Rush v. United Technologies, Otis Elevator Div.

• Decision Date: 22 February 1991
• Docket Number: No. 90-1556,90-1556
• Citation: 930 F.2d 453
• Parties: 56 Empl. Prac. Dec. P 40,703, 119 Lab.Cas. P 56,706, 6 Indiv.Empl.Rts.Cas. 1460 Donn E. RUSH, Plaintiff-Appellant, v. UNITED TECHNOLOGIES, OTIS ELEVATOR DIVISION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 453

930 F.2d 453

56 Empl. Prac. Dec. P 40,703, 119 Lab.Cas. P 56,706,

6 Indiv.Empl.Rts.Cas. 1460

Donn E. RUSH, Plaintiff-Appellant, v. UNITED TECHNOLOGIES, OTIS ELEVATOR DIVISION, Defendant-Appellee.

No. 90-1556.

United States Court of Appeals Sixth Circuit.

Argued Jan. 31, 1991.

Decided Feb. 22, 1991.

Scott F. Bergo (argued), Detroit, Mich., for plaintiff-appellant.

Richard J. Seryak (argued), Gillian Steinhauer, Miller, Canfield, Paddock & Stone, Detroit, Mich., for defendants-appellees.

Before MILBURN and GUY, Circuit Judges, and BROWN, Senior Circuit Judge.

PER CURIAM.

This is an appeal from a summary judgment granted to the defendant in this wrongful discharge case. Plaintiff, Donn Rush, argues on appeal that there were genuinely disputed issues as to material facts and that summary judgment was therefore inappropriate.

Upon review, we conclude that summary judgment was appropriate and we affirm.

I.

Rush began working for Otis Elevator in 1951 in a sales capacity and continued with the company until his discharge in November of 1986. During this period of employment, Rush received a number of promotions and enjoyed good performance reviews until 1985. In 1985, however, Richard Caldwell became plaintiff's new supervisor, and his evaluation of Rush's work performance differed dramatically from Rush's preceding supervisor. The performance evaluation sheets used by the defendant required supervisors to rate employees in 13 different performance areas, e.g., planning, decision making, and working with others. In 1984, on a scale ranging from "outstanding" to "unsatisfactory," Rush had received ten grades of "excellent" and three of "good." In 1985, with Caldwell doing the evaluating, Rush received five grades of "unsatisfactory," four of "satisfactory," and three of "good." A demotion accompanied this evaluation.

Rush had experienced problems for a number of years in connection with the handling of his expense account. As an outside salesperson, Rush was expected to entertain customers, but habitually filed late expense reports, which frequently lacked complete supporting documentations, as required. Although verbally chastised for this, no disciplinary action was ever taken. When Caldwell began reviewing the expense accounts, the official attitude changed. Caldwell, whose background was accounting and not sales, was obviously much more of a stickler for details. ¹ The situation moved from benign disapproval, to which Rush was accustomed, to one in which every bean had to be counted. Caldwell sent Rush some rather harsh warning letters, making it clear that expense account peccadillos would no longer be tolerated.

Apart from late reporting, there were a number of procedural variances that could get one in trouble with an expense account. For example, there was overspending the monthly amount allocated, using a disproportionate amount of the entertainment allowances for bar bills, billing for expenses not business related, ² and reporting more than actually was spent. Although Rush at one time or another appears to have committed all of these expense account sins, it was the "doctoring" of receipts to reflect more than was spent that proved his ultimate downfall.

An investigation and audit was conducted by management. On November 13, 1986, Rush was confronted with three receipts he had submitted and the actual restaurant records showing the actual amount spent, which was less than what the receipts showed. When Rush was unable to explain the discrepancies, he was given the choice of resigning or being terminated. Rush declined to resign and was fired.

Although terminated, Rush still remained eligible to receive the pension he earned during his 35-year tenure with Otis. He might have left it at that were it not for the fact that, three weeks after his termination, Otis announced a substantial improvement in its pension plan insofar as "early retirements" were concerned. Had Rush been on the payroll on January 10, 1987, he could have benefited from this plan change if he had elected to take early retirement.

In December 1987, Rush filed this action alleging wrongful discharge, negligent performance evaluation, promissory estoppel, intentional infliction of emotional distress, age discrimination, and a violation of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Sec. 1001, et seq. Since we are considering an appeal from a summary judgment, we review each of plaintiff's claims de novo. Gutierrez v. Lynch, 826 F.2d 1534, 1536 (6th Cir.1987).

II.

Relying on the Toussaint doctrine, ³ Rush claims he is not an at-will employee and could only be fired for just cause. Although we have serious reservations as to whether Rush could bring himself within the protection of the Toussaint ruling, we find it unnecessary to discuss this issue since we conclude that Rush was fired for just cause. The falsification of expense account records is a serious breach of responsibility on the part of an employee and constitutes just cause for termination. Although Otis had tolerated a certain laxity on the part of Rush over the years, it was clear that management's attitude had changed, and Rush was adequately informed of the new outlook both verbally and in writing. Our conclusion on this issue also disposes of the promissory estoppel argument. The fact that the company arguably had condoned Rush's deviation from the norm does not bind them forever to this policy. It was made abundantly clear to Rush that his past practices were no longer to be tolerated.

III.

We find no merit to plaintiff's claim for the tort of negligent evaluation of his expense account practices.

The law in Michigan is well-settled that an action in tort requires a breach of duty separate and distinct from a breach of contract. Haas v. Montgomery Ward & Co., 812 F.2d 1015 (6th Cir.1987); Kewin v. Massachusetts Mutual Life Insurance Co., 409 Mich. 401, 295 N.W.2d 50 (1980); Hart v. Ludwig, 347 Mich. 559, 79 N.W.2d 895 (1957); Brewster v. Martin Marietta Aluminum Sales, Inc., 145 Mich.App. 641, 378 N.W.2d 558 (1985). In Hart, Michigan's highest court noted the distinction between the legal duty which arises by operation of a contract and the fundamental concept of a legal duty to avoid conduct which creates liability in tort. "[I]f a relation exists which would give rise to a legal duty without enforcing the contract promise itself, the tort action will lie, otherwise not." Hart, 347 Mich. at 565, 79 N.W.2d at 898 (quoting W. Prosser, Handbook of Torts, Sec. 33 at 205 (1st ed. 1941)).

....

Plaintiffs rely on Schipani v. Ford Motor Co., 102 Mich.App. 606, 302 N.W.2d 307 (1981), and Chamberlain v. Bissell, Inc., 547 F.Supp. 1067 (W.D.Mich.1982), to argue that negligent performance of a contract constitutes a tort. This reliance is seriously misplaced. While Schipani points out that a breach of contract may also be a tort, it does not address the salient feature of Haas, Hart, and Brewster: an action in tort will not arise for a breach of contract unless the action in tort would arise independent of the existence of the contract. In its discussion of tort liability, plaintiffs' own authority, Chamberlain, states, "There must be some breach of duty distinct from breach of contract." Chamberlain, 547 F.Supp. at 1081 (quoting Hart v. Ludwig, 347 Mich. at 563, 79 N.W.2d 895) (citation omitted) (emphasis in original). Plaintiffs' claim in tort cannot exist under Michigan law because plaintiffs do not claim that the defendant has caused any harm in the realm beyond the contract.

Brock v. Consolidated Biomedical Laboratories, 817 F.2d 24, 25 (6th Cir.1987).

Apart from not recognizing plaintiff's theory of action for negligent evaluation, we also note that our conclusion that Rush was terminated for just cause would really subsume the issue of any alleged negligence in evaluating his expense accounts.

IV.

Since the Michigan Supreme Court has yet to recognize the tort of intentional infliction of emotional distress, the issue of its viability in this Michigan diversity case is less than clear. The panels of the Michigan Court of Appeals that have recognized this tort have adopted the elements of intentional infliction of emotional distress, as articulated in section 46 of the Restatement (Second) of Torts:

(1) One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm.

Cebulski v. Belleville, 156 Mich.App. 190, 194, 401 N.W.2d 616 (1986); Ledl v. Quik Pik Food Stores, Inc., 133 Mich.App. 583, 349 N.W.2d 529 (1984).

In commenting on a claim of intentional infliction of emotional distress, we stated in Polk v. Yellow Freight System, Inc., 801 F.2d 190, 195-96 (6th Cir.1986):

The Restatement defines this tort narrowly:

It has not been enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by "malice," or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community.

Id. at Sec. 46, comment d, quoted in Warren [v. June's Mobile Home Village & Sales,] 66 Mich.App. at 390-91, 239 N.W.2d 380 [ (1976) ]. The defendant is not liable for "mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities," Restatement (2d) of Torts Sec. 46, comment d (1965), quoted in Warren, 66 Mich.App. at 391, 239 N.W.2d 380, nor is the defendant liable "where he has done no more than to insist upon his legal rights in a permissible way, even...