Gram v. Liberty Mut. Ins. Co.

Citation384 Mass. 659,429 N.E.2d 21
Parties, 115 L.R.R.M. (BNA) 4152 Robert E. GRAM v. LIBERTY MUTUAL INSURANCE COMPANY et al. 1
Decision Date09 December 1981
CourtUnited States State Supreme Judicial Court of Massachusetts

Kalvin M. Grove, Chicago (James D. Casey, Boston, with him), for defendants.

Joseph D. Regan, Lowell, for plaintiff.

Before HENNESSEY, C. J., and WILKINS, LIACOS, ABRAMS, NOLAN and LYNCH, JJ.

WILKINS, Justice.

We consider in a new context the rights of an employee at will whose employer discharged him without good cause. We conclude that, in the circumstances, the employee is not entitled to normal contract damages for the termination of his at-will employment. He is, however, entitled to recover identifiable, reasonably anticipated future compensation, based on his past services, that he lost because of his discharge without cause. We also consider whether the evidence warranted a verdict for the employee on his claim that his immediate superiors tortiously interfered with his rights under his employment contract. We conclude that there was no case for the jury on the employee's claim against his immediate superiors.

We summarize the evidence most favorable to the plaintiff (see Boyle v. Wenk, 378 Mass. 592, --- a, 392 N.E.2d 1053 (1979) ), and resolve in his favor all reasonable inferences that could be drawn from that evidence (see Alholm v. Wareham, 371 Mass. 621, 627, 358 N.E.2d 788 (1976) ). The plaintiff, Robert E. Gram, was an insurance sales representative for Liberty Mutual Insurance Company (Liberty) from 1970 until he was discharged on January 6, 1977. His compensation was determined by percentage commissions on new sales and by lower percentage commissions on the renewal of policies previously sold. In 1976, Gram's renewal commissions amounted to $9,850, or about 28% of his total earnings for that year. Gram's employment contract was partially oral and partially written. At the time he was hired Gram signed an agreement limiting his right to compete in soliciting insurance contracts in a limited geographical area for a period of eighteen months after termination of his employment for any reason. At the time of his discharge, Gram was assigned to Liberty's Chelmsford office. His immediate superior was the defendant Richard G. Gosselin, the district sales manager for Chelmsford and Andover. Gosselin's immediate superior was the defendant James C. Fisher, an assistant division sales manager, who worked in an office in Lexington. Regular appraisals of Gram's work showed his work to be good, at least satisfactory, in all categories of performance and excellent in certain respects. Gram was a hard worker, the most productive salesman in policies and premiums of the nine sales representatives under Gosselin.

There were certain incidents during Gram's term of employment that presented administrative problems in the view of his superiors. In September, 1973, Gram altered a company mailing by having a headline printed in block letters-"10% AUTO DIVIDEND." He then changed by hand the printed percentage to 15%. Gosselin told him that no alterations were permitted in company mailings, and Gram did not thereafter alter any company mailings. At a sales managers' meeting held sometime between October, 1974, and July, 1976, Gosselin and Fisher said that they would like to have Gram out of the Chelmsford office. The witness who overheard these statements, attributed to Gosselin and Fisher, testified that he inferred from this that they did not like Gram. A former coworker testified that Gram was not disliked in the office. In June, 1976, Fisher summoned Gram to discuss Gram's use of a map Gram had prepared to show customers and prospective customers the location of the Chelmsford office. Fisher told Gram that the map was not authorized by Liberty and should not be used. Gram ceased using it. In September, 1976, Fisher and Gosselin challenged Gram's use of certain rubber stamps Gram had had made up, and they also discussed with Gram his obligations as a salesman.

The incident that led to Gram's discharge occurred in early January, 1977. Gram had typed a note on a personal memo pad to send to between thirty and fifty prospective customers whom he had already met and for whom he had made out applications for 1977 motor vehicle insurance. He xeroxed the typed note, a copy of which is set forth in the margin, 2 for each prospective customer and placed each note in an open, addressed envelope to be stamped and mailed in the regular course from Liberty's Chelmsford office. These envelopes and their contents came to Gosselin's attention, and he in turn brought them to Fisher's attention. They told their superior, one Edward Argent, that the notes were unauthorized mailings in violation of Liberty's policies and sought Argent's approval to discharge Gram. They did not first confront Gram with their conclusions. They made no statements favorable to Gram in their meeting with Argent. After checking with his superior, Argent authorized Fisher to fire Gram but only after they had given him a chance to explain his actions. Gram told Fisher and Gosselin that the notes were personal notes. Fisher disagreed and, on January 6, 1977, after consulting with Argent, he fired Gram.

The jury were warranted in finding that the mailing of xeroxed, personalized copies of a typewritten note to customers with whom Gram had already dealt did not violate any policy of the company. They were further warranted in concluding that Gram was discharged without good cause. As will be seen, the questions remain whether the jury were warranted in concluding that Gosselin and Fisher acted with malice and that Liberty dealt unfairly and in bad faith in discharging Gram so as to justify imposing liability on Liberty for breach of contract.

Gram brought this action promptly after his discharge, alleging against Liberty a bad faith breach of his oral contract of employment and alleging against Gosselin and Fisher intentional interference with his employment contract by tortiously procuring his discharge. The defendants unsuccessfully moved for directed verdicts at the close of the plaintiff's case and at the close of all the evidence. See Mass.R.Civ.P. 50(a), 365 Mass. 814 (1974). The jury returned a verdict against Liberty in the amount of $100,000, against Fisher in the amount of $40,000, and against Gosselin in the amount of $30,000. The judge denied the defendants' motion for judgments notwithstanding the verdicts or for a new trial. See Mass.R.Civ.P. 50(b), 365 Mass. 814 (1974). We transferred the defendants' appeals here on our own motion.

We consider first the question whether the evidence warranted the verdicts against Gosselin and Fisher because, if, as we conclude, there was insufficient evidence to warrant a finding that they acted with malice toward Gram, that conclusion has a bearing on the question whether Liberty acted without good faith and fair dealing in discharging Gram. 3

1. The evidence did not warrant a verdict against Gosselin or Fisher on Gram's claim that each intentionally interfered with his contractual rights with Liberty. Because Gosselin and Fisher were acting within the scope of their employment responsibilities, Gram acknowledges that each was privileged to act as he did unless he acted out of malevolence, that is, with "actual" malice. See Steranko v. Inforex, Inc., 5 Mass.App. 253, 272-273, 362 N.E.2d 222 (1977), where the authorities are carefully collected. See also Owen v. Williams, 322 Mass. 356, 360-361, 77 N.E.2d 318 (1948) (jury warranted in finding no privilege existed); Caverno v. Fellows, 300 Mass. 331, 336-338, 15 N.E.2d 483 (1938) (evidence did not show that malevolence was the supervisor's sole or even dominant reason for making a report which led to the plaintiff's discharge). The rule assigning liability to corporate officials only when their actions are motivated by actual, and not merely implied, malice has particular force because "their freedom of action directed toward corporate purposes should not be curtailed by fear of personal liability." Steranko v. Inforex, Inc., supra 322 Mass. at 273, 77 N.E.2d 318. See Avins, Liability for Inducing a Corporation to Breach its Contract, 43 Cornell L.Q. 55, 59 (1957).

Malice may be shown by the proof of facts from which a reasonable inference of malice may be drawn. The line between a proper inference and unwarranted conjecture is not easily drawn. The answer depends on the evidence in each case and on what the trier of fact may reasonably infer from that evidence. The fact that there is no direct evidence that Gosselin and Fisher acted with malice to obtain Gram's discharge is not dispositive. There might be sufficient proof that spite or ill will was the controlling factor in urging Gram's discharge, derived from a "rational inference of probabilities from established facts." Bigwood v. Boston & N. St. Ry., 209 Mass. 345, 348, 95 N.E. 751 (1911). See Zezuski v. Jenny Mfg. Co., 363 Mass. 324, 329, 293 N.E.2d 875 (1973). Any reasonable inference of malice must, however, be "based on probabilities rather than possibilities." Alholm v. Wareham, 371 Mass. 621, 627, 358 N.E.2d 788 (1976). See Poirier v. Plymouth, 374 Mass. 206, 212, 372 N.E.2d 212 (1978). 4

Gram relies on evidence that Fisher and Gosselin, some months before Gram's discharge, expressed a desire that Gram not be in Liberty's Chelmsford office. This was not, of course, evidence of a wish that Gram be fired. The witness who overheard the conversation inferred that neither man liked Gram. We think the inference, assuming it to be reasonable, that Gosselin and Fisher did not like Gram would not alone reasonably warrant a further inference that it was probable that Gosselin or Fisher acted with ill will to obtain Gram's discharge. Such an inference on an inference is particularly unwarranted where, despite years of close association with Gosselin and Fisher, Gram did...

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