700 N.E.2d 39 | Ohio Ct. App. | 1997
[EDITER'S NOTE: THIS PAGE CONTAINED HEADNOTES AND HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *350 Plaintiff appellant George Anders appeals from orders of the trial court granting summary judgment and dismissing his remaining claims against his former employer, defendant-appellee Specialty Chemical Resources, Inc. ("SCR"), in this employment termination dispute. For the following reasons, we reverse summary judgment on Anders's claim for an unpaid bonus and the dismissal of two claims stemming from the termination of his employment for ignoring his employers alleged instructions to commit crimes or engage in seriously improper misconduct.
Anders commenced this action following the termination of his employment by filing a six-count complaint against SCR in the trial court, alleging (1) breach of (express) contract, (2) breach of implied contract, (3) promissory estoppel, (4) violation of public policy, (5) breach of a covenant of good faith and fair dealing, and (6) infliction of emotional distress. SCR denied the substantive allegations in Anders's complaint and subsequently filed a motion for summary judgment on the first three claims and a motion to dismiss the remaining three claims.
SCRs motion for summary judgment argued that Anders failed to produce evidence to establish anything other than an at-will employment relationship. *351 SCR specifically argued that there was no evidence that it had made any statement or promise to Anders of employment for a definite duration as a vice-president. Anders filed a brief in opposition to summary judgment. The trial court ultimately granted the motion for summary judgment.
SCR's motion to dismiss argued that Anders's complaint failed to state a claim on the remaining three claims. Anders opposed the motion to dismiss. The trial court granted the motion to dismiss following additional briefs by the parties. Anders timely appeals, raising six assignments of error, which are not separately briefed or argued.
"The trial court erred by summarily adjudicating the claim of breach of the express employment contract where genuine issues of material fact remained for adjudication.
"The trial court erred by summarily adjudicating the claim of breach of the implied employment contract where genuine issues of material fact remained for adjudication.
"The trial court erred by summarily adjudicating the claim of promissory estoppel where genuine issues of material fact remained for adjudication."
The first assignment is well taken in part and the second and third lack merit.
Anders argues that the trial court improperly granted summary judgment against him on his claims for breach of express and implied contract and promissory estoppel. Anders contends that his claims are supported by SCR statements assuring him of a "secure future" and "secure career" or that he could be terminated only for inadequate performance. Anders also argues that SCR breached the terms of an express compensation agreement.
In a prior case this court exhaustively analyzed the case law involving similar claims and held that such statements are insufficient to establish express or implied contracts or promissory estoppel. Corradi v. Soclof (May 25, 1995), Cuyahoga App. No. 67586, unreported, at 4-5, 1995 WL 322311. It is well established that employment agreements that do not specify a particular duration or term of employment are presumed to be terminable by either party at will for any reason not contrary to law. As a result of our review of the record, we conclude that Anders failed to produce any evidence to demonstrate any specific duration of employment or that he could be terminated only for cause. *352
Anders's reliance on Wright v. Honda of Am. Mfg.. (1995),
Contrary to Anders's argument, Wright does not mark a wholesale departure from prior law or warrant reversal of the trial courts summary judgment in this case. The opinion inWright provides little guidance and is limited to the particular facts of that case.1 The case sub judice does not involve similar facts. Anders was a high level management employee who negotiated the specific terms of his employment. There is no evidence, moreover, that SCR made any specific statements at any time to transform his employment relationship into something other than at will. The trial court, therefore, properly granted summary judgment on Anders's claims for breach of express and implied contracts and promissory estoppel.
However, the trial court improperly granted summary judgment against Anders on his claim for breach of the parties express oral and/or written compensation agreement. Anders alleged that SCR orally agreed to pay him various types of bonus compensation, which agreement was subsequently reduced to writing as follows:
"In addition to base salary, he will be eligible for a bonus of up to $40,000 based on independent objectives, plus a 10,000share bonus at the end of the first year of Momentum Stock. Thestock bonus will continue at levels to be determined by the Boardof Directors. His bonus for the first year will be prorated based on eight (8) months." (Emphasis added.)
SCR's motion for summary judgment did not specifically address this claim. It is well established that the party seeking summary judgment has the initial burden of identifying those elements of the nonmoving party's case that do not raise a genuine issue of fact and upon which the moving party is entitled to *353
judgment. See Dresher v. Burt (1996),
Furthermore, even if SCR had requested summary judgment on Anders's express contract claim for payment of bonuses, the record does not warrant summary judgment. Anders testified that SCR made an oral promise to pay bonuses, including the first year ten-thousand-share "signing" bonus. Moreover, the language, emphasized above, in the subsequent written document memorializing the agreement is ambiguous. It could reasonably be construed to mean that Anders either (1) was eligible for a ten-thousand-share bonus or (2) would receive the bonus at the end of the first year regardless of performance or "independent objectives." The latter construction is sufficient to constitute an enforceable contract. See Holderman v. Huntington Leasing Co. (1984),
SCR's argument, presented for the first time on appeal, that this court affirm summary judgment on this issue because the bonuses were discretionary lacks merit for two reasons. First, Civ. R. 56 requires trial courts to consider motions for summary judgment in the first instance. Appellate courts cannot cure defects by independently reviewing the record and entering the judgment the trial court should have entered. Murphy v.Reynoldsburg (1992),
Accordingly, Anders's first assignment is well taken in part and overruled in part, and his second and third assignments are overruled.
"The trial court erred by dismissing Count 4 of plaintiffs complaint, a claim for employment termination in violation of public policy, where the complaint set *354 forth facts entitling him to recovery on this claim which has been expressly recognized as a viable cause of action in Ohio.
"The trial court erred by dismissing Count 5 of plaintiffs complaint, a claim for breach of the express covenant of good faith and fair dealing, where the complaint set forth facts entitling him to recovery on this claim which has been expressly recognized as a viable cause of action in Ohio.
"The trial court erred by dismissing Count 6 of plaintiffs complaint, a claim for infliction of emotional distress upon a wrongfully terminated employee, where the complaint set forth facts entitling him to recovery on this claim which has been expressly recognized as a viable cause of action in Ohio."
The fourth and sixth assignments of error are well taken, but the fifth assignment lacks merit.
Anders argues generally that the trial court improperly dismissed his remaining three counts for failure to state a claim. Anders specifically argues that his complaint stated claims for wrongful discharge in violation of public policy, breach of an express covenant of good faith and fair dealing, and infliction of emotional distress.
The Ohio Supreme Court has held that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt from the, complaint that the plaintiff can prove no set of facts entitling him to recovery. O'Brien v. Univ. CommunityTenants Union, Inc. (1975),
Courts applying this standard must liberally construe the complaint, accept the allegations as true, and view them in the light most favorable to the pleading party. Slife v. KundtzProperties (1974),
"Defendant's termination of Plaintiff's employment was based, in part, on Plaintiff's refusal to participate in or support improper and/or illegal acts of *355 officers of Aerosol [n.k.a. SCR], including Plaintiff's refusal to create documents to support the termination of two management employees and his refusal to participate in a scheme to increase the insurance claims of loss following the fire at the Macedonia facility in December, 1992."
This allegation can be reasonably construed in two different manners, either of which is sufficient to state a claim for relief.
Anders's claim can be construed to allege that SCR terminated his employment because he failed to participate in insurance fraud and/or falsification of insurance claims. The conduct that SCR allegedly directed Anders to perform arguably falls within the scope of R.C.
The Ohio Supreme Court discussed the tort of wrongful discharge in the context of an employees refusal to commit criminal acts inCollins v. Rizkana (1995),
Alternatively, Anders's claim can be reasonably construed to allege violations of nonstatutory public policy sufficient to state a claim for relief. As noted above, after the parties briefed this issue in the trial court and shortly before the trial court rendered its opinion in this case, the Ohio Supreme Court expanded the grounds for recovery under the tort of wrongful discharge in violation of public policy. This state now recognizes a cause of action for wrongful discharge when the discharge violates a clear public policy expressed in sources of law other than statutes, including the common law. Painter v.Graley (1994),
To the extent that SCR's alleged "improper" "scheme" set forth in Paragraph 21 did not involve insurance fraud, claim falsification, or a violation of any other statute, Anders's claim was nevertheless sufficient to defeat dismissal. SeeSabo v. Schott (1994),
SCR contends further that Anders's wrongful discharge claim is preempted by the Whistleblower Statute. The Whistleblower Statute, R.C.
"If an employee becomes aware in the course of his employment of [1] a violation of any state or federalstatute or any ordinance or regulation of a political subdivision that his employer has authority to correct, and [2] the employee reasonably believes that the violation either is acriminal offense that is likely to cause an imminent risk of physical harm to persons or a hazard to public health or safety or is a felony * * *." (Emphasis added.)
The case sub judice does not fall within the scope of the Whistleblower Statute for at least three independent legally sufficient reasons. First, as noted above, Anders's complaint can be reasonably construed to allege that SCR directed him to perform conduct that violated nonstatutory public policy, but the Whistleblower Statute applies by its own terms only to "violation[s] of any state or federal statute or any ordinance or regulation." Second, even if Anders's complaint is construed to allege the violation of criminal statutes, there is no basis to infer that Anders reasonably believed the crimes to involve "imminent risks of physical harm," "public health or safety hazards," or "felonies," particularly because insurance fraud and claim falsification are financial crimes and may constitute misdemeanors. R.C.
However, even if they were, Anders's claim did not fall within the scope of the Whistleblower Statute. Anders did not allege (1) that he was terminated for *357 reporting anything, or (2) that any violation of law occurred, or (3) that he believed any violation of law occurred. Rather, as did the plaintiff in Rizkana, Anders alleged that he was terminated simply for refusing to participate inviolating the law.
The Rizkana court recently considered and rejected the preemption argument in a similar case. In the context of a sexual harassment suit, the employer in Rizkana also argued that a statute (R.C. Chapter
Rizkana recognized three reasons why the wrongful discharge public policy tort claim was not precluded. First, the allegedly preemptive Civil Rights Act was not the sole source of public policy forming the common-law tort action because the wrongful discharge claim was also based on violation of criminal statutes. Id. at 73,
The claim of preemption in the case at bar fails for the same reasons. First, Anders's common-law tort claim for wrongful discharge is based upon either criminal statutes, R.C.
The case sub judice is simpler than Rizkana and Delaney, and distinguishable from the cases finding a wrongful discharge claim preempted by the Whistleblower *358 Statute, because the Whistleblower Statute does not overlap with the public policy claim under the circumstances of this case. A whistleblower claim involves reporting violations of legislative enactments, whereas Anders's public policy claim does not require any reporting, the occurrence of any violation, or any statute. Finally, even if the two claims overlapped, as SCR contends,Rizkana and Delaney dictate that Anders stated a viable wrongful discharge public policy claim.3
One reason for recognizing a common-law cause of action for wrongful discharge is to serve the independent public policy of statutes, such as the criminal statutes in this case, or common-law public policies that do not themselves provide a remedy or private cause of action. Courts recognize that it violates public policy to order an employee to violate the law even if the employee refuses to do so and no law is subsequently violated. The Whistleblower Statute does not reach this incipient conduct, however.4 As a result, it would serve no public policy of the Whistleblower Statute to preclude such claims and, at the same time, defeat the policy of other statutes or common-law precedents. Neither the Whistleblower Statute nor public policy compels employees to "invite retaliation" or risk their livelihoods to report possible future violations. Public policy is well served by the simple refusal to violate the law. Such refusal requires courage enough.
The preemption argument would leave employees who simply refuse their employers order to violate the law or nonstatutory public policy without any remedy whatsoever. Any common-law claim they may have would be preempted by a statute which, by its own terms, could not provide any relief. Recognizing a wrongful discharge claim under these circumstances would not detract from the policy of the Whistleblower Statute (which is to protect employees and encourage reporting of serious violations of legislative enactments).
There is a critical distinction between affirmatively reporting a violation of law that has allegedly occurred and merely adhering to the law or public policy as in *359
the case sub judice. In cases prior to the Supreme Court's most recent pronouncement in Kulch,
The record shows, however, that Count Five of Anders's complaint does not refer to an express contract. Moreover, to the extent the complaint can be construed to allege the breach of anexpress, rather than implied, covenant, the claim duplicates his claim for breach of express contract in Count One. Dismissal of redundant claims does not constitute reversible error. Phung v. Waste Mgt., Inc. (1988),
"One who by extreme and outrageous conduct intentionally or recklessly causes serious emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm. *360
(Bartow v. Smith,
Contrary to SCR's argument, the Ohio Supreme Court has recognized that, under some circumstances, at-will employees may maintain a cause of action against their former employers for intentional infliction of emotional distress arising out of their employment. Russ v. TRW, Inc. (1991),
The First District Court of Appeals reversed the dismissal of a claim against a former employer involving strikingly similar allegations in Mason v. United States Fid. Guar. Co.
(1987),
"27. The conduct of the Defendant as described above was done with a conscience [sic] disregard of Plaintiff's rights, had a great probability of causing substantial harm to Plaintiff and was done negligently, wilfully, and/or intentionally, proximately causing Plaintiff severe and extreme emotional distress, embarrassment, humiliation and mental anguish."
The complaint in Mason, which was sufficient to state a claim, was as follows:
"The Defendant USF G acted intentionally and negligently and with a reckless disregard of Plaintiff's rights, inflicting pain and suffering and with knowledge that its actions would aggravate Plaintiff's emotional distress."
As in Mason, Anders's omission of the words "extreme and outrageous" before the word "conduct" was not fatal to pleading this claim. This count of Anders's complaint incorporated by reference all his prior specific allegations, which were sufficiently detailed to allege extreme and outrageous conduct. Although Anders's complaint is no pleading masterpiece, Civ. R. 12(B)(6) does not require parties to plead each element of their action with crystalline specificity. Id.;Border City S. L. Assn. v. Moan (1984),
The case at bar, as in Russ, involves claims that the plaintiff was terminated after being directed during the course of employment to engage in illegal conduct. The exact nature of Anders's claim is unclear, but he is not required to plead facts. Under the circumstances, because the Ohio Supreme Court upheld a jury verdict on this claim for the former employee inRuss, it does not appear beyond doubt that Anders can prove no set of facts entitling him to recovery in this case.
The argument that Anders's claim of intentional infliction of emotional distress is preempted by the Whistleblower Statute is unpersuasive. Russ specifically recognized the validity of the claim of intentional infliction of emotional *361
distress in the context of an employment discharge case after passage of the Whistleblower Statute. Id. at syllabus; see, also, English v. Gen. Elec. Co. (1990),
In summary, it is well established that a motion to dismiss a complaint for failure to state a claim requires courts to accept the allegations as true and view them in the light most favorable to the nonmoving party. Even if there were any merit to the preemption argument, dismissal of Anders's claims at this early stage was erroneous because it requires construing the allegations against him. Dismissal of Anders's public policy and emotional distress claims was premature precisely because it does not appear beyond doubt that he can prove no set of facts entitling him to relief.
Accordingly, Anders's fourth and sixth assignments of error are well taken, but the fifth assignment is overruled.
The judgment is affirmed in part and reversed in part, and the cause is remanded for further proceedings.
Judgment accordingly.6
JAMES D. SWEENEY, P.J., concurs.
PORTER, J., concurs in judgment only.