Clark v. Eagle Systems, Inc.

Decision Date20 November 1996
Docket NumberNo. 96-032,96-032
Citation279 Mont. 279,927 P.2d 995,53 St.Rep. 1150
Parties, 12 IER Cases 507 Thomas Arthur (Art) CLARK, Plaintiff, Appellant and Cross-Respondent, v. EAGLE SYSTEMS, INC.; John T. Ackerman; Richard B. Schweitzer; and Randal M. Sundquist, Defendants, Respondents and Cross-Appellants.
CourtMontana Supreme Court

K.D. Peterson; Peterson & Schofield, Billings, for Appellant.

Steven J. Lehman; Crowley, Haughey, Hanson, Toole & Dietrich, Billings, for Respondents.

LEAPHART, Justice.

Thomas Arthur Clark (Clark) appeals from the order of the Thirteenth Judicial District Court, Yellowstone County, granting Eagle Systems' (Eagle) motion for summary judgment, concluding that the Wrongful Discharge From Employment Act (the Act) applied and that Clark was terminated for good cause, that Clark failed to state a prima facie case under the Age Discrimination in Employment Act, that Clark could not prevail on his tortious interference with contracts claim, and that the Act is the exclusive remedy and precludes Clark's claim for negligent or intentional infliction of emotional distress. Eagle cross-appeals from the District Court's conclusion that the Act applies to Clark's demotion absent a cessation in employment. We affirm.

We address the following issues on appeal:

1. Did the District Court err in concluding that the Wrongful Discharge from Employment Act applies to demotions that do not result in a cessation of employment?

2. Did the District Court err in granting Eagle's motion for summary judgment on the issue of Clark's claim under the Age Discrimination in Employment Act?

3. Did the District Court err in granting summary judgment in favor of the individually-named defendants on Clark's claim of tortious interference and negligent or intentional infliction of emotional distress?

Clark was employed with Eagle as the terminal manager in Billings, Montana. Eagle contracted with Burlington Northern Railroad (BN) to provide ramp, drayage, and mechanical services for BN at the Billings terminal. In addition, Eagle is responsible for loading and unloading trains in a timely manner.

Clark had been employed in the transportation field since 1955 and had served in a variety of positions for previous contractors providing services to the railroad. Clark was hired by Eagle in May of 1985 and continued to serve as terminal manager in Billings until November 21, 1991. On that date, Clark met with Dick Schweitzer (Schweitzer), who was Clark's supervisor, and Schweitzer notified Clark that he was being replaced the next day as terminal manager and was being demoted to the position of utility person. Eagle maintains that Clark was difficult to work with and verbally abusive to both customers and co-workers. Randal Sundquist (Sundquist), who was Clark's subordinate and worked as shop and maintenance supervisor, reported his problems with Clark directly to Schweitzer in the months before Clark's demotion. Several other employees at the Billings terminal stated that they had difficulties with Clark's "paranoia" and harsh discipline.

In May of 1992, Clark filed a complaint with the Montana Human Rights Commission (HRC) alleging that he had been discriminated against based on his age. Eagle removed the case to federal court and, in November of 1993, Clark amended the complaint alleging a cause of action for tortious interference with contract and joining John Ackerman, BN's intermodal hub center manager, Sundquist and Schweitzer as individual defendants. Due to the addition of the Montana defendants, the federal court lost diversity jurisdiction and the matter was remanded to state district court in March of 1994.

On March 31, 1994, the HRC issued a right to sue letter. Accordingly, Clark again amended his complaint alleging a cause of action for age discrimination against Eagle. On October 25, 1995, the District Court granted summary judgment to defendants on all issues. Clark appeals from the grant of summary judgment in favor of the defendants and Eagle cross-appeals from the court's determination that the Act applies absent a cessation in employment.

Standard of Review

Our standard in reviewing a district court's grant of a motion for summary judgment is de novo. Heiat v. Eastern Montana College (1996), 275 Mont. 322, 327, 912 P.2d 787, 790 (citing Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214). That is, we review an order of summary judgment using the same criteria as the district court; we are guided by Rule 56, M.R.Civ.P. Chilberg v. Rose (1995), 273 Mont. 414, 416, 903 P.2d 1377, 1378. Thus, we determine whether a genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. Heiat, 912 P.2d at 791 (citing Minnie, 849 P.2d at 214). Summary judgment is an extreme remedy and should never be substituted for a trial if a material fact controversy exists. Heiat, 912 P.2d at 791 (citing Howard v. Conlin Furniture No. 2, Inc. (1995), 272 Mont. 433, 436, 901 P.2d 116, 118-19).

A party seeking summary judgment has the burden of establishing a complete absence of any genuine factual issue. Howard, 901 P.2d at 118. In light of the pleadings and the evidence before the district court, there must be no material issue of fact remaining which would entitle a non-moving party to recover. Howard, 901 P.2d at 118. Once the moving party has met its burden, the party opposing the summary judgment motion must present material and substantial evidence, rather than conclusory or speculative statements, to raise a genuine issue of material fact. Howard, 901 P.2d at 119. In addition, all reasonable inferences that might be drawn from the offered evidence should be drawn in favor of the party who opposed summary judgment. Howard, 901 P.2d at 119 (citing Cereck v. Albertson's, Inc. (1981), 195 Mont. 409, 411, 637 P.2d 509, 511).

1. Did the District Court err in concluding that the Wrongful Discharge from Employment Act applies to demotions that do not result in a cessation of employment?

Relying on this Court's recent opinion in Howard, the District Court stated that "the case at bar involves neither a lateral transfer nor a minor change in job description. Plaintiff was also absolutely and finally terminated from his managerial position despite the offer of another, inferior, position." The court concluded that "a jury might conclude that plaintiff's demotion qualified as a discharge within the meaning of the Act." Having determined that the Act did apply, the court went on to conclude that there was good cause for Clark's reclassification and granted Eagle's motion for summary judgment on that basis. In reviewing a district court's conclusions of law, we determine whether the court's interpretation of the law is correct. Stratemeyer v. Lincoln County (1996), 276 Mont. 67, 915 P.2d 175, 177 (citing Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603-04).

Application of the Act hinges on the existence of a "discharge" or a "constructive discharge." Section 39-2-903, MCA, defines the terms "discharge" and "constructive discharge" as follows:

(1) "Constructive discharge" means the voluntary termination of employment by an employee because of a situation created by an act or omission of the employer which an objective, reasonable person would find so intolerable that voluntary termination is the only reasonable alternative. Constructive discharge does not mean voluntary termination because of an employer's refusal to promote the employee or improve wages, responsibilities, or other terms and conditions of employment.

(2) "Discharge" includes a constructive discharge as defined in subsection (1) and any other termination of employment, including resignation, elimination of the job, layoff for lack of work, failure to recall or rehire, and any other cutback in the number of employees for a legitimate business reason. [Emphasis added.]

As § 39-2-903, MCA, makes clear, "discharge" includes "constructive discharge" and "any other termination of employment."

In Howard, the plaintiff was terminated from his position as store manager and subsequently offered a position as a sales person at a salary of 75 percent less than his previous salary; Howard did not accept the inferior position. Howard, 901 P.2d at 118. In the instant case, however, Clark was replaced as the terminal manager and immediately reassigned and reclassified as a utility person. Unlike Howard, the record does not reflect whether there was a substantial change in salary or benefits. Clark reported for work the following morning as a utility person and there was no cessation of employment.

In the instant case, Clark does not allege that he was constructively discharged. Furthermore, there has not been a termination of employment within the meaning of the Act. While the District Court correctly stated the rule we recently announced in Howard--that an absolute and final termination from a managerial position followed by the offer of an inferior position may be a termination of employment for purposes of the Act--that rule is inapplicable in the instant case. Here, Clark was never terminated from his employment with Eagle nor did he resign. In fact, he reported to work the following morning and worked as a utility person until several months later when he became disabled and was no longer able to perform his duties.

Section 39-2-904, MCA, requires that there must be a termination of employment before the Act applies. In determining when the statute of limitations begins to run under the Act, this Court stated that termination of employment has been defined to mean " 'a complete severance of the relationship of employer and employee by positive act on the part of either or both.' " Allison v. Jumping Horse Ranch (1992), 255 Mont. 410, 412-13, 843 P.2d 753, 755 (quoting Edwards v. Equitable Life Assurance Soc. (1944), 296...

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