Crenshaw v. Bozeman Deaconess Hosp., 84-128

• Decision Date: 06 December 1984
• Docket Number: No. 84-128,84-128
• Citation: 213 Mont. 488,693 P.2d 487,41 St.Rep. 2251
• Parties: , 118 L.R.R.M. (BNA) 2075, 104 Lab.Cas. P 55,590 Shirley CRENSHAW, Plaintiff and Respondent, v. BOZEMAN DEACONESS HOSPITAL, Edwin E. Dahlberg, Administrator and Russell Nielsen, Defendants and Appellants.
• Court: Montana Supreme Court

Page 487

693 P.2d 487

213 Mont. 488, 118 L.R.R.M. (BNA) 2075,

104 Lab.Cas. P 55,590

Shirley CRENSHAW, Plaintiff and Respondent, v. BOZEMAN DEACONESS HOSPITAL, Edwin E. Dahlberg, Administrator and Russell Nielsen, Defendants and Appellants.

No. 84-128.

Supreme Court of Montana.

Submitted Sept. 27, 1984.

Decided Dec. 6, 1984.

Berg, Coil, Stokes & Tollefsen, Ben E. Berg, Jr. argued, Bozeman, for defendants and appellants.

Goetz, Madden & Dunn, James Goetz argued, Bozeman, for plaintiff and respondent.

HARRISON, Justice.

Bozeman Deaconess Hospital appeals from a judgment on a jury verdict entered by the District Court of the Eighteenth Judicial District of the State of Montana, in and for the County of Gallatin, in favor of respondent, Shirley Crenshaw, on her claims for relief from the termination of her employment.

On December 1, 1981, Crenshaw commenced employment with the Hospital as a respiratory therapist. Prior to that time, she had been employed by an independently operated respiratory therapy department which contracted services to the Hospital. The department was purchased by the Hospital on December 1, 1981. Crenshaw worked for the Hospital until January 8, 1982, at which time she took a leave of absence until February 8, 1982. After returning to work, Crenshaw was employed until March 12, 1982, when she was discharged.

Subsequent to the take-over of the respiratory department by the Hospital, two orientation meetings were held with employees of the respiratory therapy department. The employees were given information regarding salaries, benefits and formal orientation. The employees were given a personnel policy manual. A provision in the manual provided: "You are on probation during the first 500 hours of employment. Any employee may be discharged without notice during the probationary period." Both parties concur that Crenshaw had not completed the 500 hours of probationary status at the time of her discharge on March 12, 1982.

The immediate dispute began in the late hours of March 11, 1982. Three nurses on duty in the intensive care unit complained to their supervisor, Terry Knoble. A meeting was held between Terry Knoble, the three nurses, Russell Nielsen, the personnel director, and Bill Kirtley, the acting head of the respiratory therapy department. Following the meeting, a discharge memorandum was prepared directing Crenshaw's discharge. The discharge document charged Crenshaw with:

"Insubordination;

"disrupting the continuity of care;

"continually getting in the way of patient care;

"disorderly conduct;

"unsatisfactory work performance;

"violation of safety and/or health rules; and

"breach of confidentiality."

The testimony reveals, on the night of March 11, 1982, Crenshaw was not at home when the Hospital attempted to reach her at 10:30 p.m. That evening Crenshaw had been visiting a former patient. Crenshaw's husband telephoned her to tell her that the Hospital had called. Crenshaw telephoned the Hospital and was told that she would be needed at the Hospital later that evening. Crenshaw immediately departed to the Hospital. The former patient's daughter, Berna-Dean Hennessey, drove her to the Hospital. Hennessey remained at the Hospital for a number of hours. Related to Hennessey's presence, the discharge document charged Crenshaw with "breach of confidentiality." The Hospital contends a breach of confidential information resulted when Hennessey accompanied Crenshaw to the Hospital lab. While Crenshaw ran a separate errand, Hennessey waited for a blood-gas report and delivered it to the ICU. Crenshaw contends the report was not readily comprehensible to a lay person. Hennessey testified:

"(a) she did not examine the contents of the slip, (b) that upon arriving at the intensive care unit she put her hand inside the curtain and handed the slip to someone tending to patient care, and (c) that she did not at any time view the patient."

The "insubordination" charge stemmed from the nurses' allegation that Crenshaw attempted to perform ABG's (arterial blood gases). This fact is disputed not only by Crenshaw, but by the nurses and doctors present. There is question as to whether or not Hospital policy forbid respiratory therapists from doing ABG's.

The discharge document also accused Crenshaw of not performing "the respiratory therapy task of suction as needed." Again there was a dispute as to whether suctioning was called for. The nurses testified that the suctioning should have been performed for the sake of appearance of the patient. However, one of the physicians testified that suctioning was not required "that it could have been a waste of time ... with the disconnection of the ventilator necessary to suction the patient."

The three nurses present during the shift, also charged that Crenshaw was disrupting the continuity of patient care. As a result, Crenshaw was accused of "endangering patient well-being." The nurses testified that Crenshaw repeatedly answered the telephone, read electrocardiogram monitors and distracted the nurses by commenting on the irregular cardiac display on the monitors. The testimony regarding this allegation is in conflict. Two physicians present during the controversial shift testified that they found nothing deficient about Crenshaw's performance. Also, one of the nurses in attendance during part of the shift, confirmed that there was no misbehavior on Crenshaw's part. Finally, the discharge document states that Crenshaw had been subject to previous verbal counselings. It was established at the trial, however, that this was false and that Crenshaw had not been subject to previous disciplinary action by the Hospital.

The following morning, Crenshaw was called into the Hospital. Crenshaw was given the disciplinary discharge document and was advised to see the administrator the following Monday. On Monday, March 15, 1981, Crenshaw met with the administrator, Edwin Dahlberg. He informed her that he would review the matter, the administrator conducted interviews of those present in the intensive care unit during the morning in question. The administrator affirmed the discharge in a letter to Shirley Crenshaw, dated March 15, 1981. Crenshaw contends that the administrator failed to interview all of the staff members, even though he was aware that they had been present during the controversial shift and that the charges were strongly contested.

After her discharge, Crenshaw applied for unemployment compensation benefits. Crenshaw alleges the Hospital informed the Bozeman Job Service indicating that she had been discharged for unsatisfactory performance and for endangering patient well-being. As a result, Crenshaw was unable to procure employment in the medical community in Bozeman. She encountered difficulties because of a lack of references from her previous employer. In January, 1983, she and her husband were forced to close his construction business and move to Spokane. After two months of job seeking she has been employed part-time and full-time at various jobs.

Crenshaw contends the Hospital acted with malice: (1) by lodging and sustaining false charges against her; and (2) by tampering with her personnel file. Crenshaw claims a certificate authorizing her to perform arterial blood gases was removed from the file.

Crenshaw filed the present action on December 10, 1982, alleging that she had been wrongfully discharged from her employment with Bozeman Deaconess Hospital and sought damages under several theories. Crenshaw alleged the Hospital breached the implied covenant of good faith and fair dealing. She further alleged the actions of appellants were negligent and were malicious and/or in wanton and/or in willful disregard of her rights entitling her to exemplary damages. The complaint was amended to include a fourth count alleging a separate tort in violating the duty of good faith owed to her. A jury trial was held on November 28, 1983. The jury found for Crenshaw and awarded her $125,000 in compensatory damages and exemplary damages in the amount of $25,000.

The issues raised on appeal are as follows:

(1) Whether an at-will probationary employee is covered by the implied covenant of good faith and fair dealing.

(2) Whether the record sustains a separate action based on negligence.

(3) Whether the trial court abused its discretion in permitting an expert witness to testify on the question of breach of duty on either wrongful discharge or fair dealing.

(4) Whether the award of punitive damages upon a finding of negligence and/or breach of implied covenant of good faith and fair dealing was proper.

The Hospital submits that the covenant of good faith and fair dealing does not apply to a probationary employee, and that the trial court erred in giving an instruction as such.

The court gave the following instruction over the Hospital's objection:

"Instruction 14. You are instructed that Bozeman Deaconess Hospital, ... may classify certain of its employees as probationary employees and these employees may be discharged if they do not measure up to the Hospital standards during the probationary period. However, even these employees are owed a duty of good faith and fair dealing and the Hospital must comply with its written policies concerning these employees."

The court refused the Hospital's proposed instructions no. 41 and no. 42 which consecutively stated:

"Instruction 41. You are instructed that plaintiff Shirley Crenshaw was a probationary employee of defendant Bozeman Deaconess Hospital and that the purpose of a probationary status is to provide a brief period in which to measure the employee's ability to perform her job before granting her a degree of job security. If the employer feels that the employee is not measuring up during this probationary period, it can dismiss that employee without procedural due process.

"Instruction 42. You are instructed that if you find from the evidence that plaintiff Shirley Crenshaw was a...