Wisehart v. Meganck

• Decision Date: 15 August 2002
• Docket Number: No. 01CA1327.,01CA1327.
• Citation: 66 P.3d 124
• Parties: Larry N. WISEHART, Plaintiff-Appellant, v. Michael MEGANCK and Vectra Bank Colorado, NA, Defendants-Appellees.
• Court: Colorado Court of Appeals

66 P.3d 124

Larry N. WISEHART, Plaintiff-Appellant, v. Michael MEGANCK and Vectra Bank Colorado, NA, Defendants-Appellees.

No. 01CA1327.

Colorado Court of Appeals, Div. I.

August 15, 2002.

Rehearing Denied October 10, 2002.¹ Certiorari Denied March 24, 2003.²

William C. Danks, Denver, Colorado, for Plaintiff-Appellant.

McNamara Law Firm, P.C., John N. McNamara, Jr., Griffith A. Kundahl, Denver, Colorado, for Defendants-Appellees.

Opinion by Judge CASEBOLT.

In this civil case arising from termination of an employment relationship, plaintiff, Larry N. Wisehart, appeals the summary judgment in favor of defendants, Vectra Bank Colorado, NA and Michael Meganck, dismissing his claims for fraudulent misrepresentation and concealment. We affirm.

Plaintiff worked for the bank as a loan officer in an at-will relationship. Bank policy required him to obtain the approval of other bank officers when processing certain loans. While the bank's loan policy required written approval of the officers to be obtained before any closing, in practice the approvals were sometimes obtained afterwards.

On the day before the scheduled closing of a particular loan, plaintiff met with a senior loan officer to obtain his approval. That officer told plaintiff that he needed more detailed information regarding the loan and requested plaintiff to provide it. When plaintiff returned with the requested information later that afternoon, the officer had departed and could not be located.

Following the meeting with plaintiff, and without receiving the requested information, the officer informed another bank employee that he was not going to approve the loan. Nevertheless, in fact, neither the officer nor the bank had any objection to the loan.

Plaintiff's superiors knew the loan closing date well in advance and specifically were aware on the date of the closing that plaintiff intended to proceed with it. Despite opportunities to do so, no one informed plaintiff that the bank officer did not intend to give his approval.

While plaintiff was attending the closing the next day in another city, the bank issued his final paycheck in anticipation of termination. When plaintiff returned to the bank, Meganck, one of his supervisors, informed him that he was being terminated for failing to obtain the required written approvals before closing.

Plaintiff then initiated this action asserting claims for fraudulent misrepresentation and concealment against the bank and Meganck, essentially alleging that defendants had fraudulently set him up to be terminated. Plaintiff further alleged that the bank's stated reason for termination masked a plan to replace employees like himself who had been long-term employees of another financial institution that had merged with the bank.

Contending that Colorado does not recognize a claim of fraud in the employment at will context, defendants filed a motion for summary judgment. The trial court held, inter alia, that plaintiff's claims, even though couched in terms of fraud, essentially asserted a claim for wrongful termination, and the fact that his termination was achieved through fraud did not change the true nature of the claims. The court concluded that, even though defendants may have created a reason to terminate plaintiff's employment, that action did not give rise to a claim because defendants were free to terminate him without any reason whatsoever. Hence, the court dismissed plaintiff's claims, and this appeal followed.

I.

Plaintiff contends the trial court incorrectly held that he could not pursue his fraud claims because he was an at-will employee. He asserts that employers should be subject to ordinary fraud rules that apply generally in all settings. Defendants assert the trial court correctly held that allowing a fraud claim under these circumstances would improperly undermine the employment at will doctrine. We agree with defendants.

We review summary judgments de novo. Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Board, 901 P.2d 1251 (Colo.1995); Mohr v. Kelley, 8 P.3d 543 (Colo.App.2000).

A reviewing court applies the same standards as the trial court in determining whether summary judgment is warranted. Smith v. Boyett, 908 P.2d 508 (Colo.1995). Summary judgment is appropriate only if the pleadings and supporting documents demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Aspen Wilderness Workshop, Inc. v. Colorado Water Conservation Board, supra.

The nonmoving party is also entitled to the benefit of all favorable inferences that may reasonably be drawn from the undisputed facts. City of Aspen v. Marshall, 912 P.2d 56 (Colo. 1996).

A.

In Colorado, an agreement of employment that is for an indefinite term is presumed to be at will. Either the employer or the employee may terminate at-will employment at any time with or without cause, and such termination generally does not give rise to a claim for relief. Martin Marietta Corp. v. Lorenz, 823 P.2d 100 (Colo.1992); Continental Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo.1987).

The at-will nature of the employment relationship reflects a matter of public policy. Crawford Rehabilitation Services v. Weissman, 938 P.2d 540 (Colo.1997). The at-will employment doctrine promotes flexibility and discretion for employees to seek the best position to suit their talents and for employers to seek the best employees to suit their needs. By removing encumbrances to quitting a job or firing an employee, the at-will doctrine promotes a free market in employment analogous to the free market in goods and services generally. See Mackenzie v. Miller Brewing Co., 241 Wis.2d 700, 623 N.W.2d 739 (2001)

.

At the same time, strict application of the at-will doctrine may invite abuse and lead to injustice. Accordingly, legislation and the common law have restricted application of the at-will doctrine to balance the interests of employers and employees. See Martin Marietta Corp. v. Lorenz, supra. For example, certain federal and state statutes have created private claims for relief for wrongful discharge based on discrimination with respect to race, color, gender, national origin, ancestry, religious affiliation, disability, and age. State statutes also permit such claims in cases of termination resulting from an employee engaging in lawful activity off premises during nonworking hours, responding to a jury summons, and certain activities of "whistleblowing." See Crawford Rehabilitation Services v. Weissman, supra.

Colorado also recognizes a claim for relief for wrongful discharge in violation of public policy. This judicially crafted exception restricts an employer's right to terminate when the termination contravenes accepted and substantial public policies as embodied by legislative declarations, professional codes of ethics, or other sources. Rocky Mountain Hospital & Medical Service v. Mariani, 916 P.2d 519 (Colo.1996)(approving wrongful discharge claim based on accountant's refusal to violate code of professional conduct); see also Martin Marietta Corp. v. Lorenz, supra

(proscribing termination for refusing to engage in illegal conduct); Johnson v. Jefferson County Board of Health, 662 P.2d 463 (Colo.1983)(government employer may not terminate at-will employee for exercising right of free speech); Jones v. Stevinson's Golden Ford, 36 P.3d 129 (Colo.App.2001)(approving wrongful discharge claim based on employee's refusal to violate Consumer Protection Act and Motor Vehicle Repair Act); Lathrop v. Entenmann's, Inc., 770 P.2d 1367 (Colo.App.1989)(employer's retaliatory termination against employee for exercising right to apply for and receive workers' compensation benefits provided grounds for wrongful discharge claim).

These exceptions address societal concerns, while honoring the general rule that employment affects private interests, and therefore parties generally are free to bargain for conditions of employment. See Crawford Rehabilitation Services v. Weissman, supra

(claims that relate to a private contract or promise between an employer and an employee do not raise public policy concerns, other than the general interest society has in the integrity of the employment relationship).

Operating from the premise that parties are free to require cause for termination, Colorado also recognizes that an employer's failure to follow termination procedures contained in an employment manual can serve as the basis for a breach of contract or promissory estoppel claim. Continental Air Lines, Inc. v. Keenan, supra; see also Schoff v. Combined Insurance Co.,

604 N.W.2d 43 (Iowa 1999); Mackenzie v. Miller Brewing Co., supra.

In addition, Colorado recognizes the viability of certain other tort claims that arise around the employment relationship. See Jet Courier Service, Inc. v. Mulei, 771 P.2d 486 (Colo.1989)

(employee owes duty of loyalty to employer that prohibits soliciting employer's customers before terminating employment); Berger v. Security Pacific Information Systems, Inc., 795 P.2d 1380 (Colo.App.1990)(employee induced to enter into at-will employment by employer's concealment may pursue fraud claim); Cronk v. Intermountain Rural Electric Ass'n, 765 P.2d 619 (Colo.App.1988)(tortious interference claim allowed against supervisor who induced employer to exercise its at-will termination power by presenting corrupt reason).

To summarize, employers operating under at-will employment principles are generally free to discharge employees for any reason, even if that reason is wrong or incorrect, as long as the reason asserted does not trigger a recognized exception to the at-will termination doctrine noted above. Employees in such a relationship likewise may leave employment for any reason and at any time. Moreover, the presumption of at-will employment places the burden on the plaintiff to plead and prove circumstances that would authorize application of...