Graves v. Iowa Lakes Community College

• Decision Date: 24 January 2002
• Docket Number: No. 99-0863.,99-0863.
• Parties: Kathleen A. GRAVES, Appellant, v. IOWA LAKES COMMUNITY COLLEGE, Linda Wiegman, Tom Herbst, and Dale Simon, Appellees.
• Court: Iowa Supreme Court

639 N.W.2d 22

Kathleen A. GRAVES, Appellant, v. IOWA LAKES COMMUNITY COLLEGE, Linda Wiegman, Tom Herbst, and Dale Simon, Appellees.

No. 99-0863.

Supreme Court of Iowa.

January 24, 2002.

Victoria L. Herring, Des Moines, for appellant.

Stephen F. Avery of Cornwall, Avery, Bjornstad & Scott, Spencer, for appellee.

NEUMAN, J.

After an auspicious beginning, the employment relationship between a community college and a project coordinator soured and failed. This suit was brought to sort out the employee's claims that the college and its administrators were responsible and liable for her discharge. All parties have appealed but we think the trial court's rulings were correct and therefore affirm.

I. Background Facts and Proceedings.

The suit was brought on a number of theories, though not all reached jury consideration, and only one resulted in a modest recovery. Important facts were hotly disputed but, in view of our holding, they will be recited and considered in accordance with the plaintiff's version. Balmer v. Hawkeye Steel, 604 N.W.2d 639, 640-41 (Iowa 2000).

Plaintiff Kathy Graves began working for defendant Iowa Lakes Community College at its Estherville campus in September 1994 as coordinator for the Women Work project. This new grant-funded project was designed to provide unemployed, low-income women with the personal and employment skills necessary to return to the work force. As the first coordinator, Graves was responsible for creating the program from scratch. She wrote curriculum, enlisted program presenters and recruited eligible participants. She originally worked part-time under the supervision of the project's director, defendant Linda Wiegman. Wiegman's direct supervisor was defendant Dale Simon, dean of the college's Estherville campus. Defendant Tom Herbst was the college's director of human resources.

The first eight-week program seems to have been a resounding success. Wiegman gave Graves a highly favorable evaluation and offered her a position for the 1995-96 fiscal year, elevating her compensation from an hourly wage to a contracted amount. The success of the initial program led to additional ones, carrying substantial grants over a two-year period.

The relationship between Graves and Wiegman, however, did not flourish. According to Graves' showing, Wiegman intruded into her personal affairs by "counseling" her how to "recover" from a recent divorce, urging her to focus exclusively on her work and to avoid starting a new relationship. Graves nevertheless believed her performance continued to be exemplary. Wiegman's subsequent unsatisfactory evaluations were not made known to her, either in writing or orally. Although the defendants offered sharply conflicting testimony, we assume these uncommunicated negative evaluations were calculated to make Graves a scapegoat when failures by other employees led to difficulty in complying with guidelines required for continued funding of the program. Throughout the winter and spring of 1996, Wiegman documented concerns about Graves and discussed these concerns with Simon. But Graves insists she was never told of any problems or complaints.

At a meeting on April 9th, Wiegman gave Graves a written copy of her recent highly negative evaluation, which ranked her performance as unsatisfactory in all areas. Simon gave Graves a memo informing her that her contract would not be renewed and that she was no longer employed after that date. The memo also directed her not to have any contact with "agencies, clients, and staff that have been involved in the [Women Work] program" for the remainder of the contract period.

Graves was shocked at this turn of events, claiming she had no idea there were problems with her performance. She believed that even if Wiegman no longer wanted her to work as the program coordinator there were other positions at Iowa Lakes for which she was qualified and should have been considered. She filed a grievance pursuant to Iowa Lakes' employee handbook. Herbst responded by letter, indicating Wiegman's decision not to renew her contract was justified. Herbst told Graves he had discussed his conclusion with the college president who agreed with his decision. The grievance decision process was over and Graves commenced this suit.

Graves sued the defendants for negligent supervision, defamation, tortious breach of contract, interference with prospective business advantage and breach of contract. A jury found Iowa Lakes liable for breach of contract, awarding Graves no actual damages but granting $1200 in nominal damages. The jury also awarded punitive damages against the individual defendants, but the district court vacated this award and, because of evident confusion over the instructions, ordered a new trial on damages for breach of contract. This appeal by Graves and cross-appeal by the defendants followed.

II. Issues on Appeal.

A. Negligent supervision. A count in negligent supervision against Herbst and Simon survived a pretrial motion but was dismissed at the close of evidence. In assigning dismissal of this claim as error, Graves relies on our holding in Godar v. Edwards, 588 N.W.2d 701, 709 (Iowa 1999) in which we recognized a cause of action for negligent hiring as well as for negligent supervision and retention. Our decision in Godar rested on Restatement (Second) of Agency section 213, which would permit a third party claim against an employer who breached a duty of reasonable care in the supervision and retention of an employee who posed a threat to the public. Graves would have us extend such an action beyond injuries inflicted on a third party, to also include those inflicted upon another employee.

There is some support for such an expansion, but it does not extend to cases such as this where there are no physical injuries. Bruchas v. Preventive Care, Inc., 553 N.W.2d 440, 442 (Minn.Ct.App. 1996) (allowing recovery by fellow employee for negligent supervision but only for physical injuries); see Piper Jaffray Cos. v. Nat'l Union Fire Ins. Co., 967 F.Supp. 1148, 1157 (D.Minn.1997)

(no recovery for negligent supervision based solely on economic loss); Sibley v. Kaiser Found. Health Plan, 998 S.W.2d 399, 403-04 (Tex. Ct.App.1999) (recovery for negligent supervision extends only to physical injuries). Because Graves does not assert any physical injury it is unnecessary for us to decide whether a negligent supervision claim is available to a fellow employee. Theisen v. Covenant Med. Ctr., Inc., 636 N.W.2d 74, 82-83 (Iowa 2001). Therefore, we affirm the dismissal of Graves' claim.

B. Interference with prospective business relationships. Graves' separate claim for tortious interference with a business relationship was dismissed on a pretrial motion. At the close of evidence she sought to have it reinstated and assigns error in the trial court's refusal to do so.

Graves' showing on this claim goes no further than a routine claim for breach of contract. Lacking is the essential element for this intentional tort: an improper purpose on defendants' part "to financially injure or destroy the plaintiff." Fischer v. UNIPAC Serv. Corp., 519 N.W.2d 793, 800 (Iowa 1994). We think the dismissal was correct.

C. Defamation. Graves' defamation claim was rejected by the jury. She claims she was slandered by false comments Wiegman made to program participants and others in the community about her performance as program coordinator. One woman testified Wiegman told her Graves left Iowa Lakes because she no longer wanted to work at the college. Another participant stated Wiegman told her a state grant monitor reviewed the program files and, upon finding errors or incomplete reporting, demanded that Graves be terminated as program coordinator. There was no evidence that either of these statements was true.

In submitting the claim, the trial court adopted Iowa Civil Jury Instruction 2100.2, which, after listing the other requirements for recovery, requires a showing that the statements "injure the plaintiff in the maintenance of her occupation." Graves' challenge is to this jury instruction. She contends the word "injure" should have been changed to "affect," the word we used in Lara v. Thomas, 512 N.W.2d 777, 785 (Iowa 1994). In Lara this court defined statements which are slanderous per se as "attack[s] on the integrity and moral character of a party," and "imputations affecting a person in his or her business, trade, [or] profession." Lara, 512 N.W.2d at 785 (emphasis added). Graves contends that but for the use of "injure" rather than "affect" in the jury instruction, the jury would have found Wiegman's statements slanderous per se.

Our use of the word "affect" in Lara was not intended to allow recovery in a defamation action where there is no injury. Spoken words are actionable as slander because they injure a person's reputation and good name. Id. There must be some harm to a person's reputation. This requirement is suggested by the use of the word "injured" in uniform instruction 2100.2 and Restatement (Second) of Torts sections 570 and 573 (1977). Section 570(6) states spoken defamatory matter is actionable without any showing of special harm if it imputes to its victim "matter incompatible with his business, trade, profession, or office, as stated in section 573 ..." Restatement (Second) of Torts § 570(6), at 186. Slanderous statements affecting a business or occupation "ascribe[] to another conduct, characteristics or a condition that would adversely affect his fitness for the proper conduct of his lawful business...." Id. § 573, at 191 (emphasis added). Such concepts of harm to reputation are not conveyed by mere use of the word "affect."

The word "affect" in Lara should be understood to connote an injury by way of being adversely affected. The court committed no error by submitting the uniform instruction.

D. Appeal and cross-appeal on order for new trial on damages. The jury found for Graves on her breach of...