Lead Opinion
[¶ 1.] James Bad Wound (Bad Wound) appeals a judgment against Lakota Community Homes (LCH) claiming that the trial court erred in limiting the period of his recovery of damages to the three-year term of the employment contract. LCH appealed the trial court’s denial of admission of Bad Wound’s past habit and routine of nonconfusion during prior management transitions. We affirm.
FACTS
[¶ 2.] This is the second time that this case has come before this Court. Originally, we reversed the trial court’s granting of summary judgment to LCH and remanded the action for trial.
[¶ 3.] On appeal, Bad Wound raises the following issue:
1. Whether the trial court erred in limiting the period of Bad Wound’s recovery of damages to the three-year term of the contract?
[¶4.] On cross-appeal, LCH raises the following issue:
2. Whether the trial court erred in excluding LCH’s evidence of past habit and routine?
DECISION
[¶ 5.] 1. Whether the trial court erred in limiting the period of Bad Wound’s recovery of damages to the three-year term of the contract?
[¶ 6.] Whether to allow the jury to consider damages beyond the contract term is an evidentiary ruling. Our standard of review of “a trial court’s evidentia-ry ruling is that of abuse of discretion.”
[¶ 7.] At trial, Bad Wound was requesting damages for his entire work life expectancy, an indeterminate period of time which would extend beyond the expiration of his current written contract term. His justification for this claim of damages was based upon alleged comments by the Board during oral contract negotiations. Bad Wound contends that prior to his signing of the three-year contract, the Board stated that if at the end of the three years an employee was doing his job then the contract can be renewed for another three years. Bad Wound interpreted these statements to have granted to him lifetime employment with LCH.
[¶ 8.] The issue of damages under a contract of employment is well settled. See Nelson v. WEB Water Dev. Ass’n, Inc.,
[¶ 9.] This Court has often stated that “ ‘[i]n an action for breach of contract, the plaintiff is entitled to recover all his detriment proximately caused by the breach, not exceeding the amount he would have gained by full performance.’ ” Ducheneaux v. Miller,
[¶ 10.] In the present case, Bad Wound argues that Restatement (Second) of Contracts § 347 (1981) allows recovery of damages beyond the three-year contract term. The Restatement states:
Subject to the limitations stated in §§ 350-52, the injured party has a right to damages based on his expectation interest as measured by
(a) the loss in value to him of the other party’s performance caused by its failure or deficiency, plus
(b) any other loss, including incidental or consequential loss, caused by the breach,less
(c) any cost or other loss that he has avoided by not having to perform.
Bad Wound contends that his “incidental or consequential loss” would include his loss of earnings after June 30, 1998. Bad Wound argues that, based upon Board’s gratuitous oral comments which were not incorporated into the final written contract, his employment would be for as long as he was willing to remain as their employee. Therefore, application of § 347 would allow him to recover an amount equal to the difference between his wages of $13.00 from LCH and his wages of $7.82 from his new employment for the rest of his working life.
[¶ 11.] Bad Wound cites Lex K. Larson, Unjust Dismissal § 9A.02[1], as authority for' his argument that the application of Restatement (Second) of Contracts § 347 should allow him to recover damages beyond the three-year contract term. Notably, Larson mentions § 347 in the “con
Remedies for the breach of an employment contract follow the same general pattern as the remedies for the breach of any other contract: the remedies are designed to protect the expectations of the parties when they entered into the legally binding agreement. Thus, if an employee is working under a definite term contract but is dismissed before the expiration of the term, damages in the form of lost wages will be computed from the time of discharge to the end of the contract term.
Id. at § 9A.02[2] (citing Raytheon Subsidiary Support Co., Inc. v. Crouch,
[¶ 12.] An employment case which dealt with claimed future loss of income is Lindsey v. University of Arizona,
[¶ 13.] Bad Wound’s reliance on Restatement (Second) of Contracts § 347 is in essence a request for recovery of tort damages in this contract action. The trial court properly instructed the jury based upon the settled law of this state for determination of contract damages.
[¶ 14.] 2. Whether the trial court erred in excluding LCH’s evidence of past habit and routine?
[¶ 15.] This issue, raised by LCH, is also an appeal of an evidentiary ruling. Therefore, we apply the same standard of review as applied in issue one. LCH proposed to offer evidence at trial that on eight prior managerial transitions during Bad Wound’s seventeen years of employment with LCH, he never claimed confusion as to who was in- charge. Specifically, three years prior to the time period at issue, CKJ was terminated for- the first time and Bad Wound, unlike the present situation, reported to work the next day without claiming any confusion. LCH contends that these prior situations of noncon-fusion constitute habit evidence that
[¶ 16.] Prior to trial, Bad Wound filed a motion in limine for the exclusion of the alleged habit evidence. Bad Wound argued that “such evidence is remote in time, raises numerous collateral issues, and does not relate to Bad Wound’s situation on November 7 and 8, 1995. In none of those prior situations did any employee have a contract like Bad Wound’s contract.” In the motion in limine hearing, the following discussion occurred between the parties and the court:
Mr. Leach: My motion is, we shouldn’t be talking about prior management changeovers that happened two years ago, five years ago, ten years ago, which is what all these things are. We should be talking about this management changeover. Period. If we open it up and talk about two years, five years, ten years, then we are really opening up everything.
Mr. Connot: I don’t think so. If he wants to rely on the fact that he worked there for over 17 years - by his own testimony, Jim Bad Wound was there through eight previous management change-overs. In fact, previous termination in 1992 of CKJ, when CKJ was fired once before, after every one of those times, there was absolutely no confusion about who he worked for. He showed up for work for [LCH] the next morning. I think that’s entirely relevant as to whether or not he was confused during November 6th and November 9th, 1995.
The Court: Just a little while ago you were telling me, the other side of the argument is that he had only been in this supervising position for three months.
Mr. Connot: The supervisory position, but he had been an employee there for 17 years.
The Court: Well, just an employee is a little different than being a supervisor. That was the argument you were making, and I agree with that argument, that it is. Consequently, if prior management changes, I don’t think they are relevant.
Mr. Connot: Even CKJs termination in 1992? He’s testified they were fired in 1992, and he showed up the next day.
Mr. Leach: That is three years before. It’s a different deal; he doesn’t have a contract then.
The Court: I agree he doesn’t have a contract
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The Court: [Motion in limine] is granted.
In making its ruling, the court emphasized that Bad Wound did not have a written employment contract during the prior changeovers as he did here.
[¶ 17.] Bad Wound argues that the issue was not properly preserved below for our review. We find that it was. Under SDCL 19-12-8,
Evidence of the habit of a person or of the routine practice of an organization, whether corroborated or not and regardless of the presence of eyewitnesses, is relevant to prove that the conduct of the person or organization on a particular occasion was in conformity with the habit or routine. (Emphasis added.)
We have often noted that “[r]elevance is a precursor to admitting any evidence.” State v. White,
[¶ 18.] In Kavales v. City of Berwyn,
[¶ 19.] LCH relies on our discussion in Larson in which we held that evidence of an employee’s conversion of corporate funds (checks) was relevant to his credibility and probative of his truthfulness and should have been before the jury.
[tf 20.] The trial court found that the prior managerial changes and terminations were not sufficiently similar to establish a pattern of conduct or habit. This decision was based upon Bad Wound’s employment status not being similar to his status at the time of the current managerial change, Bad Wound did not have a written contract during the prior managerial transitions, and there was a different LCH Board involved in all the instances. If evidence is not relevant to the causes of action alleged, it is not admissible. See Darrow v. Schumacher,
[¶ 21.] We affirm.
Notes
. The first appeal by Bad Wound on the granting of LCH’s summary judgment is found in Bad Wound v. Lakota Community Homes, Inc.,
Concurrence Opinion
(concurring in part and dissenting in part).
[¶ 24.] The trial court erred in preventing LCH “from attacking Bad Wound’s credibility [and truthfulness] by presenting habit evidence of LCH’s prior transitions and Bad Wound’s failure to claim confusion on any of those transitions.”
[¶ 25.] LCH offered evidence “that on eight prior managerial transitions during Bad Wound’s 17 years of employment with LCH, he never claimed confusion as to who was in charge.” In fact, only three years before, CKJ was fired for the first time and Bad Wound reported to work the next day without claiming any confusion.
[¶ 26.] Clearly, this evidence is relevant to establish that Bad Wound was not truly “confused” about whom he worked for on November 7 and 8, 1995. Relevant evidence is defined as:
[E]videnee having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.
SDCL 19-12-1 (Rule 401). The determination of relevancy hinges on whether the evidence possesses sufficient probative value to justify receiving it into evidence. In other words, does the admission of Bad Wound’s lack of confusion during eight prior management transitions have a tendency to prove that Bad Wound was not confused in this instance more probable than it would be without the evidence? The answer is clearly “yes.” The ascertainment of whether Bad Wound was actually confused in this instance is indisputably the ultimate issue in this case and applies to Bad Wound’s intent and knowledge. The probative value of the habit evidence is not substantially outweighed by its prejudicial effect. If Bad Wound was not confused in the prior 17 years, was he really confused in this instance? The answer is for a jury to determine.
[¶ 27.] It was an abuse of discretion to determine that the evidence of the eight prior managerial transitions LCH endured while Bad Wound was an employee, was inadmissible and did not rise to the level of habit evidence. Habit evidence is defined as:
Evidence of the habit of a person or of the routine practice of an organization, whether corroborated or not and regardless of the presence of eyewitnesses, is relevant to prove that the conduct of the person or organization on a particular occasion was in conformity with the habit or routine practice.
SDCL 19-12-8 (Rule 406). Although the rule does not define “habit,” the Advisory Committee Note to Federal Rule of Evidence 406 quotes Professor McCormick’s description of habitual behavior as “consisting of semi-automatic, almost involuntary and invariablfy] specific responses to fairly specific stimuli.” “What Rule 406 seeks to admit are those kinds of repetitive acts that provide strong proof of conduct on a specified occasion without the danger of bogging down the trial in collateral issues or unfairly prejudicing the case of one of the parties.” 23 Wright and Graham, Federal Practice and Procedure § 5273.
[¶ 28.] Courts are divided as to how many prior instances of identical behavior must be shown in order to demonstrate a habit. See John P. Ludington, Annotation, Habit or Routine Practice Evidence Under Uniform Evidence Rule W6,
[¶29.] In Chomicki v. Wittekind,
[¶ 30.] There were nine managerial transitions throughout Bad Wound’s employment with LCH. During the first eight transitions, Bad Wound consistently reported to work on a regular basis. In fact, three years before this incident, CKJ was fired for the first time and Bad Wound did not even hesitate to report for work the next day. For 17 years, there appeared to be no question of whom he worked for. All eight of these prior managerial transitions are unquestionably similar to the managerial transition that took place in November of 1995; however, Bad Wound alleges to be confused on this ninth transition.
[¶ 31.] As a general rule, evidence of habitual behavior is admissible as circumstantial proof that the habit was followed on the occasion in question. The evidence that Bad Wound was not confused about who his employer was during the previous eight managerial transitions would be offered to prove that Bad Wound was not confused during the ninth transition. The evidence is sufficient to establish that Bad Wound’s response to management transitions was a “semi-automatic, almost involuntary and invariabl[y] specific responses to fairly specific stimuli.” Therefore, it is relevant and admissible as habit evidence under Rule 406.
[¶ 32.] The trial court granted the Bad Wound’s motion in limine because Bad Wound did not have an employment contract with LCH during the prior transitions, but did have a contract during the transition on November 7 and 8 of 1995. The fact that Bad Wound had an employment contract in this instance is immaterial to the point that Bad Wound, who never had an employment contract in the preced
Where the evidence is entirely circumstantial[,] a party should not be deprived of competent, relevant evidence because it is not of great strength. Many threads may make a rope.
Whittemore,
[¶ 33.] As indicated, Bad Wound’s credibility was the ultimate issue
[¶ 34.] I vote to reverse and remand for a new trial.
. This treatise additionally provides: "One of the reasons the courts have been reluctant to
. The irony of this case is that it has been to the South Dakota Supreme Court twice without the real issue ever having been decided by a jury. In Bad Wound I, the trial court was so impressed in LCH’s favor it granted LCH summary judgment based on the same evidence it excluded from the jury in Bad Wound II. The jury should decide this case on all the evidence instead of the trial court or this court deciding it on part of the evidence.