Bodnar v. St. John Providence, Inc.

• Decision Date: 05 March 2019
• Docket Number: No. 337615,337615
• Citation: 933 N.W.2d 363,327 Mich.App. 203
• Parties: Colleen BODNAR, Greg Bozimowski, Carol Burke, Glenda Calvin, Kevin Cardwell, Leslie Cardwell, Andrea Chelotti, Jana Chrumka, John Cirocco, Cecilia Duronio, Sharon Esguerra, Marianna Flatt, Maria Gamble, Cheryl Robb-Genevich, Kim Glanda, Becca Graham, Mary Margaret Gulowski, Angelique Gwin, Christyne Ison, Steve Kish, Heather Kwiatkowski, Robert Losey, Kathleen McNelis, Jessica Mast, Greg O'Dell, Oscar Ong, Christina Potkay, Kimberly Raffler, Bruce Reed, Nancy Richards, Ksenia Scekic, Sarah Sims, Cindy Thorne, Kelly Trethewey, Yolanda Wilkins, Marie Williams, Sheila Williamson, Kenneth Andrew Willard, and Ruthanne Wirth, Plaintiffs-Appellants/Cross-Appellees, and Tracy Chase, Plaintiff/Cross-Appellee, v. ST. JOHN PROVIDENCE, INC. and Ascension Health, Defendants-Appellees/Cross-Appellants.
• Court: Court of Appeal of Michigan — District of US

327 Mich.App. 203

933 N.W.2d 363

Colleen BODNAR, Greg Bozimowski, Carol Burke, Glenda Calvin, Kevin Cardwell, Leslie Cardwell, Andrea Chelotti, Jana Chrumka, John Cirocco, Cecilia Duronio, Sharon Esguerra, Marianna Flatt, Maria Gamble, Cheryl Robb-Genevich, Kim Glanda, Becca Graham, Mary Margaret Gulowski, Angelique Gwin, Christyne Ison, Steve Kish, Heather Kwiatkowski, Robert Losey, Kathleen McNelis, Jessica Mast, Greg O'Dell, Oscar Ong, Christina Potkay, Kimberly Raffler, Bruce Reed, Nancy Richards, Ksenia Scekic, Sarah Sims, Cindy Thorne, Kelly Trethewey, Yolanda Wilkins, Marie Williams, Sheila Williamson, Kenneth Andrew Willard, and Ruthanne Wirth, Plaintiffs-Appellants/Cross-Appellees,

and

Tracy Chase, Plaintiff/Cross-Appellee,

v.ST. JOHN PROVIDENCE, INC. and Ascension Health, Defendants-Appellees/Cross-Appellants.

No. 337615

Court of Appeals of Michigan.

Submitted October 10, 2018, at Detroit.

Decided March 5, 2019, at 9:00 a.m.

Shea Aiello, PLLC (by David J. Shea, Rochester, and Frank T. Aiello, Southfield) for plaintiffs.

Hall, Render, Killian, Heath & Lyman, PLLC, Troy (by Bruce M. Bagdady and Jonathon A. Rabin ) for defendants.

Before: Shapiro, P.J., and Servitto and Gadola, JJ.

Gadola, J. Plaintiffs appeal as of right the trial court's opinion and order granting summary disposition in favor of defendants St. John Providence, Inc. (St. John) and Ascension Health (Ascension). Defendants, in turn, cross-appeal the trial court's denial of their motion to strike certain evidence pertaining to proceedings before Michigan's Unemployment Insurance Agency (the MUIA). We affirm the trial court's opinion and order in its entirety.

I. FACTS

Plaintiffs are certified registered nurse anesthetists (CRNAs) formerly employed by St. John at hospitals located in Southfield and Novi, Michigan. Ascension is the parent company of St. John. According to plaintiffs' complaint, because of alleged financial losses, defendants elected in late 2014 to outsource St. John's anesthesiology services and began to negotiate the formation of PSJ Anesthesia, PC (PSJ), a separate entity that would provide those services. Plaintiffs allege that in August 2015, defendants contracted with PSJ to transition the employment of St. John's CRNAs directly to PSJ. In October 2015, plaintiffs were notified of the transition plan and that all CRNAs would cease to be employed by St. John effective December 31, 2015. On or about October 30, 2015, PSJ extended employment offers to the St. John CRNAs, including plaintiffs; however, many of the benefits and premiums to which plaintiffs had been entitled while employed by St. John were either reduced or eliminated.

Plaintiffs declined PSJ's offers of employment on the ground that the offers did not constitute comparable jobs providing commensurate compensation and benefits. Under two employment policies revised and effectuated by St. John in May 2015—the "Staff Reduction In Force/Workforce Transition" policy (the RIF policy) and the "Severance Pay and Benefits for Staff (Non-Management) Associates" policy (the severance-pay policy)—employees who were given notice of position elimination would be required, over a six-month period, to apply for vacant comparable jobs within St. John and would receive priority consideration to interview for such jobs. Eligible employees would be entitled to severance pay and benefits if their positions were eliminated and no comparable jobs were available throughout St. John or Ascension. However, failure to apply for a comparable job or rejection of a comparable job offer would render an employee ineligible to receive severance. The policies define the term "comparable jobs" as positions that paid at least 80% of the employee's current pay rate for which the employee had the ability and qualifications to perform. Under the terms of the policies, plaintiffs maintained that they had not been offered comparable jobs and that they were therefore entitled to severance pay and benefits, as well as to continued employment and compensation for a six-month period.

Maintaining that plaintiffs had declined PSJ's comparable job offers, defendants refused to pay severance and terminated plaintiffs' employment effective December 31, 2015. Plaintiffs subsequently initiated the present action, advancing claims for breach of contract, promissory estoppel, and statutory and common-law conversion. In lieu of an answer, defendants moved separately for summary disposition under MCR 2.116(C)(8) and (10). St. John argued that (1) the RIF and the severance-pay policies did not constitute binding contracts in light of certain disclaimer language, (2) the plaintiffs were not entitled to severance pay under the policies because they refused comparable job offers, (3) the policies did not set forth a clear and definite promise giving rise to a promissory-estoppel claim, and (4) plaintiffs had no vested right to severance, thereby undermining any conversion claim. Ascension asserted the same grounds but additionally maintained that it was not a proper party to the litigation because a corporate parent is generally not liable for the acts of its subsidiary. Defendants also jointly moved to strike from the record certain documents pertaining to unemployment proceedings before the MUIA, arguing that the documents were inadmissible under MCL 421.11.

The trial court granted summary disposition in favor of defendants and dismissed each of plaintiffs' claims. The trial court denied defendants' motion to strike, reasoning that it had accorded those materials no weight in light of their minimal probative value. Plaintiffs now appeal the trial court's opinion and order granting defendants' motions for summary disposition, and defendants appeal the trial court's order denying their motion to strike.

II. ANALYSIS

A. STANDARD OF REVIEW

This Court reviews de novo a trial court's ruling on a motion for summary disposition. Maiden v. Rozwood , 461 Mich. 109, 118, 597 N.W.2d 817 (1999). Although not clearly specified in the opinion, the trial court appears to have granted summary disposition under MCR 2.116(C)(10) because it determined that plaintiffs failed to raise any material issues of fact. See Cuddington v. United Health Servs., Inc. , 298 Mich. App. 264, 270, 826 N.W.2d 519 (2012). On appeal, however, we apply the standard of review applicable under MCR 2.116(C)(8). See Detroit News, Inc. v. Policemen & Firemen Retirement Sys. of the City of Detroit , 252 Mich. App. 59, 66, 651 N.W.2d 127 (2002) ("If summary disposition is granted under one subpart of the court rule when it was actually appropriate under another, the defect is not fatal and does not preclude appellate review as long as the record permits review under the correct subpart.") (quotation marks and citation omitted).

Summary disposition is appropriately granted under MCR 2.116(C)(8) when the opposing party has failed to state a claim upon which relief may be granted. Dalley v. Dykema Gossett PLLC , 287 Mich. App. 296, 304, 788 N.W.2d 679 (2010). A motion under MCR 2.116(C)(8) tests the legal sufficiency of a complaint on the basis of the pleadings alone. Id . All well-pleaded factual allegations are to be accepted as true and are to be construed in the light most favorable to the nonmoving party. Johnson v. Pastoriza , 491 Mich. 417, 435, 818 N.W.2d 279 (2012). A party may not support a motion under MCR 2.116(C)(8) with documentary evidence such as affidavits or depositions. Patterson v. Kleiman , 447 Mich. 429, 432, 526 N.W.2d 879 (1994). However, when an action is premised on a written contract, the contract generally must be attached to the complaint and thus becomes part of the pleadings. Laurel Woods Apartments v. Roumayah , 274 Mich. App. 631, 635, 734 N.W.2d 217 (2007) ; see also MCR 2.113(C).

B. BREACH OF CONTRACT

1. EXISTENCE OF A CONTRACT

Whether a contract exists is a question of law to be reviewed de novo. Kloian v. Domino's Pizza, LLC , 273 Mich. App. 449, 452, 733 N.W.2d 766 (2006). Fundamentally, a contract is a promise or a set of promises for which the law recognizes a remedy in the event of a breach of those promises. 1 Restatement Contracts, 2d, § 1, p 5. A promise, in turn, is "a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made." Id . at § 2, p 8. The elements of a contract include: "parties competent to contract, a proper subject matter, legal consideration, mutuality of agreement, and mutuality of obligation." Mallory v. Detroit , 181 Mich. App. 121, 127, 449 N.W.2d 115 (1989). In order for a contract to be formed, there must be an offer and acceptance, as well as a mutual assent to all essential terms. Kloian , 273 Mich. App. at 452-453, 733 N.W.2d 766. This required mutual assent on all material terms is judged by an objective standard based on the express words of the parties and not on their subjective state of mind. Kamalnath v. Mercy Mem. Hosp. Corp. , 194 Mich. App. 543, 548, 487 N.W.2d 499 (1992).

It is well settled under Michigan law that an employer's statement of policy contained in a manual or handbook can give rise to contractual obligations in certain circumstances. See Dumas v. Auto Club Ins. Ass'n , 437 Mich. 521, 529, 473 N.W.2d 652 (1991) (opinion by RILEY , J.). In one of the earliest "policy cases" concerning a severance-pay policy, Cain v. Allen Electric & Equip. Co. , 346 Mich. 568, 570-571, 78 N.W.2d 296 (1956), the employer instituted a "termination pay policy," providing that certain employees with 5 to 10 years of employment would be entitled to two months of pay should their employment be terminated. Two days after the plaintiff gave notice of his voluntary resignation, the employer terminated his employment, effective immediately. Id . at 571, 78 N.W.2d 296. Applying traditional principles of contract law, the Supreme Court considered the employer's unequivocal announcement that it would conduct...