Breslauer v. Fayston School Dist.

• Citation: 163 Vt. 416,659 A.2d 1129
• Decision Date: 24 March 1995
• Docket Number: No. 93-256,93-256
• Parties: , 101 Ed. Law Rep. 306 Gail BRESLAUER v. FAYSTON SCHOOL DISTRICT, et al.
• Court: United States State Supreme Court of Vermont

Page 1129

659 A.2d 1129

163 Vt. 416, 101 Ed. Law Rep. 306

Gail BRESLAUER v. FAYSTON SCHOOL DISTRICT, et al.

No. 93-256.

Supreme Court of Vermont.

March 24, 1995.

James S. Suskin and Catherine Roberts-Suskin of Suskin & Roberts-Suskin, P.C., Montpelier, for plaintiff-appellant.

Peter B. Joslin and John Davis Buckley of Theriault & Joslin, P.C., Montpelier, for defendants-appellees.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

DOOLEY, Justice.

Plaintiff Gail Breslauer brought this action against the Fayston School District, her former employer; Fayston School Board; Robert Stanton, the former principal of the Fayston School; Andreas Lehner, principal of the Warren Elementary School; and the Warren School Board. The complaint centers on plaintiff's attempt to obtain a teaching job in the Warren Elementary School after leaving a similar position in the Fayston School. Most of the counts relate to adverse comments about plaintiff which she alleges were made by Stanton to Lehner and resulted in her not receiving the Warren teaching job. She alleges that these comments breached a written agreement between her and Stanton and the Fayston Board and were tortious under a number of theories. One count against Lehner and the Warren School Board alleges that they discriminated against her on account of age in not hiring her, in violation of the Vermont Fair Employment Practices Act. The superior court granted summary judgment in favor of all defendants except defendant Stanton. We affirm, in part, and reverse, in part.

Most of the facts are undisputed. Plaintiff was a teacher in the Fayston School District from 1974 to 1985, when she took a one year leave of absence. During her employment with Fayston, she had been very active in the teacher's union and became president and negotiator for the Valley Teachers' Association, the collective bargaining representative for teachers in a number of towns including Fayston and Warren. During her leave of absence, she was approached by William Lincoln, Superintendent of Schools, to inform her that the Fayston Board was satisfied with its staff and preferred that she not return to the Fayston School.

This contact led to the negotiation of a written agreement, which is at the heart of many of the counts of plaintiff's complaint. The main terms of the agreement were that: (1) plaintiff would continue on leave of absence for the 1986-87 school year; (2) during that year she would be paid $12,600 and could maintain group insurance coverage; (3) she would resign effective June 30, 1987; (4) all reference inquiries, particularly those made to principal Stanton, were to be referred to superintendent Lincoln "even though he may be physically out of Vermont"; (5) plaintiff and superintendent Lincoln were to negotiate a letter of recommendation to cover certain aspects of plaintiff's experience at Fayston; (6) any derogatory material, and any record of grievances, was to be removed from plaintiff's personnel file; and (7) the parties agreed not to discuss or disclose the terms of the settlement or the issues that might have precipitated the agreement. The agreement was signed by plaintiff, the chair of the Fayston School Board, superintendent Lincoln, and principal Stanton.

In May of 1989, plaintiff decided to return to teaching and applied to fill either of two vacant positions at the Warren Elementary School. She was interviewed by principal Lehner, who thereafter called principal Stanton for a reference. By this time, Stanton had left Fayston and had become principal at the Stowe Elementary School. Stanton's telephone reference was negative. For example, he said plaintiff "polarized" the staff and caused "negative relations between the faculty and board." Lehner took notes of this conversation; the notes were found by a Warren teacher and turned over to plaintiff.

Lehner did not recommend that the Warren Board hire plaintiff in 1989, and again in 1990 when she applied for another job. He indicated in a deposition that a Warren teacher told him that the teacher would not be able to work with plaintiff. He also had a policy of not hiring "expensive" teachers, and plaintiff's salary would be quite high. He admitted, however, that he considered the information from Stanton in making his decision.

Plaintiff's amended complaint named the Fayston School Board (the Board) and the Fayston School District (Fayston), principal Stanton and principal Lehner and set forth eight counts: (1) breach of contract; (2) violation of plaintiff's rights of free speech and association because Stanton's actions were done to retaliate against plaintiff's union activities; (3) defamation; (4) intentional infliction of emotional distress; (5) violation of public policy; (6) invasion of privacy; (7) negligence of Fayston in failing to advise Stanton of his obligations under the contract and to supervise him; and (8) age discrimination against Lehner in not recommending that plaintiff be hired. The first seven counts were against the Fayston defendants and Stanton. Counts 5 and 8 were against Lehner. In response to Lehner's motion to dismiss the age discrimination count (count 8), plaintiff sought to join the Warren School Board and amend the count to make the Board the defendant. The court granted the motion to dismiss ¹ and denied the motion to join the Board on the ground that the age discrimination claim was not properly joined with the remaining counts of the complaint.

The bulk of the case was considered on defendants' motion for summary judgment. The court dismissed the counts against Fayston related to Stanton's negative reference (counts 1 through 7), on the grounds that Fayston could not be responsible for the actions of Stanton once he left its employ. ² As to count 7, the court ruled specifically that any duty Fayston had to supervise Stanton's conduct ended when he left its employ. The court did not dismiss counts 1 through 7 against Stanton.

On appeal, plaintiff raises four issues: (1) whether Fayston's duty to train or supervise Stanton continued after Stanton left its employ; (2) whether Stanton remained the agent of Fayston for purposes of the termination agreement even after he left its employ; (3) whether the court should have considered parol evidence on the meaning of the termination contract; and (4) whether the motion to join the Warren School Board was properly denied.

We first address the trial court's decision to dismiss count 7, which charged that Fayston had a duty of care to ensure that Stanton understood his obligations under the agreement with plaintiff, that Fayston knew from Stanton's past conduct that he was likely to give a negative evaluation of plaintiff, and that Fayston breached this agreement by failing to inform and supervise him in signing and performing the agreement. Plaintiff argues that Fayston is liable for any damage that occurred as a result of the breach of this duty even if it occurred after Stanton terminated his Fayston employment.

Plaintiff acknowledges that generally Fayston had no duty to control the conduct of a third person apart from its duty to control the conduct of its servants. Plaintiff relies on Restatement (Second) Torts § 315 (1965) to establish Fayston's direct duty of care to her:

§ 315. General Principle

There is no duty so to control the conduct of a third person as to prevent him from causing physical harm to another unless

(a) a special relation exists between the actor and the third person which imposes a duty upon the actor to control the third person's conduct, or

(b) a special relation exists between the actor and the other which gives to the other a right to protection.

The wording of § 315 demonstrates the main deficiency in plaintiff's theory. The section is about "physical harm," see id. at § 7(3) (physical harm means "physical impairment of the human body, or of land or chattels"), but the gravamen of plaintiff's theory is that Stanton caused a breach of contract, and the loss of the Warren jobs, by his negative reference as communicated to Lehner. The injury related to plaintiff's negligence claim is economic.

In explaining the relationship between tort and contract, Prosser and Keeton state:

[I]f the alleged obligation to do or not to do something that was breached could not have existed but for a manifested intent, then contract law should be the only theory upon which liability would be imposed.

....

... Generally speaking, there is no general duty to exercise reasonable care to avoid intangible economic loss or losses to others that do not arise from tangible physical harm to persons and tangible things. This being so, the manifested intent of the parties should ordinarily control the nature and extent of the obligations of the parties to a contract of sale, either of real or personal property, or a contract of service.

W. Keeton et al., Prosser & Keeton on the Law of Torts § 92, at 656-57 (5th ed. 1984) (emphasis in original). The limitation here is logical. Apart from the knowledge that Stanton might provide a negative evaluation of plaintiff unless prevented from doing so, there is nothing special about this contract that imposes on Fayston a duty to train one of its senior managers in implementing the contract. The contract itself created no duty to train or supervise. Stanton signed the contract which, under plaintiff's theory of the case, imposes on him a personal obligation to comply apart from his employment with Fayston. If we find a duty here, we create a new tort theory available in any breach of contract case where an economic entity acts through employees. We find this an unwise expansion of tort liability concepts.

In other contexts, we have been careful to maintain a dividing line between contract and tort theories of recovery. See, e.g., Winey v. William E. Dailey, Inc., 161 Vt. 129, 136, 636 A.2d 744, 749 (1993) (in construing consumer fraud law, Court holds...