Talkington v. American Colloid Co.

• Decision Date: 13 June 1991
• Docket Number: No. CIV. 91-5014.,CIV. 91-5014.
• Citation: 767 F. Supp. 1495
• Parties: Monte TALKINGTON, Plaintiff, v. AMERICAN COLLOID COMPANY, a Delaware corporation, Defendant.
• Court: U.S. District Court — District of South Dakota

767 F. Supp. 1495

Monte TALKINGTON, Plaintiff, v. AMERICAN COLLOID COMPANY, a Delaware corporation, Defendant.

No. CIV. 91-5014.

United States District Court, D. South Dakota, W.D.

June 13, 1991.

Terence R. Quinn, Belle Fourche, S.D., for plaintiff.

Thomas E. Simmons, Rapid City, S.D., for defendant.

MEMORANDUM OPINION AND ORDER

BOGUE, Senior District Judge.

On March 19, 1991, Defendant American Colloid Company filed with this Court motions to dismiss or for judgment on the pleadings in two separate cases: Ivan Stedillie v. American Colloid Company, CIV.91-5015, 767 F.Supp. 1502; and Monte Talkington v. American Colloid Company, CIV.91-5014. Plaintiffs, both of whom are represented by the same counsel, filed appropriate responses; and, Defendant replied accordingly. Specifically, Defendant contends that Plaintiff in this case failed to state a cause of action upon which relief can be granted under South Dakota law. See Fed.R.Civ.P. 12(b)(6) and 12(c); SDCL 60-4-4.

Decision

The purpose of a motion to dismiss under Rule 12(b)(6), or in the alternative, a motion for judgment on the pleadings under Rule 12(c),¹ is to assess the legal feasibility of the complaint, not to weigh the evidence which Plaintiff offers or intends to offer. Such a blunt tool should not be used simply because the Court doubts the factual merit of Plaintiff's case. Schieffelin & Co. v. Jack Co. of Boca, 725 F.Supp. 1314 (S.D.N.Y.1989). Thus, a case should not be dismissed pursuant to Rule 12(b)(6) "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957).

It is within the Court's discretion, however, under appropriate circumstances, to convert a motion to dismiss under Rule 12(b)(6) to a motion for summary judgment under Rule 56 of the Fed.R.Civ.P.. Rule 12(b) provides:

If, on a motion asserting the defense numbered (6) to dismiss for failure of a pleading to state a claim upon which relief can be granted, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Under Rule 56 of the Federal Rules of Civil Procedure, a movant is entitled to relief at summary judgment only if he can "show that there is no genuine issue as to any material fact and that he is entitled to judgment as a matter of law." Jane Doe A v. Special School Dist. of St. Louis County, 682 F.Supp. 451 (E.D.Mo. 1988), citing Pollard v. Columbia Broadcasting, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). In determining whether judgment should issue, the facts and inferences from those facts are viewed in the light most favorable to the nonmoving party and the burden is placed on the moving party to establish both the absence of a genuine issue of material fact and that such party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538 (1986). Once the moving party has met this burden, the nonmoving party may not rest on the allegations in the pleadings, but by affidavit or other evidence must set forth specific facts showing that a genuine issue of material fact exists. In determining whether a genuine issue of material fact exists, this Court views the evidence presented based upon which party has the burden of proof within the underlying substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 2513, 91 L.Ed.2d 202 (1986).

Recently, the Supreme Court noted that "summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to `secure the just, speedy, and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 2555, 91 L.Ed.2d 265 (1986). Therefore, the nonmoving party "must do more than show that there is some metaphysical doubt as to the material facts," Matsushita, 106 S.Ct. at 1356, and "where the record as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Id.

Breach of Contract

In 1973, Plaintiff went to work for Defendant American Colloid Company. Plaintiff did not enter into a written employment contract with Defendant, nor did Plaintiff have a specified term of employment. Sometime in early March, 1985, Plaintiff's employment with Defendant was terminated. Under South Dakota law, "an employment having no specified term may be terminated at the will of either party ..." SDCL 60-4-4. And, "despite numerous challenges, the employment-at-will doctrine is still the law in South Dakota." Larson v. Kreiser's, Inc., 427 N.W.2d 833, 834 (S.D.1988).

In Osterkamp v. Alkota Mfg. Inc., 332 N.W.2d 275 (S.D.1983), however, the South Dakota Supreme Court recognized a narrow contract-based exception to the at-will employment doctrine.² This two-pronged "handbook" exception was later articulated in Butterfield v. Citibank of South Dakota, 437 N.W.2d 857 (S.D.1989). First, such an agreement may be found where the employee handbook explicitly provides, in the same or comparable language, that discharge can be "for cause only." Id. at 859. emphasis added. Second, a "for cause only" agreement may be implied where the handbook contains a detailed list of exclusive grounds for employee discipline or discharge and, a mandatory and specific procedure which the employer agrees to follow prior to any employee's termination. Id. (emphasis added). "In short, the handbook must contain language indicating a clear intention on the employer's part to surrender its statutory power to terminate its employees at will (SDCL 60-4-4)." Id. emphasis added.

Plaintiff contends that language in Defendant's employee handbook can be construed as creating a discharge "for cause only" agreement. Defendant's handbook, however, contains not a single item, nor a series of items, sufficient to generate a genuine issue of material fact for trial. See Fed.R.Civ.P. 56(c). Plaintiff refers to several areas of the handbook—a pamphlet which actually does nothing more than "outline employer expectations, enumerate a code of conduct, and provide an assortment of information regarding personnel matters and general company policies," Bauer v. American Freight Systems, 422 N.W.2d 435, 439 (S.D.1988)³—for the proposition that a "for cause" agreement was created. Below is a list of all passages from Defendant's employee handbook which even tangentially relate to employee discharge:

1. If you are absent for three days, and do not report to your supervisor, it is possible that you will be considered automatically terminated.

2. At the completion of the 90 day probationary period, you will become a permanent employee.

3. If you act as a reasonable, law-abiding citizen, and do your job well, you will get along well and enjoy your membership in the family of American Colloid's employees.

4. If you are dismissed, a full explanation for the reasons, given to you by your supervisor, will be provided.

This list is exhaustive and each item on the list comes from a different section of the employee handbook. Far from "explicitly providing, in the same or comparable language, that discharge can be for cause only," Butterfield, 437 N.W.2d at 859, this array of statements fails to even mention the issue of "for cause" termination. Further, the items enumerated can hardly be defined as a "detailed list of exclusive grounds for employee discipline or discharge." Id. More importantly, nothing in the list—or, for that matter, in the entire employee handbook—even remotely resembles "mandatory and specific procedures which the employer agrees to follow prior to an employee's termination." Id.

The handbook in this case does nothing more than reduce to writing Defendant's dream of an optimal working environment. And, unlike the handbook in Bauer, which at least contained an enumerated list referring to employee termination and discharge yet was insufficient to survive summary judgment, the American Colloid handbook is simply a series of neutral statements designed to assuage employee discontent and encourage employer-employee dialogue. As the South Dakota Supreme Court noted in Bauer, "the general termination provisions in the handbook do not contain any procedures for terminating an employee, unlike the very specific provisions applied in Osterkamp." Jones v. E G & G Idaho, Inc., 111 Idaho 591, 726 P.2d 703 (Idaho 1986).

Moreover, Plaintiff's contention that oral assurances were made regarding permanent employment has no effect on the employment-at-will doctrine. "It is usually held that a promise of lifetime or permanent employment will be interpreted as indefinite and terminable at-will in the absence of some executed consideration in addition to the services being rendered." Merritt v. Edson Exp., Inc., 437 N.W.2d 528, 530 (S.D.1989). Notwithstanding Plaintiff's claim that he "executed consideration" because he was discouraged from holding a second job, he is still an at-will employee.⁴

The at-will employment doctrine has been challenged on numerous occasions.⁵ Nevertheless, it is still the law in South Dakota. Osterkamp; Johnson v. Krieser's, Inc., 433 N.W.2d 225 (S.D.1988); Larson v. Krieser's, Inc., 427 N.W.2d 833 (S.D.1988); Merritt; Butterfield. Accordingly, because Plaintiff had no written contract; no specified term of employment; no handbook with a discharge "for cause only" provision; no detailed list of exclusive grounds for termination; and, no mandatory and specific procedure which the employer agreed to follow prior to terminating any employee, Plaintiff is...