Gates v. Life of Montana Ins. Co.

No. 81-219 IN TEE SUPREME COURT OF THE STATE OF MONTANA 1981 MARLENE S. GATES, Plaintiff and Appellant, LIFE OF MONTANA INSURANCE COMPANY, a Montana Corporation, Defendant and Respondent. Appeal from: District Court of the Eighteenth Judicial District, In and for the County of Gallatin Honorable W. W. Lessley, Judge presiding. Counsel of Record: For Appellant: Wellcome and Frost, Bozeman, Montana A1 Frost argued, Bozeman, Montana For Respondent: Landoe, Brown, Planalp, Kommers & Lineberger, Bozeman, Montana Gene I. Grown argued, Bozeman, Montana Submitted: September 23, 1981 Decided : JRN ti ?!B2 Filed: Mr. Chief J u s t i c e Frank I . H a s w e l l d e l i v e r e d t h e Opinion of t h e Court. M a r l e n e G a t e s a p p e a l s from a summary j u d g m e n t e n t e r e d b y t h e D i s t r i c t C o u r t , G a l l a t i n C o u n t y , i n f a v o r o f L i f e o f Montana I n s u r a n c e Co., o n h e r claims f o r r e l i e f a r i s i n g from t h e t e r - m i n a t i o n o f h e r employment. Gates commenced employment as a c a s h i e r w i t h d e f e n d a n t o n J u l y 29, 1976, under an oral c o n t r a c t of i n d e f i n i t e d u r a t i o n . On O c t o b e r 1 9 , 1 9 7 9 , Gates was c a l l e d i n to meet w i t h h e r s u p e r v i s o r , Roger S y v e r s o n , and w i t h o u t p r i o r w a r n i n g s h e was g i v e n t h e o p t i o n of r e s i g n i n g or being f i r e d . She a l l e g e s t h a t w h i l e i n a d i s t r a u g h t c o n d i t i o n and u n d e r d u r e s s s h e s i g n e d a l e t t e r o f r e s i g n a t i o n which was handed t o h e r b y S y v e r s o n . She t h e n went home and d i s c u s s e d t h e s i t u a t i o n w i t h h e r husband who a d v i s e d h e r t o g e t t h e l e t t e r b a c k and t o t e l l S y v e r s o n t h a t s h e was n o t r e s i g n i n g . Gates s t a t e s t h a t s h e i m m e d i a t e l y c a l l e d S y v e r s o n and demanded t h e l e t t e r be r e t u r n e d and t h a t h e p r o m i s e d t o d o so. H e r a t t o r n e y a l s o s e n t a l e t t e r demanding a r e t u r n of t h e l e t t e r of r e s i g n a t i o n . I n h i s d e p o s i t i o n , Syverson denied t h a t Gates or h e r a t t o r n e y demanded a r e t u r n o f t h e l e t t e r . He t e s t i f i e d t h a t Gates requested a photocopy of t h e l e t t e r . When Gates a p p l i e d f o r unemployment c o m p e n s a t i o n b e n e f i t s , h e r claim was d e n i e d o n t h e g r o u n d t h a t s h e v o l u n t a r i l y r e s i g n e d . S h e a l l e g e s t h a t r e s p o n d e n t ' s a c t i o n s i n o b t a i n i n g t h e l e t t e r of r e s i g n a t i o n f r o m h e r by d u r e s s and f a i l i n g t o r e t u r n t h e l e t t e r upon demand w r o n g f u l l y d e p r i v e d h e r o f unemployment b e n e f i t s . or The r e s p o n d e n t i s s u e d a n e m p l o y e e handbook i n ~ u l y A u g u s t , 1 9 7 8 , which i n c l u d e d a s e c t i o n o n d i s c h a r g e o f e m p l o y e e s as follows: "The v i o l a t i o n of c e r t a i n r u l e s o f c o n d u c t a r e [ s i c ] s u b j e c t t o reprimand or d i s m i s s a l w i t h p r i o r warning. Such i n £ r a c t i o n s i n c l u d e : "1. Carelessness " 2. Incompetency "3. Insubordination " 4. Irregular attendance " 5. Continued t a r d i n e s s "Dismissal w i t h o u t p r i o r warning : "1. Dishonesty "2. D i s c l o s u r e o f con£ i d e n t i a l i n f o r m a t i o n .I1 R e s p o n d e n t ' s r e p r e s e n t a t i v e s t e s t i f i e d t h a t Gates was n o t g u i l t y o f d i s h o n e s t y or d i s c l o s u r e o f con£ i d e n t i a l i n f o r m a t i o n , b u t t h a t s h e was c a r e l e s s , i n c o m p e t e n t , i n s u b o r d i n a t e , and e x c e s s i v e l y absent. Gates t e s t i f i e d s h e was t o l d h e r a t t i t u d e w a s bad b u t t h a t s h e was n e v e r t o l d h e r p e r f o r m a n c e was s u b s t a n d a r d o r t h a t s h e would be t e r m i n a t e d i f s h e d i d n o t i m p r o v e . S y v e r s o n t e s t i f i e d t h a t he had i n f o r m e d Gates a t a n e v a - l u a t i o n m e e t i n g i n A p r i l o r May of 1 9 7 9 t h a t s h e was t o o slow, s h e h a d a bad a t t i t u d e and s h e was n o t g e t t i n g a l o n g w i t h o t h e r s . He s t a t e d t h a t h e d i d n o t warn h e r t h a t s h e would be f i r e d i f s h e d i d n o t i m p r o v e , b u t h e r e p e a t e d l y t o l d h e r s h e needed t o i m p r o v e . J o b e v a l u a t i o n f o r m s i n d i c a t e h e r p e r f o r m a n c e was f a i r to p o o r i n a l l categories rated. Syverson t e s t i f i e d t h a t the meeting on O c t o b e r 1 9 was calm and u n e m o t i o n a l and t h a t Gates d i d n o t a p p e a r upset. Gates t e s t i f i e d t h a t s h e was " r a t h e r d i s t u r b e d " and " k i n d o f i n shock." She s t a t e d t h a t s h e s i g n e d t h e l e t t e r of r e s i g n a - t i o n b e c a u s e s h e t h o u g h t it would be b e t t e r f o r h e r r e c o r d and b e c a u s e S y v e r s o n t o l d h e r h e would g i v e h e r a l e t t e r o f recommendation. S y v e r s o n t e s t i f i e d t h a t a l l he would s a y i n t h e l e t t e r o f r e c o m m e n d a t i o n would be t h a t Gates was employed t h e r e f o r three years. Employees o f r e s p o n d e n t p a r t i c i p a t e d i n a r e t i r e m e n t pen- s i o n p l a n by which e a c h e m p l o y e e c o n t r i b u t e d a c e r t a i n p e r c e n t of h i s salary. B e n e f i t s v e s t e d a f t e r t h e employee completed f o u r y e a r s of s e r v i c e w i t h t h e respondent. I f a n e m p l o y e e l e f t t h e com- p a n y p r i o r t o t h a t , h i s c o n t r i b u t i o n s were s h a r e d among t h e s u r - v i v i n g employees. Gates a l l e g e s t h a t t h e r e s p o n d e n t wrong f u l l y d e p r i v e d h e r of r e t i r e m e n t b e n e f i t s . Gates f i l e d h e r o r i g i n a l c o m p l a i n t o n December 6, 1 9 7 9 , a l l e g i n g t h a t s h e had b e e n w r o n g f u l l y d i s c h a r g e d from h e r employment w i t h L i f e o f Montana and s e e k i n g damages u n d e r s e v e r a l theories. The r e s p o n d e n t ' s m o t i o n f o r summary j udgment was o r i g i - n a l l y d e n i e d b y t h e t r i a l c o u r t , b u t a f t e r a s e c o n d amended c o m p l a i n t w a s f i l e d t h e renewed m o t i o n was g r a n t e d . E i g h t claims f o r r e l i e f were d e t a i l e d i n t h e s e c o n d amended c o m p l a i n t , as follows: 1) b r e a c h o f employment c o n t r a c t , b r e a c h o f i m p l i e d c o v e - n a n t o f good f a i t h and f a i r d e a l i n g ; and t h e t o r t o f w r o n g f u l discharge; 2 ) v i o l a t i o n o f Employee R e t i r e m e n t Income S e c u r i t y A c t o f 1 9 7 4 , 29 U.S.C. $ 1 0 0 l r e t seq.; 3 ) i n t e n t i o n a l i n £ l i c t i o n of e m o t i o n a l d i s t r e s s ; 4 ) v i o l a t i o n o f s e c t i o n 39-2-503, MCA, b y f a i l i n g to g i v e n o t i c e p r i o r to d i s c h a r g e ; 5 ) v i o l a t i o n o f s e c t i o n 39-51-3204, MCA, by f a i l i n g to d i s c l o s e material f a c t s to t h e Unemployment C o m p e n s a t i o n D i v i s i o n ; 6 ) f r a u d and d e c e i t i n p r o c u r i n g t h e l e t t e r o f r e s i g n a t i o n ; 7 ) v i o l a t i o n o f s e c t i o n 28-1-201, MCA; 8 ) f r a u d and d e c e i t i n f a i l i n g t o r e t u r n t h e l e t t e r of resignation. The t r i a l c o u r t found t h a t Gates had f a i l e d to show a n y v i o l a t i o n o f p u b l i c p o l i c y to s u p p o r t h e r a c t i o n f o r w r o n g f u l d i s c h a r g e , c i t i n g K e n e a l l y v. Orgain ( 1 9 8 0 ), Mont . I 606 P.2d 1 2 7 , 37 S t . R e p . 154. The i s s u e o n a p p e a l is w h e t h e r t h e t r i a l c o u r t e r r e d i n g r a n t i n g summary j u d g m e n t i n f a v o r of t h e r e s p o n d e n t o n a l l claims. A m o t i o n f o r summary j u d g m e n t is p r o p e r l y g r a n t e d i f t h e r e a r e no g e n u i n e i s s u e s of m a t e r i a l f a c t and t h e movant is e n t i t l e d t o j u d g m e n t as a matter o f l a w . Rule 5 6 ( ~ ) , M.R.Civ.P. While t h e i n i t i a l b u r d e n is on t h e m o v a n t , t h e b u r d e n s h i f t s w h e r e t h e r e c o r d d i s c l o s e s no g e n u i n e i s s u e s o f m a t e r i a l f a c t . The p a r t y opposing t h e motion must t h e n p r e s e n t s p e c i f i c f a c t s r a i s i n g a factual issue. R u l e 56 ( e ) , M.R.Civ. P. Conclusory or s p e c u l a t i v e s t a t e m e n t s are i n s u f f i c i e n t and t h e t r i a l c o u r t h a s no d u t y to a n t i c i p a t e possible proof. B a r i c h v. O t t e n s t r o r ( 1 9 7 6 ) , 1 7 0 Mont. 3 8 , 550 P.2d 395; H a r l a n d v. A n d e r s o n ( 1 9 7 6 ) , 1 6 9 Mont. 4 4 7 , 5 4 8 P.2d 613. Each o f t h e a p p e l l a n t ' s claims f o r r e l i e f m u s t be e x a - mined i n t h e l i g h t of t h e above r u l e s . A t t h e o u t s e t it m u s t be n o t e d t h a t i n t h i s case a l l o f Gates' t h e o r i e s f o r r e c o v e r y d e p e n d upon a n i n v o l u n t a r y ter- m i n a t i o n o f employment. The e m p l o y e r m a i n t a i n s t h a t s h e v o l u n - t a r i l y resigned. T h u s t h e r e is a t h r e s h o l d f a c t u a l i s s u e which s h o u l d be s u b m i t t e d t o a j u r y o r f a c t f i n d e r . M o l i n a r v. W e s t e r n E l e c t r i c Co. (1st C i r . 1 9 7 5 ) , 5 2 5 F.2d 5 2 1 , c e r t . d e n i e d 424 U.S. 9 7 8 ; and P i e r c e v. O r t h o p h a r m a c e u t i c a l C o r p . ( 1 9 8 0 ) , 8 4 N.J. 58, 417 A.2d 505. F o r h e r f i r s t claim, Gates a l l e g e s t h a t h e r t e r m i n a t i o n was w r o n g f u l i n t h a t t h e employer breached t h e c o n t r a c t u a l t e r m s of h e r employment as s e t f o r t h i n t h e e m p l o y e e handbook o r t h a t t h e e m p l o y e r b r e a c h e d t h e i m p l i e d c o v e n a n t of good f a i t h and f a i r d e a l i n g c o n t a i n e d i n h e r c o n t r a c t o f employment. The r e s p o n d e n t i s s u e d a n e m p l o y e e handbook which s t a t e d t h a t p r i o r t o d i s m i s s a l f o r u n s a t i s f a c t o r y p e r f o r m a n c e a w a r n i n g would be g i v e n to t h e employee. T h e r e a r e f a c t u a l d i s p u t e s as to w h e t h e r t h e c o n d u c t o f t h e employer p r i o r to Gatest t e r m i n a t i o n c o n s t i t u t e d a p r i o r w a r n i n g and w h e t h e r G a t e s w a s t e r m i n a t e d f o r t h e c a u s e s i n c l u d e d i n t h e e m p l o y e e handbook. I f t h e e m p l o y e r f a i l e d to f o l l o w i t s e m p l o y e e h a n d b o o k , d o e s t h i s f a i l u r e g i v e r i s e to a c l a i m f o r relief? The e m p l o y e e h a n d b o o k w a s n o t d i s t r i b u t e d u n t i l a b o u t t w o y e a r s a f t e r Gates w a s h i r e d . It c o n s t i t u t e d a u n i l a t e r a l state- m e n t o f company p o l i c i e s and p r o c e d u r e s . I t s terms were n o t b a r g a i n e d f o r , and t h e r e was no m e e t i n g of t h e m i n d s . The p o l i - c i e s may be c h a n g e d u n i l a t e r a l l y a t a n y t i m e . The e m p l o y e e hand- b o o k was n o t a p a r t o f Gates1 e m p l o y m e n t c o n t r a c t a t t h e t i m e s h e w a s h i r e d , n o r c o u l d it h a v e b e e n a m o d i f i c a t i o n to h e r c o n t r a c t b e c a u s e t h e r e was no new and i n d e p e n d e n t c o n s i d e r a t i o n f o r i t s terms. S e c t i o n 28-1-1601, MCA; R e i t e r v. Y e l l o w s t o n e C o . (1981), Mont. , 627 P.2d 8 4 5 , 38 S t . R e p . 686. An e m p l o y e e hand- book d i s t r i b u t e d a f t e r t h e e m p l o y e e is h i r e d d o e s n o t become a p a r t of t h a t employee's c o n t r a c t . Johnson v. N a t i o n a l Beef p a c k i n g Co. ( 1 9 7 6 ) , 220 Kan. 5 2 , 5 5 1 P.2d 7 7 9 . Therefore the h a n d b o o k r e q u i r e m e n t o f n o t i c e p r i o r t o t e r m i n a t i o n is n o t e n f o r - ceable a s a contract right. Gates n e x t c o n t e n d s t h a t h e r e m p l o y e r owed h e r a d u t y to a c t i n good f a i t h w i t h r e s p e c t t o h e r d i s c h a r g e . The d o c t r i n e o f i m p l i e d c o v e n a n t o f good f a i t h i n employment c o n t r a c t s h a s b e e n n e i t h e r adopted n o r r e j e c t e d by t h i s C o u r t , a l t h o u g h it w a s d i s c u s s e d i n R e i t e r v. Y e l l o w s t o n e C o u n t y , s u p r a . Reiter is d i s t i n g u i s h a b l e i n t h a t t h e i s s u e t h e r e was w h e t h e r a n e m p l o y e e a t w i l l had a p r o p e r t y i n t e r e s t i n c o n t i n u e d employment and was e n t i t l e d t o p r o c e d u r a l d u e p r o c e s s p r i o r to t e r m i n a t i o n . In Reiter we d i d n o t reach o r d e c i d e t h e i s s u e p r e s e n t e d h e r e . A g e n e r a l p r i n c i p l e o f good f a i t h and f a i r d e a l i n g h a s b e e n r e c o g n i z e d i n commercial t r a n s a c t i o n s b y t h e U n i f o r m Commercial C o d e , s e c t i o n 30-1-203 MCA, and i n i n s u r a n c e c o n t r a c t s , F i r s t S e c u r i t y Bank o f Bozeman v. Goddard ( 1 9 7 9 ) , 1 8 1 Mont. 4 0 7 , 5 9 3 P.2d 1040. Recent d e c i s i o n s i n o t h e r j u r i s d i c t i o n s lend support t o t h e p r o p o s i t i o n t h a t a c o v e n a n t o f good f a i t h and f a i r d e a l i n g i s i m p l i e d i n employment c o n t r a c t s . F o r t u n e v. N a t i o n a l C a s h R e g i s t e r Co. ( 1 9 7 7 ) , 3 7 3 Mass. 9 6 , 3 6 4 N.E.2d 1 2 5 1 ; Monge v . Beebe Rubber Co. ( 1 9 7 4 ) , 1 1 4 N.H. 1 3 0 , 316 A.2d 549. T h e s e cases emphasize t h e n e c e s s i t y of b a l a n c i n g t h e i n t e r e s t s of t h e e m p l o y e r i n c o n t r o l l i n g h i s work f o r c e w i t h t h e i n t e r e s t s of t h e e m p l o y e e i n job s e c u r i t y . I n a d o p t i n g t h e d o c t r i n e o f good f a i t h i n employment c o n t r a c t s t h e c o u r t s d i d n o t s e e k t o i n f r i n g e upon t h e i n t e r e s t s of t h e employer, b u t recognized t h a t : " ... a n e m p l o y e r is e n t i t l e d t o be m o t i v a t e d b y and t o s e r v e i t s own l e g i t i m a t e b u s i n e s s i n t e r e s t s ; t h a t a n e m p l o y e r m u s t h a v e wide l a t i - t u d e i n d e c i d i n g whom it w i l l e m p l o y i n t h e f a c e o f t h e u n c e r t a i n t i e s o f t h e b u s i n e s s w o r l d ; and t h a t an employer needs f l e x i b i l i t y i n t h e f a c e o f changing circumstances ." F o r t u n e v. N a t i o n a l C a s h R e g i s t e r C o . , s u p r a , 3 6 4 N.E.2d a t 1 2 5 6 . Y e t t h e e m p l o y e e is e n t i t l e d t o some p r o t e c t i o n from i n j u s t i c e . The c i r c u m s t a n c e s o f t h i s case a r e t h a t t h e e m p l o y e e e n t e r e d i n t o a n employment c o n t r a c t t e r m i n a b l e a t t h e w i l l o f e i t h e r p a r t y a t any t i m e . The e m p l o y e r l a t e r p r o m u l g a t e d a hand- book of p e r s o n n e l p o l i c i e s e s t a b l i s h i n g c e r t a i n p r o c e d u r e s w i t h r e g a r d to t e r m i n a t i o n s . The e m p l o y e r need n o t h a v e d o n e s o , b u t p r e s u m a b l y s o u g h t t o s e c u r e a n o r d e r l y , c o o p e r a t i v e and l o y a l w o r k f o r c e by e s t a b l i s h i n g u n i f o r m p o l i c i e s . The e m p l o y e e , h a v i n g f a i t h t h a t s h e would be t r e a t e d f a i r l y , t h e n d e v e l o p e d t h e p e a c e o f mind a s s o c i a t e d w i t h j o b s e c u r i t y . I f the employer h a s f a i l e d t o f o l l o w i t s own p o l i c i e s , t h e p e a c e o f mind o f i t s e m p l o y e e s is s h a t t e r e d and a n i n j u s t i c e is d o n e . W e h o l d t h a t a c o v e n a n t o f good f a i t h and f a i r d e a l i n g was i m p l i e d i n t h e employment c o n t r a c t o f t h e a p p e l l a n t . There r e m a i n s a g e n u i n e i s s u e o f material f a c t which p r e c l u d e s a sum- mary judgment, i.e. whether t h e r e s p o n d e n t f a i l e d to a f f o r d a p p e l l a n t t h e p r o c e s s r e q u i r e d and i f s o , w h e t h e r t h e r e s p o n d e n t t h e r e b y b r e a c h e d t h e c o v e n a n t o f good f a i t h and f a i r d e a l i n g . A s to a l l o t h e r claims a g a i n s t t h e r e s p o n d e n t , however, summary j udgment was p r o p e r l y e n t e r e d . The ~ i s ti r t C o u r t c c o r r e c t l y c o n c l u d e d t h a t a p p e l l a n t ' s claim i n t o r t f o r wrongf u l d i s c h a r g e is u n s u p p o r t e d b y a n y showing o f a v i o l a t i o n o f p u b l i c p o l i c y as r e q u i r e d u n d e r K e n e a l l y v . O r g a i n , s u p r a . The c o m p l a i n t f u r t h e r a l l e g e d t h a t t h e r e s p o n d e n t v i o l a t e d t h e p r o v i s i o n s o f t h e Employee R e t i r e m e n t Income S e c u r i t y A c t of 1 9 7 4 , 29 U.S.C. S 1001 e t seq., by i n t e r f e r i n g with o r preventing t h e e x e r c i s e of h e r r i g h t s under t h e r e p o n d e n t ' s r e t i r e m e n t p l a n . Under t h e terms o f t h e p l a n , a t t h e t i m e o f h e r t e r m i n a t i o n a p p e l l a n t had no v e s t e d r i g h t s i n r e t i r e m e n t b e n e f i t s . Appellant a r g u e s t h a t a f a c t u a l i s s u e e x i s t s a s to w h e t h e r s h e was d i s c h a r g e d i n o r d e r t o p r e v e n t h e r from o b t a i n i n g h e r b e n e f i t s , p o i n t i n g o u t t h a t t h e a m o u n t s s h e p a i d i n t o t h e p l a n would a c c r u e t o o t h e r e m p l o y e e s and p r i m a r i l y t o t h e p r e s i d e n t of t h e company. However, s h e h a s p r e s e n t e d n o e v i d e n c e from w h i c h a n i n f e r e n c e may r e a s o n a b l y be drawn t h a t t h e e m p l o y e r d i s c h a r g e d h e r w i t h a n i n t e n t o r motive to d e p r i v e h e r of b e n e f i t s . H e r claim f o r c o e r - c i v e i n t e r f e r e n c e u n d e r 29 U.S.C. § 1141 is p u r e l y s p e c u l a t i v e and c o n j e c t u r a l w i t h o u t any e v i d e n t i a r y f o u n d a t i o n . Gates' c l a i m f o r i n t e n t i o n a l i n £ l i c t i o n o f e m o t i o n a l d i s t r e s s must also f a i l . The u n c o n t r a d i c t e d f a c t s show t h a t s h e was " r a t h e r d i s t u r b e d " and " k i n d o f i n s h o c k . " Under a n y known s t a n d a r d t h e s e a l l e g a t i o n s a r e i n s u f f i c i e n t to e n t i t l e h e r to recover. K e l l y v. Lowney & Williams, Inc. ( 1 9 4 2 ) , 1 1 3 Mont. 3 8 5 , 1 2 6 P.2d 486; H e l t o n v. R e s e r v e L i f e I n s u r a n c e C o . (D.Mont., A p p e l l a n t a r g u e s t h e r e s p o n d e n t v i o l a t e d s e c t i o n 39-2-503, MCA, b y f a i l i n g t o g i v e n o t i c e p r i o r t o t e r m i n a t i o n . That s t a t u t e , however, d o e s n o t r e q u i r e p r i o r n o t i c e . R e i t e r v. Y e l l o w s t o n e Co ., s u p r a . W need n o t d i s c u s s i n d e t a i l t h e o t h e r c l a i m s f o r r e l i e f e w h i c h are l i s t e d a b o v e . The a p p e l l a n t f a i l e d to meet h e r b u r d e n o f p r e s e n t i n g e v i d e n c e which r a i s e s a g e n u i n e i s s u e o f m a t e r i a l f a c t for determination at a trial. The summary j u d g m e n t is a £ f i r m e d i n p a r t and r e v e r s e d i n p a r t and t h e c a s e is remanded f o r f u r t h e r p r o c e e d i n g s i n accor- dance with t h i s opinion. Chief J u s t i c e W e concur: /"\ J u s t i c e F r e d J. Weber s p e c i a l l y c o n c u r s : I concur w i t h t h e h o l d i n g o f t h e f o r e g o i n g m a j o r i t y opinion i n a l l respects. In a d d i t i o n , I would p o i n t o u t t h a t i n t h e c o u r s e o f f u r t h e r p r o c e e d i n g s t h e employee handbook would be p r o p e r l y a d m i s s i b l e a s e v i d e n c e t o be c o n s i d e r e d in d e t e r m i n i n g whether t h e r e s p o n d e n t had b r e a c h e d t h e c o v e n a n t o f good f a i t h and f a i r d e a l i n g owing t o t h e appellant. Justic