Circuit Court’s

April 8, 2022 Memorandum and Order.

           ALL CONCUR.

BRIEFS FOR APPELLANT:                   BRIEF FOR APPELLEES:

William Winchester, pro se              Megan R. U’Sellis
Paducah, Kentucky                       Louisville, Kentucky

                                      -18-