Scott v. Union Tank Car Co.

• Decision Date: 01 April 1980
• Docket Number: No. 3-877A203,3-877A203
• Citation: 402 N.E.2d 992
• Parties: Prentice E. SCOTT, Plaintiff-Appellant, v. UNION TANK CAR CO., Defendant-Appellee.
• Court: Indiana Appellate Court

Page 992

402 N.E.2d 992

Prentice E. SCOTT, Plaintiff-Appellant, v. UNION TANK CAR CO., Defendant-Appellee.

No. 3-877A203.

Court of Appeals of Indiana, Third District.

April 1, 1980.

Thomas J. Scully, Munster, for plaintiff-appellant.

G. Edward McHie, McHie, Enslen & Moran, Hammond, Joel H. Kaplan, Robert B. Watson, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for defendant-appellee.

HOFFMAN, Judge.

Prentice Scott was an employee at will of Union Tank Car Company for a period of approximately five years ending on August 26, 1974, the date of Scott's dismissal. On October 6, 1976, over two years later, Scott filed suit against Union, alleging that he had been discharged in retaliation for filing a Workmen's Compensation claim. However, Union's motion to dismiss the suit on the ground that it was barred by the statute of limitations (IC 1971, 34-1-2-2 (Burns Code Ed.)) was granted by the court below.

Scott argues on appeal that his claim sounded in contract, not in tort, and that the six-year statute of limitations (IC 1971, 34-1-2-1 (Burns Code Ed.)) was therefore applicable. He maintains that the court erred in concluding otherwise because his claim arose out of a contractual relationship, i. e., the relationship created by his unwritten contract of employment.

In Frampton v. Central Ind. Gas Co. (1973), 260 Ind. 249, 297 N.E.2d 425, the Supreme Court held that an employee who alleges that he or she was discharged in retaliation for filing a claim pursuant to the Workmen's Compensation Act ¹ or the Workmen's Occupational Diseases Act ² has stated a claim upon which relief can be granted. Plainly, that decision recognized that an employee who files such a claim has an interest in continuing in his or her employment which is protected from invasion by the employer's retaliatory actions. It follows that the act of an employer who discharges such an employee is one "which is intended to cause an invasion of an interest legally protected from intentional invasion," and is, therefore, a tortious act. Restatement of the Law, Torts 2d, § 6, Comment a. The fact that the right invaded is one which the law has created "in consequence of a relation which a contract has established between the parties" in no way undermines, but in fact supports, that conclusion. See: Peru Heating Co. v. Lenhart (1911), 48 Ind.App. 319, at 326, 95 N.E. 680, at 683.

Consequently, the trial court correctly denominated Scott's claim as one sounding in tort and properly applied IC 1971, 34-1-2-2 (Burns Code Ed.) in dismissing the complaint.

Accordingly, the judgment below must be affirmed.

Affirmed.

GARRARD, P. J., concurs.

STATON, J., dissents with opinion.

STATON, Judge, dissenting.

I dissent to the rationale and conclusion of the Majority Opinion. The underpinning of the Majority's conclusion is that the employer's discharge of Scott was an act "which is intended to cause an invasion of an interest legally protected from invasion." If this rationale were to be extended to every intentional act which resulted in a breach of contract, a tort action would be created in addition to the breach of contract action. If the facts surrounding the act do not exactly fit the contract theory, regardless of the fundamental relationship, then, an action in tort could be considered. ¹

Even if more compelling rationale could be presented by the Majority to show that Scott's action could be based upon a tort theory, I would still dissent. Scott's action can be better characterized as a contract action than a tort action. This is important where an action may not survive because of the statute of limitations if one theory rather than another is applied to its facts. As a matter of policy, the Courts of Indiana as well as those of many other states ² have always applied the theoretical construction which would permit the cause of action to survive the statute of limitations. Holt Ice, etc., Co. v. Arthur Jordan Co. (1900), 25 Ind.App. 314, 57 N.E. 575; Raugh v. Stevens (1899), 21 Ind.App. 650, 52 N.E. 997; See 1 I.L.E. § 25 p. 95 (1957).

Assuming arguendo that Scott's action could be based upon a tort theory as well as a contract theory, the contract theory would give Scott more time in which to file his action under the statute of limitations. Holt and Raugh would permit Scott's action to withstand the terminal threat of the statute of limitations. Scott would have six years instead of two years to bring his action. The trial court erred when it dismissed Scott's action. I would reverse.

The trial court erred when it granted Union Tank Car Company's Motion to Dismiss which was predicated upon the statute of limitations. Scott maintains that an employee's action to recover damages for an employer's retaliatory discharge can be based on contract theory. Accordingly, Scott argues that the six year statute of limitations which governs "contracts not in writing" (IC 1971, 34-1-2-1, Ind.Ann.Stat. § 2-601 ³ (Burns Code Ed.)) renders the trial court's dismissal of his action erroneous.

Traditionally, American common law has characterized contracts of employment for unspecified periods of time as "employment contracts at will." ⁴ 53 Am.Jur.2d Master and Servant § 43 (1970). As the label implies, an employment relationship for an unspecified period of time has generally been regarded as terminable at the will of either the employer or employee, with or without cause. Id.

The application of this rule of law has sometimes led to extraordinary, harsh results. For example, in Mallard v. Boring (1960), 182 Cal.App.2d 390, 6 Cal.Rptr. 171, a secretary was discharged after she refused to comply with her superior's directive to indicate on a jury service questionnaire that she was not available. Despite the fact that she had consulted with a senior partner who had advised her that jury service was a duty and that she should indicate her availability, the California Court of Appeals upheld the dismissal of her cause, at the same time noting that the employer's actions were "reprehensible" and "selfish and shortsighted." Id. at 174. Similar results have been reached in other jurisdictions which invoke a strict application of the rule that an employee whose work contract is for an unspecified period of time may be discharged at the employer's whim. See, e. g., Simmons v. Westinghouse Electric Corp. (1975), 311 So.2d 28 (La.App.) (No cause of action for foreman with twenty-five years seniority who was allegedly discharged as a result of plant manager's false report that foreman was sympathetic to union organizers, despite allegations that company had orally promised that he would not be fired except for just cause.); Geary v. United States Steel Corp., (1974), 456 Pa. 171, 319 A.2d 174 (Roberts, J. dissenting) (Dismissal of salesman's wrongful discharge suit on allegations that his complaint to superiors concerning inadequate laboratory testing regarding safety of new product motivated the termination of his employment of fourteen years, despite companion allegation that his complaint had resulted in withdrawal of product from market.).

While Indiana has traditionally adhered to the rule that an employment agreement for an unspecified period of time is terminable at the will of either party, it has recently joined with a distinct minority of this nation's jurisdictions ⁵ in recognizing that the inflexible application of the "employment at will" doctrine simply is not always consonant with the ends of justice. In Frampton v. Central Indiana Gas Company (1973), 260 Ind. 249, 297 N.E.2d 425, the Supreme Court confronted the question whether an employee who alleged that she was fired in retaliation for filing a workmen's compensation claim had stated a cause of action. Writing for the majority, Justice Hunter said:

"In summary, we hold that an employee who alleges he or she was retaliatorily discharged for filing a claim pursuant to the Indiana Workmen's Compensation Act (IC 1971, 22-3-2-1 et seq. (Ind.Ann.Stat. § 40-1201 et seq. (1965 Repl.))) or the Indiana Workmen's Occupational Diseases Act (IC 1971, 22-3-7-1 et seq. (Ind.Ann.Stat. § 40-2201 et seq. (1965 Repl.))) has stated a claim upon which relief can be granted.

"We further hold that such a discharge would constitute an intentional, wrongful act on the part of the employer for which the injured employee is entitled to be fully compensated in damages. Of course, the issue of retaliation should be a question for the trier of fact.

"We agree with the Court of Appeals that, under ordinary circumstances, an employer at will may be discharged without cause. However, when an employee is discharged solely for exercising a statutorily conferred right an exception to the general rule must be recognized."

260 Ind. at 253, 297 N.E.2d at 428. As in Frampton, Scott's complaint in the case at bar alleges a retaliatory discharge of that type which Indiana recognizes as actionable at law, notwithstanding the fact that Scott's employment agreement was one generally characterized as terminable at will.

Frampton does not establish whether employees who are exercising a statutory right may base their claims on a contract theory. In order to determine that question, our analysis turns to the consideration of the nature of the rights and obligations of employers and employees under the Workmen's Compensation Act.

As originally enacted in 1929, the rights and obligations of the Workmen's Compensation Act were not compulsory in nature. IC 1971, 22-3-2-2, Ind.Ann.Stat. § 40-1202 (Burns Code Ed.) provided that employers and employees were "presumed to have accepted" the rights and obligations of the Act, but it allowed either party to repudiate the applicability of the Act by obtaining authorization of the Industrial Board and notifying the other party of the intent to abrogate the Act's provisions. The Workmen's Compensation Act was thus presumed by statute to control the rights and obligations of parties to...