Bresnahan v. May Dept. Stores Co.

Decision Date17 March 1987
Docket NumberNo. 68688,68688
Citation726 S.W.2d 327
PartiesDelores BRESNAHAN, Plaintiff-Respondent-Appellant, v. The MAY DEPARTMENT STORES CO., Defendant-Appellant-Respondent.
CourtMissouri Supreme Court

David M. Heimos, St. Louis, for plaintiff-respondent-appellant.

Henry D. Menghini, Gerre S. Langton, St. Louis, for defendant-appellant-respondent.

BILLINGS, Judge.

The Court granted transfer of this case after the Missouri Court of Appeals, Eastern District, ruled that collateral estoppel barred plaintiff's claims against her former employer because a key fact issue had been ruled adversely to plaintiff in an administrative proceeding.

The trial court entered judgment against plaintiff on her claim for punitive damages but let stand the jury's award of actual damages in her favor. Both parties appealed. The court of appeals reversed the actual damage award on the collateral estoppel ground and noted the punitive damage issue was without merit and the trial court correctly set aside that award.

The Court agrees with the opinion authored by the Honorable Douglas W. Greene, Special Judge, for the court of appeals. Without quotation marks and with minor modifications, that opinion follows:

Plaintiff Bresnahan, an employee of the Famous-Barr South County store in St. Louis County, was discharged on May 6, 1983, for violation of company work rules. Famous-Barr is a division of the May Department Stores Company.

The incident which led to the discharge occurred on April 22, 1983. Plaintiff arrived for work that morning, prior to the store opening for business, and was observed by the store security manager looking through greeting cards. Shopping before store hours was against the store policy. A security guard was alerted and plaintiff was placed under surveillance. She walked to the toy department, picked up a stuffed toy monkey, and without paying for it, or obtaining proper authorization for removing it from that department, took the toy, placed it in a Famous-Barr sack and placed it in a "lockup" in her department. When her work day was over, plaintiff picked up the sack containing the toy and was leaving the store when she was intercepted by the security manager. Plaintiff twice refused to let the security manager look into the sack, and then said, "I did not leave the building with it. You can't get someone for stealing if they don't leave the building first." She then contended that she had made a mistake, and that she thought the sack contained her work shoes. Plaintiff was detained while a search was made of the three lockups in the department and office area where she worked. Her work shoes were not found.

Famous-Barr had work rules for its employees, among which was rule .15C which provided that "[a]ny attempt to remove Famous-Barr property/equipment from the premises without proper documentation or authorization is grounds for immediate dismissal." After a thorough investigation of the incident, during which it was found that plaintiff had violated additional work rules such as holding the monkey for a future exchange or, if regarded as a purchase, failed to have the purchase sealed, marked, and verified by a sales clerk, plaintiff was fired.

Plaintiff then made a claim for unemployment insurance benefits with the Division of Employment Security, pursuant to Chapter 288, RSMo 1978, as amended, seeking unemployment benefits. Based on the evidence of the incident, a deputy of the Division of Employment Security made the determination that plaintiff was not qualified for benefits because she had been discharged for misconduct connected with her work. The reason given for this determination was that:

The claimant was discharged because she was observed by security leaving the store with a stuffed animal, valued at less than $10.00, she had not paid for. Claimant's actions constitute aggravated misconduct and wage credits reported by this employer from 1/1/82 through 4/22/83 are cancelled.

Plaintiff filed a notice of appeal with the Appeals Tribunal of the Division of Employment Security. After a hearing at which witnesses testified for the employer and employee, the appeals referee affirmed the deputy's decision based on the following findings:

On April 22, 1983, before the employer had opened its store and even before it had turned on its lights, the claimant was observed by an employer security manager looking at merchandise outside of her department. The claimant was observed taking a stuffed animal from the employer's toy department. The claimant was seen putting this item in a bag. The employer's security manager set up a surveillance on the claimant for the rest of the day. When the claimant left work, the employer's security manager did a security check of the claimant's possessions. The claimant willingly gave up two packages in which she was carrying bona fide purchases. The claimant, however, refused to give the employer's security manager a third package. In this third package was found a stuffed animal valued at approximately $10.00. The claimant at first indicated that she had taken a wrong package and that she had meant to take home an old pair of shoes. Once the claimant had been detained, she informed the security manager that she, the security manager, could not do anything about the claimant's actions because she had not actually left the store. Because the claimant had tried to take merchandise from the employer without purchasing it, the claimant was discharged on April 22, 1983.

The Missouri Employment Security Law provides that a claimant shall be disqualified for waiting week credit or benefits for not less than one nor more than sixteen weeks for which he claims benefits and is otherwise eligible if it is found that he has been discharged for misconduct connected with his work. In addition to the disqualification for benefits under this provision the Division may in the more aggravated cases of misconduct cancel all or any part of the individual's wage credits, which were established through his employment by the employer who discharged him, according to the seriousness of the misconduct.

The claimant was discharged on April 22, 1983. The claimant was discharged because she attempted to take merchandise from the employer without proper payment. It is believed that the claimant did steal from the employer. The claimant's actions in stealing from the employer violates the fiduciary duty which the claimant owes to her employer. The claimant was entrusted with the employer's merchandise and money. The claimant's actions in stealing from the employer not only constitute misconduct but misconduct of the most aggravated nature. Accordingly, I find the claimant was discharged on April 22, 1983, for aggravated misconduct connected with her work.

Plaintiff's attorney then filed an application for review by the Labor and Industrial Relations Commission. The Commission adopted the findings of fact of the Appeals Tribunal, determined that those findings were supported by competent and substantial evidence, and determined that the decision of the Appeals Tribunal denying benefits was made in accordance with the law. This decision was properly communicated to plaintiff. She did not avail herself of the right to seek judicial review of the commission's decision, as authorized by § 288.210, RSMo 1986.

Plaintiff then filed a multi-count damage suit against May Department Stores Co., the parent company of Famous-Barr, and several of its employees. She alleged breach of an implied contract of employment, false imprisonment, libel, and other civil wrongs. Some of the counts were dismissed by the trial court prior to, or during trial, for failure to state a claim, or for failure of proof. After trial, a jury returned a verdict for plaintiff and against May Department Stores on the implied contract count and assessed her actual damages at $116,000 and punitive damages at $10,000. After hearing after trial motions, the trial court set aside the punitive damage award, but affirmed the judgment for actual damages. Both parties appealed, and the cases have been consolidated here.

The record indicates that May Department Stores timely raised the affirmative defense of collateral estoppel, and reasserted that defense at every relevant trial and after trial stage, including their motion for judgment notwithstanding the verdict. Whether an employee's claim for damages is barred by collateral estoppel is a question of law. The trial court ruled that plaintiff's claim was not barred for that reason, which ruling is one of the employer's claims on appeal of trial court error. The issue is dispositive.

As was ably stated in State ex rel. O'Blennis v. Adolf, 691 S.W.2d 498, 501 (Mo.App.1985), collateral estoppel deals with issue preclusion. This means that when a fact is appropriately determined in one legal proceeding, it is given effect in another lawsuit in cases where such fact or facts are a vital part of the evidentiary chain necessary to be established in order to prove a cause of action. In Oates v. Safeco Ins. Co. of America, 583 S.W.2d 713, 719 (Mo. banc 1979), it was emphasized that the purpose of the doctrine was to prevent the same parties from relitigating issues which had been previously litigated with adverse results. See Hudson v. Carr, 668 S.W.2d 68, 70 (Mo. banc 1984).

The doctrine has been applied by Missouri courts in situations where the fact issue was raised and decided in an administrative proceeding and relitigation later attempted in a circuit court action. In Hines v. Continental Baking Co., 334 S.W.2d 140, 144-46 (Mo.App.1960), the court held that an unappealed final award of the then named Industrial Commission in a workmen's compensation case which held that an employee did not sustain an accidential injury arising out of or in the course of his employment was a bar to his asserting it in any other proceeding in the future that he did, and that such...

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