Beavers v. Johnson Controls World Services, Inc.

• Decision Date: 02 September 1994
• Docket Number: No. 21462,21462
• Citation: 118 N.M. 391,881 P.2d 1376,1994 NMSC 94
• Parties: , 9 IER Cases 1684 Johanna BEAVERS, Plaintiff-Petitioner, v. JOHNSON CONTROLS WORLD SERVICES, INC., and Arthur Dasilva, Defendants-Respondents.
• Court: New Mexico Supreme Court

Page 1376

881 P.2d 1376

118 N.M. 391, 9 IER Cases 1684

Johanna BEAVERS, Plaintiff-Petitioner, v. JOHNSON CONTROLS WORLD SERVICES, INC., and Arthur Dasilva,

Defendants-Respondents.

No. 21462.

Supreme Court of New Mexico.

Sept. 2, 1994.

[118 N.M. 392] Eaton, Martinez & Hart, Roger V. Eaton, Michael B. Browde, Albuquerque, for petitioner.

Baca, Coryell, Gershon & Hall, P.A., Bradford V. Coryell, Santa Fe, for respondents.

Rodey, Dickason, Sloan, Akin & Robb, P.A., James P. Bieg, Santa Fe, for amicus curiae N.M. Def. Lawyers.

OPINION

MONTGOMERY, Chief Justice.

This case involves one of the great jurisprudential debates of the twentieth century:¹ Whether an appellate court decision announcing a new rule of law, or changing an old one, should always be applied retroactively or may sometimes be applied only prospectively. We granted certiorari to revisit this question in light of the United States Supreme Court's abandonment last year, in Harper v. Virginia Department of Taxation, --- U.S. ----, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993), of the multi-factored analysis, for civil cases, in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971).

More specifically, and with reference to the issues in this case, we granted certiorari to consider whether our recognition in Schmitz v. Smentowski, 109 N.M. 386, 785 P.2d 726 (1990), of a cause of action for prima facie tort should be applied retroactively to conduct occurring before we decided Schmitz. In the opinion here under review, our Court of Appeals held that Schmitz should not be applied retroactively but only prospectively to conduct occurring after our recognition of the prima facie tort doctrine. Beavers v. Johnson Controls World Services, Inc., 116 N.M. 29, 32, 859 P.2d 497, 500 (Ct.App.), cert. granted, 115 N.M. 795, 858 P.2d 1274 (1993). Petitioner Beavers ("Plaintiff") contends that we should follow the Supreme Court's lead in Harper and jettison the Chevron Oil approach, thereby adopting a bright-line rule of retroactivity in all civil cases. Alternatively, Plaintiff contends that we should reject the Court of Appeals' application of Chevron Oil and hold that Chevron Oil, correctly applied, requires that Schmitz be deemed fully retroactive.

Harper holds that a new rule of federal law announced by the Supreme Court "must be given full retroactive effect in all cases still open on direct review and as to all events, regardless of whether such events predate or postdate announcement of the rule." --- U.S. at ----, 113 S.Ct. at 2517. Chevron Oil employed a more flexible approach, requiring consideration of several factors in deciding whether to apply a new rule retroactively to events occurring before the rule's announcement or only prospectively to events postdating that announcement. We adopted the Chevron Oil approach in Whenry v. Whenry, 98 N.M. 737, 739, 652 P.2d 1188, 1190 (1982).

We agree with Respondents, Johnson Controls World Services, Inc., and Arthur DaSilva ("Defendants"), that we should decline Plaintiff's invitation to follow Harper as a matter of our state law regarding the retroactivity versus prospectivity of a judicial decision in a civil case. We agree with Plaintiff, however, that the Court of Appeals incorrectly applied the Chevron Oil approach in declaring that the prima facie tort rule announced in Schmitz was nonretroactive to conduct occurring, and harm suffered, before Schmitz was decided. Accordingly, we reverse the Court of Appeals' decision and remand to that Court for consideration of other issues in Defendants' appeal.

I.

The Court of Appeals reversed a judgment of the District Court of Rio Arriba County, entered on a jury verdict, in Plaintiff's favor for $76,000. The district court submitted the case to the jury based solely upon Plaintiff's claim of prima facie tort, and the jury returned a special verdict finding that Plaintiff had proven the elements of the tort and that she had suffered damage as a proximate result of DaSilva's conduct. At trial, Plaintiff adduced evidence of the following facts to support her claim.²

Johnson Controls provides support services to the Los Alamos National Laboratory at Los Alamos, New Mexico, under a contract with the Laboratory. Before 1986 the services were provided by Johnson Controls' predecessor, The Zia Company, for whom Plaintiff had worked in various secretarial positions since 1978. She continued her employment when Johnson Controls acquired the contract in mid-1986, and she became DaSilva's secretary in January 1987, occupying a position classified as Secretary III.

In October 1987 the photocopy machine near Plaintiff's office broke down. When she attempted to fix it, DaSilva, who assumed the machine was covered by a service contract, told her to call a repairman. She did, and the machine was fixed. However, it was not covered by a service contract, so the repairman sent a bill for his services. Plaintiff put the bill on DaSilva's desk, whereupon he became angry and told her she had not followed the correct procedure: She should have submitted a request for service to the company's purchasing department.

Plaintiff and DaSilva discussed the copier incident a number of times. DaSilva told her he was thinking about writing a memorandum to employees regarding the error; Plaintiff requested that he not do so because she felt she had been following his orders. DaSilva nonetheless directed his assistant to draft a memo mentioning the incident and outlining the correct procedure for purchase orders. Plaintiff was instructed to type three drafts of the memo, which was entitled "Not Following Procedures." The memo began by relating that an employee in DaSilva's department had recently made a direct order of services from an outside vendor in violation of company procedures. Plaintiff thought it was clear to everyone in the department that she was the employee discussed in the memo and felt that it subjected her to ridicule. The process of having to type various drafts of a memo that humiliated her was so upsetting that she requested a transfer; however, because there were no Secretary III positions available elsewhere in the company she continued working for DaSilva.

In mid-November Plaintiff submitted a leave slip to DaSilva, seeking to take leave on Monday and Tuesday of Thanksgiving week (she previously had received permission to take leave on Wednesday) to visit relatives in another state. DaSilva indicated approval but did not sign the slip. Concerned about the unsigned leave slip, Plaintiff requested her husband to inquire whether DaSilva had signed it; DaSilva responded to her husband's inquiry by simply shrugging and walking away without saying anything. Not knowing whether the slip had been signed, Plaintiff delayed her trip. She reported for work on Monday and found that although the leave slip had remained unsigned, DaSilva had made substitute secretarial arrangements and expressed surprise when she appeared for work. This so distressed her that she went to the company's health facility and was diagnosed by a physician's assistant as experiencing symptoms of stress.

On December 3 Plaintiff and DaSilva had a meeting in DaSilva's office to discuss their difficulties. The meeting quickly turned into a heated exchange of criticism, culminating in DaSilva's assuring Plaintiff that she would be transferred out of his department by the end of the week. Plaintiff left the meeting very upset. On December 7 she left work never to return; she was diagnosed on that day by a chiropractor as having a stress-related illness. In January of the following year, after arguments and fights with family members, she checked herself into a mental health facility and remained hospitalized for about a week.

On January 6, 1988, Plaintiff filed a complaint against Johnson Controls with the New Mexico Human Rights Commission, alleging essentially the same facts as formed the basis for her present tort action. She subsequently withdrew the complaint and in December of that year filed a claim against Johnson Controls and its insurance carrier with the Workers' Compensation Division of the Department of Labor. She alleged that she had suffered psychological injuries as a result of a workplace accident compensable as a "primary mental impairment" under the Workers' Compensation Act. After a trial the Workers' Compensation Judge found that the events at issue constituted an accidental injury occurring in the course and scope of her employment, but ruled that she had failed to prove a "traumatic event" under the applicable section of the act. She appealed to the Court of Appeals, but subsequently withdrew her appeal in light of a New Mexico appellate decision that defined "traumatic event" for purposes of the applicable section.

Then, on October 5, 1990, Plaintiff filed the present district-court action, seeking damages for prima facie tort, the tort of "outrage," and the tort of intentional infliction of emotional distress.³ The court dismissed the latter two claims on summary judgment, ruling that Plaintiff had failed as a matter of law to assert such severe conduct as would support these claims, and the case proceeded to trial in June 1991 on the prima facie tort claim. The court instructed the jury that to establish her claim Plaintiff had the burden of proving that Defendants performed one or more intentional, lawful acts; that Defendants intended that the act or acts would cause harm to Plaintiff or knew with certainty that harm would necessarily result; that the acts did in fact proximately cause harm; and that Defendants' conduct was not justifiable under the circumstances. The jury returned a special verdict finding that DaSilva committed acts intended to cause harm to Plaintiff or which he knew with certainty would cause such harm, that the acts proximately caused Plaintiff to suffer damage, that the acts were not justified, and that Plaintiff's damages amounted...