Decker v. Browning-Ferris Industries of Colorado, Inc.
| Decision Date | 13 January 1997 |
| Docket Number | BROWNING-FERRIS,Nos. 95SC252,95SC253,s. 95SC252 |
| Parties | 134 Lab.Cas. P 58,289, 12 IER Cases 804, 21 Colorado Journal 39 Thomas H. DECKER, Petitioner, v.INDUSTRIES OF COLORADO, INC., Respondent. Jose CASTILLO, Petitioner, v.INDUSTRIES OF COLORADO, INC., Respondent. |
| Court | Colorado Supreme Court |
Stefan Kazmierski, Littleton, for Petitioners.
McNamara Law Firm, P.C., John N. McNamara, Jr., James D. Kilroy, Denver, and Baker & Hostetler, James A. Clark, Kathryn A. Elzi, Denver, for Respondent.
Barry D. Roseman, Denver, for Amicus Curiae Plaintiff Employment Lawyers Association.
In Decker v. Browning-Ferris Industries of Colorado, Inc., 903 P.2d 1150 (Colo.App.1995), and Castillo v. Browning-Ferris Industries of Colorado, Inc., No. 93CA1428 (Colo.App. Jan. 12, 1995) (), the court of appeals determined, inter alia, that plaintiffs-petitioners Thomas H. Decker (Decker) and Jose Castillo (Castillo) could not recover damages in tort from their employer, defendant-respondent Browning-Ferris Industries of Colorado, Inc. (BFI), for breach of an express covenant of good faith and fair dealing because no such tort exists in Colorado in the employment context. The court of appeals also remanded both cases to the trial court for new trials on damages because it could not determine from the special verdict forms and instructions on damages whether the juries had based their awards on the tort claims. Having granted certiorari to review the propriety of the court of appeals' decisions, we affirm in part, reverse in part, and remand the cases to the court of appeals with directions.
In June 1985, Decker obtained a position as a trash removal truck driver's helper with BFI. Decker was hired by Anthony Vagneur (Vagneur), the manager of BFI's Aspen, Colorado, district (the Aspen District), and was assigned to work in that district. In 1985, Decker earned a wage of $7.75 per hour.
Decker was subsequently promoted to the position of trash removal truck driver, which position Decker held for approximately five years. Decker received each pay increase for which he was eligible during his employment with BFI. In 1990, Vagneur wrote a letter to Decker informing Decker that he would receive a "discretionary" $400 bonus, congratulating Decker "on having a successful winter season with BFI," and stating that BFI appreciated Decker's work. The letter contained a statement that BFI "look[ed] forward to a long and lasting relationship" with Decker.
Vagneur was Decker's immediate supervisor until January 1991, when BFI discharged Vagneur and replaced him with Gerald P. Vandervelde (Vandervelde). In August 1991, Vandervelde terminated Decker's employment for the stated reason that Decker worked too slowly. At this time Decker earned a wage of $11.50 per hour.
After his discharge from BFI, Decker obtained employment for a period of time as a truck driver for a newspaper company, earning $95 per day without benefits. Decker subsequently opened a restaurant using retirement funds accumulated during his employment at BFI as well as money borrowed from family members. At the time of trial, the restaurant was not profitable.
Castillo was hired by Vagneur in 1989 as a trash removal truck driver's helper for BFI in BFI's Aspen district. During the course of his employment, Castillo was promoted to the position of driver and received approximately five pay raises. In 1990 Castillo received a letter from Vagneur congratulating Castillo on a "successful winter season with BFI," expressing BFI's appreciation for Castillo's work, informing Castillo of his entitlement to a "discretionary" $400 bonus, and containing a statement that BFI looked forward to a "long and lasting relationship" with Castillo.
In May 1991, Castillo broke his ankle while performing duties at BFI and reported the injury to BFI's workers' compensation physician. Castillo ultimately received workers' compensation benefits for this injury. In June 1991, Castillo obtained permission from his physician to return to BFI with the restriction that he perform only light duties. In August 1991 Vandervelde terminated Castillo's employment on the stated ground that Castillo was working too slowly.
After his employment at BFI was terminated, Castillo twice underwent surgery on his ankle. In December 1992, he worked for ten days as a dishwasher at a restaurant. He obtained a full-time position with another company in March 1993, earning a wage of $8.00 per hour with no benefits. At the time of trial, Castillo was still employed by that company.
In early 1992, Decker and Castillo filed separate civil actions in the trial court against BFI. Because both Decker and Castillo were represented by the same counsel and had been discharged under similar circumstances from their employment with BFI, their complaints were identical in many respects. Decker and Castillo alleged, inter alia, that they had been discharged in violation of a progressive disciplinary policy adopted by Vagneur--a claim for wrongful discharge which sounded in contract. 1 Decker and Castillo subsequently filed amended complaints against BFI which contained an additional claim of "breach of covenant of good faith and fair dealing" based on alleged express promises by BFI management that they would be treated fairly. Although the amended complaints characterized this as a contract claim, the amended complaints requested compensatory, noneconomic and punitive damages with respect to this claim.
Castillo's action was tried first. At trial, Vagneur testified that he had personally promised to treat Castillo fairly. During the instruction conference, BFI objected to the instructions and special verdict forms which would permit the jury to award punitive damages on the breach of covenant of good faith and fair dealing claim. BFI argued that this claim sounded in contract, and punitive damages are not available for a breach of contract. The trial court held that while the covenant of good faith and fair dealing may have had its origins in contract law, its breach constituted a tort and could thus properly support an award of punitive damages. Aside from this one objection to the submission of punitive damages, BFI raised no other objection concerning the covenant of good faith and fair dealing claim, either as to the instruction defining its elements or to the special verdict form which permitted the jury to award damages for "inconvenience and emotional stress" in the event of its breach. At closing arguments, neither party made any distinction between contract and tort theories concerning the claim for breach of express covenant of good faith and fair dealing, but merely discussed whether BFI had breached its promises of fair treatment to Castillo.
The jury returned a verdict in favor of Castillo and against BFI. The jury determined that BFI had adopted a personnel policy concerning discipline and termination and had breached that policy. The jury also determined that BFI had promised fair treatment to Castillo in its employment decisions and had breached that promise as well. The jury awarded Castillo $33,500 in damages for lost income, determined that BFI's breach of covenant of good faith and fair dealing was attended by circumstances of willful and wanton conduct by BFI, and awarded Castillo punitive damages in the amount of $11,500. The jury did not award Castillo damages for inconvenience or emotional stress. BFI did not file any post-trial motions.
With respect to Decker's claims, BFI expressly stipulated at trial that it had promised to treat Decker fairly. BFI also raised the same objections concerning punitive damages that it had raised in Castillo's case, and the trial court likewise denied them for the same reasons. The parties similarly never raised the contract/tort distinction before the jury, but merely discussed whether BFI had breached its promises of fair treatment to Decker. The jury returned a verdict in favor of Decker and against BFI on the breach of disciplinary policy and breach of covenant of good faith and fair dealing claims. As in Castillo's case, the jury found that BFI had terminated Decker in violation of both its progressive disciplinary policy and its express promise of fair treatment. The jury also found that BFI had willfully and wantonly breached its promises of good faith and fair dealing. The jury awarded Decker $600,000 in damages for lost income, $80,000 in damages for inconvenience and emotional stress, and an additional $680,000 in punitive damages on the claim of breach of covenant of good faith and fair dealing.
BFI filed post-trial motions which focused largely on the matter of the punitive damage award. BFI adopted the trial court's characterization of the covenant of good faith and fair dealing claim as a tort, and stipulated that the claim had been tried as a tort. BFI argued that Colorado did not recognize a tort claim for breach of an express covenant of good faith and fair dealing in the employment context. Decker asserted that although in Farmer v. Central Bancorporation, Inc., 761 P.2d 220, 221-22 (Colo.App.1988), the court of appeals determined that no tort claim may be based on an implied covenant of good faith and fair dealing in the employment context, no Colorado appellate court had addressed the question of whether a tort claim for breach of an express covenant of good faith and fair dealing may be viable in the employment context. Decker argued that such a tort claim was analogous to the tort claim of breach of the implied covenant of good faith and fair dealing available in the context of insurance law. See, e.g., Travelers Ins. Co. v. Savio, 706 P.2d 1258, 1273-74 (Colo.1985). The trial court denied BFI's post-trial motions for the reasons stated in Decker's opposition brief.
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