James v. Pratt and Whitney ( 2005 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-1277
LARRY JAMES,
Plaintiff - Appellant,
versus
PRATT AND WHITNEY, UNITED TECHNOLOGIES
CORPORATION,
Defendant - Appellee.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. David C. Norton, District Judge.
(CA-03-1022-2-18)
Argued: December 2, 2004 Decided: March 23, 2005
Before WILKINSON, Circuit Judge, W. Craig BROADWATER, United States
District Judge for the Northern District of West Virginia, sitting
by designation, and Norman K. MOON, United States District Judge
for the Western District of Virginia, sitting by designation.
Affirmed in part, reversed in part and remanded by unpublished per
curiam opinion.
Chalmers Carey Johnson, Charleston, South Carolina, for Appellant.
Ellis Reed-Hill Lesemann, Cherie W. Blackburn, NELSON, MULLINS,
RILEY & SCARBOROUGH, L.L.P., Charleston, South Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Appellant Larry James filed this action on February 6, 2003,
in the Court of Common Pleas of the County of Charleston, South
Carolina, against Pratt and Whitney, United Technologies
Corporation, asserting claims of civil conspiracy, intentional
interference with contractual relations, and intentional infliction
of emotional distress. After removal, the district court granted
Pratt & Whitney’s motion for partial judgment on the civil
conspiracy claim and the intentional infliction of emotional
distress claim. James seeks review of that decision. For the
reasons set forth below, we hold that the district court did not
err when it dismissed James’s intentional infliction of emotional
distress claim. We, therefore, affirm that portion of the district
court’s decision. We further hold, however, that the district
court erred when it dismissed appellant’s civil conspiracy claim.
Consistent with this determination, we vacate that portion of the
judgment of the district court and remand the case for further
proceedings consistent with this opinion.
I.
James is an aircraft mechanic employed in a supervisory
position by United Airlines, Inc., at the Charleston, South
Carolina, Air Force Base. James is also a shop steward and union
representative for the International Association of Machinists and
2
Aerospace Workers. James’s job duties include conducting
maintenance and certification of aircraft engines for the United
States Air Force. Pratt & Whitney designed and manufactured the
aircraft engines on which James works. United contracts with Pratt
& Whitney to provide maintenance to the aircraft engines and
certify that the engines are safe for use. Despite this
arrangement, James is not an employee of Pratt & Whitney but James
is employed by United.
In 2000, another aircraft mechanic discovered a crack in one
of the engines and notified his supervisor, James. James inspected
the crack, confirmed that it was unsafe for use, and reported the
damage to United. United’s foreman confronted James and the
mechanic who discovered the crack and demanded that the damage
report be withdrawn. The foreman told James that an employee with
Pratt & Whitney demanded that the damage report be altered. After
refusing to falsify the damage report, James was called to a
meeting with the foreman and a representative from Pratt & Whitney.
At this meeting, Pratt & Whitney’s representative demanded that the
report be altered. Again, James refused to falsify the damage
report.
After this incident, James claims that representatives of
Pratt & Whitney began showing up at his work area and scrutinizing
his work. James asserts that this scrutiny continued over time and
became extremely oppressive and hostile. Shortly thereafter, James
3
received a disciplinary notice terminating his employment on
November 30, 2000. James was off the job for approximately five
months. In the interim, he filed a grievance pursuant to the
collective bargaining agreement between United and the union. The
grievance procedure reached a positive conclusion, and James
returned to his job on April 30, 2001.
As a result of this termination, James lost salary and other
benefits. Specifically, the complaint asserts that during the time
he was unemployed, James suffered lost wages, lost benefits,
consequential economic damages, severe emotional distress, and
injury to his reputation. The instant complaint was filed on
February 6, 2003, alleging that as the result of his refusal to
falsify the maintenance report, Pratt & Whitney (1) unlawfully
conspired with United to have James terminated, (2) intentionally
interfered with James’s employment contract with United, and (3)
intentionally inflicted emotional distress on James.
Pursuant to 28 U.S.C. §§ 1332 and 1442, Pratt & Whitney
removed the action to the United States District Court for the
District of South Carolina on April 2, 2003. On October 10, 2003,
Pratt & Whitney filed a motion for partial judgment on the
pleadings for dismissal of the claims for civil conspiracy and
intentional infliction of emotional distress pursuant to Rule 12(c)
of the Federal Rules of Civil Procedure. Pratt & Whitney argued
that retaliatory discharge alone may not serve as a basis for a
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claim of intentional infliction of emotional distress. Therefore,
Pratt & Whitney claimed it was not liable for intentional
infliction of emotional distress. Pratt & Whitney also argued that
the claim for civil conspiracy should be dismissed because the
complaint did not specifically allege special damages, a pleading
requirement under South Carolina law.
The district court held a hearing on the motion for partial
judgment on the pleadings on December 30, 2003. At the hearing,
the district court orally granted Pratt & Whitney’s motion for
partial judgment and stated that a written order would follow.
During the pendency of the motion for partial judgment, discovery
continued between the parties. In his deposition, James conceded
that due to the collective bargaining agreement between United and
the union, the claim for intentional interference with contractual
relations was not viable under applicable law. Pratt & Whitney,
therefore, filed a motion for summary judgment on the intentional
interference of contractual relations claim on January 30, 2004.
On February 10, 2004, the district court issued its written order
granting Pratt & Whitney’s motion to dismiss the civil conspiracy
claim and the intentional infliction of emotional distress claim.
By consent of James, the district court dismissed the
intentional interference of contractual relations claim on February
23, 2004. On March 1, 2004, James filed a notice of appeal of the
district court’s February 10, 2004 order granting Pratt & Whitney’s
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motion to dismiss the claims for civil conspiracy and intentional
infliction of emotional distress.
II.
The court reviews a decision to grant judgment on the
pleadings de novo, applying the same standard for Rule 12(c)
motions as for motions made pursuant to Rule 12(b)(6). Burbach
Broad. Co. v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir.
2002); Edwards v. City of Goldsboro, 178 F.3d 231,243 (4th Cir.
1999). “Accordingly, we assume the facts alleged in the complaint
are true and draw all reasonable factual inferences in appellant’s
favor.” Id.A.
The first ground of appeal is that the district court erred
when it dismissed the claim for civil conspiracy. Under South
Carolina law, when asserting a claim for civil conspiracy, one must
allege and specifically plead special damages. The district court
determined that James failed to meet that requirement.
James argues that it is permissible under Rule 8(e)(2) of the
Federal Rules of Civil Procedure to plead alternate causes of
action or legal theories. He maintains that at the motion to
dismiss stage, it is permissible under the rules of civil procedure
to plead as many separate causes of action as the facts may
support, regardless of the fact that some may be inconsistent or
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mutually exclusive. He further argues that even if the complaint
failed to adequately plead special damages, he should be allowed to
amend his complaint under Rule 15(a) of the Federal Rules of Civil
Procedure. Pratt & Whitney counters that special damages is an
element of the claim that must be properly pled. James’s complaint
asserts the three claims described above. At the end of the
sections asserting the causes of action for civil conspiracy and
intentional interference with contractual relations, James uses the
same named items of damages: 1) suffered lost wages; 2) suffered
lost benefits; 3) suffered consequential economic damages; 4)
suffered severe emotional distress; and 5) suffered injury to his
reputation as a mechanic and union member in a leadership position.
It is this repetition of damages that Pratt & Whitney alleges is
insufficient1.
A cause of action for civil conspiracy is defined as “(1) a
combination of two or more persons, (2) for the purpose of injuring
the plaintiff, (3) which causes him special damage.” Vaught v.
Waites, 387 S.E.2d 91, 95 (S.C. Ct. App. 1986) (citing Lee v.
Chesterfield Gen. Hosp. Inc., 344 S.E.2d 379 (S.C. Ct. App. 1986)).
1
In the cause of action for intentional infliction of
emotional distress James does not recite the same demand for
damages as in the other two causes of action. In the intentional
infliction of emotional distress cause of action, James states that
as a proximate result of Pratt & Whitney’s conduct, he suffered
severe emotional distress and mental anguish. James further states
that as a result of this conduct, he is entitled to actual damages,
consequential damages, punitive damages, and other damages as
determined by the court.
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Special damages are defined as “[d]amages for losses that are the
natural and proximate, but not the necessary, result of the injury
may be recovered only when such special damages are sufficiently
stated and claimed.” Sheek v. Lee, 345 S.E.2d 496, 497 (S.C. 1986)
(emphasis in original). “Special damages must be alleged in the
complaint to avoid surprise to the other party.” Id. (citation
omitted).
An early South Carolina case involving a claim and delivery
for certain articles of personal property compares general damages
and special damages as follows:
[W]hat are called general damages, as contradistinguished
from special damages, are admitted in evidence under a
general allegation,-indeed, are inferred by the law
itself,- for the reason that they are the immediate,
direct, and proximate result of the act complained of,
as, for instance, an injury to the property itself, or
its value, by detention, etc., while damages which,
although the natural, are not the necessary, consequence
of the act, being outside of the costs and disbursements
allowed by law, and consequently, in their nature, are
not admissible in evidence without special notice of the
claim in the allegations of the complaint, are therefore
called special damages.
Loeb v. Mann, 18 S.E. 1, 2 (S.C. 1893) (internal quotations
omitted). The concept that a defendant must be on notice of the
special circumstances was also found in a breach of contract
action. See Givens v. North Augusta Elec. Improvement Co., 74 S.E.
1067, 1069 (S.C. 1912) (noting that since the complaint
unequivocally claimed special circumstances, defendant was on
notice and could be held liable for special damages).
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Special damages appear to arise in two types of cases other
than civil conspiracy: disputes involving real property and causes
of action for libel and slander. See e.g., Smith v. Phoenix
Furniture Co., 339 F.Supp. 969, 971 (D.S.C. 1972) (“[s]pecial
damages in the context of libel or slander, are damages with
respect to the property, business, profession or occupation which
are computable in money . . . [s]uch special damages must be a loss
of money or some other material temporal advantage capable of being
assessed at monetary value”); Stern & Stern Associates v. Timmons,
423 S.E.2d 124, 125 (S.C. 1992) (defining special damages in a suit
for specific performance of a real estate contract as “by their
very nature conditioned by the particular circumstances of each
case . . . [t]he party claiming special damages must show that the
defendant was clearly warned of the probable existence of unusual
circumstances or that because of the defendant's own education,
training, or information, the defendant had reason to foresee the
probable existence of such circumstances . . . special damages are
considered within the contemplation of the parties at the time the
contract was signed”) (internal citations omitted); Capps v. Watts,
246 S.E.2d 606, 609 (S.C. 1978) (stating that in a suit for libel
“[g]eneral damages are those damages which the law presumes,
without proof, to have resulted from the publication of the libel
. . . [s]pecial damage is actual damage and must be pled and
proved”) (quotations omitted); Windham v. Honeycutt, 348 S.E.2d
9
185, 187 (S.C. Ct. App. 1986) (“[s]pecial damages are those that
may reasonably be supposed to have been in the contemplation of
both parties, at the time of contracting, as the probable result of
the breach”) (citation omitted).
There are two key South Carolina cases involving special
damages for a claim of civil conspiracy. See Vaught, 387 S.E.2d
91; Todd v. S.C. Farm Bureau Mutual Ins. Co., 278 S.E.2d 607 (S.C.
1981) rev’d on other grounds, 321 S.E.2d 602 (1984) quashed in part
on other grounds, 336 S.E.2d 472 (1985). In Todd, Plaintiff sued
his former employer for various causes of action, including a civil
conspiracy claim, relating to the termination of his employment
relationship with the Farm Bureau defendants. Todd, 278 S.E.2d at
608. The issue presented on appeal was whether the amended
complaint properly pled a claim for civil conspiracy. Id. at 610.
The Supreme Court of South Carolina ruled that the trial court
erred when it overruled defendant’s demurrer. Id. at 611. In so
holding, the court stated that
[T]he fifth cause of action [civil conspiracy claim] does
no more than incorporate the prior allegations and then
allege the existence of a civil conspiracy and pray for
damages resulting from the conspiracy. No additional
acts in furtherance of the conspiracy are plead. The
only alleged wrongful acts plead are those for which
damages have already been sought.
Id.
In Vaught, a director of sanitation sued the city manager and
members of city council for civil conspiracy for terminating his
10
employment without just cause. Vaught, 387 S.E.2d at 92.
Partially relying on Todd, the trial court granted summary judgment
for defendants holding that no conspiracy existed as a matter of
law because Vaught could not predicate his conspiracy claim on the
same facts as a breach of contract claim and defendants were the
alter egos of the City and, therefore, could not conspire with
themselves. Id. at 94. In upholding the trial court, the Court of
Appeals held that the trial court had correctly determined that the
civil conspiracy action was nothing more than an “embellishment of
his breach of contract action.” Id. The court concluded that the
civil conspiracy claim inadequately pled special damages in that
“[t]he damages sought in the conspiracy cause of action are the
same as those sought in the breach of contract cause of action.”
Id. The court further held that the plaintiff in Vaught did the
same thing as the plaintiff in Todd in that the complaint “does no
more than incorporate the prior allegations and then allege the
existence of a civil conspiracy.” Id. at 95 (quoting Todd, 278
S.E.2d at 611).
In this case, the district court’s decision relies heavily on
the unpublished decision of Little v. Brown & Williamson Tobacco
Corp., No. C.A. 2:98-1879-23, 1999 WL 33291385 (D.S.C. March 3,
1999)2. In discussing the element of special damages, the district
2
In Little, the district court was faced with reviewing
twelve causes of action: 1) voluntary assumption of a special
undertaking, 2) breach of implied warranties, 3) unfair acts or
11
court in this case states:
The third element of a conspiracy claim requires
plaintiff to plead and prove special damages.
Essentially, this means that the complaint must describe
damages that occurred as a result of the conspiracy
itself, in addition to any damages alleged as a result of
any other claims. That is, the damages allegedly
resulting from the conspiracy must not overlap with or be
subsumed by the damages resulting from the other claims.
J.A. 147 (quoting Little, 1999 WL 33291385, at *14). The district
court then found that James had not pled a viable cause of action
for civil conspiracy because he did not specifically plead special
damages. Specifically, the district court stated that “[s]pecial
damages are an essential element of pleading a cause of action for
civil conspiracy in the first place; one need not make a prima
facie case in pleading special damages, but one must at least plead
them in order to state a claim.” J.A. 149. The district court
concluded that James’s complaint did not meet this basic pleading
standard and granted Pratt & Whitney’s motion to dismiss the claim.
Based upon Todd and Vaught, the issue presented in this
appeal, therefore, is not necessarily whether the damages pled
practices in violation of the South Carolina Unfair Trade Practices
Act (UPTA), 4) deceptive acts or practices in violation of the
UTPA, 5) unfair methods of competition in violation of the UTPA, 6)
fraudulent misrepresentation, concealment and nondisclosure, 7)
negligent misrepresentation, concealment and nondisclosure, 8)
negligence, 9) strict liability, 10) civil conspiracy, 11) aiding
and abetting, and 12) loss of consortium. Regarding the motion to
dismiss, the trial court noted that the plaintiffs for their civil
conspiracy claim re-alleged the damages that they had already
alleged in association with all of their other claims. Id. at *14.
Unpublished district court opinions are not binding precedence on
this court. Loc. R. 36(c)
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overlapped, or were subsumed by, the other damages asserted.
Rather, the issue is whether James’s civil conspiracy claim just
incorporated prior factual allegations from the other causes of
action then recited the same demand for damages. In sum, the
question to be answered is whether James’s complaint adequately set
forth “additional acts in furtherance of the conspiracy.” Todd, 278
S.E.2d at 611.
Therefore, the allegations of each of the causes of action
must be compared. If appellant failed to allege facts for his
civil conspiracy claim separate and distinct from his other two
claims, then his civil conspiracy claim would fail under Todd. If
appellant, however, did allege separate civil conspiracy
allegations then the court would need to determine if appellant
pled damages that “are the natural and proximate, but not the
necessary result of the injury.” Sheek, 354 S.E.2d at 497.
The complaint reveals that James adequately asserted
independent allegations such that Pratt & Whitney was adequately
put on notice that it was being sued for civil conspiracy. See
e.g., Swierkiewicz v. Sorema N. A., 534 U.S. 506, 511 (2002)
(stating that “under a notice pleading system, it is not
appropriate to require a plaintiff to plead facts establishing a
prima facie case”); see also Fed. R. Civ. P. 8(a) (stating that “a
claim shall contain . . . a short and plain statement of the
claim.”). As set forth in paragraph 24, the complaint states in
13
the “Facts” section, prior to the statement of the causes of
action, that Pratt & Whitney
[C]onspired to take unlawful action against the
Plaintiff, to harm him in retaliation for his refusal to
participate in action which would have been in violation
of his duty as a mechanic, applicable FAA regulations,
and that would have put Men and Women of the United
States Air Force, and civilian citizens of the United
States in danger of injury or death.
J.A. 10.
The language of the civil conspiracy cause of action likewise
contains independent allegations of a civil conspiracy that are not
identical to the language contained in the other causes of action.
J.A. 12-14. Specifically, in the civil conspiracy cause of action,
the complaint incorporates James’s earlier allegations and then
alleges “[t]hat the Defendant conspired and acted to harm the
Plaintiff in retaliation for the Plaintiff’s refusal to falsify
maintenance records concerning the C-17 Globemaster.” J.A. 12.
Thus, James here did assert independent allegations in furtherance
of a civil conspiracy.
Further, an analysis of the damages claimed in the complaint
indicates that appellant complied with South Carolina law. In the
first cause of action for civil conspiracy, appellant sets forth in
paragraph 48 of the complaint the following named items of damages:
1) suffered lost wages; 2) suffered lost benefits; 3) suffered
consequential economic damages; 4) suffered severe emotional
distress; and 5) suffered injury to his reputation as a mechanic
14
and union member in a leadership position. J.A. 12. Thus, special
damages as alleged in this case appear to be a “loss of money or
other material temporal advantage capable of being assessed a
monetary value.” Phoenix Furniture Co., 339 F.Supp. at 971.
Under federal notice pleading standards, James is only
required to meet the requirements of Rule 8(a) and put Pratt &
Whitney on notice of the claim. Obviously, James met that standard
here. In addition, under Rule 15(a), James should have been given
the opportunity to amend the complaint and properly plead special
damages. In addressing the standard for a motion for leave to
amend the Supreme Court has stated that “[i]f the underlying facts
or circumstances relied upon by a plaintiff may be a proper subject
of relief, he ought to be afforded an opportunity to test his claim
on the merits. In the absence of any apparent or declared reason--
such as . . . futility of amendment . . . the leave sought should,
as the rules require, be ‘freely given.’” Foman v. Davis, 371 U.S.
178, 182 (1962).
At the hearing on the motion for partial judgment, the
district court specifically addressed the issue of whether the
complaint properly pled special damages and whether James would be
permitted to amend the complaint. The district court closed the
hearing by granting the motion to dismiss the civil conspiracy
claim then stating “and if, in fact, there are special damages that
[James’s counsel] can find, then [James’s counsel] can file a
15
motion to amend the pleading . . . and you can bring them back in.”
J.A. 101. In the written order, the district court did not allow
James to amend his complaint because it found that “an amendment
should not be allowed where it is apparent from the alleged facts
that no basis for the separate damages exists.” J.A. 149. The
district court did not elaborate as to how the basis did not exist.
The district court also did not explain how the damages set forth
by James did not constitute special damages under South Carolina’s
definition. By dismissing the claim because of duplicative
damages, the district court did not address whether the alleged
damages such as lost wages, benefits, and consequential economic
damages were the proximate, but not the necessary result of Pratt
& Whitney’s alleged conspiracy. Thus, the decision of the district
court should be reversed and the case remanded in order for the
district court to review the issue of special damages in light of
this opinion and to allow, if necessary, James an opportunity to
amend the complaint to properly plead special damages.
B.
The second ground for appeal is that the district court erred
when it dismissed the claim for intentional infliction of emotional
distress. The district court ruled that, as a matter of law,
James’s termination was not sufficiently outrageous to support a
claim for intentional infliction of emotional distress. James
contends that this is not the typical retaliatory discharge case
16
because Pratt & Whitney was not his employer. The allegation is
that Pratt & Whitney, a third party, conspired with the employer,
United, to have James terminated. It is the involvement of the
third party here that James argues makes Pratt & Whitney’s conduct
outrageous and extreme. Pratt & Whitney counters that the district
court properly determined as a matter of law that its actions do
not meet the standard for outrageous conduct under applicable South
Carolina law. The fact that Pratt & Whitney is a third party is
immaterial because if an employer cannot be held liable for
intentional infliction of emotional distress as the result of a
retaliatory discharge then a third party certainly cannot be held
liable for intentional infliction of emotional distress as the
result of conspiring with an employer to cause a retaliatory
discharge.
Under South Carolina law, the tort of intentional infliction
of emotional distress has four elements: (1) defendant
intentionally or recklessly inflicted severe emotional distress or
was certain or substantially certain that such distress would
result from his conduct, (2) the conduct was so extreme and
outrageous as to exceed all possible bounds of decency and must be
regarded as atrocious, and utterly intolerable in a civilized
community, (3) the actions of the defendant caused the plaintiff's
emotional distress; and (4) the emotional distress suffered by the
plaintiff was severe so that no reasonable man could be expected to
17
endure it. Ford v. Hutson, 276 S.E.2d 776, 778 (S.C. 1981) (citing
Vicnire v. Ford Motor Co., 401 A.2d 148 (Me. 1979)) (quotations
omitted).
It is permissible for a court to find as a matter of law that
based on the allegations contained in a complaint that a
defendant’s conduct is not so extreme and outrageous to allow
recovery for intentional infliction of emotional distress. See
Todd, 321 S.E.2d at 609 (stating that “[i]t is for the court to
determine in the first instance whether the defendant’s conduct may
reasonably be regarded as so extreme and outrageous as to permit
recovery, and only where reasonable persons may differ is the
question one for the jury”) (citation omitted). Thus, the question
of whether Pratt & Whitney’s conduct here was extreme and
outrageous may be decided by the district court upon a review of
the pleadings.
South Carolina courts have been reluctant to find outrageous
conduct in a variety of settings. See Gattison v. S.C. State
College, 456 S.E.2d 414 (S.C. Ct. App. 1995) (holding that hostile
work environment was not outrageous); Shupe v. Settle, 445 S.E.2d
651 (S.C. Ct. App. 1994) (failing to find outrage where doctor
mistakenly informed daughter of father’s death when father was
still alive); Manley v. Manley, 353 S.E.2d 312 (S.C. Ct. App. 1987)
(finding good faith, involuntary committal of mother to state
hospital not outrageous); Folkens v. Hunt, 348 S.E.2d 839, 845
18
(S.C. Ct. App. 1986) (holding “not all conduct . . . causing
emotional distress in a business setting may serve as a basis for
an action alleging outrage”); Save Charleston Foundation v. Murray,
333 S.E.2d 60 (S.C. Ct. App. 1985) (holding conversion of
promissory note and bringing action on note not sufficient).
In light of this authority, Pratt & Whitney’s conduct here was
not sufficiently outrageous to maintain the claim for intentional
infliction of emotional distress. James’s argument that Pratt &
Whitney’s conduct here was outrageous because it was a third party
and not the employer is a distinction without a difference. It is
a short step to infer from South Carolina’s case law holding that
mere retaliatory discharge does not constitute outrageous conduct,
to the holding that a third party’s involvement or procurement of
a retaliatory discharge does not constitute outrageous conduct.
The Court concludes, therefore, that under these facts, the South
Carolina courts would not find this conduct so extreme such that it
would be actionable for intentional infliction of emotional
distress. Thus, the district court’s decision dismissing the claim
for intentional infliction of emotional distress should be
affirmed.
III.
The judgment of the district court is affirmed as to the claim
for intentional infliction of emotional distress and reversed and
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the case remanded for disposition consistent with this opinion as
to the claim for civil conspiracy.
AFFIRMED IN PART, REVERSED IN PART AND REMANDED
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