Martin v. JohnsonMartin v. Johnson
¶ 1 Plaintiffs contract as a non-tenured Spanish teacher in the Latta school system was not renewed. She sued in the District Court, first naming the Principal Johnson as defendant, and then added Superintendent Hoover and the School District. Before her case made it to trial Plaintiff was assessed a sanction by way of attorneys fees for attempting to amend her petition, and then suffered the ultimate sanction of having her case dismissed for failure to attend a continuation session of her own deposition of which she had been given notice. Additional fees and costs accompanied the second sanction. She appealed. We reverse the sanctions, reinstate her petition, and remand.
¶ 2 Nancy Martin’s 1 allegations were that her resistance to Johnson’s sexual advances were at the heart of her non-renewal. She alleged a conspiracy, which, she claimed, included the Superintendent, and in addition to claims of sexual harassment pled theories of intentional infliction of emotional distress and tortious interference with her employment contract. She also pled breach of contract against the School District for the procedure by which she was non-renewed or terminated.
¶ 3 In March of 1996, Defendants jointly moved to dismiss, with prejudice, Martin’s claim as it related to allegations of tortious interference with contract. The motion was apparently based upon
¶ 5 Defendants argued that Johnson and Hoover had acted as employees of the School District, and thus under no circumstance could they be held liable on a theory of tortious interference with contract. Defendants explained that “Now, the Court did not specifically state whether it was with or without prejudice, but the Court granted the motion which stated in the motion itself that it was requesting a dismissal with prejudice.” The trial court allowed Martin to amend the petition, but without the allegations relating to tortious interference with contract.
¶ 6 The same day as this hearing, July 1, 1996, Defendants filed a motion for sanctions against Martin relying
¶ 7 The hearing on the motion for sanctions for the amended petition occurred in August 1996. Defendants argued that Martin had no basis to reassert a claim that had been dismissed with prejudice, and had no basis to assert the privacy claim because it was based upon publication of a matter of public record. They requested sanctions in the form of their attorney’s fees in responding to the application to file the fifth amended petition and the motion and brief for sanctions.
¶ 8 Martin responded by arguing that case-law allowed a claim for tоrtious interference with contract in the circumstances she was alleging, that sustaining a motion to dismiss was an insufficient basis to award sanctions, and that no attempt to reassert the claim had been made after the journal entry had been settled. On the privacy claim she referenced certain court opinions upon which she relied.
¶ 9 The trial court stated with regard to the invasion of privacy claim that “there was some valid argument for that.” She noted that the tortious interference with contract claim was dismissed in open court on April 22nd, that Plaintiff reasserted it in her Motion to Amend which the court then later denied, and that to prevent further similar acts a sanction should be imposed. The court awarded sanctions and directed Defendants to submit to the court an itemization of the amount of fees expended.
¶ 10 Defendants then sought more sanctions. They sought $596.40 as a sanction for Martin’s non-appearance at a deposition. They also sought an order dismissing her remaining claims without prejudice, and making' the payment of the sanction awards as conditions for refiling the action. Defendants sought this relief pursuant to
¶ 11 Defendants asserted that on July 15, 1996, they had served Martin with a notice for her deposition to be taken. Martin and her lawyer appeared on August 16, 1996 for the deposition. The deposition was not completed that date, and pursuant to agreement of thе parties Martin was to appear on August 23rd to complete the deposition.
¶ 12 On August 21, 1996 counsel for Martin served upon counsel for Defendants a motion to withdraw as counsel. On August 22, 1996 Martin sent counsel for Defendants a facsimile letter stating that she could not attend the scheduled deposition because of illness. She further stated that she would
¶ 13 A hearing was then held on September 30th on Defendants’ motions to dismiss, for sanctions, attorney’s fees, and to settle a journal entry. Martin responded with an affidavit of a licensed physician treating Martin. It stated that Martin’s “medical condition prevented her from being present at the deposition scheduled on the 23rd of August, 1996.” The trial court made a finding that Martin failed to comply with discovery, and this finding was based upon the sole circumstance of her failure to appear at the deposition on August 23rd.
¶ 14 As sanctions for her non-appearance the trial court did the following: It ordered Martin to pay $418.00 for attorneys fees, $50.40 for mileage expense, and $128.00 court reporter fees. It further dismissed all the remaining portions of her suit without prejudice, and. conditioned her re-filing of it upon payment of thе sums ordered. 3
f 15 Plaintiff appealed. The Court of Civil Appeals affirmed the sanction for attempting to amend, but reversed the sanctions, including dismissal, for failure to attend. We have granted certiorari. Before addressing the merits of her appeal we need to resolve an issue of appellate procedure raised by Defendants.
APPEAL OF THE INTERLOCUTORY ORDERS
¶ 16 Martin’s appeal, as well as her petition for certiorari, includes a challenge of certain interlocutory orders. The orders dismissed her claim for tortious interference with contract, denied her leave to amend her allegations pertaining to this theory, and imposed a sanction for attempting to amend her petition. The latter was subsequently incorporated into the judgment which also sanctioned her for her failure to appear at the deposition. Defendants counter with the argument that the first dismissal order is not properly here. They argue that those orders are not final orders, and not appealable for reason that claims were left unadjudicated in the trial court.
¶ 17 Martin brought her appeal here from the judgment that sanctioned her and dismissed all her claims. This order acts as an end-of-the-line disposition of her action, and is appealable.
Hammonds v. Osteopathic Hosp. Founders Ass’n,
¶ 18 Defendants do not challenge our review of the judgment per se, but of the interlocutory order prior to judgment that dismissed Martin’s claim based upon tortious interference with contract. We agree that the dismissal order was unappealable at the time of adjudication, because it disposed of only one of the many claims pled.
LCR, Inc. v. Linwood Properties,
THE FIRST SANCTIONS ORDER FOR ATTORNEY FEES
¶ 19 Defendants requested that the interference with contract claim be dismissed with prejudice. When the motion was heard and granted the trial court did not expressly state whether the dismissal was with prejudice or without leave to amend. Martin then sought leave to amend her petition.
¶ 20 Defendants argue that Martin violated
¶ 21 Her attempt to file the Fifth Amended Petition was what got Martin in trouble. The allegations against Johnson in the Fourth Amended Petition are identical to those in the Fifth Amended Petition, with one exception. She first alleged that Johnson interfered with her contract in certain particulars, but in the latter petition she added the allegation that he was acting in “bad faith” when he did those things. The allegations against Hoover are also similar in both petitions. But in the Fifth Amended Petition Martin adds the allegation that Hoover was “acted in bad faith and with malice” against Martin.
¶ 22 Defendants rely upon language in
Voiles v. Santa Fe Minerals, Inc.,
¶ 23 Defendants countered with several arguments, one of which was that Martin’s allegations of bad faith occurred in those portions of the petition alleging sexual harassment and intentional infliction of emotional distress, and not in the specific portions of the petition alleging interference with contract. Upon the conclusion of the oral argument the trial court asked Dеfendants if they had anything further to add, and they stated that:
Yes, Your Honor. Again, just to repeat that sexual harassment claim does, indeed, say that it was in bad faith; but it’s not in the tortious interference with — intentional infliction of emotional distress clearly alleges acts outside the scope of employment. Again, that’s not in the tortious interference with contract count.
In sum, Defendants argued at the hearing that Martin’s petition had a defect in pleading, in that while in some portions thereof she included allegations of bad faith and malice, in the tortious interference with contract portion of her petition she had not done so.
¶24 When Martin then requested leave to amend her petition by adding language of bad faith and malice to her interference with contract claim the Defendants sought sanctions, which the Court imposed. When reviewing a
Our Pleading Code states that:
G. FINAL DISMISSAL ON FAILURE TO AMEND. On granting a motion to dismiss a claim for relief, the court shall grant leave to amend if the defect can be remedied and shall specify the time within which an amended pleading shall be filed.If the amended pleading is not filed within thе time allowed, final judgment of dismissal with prejudice shall be entered on motion except in cases of excusable neglect. In such eases amendment shall be made by the party in default within a time specified by the court for filing an amended pleading. Within the time allowed by the court for filing an amended pleading, a plaintiff may voluntarily dismiss the action without prejudice.
The Pleading Code states that in granting a motion to dismiss a claim the court shall grant leave to amend if the defect can be remedied.
¶ 25 Here the trial court did not state if it was granting the motion to dismiss based upon a pleading defect, or for some other reason advanced by Defendants. Defendants did argue at the hearing that the claim had a pleading defect. The transcript of the hearing on the motion to dismiss shows that neither of the parties nor the court used the language “with prejudice” during the hearing. The record shows that no mention was made during the hearing whether leave to amend was either granted or denied.
¶ 26 The record also shows that the motion to dismiss was the first challenge to the legal sufficiency of the petition’s interference with contract claim. Thus, we are not presented with the situation where a trial court has unequivocally dismissed a claim for a non-curable pleading defect, and then a plaintiff seeks to re-file the dismissed claim in the guise of an amended petition. Finally, if Martin could rеasonably have believed that the claim was dismissed because of a pleading defect she could reasonably have believed that she was allowed to request leave to amend her pleading. In the trial court she cited
Kelly v. Abbott,
THE ORDER REFUSING LEAVE TO AMEND THE PLEADINGS
¶27 Martin also appeals the decision of the trial court to dismiss her claim based upon tortious interference with contract without allowing her to amend. Her suit contains allegations relating to a breach of contract against the School District as well as those sounding in tort against the District and as individuals. At this point in the litigation we are concerned only with the issue of whether the petition could be amended to state a claim for relief against Johnson and Hoover individually based upon the tort of interference with contract.
¶ 28 The tort liability of a school district is, of course, subject to the provisions of the Governmental Tort Claims Act, (
¶ 29 The essence of the Defendants’ argument is that even if they were acting outside of the scope of thеir employment, in bad faith and maliciously, for the purpose of the Governmental Tort Claims Act, they were nevertheless agents (or employees) of the School District, for the purpose of the interference with contract claim. They argue that as agents or employees of the School District no action for interference with contract would lie.
¶30 We have held that an agent of a principal cannot be held liable for interfering with a contract between the principal and a third party.
Voiles v. Santa Fe Minerals, Inc.,
¶ 31 Some courts have examined the issue in the context of officers, agents, or employees of a corporation interfering with a contract of their corporate employer. In
Mason v. Oklahoma Turnpike Auth,
The Oklahoma Supreme Court has not directly addressed whether a corporate officer, director or other employee can be held liable for tortiously interfering in a corporate contract. We are convinced, however, that corporate employees can be found liable under Oklahoma law for tor-tious interference with a corporate contract. See Johnson,802 P.2d at 1297 (suggesting a tortious intеrference claim could be stated against the supervisor who actually made the decision to terminate the plaintiff). As with any tortious interference claim, the determinative issue remains whether the actor’s interference was justified, privileged, or excusable. The Oklahoma Supreme Court has held that “it is not unlawful for one to ‘interfere with the contractual relations of another if [this is done] by fair means, if [it is] accomplished by honest intent, and if [it is done] to better one’s own business and not to principally harm another.’ ” Morrow Dev. Corp. v. American Bank & Trust,875 P.2d 411 , 416 n. 21 (Okla.1994) (alterations in original) (quoting Del State Bank v. Salmon,548 P.2d 1024 , 1027 (Okla.1976)). Therefore, a corporate officer’s or director’s interference with a corporate contract will be privileged only when the interferencе is undertaken in good faith and for a bona fide organizational purpose. Q.E.R., Inc. v. Hickerson,880 F.2d 1178 , 1184 (10th Cir.1989) (applying Colorado law); Allison v. American Airlines, Inc.,112 F.Supp. 37 , 38 (N.D.Okla.1953).
Id.
The Tenth Circuit thus concluded that in Oklahoma for a corporate officer’s interference with a corporation’s contract to be privileged as to that officer it must have been done in good faith. 7 Although the holding of the federal court on matter of state law has no precedential value in this proceeding, we agree with its conclusion.
¶ 32 It is fundamental that an employee or agent must act in good faith and in the interest of the employer or principal.
Butcher v. McGinn,
¶ 33 Of course, characterizing an employee’s conduct as contrary to the interests of the employer cannot be based merely upon the employee’s interference with the contract.
Voiles v. Santa Fe Minerals, Inc., supra, Ray v. American Nat. Bank & Trust Co. of Sapulpa, supra, Whitson v. Oklahoma Farmers Union Mut. Ins. Co., supra.
Every breach of contract does not give rise to a claim of tortious interference with contract merely because an employee or agent of a party to thе contract was involved in the breach. An allegation that a breach of contract occurred and was effectuated by an employee of the School District, does not, by itself, show a tortious breach of contract. In
Hayes v. Eateries, Inc.,
¶ 34 Martin sought to amend her petition to add allegations that the two employees of the school district tortiously interfered with her teaching contract. Defendants argued that as a matter of law such an action could not be brought against the employees because their employer was the other party to the contract. The trial court agreed, but did not determine the sufficiency of Martin’s proposed allegations. On an appeal this Court does not make first instance determinations on disputed questions of fact or law.
YWCA v. Melson,
THE SANCTIONS FOR FAILING TO APPEAR
¶ 35 The trial court awarded the sanctions pursuant to
... the court in which the action is pending on motion,may make such orders in regard to the failure as are just, and among others it may take any action authorized under subparagraphs a, b and c of paragraph 2 of subsection B of this section. In lieu of or in addition to any order, the court shall require the party failing to act or the attorney advising him or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.
The failure to act as described in this subsection may not be excused on the ground that the discovery sought is objectionable unless the party failing to act has applied for a protective order as provided by subsection C of Section 3226 of this title.
This language refers to paragraph 2 of subsection B which provides for a variety of orders to sanction improper conduct in discovery matters. 10
¶ 36 Defendants did not notice Martin for the continuation of the deposition, nor compel her attendance by court order. Martin argues that an order compelling her attendance is necessary prior to the imрosition of sanctions in the form of a dismissal. This view is correct.
¶ 37
¶ 38 Both
¶ 39 The trial court also awarded attorney’s fees as a sanction for Martin’s non-appearance, and such award may be made pursuant solely to
SUMMARY
¶ 40 In sum, The opinion of the Court of Civil Appeals is vacated, the trial court’s order of sanctions for Martin’s request to amend her petition is reversed, the order of the trial court dismissing her claim with prejudice and denying Martin leave to amend her petition to add allegations that employees of the school district tortiously interfered with her contract is reversed, the dismissal for Martin’s failure to appear at a deposition is reversed, and the award to Defendants for Martin’s failure to attend the deposition is reversed. The cause is remanded to the District Court for further proceedings consistent with this opinion.
Notes
. Plaintiff Martin is also an attorney licensed to practice law in Oklahoma.
. The trial court granted summary judgment involving claims relating to a conspiracy theory,
. Because we reverse the orders at issue herein on other grounds, we decline to explore our jurisprudence relevant to an order that conditions the refiling of dismissed suit upon the payment of litigation expenses in a previous proceeding.
. Martin argues on appeal that her allegations were sufficient to state a claim against certain defendants based upon a theory of tortious interference with contract. Martin sought leave to amend her petition to add allegations relevant to this theoiy. The trial court both dismissed and denied leave to amend on the basis that such a tort could not, as a matter of law, be brought against employees of an employer when the employer was a party to the contract. Because the decision of the trial court was limited to this ground, and Martin was dеnied leave to amend her petition to add allegations on this ground, our opinion does not address the sufficiency of allegations that may, or may not, be pled upon remand.
.
9. "Scope of employment” means performance by an employee acting in good faith within the duties of his office or employment or of tasks lawfully assigned by a competent authority including the operation or use of an agency vehicle or equipment with actual or implied consent of the supervisor of the employee, but shall not include corruption or fraud;
. The federal court noted that we had declined to examine the issue in
Hinson v. Cameron,
. The federal court did not note that this Court had previously allowed an action to proceed by an employee of a corporation against the directors of the corporation where the action was based upon allegations that the directors interfered with the employment contract.
Holland v. Perrault,
. For cases from other states in accord, see:
Bear v. Volunteers of America, Wyoming, Inc.,964 P.2d 1245 (Wyo.1998), (as long as the employee acted within the scope of his or her authority, the employee’s actions in recommending that another employee be discharged may be justified as a matter of law); McGanty v. Staudenraus,321 Or. 532 , 543,901 P.2d 841 (1995), (when an employеe acts within the scope of employment, that employee is not a third party to a contract between the employer and another for the purpose of the tort of intentional interference with economic relations); Shea v. Emmanuel College,425 Mass. 761 ,682 N.E.2d 1348 (1997), (court properly granted summary judgment against terminated college employee’s interference of contract action against her former supervisor because employee failed to create genuine issue of material fact as to whether former supervisor had acted with actual malice in arranging for her discharge); Murray v. St. Michael's College,164 Vt. 205 ,667 A.2d 294 (1995), (the tort is applicable in limited situations against other employees or officers of the plaintiff’s employer, the key factor being whether the defendants were acting outside the scope of their employment to further their own interests); Wagenseller v. Scottsdale Memorial Hosp.,147 Ariz. 370 , 392,710 P.2d 1025 (1985), (intentional interference with contract claim may be brought against supervisor). Cf. Hoschler v. Kozlik,3 Neb.App. 677 ,529 N.W.2d 822 (1995), (an officer, director, or employee of a corporation is not liable for its breach of contract on the theory that he induced such breach if he acts in his official capacity on behalf of the corporation and not as an individual for his individual advantage); Hickman v. Winston County Hosp. Bd.,508 So.2d 237 (Ala. 1987), (courts have held that claim of tortious interference with former employee’s contract of employment cannot be maintained against officers оr employees of a corporation unless those persons were acting outside their scope of employment and were acting with actual malice); Murray v. Bridgeport Hosp.,40 Conn.Supp. 56 ,480 A.2d 610 (1984), (although an agent acting legitimately within the scope of agent's authority cannot be held liable for interfering with or inducing principal to breach a contract between principal and a third party, an agent can be held liable for such interference or inducement if agent did not act legitimately within the agent’s scope of duty but used the corporate power improperly for personal gain); Holloway v. Skinner,898 S.W.2d 793 (Tex. 1995), (on an interference with contract claim a plaintiff must show that the officer of a corporation defendant acted in a fashion so con-traiy to the corporation's best interests that the officer’s actions could only have been motivated by personal interests).
.
2. SANCTION BY COURT IN WHICH ACTION IS PENDING. If a party or an officer, director or managing agent of a party or a person designated under paragraph 6 of subsection C of Section 3230 or subsection A of Section 3231 of this title to testify on behalf of a party fails to obey an order to provide or permit discovery, including an order made under subsection A of this section or Section 3235 of this title, or if a party fails to obey an order entered under subsection F of Section 3226 of this title, the court in which the action is pending may make such orders in regard to the failure as are just. Such orders may include the following:
a. An order that the matters regarding which the order was made or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order,
b. An order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing designated matters in evidence,
c. An order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceedings or any part thereof, or rendering a judgment by default against the disobedient pаrty.
d. In lieu of or in addition to the orders provided for in subparagraphs a through c of this paragraph, an order treating as a contempt of court the failure to obey any orders except an order to submit to a physical or mental examination,
e. Where a party has failed to comply with an order under subsection A of Section 3235 of-this title requiring him to produce another for examination, such orders as are listed in subparagraphs a, b and c of this paragraph, unless the party failing to comply shows that he is unable to produce such person for examination,
f. If a person, not a party, fails to obey an order entered under subsection C of Section 3234 of this title, thе court may treat the failure to obey the order as contempt of court.
In lieu of or in addition to the orders provided for in this paragraph, the court shall require the party failing to obey the order or the attorney advising him or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.
.
See Hargrave v. Canadian Valley Elec. Co-op., Inc.,
. We observe that generally appellate courts in other jurisdictions have not sustained dismissals that are based upon a party's absence at one deposition scheduled by a lawyer’s notice.
Gallo
v.
Henke,