Piekarski v. Home Owners Sav. Bank, F.S.B., 91-2132
| Decision Date | 28 February 1992 |
| Docket Number | No. 91-2132,91-2132 |
| Citation | 956 F.2d 1484 |
| Parties | 121 Lab.Cas. P 56,819 Peter R. PIEKARSKI, Plaintiff-Appellee, v. HOME OWNERS SAVINGS BANK, F.S.B., formerly known as Western Minnesota Federal Savings and Loan Association, formerly known as Western Minnesota Savings and Loan Association, formerly known as Fergus Falls Savings and Loan Association, Defendant-Appellant, Knutson Mortgage Corporation, a Delaware corporation; Home Owners Federal Savings and Loan Association, a federally chartered savings and loan association; Resolution Trust Corporation, Defendants, M. Gene Donley, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Charles A. Mays, Minneapolis, Minn., argued, for defendant-appellant.
William P. Luther, Minneapolis, Minn., argued, for plaintiff-appellee.
Before JOHN R. GIBSON, Circuit Judge, FRIEDMAN, * Senior Circuit Judge, and MAGILL, Circuit Judge.
Home Owners Savings Bank (Home Owners) and its president, M. Gene Donley, appeal from the trial court's judgment in favor of Peter Piekarski on claims relating to Piekarski's discharge from his employment at Home Owners. 1 Specifically, both Home Owners and Donley were found liable for retaliatory discharge and breach of an employment contract. The trial court also found Donley liable for misrepresentation and tortious interference with contract.
Additionally, the court imposed punitive damages on Donley. Home Owners and Donley challenge these findings, primarily on sufficiency of the evidence. We reverse all findings of liability
Because the factual history of this case is extensive, we will discuss the specific details of the dispute only as they relate to each of Piekarski's many claims. Initially, we will provide a more general background. Piekarski began his employment at Home Owners in 1973 as a mortgage lending officer. Charles Peterson, then president of Home Owners, hired Piekarski. From the beginning of his employment, Piekarski performed many of his job functions very well. Over the years, Piekarski's responsibilities and salary increased, and in 1981, Piekarski was promoted to vice president of mortgage lending.
Despite Piekarski's ability in some areas, problems between Piekarski and his supervisors existed. Three to four years after Peterson hired Piekarski, Peterson became sufficiently disturbed by Piekarski's criticism of management that he requested Donley to act as a buffer between them. Tr. at 682-83. Piekarski's 1978 and 1979 annual written reviews criticized Piekarski for supporting employees rather than management. Pl.'s Ex. 31, 32. Piekarski's 1981 review contained written criticisms of his cooperation with management. 2 Pl.'s Ex. 33. When Donley took charge of the officer personnel files in 1982, he began to record specific instances of misconduct. Tr. at 486-87. Problems consistently noted were tardiness and failure to respond adequately to supervisors' requests. See Pl.'s Ex. 34-47, 50. For instance, tellers complained that, contrary to a management policy requiring officers assigned to evening supervision to stay near the tellers, Piekarski would work in his office located on a different level of the building. Tr. at 628-30. Tellers also complained that Piekarski failed to show up on time for two successive Saturday shifts and had to be called at home. As a result, the bank did not open on time and customers had to wait. Tr. at 625-28. Testimony also showed that not only did Piekarski often criticize management's decisions, he discussed his criticisms with the staff in his department. Tr. at 441-43, 604, 852, 866, 1085, 1124-28. His supervisors were aware of this practice, and believed that it engendered employee dissatisfaction and friction between departments. Tr. at 155, 300, 681, 908, 1013-14, 1129-30. As early as November 1982, Donley placed a note in Piekarski's file stating that he was "not convinced that [Piekarski was] doing his job." Pl.'s Ex. 36.
Piekarski was aware of management's dissatisfaction. Piekarski testified that Donley had brought many of the above problems to his attention. Tr. at 260-78. According to a 1982 note in Piekarski's file, Piekarski told Donley that he felt he was being unfairly criticized. Pl.'s Ex. 36. In the spring of 1983, Piekarski scheduled a meeting with the chairman of the board because he perceived friction between management and himself. Tr. at 247. In January 1984, Piekarski was passed over for a promotion. Tr. at 902, 906.
Despite this ongoing conflict between Piekarski and management, Home Owners continued to employ Piekarski. In late 1987, however, Knutson Mortgage Corporation's pending acquisition of Home Owners motivated Donley to tell vice presidents, Jeffrey Vye and David Leabo, that he sought to go forward with "the strongest, most cooperative staff possible." Tr. at 1200. On January 26, 1988, Vye, Piekarski's immediate supervisor, and Leabo told Piekarski that he was being terminated because of corporate restructuring. 3 In fact, the "restructuring" that occurred involved only a change in personnel. Piekarski's position was not eliminated. Vye testified that the reason for informing Piekarski that his termination was a result of corporate As a result of this discharge, Piekarski filed an action against Home Owners and Donley. Piekarski's action included claims for breach of a "for cause" employment contract, retaliatory discharge, misrepresentation, and tortious interference with contract. This case originally began in Minnesota state court where the judge scheduled a bifurcated trial on liability and damages and then presided over the liability phase. Upon the close of testimony, the court submitted special interrogatories to an advisory jury regarding Piekarski's claims of breach of employment contract, retaliatory discharge, and tortious interference with contract. The jury returned a verdict of liability on all three claims. The court adopted this verdict and also found Donley liable on the remaining claim of misrepresentation and for punitive damages. Piekarski v. Home Owners Sav. Bank, F.S.B., 752 F.Supp. 1451, 1458-59 (D.Minn.1990) (). Before the state court could reach the damages phase of the trial, however, the Resolution Trust Corporation became conservator of Home Owners' parent corporation and removed the case to federal court. 4 Minnesota federal district court thus held the damages phase of the trial. The court found Home Owners and Donley jointly liable for $120,000 in damages to date of trial and $35,000 in lost future earnings. The court also found Donley liable for $25,000 in punitive damages. Finally, the court awarded Piekarski $152,564.50 in attorneys' fees and $10,307.07 in costs.
restructuring rather than poor job performance was because it was easier, and provided Piekarski with a better chance of obtaining new employment. Tr. at 914. Whether it was Donley or Vye that actually recommended discharging Piekarski is disputed
Home Owners and Donley now appeal both the state court's findings on liability and the federal court's findings on damages. They essentially argue that there was insufficient evidence to support a finding of liability on any of the claims. Because we are reviewing state court claims, the appropriate standard for review is that applied by Minnesota appellate courts. Thus, this court should uphold the trial court's findings of fact unless they are clearly erroneous. Minn.R.Civ.P. 52.01. A finding is clearly erroneous if this court is left with a firm and definite conviction from a review of the entire record that a mistake has been made. City of Minnetonka v. Carlson, 298 N.W.2d 763, 766 (Minn.1980). When applying the facts to the legal requirements, however, this court need not defer to the trial court's conclusions. Durfee v. Rod Baxter Imports, Inc., 262 N.W.2d 349, 354 (Minn.1977). A thorough review of the entire record leaves us convinced that Piekarski did not sustain his burden of proof on any of his claims. We will discuss each of these claims in turn.
It is undisputed that Piekarski was hired for an indefinite term, had no written employment contract, and could have left Home Owners at any time. Generally speaking, an employer can terminate such a relationship at any time and without good cause. Lewis v. Equitable Life Assurance Soc'y, 389 N.W.2d 876, 882 (Minn.1986). Piekarski, however, alleges that Home Owners' personnel policies and numerous representations made to him created an implied, unilateral employment contract that modified this relationship. Specifically, Piekarski alleges that Home Owners could terminate him only for good cause and with fair warning. The state trial court agreed, and found that Home Owners and Donley had breached this contract.
On appeal, Home Owners and Donley argue that a federal regulation preempts state contract law, and thus precludes a finding of a "for cause" employment Alternatively, Home Owners and Donley argue that Piekarski failed to prove a modification of his at-will contract. In Minnesota, an employer creates an implied employment contract of unspecified duration and with discharge limited to good cause if: (1) it communicates to the employee a definite offer of "for cause" employment; and (2) the employee accepts the offer and furnishes consideration. E.g., Pine River State Bank v. Mettille, 333 N.W.2d 622, 626 (Minn.1983). The employee's retention of employment, when free to leave, constitutes acceptance of the offer and the necessary consideration. 5 Id. at 627. Because Piekarski continued to work for Home Owners until he was fired, the only issue is whether Home Owners communicated a definite offer of "for cause" employment to Piekarski. When determining whether an employer has made such an offer, the outward manifestations of the employer's agents, rather than their...
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