Snodgrass v. Headco Industries, Inc., WD

CourtCourt of Appeal of Missouri (US)
Citation640 S.W.2d 147
Docket NumberNo. WD,WD
PartiesJames W. SNODGRASS, Respondent, v. HEADCO INDUSTRIES, INC., Appellant. 31771.
Decision Date17 August 1982

Page 147

640 S.W.2d 147
James W. SNODGRASS, Respondent,
No. WD 31771.
Missouri Court of Appeals,
Western District.
Aug. 17, 1982.
Motion for Rehearing and/or Transfer to
Supreme Court Overruled and Denied
Oct. 5, 1982.
Application to Transfer Denied
Nov. 15, 1982.

Page 150

Lee E. Wells, John R. Fox, Kansas City, for appellant.

Thaine Q. Blumer, Kansas City, for respondent.



This is an appeal from a judgment in the amount of one hundred ninety thousand and two dollars ($190,002) entered on a jury verdict in favor of plaintiff-respondent James W. Snodgrass. Defendant is a Missouri corporation doing business under the name of Bearing Headquarters Company. This action was on four counts: Count I concerned the alleged violation of the Missouri service letter statute, § 290.140, RSMo 1978; Count II alleged libel from the issuance of the service letter; Count III concerned alleged slanderous statements about plaintiff made by defendant's district and branch managers to its employee Karen Lomax; and Count IV concerned alleged slanderous statements about plaintiff made by defendant's branch manager to Todd Siler of Household Finance Corporation.

The jury found for plaintiff on Count I and awarded $1.00 actual damages and $10,000 punitive damages; for defendant on Count II; for plaintiff on Count III and awarded $1.00 actual damages and $75,000 punitive damages; and for plaintiff on Count IV and awarded $5,000 actual damages and $100,000 punitive damages.

Defendant asserts some thirteen points of error, many of which have several subpoints, in its voluminous 84 page brief. In the interests of clarity, the more general issues will be addressed first, after which more particular evidentiary questions will be considered.

From the evidence at trial, the jury could have reasonably found the following facts to be true. Prior to July, 1977, plaintiff had been employed by Headco Industries, Inc., d/b/a Bearing Headquarters Company (BH) for about three years. His direct supervisors at BH were Jim Maloney, office manager, Richard Bjork, branch manager, Jim Rund, district manager, and Tom Highley, vice-president of BH. At the time he left BH in 1977, his job entailed taking orders from customers over the telephone and locating the requested merchandise.

The jury could have found that on July 27, 1977, plaintiff discovered that a newly-hired employee was being paid a considerable amount more than he or many of the salespersons. Incited by this event, plaintiff confronted the branch manager, Bjork, and voiced his displeasure regarding this pay discrepancy. Bjork informed plaintiff that the new employee commanded the extra salary because he had a college education and that the company could not afford to give plaintiff a raise because it was on an austerity program. Plaintiff stated he

Page 151

could not work at BH under the circumstances and demanded a raise, which was refused. Although Bjork denies plaintiff told him he was quitting, plaintiff testified that he stated to Bjork that he quit, and several other employees testified that plaintiff had left the office before noon that day and said that he had had "enough of the place," "he was walking out" and "he was quitting." Plaintiff did not return to work that day, a Wednesday, nor the remainder of the week. On July 28, 1977, plaintiff applied for employment at Industrial Bearing and Transmission Company (IBT), a bearing manufacturer in close competition with BH, and was hired to commence two weeks later.

At the end of August, 1977, Karen Lomax was hired as a receptionist by defendant BH. On September 15, 1977, plaintiff returned to BH to pick up a check for vacation pay that had not been given to him with his last paycheck. He met Lomax, and the two began to date that same day. Several days later, Bjork learned that Lomax and plaintiff were seeing each other, and informed his supervisors. Highley gave orders for Rund and Bjork to discuss the matter with Lomax.

On September 17, 1977, Bjork and Rund met with Lomax to discuss her relationship with plaintiff. This conversation provided the basis for Count III of plaintiff's action. The alleged purpose of this meeting was to express the company's concern about company information available to Lomax which might be shared with an employee of a competitor, but the conversation far exceeded this scope. Lomax testified that she was told that plaintiff "had raped their other receptionist" who worked before her; "was involved in a murder"; "had mental problems"; "possessed lewd photographs of the former receptionist which were shown around the BH offices"; "had drugged [the former receptionist] to get her to pose for the pictures"; and "stole from the company." She claimed that the upshot of the meeting was that she "was to stop dating Jim or else they would find a reason to fire me." Lomax testified that the men had told her that both the meeting and her work were confidential. However, she also testified that she and plaintiff had never discussed anything relating to work. The only evidence introduced by defendant that showed any indications of a breach of confidentiality of company business was a memorandum to Bjork from a BH employee wherein the employee expressed a suspicion that information was being passed on to a competitor. However, this memorandum was shown by plaintiff to be dated a week after the September 17th meeting with Lomax.

Lomax testified that she left the meeting believing she would not see plaintiff ever again, but that he was persistent in his efforts to convince her that what she had been told by her employers was false or misleading. It took little time for plaintiff to convince her he was innocent, as the two became engaged several days later around the 19th or 22nd of September. Lomax left her employ at BH on October 17, 1977, and she and plaintiff were married on December 17, 1977.

On October 17, 1977, Bjork received a phone call from Todd Siler, an employee of Household Finance Company (HFC). The ensuing conversation provided the basis for Count IV of plaintiff's action. The purpose of Siler's call was to check past employment of plaintiff listed on an application for a $5,000 loan requested by plaintiff and Lomax. Siler asked Bjork about plaintiff's tenure at BH. Bjork stated that plaintiff had been fired from BH for "falsifying information to his boss" and because he was "caught taking company property". Siler testified that prior to this discussion, plaintiff had been qualified for a loan with HFC based on their own grading system, but that he was turned down "because of the problems he had at the former job," and because he had been on his new job for such a short time. Siler said plaintiff would have to have "someone sign with him because of those problems." Although Bjork freely volunteered the above information, he would not disclose plaintiff's salary with BH.

Page 152

Upon learning of the reason for being rejected for the HFC loan, plaintiff consulted with an attorney, who advised him to seek a service letter from BH. This letter formed the basis for Count I and II of plaintiff's action. The service letter states that the causes for plaintiff's dismissal were as follows:

(a) excessive tardiness;

(b) unexcused and unexplained failure to report to work on July 28 and 29, 1977;

(c) an investigation appeared to give Bearing Headquarters reasonable grounds for believing, and on the basis thereof, the company did believe that Mr. Snodgrass failed to follow accepted company procedure for transferring material between company warehouses, and

(d) an investigation appeared to give Bearing Headquarters reasonable grounds for believing, and on the basis thereof, the company did believe that Mr. Snodgrass criticized the company to various other of the company's employees, and morale problems were created as a result.

Defendant's vice-president Highley testified that the service letter was drafted by an attorney at defendant's home office in Chicago, apparently based on the personnel file kept on plaintiff. The letter was reviewed by Bjork and Rund for accuracy, and signed by Bjork on October 31, 1977. The Personnel Change Notice made out and signed by Bjork on July 30, 1977, listed only three reasons for plaintiff's alleged termination. It did not mention the third allegation in the service letter concerning the failure to follow company procedures regarding the transfer of company materials. Highley later testified that this fourth reason was added after learning that plaintiff was going to sue because of Bjork's statements to HFC on October 17, and they didn't want the statements and letter to conflict. Plaintiff testified that he had never shown the service letter to anyone, effectively discounting any basis for Count II of his action.

Plaintiff left IBT and was hired by Alton Box Co. (ABC) in St. Joseph, Missouri, in November 1978. Defendant subpoenaed Jess Bielby, ABC's office manager, who brought plaintiff's employment application and testified on direct examination that plaintiff was fired by ABC for falsifying information on that application. On cross-examination, Bielby said the specific act of falsification was that plaintiff listed his birthdate as 3-15-57 when in fact he was born 3-15-58. He admitted that there was no minimum age for employment with the Company, other than being older than 16, leaving the implication that the age difference was immaterial. On further cross-examination, Bielby was questioned, without objection, on certain pencilled in comments on the application that read "suing BH" and "BH filed for stealing and mental disorder." Bielby said this information was obtained from BH and written by the president of ABC.


Defendant's first point on appeal questions whether the service letter statute, § 290.140, RSMo 1978, is...

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