Herberholt v. dePaul Community Health Center

• Decision Date: 08 September 1981
• Docket Number: No. 62628,62628
• Citation: 625 S.W.2d 617
• Parties: 94 Lab.Cas. P 55,349 Lawrence A. HERBERHOLT, Plaintiff-Appellant, v. dePAUL COMMUNITY HEALTH CENTER, a corporation, Defendant-Respondent.
• Court: Missouri Supreme Court

Page 617

625 S.W.2d 617

94 Lab.Cas. P 55,349

Lawrence A. HERBERHOLT, Plaintiff-Appellant, v. dePAUL COMMUNITY HEALTH CENTER, a corporation, Defendant-Respondent.

No. 62628.

Supreme Court of Missouri, En Banc.

Sept. 8, 1981.

Rehearing Denied Dec. 14, 1982.

David M. Duree, St. Louis, for plaintiff-appellant.

Rexford Caruthers and Richard Watters, St. Louis, for defendant-respondent.

John Ashcroft, Atty. Gen., Jan Bond, Asst. Atty. Gen., Jefferson City, for intervenor.

Michael D. Gordon and Marsha J. Murphy, Kansas City, Clyde E. Craig, St. Louis, James W. Gallaher, Jefferson City, Lawrence A. Rouse, Paul E. Donnelly and Charles W. German, Kansas City, for amicus curiae.

PER CURIAM.

Pursuant to Rule 83.02, the Eastern District of the Court of Appeals transferred the within cause to this Court that it might consider, again, the constitutionality of the so-called "service letter statute" (§ 290.140, RSMo 1978). ¹

The appeal by plaintiff, now appellant, is from the trial court's entry of a judgment notwithstanding the verdict or in the alternative a new trial in an action for noncompliance with § 290.140 (Count I) and directed verdicts in actions for libel (Count II) and slander (Count III).

Appellant is a graduate electrical engineer with several years experience. On January 29, 1976, he was employed by dePaul Community Health Center as director of maintenance for a five building medical complex then being constructed by the latter. As of the date of hiring, two of the buildings were substantially complete and were considered "on-line" facilities. They were (1) St. Anne's Nursing Home and (2) the power plant. The interviewing and actual hiring of appellant was by one Felix McKeown, the owner's technical representative who had the primary responsibility for monitoring construction and ensuring full performance of all construction contracts.

At the commencement of his employment, appellant was charged with the task of pursuing corrections to any and all nonconforming systems and equipment at St. Anne's and the energy center. All discovered defects were recorded on a "punch list" and appellant either made the correction himself with his crew, or referred the job to the original vendor or installer if the defective condition was covered by a warranty. The same action was taken with regard to defects arising during the operation of the buildings subsequent to their acceptance. Appellant testified that he discovered numerous design or construction defects that McKeown should have discovered.

Sometime during the summer of 1976 respondent contacted Southwestern Bell Telephone Company (Bell) to investigate the possibility of prewiring the hospital building then under construction. Bell stated that while it typically did not prewire commercial accounts, it would in this instance if respondent provided complete and accurate drawings showing where the telephones were to be located and the position of walls wherein the wiring conduits would be placed. Respondent assured Bell that such plans would be provided. At this time, respondent already had retained Comtrol, Inc., a communications consultant, to recommend a phone system for the hospital. In the preparation of the plans to be given Bell, discrepancies between Comtrol's plans and the design and development plans (DD drawings) were discovered. McKeown instructed appellant to transpose Comtrol's drawings onto the DD drawings and appellant did so. The new drawings were then given to Bell representatives.

It developed that because of significant design changes, the new drawings were inaccurate. Bell notified McKeown of this problem and repeated its request for accurate

plans. As the installation of the phone system fell into McKeown's realm of responsibility, he scheduled meetings with various medical department heads to finalize their system requirements and update the plans. Numerous other meetings and contacts were also made between McKeown and Bell. The record makes clear that the phone problem was significant and difficult. In August revised plans were again submitted to Bell; but, as before, they were incomplete and inaccurate

On September 13, a Bell representative, Ken Leeker, met with appellant and McKeown's secretary. Leeker brought a list of deficiencies in the plans that would have to be corrected before Bell could complete the installation. McKeown arrived later and became upset about all the defects and then left. Early on the morning of September 14, Bob Schiller of Fruin-Colnon, the managing contractor, called appellant and asked about progress on the phone problem. Appellant apparently told him of the events of the September 13 meeting. Appellant testified that shortly thereafter, McKeown berated him for giving incorrect information regarding the phone problem to Walter Zimmerman, Schiller's superior, and terminated appellant's employment. McKeown then offered appellant one month to find other employment and said that he would provide appellant with a recommendation. Appellant performed his job until October 1 when McKeown told him to get off the job site immediately. Appellant received a check paying him through October 13, 1976, and a check for accrued vacation time.

Appellant filed his written request for a service letter on October 4, and the text of the letter received is as follows:

On Tuesday, September 14, I advised you of your termination and gave you one month's notice and you were informed that time could be taken to seek employment elsewhere. However, due to your abuse of this privilege, I elected to cease your services on October 1, 1976, but you were paid through October 13, as well as receiving payment for accrued vacation benefits.

Your employment was terminated by the undersigned because of the following reasons:

1. Your inability to supervise and advantageously utilize the time of your employees.

2. Your statement to me that you were weak in the area of Electrical Engineering in spite of the fact that you have an Electrical Engineering degree.

3. For quite a period of time you complained about the performance of some people who worked for you and did nothing about it until I told you not to use them as an excuse and to terminate them and then you only terminated one of them.

4. Your explosive reaction during the Professional Office Building "key" incident when you were requested to pick up a key to the Professional Office Building and hang it in a conspicious place in the Energy Center to be used only in an emergency. Your response was a verbal tirade suggesting that this was only the "tip of the iceberg" that some mysterious force was conspiring to saddle you with the total maintenance of the Professional Office Building after I repeatedly told you this would not happen.

5. Your constant complaining about the mechanical, electrical and architectural systems in St. Anne's and the Energy Center despite the fact that on numerous occasions I informed you that deviations from the original specs were required because of budgetary limitations.

6. You did not, of course, direct or guide the Energy Center employees because they had many years of hospital boiler-room experience compared to your 7 or 8 months and they conversely could and did train and educate you in the operation of the plant.

7. You did demonstrate your ability to threaten people, cases in point being the Garratt-Callahan Chemical employees who you threatened to throw bodily out of your office and became extremely vocal with them. Your words to me on

your departure were that I wouldn't find a rock big enough to hide under to escape physical abuse rendered by you. All of this was said in the presence of witnesses

8. Normal activities that you were requested to perform became "crises" items and you found innumerable reasons to blow them all out of proportion, and I could never understand your sense of priorities.

9. You complained about the engineers in the Energy Center being disrupted in their work by outside requests and used as an example that while performing some menial task they received a phone call to push a button to start the fire pump which takes all of five seconds.

10. Your personality and negative attitude were not compatible with the personnel in this Office.

This letter was signed by Felix McKeown in his capacity as Owner's Technical Representative.

Thereafter, appellant filed suit sounding in three counts. Count I alleged a violation of the service letter statute in that respondent, acting by and through its employee and agent Felix McKeown, failed to provide a letter stating the "true reason" for his discharge. Count II alleged that the contents of the letter were libelous and defamatory. Count III alleged that McKeown, appellant's supervisor, made defamatory and slanderous statements about him.

The trial court sustained respondent's Motion(s) for Directed Verdict on Counts II and III at the close of appellant's evidence. Count I was submitted to the jury which returned a verdict for appellant of $15,000 actual damages and $100,000 punitive damages. Upon motion, the court entered a judgment notwithstanding the verdict in respondent's favor. (A conditional order was entered also providing that if the entry of judgment n. o. v. was reversed on appeal, respondent's Motion for New Trial would be sustained on the question of damages only unless appellant remitted $11,825 actual damages and $50,000 punitive damages.)

COUNT I

Appellant's theory of the case was that he was fired because of the "telephone incident" and discovering and divulging several construction and design defects that McKeown should have discovered and not for the reasons given.

We do dispose, preliminarily, of one issue first raised on appeal, i.e., that the service letter statute does not and was never intended to apply to not-for-profit corporations such as respondent. The argument is predicated upon two ideas: first, not-for-profit corporations do not "do...