Lords v. Northern Automotive Corp.

• Decision Date: 07 July 1994
• Docket Number: No. 12881-4-III,12881-4-III
• Citation: 881 P.2d 256,75 Wn.App. 589
• Court: Washington Court of Appeals
• Parties: , 3 A.D. Cases 1173, 5 NDLR P 318 James Wesley LORDS and Lila Lords, husband and wife, Respondents and Cross Appellants, v. NORTHERN AUTOMOTIVE CORPORATION d/b/a Schuck's Auto Supply; Schuck's Auto Supply, Inc., Appellants.

Page 589

75 Wn.App. 589

881 P.2d 256, 3 A.D. Cases 1173, 5

NDLR P 318

James Wesley LORDS and Lila Lords, husband and wife Respondents and Cross Appellants, v. NORTHERN AUTOMOTIVE CORPORATION d/b/a Schuck's Auto Supply Schuck's Auto Supply, Inc., Appellants.

No. 12881-4-III.

Court of Appeals of Washington, Division 3 Panel Three.

July 7, 1994.

As Amended on Denial of

Reconsideration and

Publication Ordered Sept. 1, 1994.

Richard Lentini, Ryan, Swanson & Cleveland, Seattle, for appellants

Daniel M. Danforth, Underwood, Campbell Law Firm, Spokane, for respondents.

THOMPSON, Chief Judge.

Northern Automotive Corporation appeals a judgment entered on a jury verdict which awarded former employee, James Wesley Lords, $80,000 in economic damages for handicap discrimination and $150,000 emotional distress damages for negligent infliction of emotional distress. Northern also appeals the denial of several of its pretrial and posttrial motions and the attorney fee awards.

Lords cross-appeals the summary judgment dismissal of his contract cause of action, several evidentiary rulings, the court's 5-year limitation on front pay and a jury instruction regarding his age discrimination claim.

We affirm the summary judgment dismissal of Lords' contract cause of action; affirm the judgment dismissing Lords' age discrimination cause of action; reverse the award of damages for negligent infliction of emotional distress; affirm the handicap discrimination verdict, but remand for a new trial on economic damages; and reverse and remand as to attorney fees.

FACTUAL BACKGROUND

James Wesley Lords was an employee of Northern Automotive Corporation until November 1987. He became a Prior to the Schuck's-Checker merger, the two companies operated competing stores in the Spokane market. When they merged, Spokane had four Schuck's stores and six Checker stores. Eventually, three of the Checker stores were closed and the remaining three were "converted" to Schuck's stores.

Northern employee when Schuck's Auto Supply bought out and merged with his prior employer, Checker Auto Parts, and became Northern Automotive Corporation. Previously, Lords worked for Yellow Front Stores in Spokane. When they closed, he transferred to a Checker store. Apparently, Checker stores and Yellow Front Stores were owned by the same parent company. In all, Lords worked for Northern and its predecessor companies for almost 20 years. He suffered heart attacks in September 1984, June 1986 and October 1986. He was diabetic.

Darwin Streeter was a district manager for Checker; Larry Brantner was a regional manager for Schuck's. After the merger, Brantner became Streeter's supervisor. Streeter continued to supervise Checker managers, including Lords, and Brantner continued to supervise Schuck's managers in Spokane.

In early 1987, Northern devised an evaluation form for rating store managers. It contained 11 categories and used a rating scale of 1 to 5 for 8 of the 11 categories. From February through March 1987, Brantner evaluated the managers of Schuck's Spokane stores and Streeter evaluated the five managers of Checker's Spokane stores, including Lords. Lords received an overall rating of 3, the lowest rating of Checker's Spokane managers.

In early 1987, Lords managed the Checker store on Sprague Avenue. He was there until it was closed in March 1987. He then transferred to the Checker store on Francis Avenue and remained there until it was closed. On September 17, 1987, Lords was notified he would not be retained by Northern as a store manager. He did not have a written employment contract. Northern paid Lords 13 weeks' severance pay and did not rehire him.

Lords remained unemployed until December 1989 when he was hired by All Western Industrial Supply as a salesman. His wages were lower than at Northern and he received fewer benefits.

Prior to finding new employment at All Western, Lords commenced this lawsuit for discrimination based on age and handicap, negligent infliction of emotional distress, outrage, and breach of express and implied contract. His causes of action for outrage, breach of contract, and negligent infliction of emotional distress based on a duty not to discriminate were dismissed by pretrial summary judgment motions brought by Northern. His causes of action for age and handicap discrimination and negligent infliction of emotional distress went to trial by jury.

Northern's motion for directed verdicts was denied. The jury found no unlawful age discrimination, but did find handicap discrimination and negligent infliction of emotional distress. Northern's motion for judgment notwithstanding verdict, new trial or remittitur was denied. Lords was awarded attorney fees through trial and attorney fees for defending Northern's posttrial motions. Lords' motion for reconsideration of attorney fees was denied.

NEGLIGENT INFLICTION OF EMOTIONAL DISTRESS

Contentions. Northern contends there is no cause of action in Washington for negligent infliction of emotional distress based on termination of an at-will employee. The reason is, an employer has the right to terminate such employee for any reason, or no reason. He relies primarily on Thompson v. St. Regis Paper Co., 102 Wash.2d 219, 685 P.2d 1081 (1984) and Calhoun v. Liberty Northwest Ins. Corp., 789 F.Supp. 1540, 1548 (W.D.Wash.1992). Although there is an exception for violations of public policy, Northern contends Lords' negligence action was not based on a public policy exception. Thompson, 102 Wash.2d at 233, 685 P.2d 1081; Roe v. Quality Transp. Servs., 67 Wash.App. 604, 838 P.2d 128 (1992). See also Gaglidari v. Denny's Restaurants, Inc., 117 Wash.2d 426, 815 P.2d 1362 (1991).

Lords does not challenge Thompson, Roe or Calhoun, nor does he contend a public policy exception is at issue. He contends his negligence action was based on actions arising during the course of employment; not on termination. These actions consisted of promises of continued employment, pay continuation, relocation and preferential rehiring, as well as failure to return phone calls and communications with him through employees he once supervised and those holding lower level management positions. According to Lords, actions for negligent infliction of emotional distress arising during employment are recognized in Washington. He cites Wheeler v. Catholic Archdiocese, 65 Wash.App. 552, 829 P.2d 196, review granted in part, denied in part, 120 Wash.2d 1011, 844 P.2d 436 (1992); Huber v. Standard Ins. Co., 841 F.2d 980 (9th Cir.1988); and Roth v. Kay, 35 Wash.App. 1, 4, 664 P.2d 1299, review denied, 100 Wash.2d 1026 (1983).

No Negligence Cause of Action. As Northern contends, Washington does not recognize a cause of action for negligent infliction of emotional distress based on termination of an at-will employee, unless the termination violates "a clear mandate of public policy." Roe, 67 Wash.App. at 607, 838 P.2d 128 (quoting Thompson, 102 Wash.2d at 232, 685 P.2d 1081). See also Lambert v. Morehouse, 68 Wash.App. 500, 503-06, 843 P.2d 1116, review denied, 121 Wash.2d 1022, 854 P.2d 1084 (1993) (employer's faulty investigation of employee's misconduct resulting in discharge does not give rise to negligence action); Calhoun, at 1548 (routine discharge for poor work performance does not give rise to cause of action for negligent infliction of emotional distress). With few exceptions, other jurisdictions have uniformly rejected employees' negligence actions against their employers which resulted in their discharge. See 3A Arthur & Lex K. Larson, Employment Discrimination § 119.52 (1991).

Northern's alleged promises of continued employment, relocation, pay continuation and preferential rehiring arose out of the employment relationship. Although such promises might give rise to a cause of action based on an express or As to Northern's alleged failure to communicate with Lords in the manner he expected or desired, no legal duty was breached. A claim for negligent infliction of emotional distress must meet the traditional requirements of "duty, breach, proximate cause, and damage or injury". Hunsley v. Giard, 87 Wash.2d 424, 434, 553 P.2d 1096 (1976). The existence of a duty is a question of law and depends on mixed considerations of "logic, common sense, justice, policy, and precedent". Hartley v. State, 103 Wash.2d 768, 779, 698 P.2d 77 (1985) (quoting King v. Seattle, 84 Wash.2d 239, 250, 525 P.2d 228 (1974)); DuVon v. Rockwell Int'l, 116 Wash.2d 749, 753, 807 P.2d 876 (1991).

                implied contract, 1 they do not give rise to a cause of action for negligence.  Emotional distress damages are unavailable in a breach of contract action.  Gaglidari, 117 Wash.2d at 440, 815 P.2d 1362.   Further, even though the promises were allegedly made during the course of employment, any breach would occur only upon termination and a refusal to rehire
                

Even assuming Northern owed Lords a legal duty regarding its methods of communication, there was no evidence establishing the standard of care and no compelling public policy advanced for imposing liability on an employer for not returning phone calls or for communicating decisions through a particular hierarchy of employees. ² Lawson v. Boeing Co., 58 Wash.App. 261, 792 P.2d 545 (1990), review denied, 116 Wash.2d 1021, 811 P.2d 219 (1991). Not all actions which cause harm result in legal liability. Hunsley, 87 Wash.2d at 434, 553 P.2d 1096.

The actions Lords complains of are clearly distinguishable from the employer's actions in Wheeler, which he cites. In Lords also relies on Roth, a negligence action brought by an injured employee against his physician for failing to timely file a workers' compensation claim. We fail to see how Roth supports Lords' negligence claim. As to Lords' reliance on Huber, the cause of action alleged by the employee under California law was intentional infliction of emotional distress. Further, although Huber allowed the employee to proceed with his...