Court Opinion

ID: 8942289
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:03:58.176519+00
Date Added: 2024-06-11T17:09:46.035593
License: Public Domain

ARNOLD, Circuit Judge,
dissenting.
I respectfully dissent from the Court’s holding that no cause of action for breach of contract was made out in this case. It is apparently undisputed that the procedures specified in defendant’s employee handbook were not followed. The handbook promised that an immediate investigation would be held if the company became aware of any apparent dishonesty, misrepresentation, or other failure to fulfill the responsibilities of a life insurance agent. Further, the handbook assured employees that penalties appropriate to the offense, including termination, would be imposed “[i]f that investigation confirms any wrongdoing” (emphasis mine). Part of the employment contract, therefore, was a promise by the employer that an employee accused of misconduct falling within any of the defined categories would not be terminated or otherwise punished unless an investigation confirmed that the employee was in fact guilty of the alleged wrongdoing.
Plaintiff’s theory is not that the employee handbook means that “every termination was to be for cause only,” ante at 355, but only that terminations for the enumerated causes had to be preceded by investigation and finding of wrongdoing. Here, plaintiff was terminated, or at least the jury could have so found, because her superior believed that she had taken out of the office some documents that belonged to the company. If this is not “dishonesty” within the meaning of the employee handbook, it certainly seems to be a “failure to fulfill the responsibilities of a life insurance *358agent,” and, therefore, the procedures guaranteed by the employee handbook should have been afforded.
Hopes v. Black Hills Power & Light Co., 386 N.W.2d 490 (S.D.1986) (per curiam), on which the Court relies, is not in point, in my view. Hopes holds only that a company’s failure to give an employee a promised semi-annual review of her performance does not convert employment at will into employment for a definite term. The Hopes court was at pains to make clear that “[t]he procedure [adopted by the employer in that case] does not contain any rules regarding the discharge of employees.” At 490. This point is underscored by the statement later in the opinion that “[t]he performance appraisal procedure which Hope relies upon deals solely with work performance and employee development and has no termination provisions.” Id. At 491. The present case, in which procedures respecting discharge were agreed to by the employer, and in which the procedures relied on by plaintiff did have termination provisions, is not governed by Hopes.
I am also in disagreement with the Court as to Count V, tortious interference with business relationships. I am not aware of any general principle of law that a principal may not be liable in tort for maliciously interfering with a relationship between one of its agents and a third person, provided that relationship concerns the principal’s business. Here, plaintiff was no longer an employee, nor was she an agent, having been discharged in both capacities. She was a “broker,” which is apparently a status carrying with it somewhat more independence than that of “agent.” As a “broker,” she had a right to continue to service certain insurance contracts, and to derive from that activity certain fees. There is no contention that she was not carrying out this responsibility properly, nor has the company offered any clear explanation of its intervention in Ms. Cutter’s business. With respect to the Dakota Mack policy, no liability could be imposed in any event, because plaintiff clearly was not damaged. But with respect to the Thorson policy, there is some evidence of damage, because this policy is not still being serviced by plaintiff, and she is therefore losing the commission income that she had a right to expect.
The Court may be correct in holding, presumably under South Dakota law, that this conduct is simply not actionable, but the District Court, which presumably knows more about the law of South Dakota than we do, did not so hold, and this Court cites no authority in support of its holding.
I would not, however, be inclined to reinstate the verdict on Count V. A verdict for $5,000 is clearly not “nominal,” and punitive damages of $132,500 seem clearly excessive. I would prefer to remand for a determination by the District Court of the largest amount of compensatory damages that a rational jury could have attributed to the Thorson incident, and then allow that court to add to the compensatory award some reasonable amount of punitive damages. A remittitur to the extent indicated could then be offered to plaintiff, with the option of going to trial again on Count V if she rejected it.
For these reasons, I respectfully dissent from this Court’s decision to deny any recovery to the plaintiff.