Cole v. Valley Ice Garden, 03-729

• Decision Date: 05 May 2005
• Docket Number: No. 03-729,03-729
• Parties: DAVID G. COLE, Plaintiff, Respondent and Cross-Appellant, v. VALLEY ICE GARDEN, L.L.C., VALLEY ICE GARDEN MANAGEMENT, L.L.C., and WILLIAM MARTEL, Defendants and Appellants.
• Court: Montana Supreme Court

2005 MT 115

327 Mont. 99

113 P.3d 275

DAVID G. COLE, Plaintiff, Respondent and Cross-Appellant, v. VALLEY ICE GARDEN, L.L.C., VALLEY ICE GARDEN MANAGEMENT, L.L.C., and WILLIAM MARTEL, Defendants and Appellants.

No. 03-729

Supreme Court of Montana.

Submitted on Briefs: April 6, 2005

Decided: May 5, 2005

For Appellants: Richard J. Andriolo, Esq., Andriolo & Refling PLLC, Bozeman, Montana; Donald C. Robinson, Esq. and Ronald A. Thuesen, Esq., Poore, Roth & Robinson, P.C., Butte, Montana.

For Respondent: Monte D. Beck, Esq., Beck, Richardson & Amsden, PLLC, Bozeman, Montana.

Justice Patricia O. Cotter delivered the Opinion of the Court.

¶ 1 Valley Ice Garden, L.L.C. and Valley Ice Garden Management, L.L.C. (hereinafter collectively referred to as VIG) and William Martel (Martel) appeal the judgment of the Eighteenth Judicial District Court, Gallatin County, that the termination of Plaintiff David G. Cole (Cole) as the hockey coach for the Bozeman Ice Dogs (the Ice Dogs) was without cause. We reverse and remand.

¶ 2 This Court issued its original Opinion in this case on February 9, 2005. Valley Ice Garden filed a Petition for Rehearing on February 24, 2005. Cole filed his Objections to the Petition for Rehearing on March 9, 2005. In its Petition, VIG correctly argued that this Court applied the wrong standard of review in its February 9 decision. On April 6, 2005, we issued an Order withdrawing our February 9, 2005, Opinion. We replace it with this superceding Opinion.

¶ 3 The standard of review this Court applies in appellate cases identifies the level of deference we must accord a district court's decision. When a district court judge is presented with and resolves conflicting evidence, we review the district court's factual findings to determine whether they are supported by substantial credible evidence and whether they are clearly erroneous. We typically explain that this deferential standard is warranted because the decision-maker, i.e., the district court judge in this example, is present throughout the course of the trial, and is able to analyze first-hand the demeanor and credibility of each witness. State v. Spina, 1999 MT 113, 294 Mont. 367, 982 P.2d 421; State v. Whiteman, 2005 MT 15, 325 Mont. 358, 106 P.3d 543 (The trier of fact resolves conflicts in the evidence before it, and this Court will not reevaluate this same evidence on appeal). See generally Kelly Kunsch, Standard of Review (State and Federal): A Primer, 18 Seattle U. L. Rev. 11, 13-14 (1994).

¶ 4 Conversely, when we have before us review of a district court's grant or denial of a summary judgment motion, we review de novo, meaning "anew." We apply the non-deferential de novo standard because of the nature of a summary judgment. A summary judgment is "a judgment granted on a claim about which there is no genuine issue of material fact and upon which the movant is entitled to prevail as a matter of law." Black's Law Dictionary, Seventh Edition (1999). In other words, the parties are not arguing over what happened or presenting conflicting evidence; they merely need to know which of them, under the uncontested facts, is entitled to prevail under the applicable law. In such a case, the district court judge need not weigh evidence, choose one disputed fact over another, or assess credibility of the witnesses. He or she must identify the applicable law, apply it to the uncontroverted facts, and determine who wins the case. On appeal, the reviewing court has access to the same facts and can put itself in the same position as the district court judge when reviewing his or her purely legal rulings. If, after a de novo review, we determine that a district court's legal conclusion is correct, we will affirm. On the other hand, if we conclude that the district court's legal ruling is incorrect, we will reverse.

¶ 5 In our original decision, we incorrectly stated that the District Court's determination that VIG's termination of Cole's employment was without cause was a "finding of fact." As a result, we applied the deferential "clearly erroneous" standard. However, the District Court's determination of this issue was a legal conclusion based on uncontested facts and issued in the form of a summary judgment. As a result, we should have reviewed the court's conclusion de novo. In this case, the absence of issues of fact and application of the appropriate standard of review makes all the difference. Our application in this superceding Opinion of the non-deferential standard of review leads us to reverse the District Court's conclusion that Cole's termination from employment was made "without cause."

ISSUE

¶ 6 VIG presents five issues on appeal and Cole presents two issues on cross-appeal. We conclude the dispositive issue is whether the District Court erred in concluding that Cole was terminated without cause.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 7 In June of 1997, Martel purchased the Ice Dogs, a Junior A, American West Hockey League team. Because of the time in the season that Martel purchased the Ice Dogs, he needed to find a coach immediately. Hence, Martel met with and ultimately hired Cole as the Head Coach and General Manager of the Ice Dogs.

¶ 8 Martel asked Cole to draw up an employment agreement, which Cole did after consulting an attorney. The applicable portion of this employment agreement stated:

TERM: That the term of this Agreement shall be five (5) years, commencing on the 1st day of June 1997, and continuing thereafter, uninterrupted, unless employee is terminated for cause. In the event of the termination of employee for other than cause, employee shall receive one (1) full calendar year salary and a bonus equal to that paid to him for the preceding year.

¶ 9 The above-quoted provision of the agreement was subsequently amended in March 1998 to add the following:

Further, the term of this Agreement shall automatically renew, so as to have five (5) years remaining, each year on the 1st day of June, unless employer notifies employee in writing prior to the 1st day of May of that Year of the non-renewal.

Cole's annual base salary was fixed at $50,000.00.

¶ 10 The 1997-1998 hockey season was fairly successful, but the following 1998-1999 season was not. The Ice Dogs ended that season with a record of 18 wins, 35 losses, and 7 ties. The Ice Dogs did not qualify for the playoffs, Cole did not receive any performance bonuses, and the game attendance declined to approximately 1,000 fans per game.

¶ 11 Thereafter, during the off-season and at Cole's suggestion, Martel expended substantial sums of money in an effort to improve the team. In particular, Martel increased his recruitment efforts; entered the Ice Dogs in pre-season tournaments and in games in Canada; and hired a goalie coach and a new trainer. Despite these efforts, the 1999-2000 season again started out poorly, with the Ice Dogs winning one game and losing six.

¶ 12 On October 3, 1999, Martel terminated Cole due to the Ice Dogs' poor performance. Martel then told Cole that because he had cause to fire him, he felt he was not obligated to provide him severance pay. However, Martel did offer Cole $15,000 in severance pay, which Cole accepted. When Cole arrived to pick up his check, Martel asked him to sign a release from liability form, which Cole declined to sign. Cole then sought the advice of an attorney, and thereafter requested that Martel provide him with a written statement regarding his reasons for terminating him. Martel complied with Cole's request.

¶ 13 After receiving Martel's explanation, Cole brought an action for breach of the employment contract and for breach of the implied covenant of good faith and fair dealing. Cole filed a motion for partial summary judgment. VIG also filed a motion for summary judgment. The District Court denied VIG's motion, and it granted Cole's motion as to liability, holding, in part, that Cole was terminated without cause. Subsequently, a bench trial was held as to damages and Cole's bad faith claim.

¶ 14 Ultimately, the District Court determined that VIG did not violate the covenant of good faith and fair dealing; that the liquidated damages clause in the employment agreement was void because Cole's damages were both certain and ascertainable; that Cole's damages included lost wages and fringe benefits based on a five-year term of employment; and that the evidence concerning Cole's INS Visa status was inadmissable in that it was irrelevant, speculative, and not pled in VIG's Answer to Cole's Complaint. The District Court then calculated Cole's damages, accepting the viability of certain damage claims while rejecting others, and awarded damages to Cole in the sum of $199,193.00.

¶ 15 VIG now appeals the District Court's judgment, and Cole cross-appeals.

STANDARD OF REVIEW

¶ 16 Our standard of review in summary judgment appeals is de novo. We use the same standards used by the trial court: first, whether issues of material fact exist and, if not, whether the moving party is entitled to judgment as a matter of law. In cases such as this one, where the parties agree on the facts, we review only the district court's legal conclusion that a party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Mesa Communications v. Yellowstone County, 2002 MT 73, ¶ 11, 309 Mont. 233, ¶ 11, 45 P.3d 37, ¶ 11 (citation omitted).

DISCUSSION

¶ 17 Did the District Court err in concluding that Cole was terminated without cause?

¶ 18 The facts relevant to the question of whether Cole was fired for cause are undisputed. VIG fired Cole from his job for unsatisfactory job performance. The contract Cole drafted allowed for certain payments to be made to him in the event he was terminated for "other than cause." "Cause" was not defined in the contract. The District Court was therefore required to determine whether discharge for an unsatisfactory job performance constituted sufficient "cause" for discharge, so as to relieve VIG of...