Terrio v. Millinocket Community Hospital

• Decision Date: 02 November 1977
• Citation: 379 A.2d 135
• Court: Maine Supreme Court
• Parties: 115 L.R.R.M. (BNA) 4358 June TERRIO v. MILLINOCKET COMMUNITY HOSPITAL.

Page 135

379 A.2d 135

115 L.R.R.M. (BNA) 4358

June TERRIO v. MILLINOCKET COMMUNITY HOSPITAL.

Supreme Judicial Court of Maine.

Nov. 2, 1977.

Gross, Minsky, Mogul & Singal by George Z. Singal, (orally), Bangor, Libhart & Ferris by Joseph L. Ferris, Brewer, for plaintiff.

Evans & Stoddard by Noel K. Evans, Dan H. Stoddard, (orally), Millinocket, for defendant.

Before McKUSICK, C. J., and POMEROY, WERNICK, ARCHIBALD, DELAHANTY, GODFREY and NICHOLS, JJ.

McKUSICK, Chief Justice.

A Superior Court jury awarded the plaintiff, June Terrio, damages in the amount of $39,000 against Millinocket Community Hospital (Hospital) for discharging her in breach of an alleged contract of employment. The defendant Hospital appeals from the judgment entered upon that jury verdict. We deny the appeal.

In early 1955, the Hospital hired the plaintiff, then 38 years of age, a trained medical technologist, to develop and administer a medical laboratory. At the outset Mrs. Terrio was the sole laboratory employee and exercised responsibility for purchasing equipment and supplies as well as performing the required laboratory tests. When the Hospital hired other employees to work in the laboratory, Mrs. Terrio remained in charge of the procedures as well as supervisor over the other laboratory personnel. Over the years, visiting pathologists periodically checked her work and were always satisfied with its quality. Several persons who had worked under Mrs. Terrio were impressed by her competence and with the good laboratory morale during their employment with her. The Hospital awarded Mrs. Terrio periodic raises, never questioning the quality of her performance.

The jury heard conflicting testimony in regard to Mrs. Terrio's performance after a resident pathologist took charge of the laboratory in July 1973. Certain witnesses testified to unsatisfactory work and insubordination on her part, as well as abuse of co-workers, all of which she stoutly denied. In the same period of time, Mrs. Terrio was given a pay raise and a choice of better working hours and was reassured of her job security by the Hospital authorities.

The pathologist's degenerating relationship with Mrs. Terrio finally led him to threaten resignation in an ultimatum issued to the hospital administrator. After trying to make peace, the administrator elected to terminate Mrs. Terrio's employment. At the time of her discharge on February 19, 1975, she was 58 years of age, having been employed by the Hospital for approximately twenty years.

The plaintiff commenced this suit, alleging that her dismissal was without cause and constituted a breach of her contract of employment with the defendant. The parties do not dispute the fact that at no time did they enter into a written contract of employment. The plaintiff argues instead that the defendant's oral promises to her in the context of her entire employment record, coupled with a "Personnel Policy" (Policy) and an "Employees' Retirement Plan" as amended to 1972 (Retirement Plan), resulted in the formation of an enforceable contract of employment for a definite period of time, namely, until her normal retirement age of 65.

Prior to trial, the Hospital moved for summary judgment based upon the pleadings and affidavits filed pursuant to Rule 56(c), M.R.Civ.P. Mrs. Terrio's complaint based her breach of contract action solely upon the Hospital's Personnel Policy. The Hospital, in its answer, admitted the existence of the Policy, but denied that Mrs. Terrio had a contract of employment with the Hospital for a definite term. The issue thus posed was whether the Policy, standing alone, could establish that Mrs. Terrio had an enforceable contract of employment for a definite term. The presiding justice denied the Hospital a summary judgment, and the case proceeded to trial. The Hospital now contends on appeal from the final judgment entered upon the jury verdict that the denial of the motion for summary judgment constitutes reversible error. For reasons we shall develop, however, the issue raised by the Hospital in its pre-trial motion was mooted by the subsequent course of the proceedings.

In order to recover contract damages for her discharge, Mrs. Terrio had to establish that she had "tenure" in the sense of having an enforceable employment contract with the Hospital for a definite term. It is well settled that a contract of employment for an in definite length of time is terminable at will by either party. Merrill v. Western Union Telegraph Co., 78 Me. 97, 100, 2 A. 847, 850 (1886); Blaisdell v. Lewis, 32 Me. 515, 516 (1851). Mrs. Terrio, in asserting that the Hospital had promised her employment for a definite period of time, placed initial reliance upon the Hospital's Personnel Policy. The Policy, issued unilaterally by the Hospital, consists of a set of detailed guidelines relating to terms and conditions of employment, such as employee status, health and insurance benefits, work hours, and dismissal and grievance procedures. The Policy, standing alone, does not, however, expressly purport to establish either an employment relationship with any individual or a definite tenure of employment. Had Mrs. Terrio placed sole reliance upon the Policy at trial, her employment contract could only be one for an indefinite term. Shaw v. S. S. Kresge Co., 328 N.E.2d 775, 778-79 (Ind.App.1975).

Such, however, is not this case.

At trial, there was admitted in evidence, over the Hospital's objections, a copy of the 1972 version of its Retirement Plan. A clause in the plan expressly declared that the full-time employee's normal retirement date "is the first day of the month on, or after, which you reach your 65th birthday." The Hospital objected to its admissibility on the dual grounds that Mrs. Terrio had failed to lay an adequate foundation and that she had failed to list the plan as an exhibit in her pre-trial memorandum, as required by Rule 16(a)(3), M.R.Civ.P. Although the hospital administrator testified to the contrary, Mrs. Terrio identified the 1972 Plan as the one in effect in February 1975, when she was discharged. As an employee whom the Hospital had a federal obligation ^* to keep informed in regard to its Retirement Plan, Mrs. Terrio can fairly be taken to have "knowledge that a matter is what it is claimed to be." Rule 901(b)(1), M.R.Evid. Furthermore, the Hospital can show no prejudicial surprise from the admission of the Retirement Plan, despite its noninclusion in Mrs. Terrio's pre-trial memorandum; the document at issue was the Hospital's own Retirement Plan and the Hospital sought no continuance for even the short time required to get an alleged later version from Millinocket to the place of trial, Bangor. In any event, the only building block in Mrs. Terrio's case provided by the Retirement Plan was the Hospital's normal retirement age (65), and the Hospital does not suggest that whatever retirement plan was in effect in February 1975 differed in that or any other material respect from the 1972 Plan. There was no reversible error in admitting the 1972 Plan.

Although the Retirement Plan buttressed Mrs. Terrio's contract claim, based in her complaint solely upon the Policy, that pair of documents furnishes only terms relating to employment, and "no one has a job by reason of it and no obligation to any individual ordinarily comes into existence from it alone." J. I. Case Co. v. NLRB, 321 U.S. 332, 334-36, 64 S.Ct. 576, 579, 88 L.Ed. 762, 766 (1944). Cf. Curry v. Portland Terminal Co., 159 Me. 305, 192 A.2d 31 (1963). The case as tried to the jury, however, involved significant additional evidence of certain oral statements made to Mrs. Terrio by the Hospital.

Prior to the arrival of the resident pathologist, Mrs. Terrio had had an exemplary 20-year employment history, marked by repeated raises and gradual improvement in job status and benefits. Not long before her summary discharge, the Hospital, at a meeting attended by the hospital administrator and the pathologist, had discussed with Mrs. Terrio a desirable alteration in her working hours and had given her a raise. Concerned for the security of her position after the pathologist's arrival, Mrs. Terrio sought reassurance from the administrator, and he represented to her that she had nothing to fear. In fact, only a week before her dismissal, the administrator reassured Mrs. Terrio that she was secure in her job for "the rest of (her) life." This testimony could be interpreted by the jury as evidence of a specific oral promise of employment for a definite term, that is, until "normal retirement age," running directly...