No. 94-528
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
DEAN HOWARD,
Plaintiff and Appellant,
v.
CONLIN FURNITURE NO. 2, INC.,
a Montana corporation,
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Baugh, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Michael G. Eiselein Lynaugh, Fitzgerald,
Eiselein & Eakin, Billings, Montana
For Respondent:
T. Thomas Singer, Moulton, Bellingham
& Mather, Billings, Montana
Submitted on Briefs: March 30, 1995
Decided: August 21, 1995
Filed:
Justice Terry N. Trieweiler delivered the opinion of the Court.
The plaintiff, Dean Howard, filed a complaint and an amended
complaint in the District Court for the Thirteenth Judicial
District in Yellowstone County in which he alleged that he had been
wrongfully discharged from his employment by the defendant, Conlin
Furniture No. 2, Inc. (Conlin). In response to Conlin's motion for
summary judgment, the District Court concluded that Howard failed
to raise genuine issues of material fact, and that Conlin was
entitled to judgment dismissing Howard's complaint as a matter of
law. Howard appeals from the District Court's order and judgment.
We reverse the judgment of the District Court.
The issue on appeal is whether the District Court erred when
it granted Conlin's motion for summary judgment.
FACTUAL BACKGROUND
Paul Gunville is the president of 16 Conlin furniture stores,
including stores in Montana, each of which is individually
incorporated. In 1990, Gunville recruited Dean Howard from Baers
Furniture to work for Conlin's store in Billings. Howard began to
work as Conlin's manager on September 4, 1990, and was paid a
salary in the amount of $50,000 annually, plus a commission. On
May 4, 1992, Gunville evaluated Howard's performance as manager to
that date by concluding that: "Dean has brought strength in
leadership and great management tools with an underlying desire to
be and teach success. Dean will only get better as his experience
in mdse. and general furniture business increases." He concluded
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by stating that Howard's potential for advancement in the company
is "outstanding."
In late 1992, Gunville hired Robert Anderson from Rhodes
Furniture Store in Atlanta, Georgia, to work as a district
supervisor for four of his stores in Montana. Anderson began work
in Billings in January 1993.
Anderson took over Gunville's role as Howard's supervisor.
Before Anderson left Atlanta, Doug Sahr, who also worked for
Rhodes, asked Anderson to keep Sahr in mind for positions that
might become available.
After Anderson began work for Conlin, he telephoned Sahr to
determine whether he was interested in a position as a manager.
Anderson testified that he may have telephoned Sahr in March 1993.
Howard produced telephone records that indicated several telephone
calls were made from the Conlin No. 2 store in Billings to Sahr's
home telephone number, as well as to Rhodes Furniture Stores in
Atlanta, in February and March 1993. During that same month,
Anderson began to record written complaints regarding Howard's
performance.
On May 20, 1993, Howard was terminated from his position as a
store manager and then offered a sales position at a salary of
$1000 per month, plus a commission opportunity. He was not first
advised of the areas in which he was deficient and given an
opportunity to improve his performance. Sahr replaced Howard
shortly after Howard was terminated as manager.
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on June 28, 1994, Conlin moved the District Court to dismiss
Howard's complaint by summary judgment for the reasons that he was
neither actually nor constructively discharged and that there were
legitimate business reasons for his demotion. The District Court
agreed. It held that Howard's rejection of the sales job was, at
best, a constructive discharge, but that Howard failed to offer
evidence that working conditions would have been intolerable. It
also held that Conlin offered evidence of reasonable job related
grounds for demotion, and that Howard's alleged reasons were
conclusory and speculative.
DISCUSSION
Did the District Court err when it dismissed Howard's
complaint by summary judgment?
This Court reviews an order granting summary judgment based on
the same criteria applied by the district court pursuant to
Rule 56, M.R.Civ.P. Hagen v. Dow ChemicalCo. (1993), 261 Mont. 487,
491, 863 P.2d 413, 416 (citing Mnniev. CityofRoundup (1993), 257 Mont.
429, 431, 849 P.2d 212, 214). Summary judgment is an extreme
remedy and should not be granted if there is any genuine issue of
material fact; a summary judgment procedure should never be
substituted for a trial if a material factual controversy exists.
Hagen, 863 P.2d at 416 (citing Rule 56(c), M.R.Civ.P.; Cereckv.
Albertson‘s, Inc. (1981), 195 Mont. 409, 637 P.2d 509; Reaves v. Reinbold
(1980), 189 Mont. 284, 615 P.2d 896).
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A party seeking summary judgment has the burden of
establishing a complete absence of any genuine factual issues.
Hagen, 863 P.Zd at 416 (citing D'Agostinov. ~wunson (1990), 240 Mont.
435, 442, 784 P.2d 919, 924). In light of the pleadings and the
evidence before the court, there must be no material issue of fact
remaining which would entitle a nonmoving party to recover. Hagen,
863 P.2d at 416 (citing MarriageofHoyt (1985), 215 Mont. 449, 454,
698 P.2d 418, 421). Once the movant has presented evidence to
support his or her motion, the party opposing summary judgment must
present material and substantial evidence, rather than mere
conclusory or speculative statements, to raise a genuine issue of
material fact. Hagen, 863 P.2d at 416 (citing B.M by Berger v. State
(1985) I 215 Mont. 175, 179, 698 P.2d 399, 401). Finally, all
reasonable inferences that might be drawn from the offered evidence
should be drawn in favor of the party who opposed summary judgment.
Hagen, 863 P.2d at 416 (citing Cereck, 637 P.2d at 511).
In its order, the District Court recognized that Howard
alleged that he was discharged, or constructively discharged, from
his employment. However, in its discussion, the court stated that
the issue was whether Conlin created an intolerable employment
situation within the meaning of 5 39-2-903 (1), MCA, when Conlin
demoted Howard. The District Court concluded that Howard did not
raise genuine issues of fact which would preclude summary judgment
because Howard's support for the notion that his demotion was a
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pretext to hire Sahr consisted only of conclusory and speculative
statements. Because Conlin supported its reasons for demoting
Howard with several job-related incidents, the court concluded that
the demotion could be based on reasonable job-related grounds and
a logical relationship to the needs of the business. The court
also stated that it considered Howard's claim for actual discharge
to be marginal, at best, and focused its analysis on Howard's claim
for constructive discharge.
Howard argues that the District Court erred because it focused
on constructive discharge. Howard claims that Anderson admitted he
was discharged from his position as store manager, which is not the
equivalent of a voluntary termination because of an intolerable
working condition.
Conlin contends that Howard was demoted, not discharged
Conlin also claims that we should affirm the District Court's
decision because this Court has upheld a discharge motivated by
legitimate business reasons when the plaintiff presents only
conclusory allegations. Finstad v. Montana Power Co. ( 19 9 0 ) , 2 4 1 Mont
10, 29, 785 P.2d 1372, 1383.
Section 39-2-904(2), WA, states that a discharge is wrongful
only if: "the discharge was not for good cause and the employee had
completed the employer's probationary period of employment . . .I(
The term "discharge" includes
constructive discharge . . . and any other termination of
employment, including resignation, elimination of the
job, layoff for lack of work, failure to recall or
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rehire, and any other cutback in the number of employees
for a legitimate business reason.
Section 39-2-903(2), MCA. "Good cause" is defined as "reasonable
job-related grounds for dismissal based on a failure to satisfac-
torily perform job duties, disruption of the employer's operation,
or other legitimate business reason." Section 39-2-903(5), MCA.
The first sub-issue we must decide is whether Howard was
discharged, or merely demoted, following which he resigned. In
that regard, the statement made by Anderson to the Billings Job
Service in response to Howard's application for benefits, speaks
for itself. He stated:
(1) Dean Howard was discharged from the position of
store manager on the date noted.
(2) At that time he was offered a sales position at
Conlin's. That offer was declined by Mr. Howard on
5/25/93.
This case does not involve a lateral transfer, nor a minor
change in job description. This case involves absolute and final
termination from a managerial position, followed by an offer of
employment in a functionally different, and substantially inferior,
position with the same employer. To hold, as Conlin suggests, that
termination of employment in a position that pays over $50,000 per
year, and subsequently offering a position which pays less than
25 percent of that amount, is not "a termination of employment"
would ignore the plain language of the Act and allow circumvention
of the Act's damage provisions which are based on wages at the time
of termination. Section 39-2-905, MCA.
Howard was informed that he was being terminated as Conlin's
manager. He was then offered a subordinate position among the
sales staff he previously managed. His refusal to accept an offer
of a lesser position, at best, affects his duty to mitigate his
damages. We conclude that when Howard was terminated from his
managerial position, he was discharged from employment within the
meaning of 5 39-Z-903(2), MCA, of Montana's Wrongful Discharge From
Employment Act.
The second sub-issue is whether Howard's termination was for
good cause as a matter of law, or whether there was a factual issue
to be decided.
The only formal evaluation of Howard's work as manager of the
Conlin's Furniture Store was the evaluation done by the company's
president on May 4, 1992. In that evaluation, Howard was given the
highest possible rating for interest in his work, self-confidence,
personal characteristics, personal relations, leadership, and
customer service. With regard to customer service, his employer
wrote "Dean writes the book here!". He was given above average
ratings in practically every other area considered. As recently as
March 4, 1993, two and one-half months before his termination, his
direct supervisor, Anderson, testified that no thought had been
given to his termination.
However, Anderson testified that from January 1993 until
Howard's termination as manager, the following events occurred
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which demonstrated Howard's unsatisfactory performance of his job
duties:
1. The warehouse he was responsible for was found to be in
poor condition and disorderly;
2. He credited his account at the store with the value of a
rug he had brought to the store from his own home;
3. He was absent an excessive amount of time;
4. He made a personnel decision regarding Connie Smith which
caused dissatisfaction from other employees and ultimate payment to
Smith of two weeks severance pay;
5. He gave inaccurate information to a customer who then,
based on that information, traveled a long distance to the store
without being able to accomplish the purpose of her trip;
6. He loaned out a company vehicle which was damaged while
being used by a third party;
7. A letter from a disgruntled employee complained of
management performance; and
8. A claim for unpaid commissions was made by a salesperson
after her termination from employment at Conlin.
In response to those allegations, Howard testified by
deposition that:
1. He had trouble controlling the warehouse because its
employees were underpaid and dissatisfied;
2. His Karastan rug was placed on the floor of the store by
consignment openly and apparently consistent with past practices;
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3. His absences from the store were related to store
business;
4. His personnel decision which led to discontent among
other employees was a good faith effort to retain an employee who
threatened to go to work for a competitor;
5. The misinformation he gave to a long-distance customer
was based on information obtained from an inventory sheet which was
supposed to be current;
6. When he loaned the company vehicle for use by a third
party, he acted consistent with the company's policy of assisting
others for the purpose of public relations;
7. The critical letter from a former employee related to
management in general and not him in particular; and
8. The commission payments which were the subject of a claim
by a former employee were withheld with the approval of Anderson.
We conclude that these claims, denials, and counterclaims
raise a factual issue as to whether Howard was terminated for good
cause within the meaning of § 39-2-903(5), MCA, of the Wrongful
Discharge From Employment Act.
We held in Guevtinv. Moody’sMarket (19941, 265 Mont. 61, 874 P.2d
710, that where an employee testified that she had been hard
working and loyal and had not received previous complaints from her
employer about her management capability; and where she denied that
the reasons given by her employer for her termination were correct;
there was an issue of fact regarding whether she was terminated for
10
good cause. Likewise, here we conclude that reasonable persons
could differ regarding inferences to be drawn from the deposition
testimony and exhibits.
Therefore, the judgment of the District Court which dismissed
plaintiff's amended complaint is reversed and this case is remanded
for further proceedings consistent with this opinion.
We concur:
Chief Justice
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Justice Karla M. Gray, dissenting.
I respectfully dissent from the Court's opinion. The Court
resolves.the issue before it on the basis of its conclusion that a
demotion can be a "discharge," as opposed to a "constructive
discharge," under 5 39-Z-903(2), MCA. I cannot agree.
Section 39-2-903(2), MCA, provides in pertinent part:
"Discharge" includes . . . any other termination of
employment, including resignation, elimination of the
job, layoff for lack of work, failure to recall or
rehire, and any other cutback in the number of employees
for a legitimate business reason.
The plain meaning of the term "termination," as the word is used in
the statute, is "ending;" thus, a "termination of employment" is an
ending of employment. The other terms used in 5 39-2-903(2), MCA,
also connote an ending of employment. In each situation
referenced--resignation, elimination of the job, layoff, and the
like--the person's employment has ended. Therefore, I conclude
that the statute means what it so clearly says: that a discharge
means an ending of employment, nothing more and nothing less.
The Court equates a demotion, or a termination from a
particular position with an offer of a different position, to a
"termination of employment." The plain language of the statute
does not support such a conclusion. Nor does the Court offer any
authority or legal analysis which might support its conclusion.
The reason is clear--analysis would be the undoing of the result
the Court desires to reach in this regard.
Howard contends that two cases from the Michigan Court of
Appeals support his position that the term "termination of
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employment" includes the term "demotion.'1 The Court wisely does
not rely on these cases, as neither supports its conclusion.
In the wrongful discharge case of Richards v. Detroit Free
Press (Mich. App. 1988), 433 N.W.2d 320, the Michigan appellate
court states flatly: "A demotion from one job to a lesser job is
a discharge from the first job, and a demotion will support a
wrongful dischaxge claim." Richards, 433 N.W.2d at 322. There are
several insurmountable problems with attempting to use Richards as
authority in the case presently before us. First, the Michigan
court does not quote any controlling wrongful discharge statute
such as the one at issue here; thus, no basis is provided on which
we properly could reach the same conclusion. Second, the case to
which the Michigan court cites in support of its statement,
Sepanske v. Bendix Corporation (Mich. App. 1985), 384 N.W.2d 54,
was inapposite to the Richards case. Seoanske was a breach of
employment contract case, not a wrongful discharge case. Senanske,
384 N.W.2d at 58-59. Moreover, the statement drawn from Senanske
in Richards simply does not appear, either directly or indirectly,
in Seuanske. Finally, and most importantly, the Michigan Supreme
Court remanded Richards to the Michigan Court of Appeals for
reconsideration. Richards v. Detroit Free Press (Mich. 1989), 448
N.W.2d 351. Thus, the Richards decision is of no force and effect.
The Court suggests that Anderson's statement to the Billings
Job Service "speaks for itself" with regard to the issue of whether
Howard was discharged, or merely was demoted and then resigned.
Anderson's statements that Howard was discharged from the position
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of store manager and offered a sales position on the same date do,
indeed, speak for themselves; they do not, however, speak to the
legal issue of whether a demotion is a "termination of employment"
under 5 39-Z-903(2), MCA.
I would affirm the District Court's determination that a
demotion is not a termination of employment and address the issue
of constructive discharge on which, in large part, the District
Court's summary judgment ruling was based. The Court having
avoided that issue altogether by its unsupported conclusion, there
is no point in my addressing it.
Chief Justice J.A. Turnage joins in the foregoing dissent of
Justice Karla M. Gray.
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Justice Fred J. Weber dissents as follows:
I dissent from the Court's opinion. In doing so, I join in
the dissent of Justice Gray.
In addition to the points made by Justice Gray, I point out
that the Wrongful Discharge From Employment Act, §§ 39-2-901 to
915, MCA, has additional pertinent provisions. Section 39-2-904,
MCA, sets forth the key elements of wrongful discharge as follows:
39-Z-904. Elements of wrongful discharge. A
discharge is wrongful only if:
i2j the discharge was not for good cause . .
As a result of the foregoing statute, we must first determine if a
discharge was not for good cause. Good cause is defined as follows
in § 39-2-903, MCA:
(5) "Good cause" means reasonable job-related
grounds for dismissal based on a failure to
satisfactorily perform job duties, disruption of the
employer's operation, or other legitimate business
r e a s o n .
I emphasize here that good cause relates only tom dismissal based on
a failure to perform job duties, etc. Justice Gray points out that
"termination" is an ending of employment. In the same way, the
word "dismissal" is an ending of employment. I conclude this is an
additional reason to join in the conclusion of Justice Gray that a
discharge means an ending of employment, nothing more and nothing
less. I would affirm the District Court's determination.
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