Mailhiot v. Liberty Bank and Trust Co.

• Decision Date: 23 July 1987
• Citation: 24 Mass.App.Ct. 525,510 N.E.2d 773
• Parties: Irene D. MAILHIOT v. LIBERTY BANK AND TRUST COMPANY et al. 1
• Court: Appeals Court of Massachusetts

Page 773

510 N.E.2d 773

24 Mass.App.Ct. 525

Irene D. MAILHIOT v. LIBERTY BANK AND TRUST COMPANY et al. ¹

Appeals Court of Massachusetts Suffolk.

Argued March 18, 1987.

Decided July 23, 1987.

Joan A. Lukey, Boston, for plaintiff.

Michael E. Hager, Boston, for defendants.

Before ARMSTRONG, CUTTER and SMITH, JJ.

ARMSTRONG, Justice.

The plaintiff (Mailhiot) brought this action in the aftermath of her discharge in 1977 from the position of treasurer of Liberty Bank and Trust Company (the bank). Her complaint had two counts. The first was against the bank for wrongful discharge, predicated on an assertion that her discharge was in retaliation for alerting the State's bank examiners to various banking improprieties and thus was in violation of public policy. See Gram v. Liberty Mutual Ins. Co., 384 Mass. 659, 668 n. 6, 429 N.E.2d 21 (1981); DeRose v. Putnam Management Co., 398 Mass. 205, 208-210, 496 N.E.2d 428 (1986). The second count was against one Fitzgerald, the bank's president, for tortious interference with both her employment with the bank and her prospective employment opportunities at other banks. The case was tried to a jury, which found for the bank on count one and for Mailhiot on count two. It assessed damages against Fitzgerald of $95,000. The judge then allowed a motion by Mailhiot to extend the verdict against Fitzgerald to the bank on agency principles; as a result judgment was entered against both for $95,000, with interest. The judge denied Mailhiot's motion for an assessment of counsel fees and disbursements against the defendants--these being claimed in the amount of $95,731.69. All three parties appealed.

Not surprisingly, the evidence was in sharp conflict as to the circumstances and frictions that led to Mailhiot's dismissal. The defendants adduced evidence that sketched Mailhiot as moody, inconsistent, abrasive, and hostile--not at all one given to patching over differences and cooperating for the good of the organization. Mailhiot saw herself as the guardian of banking integrity, resisting at every turn what she viewed as the fast and loose practices of Fitzgerald. When, in protest, she refused to sign treasurer's reports, took to reporting improprieties to the bank examiners, and refused to report other than directly to the bank's board of directors, either Fitzgerald's departure or hers was inevitable.

The circumstances of her discharge were as follows. Mailhiot, refusing to sign treasurer's reports, insisted on speaking directly to the board at its next meeting. Fitzgerald forbade her attendance. Lien, the new chairman of the board (the bank had been sold after Mailhiot had been hired ² nine months before) backed up Fitzgerald. At the meeting Fitzgerald distributed a memo from himself containing a list of specific instances of misbehavior alleged against Mailhiot, coupled with a recommendation that she be discharged. The board so voted.

There was evidence from which the jury could find that certain of the allegations of misconduct were fabrications by Fitzgerald: his claimed sources did not support his testimony at the trial. From this the jury could properly infer that Fitzgerald acted with the malice that is required to support a charge against a superior of tortious interference with an employment relationship. See Gram v. Liberty Mutual Ins. Co., 384 Mass. at 663, 429 N.E.2d 21; Steranko v. Inforex, Inc., 5 Mass.App.Ct. 253, 272-273, 362 N.E.2d 222 (1977), and cases cited. For that reason Fitzgerald's motion for a directed verdict was correctly denied. ³ On this count the jury were correctly instructed that Mailhiot could recover for the emotional distress that the discharge caused her. Lopes v. Connolly, 210 Mass. 487, 495, 97 N.E. 80 (1912). Doucette v. Sallinger, 228 Mass. 444, 449, 117 N.E. 897 (1917). Gould v. Kramer, 253 Mass. 433, 440, 149 N.E. 142 (1925). Restatement (Second) of Torts § 774A(1)(c)(1979). ⁴

It was error, however, to allow the motion to broaden the verdict on count two by imputing Fitzgerald's tortious conduct to the bank. In effect, the bank thereby was held liable for tortiously interfering with Mailhiot's employment relation with itself. That result is conceptually incoherent. Discharge of an employee in some circumstances may subject the employer to liability for breach of contract or for wrongful discharge, but the employer cannot be liable for tortiously interfering with the employee's employment contract with the employer. Gram v. Liberty Mutual Ins. Co., 384 Mass. at 663 n. 3, 429 N.E.2d 21. Appley v. Locke, 396 Mass. 540, 543, 487 N.E.2d 501 (1986). Restatement (Second) of Agency § 248 comment c (1958). For the reason stated in note 3, supra, the motion could not properly have been allowed because of Fitzgerald's alleged activities in thwarting Mailhiot's later job prospects.

The defendants have raised a myriad of evidentiary points. The most difficult of these concerns Mailhiot's testimony as to projected earnings increases that she failed to receive due to the discharge. She produced a chalk, which the jury saw but which has not been reproduced in the record, that projected annual increases of 10.8% over the period 1977 to 1985. According to that calculation, her lost earnings to the date of trial were $252,026. Mailhiot was competent to testify to the value of her services at the time she was fired. Thibault v. DeVio, 318 Mass. 605, 606, 63 N.E.2d 354 (1945). A plaintiff is likely to have first-hand knowledge of his prospects for promotion and so should be competent to testify to them. These considerations, however, do not extend to calculating a dollar figure for nine years into the future, especially since Mailhiot's express basis for calculating this--extrapolation from various raises she had had in the past--did not take into consideration such relevant factors as future inflation or price stability and likelihood of subsequent promotions. Nevertheless, the jury were obviously not much moved by it. The chalk in question supported an award of $252,026. Fitzgerald argued for no more than $141,000. The jury obviously took the extrapolation with a grain of salt, awarding only $95,000. In the circumstances we think that the extrapolation testimony and the illustrative chart cannot be said to have worked a prejudice sufficient to warrant a new trial. It would have been better if they had been excluded. They seem, however, to have played little part in the verdict.

We have examined the other evidentiary points raised by the defendants and have concluded that they are without merit. ⁵

Mailhiot moved for attorney's fees, apparently relying upon M.F. Roach Co. v. Provincetown, 355 Mass. 731, 247 N.E.2d 377 (1969). The trial judge correctly denied them. The theory of allowing such fees in cases of intentional interference with contractual relations is that they are one of the elements of damages the defendant inflicted upon the plaintiff: i.e., the defendant not only caused the plaintiff to lose the benefit of his bargain, but also caused the plaintiff to be dragged into court against the third party. This rationale is clearest when the plaintiff must defend against a suit brought by the third party. See, e.g., Mutual Fire, Marine & Inland Ins. Co. v. Costa, 789 F.2d 83, 89-90 (1st Cir.1986) (applying Massachusetts law). This is so even if the plaintiff loses against the third party, because he still had to fight the suit. It also applies when the plaintiff is forced to sue to hold the third party to his bargain, as in the M.F. Roach case, supra, where the contractor was forced to sue the defendant town to recover compensation for the work already done. In this case, however, Mailhiot was not suing to hold the bank to the contract of employment or recover damages for its breach. She could not, because she was an at-will employee. (She could only prevail against the bank if she showed either that the bank had not paid her all that was due under her employment contract or that her discharge violated public policy.) She had no rights under her employment contract against the bank, and so she was not forced to sue to enforce nonexistent rights. Therefore, this case is not controlled by the Roach exception but by the general rule of Chartrand v. Riley, 354 Mass. 242, 237 N.E.2d 10 (1968), that counsel fees are not a proper heading of damages.

The order allowing the plaintiff's "motion for entry of a general verdict" and the amended judgment based thereon (docketed January 31, 1986) are reversed. The original judgment, docketed December 24, 1985, is to be reinstated and is affirmed. The order denying the plaintiff's motion for attorney's fees and disbursements is affirmed.

So ordered.

1 T. William Fitzgerald.

2 Rehired, actually. She had been an assistant treasurer of Liberty from 1971 to 1973, then resigned to become treasurer of another bank. She became discouraged when passed over for promotion and returned to Liberty in 1976.

3 Mailhiot failed to prove that Fitzgerald (or anyone else at the bank) damaged her prospects for future employment by any action beyond her discharge. There was no evidence, for example, that Fitzgerald gave Mailhiot negative references in response to inquiries from prospective employers. Without impermissible speculation, inferences to that effect could not be drawn merely from Mailhiot's lack of success in obtaining other employment. Compare Chemawa Country Golf, Inc. v. Wnuk, 9 Mass.App.Ct. 506, 511, 402 N.E.2d 1069 (1980) (golf club, claiming that the defendant was driving away members, did not produce any witness who had resigned from the club due to the defendant's actions), and Botkin v. Miller, 190 Mass. 411, 77 N.E. 49 (1906) (barber picketed for failure to close on a religious holiday; no showing that the loss of business was due to anything other than customers of that faith not wishing to patronize a barber who disregarded such a holiday). Contrast Owen v. Williams, 322 Mass. 356, 77 N.E.2d...