Wiskotoni v. Michigan Nat. Bank-West

• Decision Date: 08 September 1983
• Docket Number: BANK-WES,D,No. 81-1719,81-1719
• Citation: 716 F.2d 378
• Parties: 114 L.R.R.M. (BNA) 2596, 99 Lab.Cas. P 55,412, 1 Indiv.Empl.Rts.Cas. 250 Raymond R. WISKOTONI, Plaintiff-Appellee, v. MICHIGAN NATIONALefendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 378

716 F.2d 378

114 L.R.R.M. (BNA) 2596, 99 Lab.Cas. P 55,412,

1 Indiv.Empl.Rts.Cas. 250

Raymond R. WISKOTONI, Plaintiff-Appellee, v. MICHIGAN NATIONAL BANK-WEST, Defendant-Appellant.

No. 81-1719.

United States Court of Appeals Sixth Circuit.

Argued Jan. 19, 1983.

Decided Sept. 8, 1983.

Jeffrey H. Beusse (argued), Cholette, Perkins & Buchanan, Grand Rapids, Mich., for defendant-appellant.

John F. Foley (argued), Gergely & Foley, Vicksburg, Mich., for plaintiff-appellee.

Before MERRITT and WELLFORD, Circuit Judges, and PECK, Senior Circuit Judge.

JOHN W. PECK, Senior Circuit Judge.

Michigan National Bank-West (Bank) appeals the district court's denial of its motions for judgment NOV, remittitur, and for a new trial following the entry of a judgment on a jury verdict for $64,932 for damages arising from the Bank's termination of one of its branch managers, Raymond R. Wiskotoni. Wiskotoni claimed that his discharge was in violation of the terms of an implied employment contract and Michigan public policy.

This appeal raises numerous issues including whether Michigan public policy would be violated by the discharge of an employee for being subpoenaed to testify before a grand jury, whether an employment contract prohibiting arbitrary discharges could be implied by the Bank's employment manual and practices, whether the National Bank Act bars Wiskotoni's recovery under state contract or tort law, whether in this case the jury could award damages for loss of reputation and for mental anguish, and whether the evidence supported the jury's verdict.

I. Background

In September, 1975 Gary Johnson, then president of the Bank, hired Wiskotoni as a branch manager. At the time of his hiring, Wiskotoni was given an Employees Personnel Handbook. The handbook stated that employment would be on a probationary basis for three months and that during the probationary period employment could be terminated "without any other reason" than that the employee is "not suited to the work of the Bank."

Wiskotoni held the position of branch manager at several branches of the Bank. By the autumn of 1977 Wiskotoni was the manager of the Bank's South Westnedge branch in Kalamazoo, Michigan. Wiskotoni held this position when terminated by the Bank on February 28, 1978.

In October, 1977 Federal Bureau of Investigation agent Gerard Alexander met with Peter Knibloe, Bank president, and Felix Osorno, Bank vice-president. At this meeting Alexander informed the Bank officers that he had received information from a source of unknown reliability that Wiskotoni was involved in a Kalamazoo numbers operation. Alexander indicated that the informant a prostitute, had alleged that Wiskotoni helped finance the operation by cashing checks in the morning, holding them all day, and tearing up the checks at the end of the day when the cash given for the checks was returned to the bank, i.e., by making what in effect were one-day loans.

Over the next few weeks Alexander and bank officers met several times to discuss several cases of embezzlement by Bank employees other than Wiskotoni. At each meeting, the action to be taken in the Wiskotoni matter was discussed. At one of the meetings, Knibloe informed Alexander that there were no acceptable means by which to discover whether Wiskotoni was making the loans. In early November, 1977, Alexander informed the Bank officers that because it appeared that additional information could not be obtained in the Wiskotoni matter, the Bureau's investigation of Wiskotoni was being ended.

On December 16, 1977, Wiskotoni was subpoenaed by the Kalamazoo County Circuit Court grand jury to testify on December 22. The proceeding was adjourned and Wiskotoni did not appear before the grand jury until January, 1978. On December 16, 1977 Osorno was also subpoenaed to appear before the Kalamazoo County Circuit Court grand jury and to produce the Bank's records relating to Peter Stamos, a personal friend of Wiskotoni. Additionally, Osorno was ordered to produce Wiskotoni's personnel records.

On December 27, 1977, Knibloe and Osorno met with Wiskotoni. At the meeting Knibloe informed Wiskotoni that he was to be terminated as of March 1, 1978. Among the reasons that Knibloe gave for the termination was that the Bank had received information that Wiskotoni was involved in the numbers rackets. Wiskotoni denied any involvement with the numbers rackets and offered to take a lie detector test to clear himself. Knibloe refused Wiskotoni's offer.

Wiskotoni remained the branch manager at the South Westnedge branch of the Bank with full responsibilities. On February 28, 1978, Wiskotoni was finally terminated from the Bank. No indictment was ever returned involving Wiskotoni.

On September 13, 1978, Wiskotoni filed suit against the Bank for damages arising from the termination. At trial, Wiskotoni contended that his discharge breached the terms of an implied employment contract and violated Michigan public policy. Wiskotoni argued that an employment contract prohibiting arbitrary discharge was implied by the Bank's employment manual and practices. Wiskotoni also argued that the bank discharged him because he had been subpoenaed to testify before a grand jury and that such a termination violated public policy. The jury in its answers to special interrogatories found for Wiskotoni on both the tort and the contract claims and awarded Wiskotoni damages of $64,932. The trial court denied the Bank's post-trial motions for judgment NOV, remittitur, and new trial. The Bank filed this timely appeal.

II. Public Policy

One of the theories that Wiskotoni advanced at trial was that he was terminated by the Bank because he had been subpoenaed to appear and testify before a state grand jury and that such a termination was contrary to the settled public policy of the state of Michigan. The trial judge gave the following instruction on the theory:

You are instructed that the law on this subject is, that it is the law in the State of Michigan which is applicable, that it's a violation of public policy to terminate an employee for the reason that he was subpoenaed to appear before a grand jury. To prevail on Count 1, that is the public policy count, the Plaintiff must prove by a preponderance of the evidence as follows: First, that he was employed by the Defendant bank. Secondly, that the Plaintiff's employment was terminated by the Defendant; and third, that the Defendant terminated the Plaintiff's employment for the reason that Plaintiff was subpoenaed to appear before the grand jury.

Trans. at 161.

On appeal, the Bank argues that its discharge of Wiskotoni was not actionable as a violation of public policy because Wiskotoni, the Bank contends, was one of the subjects of the grand jury investigation for which he was issued a subpoena. ¹ This argument raises two specific issues: (1) does the jury instruction accurately state the law of Michigan and (2) was the evidence sufficient to support a finding that Wiskotoni was terminated for being subpoenaed to appear before the grand jury.

As a preliminary point we note that the issue is not whether the district court erred in failing to instruct that Michigan public policy was not violated by Wiskotoni's termination if the reason for that termination was his being subpoenaed to appear before a grand jury as a possible target of the investigation. The trial judge adopted the substance of the Bank's proposed jury instructions on the public policy issue. ² More importantly, the Bank failed to object to the jury instructions that were given and is thereby barred from assigning the matter as error on appeal. ³ Batesole v. Stratford, 505 F.2d 804, 807 (6th Cir.1974) (applying Fed.R.Civ.P. 51).

The Bank nevertheless contends that the jury instructions were clearly erroneous. This court has acknowledged that where an error in jury instructions was "obvious and prejudicial" an appellate court may consider the matter "in the interests of justice." Id. at 808. We do not find that the instructions were clearly erroneous.

In Suchodolski v. Michigan Consolidated Gas Co., 412 Mich. 692, 695, 316 N.W.2d 710, 711 (1982) (per curiam), the Supreme Court of Michigan recognized an exception to the general rule that an employment contract for an indefinite term is terminable at will "based on the principle that some grounds for discharging an employee are so contrary to public policy as to be actionable." The court in Suchodolski stated that public policy proscriptions of employment discharges ordinarily are based on one of three grounds: (1) explicit legislative statements prohibiting the discharge of employees who exercise a statutory right or perform a statutory duty, e.g., The Whistleblowers' Protection Act, Mich.Comp.Laws Sec. 15.362; (2) legislative statements of public policy that imply a cause of action for wrongful termination, e.g., refusal to violate a law in the course of employment; and (3) an implied public policy prohibition of a discharge in retaliation for an employee's exercise of a legislatively conferred right, e.g., filing of workers' compensation claims. 412 Mich. at 695-96, 316 N.W.2d at 711-12. The court's statements indicate that Michigan requires the location of some legislative enactment to ground a finding that a discharge is in breach of public policy. See Schipani v. Ford Motor Co., 102 Mich.App. 606, 615, 302 N.W.2d 307, 313 (1981).

The Michigan legislature has enacted numerous statutes establishing and protecting the grand jury system. Grand juries are created pursuant to Mich.Comp.Laws Sec. 767.6 et seq.; one-man grand juries are authorized by Mich.Comp.Laws Sec. 767.3 et seq. Witnesses are compelled to appear before the grand jury and may be punished for failure to appear and to testify. Mich.Comp.Laws Secs. 767.5, 767.19c. Witnesses are subject to penalties for perjury. Mich.Comp.Laws Sec. 767.19d. Possession, use or disclosure of grand jury proceedings is illegal....