Crawford Rehabilitation Services, Inc. v. Weissman

• Decision Date: 09 June 1997
• Docket Number: No. 95SC451,95SC451
• Citation: 938 P.2d 540
• Parties: 134 Lab.Cas. P 58,270, 12 IER Cases 1671, 21 Colorado Journal 799 CRAWFORD REHABILITATION SERVICES, INC., a Georgia corporation; and Crawford & Company, a Georgia corporation, Petitioners, v. Susan WEISSMAN, Respondent.
• Court: Colorado Supreme Court

Page 540

938 P.2d 540

134 Lab.Cas. P 58,270, 12 IER Cases 1671,

21 Colorado Journal 799

CRAWFORD REHABILITATION SERVICES, INC., a Georgia corporation; and Crawford & Company, a Georgia corporation, Petitioners, v. Susan WEISSMAN, Respondent.

No. 95SC451.

Supreme Court of Colorado En Banc.

June 9, 1997.

Kutak Rock, Mark L. Sabey, Melvin B. Sabey, Denver, for Petitioners.

Royce Edward Tolley, Denver, for Respondent.

Holme, Roberts & Owen, LLC, John R. Webb, Adrian Miller, Denver, for Amicus Curiae Colorado Association of Commerce and Industry.

Thomas A. Feldman, Denver, Barry D. Roseman, Denver, Feiger, Collison & King, P.C., Joan M. Bechtold, Denver, Roman & Benezra, L.L.C., John A. Culver, Denver, Jeffrey Menter, Englewood, for Amicus Curiae Plaintiff Employment Lawyers Association.

Charles T. Passaglia, Denver, for Amicus Curiae Mountain States Employers Council, Inc.

Justice KOURLIS delivered the Opinion of the Court.

This case arises out of the termination of Susan Weissman by her former employer, Crawford Rehabilitation Services, Inc., and its successor, Crawford and Company, Inc. (collectively, Crawford). Weissman sued Crawford alleging causes of action for breach of implied contract, promissory estoppel, outrageous conduct, and wrongful discharge. During the course of discovery Crawford learned that Weissman had made fraudulent misrepresentations on her application for employment with Crawford. In Weissman v. Crawford Rehabilitation Services, Inc., 914 P.2d 380 (Colo.App.1995), the court of appeals concluded that the evidence of Weissman's resume fraud ¹ could bar her claims for breach of implied contract and promissory estoppel if Crawford reasonably relied on Weissman's misrepresentations at the time it hired her. However, in reliance upon McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995), the court of appeals also held that the after-acquired evidence that Weissman fraudulently completed her application for employment could be used as only a limited defense to the claim for wrongful discharge. The court of appeals remanded the claims to the trial court for further proceedings.

We granted certiorari to review certain aspects of the court of appeals opinion. We now adopt the after-acquired evidence doctrine and hold that evidence of Weissman's resume fraud completely bars her claims for promissory estoppel and breach of implied contract. We conclude that Weissman failed to state a cognizable claim for wrongful discharge and therefore do not reach the scope of the application of the after-acquired evidence doctrine to wrongful discharge claims. We reverse the court of appeals and remand with instructions to reinstate the trial court's decision dismissing Weissman's claims.

I.

Plaintiff Susan Weissman was employed as a clerical typist by Crawford for approximately eighteen months, from July 1988 until January 1990. On January 25, 1990, Weissman asked permission to take a personal holiday on Monday, January 29. Crawford alleges that this request was in contravention of its policy requiring employees to schedule personal holidays two weeks in advance. Weissman's supervisor denied the request, but Weissman stated her intention to take the day off anyway. On January 26, Weissman was absent from work without permission.

Crawford alleges that on January 26 it made the decision to terminate Weissman based on her insubordination in declaring her intent to take a personal holiday after her request had been denied and her unexcused absence on January 26. Crawford's Denver office requested Weissman's final paycheck on the 26th and the home office in Atlanta issued the check on that date. Consistent with her stated plans, Weissman did not report for work on January 29, and Crawford discharged her when she did return to work on January 30, 1990.

Following her termination, Weissman filed a complaint against Crawford stating causes of action for breach of implied contract, promissory estoppel, outrageous conduct, and wrongful discharge, seeking compensatory and punitive damages. ² The claims for breach of implied contract and promissory estoppel were based on the assertion that Crawford breached its duty to adhere to termination procedures set forth in an employee's manual that was in effect during the period of Weissman's employment with Crawford. In the claim for outrageous conduct, Weissman asserted that Crawford's reliance upon too many unexcused absences as a ground for termination was outrageous when in fact Crawford knew that her termination occurred for other reasons.

Weissman's claim for wrongful discharge related to a dispute between Weissman and the manager of Crawford's Denver office, Leonard Francois, regarding the number of breaks Weissman was entitled to take. Weissman believed that in addition to her lunch, restroom, and drink breaks, she was also entitled to rest breaks in the morning and afternoon. After Francois instructed Weissman that she was not entitled to take the rest breaks, Weissman telephoned the Division of Labor of the Department of Labor and Employment (the division) to inquire whether Crawford could eliminate those breaks. Weissman claims that a division representative informed her that Crawford could not deny her the rest breaks. Weissman then notified Francois of her conversation with the division representative and continued to take the rest breaks. There is no information in the record as to when the call or the conversation took place. In her complaint, Weissman alleged that Crawford terminated her in retaliation for her telephone call to the division and that this conduct violated her legal rights and the public policy of the State of Colorado and the United States.

Finally, Weissman alleged that she was entitled to punitive damages because Crawford's conduct was attended by circumstances of fraud, malice, and a wanton disregard for her rights and feelings.

On July 21, 1992, before Crawford responded to the complaint, it deposed Weissman. During that deposition, Crawford discovered that Weissman had made fraudulent misrepresentations on her application for employment with Crawford. Specifically, Weissman admitted that she failed to disclose one of her previous employers, which employer had discharged her and with whom she had been engaged in litigation regarding wrongful termination.

On her application, Weissman listed three previous employers. She indicated that she had worked full-time for the second of the three, Kirk Advertising, during the period from 1980 to 1985, ³ and she listed William Kirkhuff as her supervisor. Weissman then signed the application directly beneath the following statement: "The information I am presenting in this application is true and correct to the best of my knowledge, and I understand that any falsification or misrepresentation herein could result in my discharge in the event that I am hired by Crawford & Company." In addition, as part of the process of applying for a job with Crawford, Weissman was required to fill out an application for a fidelity bond. On the fidelity bond application, Weissman listed the same three previous employers and indicated that she had never been discharged from any employment.

Prior to hiring Weissman, Crawford contacted Kirkhuff and received an excellent recommendation, but did not contact either of the other previous employers. Based in part on Kirkhuff's recommendation, Crawford hired Weissman.

In her deposition on July 21, 1992, Weissman admitted that, contrary to her representations on the employment and bond applications, from 1980 to 1985 she had worked full-time for the Association of Operating Room Nurses (AORN), ⁴ and that she was discharged from her employment there. In a subsequent deposition, on August 19, 1992, Weissman admitted that she only worked for Kirk Advertising on a part-time basis, some weeks working there two to three hours and some weeks not working there at all. ⁵

In her July deposition, Weissman stated that she did not list her employment with AORN on the application documents because she did not want to give AORN as a reference. In her August deposition, Weissman testified that she did not list AORN as a previous employer because she believed she was prohibited from doing so by the terms of a release she signed with AORN ⁶ and because she "knew [she] would never get a job if [she] put [AORN] down." ⁷ Weissman did not testify that she believed that the release prohibited her from truthfully answering the question on the fidelity bond application as to whether she had ever been terminated from prior employment. The only explanation Weissman offered as to why she misrepresented her employment with Kirk Advertising as full-time was because she did not want to list AORN as a reference.

On July 31, 1992, Crawford filed a motion to dismiss. In the motion Crawford argued that the employment relationship between Crawford and Weissman was induced by Weissman's fraud and thereby voidable. ⁸ Crawford also argued that Weissman could not pursue equitable remedies because she had unclean hands; that she was not entitled to maintain a claim for wrongful discharge because the employment relationship was void; and that her claim for wrongful discharge was not based on a valid public policy. Finally, Crawford argued that none of the actions alleged by Weissman met the threshold test for outrageous conduct. On September 11, 1992, Crawford filed a supplemental brief arguing that the after-acquired evidence of resume fraud barred Weissman's claims. On December 16, 1992, Crawford filed a second motion to dismiss arguing that Weissman's claim for outrageous conduct was barred by the exclusivity provisions of the Workmen's Compensation Act of Colorado.

On September 24, 1993, after considering both of Crawford's motions to dismiss and the briefs in support thereof, as well as Weissman's responses, and the affidavits and exhibits submitted...