Vandall v. Trinity Hospitals

Decision Date27 February 2004
Docket NumberNo. 20030255.,20030255.
Citation676 N.W.2d 88,2004 ND 47
PartiesMichael T. VANDALL, M.D., Plaintiff and Appellant v. TRINITY HOSPITALS, a corporation, and Margaret C. Nordell, M.D., Defendants and Appellees.
CourtNorth Dakota Supreme Court

Craig R. Campbell, Gunhus, Grinnell, Klinger, Swenson & Guy, Ltd., Moorhead, MN, for plaintiff and appellant.

James B. Lynch (argued), Dorsey & Whitney, Minneapolis, MN, David J. Hogue (on brief), Pringle & Herigstad, P.C., Minot, N.D., for defendant and appellee Trinity Hospitals.

Tracy L. Vigness Kolb (argued) and Lance D. Schreiner (appeared), Zuger Kirmis & Smith, Bismarck, N.D., for defendant and appellee Margaret C. Nordell, M.D.

VANDE WALLE, Chief Justice.

[¶ 1] Michael T. Vandall, M.D., appealed from a judgment dismissing his action against Trinity Hospitals ("Trinity") and Margaret C. Nordell, M.D. for failure to state a claim upon which relief could be granted, and awarding Trinity $24,740.63 in attorneys' fees. We hold Vandall's complaint fails to state a claim upon which relief can be granted, and the trial court abused its discretion in awarding Trinity attorneys' fees. We affirm the judgment dismissing Vandall's complaint but we reverse the award of attorneys' fees.

I

[¶ 2] Trinity hired Vandall under a Physician Services Agreement effective from December 1, 1996, through November 30, 2001. Vandall alleged that, during the course of his employment with Trinity, he learned Nordell, another Trinity physician, was engaged in a level of treatment that Vandall believed violated accepted standards of care. According to Vandall, he unsuccessfully attempted to address the problem through Trinity's available internal procedures. Vandall alleged that, after consulting with legal counsel, he ultimately reported the matter to the North Dakota Board of Medical Examiners ("Board"), and the Board concluded Nordell's treatment constituted gross negligence and immediately suspended her license to practice medicine in North Dakota. Vandall claimed Trinity then began a series of retaliatory actions against him, including censuring him and failing to reappoint him to various hospital committees. Vandall alleged Nordell initiated the censure action against him with a letter to Trinity's Quality Assurance Committee, and she filed meritless complaints, which were terminated in his favor, with the Board and with the American College of Obstetricians and Gynecologists ("ACOG"). On October 9, 2001, Trinity informed Vandall that his employment at Trinity would end when his Physician Services Agreement expired on November 30, 2001.

[¶ 3] In January 2003, Vandall sued Trinity and Nordell, alleging Trinity undertook a series of retaliatory actions against him, because, as required by N.D.C.C. § 43-17.1-05.1, he reported deficiencies in Nordell's medical practice. Vandall alleged Nordell, without a reasonable basis, initiated and continued a series of meritless administrative actions to impair his right and ability to practice medicine. Vandall also alleged the actions by Trinity and Nordell constituted intentional infliction of emotional distress.

[¶ 4] The trial court dismissed Vandall's complaint against Trinity and Nordell under N.D.R.Civ.P. 12(b)(vi), concluding Vandall failed to state a claim upon which relief could be granted against both defendants. The court concluded Vandall's claim for retaliation against Trinity was barred by the 180—day statute of limitations in N.D.C.C. § 34-01-20, which preempted his common law cause of action for retaliation. The court concluded Vandall failed to state a claim against Nordell because she did not initiate, continue, or procure a civil administrative proceeding against him within the meaning of Restatement (Second) of Torts § 680 (1977). The court also concluded Vandall's claims against Trinity and Nordell failed to meet the threshold requirement of extreme and outrageous conduct necessary for a claim for intentional infliction of emotional distress under Restatement (Second) of Torts § 46 (1965). The court also awarded Trinity $24,740.63 in attorneys' fees under N.D.C.C. § 34-01-20(3).

II

[¶ 5] A motion to dismiss a complaint under N.D.R.Civ.P. 12(b)(vi) tests the legal sufficiency of the claim presented in the complaint. Ziegelmann v. DaimlerChrysler Corp., 2002 ND 134, ¶ 5, 649 N.W.2d 556. On appeal from a dismissal under N.D.R.Civ.P. 12(b)(vi), we construe the complaint in the light most favorable to the plaintiff and accept as true the well-pleaded allegations in the complaint. Ziegelmann, at ¶ 5. Under N.D.R.Civ.P. 12(b)(vi), a complaint should not be dismissed unless "it is disclosed with certainty the impossibility of proving a claim upon which relief can be granted." Ziegelmann, at ¶ 5 (quoting Lang v. Schafer, 2000 ND 2, ¶ 7, 603 N.W.2d 904). We will affirm a judgment dismissing a complaint for failure to state a claim if we cannot "discern a potential for proof to support it." Ziegelmann, at ¶ 5 (quoting Towne v. Dinius, 1997 ND 125, ¶ 7, 565 N.W.2d 762).

III

[¶ 6] Vandall argues his complaint states a common law claim for retaliation against Trinity. He argues his common law claim is subject to a six-year statute of limitations and has not been preempted by the 180— day statute of limitations in N.D.C.C. § 34-01-20.

[¶ 7] Section 34-01-20(1), N.D.C.C., prohibits an employer from discharging or penalizing an employee for reporting the violation or suspected violation of a law, ordinance, regulation, or rule to an employer, a governmental body, or a law enforcement official. Under N.D.C.C. § 34-01-20(3), an employee may bring a civil action for injunctive relief or actual damages, or both, within 180 days after the alleged violation, completion of proceedings with the department of labor, or completion of any internal grievance procedure, whichever is later. Vandall commenced his action against Trinity in January 2003, which is more than 180 days after his Physician Services Agreement expired on November 30, 2001.

[¶ 8] Vandall nevertheless argues N.D.C.C. § 34-01-20 does not preempt his common law claim for retaliatory discharge. He argues the clear legislative intent of N.D.C.C. § 34-01-20 was to expand, not to restrict, the existing common law remedies for tortious retaliatory conduct. He argues this Court has recognized the coexistence of common law and statutory claims for retaliatory discharge after the enactment of N.D.C.C. § 34-01-20.

[¶ 9] In 1993, the North Dakota Legislature enacted the whistle-blower statute now codified at N.D.C.C. § 34-01-20. See 1993 N.D. Sess. Laws ch. 346. The 1993 enactment prohibited an employer from discharging or penalizing an employee for reporting a violation of law to the employer, a governmental body, or a law enforcement official. Id. Under the 1993 enactment, an employer who willfully violated that statute was guilty of an infraction and the employee could seek assistance from the labor commissioner to assure compliance with the law, but the 1993 enactment did not specifically authorize a civil action. Id. See Dahlberg v. Lutheran Soc. Servs., 2001 ND 73,¶ 33, 625 N.W.2d 241

. In 1997, the Legislature amended N.D.C.C. § 34-01-20 to authorize an employee claiming retaliation to bring a civil action for injunctive relief or damages and to allow the labor department to receive complaints about violations of the statute. 1997 N.D. Sess. Laws ch. 291. See Dahlberg, at ¶ 33. The 1997 enactment required the employee to bring a civil action within ninety days after the alleged violation, completion of proceedings before the labor department, or completion of an internal grievance procedure, whichever was later. 1997 N.D. Sess. Laws ch. 291. In 2001, the Legislature amended the ninety-day time period to 180 days. 2001 N.D. Sess. Laws ch. 307, § 1.

[¶ 10] Before the 1997 enactment of legislation authorizing a civil action for retaliatory discharge, this Court had discussed a limited public policy exception to the employment at-will doctrine for cases where a termination violated a specific declaration of public policy evidenced by a constitutional or a statutory provision. Lee v. Walstad, 368 N.W.2d 542, 546-47 (N.D. 1985) (citing Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834, 840 (1983)). Without deciding the propriety of a public policy exception to the at-will doctrine, we held the employee in that case had not defined a clear public policy which his termination violated. Lee, at 547.

[¶ 11] Since Lee, we have recognized employees may bring a tort action for retaliatory discharge against an employer, if the employer's actions contravene a clear statement of public policy in a constitutional or a statutory provision. In Krein v. Marian Manor Nursing Home, 415 N.W.2d 793, 794-95 (N.D.1987), we held an at-will employee could sue an employer in tort for wrongful discharge in retaliation for seeking statutorily authorized workers compensation benefits. In Ressler v. Humane Soc., 480 N.W.2d 429, 431-32 (N.D. 1992), we held an at-will employee could sue an employer for wrongful discharge in retaliation for honoring a subpoena and for testifying truthfully at a trial. In Jose v. Norwest Bank, 1999 ND 175, ¶ 21, 599 N.W.2d 293, we cited N.D.C.C. § 34-01-20, but we concluded an at-will employee could not sue an employer for wrongful discharge for participating in an internal employee investigation where the employee defined no clear public policy which the discharge violated. In Schultze v. Continental Ins. Co., 2000 ND 209, ¶¶ 9-10, 619 N.W.2d 510, we considered an at-will employee's wrongful discharge claim in the context of an insurance company's duty to defend the employer, and we concluded the insurance company had a duty to defend because the employee's complaint alleged acts that began before the prior acts date for coverage under an insurance policy. In Dahlberg, 2001 ND 73, ¶¶ 32-38,625 N.W.2d 241, we said we had recognized a limited public policy exception to the...

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