Tsotaddle v. Absentee Shawnee Housing Auth., 92410.

• Decision Date: 08 August 2000
• Docket Number: No. 92410.,92410.
• Citation: 2001 OK CIV APP 23,20 P.3d 153
• Parties: Angela TSOTADDLE, Plaintiff, v. ABSENTEE SHAWNEE HOUSING AUTHORITY, an agency of the State of Oklahoma, Appellant, and Jim Murdock, Appellee, and Absentee Shawnee Tribe of Oklahoma, an Indian Tribe, Defendant.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

20 P.3d 153

2001 OK CIV APP 23

Angela TSOTADDLE, Plaintiff, v. ABSENTEE SHAWNEE HOUSING AUTHORITY, an agency of the State of Oklahoma, Appellant, and Jim Murdock, Appellee, and Absentee Shawnee Tribe of Oklahoma, an Indian Tribe, Defendant.

No. 92410.

Court of Civil Appeals of Oklahoma, Division No. 4.

August 8, 2000.

Certiorari Denied December 12, 2000.

Patrick A. Morse, Gary S. Pitchlynn, David Morse, Pitchlynn, Morse, Ritter & Morse, Norman, OK, for Appellant.

Jim T. Priest, Lora F. Irani, McKinney & Stringer, P.C., Oklahoma City, OK, Paul McKinney, Shawnee, OK, for Appellee.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4.

REIF, J.

¶ 1 This appeal arises from a sexual harassment suit brought by Angela Tsotaddle against Jim Murdock, her former supervisor, and the Absentee Shawnee Housing Authority, her former employer. The primary focus of this appeal is the cross litigation between Mr. Murdock and the Housing Authority.

¶ 2 Mr. Murdock filed a cross-petition against the Housing Authority for terminating his employment following Ms. Tsotaddle's complaint against him. Mr. Murdock established that the Housing Authority failed to hold a hearing to receive evidence on the complaint and to determine the appropriate action, as set forth in the Housing Authority's Notice of Complaints of Harassment/Leave With Pay, dated May 6, 1997. He also established that the Housing Authority did not provide him a hearing following termination as set forth in the Housing Authority's letter of termination dated June 16, 1997. Mr. Murdock further established that the Housing Authority did not state a specific cause for his termination as provided in the Housing Authority's Personnel Policy. Instead, the termination letter merely advised Mr. Murdock that his "return to work [following the leave period to investigate the complaint] would be subversive to the proper order, discipline and morale of the Housing Authority." In defense, the Housing Authority contended that it did not have to give Mr. Murdock a hearing or a specific cause to terminate him, because his employment was terminable "at-will."

¶ 3 The jury rejected the Housing Authority's defense and agreed with Mr. Murdock that he was entitled to a hearing and a specific cause for termination as part of his employment contract and as a matter of due process. The jury awarded Mr. Murdock $75,000 actual damages against the Housing Authority, but did not apportion this award between damages for breach of contract and damages for the deprivation of due process in violation of Mr. Murdock's civil rights. After denying motions for judgment notwithstanding the verdict and new trial, the trial court entered judgment for Mr. Murdock, and also awarded attorney fees and costs as the prevailing party on the 42 U.S.C. § 1983 civil rights claim.¹ The Housing Authority appeals both the principal judgment and the attorney fee award.

¶ 4 The Housing Authority states four propositions of error in its petition in error, and briefs the identical issues:

1. The District Court erred in denying [Housing Authority's] motion for judgment notwithstanding the verdict because [Housing Authority's] termination of Murdock's employment did not constitute a breach of any implied contract of employment between [Housing Authority] and Murdock.

2. The District Court erred in denying [Housing Authority's] motion for judgment notwithstanding the verdict because the terms of [Housing Authority's] employment of Murdock did not create a sufficient expectancy of continued employment to give rise to a property interest entitled to constitutional due process protection.

3. The District Court [erred] in denying [Housing Authority's] motion for a new trial, or alternatively a remittitur of all or part of the damages awarded to Murdock, in that the damages award was made in error, was not sustained by the evidence and was contrary to law.

4. The award to Murdock of attorney's fees and costs should be reversed.

¶ 5 These propositions of error are reviewable under different standards of review. We will discuss the applicable standard of review in the course of addressing and deciding the respective propositions.

I.

¶ 6 The Housing Authority first claims that the trial court erred in denying its motion for judgment notwithstanding the verdict because the termination of Mr. Murdock did not constitute a breach of contract. The Housing Authority claims that the evidence simply does not support a conclusion that there was a protected contract of employment, or that there was any breach.

¶ 7 Upon review of a ruling on a motion for judgment notwithstanding verdict, the test of the sufficiency of the evidence is the same as the test for sufficiency of evidence on a motion for directed verdict. Sadler v. T.J. Hughes Lumber Co., Inc., 1975 OK CIV APP 30, ¶ 4, 537 P.2d 454, 456; McInturff v. Oklahoma Natural Gas Transmission Co., 1970 OK 169, ¶ 9, 475 P.2d 160, 162. The reviewing court should disregard all conflicting evidence favorable to the movant for judgment notwithstanding the verdict, and the motion should not be sustained unless there is an entire absence of proof showing plaintiff's right to recover. Sadler, 1975 OK CIV APP 30, ¶ 4, 537 P.2d at 456 (citing Austin v. Wilkerson, Inc., 1974 OK 23, 519 P.2d 899). In analyzing the evidence we shall, according to the review standard, disregard all conflicting evidence favorable to the Housing Authority, and determine if there is a total lack of evidence.

¶ 8 The Housing Authority first emphasizes Oklahoma's staunch recognition of the at-will employment doctrine. Under this doctrine, employers can terminate at-will employees without recourse, in good or bad faith, with or without cause. Hinson v. Cameron, 1987 OK 49, ¶ 13, 742 P.2d 549, 552. There is no implied covenant of good faith and fair dealing that protects an at-will employment relationship from termination. Gilmore v. Enogex, Inc., 1994 OK 76, ¶ 6, 878 P.2d 360, 362-63 (footnote omitted). The Housing Authority cites the rule that an employee is an at-will employee when his employment contract is of an indefinite duration. Because Mr. Murdock's employment was of an indefinite duration, the Housing Authority contends that this rule dictates that he was an at-will employee. Hayes v. Eateries, Inc., 1995 OK 108, ¶ 7, 905 P.2d 778, 781 (citation omitted).

¶ 9 The Housing Authority does acknowledge an exception to the at-will rule in an instance where a contractual entitlement to employment is found, and also acknowledges that "the language of an employer's personnel manual may alter the employment-at-will relationship." Id. at ¶ 10, 905 P.2d at 782. Oklahoma law recognizes that an employee manual or personnel policy may form the basis of an implied contract between an employer and its employees if four traditional contract requirements exist: (1) competent parties; (2) consent; (3) a legal object; and (4) consideration. Russell v. Bd. of County Comm'rs, 1997 OK 80, ¶ 23, 952 P.2d 492, 501, 502. A principal limitation upon recognition of implied contracts via an employee handbook or personnel policy is that the promises in the employee manual must be in definite terms, not in the form of vague assurances. Id.

¶ 10 In arguing that its policy manual does not create a contract, the Housing Authority emphasizes the conclusion of the Oklahoma Supreme Court in both Hayes and Hinson that a manual's recitation of non-exclusive grounds for termination does not change the at-will relationship. However, the Housing Authority's Personnel Policy seems to go well beyond the employee manuals in Hayes and Hinson. In those cases, the appellate court noted that the employee manuals listed only some grounds for an employee's termination and gave little additional information regarding the scope of the manuals.

¶ 11 Section VIII(G) of the "Personnel Policy" (the Policy) of the Housing Authority does set forth eight nonexclusive reasons for which an employee may be terminated. However, the Policy also contains very specific rules and regulations of employment. It deals with nearly every aspect of employment, including selection procedures, conditions of employment, personnel actions, compensation, overtime/compensatory time, leave/sick leave, fringe benefits, personnel records, performance evaluations, employee rights, grievances, bonuses, and job safety.

¶ 12 The Policy also contains a merit provision relied upon by Mr. Murdock. This merit provision states:

II. BASIC PRINCIPLES

A. Merit System. The employment of personnel and all actions affecting employees shall be based solely on merit, ability, cooperation, attitude and justice.

The Policy also contains a statement of "Employee Rights" which provides that employees may choose representatives, present grievances, and be treated in a fair and equitable manner by the executive director and board of commissioners. Murdock points to the "Merit System" and "Employee Rights" clauses as contractual provisions upon which he relied, as provisions upon which an implied contract can be construed, and as necessitating due process in acts relating to an employee's employment.

¶ 13 Review of the record leads us to conclude that reasonable minds could reach different conclusions on the issue of whether the Policy created contract rights. Significantly, evidence tending to support the conclusion that the Policy did create such rights came from the Housing Authority's Executive Director. The testimony of the Executive Director established (1) that, when an employee is hired by the Housing Authority, he receives a copy of the Policy; (2) the employee is required to sign a document that states that he has read the Policy, understands it, and agrees to abide by it; (3) the Policy does not state that employees are at-will; and, (4) the Policy does not contain any disclaimer of the intent to contract. Further, the Director candidly admitted that an...