Jones v. Lake Park Care Center, Inc.

• Decision Date: 17 September 1997
• Docket Number: No. 96-696,96-696
• Citation: 569 N.W.2d 369
• Parties: 13 IER Cases 504 Rebecca A. JONES, Appellee, v. LAKE PARK CARE CENTER, INC., James Rogers, and Pamela Rogers, Appellants.
• Court: Iowa Supreme Court

Page 369

569 N.W.2d 369

13 IER Cases 504

Rebecca A. JONES, Appellee, v. LAKE PARK CARE CENTER, INC., James Rogers, and Pamela Rogers, Appellants.

No. 96-696.

Supreme Court of Iowa.

Sept. 17, 1997.

Rehearing Denied Oct. 23, 1997.

Douglas A. Fulton and Russell J. Hansen of Connolly, O'Malley, Lillis, Hansen & Olson, L.L.P., Des Moines, for appellants.

Richard J. Barry and Michael R. Bovee of Montgomery, Barry & Bovee, Spencer, for appellee.

Considered by HARRIS, P.J., and CARTER, ANDREASEN, TERNUS, and SCHULTZ, ^* JJ.

ANDREASEN, Justice.

Rebecca Jones (Becky) brought an action at law against her employer, Lake Park Care Center, Inc. (Care Center), and its sole shareholders and officers, James Rogers (James) and his wife Pamela Rogers (Pam). Becky claimed the Care Center breached its employment contract with her and the Rogers intentionally interfered with the employment contract resulting in both compensatory and punitive damages. The defendants denied the allegations and the Rogers affirmatively urged they were protected by a qualified privilege granted to them as officers and directors of the Care Center. Following a bench trial, the district court awarded compensatory damages of $320,064 against both the Care Center and the Rogers individually and punitive damages of $50,000 against the Rogers. Following the court's ruling on a posttrial motion, the defendants appeal. We affirm.

I. Scope of Review.

Law actions are reviewed for correction of errors. Iowa R.App. P. 4. The facts as found by the court have the force of a special verdict and are binding on us if they are supported by substantial evidence. See Iowa R.App. P. 14(f)(1). Evidence is substantial if a reasonable mind could find it adequate to reach the same findings. Pierce v. Farm Bureau Mut. Ins. Co., 548 N.W.2d 551, 553 (Iowa 1996).

Here, the district court made specific findings as to the veracity of key witnesses. It observed:

The court finds that the testimony of Rebecca, for the most part, is reasonable and consistent with her claim. While testifying, she demonstrated intelligence, good memory and knowledge of the facts of the case. The defendants, Pamela Rogers and James Rogers, while testifying, demonstrated a lack of intelligence, memory and knowledge of the facts. Also, many of the witnesses called on behalf of the defendants demonstrated a bias or prejudice against Rebecca. Many of the witnesses called on behalf of the defendants were impeached by their prior testimony at the unemployment hearing. Many of the witnesses called on behalf of the defendants showed a lack of intelligence, memory and knowledge of the facts. The court concludes that, overall, Rebecca's testimony, her appearance, conduct, intelligence, memory and knowledge of the facts persuades the court that her version of what happened is much more plausible than the version as related by the defendants.

We view the evidence in the light most favorable to upholding the judgment. Boelman v. Manson State Bank, 522 N.W.2d 73, 76 (Iowa 1994).

II. Background Facts and Proceedings.

Becky is forty-seven years of age. After graduating from high school, she completed a nine-month course in business school and then worked several years as a secretary. While working as a secretary-bookkeeper in a nursing home, she attended a community college where she obtained, in 1985, a two-year associate degree in health care administration. After obtaining this degree, she was employed as the administrator of a nursing home in Hull, Iowa. Her employment was terminated by her employer in January of 1989. Three months later she started working as an administrator in the care center at Lake Park, Iowa. This is a fifty-one-bed nursing home with approximately forty employees. The nursing home was sold to the Rogers in July of that year. Pamela Rogers was the licensee and the Care Center operated the facility.

Shortly after the Rogers purchased the Lake Park facility, Pam suggested to Becky that the center needed an employee handbook. Becky, the administrative assistant Melanie Jurgensen (Melanie), and the director of nursing Gayle Eral (Gayle) collected employee handbooks and written personnel policies that they had received from prior employers and gave them to Pam. She intended to use them as examples to develop a policy handbook for the Care Center. Some time later, Becky inquired as to how the employee handbook was coming. When Pam told Becky she had not started on it, Becky suggested Melanie was interested in helping and would work with her on a draft handbook. Pam agreed to the plan and returned the samples to Becky.

Melanie then reviewed the handbooks and selected the best two or three provisions on the various topics. She and Becky then picked out the best provisions and included them in a rough draft of a proposed employee handbook. Each proposed policy was put on a separate page and delivered to Pam. She then reviewed the proposed handbook, made some changes, and returned it to Becky with instructions to go ahead and print it in a final form and pass it out to the employees.

The handbooks were distributed to all staff members including Becky. Each employee was asked to sign and return a receipt to the administrator to acknowledge their receiving a handbook. The twenty-four page handbook contained a welcome, general policies on hiring, schedules, time cards, pay days, resignation, benefits, disciplinary action, additional miscellaneous policies, and an organizational chart. All the employees received the handbook and returned a signed receipt. On December 12, 1991, Becky signed a receipt. The receipts were placed in each employee's personnel file at the Care Center.

In July 1992, Pam gave Becky a disciplinary warning. The written warning identified specific incidents that demonstrated Becky's poor employee relations, including her terrible working relationship with the director of nursing, and Becky's unpredictability. In response, Becky explained in writing her actions and acknowledged there was "a part of my personality that others find intimidating or abusive and I will need to keep that in mind when dealing with staff problems or situations in the future." Pam placed Becky on probation with a review in one month and a second review at the end of two months. Becky received psychiatric counseling for depression at Pam's suggestion and at the Care Center's expense. Becky's attitude and behavior improved in 1992 after receiving the warning and counseling. However, her relationship with the director of nursing, Gayle, remained poor.

In May 1993, the certified nurses's aids (CNA's) sent a list of demands to the Care Center, the administrator, and the director of nursing. Pam was concerned that the CNA's might strike, or refuse to perform their assigned duties. She hired her sister Cynthia Bartling (Cindy), a registered nurse (RN) and consultant, to visit the center and evaluate the situation.

Cindy spent the months of May, June, and July at the center. She met with every employee to determine what problems existed at the Care Center. She determined that nearly all of the professional staff were threatening to leave because of the tension existing at the center and that the relationship between Becky and Gayle had deteriorated to the point where they were not communicating effectively. The professional staff was being divided into "camps," those loyal to Becky and those loyal to Gayle.

At about this same time, the Iowa Department of Inspections and Appeals commenced its annual inspection of the Care Center. The inspection began on July 26 and lasted through July 29. While at the Care Center, Becky had been through four annual department inspections and three follow up surveys. During the 1993 inspection one of the inspectors asked Becky to compile a list of the Care Center's closed files for the past six months. These were the files of residents of the facility that had died, transferred to the hospital and not returned, or who had returned to their home after being residents at the facility.

After receiving the inspector's request, Becky went to Gayle and asked her whether the closed files had been completed. Gayle reported that not all of the closed files had been completed and that Becky should give the inspector a list of the files that had been completed. Becky believed Gayle was asking her to lie to the state inspectors about the status of the closed files. She told Gayle she would not lie to the inspectors.

Following the completion of the state inspection survey on July 29, Cindy reported to the Rogers that Becky "sacrificed facility performance during the state survey in an effort to make (Gayle) look incompetent." She recommended that Becky be terminated. The following day James contacted Sandra DeGroot about the administrator position at the Care Center. At about this same time Pam called Becky and requested she post a notice of an all-staff meeting to be held on August 9. On August 2 or 3, DeGroot was hired as the new administrator of the Care Center by the Rogers.

On August 6, Pam and James met with Becky at the facility and Becky was told her employment was terminated. The following day she was given a written termination notice that gave as a reason "inability to provide continuity in the facility by failure to provide effective leadership." At the August 9 all-staff meeting, Pam introduced the new administrator. She reported that Becky could not compromise on certain issues, that she was unable to fulfill some administrative responsibilities, and that as a result Becky had resigned.

The Care Center was paying Becky an annual wage of $31,939 plus other benefits including paid vacation and health insurance at the time of her discharge. Following her discharge, she searched for employment as a nursing home administrator and for other gainful employment for which she was trained. She was able to secure only part-time employment paying approximately $1239...