McLain v. Great American Ins. Companies

• Decision Date: 28 March 1989
• Docket Number: No. H002936,H002936
• Citation: 256 Cal.Rptr. 863,208 Cal.App.3d 1476
• Court: California Court of Appeals Court of Appeals
• Parties: , 113 Lab.Cas. P 56,129, 4 IER Cases 501 E. Robert McLAIN, Plaintiff and Respondent, v. GREAT AMERICAN INSURANCE COMPANIES, et al., Defendants and Appellants.

Page 863

256 Cal.Rptr. 863

208 Cal.App.3d 1476, 113 Lab.Cas. P 56,129, 4 IER Cases 501

E. Robert McLAIN, Plaintiff and Respondent, v. GREAT AMERICAN INSURANCE COMPANIES, et al., Defendants and Appellants.

No. H002936.

Court of Appeal, Sixth District, California.

March 28, 1989.

Susan R. Reischl, Law Offices of Robert L. Mezzetti, Robert M. Tobin, San Jose, for plaintiff and respondent, E. Robert McLain

Kalvin M. Grove, Paul R. Garry, Michael A. Paull, Fox and Grove, Chartered, Chicago, Ill., K. Victor Waye, McCutchen, Doyle, Brown & Enersen, San Jose, for defendants and appellants, Great American Ins.

ELIA, Associate Justice.

This is an action for wrongful termination of employment brought by respondent E. Robert McLain against appellants Great American Insurance Companies, Great American West, Inc., American Financial Corporation, Rose Ann Herman and Kemper Eakle. The jury returned a general verdict for McLain and awarded him $62,000 in compensatory damages. We affirm.

FACTS AND PROCEDURAL BACKGROUND

In 1984, McLain was employed with an independent adjusting firm in San Jose. In February 1984, McLain was assigned to temporarily work in the Great American offices in Walnut Creek. While working in Walnut Creek, McLain became friendly with Don Kustaborder, a Division Manager of Great American. Kustaborder told McLain he needed two specialists and apprised McLain of employment opportunities available with Great American. Kustaborder McLain was content with his $40,000 salary at the independent adjusting firm but was attracted by Kustaborder's description of the opportunities available with Great American and because Great American was a large, national company. Kustaborder said several Great American offices would soon be consolidated and McLain would have a good chance of becoming the Casualty Claims Manager in the consolidated office. Kustaborder also said that if McLain was employed by Great American he would be on probation for ninety days and then become a "permanent" employee.

emphasized that Great American was one of the highest paying companies in the industry and had a lucrative bonus package for its managers.

Within a few days, McLain and Kustaborder agreed that McLain would join Great American. McLain agreed to reduce his salary to $30,000 based upon Kustaborder's representations of long-term advancement possibilities.

Before McLain starting working for Great American, he was given an application form to complete and was told that it was needed for his personnel file. The form required McLain to provide information regarding his employment and educational background. The form did not specify McLain's position or salary at Great American. At the bottom of the form was an area marked "For Company Use Only." This portion of the application was never signed or filled in by Great American.

On the back page of the application form was the following provision: "In consideration of my employment, I agree to conform to the rules and regulations of the GREAT AMERICAN INSURANCE COMPANY, and I agree that my employment and compensation can be terminated with or without cause, and with or without notice, at any time, at the option of either the GREAT AMERICAN INSURANCE COMPANY or myself. I also understand and agree that the terms and conditions of my employment may be changed, with or without cause, and with or without notice, at any time by the GREAT AMERICAN INSURANCE COMPANY. I understand that no representative of the GREAT AMERICAN INSURANCE COMPANY, has any authority to enter into an agreement for any specified period of time, or to make any agreement contrary to the foregoing." McLain signed the form a few lines below this clause and returned the form to Great American. McLain testified that he never read the clause and that no one from Great American ever pointed it out or discussed it with him.

On April 2, 1984, McLain started working as a litigation specialist for Great American in its Walnut Creek office. That same day his employment was confirmed in a letter which stated his salary, his position and various benefits. A "New Employee Checklist" was also distributed and signed by McLain as acknowledgment that McLain had been advised of certain Great American benefits and policies.

A June 1984 probationary review commended McLain's job knowledge and capabilities and recommended managerial advancement. In October 1984, the Walnut Creek, San Jose and Sacramento offices of Great American were consolidated in San Jose. McLain was made Casualty Claims Manager of the newly consolidated San Jose office. McLain's salary was raised to $34,000 and then to $36,000 in January 1985. By July 1985, McLain was earning $38,000 and had favorable reviews about the quality of his work performance.

In October 1985, McLain was terminated by Great American. At trial, appellants contended that McLain was terminated for "insubordination" because he distributed a confidential memo. McLain, however, claimed his discharge was without good cause and in retaliation for his complaints about the management style of appellant Rose Ann Herman. The evidence surrounding McLain's termination reveals the following circumstances.

Appellant Rose Ann Herman was Claims Manager and McLain's immediate supervisor at the San Jose office. She was widely known among employees as "the Dragon Lady" of Great American. She was merciless in her dealings with subordinate employees Great American employee Patrick Rains also had a confrontation with Herman. At trial, Rains testified that Herman berated Rains over a form he had completed. Herman called the form "garbage", tore it up, threw it at him and then stated "wipe that smirk off your face or I'll slap it off." There was testimony that Herman told the workers' compensation group at Great American that she had never worked with more unprofessional people and that the employees' work stations were such a mess that she was surprised that they did not have body lice. At least two Great American employees quit as a result of "the lice incident."

                given to racial epithets and quick to ridicule.  The record is replete with evidence of Herman's abusive and intimidating conduct toward Great American employees.  For example, in 1985, Herman fired a black claims representative and announced "You can take the girl out of the ghetto, but you can't take the ghetto out of the girl."   Herman, in her testimony, admitted this statement
                

There was an abundance of other testimony regarding incidents between Herman and Great American employees. Robert Marshall, an Administrative Manager, and Jackie Waite, a Personnel Administrative Supervisor, both testified that people were leaving Great American because of Herman's behavior. There was additional evidence that McLain's subordinates complained to McLain about the standards imposed by Herman and also complained that Herman's language and conduct were abusive. Although Herman may have felt misunderstood, it is unlikely that the jury was reminded of Ralph Waldo Emerson's observation "to be great is to be misunderstood" when they considered this evidence.

McLain was concerned about the effect of Herman's behavior on employees under his supervision. McLain was also worried that he would be held responsible for the employee turnover. In August 1985, McLain spoke with Marshall about Herman's conduct and her criticism of employees under McLain's supervision. Marshall suggested that McLain discuss the matter with appellant Kemper Eakle, the San Jose Branch Manager. McLain met with Eakle, described the problems and was assured that their conversation would remain confidential. McLain then spoke to Herman and asked her to refrain from criticizing his employees outside of his presence. Later that same day, McLain was called to Eakle's office, along with Herman and Marshall. Eakle advised Herman and McLain to resolve their differences. Shortly thereafter, Herman sent a handwritten memo to Eakle describing both her and McLain's positions. At the end of the memo, Herman wrote "I apologize for handwriting this but due to its delicate nature, I did not believe it to be prudent to dictate this."

Herman's memo contained statements regarding certain punitive actions to be taken if employees did not perform satisfactorily. After receiving a copy of the memo, McLain called in three employees and read them the portion relating to Herman's expectations. One of those employees asked McLain for a copy of the memo. McLain refused to turn it over. McLain testified that he did not give anyone a copy of the memo.

In October 1985, McLain was called to Eakle's office. Herman and Marshall were present. Eakle accused McLain of distributing Herman's memo and calling Eakle an "idiot" and a "traitor" for trying to work out the differences between McLain and Herman. McLain denied the charges and asked to confront his accusers. Eakle, however, told McLain that an investigation had already been conducted and that McLain was being terminated for insubordination.

McLain then brought this action alleging seven causes of action. These were (1) wrongful termination; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) violation of civil rights; (5) intentional infliction of emotional distress; (6) negligent infliction of emotional distress; and (7) wrongful termination based upon violation of public policy. The appellants' motion for a directed verdict was granted as to the fourth and seventh claims.

The jury found in favor of McLain and awarded him $62,000 in compensatory damages. The judgment was entered on a general verdict. It is settled that "[w]here several counts or issues are tried, a general verdict will not be disturbed by an appellate court if a single one of such counts or issues is supported by substantial evidence and is unaffected by error, ..." (Posz v. Burchell (1962) 209 Cal.App.2d 324, 335-336, 25 Cal.Rptr. 896; see also ...