Coors Brewing Co. v. Floyd, 97SC821

Decision Date11 January 1999
Docket NumberNo. 97SC821,97SC821
Parties14 IER Cases 1232, 1999 CJ C.A.R. 155 COORS BREWING COMPANY, Petitioner, v. David J. FLOYD, Respondent.
CourtColorado Supreme Court

Hall & Evans, L.L.C., Daniel R. Satriana, Steven M. Gutierrez, Denver, Colorado, Attorneys for Petitioner

Cheryl Redmond Doyle, Denver, Colorado, Eugene F. Tardy, Lakewood, Colorado, Attorneys for Respondent

Arckey & Reha, L.L.C., Thomas J. Arckey, Jeffrey Menter, Littleton, Colorado, Sander N. Karp, Julie Berquist, Denver, Colorado, Attorneys for Amicus Curiae Plaintiff Employment Lawyers Association

Justice BENDER delivered the Opinion of the Court.

In this case, we decide whether the court of appeals correctly reversed the trial court's dismissal of two of David Floyd's tort claims against his former employer, the Coors Brewing Company (Coors). We hold that Floyd failed to state a claim for intentional infliction of emotional distress by outrageous conduct because Coors's alleged behavior does not rise to the high level of outrageous conduct required under our case law. We also hold that Floyd failed to state a claim for wrongful discharge in violation of public policy because he did not allege that he refused to participate in the illegal conduct. Therefore, on these two issues, we reverse the court of appeals decision, Floyd v. Coors, 952 P.2d 797 (Colo.App.1997), and we remand this case with instructions that the court of appeals return the case to the trial court for dismissal of these two claims.

I. FACTS

Because this case concerns the adjudication of a motion to dismiss for failure to state a claim, our recitation of the facts is a distillation of the relevant allegations in Floyd's complaint. We emphasize that these "facts" are merely allegations and that by reciting them here, we make no assessment of their truthfulness. Indeed, for the purposes of this case, we are required to accept Floyd's allegations as true.

Floyd worked as an investigator in the Security Department at Coors from March 1977 until October 1992, when he was fired. Beginning in 1984, acting on instructions from senior executives at Coors, Floyd performed surreptitious narcotics investigations of Coors employees. Coors's in-house legal counsel consented to Floyd and other Coors employees undertaking these investigations.

In November 1987, Coors's outside legal counsel advised Coors not to participate in these investigations because of unwarranted legal risks, including the potential for civil rights litigation against Coors. Despite this advice, Coors conspired with its outside legal counsel to continue these investigations and to conceal Coors's involvement in them. Thus, Coors and its outside legal counsel devised a scheme to launder Coors funds to be used in the investigations by means of fraudulent billing for legal services through the law firm. Over the course of several years, some $266,000 was laundered through the law firm for the purposes of funding the investigations. The purpose of this laundering scheme was to circumvent Coors's internal policies and to conceal Coors's disbursement of funds for the investigations.

In November 1987, an attorney from the law firm advised Floyd that the "best" drug investigations for Coors to be involved with were those that could not be traced to Coors. This lawyer and a senior Coors executive directed Floyd to "bury" evidence of the drug investigations.

In August 1992, Coors executives met and planned Floyd's termination in order to protect themselves from liability for their orchestration of the drug investigations and related money-laundering scheme. That month, one of these executives, who was also Floyd's supervisor, ordered Floyd to provide an accounting for $288,000 worth of expenses related to investigations that had taken place over a period of seven years. Floyd and another Coors security officer spent an entire week reconstructing the seven years of expenses. The supervisor rejected the accounting provided without explanation.

In October 1992, senior Coors executives fired Floyd for these stated reasons: improprieties with a female employee, failure to account for company funds, and misuse of company funds. Floyd alleges that these reasons were pretextual and that the real reason Coors executives fired him was to cover up their own misconduct by making it appear that Floyd was solely responsible for the illegal investigations. Floyd claims that Coors's actions were intentional and that as a result he suffered substantial and serious emotional distress.

Assuming Floyd's factual allegations to be true, the trial court granted Coors's motion to dismiss for failure to state a claim with respect to Floyd's claim for intentional infliction of emotional distress by outrageous conduct and his claim for wrongful discharge in violation of public policy.

The court of appeals reversed both rulings. See Floyd, 952 P.2d at 804-05. The court of appeals held that the trial court's dismissal of Floyd's outrageous conduct claim was in error because reasonable people could disagree about whether the series of acts alleged by Floyd was outrageous. See id. at 804. Regarding the public policy claim, the court of appeals ruled that by claiming that his supervisors fired him in order to conceal their own illegal conduct, Floyd stated a cognizable claim for wrongful discharge in violation of public policy. See id. at 805.

We granted certiorari on the following issues: (1) whether the trial court erred in dismissing Floyd's fifth claim for relief for alleged outrageous conduct based upon the allegations of Floyd's complaint; and (2) whether the trial court erred in dismissing Floyd's sixth claim for relief for wrongful discharge in violation of public policy against Coors at the pleading stage.

II. APPELLATE REVIEW OF A MOTION TO DISMISS UNDER RULE 12(b)(5)

Before addressing each of Floyd's claims, we briefly note that we accept the claims of the complaint as true and construe them in the light most favorable to Floyd.

The trial court granted Coors's motion to dismiss Floyd's claims under C.R.C.P. 12(b)(5). This rule is designed to allow defendants to "test the formal sufficiency of the complaint." Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 911 (Colo.1996). In evaluating a Rule 12(b)(5) motion, courts may consider "only those matters stated in the complaint." Abts v. Board of Educ., 622 P.2d 518, 522 n. 5 (Colo.1980). A trial court must accept all allegations of material fact as true and view the allegations in the light most favorable to the plaintiff. See Dorman, 914 P.2d at 911. Such motions "are viewed with disfavor, and a complaint is not to be dismissed unless it appears beyond doubt that the plaintiff cannot prove facts in support of the claim that would entitle the plaintiff to relief." Id. When reviewing cases involving a trial court's ruling on a motion to dismiss pursuant to Rule 12(b)(5), we apply these same standards. See id.

III. OUTRAGEOUS CONDUCT

In Colorado, to state a claim for intentional infliction of emotional distress by outrageous conduct, a plaintiff must allege behavior by a defendant that is extremely egregious. Here, we hold that Floyd fails to meet that high standard as a matter of law.

Before permitting a plaintiff to present a claim for outrageous conduct to the jury, the trial court must initially rule on the threshold issue of whether the plaintiff's allegations of outrageous conduct are sufficiently outrageous as a matter of law: "Although the question of whether conduct is outrageous is generally one of fact to be determined by a jury, it is first the responsibility of a court to determine whether reasonable persons could differ on the question." Culpepper v. Pearl St. Bldg., Inc., 877 P.2d 877, 883 (Colo.1994). Here, the trial court found that reasonable people could not differ on the question of whether Coors's alleged conduct was outrageous, but the court of appeals disagreed.

To begin our analysis of this issue, we turn to basic principles of law regarding the tort of intentional infliction of emotional distress by outrageous conduct. In Rugg v. McCarty, 173 Colo. 170, 176, 476 P.2d 753, 756 (1970), we approved the definition of this tort as set out in the Restatement (Second) of Torts § 46 (1965): "One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm." Id. We applied the Restatement's commentary to hold that the level of outrageousness required for conduct to create liability for intentional infliction of emotional distress is extremely high: "Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Id.

In Cronk v. Intermountain Rural Elec. Ass'n, 765 P.2d 619, 621 (Colo.App.1988), the Colorado Court of Appeals decided a case analogous to this one in which several plaintiffs alleged claims for outrageous conduct and for wrongful discharge in violation of public policy. In that case, one plaintiff alleged that he was fired because he asked for a transfer since he could not support the policies of his supervisor, who was directing him to engage in illegal practices, while another plaintiff alleged that he was fired for giving truthful testimony to the Public Utilities Commission during their investigation of these illegal practices. See id. The court of appeals held that even though the plaintiffs' wrongful discharge claims were sufficient to survive summary judgment, as...

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