IN THE COURT OF APPEALS OF TENNESSEE
WESTERN SECTION AT JACKSON
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JIM VOSS, Shelby Circuit No. 33592997
C.A. No. 02A01-9604-CV-00082
Plaintiff,
Hon. W. B. Acree, Judge
v.
SHELTER MUTUAL INSURANCE COMPANY,
SHELTER GENERAL INSURANCE COMPANY,
FILED
and SHELTER LIFE INSURANCE COMPANY May 22, 1997
OF COLUMBIA MISSOURI,
Cecil Crowson, Jr.
Defendants. Appellate C ourt Clerk
GERALD F. EASTER & KAREN R. CICALA, Memphis, Attorneys for Plaintiff.
JAMES E. CONLEY and JOHN H. DOTSON, Thomason, Hendrix, Harvey, Johnson &
Mitchell, Memphis, Attorneys for Defendants.
REVERSED AND DISMISSED
Opinion filed:
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TOMLIN, Sr. J.
Jim Voss (hereinafter “Voss” or “Plaintiff”) filed suit in the Circuit Court of
Shelby County against Shelter Mutual Insurance Company, Shelter General Insurance
Company, and Shelter Life Insurance Company of Columbia, Missouri, (hereinafter
“Shelter” or “Defendant”) seeking dam ages allegedly caused by a breach of contract,
wrongful termination of agency agreem ent, retaliatory discharge, and libel and slander.
The trial court granted summ ary judgment in favor of Shelter on all claims except that
of retaliatory discharge. The case was tried to a jury, w hich resulted in a verdict in
favor of plaintiff in the am ount of $165,077.00. The trial court overruled Shelter’s
Motion for a Judgment NOV, or In the Alternative, for a New Trial. Shelter has raised
two issues for our consideration on appeal: W hether the trial court (1) erred in failing to
grant its Motion for a Directed Verdict at the close of plaintiff’s proof as well as at the
close of all the proof; and (2) in failing to properly charge the jury as to the law of
retaliatory discharge. For the reasons hereinafter stated we reverse the judgment of the
trial court and dismiss.
Plaintiff started in the insurance business as an employee of Shelter in 1982. In
1984 plaintiff entered into an agency agreement with Shelter, under which he
knowingly rem ained an employee-at-will throughout the course of his employm ent.
In mid 1991 after some conversations with fellow Shelter employees and after
attending a sales meeting in his area, Voss made a telephone call to the Tennessee
Departm ent of Insurance and spoke w ith an official in that department. At that time
Voss voiced his complaints and objections concerning the potential increases of
insurance rates by Shelter, along with some management complaints.
This conversation took place som e time in July, 1991. Later that m onth David
Williams, the insurance department official with whom Voss talked, contacted an
employee of Shelter and advised him of the details of this conversation. Several days
later, Shelter, through its Tennessee sales m anager, term inated Voss’s em ploym ent.
This suit was filed some two years later.
I. The Directed Verdict Issue.
Shelter moved for a directed verdict at the close of plaintiff’s proof, and it was
overruled. Shelter renewed its m otion at the close of all the proof. It was again
overruled. These two rulings by the trial court were preserved by Shelter in its Motion
for Judgment NOV or in the Alternative, for a New Trial, where the trial court once
again ruled in favor of plaintiff. The principal if not sole basis of each of the two
motions was that there was no proof by plaintiff of any illegal activity on the part of
Shelter.
Our scope of review is as follows, as stated by the supreme court in Williams v.
Brown, 860 S.W .2d 854, 857 (Tenn. 1993):
On review of the grant of a directed verdict on motion of a defendant, it
is not the office of an appellate court to weigh the evidence. Rather, it
must take the strongest legitimate view of the evidence in favor of the
plaintiff, indulging in all reasonable inferences in his favor, and
disregarding any evidence to the contrary. The trial judge’s action may be
sustained only if there is no m aterial evidence in the record that would
support a verdict for the plaintiff, under any of the theories that he has
advanced.
Both Voss and Shelter in their respective briefs before this court rely upon the
provisions of T.C.A. § 50-1-304, obviously drawing differing conclusions therefrom.
The pertinent provisions of this statute, sometimes referred to as “The W histle
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Blower” statute, codified as T.C.A. § 50-1-304, reads as follows:
50-1-304. Discharge for refusal to participate in or remain silent about illegal
activities, or for legal use of agricultural product—Damages—Frivolous
lawsuits.—(a) No employee shall be discharged or terminated solely for
refusing to participate in, or for refusing to remain silent about, illegal
activities.
(b) As used in this section, “illegal activities” means activities which are
in violation of the criminal or civil code of this state or the United States
or any regulation intended to protect the public health, safety or welfare.
(c) Any employee terminated in violation of subsection (a) shall have a
cause of action against the employer for retaliatory discharge and any
other damages to which the employee may be entitled.
****
This enactment of a statutory cause of action, which took place in 1990,
embodies a comm on-law cause of action, initially recognized as an exception to the
employee at-will doctrine in Clanton v. Cain-Sloan Co., 677 S.W .2d 441 (Tenn. 1984).
Our supreme court previously considered this cause of action in its com mon-law form
in both Chism v. Mid-South Milling Co., Inc., 762 S.W.2d 552, 555-57 (Tenn. 1988)
and shortly thereafter in Watson v. Cleveland Chair Co., 789 S.W.2d 538, 544 (Tenn.
1989). The Chism court, while recognizing the cause of action found that there was
none on the facts of the case there presented.
Both the Chism court and the Watson court show ed reluctance, in our opinion, to
fully embrace this cause of action. The Chism court stated the importance of basing the
cause of action upon public policy clearly “evidenced by an unambiguous
constitutional, statutory or regulatory provision.” Id. at 556.
That court noted that public policy guidance was necessary because a balance between
the em ployer’s right to term inate an at-will employee over management and public
policy decisions and the employee’s right to be protected from unlawful discharge lay
at the heart of the law of retaliatory discharge. Id. at 555.
In Watson the court reflected its reluctance “to establish public policy or adopt
an exception to the comm on-law by placing [its] imprimatur thereon in the absence of
some constitutional or legislative precedent.” Id. at 544.
In Merryman v. Central Parking System, Inc., 1992 WL 330404 (Tenn. App.
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1992) after analyzing “the framework of analysis of a comm on-law wrongful or
retaliatory discharge action”, this court found four elements were necessary for the
existence for a cause of action under the Act:
(1) the plaintiff’s status as an em ployee of the defendant;
(2) the plaintiff’s refusal to participate in, or to remain silent about, illegal
activities;
(3) the employer’s discharge of the employee;
(4) an exclusive causal relationship betw een the plaintiff’s refusal to
participate in or rem ain silent about illegal activities and the employer’s
termination of the employee.
Id. at page 6. See also Anderson v. Standard Register Co., 857 S.W.2d 555, 585 (Tenn.
1993).
While not relevant to the issue before this court at this time, our supreme court in
the case of Mason v. Kenneth M. Setton, et al, No. 03S01-9606-CV-00061 slip op.
(Tenn. April 7, 1997) has held that this Act does not require a showing that the
employer instructed the employee to refrain from reporting the illegal activity. In so
ruling the Mason court stated: “Remaining silent is the opposite of speaking out, and
refusing to rem ain silent is the sam e as speaking out. The clear m eaning of the statute
is that em ployees have the absolute right to speak out about illegal activities in their
work places.” Id. at page 19.
We next turn to the first element of plaintiff’s prima facie case, i.e., whether he
had engaged in protected activity. In that regard the Act provides that “no employee
shall be term inated solely for . . . refusing to rem ain silent about, illegal activities.”
T.C.A. § 50-1-304(a). “Illegal activities” is defined as “activities which are in violation
of the criminal or civil code of this state or of the United States, or of any regulation
intended to protect the public health, safety, or welfare.” T.C.A. § 50-1-304(b). The
incident that would have to rise to this level to satisfy this definition would of course be
plaintiff’s conversation about defendant, related in a telephone call to a member of the
Tennessee Insurance Departm ent. Both parties stipulated that the contents of said
conversation were specifically detailed in the following memorandum entered into
evidence at trial:
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TO: Max Dills
From: Lanny Barton
David Williams of the Tennessee Insurance Department called today
concerning the status of an auto rate filing.
In the conversation he stated Shelter has an agent who is trying to get us
“in a whole bunch of trouble”. The agent, Jim V oss of Somerville,
Tennessee recently called David. David said the agent was “mad, real
mad”. David said the same agent also called him last year. David made
the following comments about the phone conversation:
-Agent was extrem ely upset with rate increases in all lines.
He stated Shelter is running him out of business because the
rates are so high. Agent stated the company is making so
much money that we recouped all of 1990 losses in the first
quarter of 1991. Agent stated he was sending David a copy
of a letter from the Tennessee State Sales Manager which
included this information.
-Agent stated the company was “cleaning up”. Company
managem ent is looking out only for themselves, not the
policyholders.
-An employee was promoted to President only one to one
and one-half years before retirement only so the employee
could receive higher benefits.
-Som eone should be w atching out for this company. There
will be a change in presidents in the future and it has already
been worked out as to who will get the position.
David also said the agent mentioned he has the Secretary of the Speaker
of the Tennessee Senate (Wilder) insured.
David suggested that someone from Shelter might want to talk to the
agent. David requested that his name not be used but he realized that the
agent would know where the information came from.
While there is other testimony by plaintiff in the record as to what may have
prompted plaintiff to call the Insurance Department, there is nothing in the record to the
effect that plaintiff told any of this to the Insurance D epartment official.
Plaintiff contends that The Public Protection A ct is a rem edial statute, in that it
introduces regulations conducive to the public good, and as such should be construed
liberally and in furtherance of the statute’s purpose, citing Loftin v. Langsdon, 813
S.W.2d 475 (Tenn. App. 1991). For the sake of this opinion, we will concur. How ever,
we point out that in Loftin the middle section of this court set forth several other long
standing rules of statutory construction that are to be followed by the courts of this
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state. Some of these tried and true principles are as follows: In construing a statute it is
the duty of the court to give every word and phrase m eaning. United Canners, Inc. v.
King, 696 S.W.2d 525, 527 (Tenn. 1985). Questions involving statutory construction
must be answered in light of reason, having in mind the object of the statute and the
mischief it aims at. State v. Netto, 486 S.W.2d 725, 728 (Tenn. 1972). Furtherm ore, in
construing a statute the intention of the legislature is to be gathered from words it has
used and not from words it has chosen not to include. Dw yer v. Progressive B ldg. &
Loan Assoc., 20 Tenn. A pp. 16, 94 S.W.2d 725, 729 (1935). This statute, like all
statutes, must be applied in its present form unless doing so would result in “manifest
injustice.” Scarboro v. First American Bank, 619 F.2d 621 (6th Cir. 1980). And lastly,
we must take the words of this statute in their natural and ordinary sense without
forcing a construction upon them which w ould lim it their meaning. State v. Thomas,
635 S.W.2d 114 (Tenn. 1982).
When we examine the contents of the sole conversation between plaintiff and the
official of the Tennessee Insurance Department, which by stipulation was admitted by
plaintiff to be “relatively accurate”, and to which plaintiff did not seek to add any
content, we are of the opinion that plaintiff failed to introduce evidence of any “illegal
activities”—nam ely, activities “described in violation of any civil or criminal code or
regulations of this state or country, intended to protect the public health, safety or
welfare.” To the contrary, the first paragraph thereof merely states that the rates being
charged by Shelter were so high that it was adversely affecting his business. The thrust
of the balance of the com plaints involve only com plaints about management.
Clearly, the activities thus reported in no way could be considered “illegal
activities” within the meaning of the statute. In addition, it was stipulated to by the
parties that no illegal activities on the part of defendant took place in regard to the
establishment of insurance rates. In our opinion this dispute involved only a
combination of a corporate management dispute coupled with a personal financial
problem of plaintiff. Plaintiff did not report any illegal activity in his telephone
conversation with the Insurance Department. There was no proof of any violation of
any established public policy. Accordingly, this court is of the opinion that the trial
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court erred in failing to grant defendants’ Motion for Directed Verdict at the close of
plaintiff’s proof, on the ground that plaintiff failed to establish a prima facie case.
In light of our opinion as to this issue, we pretermit Shelter’s second issue
pertaining to the jury charge. Accordingly, the judgment of the trial court is
reversed and plaintiff’s suit is dismissed. Costs in this cause on appeal are taxed to
plaintiff, for which execution may issue if necessary.
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TOMLIN, Sr. J.
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FARMER, J. (CONCURS)
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LILLARD, J. (CONCURS)
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