Komm v. McFliker, 85-0862-CV-W-6.

• Decision Date: 20 June 1987
• Docket Number: No. 85-0862-CV-W-6.,85-0862-CV-W-6.
• Citation: 662 F. Supp. 924
• Parties: Steven L. KOMM, Plaintiff, v. Henry McFLIKER, et al., Defendants.
• Court: U.S. District Court — Western District of Missouri

662 F. Supp. 924

Steven L. KOMM, Plaintiff, v. Henry McFLIKER, et al., Defendants.

No. 85-0862-CV-W-6.

United States District Court, W.D. Missouri, W.D.

June 20, 1987.

Richard L. Routman, Grier & Swartzman, Kansas City, Mo., for plaintiff.

Joel Pelofsky, Shughart, Thomson & Kilroy, Kansas City, Mo., for defendant McFliker.

Michael Waldeck, Niewald, Waldeck, Norris & Brown, Kansas City, Mo., for defendant Universal.

ORDER

SACHS, District Judge.

Before the court is plaintiff's Motion for Reconsideration of the Dismissal of Counts III and IV of Plaintiff's First Amended Complaint and for Leave to Amend. For reasons set forth below, the motion will be denied with respect to Count III and granted with respect to Count IV.

Count III of plaintiff's First Amended Complaint purported to state a cause of action by a "whistle blower" in tort for wrongful discharge. By order of September 29, 1986, the claim was dismissed because plaintiff was not an at-will employee and he had failed to identify any "duty that was `superimposed by operation of law as an incident of the relationship between the parties rather than the contract.'" Nollman v. Armstrong World, 603 F.Supp. 1168, 1172 (E.D.Mo.1985) (quoting General Dynamics Corp. v. Selb Manufacturing Co., 481 F.2d 1204, 1216 (8th Cir.1973), cert. denied 414 U.S. 1162, 94 S.Ct. 926, 39 L.Ed.2d 116 (1974)). Plaintiff contends now, as he did in opposition to the original motion to dismiss, that the public policy doctrine enunciated in Boyle v. Vista Eyewear, Inc., 700 S.W.2d 859 (Mo.App.1985), is not limited to at-will employment relationships. This contention is simply not supported by relevant cases. All Missouri cases specifically refer to the public policy argument as an exception to the at-will employment doctrine, e.g. Boyle, 700 S.W.2d at 871; Beasley v. Affiliated Hospital Products, 713 S.W.2d 557, 561 (Mo. App.1986), and plaintiff has failed to direct the court's attention to any case from any jurisdiction which holds that the public policy exception affords a tort remedy to definite term employees.

Independent research discloses what is at least a dictum favorable to plaintiff's contention in a California decision. Koehrer v. Superior Court, 181 Cal.App.3d 1155, 226 Cal.Rptr. 820, 826 (1986). Whether the Missouri courts would accept this development in the law of tortious discharge is speculative.

Further consideration has been given, however, to Boyle v. Vista Eyewear, Inc., supra, in which, by a split decision, the intermediate appellate court attempted to distinguish Dake v. Tuell, 687 S.W.2d 191 (Mo.1985) (en banc). The Boyle majority, in a "whistle blower" case like that at bar, ruled that Dake was not a bar to such litigation because the plaintiff in Dake had chosen to proceed on the theory of prima facie tort rather than tortious discharge. While it is conceivable that the Missouri Supreme Court simply held that plaintiff must lie in the legal bed that he had mistakenly chosen, the language of the court is very much stronger than necessary to such a procedural ruling. Going beyond the "sole issue" initially stated, the court reaffirmed the view that in Missouri "it is firmly established that absent a contrary statutory provision an at will employee cannot maintain an action for wrongful discharge ..." 687 S.W.2d at 192-3. This "firmly established" rule was not followed in Boyle. After further deliberation I am, with due deference, unable to accept Boyle as stating current Missouri law.

Judge Blackmar's concurring opinion in Dake is of special pertinence to this conclusion. Judge Blackmar protested that it was unnecessary to announce a highly restrictive doctrine that tortious discharge can only be asserted when plaintiff can claim statutory protection. But he said, "I agree that the alleged discharges for `whistle blowing' should not give rise to a claim for damages for wrongful termination. Such a holding is supported by the great weight of modern authority. See Krauskopf, `Employment Discharge: Survey and Critique of the Modern At Will Rule,' 51 UMKC Law Review 190, 237-239. The principal opinion need go no further than this." 687 S.W.2d at 194. (Emphasis added.)

If one accepts Judge Blackmar's opinion in Dake and his view of the intent of the majority in that case, Boyle does not correctly enunciate the applicable Missouri law. It seems probable that Judge Blackmar sensed the true thrust of the majority opinion on his court and soundly resolved the ambiguity in language. Further, Judge Blackmar seems to capture and follow Professor Krauskopf's appraisal of the whistle blowing issue.

As Boyle and Dake make clear, there are strong policy reasons favoring both sides of this case. While it would be inappropriate for a federal judge to second-guess the policy views in Boyle, I feel obligated to accept the views of the Missouri Supreme Court where I conclude (based on the indicia noted above) that they are contrary to the views of a later decision by an intermediate appellate court. R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d 818, 826-9 (8th Cir.1983); Matco Tools Corp. v. Pontiac State Bank, 614 F.Supp. 1059, 1064-5 (E.D.Mich.1985) (and authorities cited therein).

Other intermediate appellate panels in Missouri have clearly accepted Dake's sweeping reaffirmation of the rule against asserting wrongful discharge claims in the absence of contractual protection or a statutory umbrella. Tippit v. Jepco, Inc., 726 S.W.2d 877, 878 (Mo.App.1987); Reed v. Sale Memorial Hosp. & Clinic, 698 S.W.2d 931, 940 (Mo.App.1985); Neighbors v. Kirksville College of Osteopathic Medicine, 694 S.W.2d 822, 823-4 (Mo.App.1985); Burkin v. Burl. No. R. Co., 690 S.W.2d 508 (Mo.App.1985); Sanders v. Public Water Supply Dist., 690 S.W.2d 506, 507 (Mo. App.1985). It is of interest that Tippit cites Boyle as well as Dake as conforming to the above rule, thus suggesting that the result in Boyle may be sound where an alternate basis of recovery was plaintiff's being "fired for refusing to violate the FDA regulation ..." 700 S.W.2d at 877. The present case, however, presents a simple "whistle blower" contention in that plaintiff "claims he was discharged in retaliation for his reporting of corporate wrongdoing and the wrongdoing of his superior, Henry McFliker." Suggestions in Support of Motion for Reconsideration. (Doc. 133, page 3.)

The motion to reconsider the dismissal of Count III will therefore be denied.

This court's September 29, 1986, order also dismissed Count IV of plaintiff's First Amended Complaint, which purported to state a claim under the Racketeer Influenced Corrupt Organizations Act (RICO), under the analysis of Superior Oil Co. v. Fulmer, 785 F.2d 252 (8th Cir.1986), for failure to allege more than a single fraudulent scheme. Plaintiff seeks reconsideration of that ruling and also seeks leave to file a Second Amended Complaint, which attempts to expand and clarify the RICO allegations. These allegations are central to the viability of the RICO claim, and will therefore be detailed below.

Paragraph 10 of the proposed complaint addresses the sale of $1.943 million worth of Universal Money Centers (UMC) debentures prior to May of 1985. Plaintiff contends that these sales may be voidable since McFliker actually effectuated the transactions but ceased being an employee of UMC on March 6, 1985, and was not a registered broker. The failure to disclose this fact in UMC's May 15, 1985, 10K form or otherwise is separately alleged as fraud and a violation of federal securities laws. Further fraudulent non-disclosure is alleged in the failure to report significant conditions and restrictions with respect to the sale of $1.8 million of the debentures, including the facts that (1) the $1.8 million was sold to a single investor, (2) the money had not yet been paid to UMC, (3) McFliker or an affiliated corporation were to receive $180,000 as commissions, and (4) $400,000 was to be paid to the Bank of Kansas City to release collateral pledged personally by McFliker on other UMC obligations. Finally, paragraph 10 alleges that Phillip Kusnetzky knew of the above facts, that by virtue of his roles as counsel for both UMC and McFliker he had a direct conflict of interest, and that it was improper to not disclose this conflict in proxy solicitations seeking to elect Kusnetzky as a director of UMC.

Paragraph 11 alleges various improprieties in the sales or solicitations for sales of automatic teller machines (ATMs), the primary product of UMC. The first of these is that McFliker sent out ATM sales brochures which overstated the number of ATMs currently in operation, under construction and scheduled for construction. Second, it is alleged that McFliker made false or misleading representations while soliciting business from financial institutions. The third allegation involves transactions in which McFliker sold ATMs to John Hudson and Savings Investment Service Corporation (SISCO). UMC received full payment for the machines, but McFliker told Hudson and SISCO that UMC would assist in making payments on loans obtained for the purchases. The "assistance" was rendered in the form of McFliker directing UMC to pay billings for services from Hudson and SISCO when no services had actually been performed.

Paragraph 12 alleges improprieties in the proxy solicitation seeking votes to elect Paul B. Rossan as a UMC director. The underlying conduct is described by incorporating paragraphs 10 and 11 of the complaint. These allegations are summarized above and need not be reiterated.

Improper proxy solicitations are also the subject of paragraph 13. While the allegations are rather detailed, they may be summarized for present purposes as omissions of two series of transactions. The first involves a contract between UMC and Universal Money Centers Canada (Canada) in which UMC eventually wrote off as uncollectible $279,576 in fees from Canada. Plaintiff alleges that Canada's inability...