Salter v. Alfa Ins. Co., Inc.

• Decision Date: 12 April 1990
• Parties: Betty SALTER v. ALFA INSURANCE COMPANY, INC. 88-1497.
• Court: Alabama Supreme Court

Page 1050

561 So.2d 1050

Betty SALTER v. ALFA INSURANCE COMPANY, INC.

88-1497.

Supreme Court of Alabama.

April 12, 1990.

Allen G. Woodard of Cherry & Givens, Dothan, for appellant.

William C. Carn III and Connie Ray Stockham of Lee & McInish, Dothan, for appellee.

HOUSTON, Justice.

After Betty Salter's agent's contract was terminated by Alfa Insurance Company, Inc. ("Alfa"), she sued Alfa, claiming that the contract had been wrongfully terminated and that she had been defrauded. The trial court entered a summary judgment for Alfa on both claims, ¹ and certified it as final pursuant to Rule 54(b), Ala.R.Civ.P. ² Salter appealed. We affirm.

Initially, we note that the summary judgment was appropriate in this case if there was no genuine issue of material fact and Alfa was entitled to a judgment as a matter of law. In determining whether there was a genuine issue of material fact, this Court must review the evidence in the light most favorable to Salter and resolve all reasonable doubts against Alfa. Kizziah v. Golden Rule Insurance Co., 536 So.2d 943 (Ala.1988). This action was pending on June 11, 1987; therefore, the applicable standard of review is the "scintilla of evidence rule." Ala.Code 1975, § 12-21-12.

Salter argues that the trial court erred in entering the summary judgment on her wrongful termination claim on the ground that her employment contract with Alfa was terminable at will. We disagree.

Salter alleged that Alfa's termination of her contract was wrongful because it was based upon a finding by Alfa that she had not cooperated in the investigation of a life insurance claim that had been filed with Alfa in connection with the death of W.B.; Salter alleged that she had been told by a representative of Alfa that she did not have to be involved in the investigation of the W.B. claim and that she had relied upon that representation. The undisputed evidence showed that Salter had an employment contract with Alfa that was terminable at the will of either party. ³ She argues, nonetheless, that the termination of her contract was in violation of this state's public policy because, she says, the Legislature has historically treated the insurance industry "with a view to the public interest." Salter asks that we carve a public policy exception out of the rule in this state that an employment contract at will may be terminated by either party with or without cause or justification. In Hinrichs v. Tranquilaire Hospital, 352 So.2d 1130 (Ala.1977), this Court was faced with the question whether the plaintiff could maintain an action in tort for the termination of her employment contract, which was terminable "at will," based on her claim that the termination was the result of her refusal to continue to falsify medical records and, therefore, that it was "wrongful." We held that she could not, and affirmed the summary judgment entered for the defendants, stating, in pertinent part, as follows:

"It is well settled that an employment contract at will may be terminated by either party with or without cause or justification. 56 C.J.S. Master & Servant § 31; and 62 A.L.R.3d 271. Hinrichs, however, contends that the absoluteness of this rule has been increasingly circumscribed when such discharge contravenes a statute or is contrary to 'public policy,' citing Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 344 P.2d 25 (1959), and Nees v. Hocks, 272 Or. 210, 536 P.2d 512 (1975).

"We reject this contention and affirm the grant of summary judgment for three reasons:

"(1) Such a new rule as Hinrichs espouses would abrogate the inherent right of contract between employer and employee; (2) such a rule would overrule existing Alabama law; (3) the suggested foundation for such rule, 'contrary to public policy,' is too nebulous a standard to justify its adoption. We amplify on these reasons in the ensuing three paragraphs.

"(1) The general rule is that an employment contract at will may be terminated by either party with or without cause or justification. 56 C.J.S. Master and Servant § 31; and 62 A.L.R.3d 271. This means a good reason, a wrong reason, or no reason.

"(2) Alabama has followed the general rule which is that in a contract of employment 'at will,' the contract means what it says, that it is at the will of either party. The employee can quit at will; the employer can terminate at will. Alabama Mills, Inc. v. Smith, 237 Ala. 296, 186 So. 699 (1939). This is true whether the discharge by the employer was malicious or done for other improper reasons. Comerford v. International Harvester Co., 235 Ala. 376, 178 So. 894 (1938). This has been the Alabama law since the early years of this century. See Tennessee Coal, Iron and R. Co. v. Kelly, 163 Ala. 348, 50 So. 1008 (1909), where this Court held:

" '... If one does an act which is legal in itself and violates no right of another, the fact that this rightful act is done from bad motives or with bad intent toward the person so injured thereby does not give the latter a right of action against the former.'

"We pretermit any discussion of this issue in the constitutional context since it is not raised.

"(3) Appellant Hinrichs would have this Court justify the creation of this rule on 'public policy' grounds and bases her contention on an Oregon and a California appellate court decision. However, even the California appellate court in Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 344 P.2d 25 (1959), confessed that, ' "The term 'public policy' is inherently not subject to precise definition.... 'Public policy is a vague expression, and few cases can arise in which its application may not be disputed....' " ' We hold that this is too vague a concept to justify the creation of such a new tort. Such creations are best left to the legislature.

"In sum, because we think employment contracts 'at will' mean what they say, and because adoption of such a rule would overrule nearly 70 years of existing Alabama case law, and because the suggested basis of 'public policy' is too nebulous an underpinning to justify adoption of such a rule, we affirm."

352 So.2d at 1131-32. Recently, in Bosarge v. Bankers Life Co., 541 So.2d 499, 501 (Ala.1989), involving a suit alleging breach of contract, this Court, quoting Hoffman-LaRoche, Inc. v. Campbell, 512 So.2d 725, 728 (Ala.1987), declined to modify the employee-at-will doctrine, stating, in pertinent part, as follows:

" 'By now, the rule is well settled in Alabama that an employee contract at will may be terminated by either party with or without cause or justification. See, e.g., Meeks v. Opp Cotton Mills, Inc., 459 So.2d 814 (Ala.1984); Hinrichs v. Tranquilaire Hospital, 352 So.2d 1130 (Ala.1977). This means a good reason, a wrong reason, or no reason. Hinrichs, supra.

" '... This Court has repeatedly refused to modify [the employee-at-will] doctrine even so much as to recognize a so-called public policy exception to its application. Thus, we have refused to recognize an exception where an employee had been dismissed for refusing to commit a criminal act, see, e.g., Jones v. Ethridge, 497 So.2d 1107 (Ala.1986); Williams v. Killough, 474 So.2d 680 (Ala.1985), or where an employee had been dismissed because he filed a workmen's compensation claim, see Meeks v. Opp Cotton Mills, Inc., supra, or where an employee had been dismissed because he responded to a subpoena for jury duty, see Bender Ship Repair, Inc. v. Stevens, 379 So.2d 594 (Ala.1980).' " ⁴

(Some emphasis in original; some emphasis added in Bosarge.)

Again, we decline to modify the employee-at-will doctrine by recognizing a public policy exception to it in this case. The trial court did not err in entering the summary judgment on the wrongful termination claim on the ground that Salter had an employment contract that was terminable at will.

Salter next contends that the trial court erred in entering the summary judgment on her fraud claim because, she argues, there was at least a scintilla of evidence tending to prove each element of the claim. Again, we disagree.

Salter's complaint, in pertinent part, reads as follows:

"[Alfa] by and through [its] agent, servant, employee, Sandy Godwin, represented to [Salter] in 1984 that [Salter] would not be required to participate in any way in the claims process concerning the death of [W.B.].

"The representations made by [Alfa] were false, [Alfa] knew they were false and/or [Alfa], with knowledge of the true facts, recklessly misrepresented them to [Salter] with the intention that [Salter] should rely upon them.

"[Salter] believed the representations made by [Alfa] and in reliance upon them was caused to be terminated from her employment with [Alfa] thus causing her substantial financial damage because of this reliance."

The record shows that Alfa made a prima facie showing that Salter's allegations were unsubstantiated and, therefore, that it was entitled to a judgment as a matter of law. Accordingly, the burden shifted to Salter to present at least a scintilla of evidence tending to show the existence of a fact question. In an attempt to do this, Salter presented evidence tending to show that Sandy Godwin, the director of life insurance claims for Alfa, had told her that Alfa was "not going to involve [her] in the investigation [of W.B.'s death], because of the closeness that [she] had with [W.B.'s] family." The evidence also tended to show that Salter had relied on that representation by staying out of the investigation and that she had been told that Alfa terminated her contract because she did not cooperate in the investigation.

The elements of actionable fraud based on a misrepresentation are: (1) a duty to speak the truth; (2) a false representation of a material existing fact made intentionally, recklessly, or innocently; (3) action upon the false representation by the plaintiff; and (4) damages proximately resulting from the false representation. Alfa...