Osterkamp v. Alkota Mfg., Inc., 13758

• Court: Supreme Court of South Dakota
• Writing for the Court: MORGAN
• Citation: 332 N.W.2d 275
• Parties: 115 L.R.R.M. (BNA) 2824 Edward V. OSTERKAMP, Plaintiff and Appellant, v. ALKOTA MANUFACTURING, INC., Defendant and Appellee.
• Docket Number: No. 13758,13758
• Decision Date: 13 April 1983

Page 275

332 N.W.2d 275 115 L.R.R.M. (BNA) 2824 Edward V. OSTERKAMP, Plaintiff and Appellant,
v.
ALKOTA MANUFACTURING, INC., Defendant and Appellee. No. 13758. Supreme Court of South Dakota. Argued Oct. 12, 1982.
Decided April 13, 1983.

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Carleton R. Hoy of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for plaintiff and appellant; Sarah Richardson of Davenport, Evans, Hurwitz & Smith, Sioux Falls, on the brief.

C.E. Light of Light Law Offices Yankton, for defendant and appellee; Jerry Pollard of Light Law Offices Yankton, on the brief.

MORGAN, Justice.

Appellant, Edward Osterkamp (Employee), sued his former employer, appellee Alkota Manufacturing, Inc. (Employer), for wrongful discharge. After the jury rendered judgment for Employee, the trial court upon Employer's motion ordered a new trial. Employee appeals the granting of a new trial and we reverse and remand.

Employee, who for many years had been engaged in farming, began his employment with Employer as a welder on a part-time basis in February of 1968. Employer is a manufacturing company in Alcester, South Dakota, which makes high pressure washers and steam cleaners. In May 1969, Employee left farming, moved to Alcester and began working full-time for Employer. Employer promoted Employee twice and in 1977 Employee was a foreman for Employer. On January 16, 1981, in the process of a general work-force reduction, Employer laid off eleven other employees but offered Employee the option of leaving or being demoted. Employee agreed to the demotion and after a week vacation returned on Monday, January 26, 1981. On Wednesday, January 28, 1981, the General Manager called Employee into the office and summarily fired him for being "disloyal." During the subsequent eleven months Employee found only three weeks of temporary work. Finally, in December 1981 Employee obtained permanent employment with the City of Alcester. Employee brought this suit for wrongful discharge ¹ and at trial received a judgment of $30,000.00. The trial court ordered a new trial and Employee appeals.

The trial court ordered the new trial pursuant to SDCL 15-6-59(a) which provides, in pertinent part:

A new trial may be granted to all or any of the parties and on all or part of the issues for any of the following causes:

* * *

(5) Excessive or inadequate damages appearing to have been given under the influence of passion or prejudice;

(6) Insufficiency of the evidence to justify the verdict or other decision or that it is against law[.]

The trial court's grounds for granting a new trial were that the verdict was not supported by the evidence and that the damages were excessive and substantially influenced by passion and prejudice.

In reviewing whether the evidence was sufficient to sustain the verdict, we note that "the trial court has broad discretionary power in granting a new trial on the ground of insufficiency of the evidence, and that such order will not be disturbed absent a clear showing of abuse of discretion." Lewis v. Storms, 290 N.W.2d 494, 497 (S.D.1980) citing to Basin Elec. Power Coop. v. Gosch, 90 S.D. 222, 240 N.W.2d 96 (1976); Jensen v. Miller, 80 S.D. 384, 124 N.W.2d 394 (1963); Allen v. McLain, 74 S.D. 646, 58 N.W.2d 232 (1953); Western Surety Co. v. Boettcher, 39 S.D. 541, 165 N.W. 381 (1917); Drew v. Lawrence, 37 S.D. 620, 159 N.W. 274 (1916). Employee brought this action for wrongful discharge alleging that Employer violated the rules, regulations and disciplinary procedures in Employer's Employees Handbook. The Employees Handbook, admitted as Exhibit 4 at trial, lists twenty-eight rules "necessary for the orderly operation of [Employer's] business." The handbook further states that "[v]iolations of the rules listed ... will result in disciplinary action ...."

In reviewing the reasons for discharge, we note that Employee testified at trial that the Employer's General Manager

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fired him for "disloyalty," as indicated on the termination form, Exhibit 3. Although the handbook enumerates twenty-eight rules as a basis for discipline, none of these rules relate to disloyalty. Employee's testimony also indicated that failing to work properly may have been the basis for discharge. ² Assuming there was a basis for discharge on failing to work properly, the handbook rules clearly provide a procedure which was not followed. Alternatively, if the basis for discharge was "disloyalty," review of the record produces absolutely no evidence to support this basis for discharge. Clearly, no matter which alternative basis the trial court considered, the Employer failed to rebut the Employee's evidence of wrongful discharge.

We note the trial court instructed the jury:

[T]hat the reason for Plaintiff's discharge is not material to the resolution of the issue in this case. The only issue to be resolved by you is whether or not Plaintiff's discharge from his employment was in violation of Defendant's own rules and regulations, and if so, whether or not Plaintiff sustained any damages thereby.

In view of the court's instruction, the reason for discharge was removed from the jurors' consideration. The only consideration was whether Employer followed the discipline procedure outlined in the handbook.

Under the section titled "Disciplinary Action," the handbook states: "The Company will not discharge nor give disciplinary layoff to any employee without just cause. The Company affirms and endorses the theory and practice of 'corrective discipline'." As a procedure for "corrective discipline," the Employer provides in the handbook the following detailed procedure:

An employee warning notice will be used for violations of work rules and regulations.

1. FIRST NOTICE--will be a warning.

2. SECOND NOTICE--will result in a 1 (one) day suspension.

3. THIRD NOTICE--will result in a 1 (one) week suspension.

4. FOURTH NOTICE--will result in discharge.

Violations will be kept in the individual personnel file permantently [sic]. All violations over one year old will be disregarded for discharge purposes.

Employee testified that Employer had not given him any prior indication that his work was unsatisfactory or that discipline...