KENNETH E. STANLEY v. SEWELL COAL CO., a Corp.
(No. 14857)
Supreme Court of Appeals of West Virginia
Decided December 18, 1981.
Dissenting Opinion January 8, 1982.
Jackson, Kelly, Holt & O‘Farrell, Roger A. Wolfe for appellee.
Kenneth E. Stanley appeals from a judgment of the Circuit Court of Nicholas County dismissing his retaliatory discharge action against Sewell Coal Company (Sewell) on the ground that it was time-barred by the one-year limitation period of
I.
Stanley was an employee at-will with none of the terms or conditions of his employment being the subject of a written contract. According to the allegations of his complaint, Stanley was employed by Sewell as a section foreman from January 14, 1975, until he was discharged effective January 12, 1977. Stanley alleged that he and another employee were injured in an industrial accident in the spring of 1976. He also alleged that Sewell falsely reported the accident to the Mine Enforcement Safety Administration as a no lost-time accident, and advised him that he could miss work when necessary because of the occupational injuries.
On January 12, 1977, Stanley became ill, was unable to work, and consulted a physician who prescribed a drug which interfered with his ability to perform his duties. He notified Sewell that he would be unable to return to employment until he had completed the prescribed course of medication and had been released by his physician. When he returned to work on January 24, 1977 and presented his doctor‘s certification, Stanley was advised that he was being discharged from employment for excessive absenteeism. Stanley averred that in contravention of substantial public policy principles, he was discharged by Sewell in an attempt to prevent discovery of its false reporting of accidents to the Mine Enforce-
II.
Stanley‘s contention that his action sounded in contract was resolved in Shanholtz v. Monongahela Power Company, 165 W. Va. 305, 270 S.E.2d 178, 182 (1980). There we held that an action brought by an employee at-will on the ground that he was discharged in contravention of some substantial public policy principle sounded in tort and was subject to the limitation periods embodied in
Although Shanholtz recognized that a “tort action must be brought within one or two years after the cause of action shall have accrued,” 270 S.E.2d at 181, it was unnecessary for the Court to decide whether the one- or two-year limitation period was applicable because the complaint in that case had been filed more than two years after the cause of action accrued. That question is squarely presented by this appeal.
Our consideration of the statute of limitations question is controlled by Snodgrass v. Sisson‘s Mobile Home Sales, Inc., 161 W. Va. 588, 244 S.E.2d 321 (1978), where we made an analysis of our limitation of action statute,
“[T]he provisions of subsection (a) of
W.Va. Code, 55-7-8a , statutorily create survivability by the following language:” ‘In addition to the causes of action which survive at common law, causes of action for injuries to property, real or personal, or injuries to the person and not resulting in death, or for deceit or fraud, also shall survive; and such actions may be brought notwithstanding the death of the person entitled to recover or the death of the person liable.’ “The effect of this subsection is to create statutory survivability for the causes of action contained therein to parallel the same causes of action set out in
W.Va. Code, 55-2-12(a) and (b).” ___ W. Va. at ___, 244 S.E.2d at 324-25.
Sewell, however, asserts that the retaliatory discharge cause of action created in Harless v. First National Bank in Fairmont, 162 W. Va. 116, 246 S.E.2d 270 (1978), cannot be considered as a species of fraud and deceit, because if such a cause of action were founded upon fraud and deceit this Court simply could have utilized the common law action to create the remedy. This argument misconceives the underlying rationale of Harless, which is expressed in its single syllabus:
“The rule that an employer has an absolute right to discharge an at will employee must be tempered by the principle that where the employer‘s motivation for the discharge is to contravene some substantial public policy principle, then the employer may be liable to the employee for damages occasioned by this discharge.”
In Harless, we adopted the view of a number of other courts that concluded an employer may be liable for firing an employee for the reason that the employee chose to exercise some substantial public policy principle, and that
While it is true that we did not expressly utilize fraud concepts in Harless, its underlying rationale is clearly compatible with our general principles of fraud. Fraud has been defined as including all acts, omissions, and concealments which involve a breach of legal duty, trust or confidence justly reposed, and which are injurious to another, or by which undue and unconscientious advantage is taken of another. See, Dickel v. Smith, 38 W. Va. 635, 18 S.E. 721 (1893); 8B Michie‘s Jurisprudence, Fraud and Deceit §§ 1 and 2 (1977); 37 Am.Jur.2d Fraud and Deceit § 1 (1968).
Fraud may be either actual or constructive. The word “fraud” is a general term and construed in its broadest sense embraces both actual and constructive fraud. Actual fraud, or fraud involving guilt, is defined as anything falsely said or done to the injury of property rights of another. Hulings v. Hulings Lumber Co., 38 W. Va. 351, 18 S.E. 620 (1893). Actual fraud is intentional, and consists of intentional deception to induce another to part with property or to surrender some legal right, and which accomplishes the end designed. Miller v. Huntington & Ohio Bridge Co., 123 W. Va. 320, 15 S.E.2d 687 (1941). See also, Steele v. Steele, 295 F.Supp. 1266 (S.D. W.Va. 1969); Bowie v. Sorrell, 113 F.Supp. 373 (W.D. Va. 1953).
Constructive fraud is a breach of a legal or equitable duty, which, irrespective of moral guilt of the fraud feasor, the law declares fraudulent, because of its ten-
Perhaps the best definition of constructive fraud is that it exists in cases in which conduct, although not actually fraudulent, ought to be so treated, that is, in which conduct is a constructive or quasi fraud, which has all the actual consequences and legal effects of actual fraud. In Re Arbuckle‘s Estate, 98 Cal. App.2d 562, 220 P.2d 950 (1950). Constructive fraud does not require proof of fraudulent intent. The law indulges in an assumption of fraud for the protection of valuable social interests based upon an enforced concept of confidence, both public and private.4 Perlberg v. Perlberg, 18 Ohio St.2d 55, 247 N.E.2d 306 (1969). In this respect, constructive fraud closely parallels the wrongful discharge in Harless, which contravened a substantial public policy principle.
The problem here is that our survivability statute,
Although we have found that for purposes of our survival statute, a cause of action for retaliatory discharge is analogous to the broader action of fraud and deceit, we do not mean to imply that any act which may constitute constructive fraud will automatically be sufficient to constitute a retaliatory discharge. The general standards set forth in Harless still govern as to the substantive cause of action for a retaliatory discharge.
For the foregoing reasons, we reverse the judgment of the Circuit Court of Nicholas County since the two-year statute of limitations is applicable.
Reversed.
NEELY J. dissenting:
The reiteration of the syllabus point from Harless v. First National Bank in Fairmont, 162 W.Va. 116, 246 S.E.2d 270 (1978), prompts me to note once again that “the primary effect of the courts is not upon the cases which they decide, but rather upon the cases which they do not decide.” See Shanholtz v. Monongahela Power Co., ___ W. Va. ___, 270 S.E.2d 178, 183 (1980) (Neely C, C.J., concurring). By creating the cause of action in Harless, this Court has spawned a plethora of law suits of which the instant case is but one example. The plaintiff here has used Harless as the basis for a cause of action which on its face seems groundless. He claims that he was discharged by the coal company so that the coal company could prevent discovery of its false reporting of accidents to the Mine Enforcement Safety Administration. I submit that this is a nuisance lawsuit made possible only the improvident holding in Harless. A greater harm worked by
Not content merely to permit the Harless cause of action to continue its morbid, Grendel-like rampage through our economic system, the majority has given the monster even greater strength by extending the time in which the action may be brought. Hence employers who have determined to let an employee-at-will go must now face the specter of an increased period of liability in which the pall of nuisance litigation will hang over their enterprises. In a feat of alchemy worthy of Paracelsus’ envy, the majority has transformed an action based on retaliatory discharge into one based on fraud. Without resorting to cauldron or incantation I feel that if we must live with this cause of action it is limited by