Dowdy v. Bower

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: JEFFREY WAYNE BOWER,
Debtor.

SUMMER M. DOWDY,
Plaintiff-Appellant,
No. 97-1903
v.

JEFFREY WAYNE BOWER, individually
and t/a American Lenders Service
Company of Roanoke,
Defendant-Appellee.

Appeal from the United States District Court
for the Western District of Virginia, at Roanoke.
Samuel G. Wilson, Chief District Judge.
(CA-96-934-R)

Argued: May 8, 1998

Decided: June 5, 1998

Before WIDENER and HAMILTON, Circuit Judges, and
FRIEDMAN, United States District Judge for the
Eastern District of Virginia, sitting by designation.

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Vacated and remanded for a new trial by unpublished per curiam
opinion.

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COUNSEL

ARGUED: Terry N. Grimes, KING, FULGHUM, SNEAD, NIXON
& GRIMES, P.C., Roanoke, Virginia, for Appellant. Malissa Lambert
Giles, GILES & LAMBERT, P.C., Roanoke, Virginia, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

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OPINION

PER CURIAM:

The principal issue in this appeal is whether Virginia law recog-
nizes a common law cause of action in tort for wrongful discharge
where the employee's discharge is based on sex discrimination. The
district court held that Virginia law does not recognize such a cause
of action, and consequently, over the objections of the appellant, tried
her case on an intentional infliction of emotional distress theory. For
reasons that follow, we vacate the district court's judgment and
remand for a new trial.

I

A

Jeffrey Wayne Bower (Bower) owned and operated a repossession
company called American Lenders Service Company (American
Lenders) in Roanoke, Virginia. In July 1994, Summer Dowdy began
working as the office manager for American Lenders. Dowdy was
hired as an at-will employee.

At trial, Dowdy testified that she was sexually harassed from the
first day of her employment until her employment ended. According
to Dowdy, Bower asked her to photocopy her breasts, bragged about
the size of his penis, offered to give her a raise if she would provide

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sexual favors to him, and encouraged her to have sexual intercourse
with two persons and/or another woman. Bower also subscribed to
several pornographic magazines which were available to all the
employees in the office. On one occasion, a pornographic homosexual
magazine was placed in Dowdy's desk with a "post-it" note affixed
to one of the pages of the magazine. The note was written by Jerry
Bower, Bower's father, and was placed on a page displaying a photo-
graph of a nude man with an erect penis. The "post-it" note said,
"Summer, this is for you." (J.A. 96). The other employees of Ameri-
can Lenders, all male, also bragged to Dowdy about their sexual
prowess, asked her intrusive questions about her sexual experiences,
and suggested that she participate in certain lewd sexual acts.

Bower denied the acts of which Dowdy accused him, but did
acknowledge that everyone in the office, including Dowdy, engaged
in conversations of a sexual nature. Additionally, Bower acknowl-
edged the presence of pornographic magazines.

The cause of Dowdy's departure in January 1995 was disputed at
trial. According to Dowdy, after enduring the sexual harassment for
a little over six months and searching unsuccessfully for a comparably
paying job, she quit. According to Bower, she was dismissed because
of poor performance.

As to her damages, Dowdy testified that the sexually charged envi-
ronment disrupted her ability to concentrate and do her job properly.
She testified that her work environment caused depression, anxiety,
and insomnia.

B

On May 4, 1996, Dowdy filed a motion for judgment against
Bower in his individual capacity and trading as American Lenders in
the Circuit Court for the City of Roanoke. Dowdy's motion for judg-
ment alleged claims of sex discrimination and sexual harassment
under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
et seq., and the Virginia Human Rights Act, Va. Code § 2.1-714 et
seq. Dowdy's motion for judgment also asserted a claim for common
law wrongful discharge based on sex discrimination.

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At the time Dowdy filed her motion for judgment, she was unaware
that Bower was proceeding in bankruptcy. After Dowdy learned of
Bower's bankruptcy petition, she filed an adversary proceeding
against Bower in Bower's Chapter 7 bankruptcy proceeding, seeking
a determination that her Title VII, Virginia Human Rights Act, and
common law wrongful discharge claims were not dischargeable. See
11 U.S.C. § 523(a)(6) (a Chapter 7 bankruptcy debt is nondischarge-
able if the debtor's obligation to the creditor arose from a "willful and
malicious" injury). Following a pre-trial hearing, the bankruptcy court
declined to hear the case and transmitted a withdrawal of reference to
the district court, where a trial was set for May 12, 1997.

On the day of trial, the district court held, over Dowdy's objection,
that the only potential non-dischargeable claim was the tort claim of
intentional infliction of emotional distress. According to the district
court, because Bower did not employ enough people to qualify as an
employer under Title VII and because the Virginia Human Rights Act
did not create a separate cause of action for sex discrimination,
Dowdy was left with only the state law claims of wrongful discharge
and intentional infliction of emotional distress. 1 Additionally, the dis-
trict court concluded that because Dowdy's common law wrongful
discharge claim was contractual, and not tortious, the debt was dis-
chargeable under § 523(a)(6). See, e.g. , Barbachano v. Allen, 192
F.2d 836, 838 (9th Cir. 1951) (simple breach of contract is not the
type of injury addressed by § 523(a)(6)); In re Akridge, 71 B.R. 151,
154 (Bankr. S.D.Cal. 1987) (debts that are excepted from discharge
under § 523(a)(6) relate solely to tortious liabilities, not debts stem-
ming from breach of contract). Accordingly, Dowdy's case was tried
on an intentional infliction of emotional distress theory, which, under
Virginia law, requires proof by clear and convincing evidence. See
Russo v. White, 400 S.E.2d 160, 162 (Va. 1991). Following a jury
trial, the jury returned a verdict in favor of Bower. Dowdy moved for
a new trial, but that motion was denied. Dowdy filed a timely notice
of appeal.
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1 Dowdy does not challenge on appeal the district court's ruling with
respect to her claims under Title VII and the Virginia Human Rights Act.

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II

The district court held that Virginia law does not recognize a com-
mon law cause of action in tort for wrongful discharge where the
plaintiff's discharge is based on sex discrimination. Consequently,
Dowdy's case was not tried on a wrongful discharge/sex discrimina-
tion theory, but rather on an intentional infliction of emotional dis-
tress theory, which, as all parties concede, requires a higher burden
of proof. See id. Dowdy contends that Virginia law does recognize a
common law cause of action in tort for wrongful discharge where the
plaintiff's discharge is based on sex discrimination and, therefore, the
district court's failure to try the case on this theory constitutes revers-
ible error. At oral argument, counsel for Bower candidly conceded
that the district court erred in converting Dowdy's theory of the case
from wrongful discharge/sex discrimination to intentional infliction of
emotional distress.

In Bowman v. State Bank of Keysville, 331 S.E.2d 797 (Va. 1985),
the Virginia Supreme Court recognized a common law cause of action
in tort for the wrongful termination of employment under an excep-
tion to the employment at-will doctrine. Id. at 800-01. The exception
to the employment at-will doctrine applies to terminations that violate
Virginia's public policy. See Shaw v. Titan Corp., 1998 WL 190860,
*3 (Va. April 17, 1998). The Virginia Supreme Court has held that
when an employer terminates an at-will employee on account of sex
discrimination, the termination violates the public policy of Virginia.
See id. at *4; Lockhart v. Commonwealth Educ. Sys. Corp., 439
S.E.2d 328, 332 (Va. 1994).2 Accordingly, Virginia law does recog-
nize a common law cause of action in tort for wrongful discharge
where the employee's discharge is based on sex discrimination and,
therefore, Dowdy was entitled to have her case tried on that basis.
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2 Because the events giving rise to Dowdy's wrongful discharge action
occurred before the effective date of the 1995 amendments to the Vir-
ginia Human Rights Act, we need not address the applicability of the
1995 amendments to this case. The 1995 amendments to the Virginia
Human Rights Act, inter alia, created a private cause of action for
wrongful discharge in certain specified circumstances and abolished
common law claims of wrongful discharge in violation of the policies set
forth in the Virginia Human Rights Act. See Doss v. Jamco, Inc., 492
S.E.2d 441, 447 (Va. 1997).

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III

For the reasons stated herein, the judgment of the district court is
vacated and the case is remanded for a new trial.

VACATED AND REMANDED FOR A NEW TRIAL

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