No. 8 9 - 2 1 7
IN THE SUPREME COURT OF THE STATE OF MONTANA
1989
CAROL FOX KARELL,
plaintiff and Appellant,
-vs-
AMERICAN CANCER SOCIETY, Montana
Division, Inc., a Montana corp.,
Defendant and Respondent.
APPEAL FROM: District Court of the ~hirteenthJudicial District,
In and for the County of Yellowstone,
The Honorable Diane G. Barz, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Calvin J. Stacey; Keefer, Roybal, Hanson, Stacey and
Walen, Billings, Montana
For Respondent:
Sidney R. Thomas; T. Thomas Singer; Moulton Law ~ i r m ,
~illings, Montana
submitted on ~riefs: Aug. 3, 1 9 8 9
Decided: September 14, 1989
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Chief Justice J. A. Turnage delivered the Opinion of the Court.
The District Court of the Thirteenth Judicial District,
Yellowstone County, granted respondent American Cancer Society's
motion for summary judgment dismissing appellant Carol Karell's
suit for breach of the implied covenant of good faith and fair
dealing, and negligent discharge. The court found that the
respondent employer gave the appellant employee no reasonable
expectation of job security and therefore created no implied
covenant of good faith and fair dealing or duty of reasonable care.
Karell appeals this decision. The American Cancer Society cross-
appeals the District Court's denial of the respondent's memorandum
of costs as not timely filed. We affirm the summary judgment and
reverse the denial of respondent's memorandum of costs as untimely
filed.
ISSUES
1. The appellant raises the following issues on appeal. Did the
District Court err in concluding on summary judgment:
a. That as a matter of law the implied covenant of good
faith and fair dealing did not arise in the employment
relationship between the American Cancer Society and
Carol Karell because the respondent gave the appellant
no reasonable expectation of job security; and
b. That the American Cancer Society was not negligent
in discharging appellant Karell?
2. The respondent raises the following issue on cross-appeal:
Did the District Court err in rejecting the American Cancer
Society's memorandum of costs as not timely filed?
FACTS
Stan Wieczorek, the Vice President of the Montana Division of
the American Cancer Society (ACS), hired Carol Karell as Division
Program Director on January 6, 1986. ACSfs policy manual provided
for a six-month probationary period during which either party could
terminate the employment relationship without notice. Following
the probationary period, ACS retained an express Itright to dis-
charge without notice or further pay, anyone who has willfully
failed in his duties or who has been guilty of misconduct."
During her year-long employment with ACS, Karell received
three pertinent memos from officers of the national organization.
Each memo discussed business-related topics and included praise for
Karellls work on various projects. In April, National Public
Education Representative Marcia Nenno praised Karellts Itexcellent,
enthusiastic, well organizedt1 Public Education Committee meeting.
In November, Representative Nenno again praised Karell for having
accomplished a "GREAT deal" through her enthusiastic efforts. In
December, C.P.S. I1 National Coordinator Melody Davis congratulated
Karell on "a job beautifully done" in a data collection project.
During the same period, Karell received several critical
letters from Stan Wieczorek, her immediate supervisor. In April
Wieczorek reproached Karell for failing to complete a required
inventory report. In August he noted that Karell had failed to
complete time summary reports and had taken vacation time without
a written request. In September Wieczorek again sent Karell a
disapproving letter. He complained that she failed to set an
itinerary for a field trip and lacked the basic occupational skills
to organize volunteer groups for the ACS. Finally, he rebuked
Karell for consistently failing to show up for work on time. On
January 30, 1987, Wieczorek discharged Karell.
In April of 1987, Karell filed suit against ACS in District
Court alleging breach of the implied covenant of good faith and
fair dealing, negligent discharge, and wrongful discharge. Karell
later dropped the wrongful discharge count. On February 6, 1989,
the District Court, by memorandum decision mailed to the parties,
granted ACS1smotion for summary judgment on the remaining charges.
On February 14, 1989, the District Court entered judgment and the
following day the respondent filed its memorandum of costs with the
District Court clerk. The appellant objected to the memorandum of
costs and the District Court rejected it as not timely filed.
1. a. The Implied Covenant of Good Faith and Fair Dealinq
Given these facts, did the District Court err in granting
ACSgs motion for summary judgment when it found that as a matter
of law the implied covenant of good faith and fair dealing did not
arise because the ACS gave Karell no reasonable expectation of job
security?
The criteria for review of summary judgment are well settled.
The standard for review of a summary judgment is the same as that
used by the trial court. Frigon v. Morrison-Maierle, Inc. (Mont.
1988), 760 P.2d 57, 59, 45 St.Rep. 1344, 1346. Summary judgment
is properly granted when it appears "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 law." Rule 56(c), M.R.Civ.P. Once the
moving party meets its burden of establishing facts sufficient to
satisfy both statutory requirements, the burden shifts to the non-
moving party to show the existence of a genuine issue of fact.
Gamble Robinson Co. v. Carousel Properties (1984), 212 Mont. 305,
311-12, 688 P.2d 283, 286-87. The non-moving party's evidence of
an issue of fact must be substantial and material. Benson v. Diehl
(Mont. 1987), 745 P.2d 315, 316, 44 St.Rep. 1455, 1456. Here, we
hold that there is no genuine issue of material fact which requires
reversal of the summary judgment. When, as in this case, there is
no genuine issue as to any material fact, the question of whether
or not the implied covenant of good faith and fair dealing arises
is a matter of law to be decided by the judge.
In determining whether the covenant of good faith and fair
dealing is implied in a particular case, the trial court must look
to the employment relationship of the parties.
Whether a covenant of good faith and fair
dealing is implied in a particular case de-
pends upon objective manifestations by the
employer giving rise to the employee1sreason-
able belief that he or she has job security
and will be treated fairly.
Dare v. Montana Petroleum Marketing Co. (1984), 212 Mont. 274, 282,
Res~ondentlsBurden
ACS argues that it has satisfied its summary judgment burden
because no attending facts show that the respondent gave Karell any
reason to believe that her position was secure and, therefore, the
implied covenant against bad faith never materialized. We agree;
the facts of this case depict no reasonable expectations of job
security.
Karel18s immediate supervisor, Stan Wieczorek, criticized
Karellts performance on several occasions. In April of 1986, he
sent Karell a letter noting that she had failed to compile a "Loan
Closet Inventory and Needs Assessment for the Yellowstone/Billings
Unit." Noting the adverse effect of Karellls dereliction, Wiec-
zorek stated, I1I cantt tell you how disappointed I was that I did
not receive this report and how embarrassed I was to tell Carolyn
and the other volunteers it was not a~ailable.~~ Three months
later, Wieczorek admonished Karell for taking vacation time without
first obtaining written permission as required by the Montana
Division's personnel policies. He also noted that she had not
filed weekly time summary reports for the third weeks in February,
May and August which were required by the organization's auditors.
At one point, Wieczorek relieved Karell of responsibility for
supervising her secretary because he felt she had no management
skills.
A September 26 letter from Wieczorek to Karell illustrates his
concerns.
I was surprised to hear you admit that you did
not even know what your itinerary was for 3 of
the 4 day field trip [to Great Falls]. It was
obvious, you did not put alot [sic] of thought
into the reasons for the trip.
It was even more alarming to me for you to
admit that you did not know how to organize a
volunteer committee. Carol, the reason I
hired you as Program Director, is because you
had over 6 years experience working with
volunteers . ... Added to this experience,
I have provided Division training plus Nation-
al training at the Western Area New Staff
Orientation . . . in February and the New
Staff Public Education Conference .. . this
past summer.
As you are aware, our Area Directors have an
enormous responsibility to their Units and
this is one of the reasons we decided to hire
a Division Program Director, to give our staff
the much needed assistance in Unit organiza-
tion.
I need to address one of your frequently
stated concerns: too much work and not enough
time . . . . One way that would provide you
with more time is to simply report to work at
9:00 a.m. every morning. You are not meeting
your obligation or demonstrating staff leader-
ship by reporting to work at 9:20 every morn-
ing.
Carol, please plan to meet with me Wednesday,
October lst, at 9:00 a.m. to discuss in depth
your role as our Division Program Director.
Defendant's Deposition Exhibit No. 5.
Wieczorek took several remedial steps to improve Karellts
performance. He asked her to work closely with knowledgeable
personnel in preparing the Inventory and Needs Assessment report.
In his September 26 letter, Wieczorek laid out a seven-step
procedure for organizing volunteer committees, offered individual
training by Marcia Nenno of the national organization, and asked
Karell to attend several training workshops. Finally, Wieczorek
asked Karell to submit weekly written reports of her activities.
From these facts, it is difficult to see how any reasonable
person could believe that their job was secure. We agree with the
District Court that the respondent provided sufficient evidence to
meet its burden of establishing that as a matter of law the implied
covenant of good faith and fair dealing never arose in the employ-
ment relationship between ACS and Karell.
Appellant's Burden
Appellant argues that the laudatory remarks in her three
National American Cancer Society memos constitute objective
manifestations of job security sufficient to overcome a motion for
summary judgment. We do not agree.
Objective manifestations of job security must come from the
employer. In Dare we specifically stated "manifestations by the
emplover" could imply the covenant of good faith and fair dealing.
Dare, 212 Mont. at 282, 687 P.2d at 1020. (Emphasis added.)
The employer's position is pivotal in the employment relation-
ship. The employer has the exclusive right to hire and fire. The
employer is responsible for the employee's performance and is in
the best position to evaluate it. The employer has the power to
rebuke or reward the employee and is the only one with the power
to create job security.
As in the present case, compliments from those who are not the
employer may be based on incomplete or inaccurate information by
persons who are not accountable to the employee. Representative
Nenno and Coordinator Davis praised Karellls work on specific
projects in which they were involved. They may have been unaware
that Karell's immediate supervisor, Stan Wieczorek, who held
responsibility for her work and continued employment, had repeated-
ly complained about her performance. We agree with the District
Court that these non-employer comments do not support an implied
covenant of good faith and fair dealing.
The appellant argues that a conversation with Wieczorek during
a ski trip in December of 1986 also supports her belief that her
position with ACS was secure. Karell alleges thatwieczorek stated
that she "had a wonderful future with the American Cancer Society
and ... could go anywherew in the organization. To overcome a
motion for summary judgment, the non-moving party's evidence must
be substantial and material. Benson v. Diehl (Mont. 1987), 745
P.2d 315, 316, 44 St.Rep. 1455, 1456. Occasional compliments by
an employer are not sufficient to establish a reasonable expecta-
tion of job security.
The appellant also argues that she reasonably believed she had
job security because Wieczorek did not warn her that her employment
was in jeopardy. Such warnings are not mandatory, but may be
considered along with other evidence of objective manifestations
of job security. Rupnow v. City of Polson (Mont. 1988), 761 P.2d
802, 805, 45 St.Rep. 1734, 1739.
The appellant's evidence is distilled to one compliment from
her employer and the fact that he did not threaten to fire her
before doing so. Karellhas established no substantial facts which
demonstrate a genuine issue as to whether she had a reasonable
expectation of job security. The District Court correctly held
that no implied covenant of good faith and fair dealing occurred
in this employment relationship. We affirm its summary judgment.
1. b. Neqlisent Discharqe
Did the District Court err in concluding on summary judgment
that the American Cancer Society was not negligent in discharging
appellant Karell?
Montana has recognized the cause of action for negligent
discharge from employment. Rupnow v. City of Polson (Mont. 1988),
761 P.2d 802, 806, 45 St.Rep. 1734, 1739. The appellant argued
this issue before the District Court, and the District Court
entered summary judgment for the respondent. In the present
appeal, Karell did not address negligent discharge in either the
appellantIs brief or the reply brief. Nor has the respondent moved
for dismissal of this issue. With no contentions to show that the
District Court was in error, we affirm summary judgment on the
negligent discharge issue.
2. Memorandum of Costs
Did the District Court err in rejecting the American Cancer
Society's memorandum of costs as not timely filed?
The pertinent Montana statute provides that:
The party in whose favor judgment is rendered
and who claims his costs must deliver to the
clerk and serve upon the adverse party, within
5 days after the verdict or notice of the
decision of the court or referee or, if the
entry of the judgment on the verdict or deci-
sion be stayed, then before such entry is
made, a memorandum of the items of his costs
....
Section 25-10-501, MCA (1987).
The case law on the timing of memoranda of costs has been a
slow and sometimes meandering evolution. In McDonnell v. Huffine,
we held that the five-day statutory time period begins to run when
the District Court signs and files its findings of fact and
conclusions of law and not when the court orally announces its
decision. Huffine (1912), 44 Mont. 411, 428, 120 P. 792, 797. In
contrast, in Miles v. Miles we held that the "notice1' under the
statute indicated knowledge of the court's decision and that formal
notification was not necessary. Miles (1926), 76 Mont. 375, 382-
83, 247 P. 328, 331.
In the present case, the respondent makes an alternative
argument that the five days begins to run on the date of entry of
judgment. This is not necessarily true. Whether the date of entry
will be the trigger date depends on when the District Court's
decision is final.
In Ballenger v. Tillman, we upheld a memorandum of costs filed
within five days after the District Court rendered its final
decision. Ballenser (1958), 133 Mont. 369, 382, 324 P.2d 1045,
1052. We rejected the date of the court's findings of fact and
conclusions of law as an appropriate trigger because the court
allowed the parties to file exceptions to the findings and conclu-
sions effectively staying the final decision. In Davis v. Trobough
we interpreted Ballenqer as holding that the date of entry of
judgment was the appropriate trigger. Davis (1961), 139 Mont. 322,
326-27, 363 P.2d 727, 729-30. Two subsequent cases followed this
decision in rejecting the date of the jury verdict. By relying on
the date of entry of judgment, these courts postponed filing and
serving the memorandum of costs until after the parties completed
all post-trial motions. Poeppel v. Fisher (1977), 175 Mont. 136,
142, 572 P.2d 912, 915; Funk v. Robbin (1984), 212 Mont. 437, 448,
689 P.2d 1215, 1221.
In State v. Helehan post-trial proceedings were not an issue
and we returned to the plain language of the statute. Helehan
(1980), 189 Mont. 339, 342-43, 615 P.2d 925, 927-28. The statute
provides that the time period begins with the "verdict or notice
of the decision." We held that the date of the jury verdict
triggered the time limitation. We also applied Rule 6 of the
Montana Rules of Civil Procedure extending the deadline by correct-
ly excluding intervening Saturdays and Sundays, but, because of the
jury verdict, incorrectly allowing three additional days for
mailing. Helehan, 189 Mont. at 343, 615 P.2d at 928. Mailing is
not necessary in the case of a jury verdict, and the three-extra-
days clause of Rule 6 does not apply.
Like Helehan, our most recent decision on this issue followed
the plain language of the statute in holding that the date of the
jury's decision is the appropriate trigger. R.H. Grover, Inc. v.
Flynn Ins. Co. (Mont. 1989), P.2d ,I 46 St.Rep. 1266,
1274. Rule 6, M.R.Civ.P., was not addressed in Grover; an extra
three days for mailing and exclusion of weekends would not have
affected the outcome of the decision. We also distinguished cases
relying on the date of entry of judgment such as Poeppel and Funk,
erroneously stating that they were bench trials. We reasoned that
in a bench trial the District Court retains more latitude than
juries as to when it will render its decision. Grover, - P.2d
at , 46 St.Rep. at 1274.
In the present case we agree with the respondent's argument
that Rule 6, M.R.Civ.P. brings ACS1smemorandum of costs within the
five-day limitation. Because no jury was involved, the issue here
is one of 81noticewunder the statute rather than one of ltverdict.w
The District Court mailed its memorandum decision to the parties
on Monday, February 6, thereby beginning the five-day limitation.
The day of notice is not counted, Rule 6(a), M.R.Civ.P.;
section 1-1-306, MCA (1987), leaving Tuesday, February 7 as day
one. Since the statutory period in question is less than eleven
days, intermediate Saturdays and Sundays are excluded by Rule 6(a),
M.R.Civ.P. Saturday, February 11, and Sunday, February 12, are
eliminated. Monday, February 13, thereby becomes the fifth day.
A party receiving notice by mail, as in this case, has an addi-
tional three days in which to act. Rule 6(e), M.R.Civ.P. The
three additional days, and the limitation on ACS1s memorandum of
costs, ended on February 16. ACS filed its memorandum in the
District Court on February 15 and sewed the appellant on February
16. We therefore hold that the respondent's memorandum of costs
was timely filed and reverse the District Courtls decision.
Summary judgment for the respondent affirmed. Dismissal of
respondentlsmemorandum of costs reversed.
<
Chief ~ustice
W , concur:
e,