NO. 90-153
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
DONALD D. CECIL,
plaintiff and Appellant,
CARDINAL DRILLING COMPANY, a
Colorado corporation,
Defendant and Respondent.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Maurice R. Colberg, Jr., Judge
presiding.
COUNSEL OF RECORD:
For Appellant:
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o Tolliver & Guthals; Billings, Montana
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For Respondent:
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- 'L- David A. Veeder; Veeder & Broeder, Billings, Montana
Submitted on Briefs: July 20, 1990
Decided: September 6, 1990
Filed:
Justice R. C. McDonough delivered the Opinion of the Court.
Plaintiff Donald Cecil (Cecil) appeals the order of the
Montana Thirteenth Judicial District Court, Yellowstone County,
granting summary judgment to the defendant, Cardinal Drilling
Company (Cardinal) on Cecil's claim of wrongful discharge. The
Court granted summary judgment to Cardinal on the grounds that
there were no facts to dispute that Cecil's termination was for
other than legitimate business reasons. We affirm.
Cecil raises a sole issue on appeal:
Did the District Court err in granting summary judgment to
Cardinal on Cecil's claim of wrongful discharge under 539-2-
904 (2), MCA?
Cardinal is a subsidiary of Ocelot Industries, a Canadian
corporation. Cecil, age 57, was recruited and hired in 1981 by
Otto Jensen, who acted as Cardinal president until January 1988.
When Jensen announced his plans to retire in December of 1987, an
Ocelot employee, Bill Kelsay, informed Cecil that as the highest
ranking employee after Jensen, he would likely be the next
president of Cardinal. However in January, 1988, Kelsay hired Kurt
Burris, former president of a competing drilling company, as
president instead.
Ocelot informed Cecil that he was not named as president
because he would have attempted to do all the work by himself and
that it would take two people to carry out Ocelot's plans for
Cardinal's future. Kelsay asked Cecil to stay on and help Burris
run the company and promoted him to executive vice president.
2
Kelsay allegedly told Cecil that Ocelot planned to infuse
additional capital into Cardinal and that he expected great things
for Cardinal and Cecil in the upcoming year.
In early 1988, after rumors concerning Ocelotls solvency,
Kelsay came to Billings to reassure Cardinal employees that their
jobs were secure. In April Burris gave all Cardinal employees
raises, including Cecil. Burris allegedly informed Cecil that he
was pleased with his work and that Cecil would get more raises
later. In May 1988, Burris prepared a revised budget for Cardinal,
budgeting upward because it looked like it would be a good year
for Cardinal.
During the first months of Burris' presidency at Cardinal
Cecil alleges that he worked diligently to familiarize Burris with
the operations of Cardinal and ease Burris into his new position.
Cecil alleges that by July of 1988, he had familiarized Burris with
most, if not all, of his personal knowledge relating to Cardinal
marketing activities.
Cecil alleges that on July 18, 1988, he was summoned into
Burris' office and told without any prior warning or other
indication of poor performance by him or the company, that he was
being terminated. He alleges that he was told that his termination
was effective immediately but that he might be given some severance
pay. Cecil alleges that when he went to pick up his final paycheck
Burris offered him an additional check for severance pay,
conditioned upon Cecil signing a release of any claims against
Cardinal. Later Burris presented a second release drafted by an
attorney. Cecil declined to sign either release and has never
received any severance pay.
Between July and December of 1988, Burris gave the remaining
salaried staff of Cardinal in ~illings additional raise. At the
an
end of 1988, Cardinal gave its field employees cash bonuses.
cardinal was able to meet its expenses through its own revenues in
1988. In March, 1989 within eight months of Cecil's termination,
Cardinal spent $225,000.00 to expand its drilling operations and
allegedly hired a new employee for marketing and bidding, with
duties identical to Cecil's.
Another cardinal employee, the safety director, was terminated
at the same time as Cecil. Unlike Cecil, who had no performance
deficiencies on his record, the safety director had recently been
cited for DUI in an accident involving a company vehicle in a bar
parking lot.
Burris claims that an anticipated decline in the price of
crude oil was the reason for terminating Cardinal employees. Some
time in the spring of 1988 Kelsay of Ocelot discussed making
expenditure cuts with Burris, although termination of employees was
not discussed at this time. During this downturn Ocelot itself
terminated approximately 100 people. In July of 1988, Burris
discussed with Kelsay his plans to terminate ~ecil.
The price of crude oil did fall dramatically as Burris
predicted; local and world oil prices fell sharply in 1988
beginning in April with a temporary rebound in July, and then
resumed their downward trend until December 1988. Based on this
trend, the District Court found that there was no genuine issue of
material fact regarding the reason for Cecil's termination.
Furthermore, at the time Cecil's job was terminated Cecil largely
admits that crude oil prices were falling. The court also noted
that the number of drilling rigs operated by Cardinal is directly
related to the price of crude oil.
The District Court stated there was nothing in the record to
suggest that Burris gained any pecuniary benefit from terminating
Cecil. The Court further noted there was no evidence that Burris'
intended to harm Cecil; Cecil himself testified in his deposition
that he and Burris had only a business relationship and had no
problems in that relationship. While Cecil claims to have been
wrongfully discharged, he offers no other specific reason for his
termination to contradict that he was terminated for economic
reasons.
At the time Cecil filed suit on September 29, 1988, his
complaint included a count requesting declaratory judgment on the
constitutionality of the Wrongful Discharge from Employment Act,
a count alleging tortious breach of the implied covenant of good
faith and fair dealing and a corresponding count requesting
punitive damages, a count alleging gross negligence, and a count
alleging wrongful discharge. Subsequently we upheld the
constitutionality of the Act and its damage provisions in Meech v.
Hillhaven West, Inc. (1989), 238 Mont. 21, 776 P.2d 488. Following
Meech the remaining count of Cecil's complaint alleged wrongful
discharge under the Act. On January 9, 1990, the District Court
entered summary judgment in favor of Cardinal on Cecil's claim of
wrongful discharge, and all other counts precluded by Meech. Cecil
now appeals solely with respect to his claim of wrongful discharge.
In order for summary judgment to issue, the movant must
demonstrate that there is no genuine issue as to all facts deemed
material in light of the substantive principles entitling the
movant to judgment as a matter of law. Rule 56 (c), M.R.Civ.P. ;
Cerek v. Albertsonls, Inc., (1981), 195 Mont. 409, 411, 637 P.2d
509, 511. Under the Wrongful Discharge From Employment Act a valid
ground for maintaining a cause of action against a former employer
is when the employee's "discharge was not for good cause and the
employee had completed the employer's probationary period of
employment. ... Section 39-2-904 (2), MCA. The Act defines good
cause as lureasonablejob-related grounds for dismissal based on a
failure to satisfactorily perform job duties, disruption of the
employer's operation, or other leqitimate business reason."
Section 39-2-903 ( 5 ) , MCA.
It is well-settled in the case law prior to the Act that
economic conditions constitute a Illegitimate business reason."
This court has held that employers should not be foreclosed from
"engaging in legitimate reductions in force necessary to maintain
the economic vitality of the company. Flanigan v. Prudential
Federal Savings and Loan Association (1986), 221 Mont. 419, 426,
720 P.2d 257, 261. Furthermore, an employer is entitled to be
motivated by and serve its own legitimate business interest and
must be given discretion who it will employ and retain in
employment. Hobbs v. Pacific Hide and Fur Depot (1989), 236 Mont.
503, 511, 771 P.2d 125, 130; Coombs v. Gamer Shoe Company (Mont.
1989), 778 P.2d 885, 887, 46 St.Rep. 1478, 1480. We have also held
that summary judgment is proper where there is no genuine fact
issue as to whether an employee was terminated for a legitimate
business reason. Coombs, 778 P.2d at 887-888.
Here, the District Court found that because of trends in the
price of crude oil there was no genuine issue of material fact that
Cecil was terminated for other than legitimate business reasons.
On the other hand, Cecil alleges that he was terminated without
good cause, because Cardinal did not act fairly and honestly when
claiming vveconomic
necessityIv or "legitimate business reasonvvas
the reason for his termination. However, once Cardinal made a
sufficient showing of no material fact issues, the burden then
shifted to Cecil to raise a factual issue sufficient to show that
summary judgment was improper. See Thelen v. City of Billings,
238 Mont. 82, 85, 776 P.2d 520, 522. "If the movant has met this
burden, it then shifts to the non-moving party to demonstrate a
genuine issue of material fact. Mere denial or speculation will
not suffice, the non-moving party must show facts sufficient to
raise a genuine issue. Gamble Robinson Co. v. Carousel Properties
(1984), 212 Mont. 305, 312, 688 P.2d 283, 287. (Emphasis added.)
Here, Cecil did not offer any other motive or reason for his
termination. He merely denied that the reasons were legitimate
business reasons. And while the record might arguably show that
it was possible for Cardinal to keep Cecil employed during the
decline in oil prices, this Court cannot speculate as to what
Cardinal's real reasons may have been, if they were in fact not as
claimed. Cecil has failed to meet his burden of raising a material
fact issue sufficient to withstand a motion for summary judgment.
The order of the District Court is
AFFIRMED.
& PJustice & ~
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