Willard v. Paracelsus Health Care Corp.
| Decision Date | 12 September 1996 |
| Docket Number | 92-CA-01274-SCT and 93-CA-00021-SCT,Nos. 92-CA-00996-SC,s. 92-CA-00996-SC |
| Parties | 132 Lab.Cas. P 58,171, 12 IER Cases 142 Carolyn WILLARD v. PARACELSUS HEALTH CARE CORPORATION, Paracelsus Senatobia Community Hospital, Inc., Carolyn Revel and Danny Swindle. Bettie Sue SUMNER v. PARACELSUS HEALTH CARE CORPORATION, Paracelsus Senatobia Community Hospital, Inc., and Carolyn Revel (Two Cases). |
| Court | Mississippi Supreme Court |
Michael T. Lewis, Lewis & Lewis, Clarksdale, Nancy A. Wegener, Clarksdale, for Appellants.
Gerald W. Chatham, Sr., Hernando, for Appellees.
Before SULLIVAN, P.J., and PITTMAN and BANKS, JJ.
The Appellants, Carolyn Willard and Bettie Sue Sumner, were employees of Senatobia Community Hospital, a wholly owned subsidiary of Paracelsus Health Care Corporation. 1 Willard and Sumner reported to higher-ups that a certain number of Paracelsus checks were made out to hospital administrator Carolyn Revel as well as signed by Revel and allegedly done so in violation of hospital policy. Willard, and then Sumner, were subsequently discharged. The gist of their case at trial was that they were fired by Revel in retaliation for reporting the checks. Paracelsus cited other reasons. Willard and Sumner had separate trials; however, their cases are consolidated on appeal. Willard and Sumner address the same issues on similar facts.
The juries returned a verdict against Paracelsus and awarded actual damages in the amount of $10,000 to Willard and $35,102 to Sumner. Special interrogatories were submitted to both juries in which they found that Willard's and Sumner's discharges were in violation of their contracts with the hospital as supplemented by the handbook and personal policy and procedure manual. Neither jury found that the hospital intentionally inflicted emotional distress upon Willard nor Sumner.
We are called on to decide whether the trial courts erred by refusing to give the juries an instruction on retaliatory discharge, and further, if such error was committed, whether the juries should have been allowed to consider an award of punitive damages based on retaliatory discharge. Additionally, we must determine whether the lower courts erred by failing to grant a punitive damages instruction based on tortious breach of contract. We hold that the trial court erred on both of these points. However, we affirm the trial court's denial of attorney's fees for Willard and Sumner.
Willard was hired on July 27, 1988, and received a copy of the Senatobia Community Hospital Employee Handbook. She signed a card acknowledging the receipt of this handbook and also acknowledging that she had familiarized herself with it.
Willard was the accounts payable clerk before being promoted to business office manager. She had the responsibility of doing the bank reconciliation. After her promotion and while she was training the new accounts payable clerk, she continued to do the bank reconciliation. Most Paracelsus checks were keyed into the computer and were printed by the computer along with a department code. Manual checks were typed on the typewriter. They were used in emergencies only when an immediate payment was necessary. Copies or backups of manual checks were retained in the accounts payable office for two years.
In August 1990 Willard received a copy of the July bank statement which was faxed from Paracelsus headquarters in California. When Willard tried to match the bank statement with the check ledger, there were three checks on the bank statement which were not in the ledger nor in the computer system. These amounts were $2,500, $3,000 and $2,000. Willard searched all files and records trying to locate the checks. She could not locate any of the backup documents. Three weeks later when the canceled checks arrived, she found the three unaccounted for checks in the above amounts made payable to Carolyn Revel and signed by Revel and Clifford Olson. Clifford Olson was the former chief financial officer for Paracelsus who had left his employment at the hospital. He testified that he did not sign the three checks. Willard, Sumner (an administrative secretary who had authority to sign Paracelsus checks), and Kiefer (the new accounts payable clerk) confronted Olson. Willard also reported the conduct to Pete Mistr, the regional chief financial officer in Nashville. Willard claimed she was subsequently discharged for these actions. Willard's personnel file contained no reprimands and only outstanding evaluations.
Additionally, Sumner reported two checks that arrived later in August and were made out to Revel. She testified that these two checks contained Revel's signature and her (Sumner's) own forged signature.
The evidence at trial showed that all original documents relevant to the suspicious checks were missing although they were kept in several different locations. The only copies of the five forged checks were those provided by Willard and Sumner. None of the five original checks or the yellow and pink copies of the checks or the accounts payable for that period were produced. However, Kiefer claimed to have seen these records and sent them to storage two weeks before the auditors were to examine them. Not long after, a break-in occurred at the storage facility in which these records were purportedly stolen.
Revel and Paracelsus maintained at trial that Willard was not fired but that she resigned. Revel testified that she was paged at the hospital on August 22, 1990, by Danny Swindle, who replaced Olson. At that time Swindle told Revel that Willard wanted her money and was leaving. According to Revel, Swindle was trying to discuss with Willard some complaints they had received about accounts payable when Willard up and quit.
Revel also testified that she had seen Olson's deposition wherein he stated he did not sign the three checks and noted that as soon as it came to her attention she thought it might be forgery. However, she stated that if she as hospital administrator signed the check, it was not necessary that the check be signed by another person.
On September 17 Sumner was terminated by Revel for, among other things, an incident involving a woman demanding treatment in the hospital's emergency room. Sumner maintained at trial that her termination was a result of her conduct in reporting the checks. Sumner also testified that she thought she had certain rights as stated by the handbook. Particularly, she thought Paracelsus should follow the disciplinary procedures set out in the handbook for a first offense. Only for a critical offense could you be terminated on a first offense. The only critical offenses were theft or dishonesty. Such a termination required a three-day suspension while an investigation was undertaken. This procedure was not followed for Sumner or Willard nor were the procedures for other types of offenses followed.
Sumner had never received an oral or written reprimand. Her personnel file revealed no negative reviews.
Chronology
1990
First Week
in Aug. Willard and Sumner report three checks
Aug. 22 Willard leaves
Aug. 27 Sumner reports two checks
Sept. 5 Revel repays Paracelsus for three checks (the two allegedly
co-signed by Sumner and the one co-signed by Olson)
Sept. 6 Revel reduces Sumner's job description
Sept. 14 Emergency room incident.
Sept. 17 Sumner is fired.
Paracelsus maintained from the beginning of the lawsuits that it did not acknowledge the handbook. Revel testified at the Willard trial that she did not recognize the handbook, because it was issued when the hospital was under the control of someone other than her employer, Paracelsus. At the Sumner trial, Revel testified that there was a handbook, but it was undergoing revision.
We addressed this issue in McArn v. Allied Bruce-Terminix, Inc., 626 So.2d 603, 607 (Miss.1993), where we ruled that there is an action at law based on a public policy exception to the employment at-will doctrine in either of the two following circumstances: 1) an employee refuses to participate in an illegal act; or 2) an employee is discharged for reporting illegal acts of his employer to the employer or anyone else. At that time, we did not address the question of whether or not such conduct by an employer, if found, is an independent tort giving rise to punitive damages.
Paracelsus argues that our holding in McArn is not applicable, because McArn was decided subsequent to the trial in the case sub judice. Yet, McArn was a case of first impression, and we applied the employment-at-will exceptions retroactively by remanding McArn's case. Therefore, Paracelsus' argument based on the subsequent determination of McArn is not determinative of whether or not it was error to deny a retaliatory discharge instruction.
Clearly, the jury should have been given an instruction on retaliatory discharge. The evidence at trial or, rather, the lack of evidence suggests that Willard and Sumner were fired in retaliation for reporting an illegal act of their employer, i.e., forgery and financial irregularities. Sumner and Olson both testified that the co-signatures on the copies of the checks provided by Willard and Sumner were not theirs. Had the jury been properly instructed on the theory of retaliatory discharge, it is quite conceivable that they would have returned a verdict for Willard and Sumner on this issue. Nevertheless, the jury should have had that option.
The exception to the employment-at-will doctrine sounds in tort, and we recognize, as the majority of jurisdictions do, that a party is entitled to pursue all remedies available in tort, including punitive damages. For example, in Moniodis v. Cook, 64 Md.App. 1, 494 A.2d 212, 218 (1985), an...
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