Nilsson v. Mapco

• Decision Date: 13 October 1988
• Docket Number: No. 17084,17084
• Citation: 764 P.2d 95,115 Idaho 18
• Parties: , 5 IER Cases 1727 Keith B. NILSSON, Plaintiff-Respondent, v. MAPCO, a Nevada corporation, Defendant-Appellant.
• Court: Idaho Court of Appeals

Page 95

764 P.2d 95

115 Idaho 18, 5 IER Cases 1727

Keith B. NILSSON, Plaintiff-Respondent, v. MAPCO, a Nevada corporation, Defendant-Appellant.

No. 17084.

Court of Appeals of Idaho.

Oct. 13, 1988.

Claude V. Marcus, of Marcus, Merrick & Montgomery, Boise, for defendant-appellant.

William B. Latta, Jr., Boise, for plaintiff-respondent.

WALTERS, Chief Judge.

This is an employment termination case. Mapco, Inc., a Nevada Corporation (MAPCO-Nevada), appeals from a judgment entered upon a jury's special verdict finding that it wrongfully terminated Keith B. Nilsson's employment. On appeal, MAPCO-Nevada contends: (1) that it was not Nilsson's employer; (2) that if it was Nilsson's employer, Nilsson was an at-will employee, and could be terminated for any reason; (3) that the trial court erred in failing to give the jury instructions concerning at-will employment; and (4) that MAPCO-Nevada was entitled to costs and attorney fees on its defense of this action. We hold that MAPCO-Nevada was the proper party to this action, but that the trial court's jury instructions and special verdict form were ambiguous and not fully consistent with present Idaho law. We therefore vacate the judgment and remand this case for a new trial.

Nilsson was employed as maintenance superintendent at the DeLamar Silver Mine in May, 1979. The initial job offer was made by Lyle Talbott, manager of the mine, on behalf of Earth Resources Company (ERC), a joint venture that operated the facility. When he was hired, Nilsson was given an employee handbook which outlined ERC's policies regarding a "guarantee of fair treatment" for all employees disciplinary procedures, and "rules of good conduct," enumerating certain grounds for terminating employees. Some time after Nilsson's hiring, ERC was acquired by Mapco Minerals Corporation (MMC), a subsidiary of MAPCO, Inc., a Delaware Corporation (MAPCO-Delaware). However, on-site management of the mine remained the same. At the time of the acquisition, Nilsson was given a new employee handbook, which again contained a guarantee of fair treatment, almost identical to that in the ERC handbook, but which did not contain any disciplinary procedures or rules of conduct.

Nilsson's employment with MMC went well for several years. During this time, he was given average or better than average job evaluations by his supervisor, Talbott, and he received pay raises. Talbott described his working relationship with Nilsson as "congenial," stating that the two were "good friends as well as fellow employees." Nilsson agreed, stating that many times Talbott had told him he could work at the mine until he (Nilsson) retired. Nonetheless, Nilsson was fired in July, 1983, because, as Talbott testified, Nilsson's fellow employees had "lost confidence" in him. There was, in addition, a more specific allegation that Nilsson had frequently misappropriated mine property. Nilsson's termination was ordered by Talbott after consulting with William Cole, president of MMC.

After his dismissal, Nilsson filed this action, alleging age discrimination, breach of contract, and bad faith dealing. In an amended complaint, Nilsson named MAPCO-Nevada as the sole defendant. In response to Nilsson's complaint and amended complaint, MAPCO-Nevada admitted Nilsson's employment at the mine, but otherwise denied the remainder of Nilsson's allegations. The parties conducted discovery, and attended a pre-trial conference with the presiding district court judge. At that conference, the parties evidently stipulated that Nilsson was employed at the mine during the dates in question. Although the exact wording of the stipulation is not known, the court issued a "Pre-trial Conference Order," pursuant to I.R.C.P. 16(f). Under "Stipulations," the Order recited: "[f]acts admitted by all parties: (1) Plaintiff [Nilsson] was employed by defendant MAPCO May 21, 1979 to July 14, 1983...." MAPCO-Nevada made no timely objection to this Order, as permitted by I.R.C.P. 16(g), but instead proceeded with the litigation. The trial was commenced six weeks later. After the jury had been selected, MAPCO-Nevada moved for its dismissal from the action. MAPCO-Nevada asserted that it was not involved in operation of the mine, and argued that the case should be dismissed because the wrong party was named as the defendant. The trial judge was unpersuaded by this argument, and held that MAPCO-Nevada would not be relieved from the pre-trial stipulation naming it as the party-defendant in this action. The trial proceeded, and the jury found by special verdict that MAPCO-Nevada was liable for wrongfully terminating Nilsson's employment. The jury awarded Nilsson $20,000 in damages. Judgment for that amount, together with costs, was entered accordingly. MAPCO-Nevada thereafter pursued this appeal.

I MAPCO-Nevada as Proper Defendant

MAPCO-Nevada first argues that the trial court erred by failing to dismiss it as the defendant in this action. MAPCO-Nevada contends that it had nothing to do with the operation or management of the DeLamar mine during Nilsson's employment; that Nilsson was aware of this fact; and that there actually was no stipulation at the pre-trial conference that MAPCO-Nevada was the proper defendant. ¹ Nilsson maintains that MAPCO-Nevada's defense on the merits, coupled with its failure to move for a dismissal under I.R.C.P. 12, its failure to join MAPCO-Delaware as an indispensable party under I.R.C.P. 19, and its failure to make a timely objection to the pre-trial conference order under I.R.C.P. 16(g), should operate to estop MAPCO-Nevada from denying liability for the judgment.

We see no error in the trial judge's decision. I.R.C.P. 16(a) authorizes the trial court to conduct pre-trial conferences for the purpose of, among other things, expediting the disposition of cases before it. At the pre-trial conference, the parties are expected to stipulate to facts which are not in contention. To this end, the parties must fully disclose in good faith their contentions and the gist of the evidence expected to support those contentions. Stevenson v. Steele, 93 Idaho 4, 453 P.2d 819 (1969). Ordinarily, the parties are bound by these stipulations. Workman Family Partnership v. City of Twin Falls, 104 Idaho 32, 655 P.2d 926 (1982); Call v. Marler, 89 Idaho 120, 403 P.2d 588 (1965); see generally Annotation, Binding Effect of Court's Order Entered After Pretrial Conference, 22 A.L.R.2d 15, § 2 (1952). Nonetheless, this process is to be administered fairly by the trial judge. Dursteler v. Dursteler, 108 Idaho 230, 697 P.2d 1244 (Ct.App.1985), appeal after remand, 112 Idaho 594, 733 P.2d 815 (Ct.App.1987). Amendments to pre-trial stipulations should be liberally granted in order to relieve a party from the effect of a stipulation if its enforcement would work a substantial injustice. Stevenson v. Steele, supra. Although the trial court may expedite justice, it must always do substantial justice. Id.

In this case, the trial judge recognized an inequity that would occur if MAPCO-Nevada was relieved from its stipulation. Nilsson had taken all steps necessary to ascertain the proper defendant. He apparently served a summons and complaint upon a registered agent of MAPCO, Incorporated. He then proceeded with discovery. In response, MAPCO-Nevada answered the complaint and amended complaint, responded to discovery pleadings, and entered into pre-trial stipulations, never once denying it was the proper defendant. It was not until the trial commenced that MAPCO-Nevada specifically denied being the proper defendant. Although MAPCO-Nevada argues that Nilsson was aware of this apparent error beforehand, the trial judge evidently did not agree, and felt that it would be patently unfair to Nilsson to dismiss MAPCO-Nevada from the trial at such a late date. This was entirely within the court's discretion. Cf. Fisher v. Crest Corp., 112 Idaho 741, 735 P.2d 1052 (Ct.App.1987) (default judgment granted despite flaw in service of process on corporation).

In addition, we are mindful that if MAPCO-Nevada had timely moved for a dismissal for lack of personal jurisdiction under I.R.C.P. 12(b)(2), (4), or (5), we would be compelled to determine whether or not the trial court had personal jurisdiction over the proper defendant. However, MAPCO-Nevada's failure to raise such a motion in its pleadings permits us to determine, under I.R.C.P. 4(i), whether it waived its defense by voluntarily appearing to defend this case on the merits. In such cases, we have determined that a "voluntary appearance" is evidenced by conduct which manifests the party's intent to defend the action. Donaldson v. Donaldson, 111 Idaho 951, 729 P.2d 426 (Ct.App.1986). In this case, MAPCO-Nevada showed such intent.

We therefore hold that because the trial judge did not abuse his discretion in failing to relieve MAPCO-Nevada from a pre-trial stipulation naming it as the defendant and that MAPCO-Nevada voluntarily appeared to defend this action on the merits, the trial judge did not err in denying MAPCO-Nevada's request to dismiss it as the defendant in this action.

II Grounds for Wrongful Termination

Second, MAPCO-Nevada argues that the trial court's special verdict is contrary to existing Idaho law. Specifically, it contends that Nilsson was an at-will employee because no written employment contract existed between the parties, and neither the ERC nor the MMC employee manual was intended to establish contract terms. In addition, MAPCO-Nevada asserts that an at-will employment contract does not carry an implied covenant of good faith and fair dealing. In contrast, Nilsson maintains that this is not an at-will employment case. He submits that a combination of guarantees made to him by Talbott and Cole, along with provisions of the employee manuals given to him by ERC and MMC, created an employment contract. As a result, Nilsson contends that he was denied his contractual guarantees of fair treatment and...