Frigon v. Morrison-Maierle, Inc.

NO. 87-349

I N THE SUPREME COURT O F THE STATE O F MONTANA

1988

LORRAINE C . FRIGON,

P l a i n t i f f and A p p e l l a n t ,

-vs-

MORRISON-MAIERLE, I N C . ; WILLIAM

G . E N R I G H T and LARRY W. LARSEN,

D e f e n d a n t s and R e s p o n d e n t s .

A P P E A L FROM: D i s t r i c t C o u r t of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t ,

I n and f o r t h e C o u n t y of Y e l l o w s t o n e ,

T h e H o n o r a b l e R o b e r t H o l m s t r o m , Judge p r e s i d i n g .

COUNSEL O F RECORD:

For A p p e l l a n t :

Nye & Meyer; Joan M e y e r N y e , B i l l i n g s , M o n t a n a

For R e s p o n d e n t :

Crowley, Haughey, Hanson, T o o l e & D i e t r i c h ; Sharon

Novak, B i l l i n g s , Montana

S u b m i t t e d on B r i e f s : May 26, 1988

Decided: A u g u s t 1, 1 9 8 8

Clerk

Mr. Justice R. C. McDonough delivered the Opinion of the

Court.

Appellant Lorraine C. Frigon appeals from the judgment

and order of the District Court of the Thirteenth Judicial

District, Yellowstone County, granting summary judgment in

favor of respondents Morrison-Maierle, Inc., William G.

Enright and Larry W. Larsen. We affirm.

Appellant frames nine issues for consideration by this

Court :

1. "Is a cause of action for breach of the employer's

covenant of good faith and fair dealing limited to wrongful

termination, where Employer breached its own handbook

requirements as to performance and related salary reviews."

2. "Does the record present genuine issues of material

facts as to whether Frigon has a cause of action for wrongful

discharge on a constructive discharge theory."

3. "Does the record present genuine issues of material

fact sufficient to present Frigon's cause of action for

defamation. "

4. "Does the record present genuine issues of material

fact as to whether a privilege exists to prevent a claim for

defamation in this case."

5. "Does the record present genuine issues of material

fact sufficient to present a cause of action for negligent

infliction of emotional distress on the part of any

Defendant. "

6. "Does the record present genuine issues of material

fact sufficient to present a cause of action for intentional

infliction of emotional distress on the part of any

Defendant."

7. "Is Frigon's claim for negligent or intentional

infliction of emotional distress barred by the exclusivity

provisions of Montana Workers Compensation Law?"

8. "Did the Court err in ordering Defendants their costs

on summary judgment, where Defendants recovered no damages

and did not ask for costs in their Motion for Summary

Judgment."

9. "Did the Court err in awarding Defendant as a cost on

summary judgment the expense of Defendants taking Frigon's

deposition."

Appellant was hired by respondent Morrison-Maierle as a

part-time secretary/receptionist in January of 1984, and paid

$5.50 per hour. Her immediate supervisors were respondents

Enright and Larsen. The "Employee's Handbook" produced by

Morrison-Maierle and given to appellant soon after she was

hired stated a policy of conducting employee performance

reviews and annual salary reviews. These reviews were to be

conducted by the employee's immediate supervisor. When she

was hired, appellant was informed that she would receive her

first salary review in six months. In April of 1984,

appellant became a full-time employee, and in July of 1984

she received a 2 9 $ per hour raise as part of a general annual

office raise. Appellant was told by Enright that she was

still due a merit raise, but he didn't have time to do a

performance evaluation on her.

In October of 1984 at appellant's request, she was given

a perf.ormance evaluation by respondent Larry Larsen, during

which she was told that her work was satisfactory with the

exception of some complaints about her filing things in the

wrong place.

In November of 1984, Philip Green became branch manager

of the office, and appellant's supervisor. Appellant

requested an annual salary review in January of 1985, but the

record does not show that such a review was ever conducted.

On July 15, 1985, appellant met with Green for a performance

review. During this meeting, appellant was informed that

while Green had recommended she receive a merit raise, the

Helena office (headquarters of Morrison-Maierle) had denied

the raise on the basis of prior negative comments about

appellant's job performance made to company officials in

Helena by Enright and Larsen.

Appellant testified in deposition that Green had

characterized the negative comments as "tremendous trifles"

or "tremendous trivials". Green indicated that he would

personally re-evaluate appellant's performance in three

months, and if warranted, recommend a merit raise. He

expressed his desire to work with appellant to resolve the

problems in her working relationship with Enright and Larsen.

He also said, however, that if the choice were his, he would

look for another job rather than continue working with

Enright and Larsen, who he said, "literally don't like the

way you squeeze the toothpaste." Appellant testified that

her response was that she would not let the two men bother

her, to which Green said, "Good for you."

Appellant requested that the negative comments be put

into writing. The two men were at first reluctant to do so,

but on July 25, 1985, she received a memorandum written by

Enright and Larsen containing a list of ten criticisms.

Appellant prepared a written response to these criticisms,

which she gave to Green on Friday, July 26. On Monday, July

29, appellant tendered her resignation, and on December 11,

1985, initiated this lawsuit, alleging breach of implied

covenant of good faith and fair dealing, constructive

discharge, slander and negligent or intentional infliction of

emotional distress. Respondents filed a motion for summary

judgment on February 25, 1987, which the District Court

granted. This appeal followed.

The standard for review of the grant or denial of a

summary judgment motion is the same as that used by the trial

court. Dare v. Montana Petroleum Marketing Co. (Mont. 1984),

687 P.2d 1015, 41 St.Rep. 1735. In order for summary

judgment to issue, the movant must show there is "no genuine

issue as to all facts considered material in light of the

substantive principles entitling the movant to a judgment as

a matter of law." Cereck v. Albertsonls, Inc. (1981), 195

Mont. 409, 411, 637 P.2d 509, 511. "If the movant has met

this burden, it then shifts to the non-moving party to

demonstrate a genuine issue of material fact. Mere denial or

speculation will not suffice, the non-moving party must show

facts sufficient to raise a genuine issue. " Gamble Robinson

Co. v. Carousel Properties (Mont. 1984), 688 P.2d 283, 287,

41 St.Rep. 1757, 1761.

I.

Appellant contends the respondents breached their

covenant of good faith and fair dealing with her by refusing

to give her performance and salary reviews when required by

the Employee's Handbook, and by denying her a merit raise on

the basis of negative and at least partially false comments

made by her former supervisors, to which she had little or no

opportunity to respond. Appellant disputes the District

Court's holding that a cause of action for breach of a

covenant of good faith and fair dealing did not lie because

appellant voluntarily resigned. According to appellant, our

decisions in Dare and Gates v. Life of Montana Insurance Co.

(1982) 196 Mont. 178, 638 P.2d 1063, establish breach of the

covenant of good faith and fair dealing as a tort separate

from wrongful discharge, thereby obviating the need for

termination in order for this cause of action to lie.

Appellant further argues that our decision in Drinkwalter v.

Shipton Supply Co. (Mont. 1987), 732 P.2d 1335, 44 St.Rep.

318, establishes that such a covenant can be breached

"on-the-job" through sexual harassment.

All of the decisions of this Court involving a covenant

of good faith and fair dealing have been limited to instances

of express employee termination or constructive discharge.

The appellant is correct in her assertion that breach of a

covenant of good faith and fair dealing is a separate tort

from wrongful discharge. The latter is premised on acts by

the employer in violation of public policy, while the former

is broader, and does not require a public policy violation.

Dare, 687 P.2d at 1019-20. However, both Dare and Gates

involved employee terminations. Breach of the covenant of

good faith and fair dealing was established as a tort

separate from wrongful discharge, but applicable only in

cases of employee termination.

Our holding in Drinkwalter also fails to support

appellant's argument. Our holding in that case simply stated

the plaintiff could plead established common-law causes of

action in addition to distinct and different statutory causes

of action such as the plaintiff's sexual discrimination claim

under the state Human Rights Act. Drinkwalter, 732 P.2d at

1338. The fact remains that the covenant of good faith and

fair dealing is applicable only in cases of employee

termination in this state.

The record contains the letter in which appellant

voluntarily resigned from her job. There was thus no express

termination. On these facts, there is no genuine issue of

material fact as to appellant's claim for breach of the

covenant of good faith and fair dealing. As we will discuss

below, appellant has failed to set forth sufficient facts to

establish constructive discharge. Appellant's argument

therefore amounts to "mere denial or speculation" which is

insufficient under our test in Gamble to avoid summary

judgment. The District Court's decision to grant summary

judgment on appellant's claim of breach of the covenant of

good faith and fair dealing was therefore correct, and we

affirm the court on this issue.

Appellant next argues that she presented genuine issues

of material fact as to her claim of constructive discharge.

She argues that she was forced to resign because "the

employer had deliberately accepted Enright and Larsen's

criticisms over the recommendations of her supervisor,

contrary to its own policies." Appellant points to comments

by Green and former Morrison-Maierle secretary Phyllis

Swindell that they would leave rather than continuing to work

with Enright and Larsen as further evidence of appellant's

reasonable belief that she was being forced to resign.

Appellant's brief states the test in Montana for

constructive discharge as "whether sufficient words or

actions by the employer 'would logically lead a prudent

person to believe his tenure had been terminated.'" Hannifin

v. Retail Clerks Int'l Ass'n (1973), 162 Mont. 170, 178, 511

P.2d 982, 987. She also notes, "A determination of

constructive discharge depends on the totality of

circumstances, and must be supported by more than an

employee's suggestive [sic] judgment that working conditions

are intolerable," and cites Snell v. Montana Dakota

Utilities Co. (1982), 198 Mont. 56, 643 P.2d 841. There is

room to dispute this characterization. Hannifin did not deal

with constructive discharge, nor has that doctrine been

recognized beyond discrimination cases such as Snell, where a

high burden of proof was placed on the plaintiff.

Even assuming that appellant correctly states the test

for constructive discharge in Montana, the facts do not

support her argument. Appellant relies on the fact that she

was denied a raise due to negative comments by Enright and

Larsen. Looking at the "totality of the circumstances," this

was far from a situation that would lead a "prudent person to

believe [her] tenure had been terminated." She was denied a

raise, but was never told that she was going to be fired. On

the contrary, appellant testified in deposition that Green

stated he wanted appellant to stay at her job, he would

personally re-evaluate her in three months and if warranted

recommend a raise, and he wanted all of the parties concerned

to sit down and work out any differences (a suggestion

initially made by Larsen). Green's statement that if he were

in appellant's position, he would contemplate quitting does

not rise to the level of intimating to appellant that she was

being terminated. The appellant was instead laboring under

her own subjective judgment that working conditions at

Morrison-Maierle had become intolerable.

The appellant fails to raise a genuine issue of material

fact as to her claim of constructive discharge. The District

Court was correct in granting summary judgment, and we affirm

the court's order on this issue.

111.

Appellant next presses her argument that she was defamed

by respondents Enright and Larsen. According to appellant,

the oral remarks of Enright and Larsen amounted to slander,

and when those criticisms were reduced to writing, they were

libelous.

The memorandum written by Enright and Larsen at

appellant's request contained the following ten criticisms of

her job performance:

Correspondence filing--copies not made or

copies lost or copies placed in wrong file.

Correspondence filed in wrong file, have had

to send out to get copies from clients so we

could have in our files.

Reading file not always complete--every piece

of correspondence should be filed for reading.

Telephone questions pretaining [sic] to

specific projects are to and should be

referred to the project manager

Phone is a business phone--not to be abused.

Does not realize importance of position:

prompt and accurate measures should be taken

concerning typing, packaging or mailing items

requested as soon as possible

Lacking confidence in what she does.

Can not or does not want to be creative--rely

on others.

Does not understand or remember content of

correspondence.

Repetitious tasks not undertaken without

repeted [sic] help.

Loss of a $100,000 check because of

mis-address, after very specific instructions.

The Montana legislature has defined defamation by

statute as follows:

Libel Defined. Libel is a false and unprivileged

publication by writing, printing, picture, effigy,

or other fixed representation to the eye which

exposes any person to hatred, contempt, ridicule,

or obloquy or which causes him to be shunned or

avoided or which has a tendency to injure him in

his occupation.

Section 27-1-802(3), MCA.

Slander defined. Slander is a false and

unprivileged publication other than libel which:

...

(3) tends directly to injure him in respect to his

office, profession, trade, or business, either by

imputing to him general disqualification in those

respects which the office or other occupation

peculiarly requires or by imputing something with

reference to his office, profession, trade, or

business that has a natural tendency to lessen its

profit.

Section 27-1-803, MCA.

Appellant argues that the comments made by Enright and Larsen

tended to injure her in her occupation, as they called into

question her competence, and tended to injure her

financially, as they prevented her from obtaining a raise.

The test applied by this Court in defamation cases is

stringent. In Wainman v. Bowler ( 1 9 7 8 ) , 176 Mont. 91, 576

P.2d 268, we stated:

Defamatory words to be actionable . ..

must be of

such a nature that the court can presume as a

matter - - that they will tend to d i s g r a c e a d

of law

degrade [the plaintiff] or cause him to be shunned

and avoided. It is not sufficient, standing alone,

that the language is unpleasant and annoys or irks

him, and subjects him to jests or banter, so as to

affect his feelings.

Waiman, 576 P.2d at 271 (emphasis supplied). The comments

made by Enright and Larsen were directed at areas of

appellant's job performance they felt were in need of

improvement. The fact that these comments were not initially

relayed to appellant may not have been good business

practice, but there is no evidence to support a holding that

they disgraced or degraded appellant as a matter of law.

According to appellant's own testimony, her supervisor

characterized the comments as trivial and proposed a

re-evaluation in a short time. If we were to accept

appellant's argument, every time an employee was denied a

raise on the basis of dissatisfaction with elements of their

job performance, the employer could be subjected to a

defamation suit.

Furthermore, a basic tenet of the law of defamation is

that. an expression of opinion is generally not actionable.

50 Am Jur 2d, Libel and Slander, § 14; see, e.g. Janklow v.

Newsweek, Inc., 759 F.2d 644 (8th Cir. 1985). There is

nothing in the comments to show a factual allegation that

appellant was generally disqualified for her job. If that

were the case, presumably Enright and Larsen would have taken

steps to have appellant terminated. Instead, appellant's

deposition testimony shows that Larsen wished to sit down

with Enright, Green and appellant and work out the problem.

The facts relied on by appellant to show defamation instead

reflect opinions rendered in the context of the evaluation of

her performance on the job.

Appellant's allegation that the District Court made an

improper finding of fact in ruling that the comments quoted

above were not defamation is incorrect. As we have held

previously, facts are not found on summary judgment, as Rule

56, M.R.Civ.P., requires that there be no issue of material

fact in order for summary judgment to issue. Major v. North

Valley Hospital (July 15, 1988), No. 87-511, slip op. at 4;

citing Boise Cascade Corp. v. First Security Bank of Anaconda

(1979), 183 Mont. 378, 600 P.2d 173. The evidence in this

case does not raise a genuine issue of material fact

regarding any possible defamation of appellant. Upon

reviewing that evidence, the District Court correctly

concluded that summary judgment would be proper on this

issue, and we affirm that decision. Having so held, it will

not be necessary for us to proceed further and consider the

issue of privilege framed by appellant.

IV.

Appellant next contends that she set forth facts

sufficient to establish a cause of action for negligent or

intentional infliction of emotional distress. As to

negligent infliction of emotional distress, appellant asserts

this Court recognized. that negligence can be a proper basis

for recovery in a wrongful discharge case in Crenshaw v.

Bozeman Deaconess Hospital (Mont. 1984), 693 P.2d 487, 41

St.Rep. 2251. Appellant contends that the record contains

genuine issues of material fact on this issue, in that

"Enright and Larsen had to be either negligent or

intentionally malicious in making statements about Frigon"

when the mistakes complained of were attributable to others,

including Enright and Larsen themselves. She also states

that Morrison-Maierle was negligent in failing to determine

whether the criticisms were warranted.

Appellant and respondents note that this Court has

recognized the tort of negligent infliction of emotional

distress in only limited situations, and cite Versland v.

Caron Transport (1983), 206 Mont. 313, 671 P.2d 583, as their

example. In Versland, we enunciated a three-part test for

this tort:

1. The shock must result from a direct emotional

impact upon the plaintiff from the sensory and

contemporaneous perception of [an] accident, as

contrasted with learning of the accident from

others after its occurrence.

2. The plaintiff and the victim must be closely

related, as contrasted with an absence of any

relationship or the presence of only a distant

relationship.

3. Either death or serious physical injury of the

victim must have occurred as a relult of the

defendant's negligence.

Versland, 671 P.2d at 588. Appellant does not meet this

test, nor is her argument based on the Crenshaw case

convincing. In Crenshaw, we held that an action for

negligence could lie in a case of wrongful discharge. As

discussed above, appellant has not presented facts sufficient

to establish a cause of action for wrongful discharge.

Appellant's claim of intentional infliction of emotional

distress is premised on our decision in Gates and the

Restatement (Second) of Torts. Appellant notes that in

Gates, we addressed the plaintiff's claim for intentional

infliction of emotional distress, although we did not uphold

it. The opinion in Gates cited Kelly v. Lowney & Williams,

Inc. (1942), 113 Mont. 385, 126 P.2d 486 (recognizing

"recovery for damages for personal injuries occasioned by

fright or mental shock though there be no physical contact").

Emotional distress under Montana law has been and

remains primarily an element of damages rather than a

distinct cause of action. See, e.g. Gurnsey v. Conklin Co.,

Inc., (Mont. 1988), 751 P.2d 151, 45 St.Rep. 1. Appellant,

however, argues that our holding in Gates opened the door for

such a cause of action, and urges that we apply the following

elements to this case:

One who by extreme and outrageous conduct

intentionally or recklessly causes severe emotional

distress to another is subject to liability for

such emotional distress, and if bodily harm to the

other results from it, such bodily harm.

Restatement (Second) of Torts § 46 (1965).

Appellant asserts that "Enright and Larsen intentionally

and/or recklessly made false, negative statements about

[appellant]". She argues that the only remaining question is

thus whether the conduct of the two men was "extreme and

outrageous". Appellant asserts that a material question of

fact exists as to that conduct, citing her testimony that

Green characterized the comments as trivial and yet expressed

hesitance about giving appellant the written memorandum

because of its harshness.

Appellant does not present a case that merits

recognition by this Court of intentional infliction of

emotional distress as a cause of action. Comment "d" to

Section 46 of the Restatement explains the nature of the

conduct necessary to impose liability:

Liability has been found only where the conduct has

been so outrageous in character, and so extreme in

degree, as to go beyond all possible bounds of

decency, and to be regarded as atrocious, and

utterly intolerable in a civilized community.

Restatement (Second) of Torts, S 46, Comment d (1965). In

Johnson v. Supersave Markets, Inc. (Mont. 1984), 686 P.2d

209, 41 St.Rep. 1495, this Court enunciated a test for

compensation of intentional infliction of emotional distress.

In the context of an action for unlawful arrest or

imprisonment, we held that such an element of damages would

only be proper if the tortious conduct complained of resulted

in "a substantial invasion of a legally protected interest

and caused a significant impact upon the person of the

plaintiff." Johnson, 686 P.2d at 213 (emphasis in original) .

There is no evidence in the record of this case which

would support a claim for intentional infliction of emotional

distress. The comments made by Enright and Larsen, and the

failure of Morrison-Maierle to give appellant a raise are

hardly instances of conduct that goes "beyond all possible

bounds of decency. " Nor has appellant presented facts

showing a substantial invasion of her legally protected

interests. The law has yet to protect a person's interest in

receiving a merit raise.

The District Court correctly granted summary judgment on

this issue, and we affirm that decision. Having so held, it

is not necessary for us to proceed to the issue involving

Montana Workers' Compensation law framed by appellant.

v.

Finally, appellant asserts that respondents were not

entitled to costs in this case. She asserts that the

District Court erred in awarding costs in that it did not

follow Montana statutes on the subject:

25-10-101. When costs allowed, of course, to

plaintiff. Costs are allowed, of course, to the

plaintiff upon a judgment in his favor in the

following cases:

(3) in an action for the recovery of money or

damages, exclusive of interest, when the plaintiff

recovers over $50;

25-10-102. When costs allowed, of course, to

defendant. Costs must be allowed, of course, to

the defendant upon a judgment in his favor in the

actions mentioned in 25-10-101.

Sections 25-10-101 and 25-10-102, MCA. Appellant argues that

under these statutes, respondents would be entitled to costs

only if the judgment of the District Court awarded them a

recovery of at least $50. No damages were awarded by the

court, and appellant therefore asserts that no costs should

have been allowed.

The prevailing party is generally entitled to costs.

See, e.g. Carroccia v. Todd (1980), 189 Mont. 172, 615 P.2d

225. While the particular situation presented by this case

is rarely before this Court, we are guided by our decision in

Marcus v. Bowman (1940), 110 Mont. 412, 101 P.2d 68. In

Marcus, we upheld an award of costs to a defendant whose

counter-claim had been dismissed, but who prevailed on the

merits of the plaintiff's claim. The defendant was awarded

nothing by the court as a recovery, but we upheld the award

of costs to defendant as the prevailing party.

Appellant asserts that in particular, the District Court

erred in allowing the cost of taking her deposition as part

of the costs awarded to respondents. She asserts that the

deposition was taken solely for the convenience of

respondents, and was therefore not includable in the costs

awarded under our decision in Morrison-Maierle v. Selsco

(1980), 186 Mont. 180, 606 P.2d 1085. However, our decision

in Roy v. Neibauer (Mont. 1981), 623 P.2d 555, 38 St.Rep. 173

specifically held that depositions necessary for disposing of

litigation by summary judgment were includable as costs. In

this case, the briefs of both appellant and respondents

before the District Court relied heavily on testimony taken

from appellant's deposition in arguing for and against

summary judgment. The memorandum of the District Court also

referred to information from that testimony. Appellant's

deposition was therefore necessary for disposal of this

litigation by summary judgment, and was properly included by

the District Court in the award of costs. We affirm the

ruling of the District Court on this issue.

Our review of the record in this case shows that

appellant failed to present facts sufficient to raise a

genuine issue of material fact concerning any of her alleged

causes of action. The District Court was therefore correct

in granting respondents' motion for summary judgment.

We affirm the judgment of the District Court.

&pa/&

Justice /)

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