Garrity v. Overland Sheepskin Co. of Taos, 22181

• Decision Date: 29 May 1996
• Docket Number: No. 22181,22181
• Citation: 121 N.M. 710,1996 NMSC 32,917 P.2d 1382
• Parties: , 132 Lab.Cas. P 58,154 Joan GARRITY, Dawn Garrity Wood, and Troy Garrity, Plaintiffs-Appellants, v. OVERLAND SHEEPSKIN COMPANY OF TAOS, a New Mexico corporation, Overland Outfitters, Inc., an Iowa corporation, Overland Sheepskin, a New Mexico corporation, and James Leahy, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 1382

917 P.2d 1382

121 N.M. 710, 132 Lab.Cas. P 58,154

Joan GARRITY, Dawn Garrity Wood, and Troy Garrity Plaintiffs-Appellants, v. OVERLAND SHEEPSKIN COMPANY OF TAOS, a New Mexico corporation, Overland Outfitters, Inc., an Iowa corporation, Overland Sheepskin, a New Mexico corporation, and James Leahy, Defendants-Appellees.

No. 22181.

Supreme Court of New Mexico.

May 29, 1996.

[121 N.M. 711] Aarons Law Firm, P.C., Stephen D. Aarons, Santa Fe, for Appellants.

Herrera, Long & Pound, P.A., John B. Pound, Santa Fe, for Appellees.

OPINION

FROST, Chief Justice.

1. This appeal involves what are essentially two separate claims arising out of a similar employment background. The first claim is by Joan Garrity and her daughter Dawn Garrity Wood (the Garritys) against Overland Outfitters, Inc. (Overland Outfitters), for wrongful discharge and breach of contract. The second claim is a personal injury suit brought by Joan Garrity's son Troy Garrity (Troy) against Overland Sheepskin Company of Taos, Inc. (Overland Sheepskin). We will address both these claims in turn.

I. FACTS

2. Overland Sheepskin is a corporation owned by James and Leslie Leahy that controls and operates a chain of retail stores selling sheepskin coats, animal pelts, clothing, and various other leather and fur products. Joan, Dawn, and Troy all worked as sales staff in Overland Sheepskin's Santa Fe store. On February 28, 1991, Overland Sheepskin sold its Santa Fe store to Overland Outfitters, a national retail organization. Overland Outfitters continued to operate the Santa Fe store in the same manner as Overland Sheepskin had done. As part of the sales agreement, James Leahy, who owned the building that houses the Santa Fe store, agreed to lease the property to Overland Outfitters.

A. The Garritys' Claim

3. Shortly after Overland Outfitters purchased the Santa Fe store in February 1991, it brought in Bruce Davis as the new store manager. Davis retained the Garritys as sales staff for Overland Outfitters and raised their pay. The Garritys allege that they noticed Davis exhibiting unusual behavior shortly after he began working at the Santa Fe store. They allege that he would frequently retire to a room in the back of the store, which he used as his apartment, and when he emerged he acted aggressively and erratically. They also allege that, on one occasion, Troy's friend looked through a partially opened office door and observed Davis sniffing a white powdery substance. Shortly following this incident, Joan Garrity phoned Leslie Leahy, who was acting as the Santa Fe contact for Overland Outfitters, and reported her suspicions that Davis was using illegal drugs. Leslie Leahy agreed to notify the owner of Overland Outfitters. One week later, on April 4, 1991, Davis fired the Garritys. The Garritys then sued for breach of employment contract and wrongful discharge.¹ After the Garritys presented their case in chief, the trial court granted Overland Outfitters' motion for a directed verdict.

B. Troy's Claim

4. Troy alleges that, after the February sale of the Santa Fe store to Overland Outfitters, James Leahy continued to ship truckloads of exotic animal pelts from Overland Sheepskin's warehouse in Taos to the Santa Fe store. Troy was responsible for loading, unloading, and inventorying many of these shipments. Troy states that one of these shipments included a decomposing bear pelt, which he was instructed to return to Taos.

5. Troy contends that on approximately March 18, 1991, he contracted a debilitating illness. In April 1991 Overland Outfitters fired Troy. About one year later, Troy learned from an infectious disease specialist that he had likely contracted chronic brucellosis. Brucellosis is a rare, incurable, bacterial disease endemic among wild animals and domesticated sheep. The disease is not contagious between humans, but humans can contract the disease from direct exposure to the blood or tissue of infected animals. The specialist indicated that Troy had probably contracted the disease from handling the animal pelts.

6. Troy filed a complaint with the Workers' Compensation Division against Overland Outfitters, his employer at the time he alleged that he contracted the disease. Troy settled his workers' compensation claim against Overland Outfitters for $50,000. As part of the settlement, the parties executed a release that applied directly to Overland Outfitters, but also included Overland Sheepskin, Troy's former employer, as a predecessor in interest of Overland Outfitters. Troy then sued Overland Sheepskin as supplier and consignor of the suspectedly diseased pelts and James Leahy in his role of landlord of the premises. The trial court granted summary judgment in favor of Overland Sheepskin, holding that Troy released his claim against Overland Sheepskin when he released Overland Outfitters.²

7. The Garritys and Troy appeal from the trial court's judgments. We affirm the trial court as to the Garritys' claims and reverse and remand as to Troy's personal injury claim.

II. THE GARRITYS' WRONGFUL DISCHARGE CLAIMS

8. The trial court granted Overland Outfitters' motion for directed verdict against the Garritys on their claims for breach of employment contract and retaliatory discharge. On appeal from a grant or denial of a motion for a directed verdict, we view the facts and all reasonable inferences in the light most favorable to the party resisting the motion. Gonzales v. Surgidev Corp., 120 N.M. 133, 145, 899 P.2d 576, 588 (1995); Bourgeous v. Horizon Healthcare Corp., 117 N.M. 434, 437, 872 P.2d 852, 858 (1994).

A. The Garritys' Employment Contract Claim

9. The Garritys first argue that they were fired in violation of an oral employment contract. This argument is without merit. Neither Joan Garrity nor Dawn Garrity Wood testified that Davis or Overland Outfitters ever offered the Garritys an employment contract. The Garritys' also did not allege at trial that Davis or Overland Outfitters even made any promises to them that they could be fired only for just cause. Dawn Garrity Wood did testify that she had a general feeling that if she did good work, she would always have a job at Overland Outfitters.

10. However, a vague impression or general feeling of continued employment is not sufficient to create an employment contract.

The general rule in New Mexico is that an employment contract is for an indefinite period and is terminable at the will of either party unless the contract is supported by consideration beyond the performance of duties and payment of wages or there is an express contractual provision stating otherwise.

Hartbarger v. Frank Paxton Co., 115 N.M. 665, 668, 857 P.2d 776, 779 (1993), cert. denied, --- U.S. ----, 114 S.Ct. 1068, 127 L.Ed.2d 387 (1994). Courts have allowed an exception to the at-will employment rule when there is an implied contract arising out of an employer's promise not to fire an employee except for just cause. Id. However, we will not find an implied contract for cases in which "the alleged promise by the employer [is] not sufficiently explicit." Id. at 669, 857 P.2d at 780.

11. To bolster their claim, the Garritys point out that Overland Outfitters had a written personnel policy which they argue created an implied contract. However, Overland Outfitters first published this personnel policy in August 1991, four months after Overland Outfitters fired the Garritys. The Garritys, however, rely on a statement made by Davis in his deposition. After being asked whether he may have communicated the terms of the personnel policy to the Garritys in March 1991, Davis replied: "I don't recall having done that. It's not unlikely that I did mention [it]." This statement, upon which the Garritys place much significance, is equivocal at best. However, even if we assume that this statement could give rise to the inference that Davis promised to abide by the terms of the written personnel policy, we conclude that this policy did not create an implied employment contract.

12. The written personnel policy of August 1991 expressly provided that Overland Outfitters "reserve[d] the right to terminate any employee without notice for any reason (as long as such termination is not in violation of law)." As we explained in Hartbarger: "An implied contract is created only where an employer creates a reasonable expectation. The reasonableness of expectations is measured by just how definite, specific, or explicit has been the representation or conduct relied upon." Id. at 672, 857 P.2d at 783. Given the express reservation of the right to terminate an employee for any reason, Overland Outfitters' written personnel policy cannot be said to have created any reasonable expectation of an implied contract. See id. at 672-75, 857 P.2d at 783-86 (rejecting implied contract claim under similar circumstances). Accordingly, we conclude that the Garritys were at-will employees without an employment contract either express or implied.

B. The Garritys' Retaliatory-Discharge Claim

13. The Garritys next argue that, even if they did not have an employment contract, they still were improperly terminated. They allege that Overland Outfitters fired them for reporting the illegal activities of the store manager, which firing, they argue, violates public policy and gives rise to a tort claim for retaliatory discharge.

14. New Mexico first recognized the tort of retaliatory discharge in Vigil v. Arzola, 102 N.M. 682, 686-90, 699 P.2d 613, 617-21 (Ct.App.1983), rev'd in part on other grounds, 101 N.M. 687, 687 P.2d 1038 (1984), overruled in part on other grounds by Chavez v. Manville Prods. Corp., 108 N.M. 643, 649, 777 P.2d 371, 377 (1989). In Vigil, the Court of Appeals noted that, traditionally, employers could fire at-will employees for good cause, no cause, or even for reasons that were morally suspect. Id. at 686, 699 P.2d at 617. However, this strict policy created harsh results that were sometimes contrary to the...