NuVision, Inc. v. Dunscombe

• Decision Date: 24 November 1987
• Docket Number: Docket No. 92460
• Citation: 163 Mich.App. 674,415 N.W.2d 234
• Court: Court of Appeal of Michigan — District of US
• Parties: NuVISION, INC., Plaintiff-Appellant, v. Ian DUNSCOMBE, O.D., Defendant-Appellee. 163 Mich.App. 674, 415 N.W.2d 234, 3 Indiv.Empl.Rts.Cas. (BNA) 756

Page 234

415 N.W.2d 234

NuVISION, INC., Plaintiff-Appellant, v. Ian DUNSCOMBE, O.D., Defendant-Appellee.

Docket No. 92460.

163 Mich.App. 674, 415 N.W.2d 234,

3 Indiv.Empl.Rts.Cas. (BNA) 756

Court of Appeals of Michigan.

Submitted April 7, 1987.

Decided Sept. 14, 1987.

Released for Publication Nov. 24, 1987.

[163 MICHAPP 676] Jonathan E. Raven and Mitchell Goodman, Flint, for plaintiff-appellant.

VanBenschoten, Hurlburt & Tsiros, P.C. by Harvey E. VanBenschoten and Lawrence

A. Hurlburt, Saginaw, for defendant-appellee.

Before KELLY, P.J., and HOOD and OPPLIGER, ^* JJ.

HOOD, Judge.

Plaintiff appeals as of right from an order of the Saginaw Circuit Court granting defendant's motion for summary disposition pursuant to MCR 2.116(C)(8) and (10), formerly GCR 1963, 117.2(1) and (3), after plaintiff filed suit to vacate an arbitration award. We affirm in part and reverse in part.

On January 2, 1976, plaintiff and defendant entered into an employment agreement wherein defendant was to be employed by plaintiff as an optometrist at plaintiff's clinic. The agreement provided that either party could terminate the contract at any time upon giving the other party six months notice. The contract contained a provision stating that any dispute arising out of the agreement was to be submitted to arbitration. Defendant was transferred to plaintiff's Traverse City, Michigan, office shortly after entering into the agreement, and the parties operated under the agreement without incident until late 1982. According[163 MICHAPP 677] to plaintiff, it became dissatisfied with defendant's work in late 1982 and on February 7, 1983, gave defendant notice of its intention to terminate defendant's employment contract on August 7, 1983. Defendant submits a different version of the facts. ¹ Defendant claims that in late October or early November, 1982, an incident developed regarding a contact lens. While defendant was away at a seminar, a representative of a contact lens manufacturing company visited the Traverse City office and prescribed an experimental contact lens for a patient without having the patient sign a consent form required by the federal Food and Drug Administration. The patient, dissatisfied, later returned the lens whereupon defendant told the patient that the lens was an experimental one and that the patient should have been given the form to sign. Shortly after this incident, plaintiff's president called defendant at home and severely reprimanded him for having told the patient of the experimental nature of the lens and of the form. The president then told defendant that there were going to be some "changes made" in Traverse City. Defendant was assigned only seven work days in December, 1982, and only three days during the entire month of January, 1983. On December 29, 1982, plaintiff's vice-president sent defendant a letter stating that "... as of February 1, 1983 you will be identified as a part time employee." In addition, plaintiff removed defendant from Blue Cross coverage and took away defendant's company car.

The termination letter from plaintiff followed in February, 1983. Following receipt of the termination letter, defendant filed for arbitration under the employment agreement, claiming that plaintiff [163 MICHAPP 678] breached the employment contract in the fall of 1982 by failing to provide him with full-time employment and benefits which arose therefrom and by altering his contract in February to that of a part-time employee.

Arbitration hearings were held over three days in April, 1985. Defendant raised alternative theories upon which the arbitrators could base an award in his favor. First, he argued that the "changes" made in defendant's employment conditions, which marked a breach in the employment contract, were made by plaintiff in retaliation for defendant's informing the patient of the required consent form which the patient had not received. Thus, termination of his employment contract constituted a wrongful retaliatory discharge which was against public policy. See Trombetta v. Detroit, T & I R Co., 81 Mich.App. 489, 265 N.W.2d 385 (1978), lv. den. 403 Mich. 855 (1978). Second, defendant argued that the employment contract carried with it an oral agreement that defendant could not be fired except for good cause. See Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980). Defendant claimed total losses of $220,519.51 as a result of the wrongful discharge and breach of his employment contract.

On July 2, 1985, the arbitration panel unanimously ruled that defendant was entitled to $92,500 from plaintiff as a result of plaintiff's breach of his employment contract. Plaintiff thereafter filed a complaint in the Saginaw Circuit Court pursuant to MCR 3.602(J)(1), formerly GCR 1963, 769.9(1), to vacate the award on the ground that the award was grossly excessive, a result of prejudicial hearings, and awarded by obviously partial arbitrators. Defendant filed a motion for summary disposition, which was granted by the court on November 1, 1985. Thereafter, an order was signed [163 MICHAPP 679] on December 17, 1985, affirming the arbitration award, granting defendant's motion for summary disposition, and giving plaintiff thirty days in which to file an amended complaint. Plaintiff filed an amended complaint on January 21, 1986.

Defendant again moved for summary disposition under both MCR 2.116(C)(8) and (10). Plaintiff countered with its own motion for summary disposition. On April 10, 1986, the trial court issued a written opinion denying plaintiff's motion for summary disposition and granting defendant's motion for summary disposition. The court held that p 11(a) of plaintiff's amended complaint spoke in terms of conclusions and did not set forth allegations of fact upon which the conclusions were based. Citing MCR 2.111(B)(1), formerly GCR 1963, 111.1(1), and MCR 2.116(C)(8), the court stated that the amended complaint did not state a claim upon which relief could be granted. Additionally, the court ruled that paragraphs 11(b) and 12 of the amended complaint, while set forth with more particularity than p 11(a), did not present genuine issues as to any material facts. Thus, the court determined that summary disposition was proper under MCR 2.116(C)(10). On April 29, 1986, the court entered an order awarding defendant $92,500, in accordance with the arbitration award. Plaintiff appeals as of right, alleging that the court erred both in granting defendant's motion for summary disposition and in denying plaintiff's motion for summary disposition.

In its written opinion, the court granted defendant's motion for summary disposition under MCR 2.116(C)(8) and (10). The court examined paragraphs 11(a) and (b) and 12 in dismissing plaintiff's amended complaint. Paragraph 11(a) was dismissed for failure to state a claim upon which relief could be granted, and therefore must be analyzed with [163 MICHAPP 680] reference to MCR 2.116(C)(8). Sections 11(b) and 12 were dismissed because the trial court concluded that there were no disputes as to material fact. We therefore analyze those dismissals with reference to MCR 2.116(C)(10). We will examine each relevant paragraph of plaintiff's amended complaint separately.

I. Paragraph 11(a) of plaintiff's amended complaint states:

"The arbitrators exceeded their powers in that:

"The arbitration award resulted from a substantial error in application of the relevant law. In particular, the arbitrators awarded Dunscombe $92,500 notwithstanding that the Employment Agreement expressly granted NuVision the right to terminate Dunscombe on six months' notice and that Dunscombe's damages for this period, by his own admission, were $25,608.67. A review of the transcript and record demonstrates that during the six-month period Dunscombe incurred no other damages. Moreover, Dunscombe could prove his entitlement to damages beyond the six-month termination period only by showing that he had a claim under Toussaint v Blue Cross and Blue Shield of Michigan. A review of the transcript demonstrates that Dunscombe has no claim under Toussaint. In effectively holding that Dunscombe had shown a claim under Toussaint, the arbitrators committed a substantial error in application of the relevant law."

With regard to this paragraph, the court stated:

"This paragraph speaks in terms of conclusions and does not set forth the allegations of fact upon which they are based. It is insufficient to state a claim upon which relief can be granted. Pursell v Wolverine-Pentronix, Inc, 44 Mich App 416, 422 [205 NW2d 504] (1973); MCR 2.111(B)(1); MCR 2.116(C)(8)."

[163 MICHAPP 681] A motion under MCR 2.116(C)(8) tests the legal sufficiency of the pleadings alone. All well-pled allegations must be taken as true. The motion should be denied unless the alleged claims are so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recover. Dzierwa v. Michigan Oil Co., 152 Mich.App. 281, 393 N.W.2d 610 (1986). The mere statement of the pleader's conclusions, unsupported by allegations of fact upon which they may be based, will not suffice to state a cause of action. Koebke v. LaBuda, 339 Mich. 569, 573, 64 N.W.2d 914 (1954); Pursell, supra, 44 Mich.App. 422, 205 N.W.2d 504.

We feel that plaintiff satisfied the rule requiring particularity in pleading. Paragraph 11(a) states that the arbitration award resulted from a substantial error in application of the relevant law. This is another way of stating that the arbitrator exceeded his or her powers. See DAIIE v. Gavin, 416 Mich. 407, 331 N.W.2d 418 (1982). Under MCR 3.602(J)(1)(c), formerly GCR 1963, 769.9(1)(c), a circuit court can vacate an arbitration award if the arbitrator exceeded his or her powers. Thus, the first sentence of p 11(a) sets forth the applicable standard a court would use to determine whether or not to vacate the arbitration award. Paragraph 11(a) goes on to...