Cynthia GATTO, Appellant-Plaintiff, v. ST. RICHARD SCHOOL, INC., d/b/a St. Richard‘s School, St. Richard‘s School Foundation Board of Directors, David Peerless, Larry Wechter, Jan Wechter, Robert Greising, and Midge Greising, Appellees-Defendants.
No. 49A05-0201-CV-014
Court of Appeals of Indiana
Aug. 19, 2002
Publication Ordered Aug. 27, 2002.
Thomas E. Wheeler, II, Locke Reynolds LLP, Indianapolis, IN, Attorney for Appellees.
OPINION
BAKER, Judge.
Appellant-plaintiff Cynthia Gatto appeals the trial court‘s grant of summary judgment in favor of appellees-defendants St. Richard‘s School, Inc., d/b/a St. Richard‘s School, St. Richard‘s School Foundation Board of Directors, David Peerless, Larry Wechter, Jan Wechter, Robert Greising, and Midge Greising (collectively, St. Richard‘s). Determining that the trial court properly granted summary judgment and denied Gatto‘s claims of breach of contract, tortious interference with contract, and defamation, we affirm.1
FACTS
The facts viewed in a light most favorable to Gatto indicate that St. Richard‘s is a private Episcopal school with students in grades kindergarten through eight. Peerless, Headmaster of St. Richard‘s, hired Gatto for the position of Middle School Head. At the time of her hiring on July 31, 1998, she signed a one-year contract for the 1998-99 school year. Gatto‘s responsibilities included disciplining students, insuring that the curriculum was administered properly, and attending after-school student events.
According to Gatto, in early October 1998, Peerless informed her that she was “brusque” with people. Appellant‘s App. p. 118. His comment was part of a brief discussion2 about her job performance in
In March 1999, Peerless conducted a formal evaluation of Gatto‘s job performance. Along with reviewing her positive contributions to the school, Peerless cited job responsibilities in which Gatto needed to show improvement:
There have been a number of times when details have not been followed up on, or communicated by you, when necessary. Covering a detention supervision, telling me that you wanted me in a Student Council meeting, realizing the conflict between the NCAA and Kathleen‘s rehearsal are all examples. There are a great number of different events and issues that are interweaving or occurring at the same time. It is important that you find a way to manage all these. Perhaps noting them in an expanded schedule, referring regularly to a list are possible helps.
. . . .
The two major growth areas that I want you to focus on are:
- Keeping open to other people so that communication can be positive. You need to avoid conveying negative emotions or defensiveness that close[s] communication or escalate[s] a conflict. Be careful of the words that you use. Don‘t be too blunt.
- Make sure that details don‘t get overlooked and all information and decisions are shared as needed in as timely a way as possible.
Appellees’ App. p. 76-77. Two weeks after presenting Gatto with her evaluation, Peerless offered her a contraсt for the 1999-2000 school year, which she signed.
However, Gatto‘s handling of an extracurricular activity in April 1999 spawned additional criticism of her job performance. It is undisputed that Gatto was responsible for insuring that an annual spring dance would be adequately chaperoned. Her task was made more difficult by the scheduling of a surprise party for Peerless on the same night. The dance included students from St. Richard‘s and other area middle school students. She arranged for her nineteen-year-old son, his girlfriend (18), a student‘s older sister (17), and the sister‘s boyfriend (18) to chaperone a dance where roughly eighty students from the sixth, seventh, and eighth grades were expected to attend.
Given that the school‘s neighborhood had been repeatedly vandalized over the years and the school itself had been broken into the day before, there were increased concerns about security for the dance. Although the sponsoring church of St. Richard‘s employs a security guard, the guard is stationed in the south parking lot and does not monitor the school or gym
When parents arrived to bring their children to the dance, some became upset that no security was present and that no parents were acting as chаperones. Because of concerns about inadequate supervision, three parents decided to remain at the dance. When Gatto eventually arrived at the dance after the conclusion of the surprise party, an angry parent confronted her. Another parent who had remained at the dance later said that Gatto should be fired for the lack of supervision at the dance. Referring to the parent‘s wish that she be fired, Gatto admitted, “This was a good way to jump on the bandwagon. This was the only thing that I had done that would merit criticism like that.” Appellees’ App. p. 60.
On May 21, 1999, Peerless and St. Richard‘s Personnel Policy Committee met to discuss Gatto‘s job performance. Peerless had already decided that Gatto‘s employment should be terminated, and the committee concurred with his decision. A few days later Peerless met with Gatto to notify her of the termination, explaining that she was not a good fit for the school. In a letter dated May 26, Gatto challenged the decision and argued that she was not given any reasons for her termination.
To inform parents of five personnel changes for the upcoming school year—including Gatto‘s—Peerless and the president of the Board of Directors sent a two-page letter dated June 4. The only portion addressing Gatto‘s employment status read:
Mr. Peerless and the Personnel Policy Committee of the Board have decided that in the best interest of the Middle School program, Dr. Gatto should not return next year. This decision was the conclusion of a normal personnel process for these matters. The School‘s policy in evaluating any employee is to treat the details of such discussions in confidence.
Appellees’ App. p. 120.
Within seven months of the letter, Gatto filed a three-count complaint alleging, in part, that St. Richard‘s breached her employment contract when it terminated her employment. Gatto also brought a claim for tortious interference with contract against Larry and Jan Wechter and against Robert and Midge Greising, parents of students who attended St. Richard‘s. Her third and final count alleged that the Board of Directors and the school defamed her by sending the June 4 letter to the school‘s parents. St. Richard‘s responded by filing a motion for summary judgment, which the trial court ultimately granted on all counts. Gatto now appeals.
DISCUSSION AND DECISION
I. Standard of Review
The party appealing from a summary judgment decision has the burden of persuading the court that the grant or denial of summary judgment was erroneous. Owens Corning Fiberglass Corp. v. Cobb, 754 N.E.2d 905, 908 (Ind. 2001). Summary judgment is appropriate only if the pleadings and evidence sanctioned by the trial court show that “there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”
A. Breach of Contract
The essential elements of a breach of contract action are the existence of a contract, the defendant‘s breach thereof, and damages. Shumate v. Lycan, 675 N.E.2d 749, 753 (Ind. Ct. App. 1997), trans. denied. Gatto argues that genuine issues of material fact exist regarding whether St. Richard‘s breached her employment contract by failing to comply with the process for termination. In Gatto‘s employment contract, the termination clause reads as follows:
RIGHT TO TERMINATE: This contract may be terminated by the School upon a determination by the School, in its sole discretion that a reasonable cause exists to terminate the contract. The Faculty Member will receivе written notice of termination. Employee shall be paid through the effective date of termination.
Appellant‘s App. p. 20.
1. “Identity of the School”
She first contends that there is a genuine issue of material fact regarding the “identity of the ‘School‘” within the meaning of the contract. Appellant‘s Br. p. 13. The contract specifically defines the “School” as St. Richard‘s School Foundation, Inc. Appellant‘s App. p. 20. According to Gatto, Peerless and the School are not “interchangeable,” and, therefore, Peerless had no contractual authority to determine whether reasonable cause existed to terminate her. Appellant‘s Br. p. 14.
The undisputed facts, however, show that the school delegated to Peerless the аuthority to hire and fire employees. His own contract with the School makes this delegation explicit:
Additionally, as Head and the educational operating and administrative leader of St. Richard‘s, you will have general supervision and management over all aspects of school operations, as well as all subsidiary activities sponsored by the School and other duties assigned by the Board of Directors. Included in the foregoing, by way of illustration and not limitation, are preparation of the annual budget and the engagement, termination and delineation of the duties of all administrative, faculty and staff employees, all of whom shall be responsible to, and report to you.
Appellees’ App. p. 29 (emphasis added). On behalf of the school, Peerless hired Gatto and signed her employment contract. Moreover, Peerless was responsible for evaluating Gatto‘s performance, formally and informally. Exercising his delegated authority, Peerless fired Gatto.
Gatto makes much of the fact that St. Richard‘s is a “separate entity” from Peerless. Appellant‘s App. p. 16. We agree that the St. Richard‘s and Peerless are separate metaphysical entities. But one entity (a principal) may delegate its authority to another entity (an agent). See Dept. of Treasury v. Indianapolis Brewing Co., 108 Ind.App. 259, 265, 25 N.E.2d 653, 655 (1940) (“Generally speaking, an agent is one who, by the authority of another, undertakes to transact some business or manage sоme affairs on account of such other, and to render an account of it.“).
Gatto also attempts to create a genuine issue of material fact by asserting that the school board ultimately terminated Peerless‘s contract some time after he had fired her. From his termination, she infers that the school board was required to terminate all employee contracts. In addition to the clear delegation of authority in Peerless‘s contract to terminate employees, two other factors make her inference unreasonable. First, his own contract reveals that he was responsible to the school board for the performance of his duties. Natural
Gatto attempts to create a separate issue by arguing that a genuine issue of material fact exists as to whether St. Richard‘s itself—rather than Peerless—made a determination that reasonable cause existed to fire her. Her argument is redundant: the school acted through its agent, Peerless, when she was fired.
2. “Written Notice”
Gatto‘s contract provides for post-termination notice: “The Faculty Member will receive written notice of termination.” Appellant‘s App. p. 20. She contends that the school breached her contract by failing to provide post-termination notice. St. Richard‘s concedes that there is a dispute regarding whether Gatto received written notice of her termination. Appellees’ Br. p. 21. However, the school argues that even if Gatto did not receive written notice of her termination, such fact would not constitute a breach as a matter of law.
We were confronted with similar circumstances in Lewis v. Charles A. Beard Memorial School Corp., 657 N.E.2d 180 (Ind. Ct. App. 1995), trans. denied. There, the school corporation decided not to renew a nonpermanent teacher‘s contract for the following year. Id. at 181. The teacher sued the school board because she was not afforded a post-termination conference as required by statute. Id. We held that the conference was not a condition precedent to the school board‘s refusal to renew the teacher‘s contract. Id. at 184. The statute made clear that the conference was to be held after the nonrenewal decision was made. Id. Because the school board did not violate a condition precedent in refusing to renew the teacher‘s contract, she was not entitled to damages from the nonrenewal decision. Id.
Herе, even if we accept as true the assertion that Gatto did not receive written notice of her termination, summary judgment is still appropriate. The school was not contractually required to provide written notice before terminating Gatto‘s employment. Written notice, in other words, was not a condition precedent to terminating Gatto‘s employment contract. Moreover, Gatto has not shown how the lack of written notice harmed her. As a result, the school‘s failure to give written notice will not support a breach-of-contract claim. See id.
3. “Reasonable Cause”
Gatto‘s final argument on the breach-of-contract claim challenges the existence of reasonable cause to fire her. She claims that reasonableness is always a question for the fact-finder incapable of resolution on summary judgment.
On the contrary, when a party is given the exclusive contractual authority to determine reasonableness, there is no need for resort to a fact-finder‘s second-guessing. See Ferrell v. Dunescape Beach Club Condos., Phase I, Inc., 751 N.E.2d 702, 711 (Ind. Ct. App. 2001). In Ferrell, a condominium association was contractually entitled to make certain reasonable repairs to parts of the owner‘s condominium. Id. Ferrell refused the association access to her apartment for the repair. Id. at 706. In response, the association brought a complaint for declaratory judgment and requested summary judgment in its favor arguing that it was entitled to access tо Ferrell‘s condominium to make reasonable repairs. Id.
[B]ecause the assessment of the reasonableness of repairs was within the exclusive province of the [association] and not subject to challenge under the plain and ordinary meaning of Dunescape‘s Bylaws, there was no need, as Ferrell urges, to proceed with a factual determination on the issue of reasonableness.
Id. at 711. This court “discern[ed] no material question of fact on the issue of reasonableness.” Id.
In the instant case, St. Richard‘s reserved to itself exсlusive authority to terminate Gatto‘s employment. The contract provides that the school makes such reasonable cause determinations “in its sole discretion.” Appellant‘s App. p. 20. In other words, because the assessment of reasonable cause was within the exclusive province of the school, and not subject to challenge under the plain and ordinary meaning of the employment contract, there is no need to proceed with a factual determination on the issue of reasonableness. See Ferrell, 751 N.E.2d at 711. Therefore, St. Richard‘s was entitled to summary judgment on Gatto‘s breach-of-contract claim.
B. Tortious Interference with Contract
Gatto next claims that the Wechters and Greisings tortiously interfered with her contractual relationship with the school. Five elements are necessary to support a claim for tortious interference with contract:
[1] existence of a valid and enforceable contract, [2] defendant‘s knowledge of that contract, [3] defendant‘s intentional inducement to breach that contract, [4] the absence of justification, and [5] damages resulting from the breach.
Nat‘l City Bank, Ind. v. Shortridge, 689 N.E.2d 1248, 1252 (Ind. 1997) (citing Winkler v. V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1235 (Ind. 1994)). Here, St. Richard‘s did not breach Gatto‘s contract. Thus, as a matter of law, Gatto may not succeed on a claim for tortious interference with contract. The trial court did not err in granting the school summary judgment on this claim.
C. Defamation
Gatto‘s final contention is that the June 4 letter sent by Peerless and the school board president was defamatory. Gatto maintains that the elements of defamation in this case are: “(1) communication with a defamatory imputation; (2) malice; (3) publication; and (4) damages.” Appellant‘s Br. p. 27 (citing Furno v. Citizens Ins. Co. of Am., 590 N.E.2d 1137, 1141 (Ind. Ct. App. 1992)). Given the four separate opinions in our supreme court‘s most recent decision addressing defamation, it is not clear that actual malice is the standard of fault where the plaintiff is a private figure and the matter is not a public or general concern.3 Because resolution of
Gatto‘s claim for defamation fails because the June 4 letter contains no defamatory imputation. “A statement is defamatory if it tends to harm the reputation of another so as to lower him in the estimation of the community or to deter third persons from associating or dealing with him.” Van Eaton v. Fink, 697 N.E.2d 490, 494 (Ind. Ct. App. 1998). Initially, the determination of whether a communication is defamatory is a question of law for the court; it is to be presented to the jury as a question of fact only if the communication is reasonably susceptible to either defamatory or nondefamatory interpretation. N. Ind. Pub. Serv. Co. v. Dabagia, 721 N.E.2d 294, 301 (Ind. Ct. App. 1999), trans. denied. In making such a determination, the communication is to be viewed in context and given its plain and natural meaning. Id.
Addressing employer statements concerning an employee‘s performance, Professor Smolla offers some common sense suggestions about defamatory meaning:
Many negative statements concerning an employee‘s work performance will easily satisfy the requirement of defamatory meaning. Statements alleging fraud or dishonesty, sexual misconduct, alcohol or drug abuse, or simple incompetence will usually qualify. The statements need not be sharply specific. . . .
Courts should nevertheless be alert to the fact that many evaluations are simply too watered down and amorphous to qualify as carrying defamatory meaning. Typical statements such as “he no longer fit in with our plans,” or “we felt we needed a change of direction,” or we werе “looking for new ideas” or a “fresh approach,” or we “didn‘t like the way things were working out” should be normally dismissed as nondefamatory. The plaintiff may perceive these statements as mere euphemisms for more damning sentiments that the employer has left unsaid, and the plaintiff may very well feel that the stated grounds are irrational or unfair. But the law of defamation must be grounded in what is actually communicated; it is not a forum for trying causes of action based on unfair or arbitrary terminations. When the employer does not say anything negative to the employee, or to anyone else, beyond the sort of vague and neutral type of statement described above, the defamation count should be dismissed.
Rodney A. Smolla, Law of Defamation § 15:16 (2d ed. 1999 & Supp. 2002) (emphasis supplied). Regarding the “vague and neutral type of statement,” Professor Magruder‘s proposed remedy is apt: “Against a large part of the frictions and irritations and clashing of temperaments incident to participation in a community life, a certain toughening of the mental hide is a better
1. No Defamatory Meaning Here
With these principles in mind, we turn to the statements of which Gatto complains. The first portion of the June 4 letter directly addresses her employment status:
Mr. Peerless and the Personnel Policy Committee of the Board have decided that in the best interest of the Middle School рrogram, Dr. Gatto should not return next year. This decision was the conclusion of a normal personnel process for these matters. The School‘s policy in evaluating any employee is to treat the details of such discussions in confidence.
Appellees’ App. p. 120. The second complained-of portion discusses the school‘s plans to search for a new Middle School Head:
Mandate for the Future
Within the next few days, Mr. Peerless will assemble a Middle School Advisory Search Committee. The team will consist of two Middle School faculty, two administrators, two Board members with Middle School students, and three Middle School parents. The team will review the job description and expectations of this position, inсluding the vision and mission statements for the Middle School, and continue the important job of building a Middle School based on our core values. The ad hoc team will continue its work until the job is complete.
Appellees’ App. p. 120.
It is hard to imagine statements relating to a fired employee being any more sanitized than these. The school said nothing about Gatto‘s character, work habits, or her interaction with parents and faculty. The school did not insinuate any impropriety or incompetence on Gatto‘s part. Rather, in the judgment of Headmaster Peerless and the Personnel Policy Committee, Gatto‘s continued employ was not in the best interest of the school. In this context, the two portions of the letter were not reasonably susceptible to defamatory meaning. See Dabagia, 721 N.E.2d at 301. Gatto‘s defamation claim fails as a matter of law.
2. Truth is a Defense
Even if the statements could somehow be construed as defamatory, they are nevertheless true. And truth is a complete defense to defamation. Assocs. Corp. of N. Am. v. Smithley, 621 N.E.2d 1116, 1119 (Ind. Ct. App. 1993). Peerless, it is undisputed, did decide it was in the best interest of the school to fire Gatto. The Personnel Policy Committee, viewing the facts most favorable to Gatto, concurred with his decision. Moreover, Peerless was committed with the responsibility to hire, continually evaluate, and, if necessary, terminate St. Richard‘s faculty and administrative personnel. It is undisputed that Peerless reevaluated Gatto‘s job performance after the spring dance debacle. He even went so far as to discuss his decision with the Personnel Policy Committee before firing Gatto. He then fired her. There was nothing abnormal about this process. Finally, there is nothing untrue about a school‘s expression of a desire to continue building upon core values in the instruction of its youth.
3. Common Interest Privilege Applies
Again, if one assumed that the statements were defamatory, they were protected by a qualified privilege of common interest. The qualified privilege applies to communications made in good faith on any subject matter in which the party making the communication has an interest or in reference to which he has a duty,
Parents and schools have a “corresponding interest” in the free flow of information about administrators and faculty members. We are in agreement with many of our sister states that have recognized the common interest privilege under similar circumstances.4 The protection afforded this privilege, however, may be lost upon a showing that it was abused.
The statements here were communicated to apprise Middle School parents of St. Richard‘s decision to terminate Gatto‘s contrаct. Parents have an interest in the employment status of teachers and administrative personnel to whom they entrust their children. This interest extends to whether the particular employee was fired, was refused a contract renewal, retired, or quit. In sum, the common interest privilege protected statements concerning Gatto in the June 4 letter.
Gatto argues that St. Richard‘s abused the privilege because Peerless and Dorfman knew that the letter contained false statements. Because the statements were true, Gatto‘s contention on these grounds fails.
CONCLUSION
In sum, we affirm the summary judgment in favor of St. Richard‘s on all counts of Gatto‘s complaint. First, the school did not breach Gatto‘s employment contract. Second, the claim for tortious interference with contract is defeated because there was no breach. Finally, the Gatto‘s claim for defamation fails because the statements in the June 4 letter: (1) contained no defamatory meaning; (2) were true; and (3) were protected by the common interest privilege.
Judgment affirmed.
DARDEN, J., concurs.
SULLIVAN, J., dissents with opinion.
SULLIVAN, Judge, dissenting.
I respectfully dissent with respect to Part II A. 1.
The contract between Peerless and the School is at odds with the contract between Gatto and the School. Gatto was not a party to the Peerless-School contract. She is, therefore, entitled to rely upon her own contract with regard to the ultimate authority for termination of that contract. It specifically stated that termination is a determination to be made upon reasonable cause in the sole discretion of the School. It does not contemplate that such authority may be delegated to a designee such as the Headmaster.
Under Part II A. 3. of the majority opinion, this fact would appear to be acknowledged. In treating the issue of whether the reasonableness of a contract termination is a question appropriate for summary judgment, the majority states:
“... St. Richard‘s reserved to itself exclusive authority to terminate Gatto‘s employment. The contract provides that the school makes such reasonable cause determinations ‘in its sole discretion‘.... In other words, because the assessment of reasonable cause was within the exclusive province of the school...” Op. at 922.
I fail to understand how the School may delegate its exclusive authority to another employee of the School.
For these reasons, I respectfully disagree with the majority‘s conclusion that Peerless possessed delegated authority to fire Gatto.5
ORDER
This Court having heretofore handed down its deсision in this case on August 19, 2002, marked Memorandum Decision, Not for Publication;
The Appellees, by counsel, having thereafter filed their Motion to Publish Decision, alleging therein that the decision both clarifies existing law and is a matter of substantial public importance in that it clarifies the application of the defamation standard in the context of school communications with parents and in particular establishes a new rule of law, namely, the adoption of the common interest privilege to protect communications between schools, parents and taxpayers.
The Court having examined said Motion and being duly advised, now finds that said Motion should be granted and this Court‘s opinion in this appeal should now be ordered published.
IT IS THEREFORE ORDERED as follows:
- The Appellees’ Motion to Publish Decision heretofore handed down in this cause on August 19, 2002, marked Memorandum Decision, Not for Publication, is now ordered published.