Anderson v. First Century Credit Union, 24164.
| Decision Date | 03 July 2007 |
| Docket Number | No. 24164.,24164. |
| Citation | 738 N.W.2d 40,2007 SD 65 |
| Parties | Chad ANDERSON, Plaintiff and Appellant, v. FIRST CENTURY FEDERAL CREDIT UNION, Defendant and Appellee. |
| Court | South Dakota Supreme Court |
South Dakota, Attorneys for plaintiff and appellant.
Melanie Carpenter, Gary P. Thimsen of Woods, Fuller, Shultz & Smith, Sioux Falls, South Dakota, Attorneys for defendant and appellee.
[¶ 1.] On September 22, 2004, Chad Anderson (Anderson) filed suit in the South Dakota Second Judicial Circuit against First Century Federal Credit Union (hereinafter referred to as either "First Century" or the "credit union") in connection with cessation of his employment. On April 28, 2006, First Century filed a motion for summary judgment. On June 14, 2006, the circuit court issued its memorandum opinion granting First Century's motion. The circuit court's order of dismissal and summary judgment were entered on June 19, 2006.
[¶ 2.] The material events leading up to the cessation of Anderson's employment with First Century are essentially undisputed. Anderson was employed as executive vice president of First Century, the second highest position at the credit union. In January 2002, Judy Wickre (Wickre), head teller and operations manager for First Century, confronted Anderson about unusual activity involving the personal accounts of First Century's president and CEO, Jill Handel (Handel) and her boyfriend Jarrod Haacke (Haacke). Wickre observed that late-night, large, even-dollar-amount drafts and ATM withdrawals were being drawn on the accounts. She also noted that tens of thousands of dollars at a time were coming into and going out of the accounts. Anderson and Wickre began to monitor the activity and eventually concluded that Handel, who they suspected had a gambling problem, was taking out loans in the names of other individuals and then depositing the proceeds in accounts belonging to Haacke and her. The two suspected that Handel was taking out the loans in the names of her two sons, a daughter-in-law and her father, and then refinancing them to conceal delinquencies.
[¶ 3.] Anderson and Wickre withheld notification to First Century's board of directors of the suspicious activity involving the accounts of Handel and Haacke, anticipating that it would be exposed during an upcoming annual National Credit Union Administration (NCUA)1 audit. However, the NCUA's May on-site audit, which focused on commercial rather than personal accounts, failed to uncover the activity. Anderson and Wickre then revealed the information about Handel and Haacke's accounts to First Century vice president of operations, Matt Perry (Perry). Perry concurred with Anderson and Wickre's assessment that Handel appeared to be complicit in wrongdoing.
[¶ 4.] On or about May 22, 2002, Anderson and Wickre went to the home of Lee Thompson (Thompson), chairman of the board of directors for First Century, to report their concerns about Handel. Anderson brought a prepared copy of his letter of resignation to the meeting with Thompson in order to show that he was not motivated by a desire to assume Handel's position, but rather a genuine concern for the credit union and its members. During this meeting, Anderson and Wickre did not reveal in toto the information they had obtained, limiting the disclosure of names and account activity to that of Handel. Thompson told Anderson he would look into the situation and assured Anderson and Wickre that in bringing the information to his attention they "did the right thing."
[¶ 5.] Between the date of this meeting and the middle of June 2002, Anderson called Thompson on two occasions to check on the status of Thompson's investigation. On each occasion Anderson reiterated his willingness to resign if necessary to demonstrate that he was genuinely concerned about the well-being of the credit union and not simply angling for Handel's job. During each of these conversations Thompson reassured Anderson that he was looking into the matter.
[¶ 6.] Cognizant of the recent NCUA audit, Thompson contacted the examiner who had conducted the review, Larry Wirt, to discuss the allegations against Handel. Wirt was dismissive of the claims. He also told Thompson that the allegations as reported did not justify a further review from the NCUA's perspective.
[¶ 7.] Thompson then contacted Warren Anderson, the board's supervisory committee chairman. However, Anderson had just resigned from the First Century board of directors due to his recent appointment to the position of United States Marshall. The two were therefore unable to discuss the matter. Thompson did not contact other past or present First Century board members at this time concerning the allegations involving Handel.
[¶ 8.] In addition to the NCUA, First Century's accounting firm, Eide-Bailly, had also conducted its annual outside audit of the credit union's operations. Thompson contacted Roger Terveen, the Eide-Bailly auditor who had conducted the review. During his deposition, Thompson stated that when he asked Terveen whether he had noticed anything unusual about the account activity of any First Century officers, Terveen indicated that although fraud detection had not been the focus of the audit, he had not found anything of concern during his review.
[¶ 9.] On or about June 20, 2002, Thompson contacted Anderson and informed him that he would need the identity of the other individuals whose names were being used in Handel's alleged scheme in order to facilitate continued investigation. Anderson printed out account information for Handel, Haacke, and Handel's sons, daughter-in-law and father. This information was then placed in an envelope and on June 20, 2002, was delivered by Wickre to Thompson at his place of business. Thompson, who at the time was meeting with a customer, placed the envelope in a drawer. Thompson left town later that day and did not open the envelope until July 1, 2002, following his return home.
[¶ 10.] On Monday, July 1, 2002, at 7:00 a.m., Anderson was preparing for his first day back to work after a vacation when he received a call from Thompson. Thompson informed Anderson that on June 28, 2002, Handel had apparently heard from First Century staff that Anderson, Perry and Wickre had raised allegations about her with Thompson, had disseminated personal account information to him, and that the trio were commenting that Handel's "head would roll." Handel had taken this information to another First Century board member, Cecilia Grunewaldt, who in turn contacted board member Dick DeVaney. The two had then confronted Thompson about his knowledge of the allegations and account information.
[¶ 11.] Through this juncture, while Anderson, Perry and Wickre had observed that Handel had become noticeably aloof and ill-tempered at work, her irascibleness was not specifically directed at the trio.2 Also, Anderson acknowledged that no one with First Century told Anderson that he should not have reported his suspicions about Handel and no one at First Century retaliated against Anderson for doing so. At no time following the discovery of Handel's suspicious account activities did anyone associated with First Century, including Handel and Thompson, tell him to resign or that he was going to be terminated, demoted or disciplined. Further, no one lead Anderson to believe that his job was in jeopardy.3
[¶ 12.] During the July 1, 2002, telephone call, Thompson informed Anderson that the First Century board of directors was going to meet later that day to discuss the allegations Anderson, Perry and Wickre had made against Handel. Anderson once again offered up his resignation stating to Thompson, 4 Thompson then told Anderson, "You do what you think you have to do."
[¶ 13.] Before leaving for the credit union, Anderson called Perry to advise him that Handel and other members of the board of directors besides Thompson were now aware of their allegations. When Anderson arrived at the credit union, he walked into Handel's office and tendered his resignation. Handel asked him to reconsider and at least hold off on making a decision until the board of directors had met. Anderson refused her request, packed his things and left. Later that same morning Perry submitted his resignation to Handel as well. Handel implored him to stay.5 Perry rejected her request, but agreed to stay through the end of the week to assist with transition. Following the board of directors meeting, Wickre was dismissed by Handel for carrying documents off the premises in violation of credit union policy.6
[¶ 14.] As a result of the allegations against Handel, raised by Anderson, Perry and Wickre, the First Century board of directors voted during the July 1, 2002 meeting to hire Eide-Bailly to conduct another audit. In addition, after the cessation of their employment with First Century, Anderson and Perry filed a suspicious activity report with the NCUA prompting the regulatory agency to conduct an on-cite investigation into their allegations in November 2002.7 Ultimately, Handel was terminated by First Century in December 2002.
[¶ 15.] Anderson filed a suit against First Century for wrongful discharge and intentional infliction of emotional distress on September 22, 2004. On April 28, 2006, First Century filed a motion for summary judgment. On June 14, 2006, the circuit court granted First Century's motion, dismissing Anderson's claims.
[¶ 16.] Anderson appeals raising the following issues:
1. Whether the circuit court erred in granting First Century's motion for summary judgment as to Anderson's claim of wrongful discharge...
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