Rocky Mountain Hosp. and Medical Service v. Mariani, 95SC209

• Decision Date: 29 April 1996
• Docket Number: No. 95SC209,95SC209
• Citation: 916 P.2d 519
• Parties: , 11 IER Cases 1153, 52 A.L.R.5th 857 ROCKY MOUNTAIN HOSPITAL AND MEDICAL SERVICE, d/b/a/ Blue Cross and Blue Shield of Colorado, a Colorado corporation in good standing, Petitioner, v. Diana I. MARIANI, Respondent.
• Court: Colorado Supreme Court

Page 519

916 P.2d 519

64 USLW 2703, 11 IER Cases 1153, 52

A.L.R.5th 857

ROCKY MOUNTAIN HOSPITAL AND MEDICAL SERVICE, d/b/a/ Blue Cross and Blue Shield of Colorado, a Colorado corporation in good standing, Petitioner, v. Diana I. MARIANI, Respondent.

No. 95SC209.

Supreme Court of Colorado En Banc.

April 29, 1996.

Kennedy & Christopher, P.C., Richard B. Caschette, Dean A. McConnell, Denver, for Petitioner.

Fowler, Schimberg & Cowman, P.C., Daniel M. Fowler, Catherine A. Tallerico, Katherine Taylor Eubank, Denver, for Respondent.

Truhlar and Truhlar, Doris B. Truhlar, Robert J. Truhlar, Littleton, Miller & Steiert, P.C., Leonard Segreti, Littleton, Jeffrey

Menter, Englewood, for Amicus Curiae Plaintiff Employment Lawyers Association--Colorado Chapter.

Mountain States Employers Council, Inc., Melanie Daly, Denver, for Amicus Curiae Mountain States Employers Council, Inc.

Justice KOURLIS delivered the Opinion of the Court.

We granted certiorari to review the court of appeals opinion in Mariani v. Rocky Mountain Hospital & Medical Service, 902 P.2d 429 (Colo.App.1994), reversing the trial court's grant of a directed verdict against the plaintiff, Diana Mariani, on her tort claim against her former employer, Colorado Blue Cross and Blue Shield (BCBS), for wrongful discharge in violation of public policy. The court of appeals held that the Colorado State Board of Accountancy Rules of Professional Conduct, specifically Rule 7.3, could establish public policy for purposes of a wrongful discharge claim. Mariani, 902 P.2d at 433. The court of appeals further held that Mariani had produced sufficient evidence during her trial to establish that BCBS fired her for refusing to violate this public policy. Id. at 434. We affirm.

I.

Since this case was resolved on a directed verdict, the facts regarding Mariani's retaliatory discharge claim must be viewed in the light most favorable to Mariani. ¹

Diana Mariani is a licensed certified public accountant. In November of 1987, BCBS hired her as an at-will employee as manager of general accounting for their human resources department. In that position, Mariani had financial reporting responsibilities for the company. According to Mariani, those responsibilities included reporting all transactions involving the company's payroll expenses, premiums, revenues, and claims expense. In April of 1990, BCBS reassigned Mariani to the position of manager of special projects. In this new position, Mariani did not have any financial reporting responsibilities, but did have a general oversight role. Mariani remained an at-will employee of BCBS until her termination in February of 1991.

At trial, Mariani testified that during her employment with BCBS she discovered and complained to her supervisors about questionable accounting practices. Her concerns included her observation that reimbursed expenses, such as moving expenses, were not properly noted on some of the IRS reports that BCBS submitted. Mariani reported these concerns to her supervisor, Samuel Weidman. ²

She further complained to her supervisor ³ that BCBS had reduced its fees for management services and office space charged to Rocky Mountain Life Insurance Company in order to make Rocky Mountain Life appear profitable and to preserve its B plus solvency rating. Mariani told her supervisor that the adjustment violated generally accepted accounting principles because the reports then misrepresented the financial status of Rocky Mountain Life. Her supervisor responded that the adjustment was a business decision.

When she became manager of special projects Mariani continued to object to BCBS's accounting practices. Mariani worked on two documents discussing the benefits of a proposed merger between BCBS, New Mexico Blue Cross and Blue Shield, and Nevada Blue Cross and Blue Shield. The documents were to be submitted to the Board of Directors of BCBS and ultimately to the Colorado Division of Insurance. ⁴ Mariani's supervisor, Weidman, told her that she should identify and describe benefits of the merger in the documents. Mariani informed Weidman that she was having difficulty uncovering any benefits of the merger. In response, Mariani asserts that Weidman told her she would be fired if she was unable to quantify concrete benefits of the merger. Mariani attempted to uncover some benefits, although she was ultimately unsuccessful. ⁵

Mariani further testified that she objected to some of the representations that her supervisors made about the benefits of the merger within the documents. Mariani explained that her supervisors deleted information she had included in the merger documents and substituted their own. Mariani further stated that she believed that her supervisors had made what she considered to be inappropriate omissions and misrepresentations in the merger documents.

Mariani testified that one of her duties was to compile a staffing analysis of New Mexico Blue Cross and Blue Shield. While compiling the analysis, Mariani discovered that BCBS had purchased a $3.5 million computer for New Mexico Blue Cross and Blue Shield. Mariani objected to this purchase because it was recorded as an asset on the books of New Mexico Blue Cross and Blue Shield. As an accountant, Mariani considered it improper for an asset purchased by one entity to be recorded on the books of another separate entity. Mariani further objected to BCBS not recording as liabilities certain discounts that BCBS owed to other companies. She claimed that the omission misled BCBS subscribers into believing that BCBS had more funds in reserve to pay claims than it actually had.

As a result of reviewing the Nevada Blue Cross and Blue Shield account, Mariani learned that Nevada had $1.5 million of duplicate claim liability. Mariani explained that between 1987 and 1990, Nevada had collected $1.5 million in overpayments but had not refunded the money. Mariani brought this to the attention of Weidman, her supervisor, who declined to take any action to remedy the situation. Lastly, while reviewing Nevada Blue Cross and Blue Shield's premium taxes, Mariani discovered that the entity was improperly taking a home office tax credit. Mariani reported to Weidman that Nevada Blue Cross and Blue Shield was not entitled to that credit. Weidman told Mariani that Nevada Blue Cross and Blue Shield would take the credit anyway. Weidman ordered Mariani to turn the work papers over to someone else.

Mariani also complained about BCBS's treatment of non-admitted assets on its financial statement. A non-admitted asset is a receivable that is outstanding for more than ninety days. In 1988, BCBS had loaned New Mexico Blue Cross and Blue Shield $13.5 million through a surplus note. This note was not indicated on the BCBS financial statement as a non-admitted asset. She objected to Weidman about this practice. Weidman told her that he believed it was proper not to list the note as a non-admitted asset.

On February 19, 1991, BCBS fired Mariani. BCBS told Mariani that her job was being eliminated because of a restructuring within the finance department. Mariani testified that her dismissal was the direct result of her objections to BCBS' irregular accounting practices. On June 11, 1991, Mariani filed suit against BCBS and Weidman. She asserted five claims for relief: (1) breach of contract for wrongful discharge; (2) breach of implied contract and promissory estoppel for wrongful discharge; (3) retaliatory discharge in violation of the public policy exception to employment at-will; (4) tortious interference with contract by Samuel Weidman; and (5) outrageous conduct against Weidman.

At the close of Mariani's case, BCBS and Weidman made a Motion for a Directed Verdict. The district court directed a verdict against Mariani as to the breach of implied and express contract causes of action and the tortious interference with contract cause of action. The district court reserved judgment on Mariani's promissory estoppel claim until the end of the trial and ruled that the outrageous conduct cause of action against Weidman should be submitted to the jury.

In addition, the district court directed a verdict against Mariani on her claim of retaliatory discharge in violation of public policy. Relying on Martin Marietta v. Lorenz, 823 P.2d 100 (Colo.1992), the trial court ruled that in order to establish a prima facie case of wrongful discharge in violation of public policy, Mariani must allege that BCBS had asked her to violate a specific public policy. In her complaint, Mariani relied on the following sources of public policy to make her claim: 18 U.S.C. § 1001 (1988) which prohibits the making of false statements to federal agencies; section 24-34-402, 10A C.R.S. (1995 Supp.), which provides a cause of action and remedies for discriminatory and unfair employment practices; section 10-16-102, 4A C.R.S. (1994), which provides statutory definitions for the Colorado Health Care Coverage Act; and the Colorado State Board of Accountancy Rules of Professional Conduct. The trial court considered each of these sources of public policy and held that none of them could support Mariani's claim for wrongful discharge in violation of public policy.

After trial, the jury found for BCBS and Weidman on Mariani's outrageous conduct claim. The trial court ruled that Mariani had failed to prove her claim of promissory estoppel and entered final judgment for BCBS and Weidman on all counts.

Mariani appealed the dismissal of her claims to the court of appeals. The court of appeals upheld the trial court's ruling regarding Mariani's implied contract and promissory estoppel claims. Mariani v. Rocky Mountain Hosp. & Medical Serv., 902 P.2d 429, 434-36 (Colo.App.1994). The court of appeals reversed the directed verdict for BCBS on Mariani's claim that she had been wrongfully discharged in violation of public policy. The court of appeals held that the Colorado State Board of Accountancy Rules of Professional...