CENTRAL BERING SEA FISHERMEN'S v. Anderson

• Decision Date: 06 September 2002
• Docket Number: No. S-9955.,S-9955.
• Citation: 54 P.3d 271
• Parties: CENTRAL BERING SEA FISHERMEN'S ASSOCIATION and Carl Merculief, Appellants, v. Susan D. ANDERSON, Appellee.
• Court: Alaska Supreme Court

54 P.3d 271

CENTRAL BERING SEA FISHERMEN'S ASSOCIATION and Carl Merculief, Appellants, v. Susan D. ANDERSON, Appellee.

No. S-9955.

Supreme Court of Alaska.

September 6, 2002.

Rehearing Denied November 18, 2002.

Susan Orlansky, Jeffrey M. Feldman, Ruth Botstein, Feldman & Orlansky, Anchorage, for Appellants.

Timothy J. Petumenos, Peter C. Nosek, Birch, Horton, Bittner & Cherot, Anchorage, for Appellee.

Before: MATTHEWS, EASTAUGH, BRYNER, and CARPENETI, Justices.

OPINION

MATTHEWS, Justice.

I. INTRODUCTION

A jury awarded Susan Anderson compensatory and punitive damages against Central Bering Sea Fishermen's Association and its president, Carl Merculief, based upon her claims of constructive retaliatory discharge, promissory estoppel, and defamation. The Association and Merculief challenge various aspects of the damages awards. We agree that the jury's award of lost earnings is excessive; however, we sustain the jury's punitive damages award.

II. FACTS AND PROCEEDINGS

Central Bering Sea Fishermen's Association is a nonprofit economic development organization established by fishermen in St. Paul in the Pribilof Islands in conjunction with the community development quota program ("CDQ"). The program was instituted by the North Pacific Fisheries Management Council to allocate a portion of the fisheries' resource to the coastal villages of western Alaska. Carl Merculief was the president of the Association in 1997 and 1998.

In late 1997 Susan Anderson approached the Association about working for it as an economic development project coordinator. At the time, Anderson held a similar job with Yukon Delta Fisheries Development Association, another CDQ group. After Anderson's first interview, Merculief told her that he would like to hire her but that he needed the approval of the Association board of directors.

In January 1998 Merculief asked Anderson to start work with the Association, as Kathy Faltz, the office manager and controller, had suddenly fallen ill and Merculief needed help with the corporation's accounting. At a January 9 meeting of the Association board of directors, which Anderson attended, Merculief proposed hiring Anderson to do economic development work. After some discussion, the board agreed to hire Anderson and to pay her initially at the rate of $55,600 annually. The board also promised to give Anderson a written contract and to raise her salary to $60,000 if she successfully concluded a probationary period. The board instructed Anderson and Merculief to negotiate an employment contract to present to the board for approval after the completion of her probation.

Anderson began work on January 16, 1998. She performed some of Faltz's bookkeeping supervision and accounting duties in addition to her economic development responsibilities. Despite the burden of additional duties, Anderson performed well in her economic development work. During this time, personnel working for Anderson began to approach her to report irregularities and potential theft of Association assets by Faltz. When Anderson reported these allegations to Merculief, Merculief refused to look into the matter, citing Faltz's current illness.

In early April 1998 Anderson and Merculief negotiated a draft employment contract to present to the board. The board was to consider the proposed contract at its April 13 meeting; however, at the meeting the Association's attorney Roger DuBrock had a different version of the draft contract. The confusion over the multiple drafts of the contract was compounded by discussion of where this economic development position should be located—St. Paul or Anchorage—and whether or not the position should continue to exist if the Anchorage office closed. Anderson explained to the board the advantages of having an office in Anchorage and told the board that she would not be able to live and work on St. Paul. Due to the confusion over the multiple contract drafts and the contingency of the position on office location, the board voted not to approve Anderson's contract at that time; however, the board nonetheless assured Anderson that she was doing a good job and implied that it would approve a contract at a later date.

Shortly after this board meeting, on April 16, the Association's day-to-day bookkeeper reported to Anderson that Merculief had been charging personal expenses to the Association's credit card without submitting the proper reimbursements. Follow-up on this report revealed multiple instances in which Merculief appeared to have misappropriated company funds. Anderson informed two board members of the problem and asked if she had the authority to look into this matter. The board members responded that she did. On April 23, 1998, Anderson brought her concerns to DuBrock, the Association's attorney. DuBrock responded that they had to proceed very carefully, as making these allegations could threaten Anderson's job.

The next morning, Merculief met Anderson at her office and, without explanation, told her to go home. Merculief then called DuBrock, insisting that he wanted to fire Anderson, but DuBrock advised that any action against Anderson would have to be taken by the board. That same day, the board met and decided that while it would order an audit to look into Anderson's allegations, Anderson would be suspended without pay. In addition, the board ordered that the locks to the Association offices be changed and that Anderson be instructed not to return to the Association and not to speak with any representative of the Association other than DuBrock. No one informed Anderson of the board's actions; however, Anderson received a call that same day from an industry colleague who had been told that Anderson no longer worked at the Association and that she had been fired. These statements convinced Anderson that she was being fired and on Monday morning she went to DuBrock to turn in her office keys and cell phone. She brought along a memorandum to which she had attached copies of business records documenting her concerns about Merculief's use of Association funds. Later that morning, DuBrock delivered to Anderson a letter in which he issued the board's orders and informed her that she had until May 1, 1998, to document her concerns about fraud.

Anderson retained counsel. On April 30, 1998, she wrote Du Brock, through counsel, and demanded her job back, asserting that she had a de facto contract for a definite term with the Association. She also warned that the Association's actions were improperly retaliatory.

The next day Merculief contacted Glenn Haight, the CDQ manager for the state, and reported that Anderson had falsely accused Merculief of misappropriation and that she would be terminated for her misconduct. Merculief also told Haight that Anderson had threatened previous colleagues both personally and professionally. Haight passed along Merculief's remarks in an e-mail sent to a number of high officials in state government as well as members of the CDQ industry.

On May 7, 1998, the Association board held a meeting in which Anderson was accused of: (1) breaking into Association offices; (2) illegally accessing the Association's computers; (3) stalking Merculief; (4) making death threats; and (5) retaliating against the Association by accusing Merculief of wrongdoing after she was suspended. Neither of the two board members that Anderson had approached with her concerns voiced their knowledge that Anderson had raised her concerns prior to her suspension, not after.

The board had DuBrock send a letter to Anderson explaining that the reason for her suspension was that an employee had told the board that Anderson was out to destroy Merculief. However, that employee reported to Anderson that the board's representation of her statement to them was untrue, that those present at the May 7 meeting wanted Anderson "gone," and that no one on the board cared about the Association's finances.

Meanwhile, DuBrock commissioned an audit to examine the nine instances of fiscal concern that Anderson had identified. The board reviewed this audit—the results of which supported most of Anderson's concerns—at its May 22, 1998 board meeting. At that meeting Merculief alleged that Anderson had instructed him to engage in misconduct; Anderson denied these allegations at trial.

After some indecision as to what to do with Anderson, the board offered her the economic development job on St. Paul. The board simultaneously reelected Merculief president, moved his position to St. Paul, and named as Anderson's supervisor a successful applicant for an internship that Anderson had created and advertised. Furthermore, the board did not offer Anderson a contract; instead, it appeared that her employment would be at will. When Anderson talked to others to investigate the sincerity of the offer, she found that the offer was "just a way [for the Association] to get rid of her." She thus declined to appear in St. Paul by September 1, 1998, as instructed. DuBrock wrote Anderson's attorney on September 11, 1998, asserting that the corporation considered Anderson's failure to appear a resignation.

In order to protect herself, Anderson had begun circulating resumes and applying for jobs during the summer and fall of 1998. She accepted employment with Bank of America in mid-September at $45,000 per year. After the bank was sold in December 1998, Anderson quit her job at the bank and decided to go to school to become a barrister in Australia.

Anderson filed suit against the Association and Merculief in November 1998. She went to trial in April 2000 on three causes of action: (1) constructive retaliatory discharge; (2) promissory estoppel; and (3) defamation. She brought the first two charges against the Association only; they are alternative theories behind Anderson's claim that she was wrongfully terminated, for which she sought past and future lost wages. Anderson based her defamation claim on nine statements made...