March 29, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-2137
JAMES CENSULLO, ET AL.,
Plaintiffs, Appellees,
v.
BRENKA VIDEO, INC.,
Defendant, Appellant.
No. 92-2193
JAMES CENSULLO,
Plaintiff, Appellant,
v.
BRENKA VIDEO, INC.,
Defendant, Appellee.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Martin F. Loughlin, Senior U.S. District Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Boudin, Circuit Judge.
Robert E. Murphy, Jr., with whom Wadleigh, Starr, Peters,
Dunn & Chiesa, was on brief for appellant Brenka Video, Inc.
Vincent A. Wenners, Jr., with whom James W. Craig, and
Craig, Wenners, Craig & Casinghino, P.A., were on brief for
appellee James Censullo.
March 29, 1993
TORRUELLA, Circuit Judge. These appeals arise out of
plaintiff James Censullo's suit for wrongful termination and
other claims. Censullo won in a jury trial on the wrongful
termination ground only. Appellant Brenka Video in appeal number
92-2137 asks this court to reverse the denial of its motions for
directed verdict and judgment notwithstanding the verdict, and
remand the case to enter judgment for Brenka Video on wrongful
termination. Appellant James Censullo in appeal number 92-2193
first asks us to rule that Brenka Video was required to indemnify
David Bowders, Censullo's immediate supervisor, for the amount
awarded against him in default judgment. Censullo next asks us
to reverse the exclusion of a newspaper article as hearsay. We
affirm the judgments in both appeals.
THE FACTS
On November 14, 1989, Censullo's wife gave birth to a
gravely ill child in New Hampshire. The child was transferred to
Boston Children's Hospital, accompanied by the Censullos. On
November 20, the child underwent a six and one-half hour
operation, following which his chances of survival were thought
to be slim at best. The parents stayed at the hospital until
after November 24.
Brenka Video, a distributor of home videos, employed
James Censullo, pursuant to an employment contract, as manager
for the New England region until November 24, 1989. On that day,
Censullo was contacted by his supervisor, David Bowders. Bowders
sought to determine when Censullo would return to work. Censullo
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explained that his son's condition was very serious, and thus he
did not know when he would return to work. Bowders told Censullo
that he needed to straighten out his priorities, and determine
whether it would be "better to suffer one loss or two," referring
to the losses of a son and a job. Censullo later called Bowders
supervisor, David Perrier, who concurred that Censullo should
separate his personal problems from his business
responsibilities.
Bowders called Censullo back, saying that Censullo
would receive a telegram shortly as a result of the phone
conversations and for "going over my head." The telegram which
arrived later that day, stated that Censullo was terminated for
poor performance. Brenka Video contends that Censullo had
already been placed on probation because he needed frequent
redirection, reprimand, and intervention by supervisors.
On November 30, an article appeared in the Boston Globe
entitled "A Heart of Stone" detailing Censullo's termination from
Brenka Video. On the same day, Brenka Video reinstated Censullo
and placed him on "administrative leave." Censullo did not
comply with the terms of the administrative leave, and was
terminated again on December 14.
Censullo sued Brenka Video, Bowders, and Perrier for
wrongful termination, breach of contract, and other claims. When
Bowders failed to appear, the district court entered default
judgment against him totaling $250,000. The district court also
refused to require Brenka Video to indemnify Bowders for this
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judgment.
The case proceeded to trial against Perrier and Brenka
Video. Censullo sought to introduce the article entitled "A
Heart of Stone" to show Brenka Video's motive in rehiring him.
The district court excluded the opinion portions of the article,
but admitted the factual portions into evidence.
The jury found for Censullo only on the wrongful
termination claim, and assessed $73,000 in damages. The jury
found for Brenka Video on the breach of contract claims. The
district court denied Brenka Video's motions for directed verdict
and for judgment notwithstanding the verdict. These appeals
followed, and we address them in turn.
APPEAL OF BRENKA VIDEO
Brenka Video contends that the district court, upon
motions for directed verdict and judgment notwithstanding the
verdict, should have reversed the jury verdict for Censullo on
wrongful termination. According to Brenka Video, only at-will
employees can make a claim for wrongful termination, and Censullo
could not have been an at-will employee.
We review the district court's decisions on motions to
direct a verdict and for judgment notwithstanding the verdict on
the same standard. We examine the evidence in the light most
favorable to the plaintiff, and determine whether there is a
total lack of evidence in support of plaintiff's case. Mayo v.
Schooner Capital Corporation, 825 F.2d 566, 568 (1st Cir. 1987).
The district court properly grants these motions when the
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evidence allows a reasonable person to arrive at only one
conclusion. Conway v. Electro Switch Corporation, 825 F.2d 593,
598 (1st Cir. 1987).
Under the governing law of New Hampshire, employees
fall into two classes: contract employees and at-will employees.
Panto v. Moore Business Forms, Inc., 547 A.2d 260, 267 (N.H.
1988). Contract employees are limited in their remedies for
breach by the terms of the contract. Id. In contrast, at-will
employees are limited in their remedies to claims for wrongful
termination.1 Cloutier v. Great Atlantic & Pacific Tea Co., 436
A.2d 1140, 1143 (N.H. 1981).
Censullo was a contract employee until November 24. We
must determine whether the evidence could support a finding that
Censullo's status changed after November 24 to an at-will
employee, such that the second termination could be wrongful. As
the jury found a wrongful termination, we view the evidence in
the light most favorable to this finding. In this light, the
evidence sufficiently supports the jury finding.
The president of Brenka Video sent Censullo a telegram
on the same day that the "A Heart of Stone" article appeared. It
informed Censullo that the initial termination had been reversed,
1 While an employer has great discretion to terminate an at will
employee, he may not do so when he is motivated by bad faith,
malice or retaliation. Cloutier v. Great Atlantic & Pacific Tea
Co., 436 A.2d 1140, 1143 (N.H. 1981). To state a claim for
wrongful termination, the employee must also show that he was
terminated for doing something that public policy would
encourage, or refusing to do something that public policy would
condemn. Id. As these elements of the wrongful termination
claim are not in dispute here, we discuss them no further.
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that Censullo had not been removed from Brenka Video's payroll,
could continue to cash his paychecks, and was relieved of his
working responsibilities. The president assured Censullo that "I
will personally get back to you." The next day, Censullo
received a telegram from Brenka Video's controller explaining
that Censullo had not at any time been removed from active
employee status, but was considered to be on an indefinite
administrative leave. When Censullo's "personal situation" was
resolved, Censullo was to meet with Brenka Video to "discuss the
conditions and standards" of continued employment. The
controller asked Censullo to check in with Brenka Video
regularly.
In the ensuing period, Censullo did not contact Brenka
Video. He cashed two paychecks and kept two others. He later
explained that he considered himself at all times a terminated
employee, and cashed two checks as severance pay. On December
14, Censullo received another communication terminating him for
failure to comply with the administrative leave.
Censullo's own views notwithstanding, we believe that
the jury could find that Censullo became an at-will employee as a
result of the telegrams from Brenka Video's principals. Those
telegrams relieved Censullo of the job he had contracted to do,
and placed him in a nebulous administrative leave status. The
parties would later fix the terms of continued employment. As
the telegrams contained no terms limiting Brenka Video's power to
terminate Censullo, the jury reasonably could find that the
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telegrams created an at-will relationship.
Brenka Video asserts that while the telegrams could
constitute an offer of at-will employment status, such status was
not effective until Censullo accepted the offer, which he never
did. While we agree that Censullo bore the burden of showing
acceptance of the offer, see Panto, 547 A.2d at 264, we disagree
as to whether Censullo actually met his burden. In Panto, the
New Hampshire Supreme Court found that an employee accepted a
change in employment status by merely performing as called for by
the change. Id. at 265. In this case, the jury could find that
Censullo had accepted the change in status by doing nothing and
cashing his paychecks, which is what the telegram asked him to
do. Censullo did not comply with the telegram from Brenka
Video's controller urging Censullo to check in with the company
periodically. The letter from Brenka Video's president, however,
indicated that the company would be in touch with Censullo. The
jury could have determined that the letter from the president
more accurately stated the requirements of the change in status.
The jury could have found from the evidence presented
at trial that Censullo became an at-will employee after November
24. Therefore, a finding of wrongful termination was proper.
The district court did not err in failing to grant Brenka Video's
motions for directed verdict and for judgment notwithstanding the
verdict.
APPEAL OF JAMES CENSULLO
Censullo's first argument on appeal is that Brenka
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Video is vicariously liable for the tort of intentional
infliction of emotional distress committed by its employee David
Bowders. Censullo's current claim of vicarious liability
deviates from his original claim of indemnification. We address
it in an abundance of caution, however, noting that Censullo's
complaint at least contained an allegation of respondeat
superior. For reasons that parallel those of the district court,
we find the current claim meritless.
Censullo presented this issue to the district court in
a "Motion to Assess Damages and for Indemnification," seeking to
recover for the default against Bowders through indemnification
of Bowders from Brenka Video. The district court denied the
motion because Censullo cited no authority for the proposition
that an employer must indemnify an employee. The district court
noted that normally, when the negligence of an agent is imputed
to the principal, the principal may recover from the agent the
amount paid as indemnification. Furthermore, the district court
already ruled that the state workmen's compensation scheme barred
Censullo from recovering from Brenka Video for the intentional
infliction of emotional distress. The court thus found that
granting the motion would allow Censullo to recover indirectly
from Brenka Video when he could not do so directly.
The district court correctly found that the workmen's
compensation statute bars employees from suing their employers
for personal injuries arising out of the employment relationship.
O'Keefe v. Associated Grocers of N.E., Inc., 424 A.2d 199, 201
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(N.H. 1980). Emotional distress is a personal injury, not
subject to recovery in a common law action under state workmen's
compensation statute. See Bourque v. Town of Bow, 736 F. Supp.
398, 404 (D.N.H. 1990).
The district court also correctly held, in granting the
default judgment, that Censullo could sue his co-employee acting
as a supervisor for intentional infliction of emotional distress.
Thompson v. Forest, 614 A.2d 1064, 1067 (N.H. 1992) (under
workmen's compensation scheme, co-employee not immunized from
suit for intentional torts). While Thompson authorizes Censullo
to raise a claim of intentional infliction of emotional distress
against his co-employee Bowders, it does not authorize such an
action against Brenka Video, his employer. Indeed, according to
a leading commentator, "when the intentional injury is committed
by a co-employee the better rule is that an action in damages
will not lie against the employer . . . ." 2A Arthur Larson, The
Law of Workmen's Compensation 68.00 (1992). Because we find
that Censullo has not stated a valid claim on vicarious
liability, we affirm the district court's order.
Censullo's second argument, the only one remaining in
this appeal, relates to the admission of the newspaper article
entitled "A Heart of Stone." As Censullo conceded that
resolution of this issue is unnecessary unless we were to remand
the case for a new trial, and we have found no reason to do so,
we do not reach this issue.
CONCLUSION
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Cases 92-2137 and 92-2193 are dismissed.
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