Howard v. Conlin Furniture No. 2, Inc.

• Decision Date: 21 August 1995
• Docket Number: No. 94-528,94-528
• Citation: 272 Mont. 433,52 St.Rep. 814,901 P.2d 116
• Parties: , 130 Lab.Cas. P 57,973, 10 IER Cases 1642 Dean HOWARD, Plaintiff and Appellant, v. CONLIN FURNITURE NO. 2, INC., a Montana corporation.
• Court: Montana Supreme Court

Page 116

901 P.2d 116

272 Mont. 433, 130 Lab.Cas. P 57,973,

10 IER Cases 1642

Dean HOWARD, Plaintiff and Appellant, v. CONLIN FURNITURE NO. 2, INC., a Montana corporation.

No. 94-528.

Supreme Court of Montana.

Submitted on Briefs March 30, 1995.

Decided Aug. 21, 1995.

Michael G. Eiselein, Lynaugh, Fitzgerald, Eiselein & Eakin, Billings, for appellant.

T. Thomas Singer, Moulton, Bellingham & Mather, Billings, for respondent.

TRIEWEILER, Justice.

The plaintiff, Dean Howard, filed a complaint and an amended complaint in the District Court for the Thirteenth Judicial District in Yellowstone County in which he alleged that he had been wrongfully discharged from his employment by the defendant, Conlin Furniture No. 2, Inc. (Conlin). In response to Conlin's motion for summary judgment, the District Court concluded that Howard failed to raise genuine issues of material fact, and that Conlin was entitled to judgment dismissing Howard's complaint as a matter of law. Howard appeals from the District Court's order and judgment. We reverse the judgment of the District Court.

The issue on appeal is whether the District Court erred when it granted Conlin's motion for summary judgment.

FACTUAL BACKGROUND

Paul Gunville is the president of 16 Conlin furniture stores, including stores in Montana, each of which is individually incorporated. In 1990, Gunville recruited Dean Howard from Baers Furniture to work for Conlin's store in Billings. Howard began to work as Conlin's manager on September 4, 1990, and was paid a salary in the amount of $50,000 annually, plus a commission. On May 4, 1992, Gunville evaluated Howard's performance as manager to that date by concluding that: "Dean has brought strength in leadership and great management tools with an underlying desire to be and teach success. Dean will only get better as his experience in mdse. and general furniture business increases." He concluded by stating that Howard's potential for advancement in the company is "outstanding."

In late 1992, Gunville hired Robert Anderson from Rhodes Furniture Store in Atlanta, Georgia, to work as a district supervisor for four of his stores in Montana. Anderson began work in Billings in January 1993.

Anderson took over Gunville's role as Howard's supervisor.

Before Anderson left Atlanta, Doug Sahr, who also worked for Rhodes, asked Anderson to keep Sahr in mind for positions that might become available.

After Anderson began work for Conlin, he telephoned Sahr to determine whether he was interested in a position as a manager. Anderson testified that he may have telephoned Sahr in March 1993. Howard produced telephone records that indicated several telephone calls were made from the Conlin No. 2 store in Billings to Sahr's home telephone number, as well as to Rhodes Furniture Stores in Atlanta, in February and March 1993. During that same month, Anderson began to record written complaints regarding Howard's performance.

On May 20, 1993, Howard was terminated from his position as a store manager and then offered a sales position at a salary of $1000 per month, plus a commission opportunity. He was not first advised of the areas in which he was deficient and given an opportunity to improve his performance. Sahr replaced Howard shortly after Howard was terminated as manager.

On June 28, 1994, Conlin moved the District Court to dismiss Howard's complaint by summary judgment for the reasons that he was neither actually nor constructively discharged and that there were legitimate business reasons for his demotion. The District Court agreed. It held that Howard's rejection of the sales job was, at best, a constructive discharge, but that Howard failed to offer evidence that working conditions would have been intolerable. It also held that Conlin offered evidence of reasonable job related grounds for demotion, and that Howard's alleged reasons were conclusory and speculative.

DISCUSSION

Did the District Court err when it dismissed Howard's complaint by summary judgment?

This Court reviews an order granting summary judgment based on the same criteria applied by the district court pursuant to Rule 56, M.R.Civ.P. Hagen v. Dow Chemical Co. (1993), 261 Mont. 487, 491, 863 P.2d 413, 416 (citing Minnie v. City of Roundup (1993), 257 Mont. 429, 431, 849 P.2d 212, 214). Summary judgment is an extreme remedy and should not be granted if there is any genuine issue of material fact; a summary judgment procedure should never be substituted for a trial if a material factual controversy exists. Hagen, 863 P.2d at 416 (citing Rule 56(c), M.R.Civ.P.; Cereck v. Albertson's, Inc. (1981), 195 Mont. 409, 637 P.2d 509; Reaves v. Reinbold (1980), 189 Mont. 284, 615 P.2d 896).

A party seeking summary judgment has the burden of establishing a complete absence of any genuine factual issues. Hagen, 863 P.2d at 416 (citing D'Agostino v. Swanson (1990), 240 Mont. 435, 442, 784 P.2d 919, 924). In light of the pleadings and the evidence before the court, there must be no material issue of fact remaining which would entitle a nonmoving party to recover. Hagen, 863 P.2d at 416 (citing Marriage of Hoyt (1985), 215 Mont. 449, 454, 698 P.2d 418, 421). Once the movant has presented evidence to support his or her motion, the party opposing summary judgment must present material and substantial evidence, rather than mere conclusory or speculative statements, to raise a genuine issue of material fact. Hagen, 863 P.2d at 416 (citing B.M. by Berger v. State (1985), 215 Mont. 175, 179, 698 P.2d 399, 401). Finally, all reasonable inferences that might be drawn from the offered evidence should be drawn in favor of the party who opposed summary judgment. Hagen, 863 P.2d at 416 (citing Cereck, 637 P.2d at 511).

In its order, the District Court recognized that Howard alleged that he was discharged, or constructively discharged, from his employment. However, in its discussion, the court stated that the issue was whether Conlin created an intolerable employment situation within the meaning of § 39-2-903(1), MCA, when Conlin demoted Howard. The District Court concluded that Howard did not raise genuine issues of fact which would preclude summary judgment because Howard's support for the notion that his demotion was a pretext to hire Sahr consisted only of conclusory and speculative statements. Because Conlin supported its reasons for demoting Howard with several job-related incidents, the court concluded that the demotion could be based on reasonable job-related grounds and a logical relationship to the needs of the business. The court also stated that it considered Howard's claim for actual discharge to be marginal, at best, and focused its analysis on Howard's claim for constructive discharge.

Howard argues that the District Court erred because it focused on constructive discharge. Howard claims that Anderson admitted he was discharged from his position as store manager, which is not the equivalent of a voluntary termination because of an intolerable working condition.

Conlin contends that Howard was demoted, not discharged. Conlin also claims that we should affirm the District Court's decision because this Court has upheld a discharge motivated by legitimate business reasons when the plaintiff presents only conclusory allegations. Finstad v. Montana Power Co. (1990), 241 Mont. 10, 29, 785 P.2d 1372, 1383.

Section 39-2-904(2), MCA, states that a discharge is wrongful only if: "the discharge was not for good cause and the employee had completed the employer's probationary period of employment...." The term "discharge" includes

constructive discharge ... and any other termination of employment, including resignation, elimination of the job, layoff for lack of work, failure to recall or rehire, and any other cutback in the number of employees for a legitimate business reason.

Section 39-2-903(2), MCA. "Good cause" is defined as "reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer's operation, or other legitimate business reason." Section 39-2-903(5), MCA.

The first sub-issue we must decide is whether Howard was discharged, or merely demoted, following which he resigned. In that regard, the statement made by Anderson to the Billings Job Service in response to Howard's application for benefits, speaks for itself. He stated:

(1) Dean Howard was discharged from the position of store manager on the date noted.

(2) At that time he was offered a sales position at Conlin's. That offer was declined by Mr. Howard on 5/25/93.

This case does not involve a lateral transfer, nor a minor change in job description. This case involves absolute and final termination from a managerial position, followed by an offer of employment in a functionally different, and substantially inferior, position with the same employer. To hold, as Conlin suggests, that termination of employment in a position that pays over $50,000 per year, and subsequently offering a position which pays less than 25 percent of that amount, is not "a termination of employment" would ignore the plain language of the Act and allow circumvention of the Act's damage provisions which are based on wages at the time of termination. Section 39-2-905, MCA.

Howard was informed that he was being terminated as Conlin's manager. He was then offered a subordinate position among the sales staff he previously managed. His refusal to accept an offer of a lesser position, at best, affects his duty to mitigate his damages. We conclude that when Howard was terminated from his managerial position, he was discharged from employment within the meaning of § 39-2-903(2), MCA, of Montana's Wrongful Discharge From Employment Act.

The second sub-issue is whether Howard's termination was for good cause as a matter of law, or whether there was a factual issue to be decided.

The only formal evaluation of Howard's work as manager of the Conlin's Furniture Store was the...