Jeffers v. Convoy Co., Civ. No. 4-85-1574.

• Decision Date: 03 June 1986
• Docket Number: Civ. No. 4-85-1574.
• Citation: 636 F. Supp. 1337
• Parties: Jay JEFFERS, Plaintiff, v. CONVOY COMPANY, an Oregon corporation, C. Dennis McCorkle, individually, and Edward Vaughn, individually, Defendants.
• Court: U.S. District Court — District of Minnesota

636 F. Supp. 1337

Jay JEFFERS, Plaintiff, v. CONVOY COMPANY, an Oregon corporation, C. Dennis McCorkle, individually, and Edward Vaughn, individually, Defendants.

Civ. No. 4-85-1574.

United States District Court, D. Minnesota, Fourth Division.

June 3, 1986.

James H. Kaster, Minneapolis, Minn., for plaintiff.

Robert E. Cattanach, and Michael J. Vanselow, Oppenheimer, Wolff, Foster, Shepard & Donnelly, St. Paul, Minn., for defendants.

MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

Plaintiff Jay Jeffers originally brought this action in Ramsey County District Court against Convoy Company (Convoy), C. Dennis McCorkle, and Edward Vaughn, alleging defamation, violations of Minn. Stat. §§ 181.75 and 181.76, breach of contract, negligent and intentional infliction of emotional distress, fraud and misrepresentation, and breach of an implied covenant of good faith and fair dealing. The action was subsequently removed to this court pursuant to 28 U.S.C. § 1441. The matter is now before the court upon defendants' motion for dismissal, or alternatively, for summary judgment on all counts except for part of Count II.

I. Background

The facts pertinent to this motion have been taken from each side's submissions. For purposes of this motion, the court will accept plaintiff's version where the two accounts diverge. Plaintiff is a former employee of Convoy. Defendants C. Dennis McCorkle and Edward Vaughn were Jeffers' supervisors at Convoy. Convoy is in the trucking business. Beginning in November 1982, Jeffers was hired by Convoy to load, transport, and unload motor vehicles. Prior to that time, he worked for Kenosha Auto Transport Corporation for approximately seven years.

On December 10, 1983, a security guard observed Jeffers taking or attempting to take, gasoline from a tank on one of Convoy's service vehicles. The guard reported this incident to Convoy. Jeffers admits attempting to get gas, but states that he was trying to refuel a work-related vehicle which was about to be transported.

On December 19, 1983, defendants Vaughn and McCorkle confronted Jeffers with the observations of the security guard. Jeffers states Vaughn and McCorkle gave him three options: he could resign, he could be fired and file a grievance, or he could submit to a polygraph and be reinstated immediately if it indicated his story was truthful. Defendants state they fired Jeffers when he did not offer a satisfactory explanation for his conduct. They also state that union representatives subsequently advised Convoy that Jeffers wanted to take a polygraph test to clear himself.

Convoy made arrangements for Jeffers to appear at the offices of Minneapolis polygrapher James I. Gibson. Jeffers declined to take the test during his initial appointment because he was concerned about the scope of the test questions. He states that many of the questions related to whether he knew who among his fellow employees was stealing gas. Defendants state that plaintiff told Gibson that he had done everything the security guard said but that he had not actually taken any gas because the tank on the vehicle was empty.

Gibson called Jeffers requesting a continuance of the earlier examination, apparently after having spoken with the individual defendants. Defendants maintain that during this second visit Jeffers stated that he had only pumped gas in one of the vehicles he was attempting to load onto his truck. Plaintiff took the polygraph test, but the results of the test were inconclusive. Jeffers was not reinstated.

Jeffers then asserted a grievance pursuant to the collective bargaining agreement. Following an arbitration hearing on January 5, 1984, in which the Wisconsin Joint Auto Transport Committee received some testimony and exhibits, the committee denied the grievance and upheld the discharge.

Jeffers asserts that past events show that Convoy was out to get him. In July of 1983 he was fired for allegedly damaging a Datsun 626. An arbitration committee subsequently reinstated Jeffers with backpay. Jeffers notes that he was a Kenosha Auto Transport (KAT) employee that Convoy reluctantly agreed to maintain after KAT lost its auto transport contract to Convoy. He asserts that McCorkle wrote a letter or memo stating "as soon as we (Convoy) get rid of the KAT employees this will be a better place." Defendants have denied the existence of any such communication.

After Jeffers was discharged from Convoy he applied for unemployment benefits. Convoy denied eligibility and informed the Department of Economic Security that Jeffers was fired for theft and had refused to take a polygraph test. Jeffers states that Convoy also informed a prospective employer, McKeown Transport, that Jeffers was fired for cause.

Jeffers states that he has suffered serious mental distress and has been unable to keep his job at McKeown Transport because of clinical depression.

II. Discussion

A. Count I: Defamation

Convoy raises the defense of collateral estoppel to the defamation claim, contending that the grievance committee has already determined that it had just cause to terminate plaintiff. It argues that summary judgment on Count I is thus justified.

Collateral estoppel is appropriate only where: "1) the issue is identical to one in a prior adjudication; 2) there was a final judgment on the merits; 3) the estopped party was a party or in privity with a party to the prior adjudication; and 4) the estopped party was given a full and fair opportunity to be heard on the adjudicated issue."¹ Oldham v. Pritchett, 599 F.2d 274, 279 (8th Cir.1979), citing Gerrard v. Larsen, 517 F.2d 1127, 1130 (8th Cir.1975). If these conditions are met, collateral estoppel may be applied to arbitration decisions. See Ritchie v. Landau, 475 F.2d 151 (2d Cir.1973); Maidman v. O'Brien, 473 F.Supp. 25 (S.D.N.Y.1979). Because the doctrine of collateral estoppel is flexibly applied, the focus is on whether its application would work an injustice on the party against whom estoppel is urged. Oldham at 279; Tipler v. E.I. DuPont de Nemours and Co., Inc., 443 F.2d 125, 128 (6th Cir.1971). Further, upon this motion for summary judgment, the court is required to view the facts in a light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences to be drawn from the underlying facts.

Plaintiff asserts that application of collateral estoppel is inappropriate because he lacked a full and fair opportunity to be heard at the prior arbitration hearing. Whether plaintiff had a full and fair opportunity to be heard depends on whether he was denied procedural, substantive, or evidentiary opportunities at the prior arbitration hearing. See Oldham v. Pritchett, 599 F.2d 274 (8th Cir.1979).

The record shows that plaintiff's case was one of eleven cases heard by the Wisconsin Joint Auto Transport Committee that day. Plaintiff was not present at the hearing nor was he represented by counsel. These circumstances distinguish the case from one which defendants heavily rely, Ritchie v. Landau, 475 F.2d 151 (2d Cir. 1973). In Ritchie, the court affirmed a finding that plaintiff Ritchie was estopped from reasserting claims that had been reduced to judgment in a prior arbitration proceeding. In finding that Ritchie had had a full and fair opportunity to litigate in the arbitration proceeding, the court noted that three days of "detailed proceedings" had taken place. Id. at 153. It also noted that Ritchie had "testified extensively" on his own behalf and had cross-examined the defendant and other hostile witnesses. Id. at 154.

Moreover, in the instant case, plaintiff had been urged to step outside the established grievance procedure by the company when it offered the polygraph alternative. Thus, plaintiff may not have had the motivation to pursue vigorously the grievance and arbitration procedures.

Finally, the record shows that plaintiff's polygraph test was presented at the arbitration hearing. Minnesota courts have recognized the unreliability of polygraph tests and refuse to allow the results of such tests as competent evidence. See State by Spannus v. Century Camera, Inc., 309 N.W.2d 735, 743 (Minn.1981). Defendants contend that receiving the polygraph test into evidence was harmless error at best, but the court is unpersuaded. Granting collateral estoppel effect to a decision which is partly based on evidence from a polygraph test allows the party presenting the evidence to avoid an evidentiary rule of the Minnesota courts.

For these reasons, the court finds that defendants have not shown as a matter of law that plaintiff had a full and fair opportunity to litigate the question at hand at the prior arbitration proceeding. Thus, summary judgment is not appropriate on Count I.

Defendants also argue, however, that individual defendants McCorkle and Vaughn are entitled to summary judgment because they did make any defamatory statements about plaintiff. The individual defendants have submitted affidavits which state that they had no communication with McKeown or any other of plaintiff's prospective employers regarding his employment with Convoy. See aff. of C. Dennis McCorkle at ¶ 5; aff. of Ed Vaughn at ¶ 5. Neither of them wrote the letter by which Convoy informed McKeown that plaintiff was fired for cause.

Plaintiff has failed to counter this argument in any way. Under Fed.R.Civ.P. 56(e), plaintiff may not merely rest upon his pleadings, but must set forth specific facts by affidavits or otherwise showing that there is a genuine issue for trial. See One Blue 1977 AMC Jeep CJ-5 v. United States, 783 F.2d 759, 762 (8th Cir.1986); Burst v. Adolph Coors Co., 650 F.2d 930, 932 (8th Cir.1981). Summary judgment is therefore appropriate in favor of individual defendants McCorkle and Vaughn on Count I of the complaint. The claims against Convoy in Count I still remain in the case.

B. Count II: Violations of Minnesota Statutes §§ 181.75 and 181.76

Defendants request...