76 Hawai'i 454, Ross v. Stouffer Hotel Co. (Hawai'i) Ltd., Inc.

• Decision Date: 30 August 1994
• Docket Number: No. 16486,16486
• Citation: 879 P.2d 1037
• Court: Hawaii Supreme Court
• Parties: 76 Hawai'i 454, 72 Fair Empl.Prac.Cas. (BNA) 1615 Harvey J. ROSS, Plaintiff-Appellant, v. STOUFFER HOTEL COMPANY (HAWAI'I) LTD., INC., d/b/a Stouffer Waiohai Resort; Glenn Perry, in his official capacity as General Manager of Stouffer Waiohai Resort; Carol Furtado, in her official capacity as Director of Personnel of Stouffer Waiohai Resort, Defendants-Appellees and John Does 1-10; Jane Does 1-10; Doe Business Entities 1-10; Doe Corporations 1-10; and Doe Partnerships 1-10, Defendants.

Page 1037

879 P.2d 1037

76 Hawai'i 454, 72 Fair Empl.Prac.Cas. (BNA) 1615

Harvey J. ROSS, Plaintiff-Appellant, v. STOUFFER HOTEL COMPANY (HAWAI'I) LTD., INC., d/b/a Stouffer

Waiohai Resort; Glenn Perry, in his official capacity as

General Manager of Stouffer Waiohai Resort; Carol Furtado,

in her official capacity as Director of Personnel of

Stouffer Waiohai Resort, Defendants-Appellees and John Does

1-10; Jane Does 1-10; Doe Business Entities 1-10; Doe

Corporations 1-10; and Doe Partnerships 1-10, Defendants.

No. 16486.

Supreme Court of Hawai'i.

Aug. 30, 1994.

William Tagupa (Elizabeth Jubin Fujiwara and Ronald T. Fujiwara with him, on the briefs), Honolulu, for plaintiff-appellant.

Perry W. Confalone (Robert S. Katz with him on the brief; Torkildson, Katz, Jossem, Fonseca, Jaffe, Moore & Hetherington), Honolulu, for defendants-appellees.

John Ishihara, on the brief, Honolulu, for amicus curiae Hawai'i Civil Rights Com'n.

Before MOON, C.J., and KLEIN, LEVINSON, NAKAYAMA and RAMIL, JJ.

NAKAYAMA, Justice.

Plaintiff-appellant Harvey J. Ross filed an action against defendant-appellee Stouffer Hotel Company (Hawai'i) Ltd. (Stouffer) ¹ in the Circuit Court of the Fifth Circuit, State of Hawai'i, after Stouffer discharged him from his position as a massage therapist at the Waiohai Resort (the Resort), on the island of Kaua'i, because of his marital status. At the time he was discharged, Ross was married to Viviana Treffry, who was the principal massage therapist at the Resort. Stouffer discharged Ross pursuant to its policy prohibiting persons related by blood or marriage from working in the same department (the no-relatives policy). The primary claim of Ross's complaint (and later his amended complaint) was that Stouffer's enforcement of its no-relatives policy violated Hawai'i Revised Statutes (HRS) § 378-2 (1985). ² Following a series of procedural skirmishes and two prior appeals to this court, the circuit court granted summary judgment in favor of Stouffer on six of the seven claims included in Ross's amended complaint and entered final judgment on those claims pursuant to Hawai'i Rules of Civil Procedure (HRCP) 54(b) (1991). Ross filed a timely appeal. For the following reasons, the summary judgment is affirmed in part and vacated in part.

I. BACKGROUND

In August 1986, Amfac Hotels and Resorts, Inc. (Amfac Hotels) hired Ross as a massage therapist at the Resort, which it then owned and operated. Amfac Hotels also hired Treffry, with whom Ross had been living for almost a year, as the principal massage therapist. Both worked in the Resort's Po'ipu Beach Fitness Center.

In August 1987, Ross and Treffry married. A couple of weeks later, Stouffer acquired the Resort from Amfac Hotels and became Ross's and Treffry's employer.

At the end of September 1987, Ross and Treffry became aware of Stouffer's no-relatives policy. In early October 1987, Ross and Treffry met with Perry and Furtado. At that meeting, the no-relatives policy was discussed, and Perry and Furtado agreed to talk to Stouffer's corporate headquarters about whether the policy would be enforced. Stouffer decided to enforce the policy.

On October 16, 1987, Perry sent a memo to Ross and Treffry, which stated in part:

In our meeting on October 9, 1987 we discussed the memo you had received relating to the employment of immediate family in the same department. We have taken your comments into consideration, discussed the situation and our decision is to enforce consistent application of our policy. This means that one of you will need to either apply for a transfer to another department or resign.

Because we understand that your specialty as massage therapists may make a transition to another position more complicated[,] we will allow an additional 60 days from today for you to decide which avenue will offer the best opportunities. An application for transfer will be based on qualifications for the position. In the event that you are unable to decide which one of you will transfer or resign, management will be obligated to terminate the employment of the less senior employee[;] in this case this would be Harvey.

Ross received the memo on October 20, 1987. Because neither he nor Treffry had transferred or resigned by the December 15, 1987 deadline, Ross was discharged.

On March 14, 1988, Ross filed a complaint with the enforcement division of the Department of Labor and Industrial Relations (DLIR), asserting that he had "been discriminated against on the basis of [his] marital status." He received a notice of right-to-sue from the DLIR about two weeks later. Ross filed a complaint in the circuit court on May 17, 1988, asserting claims for: wrongful discharge in violation of HRS § 378-2 (count I); discharge in violation of public policy (count II); intentional or negligent infliction of emotional distress (counts III and IV); and punitive damages (count V). Ross's complaint was later amended to include a federal claim under 42 U.S.C. § 1983 (count VI) and a claim for breach of implied contract (count VII). The case was eventually admitted to the Court Annexed Arbitration Program, where it was pending when the motions for summary judgment that are the subject of this appeal were made.

Following the addition of the federal statutory claim (count VI), the case was removed to the United States District Court for the District of Hawai'i. The federal district court dismissed the federal claim and remanded the case to the circuit court for adjudication of the remaining state claims. Ross v. Stouffer Hotel Co. (Hawai'i) Ltd., No. 89-00049 (D.Haw. April 21, 1989) (order granting judgment on pleadings on federal cause of action and remanding to circuit court).

In July 1989, following the remand from the federal district court, the circuit court filed an order granting Stouffer's motion for summary judgment on "each remaining count" of Ross's amended complaint. Ross appealed to this court. On September 21, 1990, we dismissed the appeal for lack of jurisdiction because, although the order granting summary judgment indicated that it applied to "each remaining count," it failed to expressly dismiss several of the counts in Ross's amended complaint. We therefore ruled that it was not an appealable final order.

On October 29, 1990, the circuit court entered an amended order granting summary judgment in favor of Stouffer on all remaining claims. Ross again appealed to this court. On August 29, 1991, we issued an opinion addressing only count I, Ross v. Stouffer Hotel Company (Hawai'i) Ltd., Inc., 72 Haw. 350, 816 P.2d 302, reconsideration denied, 72 Haw. 616, 841 P.2d 1074 (1991) (Ross I ). Ross I held that, unless it fit into one of the exceptions in HRS § 378-3 (1985), ³ Stouffer's discharge of Ross pursuant to its no-relatives policy violated HRS § 378-2, because it discriminated against Ross because of his marital status. 72 Haw. at 355, 816 P.2d at 304. Finding the record incomplete as to whether any of the exceptions in HRS § 378-3 applied, this court vacated the judgment and remanded the case to the circuit court for further proceedings consistent with the opinion. Id.

Following remand, Stouffer moved for partial summary judgment on counts II through VII, primarily arguing that the claims included in those counts were either barred or factually unsupported. On June 4, 1992, the circuit court entered an order granting Stouffer's motion as to counts II through VI and denying the motion as to count VII (breach of implied contract). ⁴

About a month later, Stouffer moved for summary judgment on count I, the HRS § 378-2 claim, and to strike certain damages claims. Stouffer primarily argued that Ross was barred from bringing count I because he did not timely file his complaint with the DLIR. Stouffer also argued that Ross's claims for compensatory and punitive damages under count I should be stricken because neither were available remedies under HRS § 378-5 (1985).

On August 27, 1992, the circuit court filed an order granting the motion and, finding that there was no just reason for delay, entered final judgment in Stouffer's favor on counts I through VI, pursuant to HRCP 54(b). (The breach of implied contract claim, count VII, remains.) Ross filed a timely appeal.

II. STANDARD OF REVIEW

Review of an award of summary judgment is under the same standard applied by the circuit court and is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. S. Utsunomiya Enterprises, Inc. v. Moomuku Country Club, 75 Haw. 480, 497, 866 P.2d 951, 961, reconsideration denied, 76 Hawai'i 247, 871 P.2d 795 (Sup.1994).

III. DISCUSSION

A. Count I

1. Reconsideration of Ross I

Stouffer initially asks us to reconsider and overrule the majority's decision in Ross I because, it argues, that decision was based on incorrect facts and analysis.

Stouffer reiterates an argument it previously made in its motion to reconsider Ross I. It points out that the majority's opinion in Ross I incorrectly stated that Ross and Treffry were married in August 1986, over a year before Stouffer decided to enforce its no-relatives policy. 72 Haw. at 351, 816 P.2d at 303. In fact, the two were married in August 1987, approximately two months before Stouffer informed Ross and Treffry of its decision to enforce the policy. Based on this mistake, the majority stated:

[I]nvocation of the policy a year after [Ross and Treffry] had entered into a marital relationship left them with a Hobson's choice of one of them either giving up his or her employment, or their seeking a divorce, and continuing to live together and being employed in their chosen occupation.

Id. at 354, 816 P.2d at 304. Although regrettable, the error affected neither the analysis nor the result of Ross I, as this court indicated when we denied Stouffer's motion for reconsideration. 72 Haw. 616, 841 P.2d 1074. In Ross I, the majority concluded that, by...