Dawn Duty v. Boys and Girls Club of Porter County and Chuck Leer , 23 N.E.3d 768 ( 2014 )

FOR PUBLICATION Dec 18 2014, 8:39 am
ATTORNEYS FOR APPELLANT: ATTORNEYS FOR APPELLEES:
EDWARD P. GRIMMER JOHN E. HUGHES
DANIEL A. GOHDES LAUREN K. KROEGER
Edward P. Grimmer, P.C. Hoeppner Wagner & Evans LLP
Crown Point, Indiana Merrillville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
DAWN DUTY, )
)
Appellant-Plaintiff, )
)
vs. ) No. 64A03-1407-PL-255
)
BOYS AND GIRLS CLUB OF PORTER )
COUNTY and CHUCK LEER, )
)
Appellees-Defendants. )
APPEAL FROM THE PORTER SUPERIOR COURT
The Honorable William E. Alexa, Judge
Cause No. 64D02-1309-PL-8059
December 18, 2014
OPINION - FOR PUBLICATION
NAJAM, Judge
STATEMENT OF THE CASE
Dawn Duty appeals the trial court’s dismissal of her complaint against Boys and
Girls Club of Porter County (“BGC”) and Charles R. Leer for failure to state a claim
upon which relief can be granted. Duty presents a single issue for our review, namely,
whether the trial court erred when it dismissed her complaint.
We affirm in part, reverse in part, and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
Duty and Leer were both employed by BGC.1 At some point, Duty
reported [to someone at BGC regarding the] financial practices of then[-]
President Charles R. Leer and the financial officer of [BGC,] which
violated good accounting practices, policy[,] and recommendations of the
national Boys and Girls Clubs, and transparency as to all income and where
it is in [BGC’]s accounts, which reported practice was criticized in audit
thereafter.
Appellant’s App. at 74. Leer’s employment with BGC ended in April 2013. And in July
2013, BGC terminated Duty’s employment.
On September 10, 2013, Duty filed a complaint against BGC and Leer alleging
wrongful discharge (against BGC) and tortious interference with a business relationship
(against Leer). In particular, Duty alleged that BGC had violated its own policy to
protect employees “from any adverse consequence or retaliation for reporting under the
‘Whistleblower’ policy” as set out in BGC’s employee handbook, which, Duty alleged,
created a “quasi-contract.” Id. at 10. And Duty alleged that Leer, a former BGC
employee, had persuaded the interim Chief Executive Officer of BGC to terminate
Duty’s employment.
1
The complaint does not state when each of the parties began their employment with BGC.
2
The “Whistleblower Policy” included in BGC’s employee handbook, relevant
portions of which were attached to Duty’s complaint, states in relevant part as follows:
If an employee believes that any employee of [BGC] may be acting in
violation of [any federal, state, or local laws and regulations that apply to
BGC and its business operations,]—or in violation of a [BGC] policy—the
employee has a duty to report the perceived violation to their [sic]
supervisor or to the Director of Operations as soon as possible or
reasonable under the circumstances. . . .
***
Whistleblower protections are provided in two important areas—
confidentiality and against retaliation. . . . This includes, but is not limited
to, protection from retaliation in the form of an adverse employment action
such as termination, compensation decreases, or poor work assignments
and threats of physical harm. . . .
Id. at 47.
BGC and Leer filed a joint motion to dismiss Duty’s complaint, and Duty moved
the trial court for leave to file an amended complaint. In her first amended complaint,
Duty alleged two additional counts against Leer, namely, tortious interference with a
contractual relationship and “disparagement.” Id. at 41. On March 5, 2014, the trial
court issued an order stating in relevant part as follows:
Defendants’ Motion to Dismiss under Indiana Trial Rule 12(B)(6) is
GRANTED for Plaintiff’s Count I. Defendants’ Motion to Dismiss under
Indiana Trial Rule 12(B)(6); [sic] and, for Plaintiff’s Count II, III, and IV is
DENIED in part as to dismissal of the action; and is GRANTED in part so
far as it is treated as a Motion for a More Definite Statement under Indiana
Trial Rule 12(E).
Id. at 69.
On March 13, Duty filed her second amended complaint. And on March 28, BGC
and Leer filed a joint motion to dismiss Duty’s second amended complaint for failure to
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state a claim upon which relief can be granted. Following a hearing, the trial court
granted the defendants’ motion to dismiss with prejudice. This appeal ensued.
DISCUSSION AND DECISION
Our review of a trial court’s grant of a motion to dismiss under Trial Rule
12(B)(6) is de novo and requires no deference to the trial court’s decision. Sims v.
Beamer, 757 N.E.2d 1021, 1024 (Ind. Ct. App. 2001). “A motion to dismiss under Rule
12(B)(6) tests the legal sufficiency of a complaint: that is, whether the allegations in the
complaint establish any set of circumstances under which a plaintiff would be entitled to
relief.” Trail v. Boys & Girls Clubs of NW Ind., 845 N.E.2d 130, 134 (Ind. 2006).
“Thus, while we do not test the sufficiency of the facts alleged with regards to their
adequacy to provide recovery, we do test their sufficiency with regards to whether or not
they have stated some factual scenario in which a legally actionable injury has occurred.”
Id. When reviewing a Trial Rule 12(B)(6) motion to dismiss, we accept the facts alleged
in the complaint as true and view the pleadings in a light most favorable to the
nonmoving party and with every reasonable inference in the nonmoving party’s favor.
Id. We view motions to dismiss under Trial Rule 12(B)(6) “with disfavor because such
motions undermine the policy of deciding causes of action on their merits.” McQueen v.
Fayette Cnty. Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct. App. 1999), trans. denied.
Further, under Indiana’s notice pleading system, a pleading need not adopt a
specific legal theory of recovery to be adhered to throughout the case. Shields v. Taylor,
976 N.E.2d 1237, 1244 (Ind. Ct. App. 2012). However, although Indiana’s notice
pleading rules do not require the complaint to state all elements of a cause of action, the
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plaintiff must still plead the operative facts necessary to set forth an actionable claim.
State v. Am. Family Voices, Inc., 898 N.E.2d 293, 296 (Ind. 2008).
Duty contends that the trial court erred when it dismissed her complaint because it
states claims upon which relief can be granted, namely, wrongful discharge, tortious
interference with a business relationship, and tortious interference with a contractual
relationship.2 We address the sufficiency of each of Duty’s claims under Trial Rule
12(B)(6) in turn.
Wrongful Discharge
As our supreme court explained in Orr v. Westminster Village North, Inc., 689
N.E.2d 712, 717-18 (Ind. 1997):
If there is no definite or ascertainable term of employment, then the
employment is at-will, and is presumptively terminable at any time, with or
without cause, by either party.
***
This Court has recognized only three ways to avoid or rebut the
presumption of at-will employment, or stated another way, three exceptions
to the employment-at-will doctrine. First, if an employee establishes that
“adequate independent consideration” supports the employment contract,
the Court generally will conclude that the parties intended to establish a
relationship in which the employer may terminate the employee only for
good cause. . . .
Second, we have recognized a public policy exception to the
employment-at-will doctrine if a clear statutory expression of a right or
duty is contravened. . . .
2
In her brief on appeal, Duty states that “the trial court’s dismissal of [the disparagement count
in her second amended complaint] is not assigned as error, but the [court’s order] should not preclude
disparagement as an element of damages subject to the burden of proof.” Appellant’s Br. at 12.
Accordingly, we need not address whether the trial court erred when it dismissed Count IV of Duty’s
second amended complaint.
5
Third, this Court has recognized that, in certain instances, an
employee may invoke the doctrine of promissory estoppel. . . .
Duty contends that, while an at-will employee generally has no cause of action for
wrongful discharge, her claim against BGC falls under an additional exception to that
general rule as stated in Orr, namely, a “mandatory procedures” exception. In particular,
Duty maintains that “a mandatory provision, i.e. [BGC’s Employee] Handbook creates a
right in [BGC] by creating a duty in the employee, because of the whistleblower
provision, to act. The corollary to the mandatory action required of the employee is
[BGC’s] representation there will be no retaliation.” Appellant’s Br. at 10. In sum, Duty
asserts that “the [Employee] Handbook creates mutual obligations and rights and
therefore would come under the Orr exception (‘mandatory procedures’).” Id.But Duty mischaracterizes our supreme court’s holding in Orr. In that case, the
court explicitly declined the plaintiffs’ invitation to recognize “a broad new exception to
the at-will doctrine for employee handbooks.” Orr, 689 N.E.2d at 719. Rather, in dicta,
our supreme court stated as follows:
[P]laintiffs urge us to establish a broad new exception to the at-will doctrine
for employee handbooks. We are aware that there has been substantial
criticism of the at-will doctrine and a significant amount of commentary
and litigation regarding whether employee handbooks constitute valid
contracts and, if so, under what circumstances. We are also aware that this
Court has not expressly addressed and resolved the question of whether
unilateral contracts in the employment context always require adequate
independent consideration and whether an employee handbook can ever
constitute a unilateral contract serving to modify the otherwise at-will
employment relationship. See Wior v. Anchor Industries, Inc., 669 N.E.2d
at 175-78, n.6; Streckfus v. Gardenside Terrace Co–Op., Inc., 504 N.E.2d at
276. Nevertheless, we decline plaintiffs’ invitation to use this case as a
vehicle for resolving these questions.
6
Even if we were to conclude that an employee handbook, under
some circumstances, can constitute a valid unilateral contract in the absence
of adequate independent consideration—and we do not do so today—
Westminster’s Handbook could not constitute such a unilateral contract
and, in fact, cannot meet the requirements set forth in Duldulao v. Saint
Mary of Nazareth Hosp. Center, 115 Ill.2d 482, 106 Ill.Dec. 8, 12, 505
N.E.2d 314, 318 (1987), upon which plaintiffs primarily rely while urging
the Court to create a handbook exception to the employment-at-will
doctrine.
Under the Duldulao rule, an employee handbook may constitute a
unilateral contract and bind the employer if the following three criteria are
met: (1) the language of the employee handbook must contain “a promise
clear enough that an employee would reasonably believe that an offer had
been made;” (2) the employee handbook must be disseminated to the
employee in such a manner that the employee is aware of its contents and
reasonably believes it to be an offer; and (3) the employee must accept the
offer by commencing or continuing work after learning of the terms of the
employee handbook. Id. . . .
. . . [But] the [Westminster] Handbook also contains a disclaimer,
which is placed towards the front of the Handbook and which clearly states
that the Handbook is not a contract and that its terms can be changed at any
time. A similar disclaimer is included in the Personnel Handbook
Statement which accompanied, and was referenced in, the Handbook and
which Westminster required plaintiffs to sign. Again, even under the
Duldulao rule, an employee handbook bearing or accompanied by such
disclaimers, particularly when the employee signs one of the disclaimers,
generally, as a matter of law, does not create a unilateral contract.
Id. at 719-21 (emphases added).
Here, we likewise decline Duty’s invitation to recognize a mandatory procedures
exception to the employment at-will doctrine. And, like the handbook in Orr, the BGC
employee handbook3 includes the following disclaimer:
NOTHING CONTAINED WITHIN THIS EMPLOYEE HANDBOOK IS
INTENDED TO CREATE A CONTRACT FOR EMPLOYMENT,
EXPRESS OR IMPLIED, NOR A GUARANTEE OF CONTINUED
3
Duty attached to her complaint portions of BGC’s employee handbook as Exhibit 1. Under
Trial Rule 10(C), “[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for
all purposes.”
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EMPLOYMENT FOR A SPECIFIC DURATION. THE EMPLOYEE
AGREES THAT EMPLOYMENT WITH THE CLUB IS AT-WILL. THE
CLUB MAY DISCHARGE AN EMPLOYEE AT ANY TIME, FOR ANY
REASON WHATSOEVER, WITH OR WITHOUT CAUSE, AND WITH
OR WITHOUT NOTICE. NOTHING WITHIN THIS HANDBOOK OR
WITH THE CLUB’S POLICIES, PRACTICES, OR PROCEDURES IS
INTENDED TO CREATE A CONTRACT FOR EMPLOYMENT,
EXPRESS OR IMPLIED, OR A GUARANTEE O[F] CONTINUED
EMPLOYMENT FOR A SPECIFIC DURATION.
Appellant’s App. at 46 (emphasis original). Thus, even under Duldulao, which is not
binding precedent in Indiana, the BGC employee handbook does not create a unilateral
contract.
Duty has not demonstrated that the factual scenario alleged in her complaint
correlates to a claim under an exception to the employment at will doctrine. See Trail,
845 N.E.2d at 134. The trial court did not err when it dismissed that claim.
Tortious Interference with a Contractual Relationship
Duty next contends that the trial court erred when it dismissed her claim alleging
that Leer tortiously interfered with her contractual relationship with BGC. “‘Indiana has
long recognized that intentional interference with a contract is an actionable tort, and
includes an intentional, unjustified interference by third parties with an employment
contract.’” Drake v. Dickey, 2 N.E.3d 30, 34 (Ind. Ct. App. 2013) (quoting Winkler v.
V.G. Reed & Sons, Inc., 638 N.E.2d 1228, 1234 (Ind. 1994)), summarily aff’d in relevant
part, 12 N.E.3d 875 (Ind. 2014). This tort reflects the public policy that contract rights
are property and, under proper circumstances, are entitled to enforcement and protection
from those who tortiously interfere with those rights. Id. Tortious interference with a
contractual relationship consists of the following elements: (1) that a valid and
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enforceable contract exists; (2) the defendant’s knowledge of the existence of the
contract; (3) defendant’s intentional inducement of breach of the contract; (4) the absence
of justification; and (5) damages resulting from defendant’s wrongful inducement of the
breach. Id. Further, our supreme court has held that
[a]n employee with an at[-]will employment contract must be able to expect
that his continued employment depends on the will of his employer and not
upon the whim of a third party interferer. . . . [T]herefore[,] . . . a claim for
tortious interference with an employment relationship can be maintained
upon a contract terminable at will.
Bochnowski v. Peoples Fed. Sav. & Loan, 571 N.E.2d 282, 285 (Ind. 1991).
Here, the trial court found in relevant part that Duty’s complaint “is not specific
enough to know whether the conduct was wrongful for any type of tortious interference.”
Appellant’s App. at 7. But Duty maintains that she alleged each element of this claim
with sufficient specificity. In particular, Duty’s second amended complaint includes the
following allegations:
30. At all relevant times up to and including the date her employment
contract with [BGC] was terminated, Plaintiff had a valid and enforceable
employment contract with [BGC].
31. At all relevant times up to and including the date her employment
contract with [BGC,] Charles R. Leer knew of and was aware of that
employment relationship between Dawn Duty and [BGC].
32. Charles R. Leer engaged in statements and conduct with his purpose
and intention to persuade and induce [BGC], and particularly the individual
who replaced him as interim chief executive officer[,] to terminate this
Plaintiff as an employee of [BGC]. Plaintiff retains the right through
discovery process to discover evidence in proof of the actions, words[,] and
influence undertaken by Charles Leer in interference with Plaintiff’s
employment relationship with [BGC] and asserts she has a reasonable basis
for these allegations. Plaintiff asserts her right to conduct discovery to
develop and solidify by discovery her allegations.
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33. The actions of Charles Leer were his knowing interference with the
employment relationship he knew existed between Plaintiff and [BGC] and
were done without justification and in retaliation for Plaintiff’s invocation
of the Whistleblower policy of [BGC] with the intention to induce [BGC]
to terminate its employment of Plaintiff.
34. Charles Leer lacked justification for his interference with the
relationship and contract between [BGC] and Plaintiff.
35. The actions of Charles R. Leer were vindictive against Plaintiff for
what he thought were damaging [sic] to his reputation and tortious
interference with Plaintiff’s advantageous employment relationship.
36. Dawn Duty has been damaged by these wrongful actions of Charles
R. Leer.
Appellant’s App. at 77-78 (emphases added).
In their brief on appeal, BGC and Leer maintain that Duty “failed to specify the
wrongful conduct” by Leer and made only a conclusory statement that Leer lacked
justification for his alleged conduct, which, they contend, is insufficient. Appellees’ Br.
at 21. BGC and Leer do not allege that Duty’s claim is insufficient with respect to any of
the other elements of her claim. BGC and Leer are correct that a plaintiff must state more
than a mere assertion that the defendant’s conduct was unjustified. See Morgan Asset
Holding Corp. v. CoBank, ACB, 736 N.E.2d 1268, 1272 (Ind. Ct. App. 2000). To satisfy
the element of lack of justification, the breach must be malicious and exclusively directed
to the injury and damage of another. Id. (citing Winkler, 619 N.E.2d at 600-01).
But our reading of Duty’s allegations reveals that they are sufficiently specific
regarding Leer’s alleged wrongful and unjustified conduct. First, paragraph 32 of Duty’s
second amended complaint alleges that Leer “engaged in statements and conduct with
[the] purpose and intent[] to persuade and induce [BGC] . . . to terminate [Duty] as an
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employee of [BGC].” Appellant’s App. at 77. Under notice pleading, Duty does not
have to describe those statements and conduct with more specificity than that. See Trail,
845 N.E.2d at 134. Moreover, Duty alleges that Leer’s statements and conduct were “in
retaliation for [her] invocation of the Whistleblower policy of [BGC] with the intent[] to
induce [BGC] to terminate its employment of [Duty]” and that Leer’s actions were
“vindictive against [Duty] for what he thought were damaging [sic] to his reputation[.]”
Id. at 77-78. Vindictiveness is, by its nature, malicious. Thus, Duty has pleaded facts
sufficient to show that the alleged breach was malicious and exclusively directed to the
injury and damage of Duty. See Morgan, 736 N.E.2d at 1272. Applying the standard
when reviewing a motion to dismiss under Trial Rule 12(B)(6), we hold that Duty has
stated a claim upon which relief can be granted for tortious interference with a
contractual relationship.4
Conclusion
The trial court did not err when it dismissed Duty’s claim against BGC alleging
wrongful discharge. But the trial court erred when it dismissed Duty’s claim against Leer
alleging tortious interference with a contractual relationship. Duty may proceed with that
claim on remand.
Affirmed in part, reversed in part, and remanded for further proceedings.
MATHIAS, J., and BRADFORD, J., concur.
4
In her brief on appeal, Duty states that, should we reverse the trial court’s dismissal of her
tortious interference with a contractual relationship claim, “dismissal [of her tortious interference with a
business relationship claim] as an alternate theory could be considered moot.” Appellant’s Br. at 19.
Thus, we do not address that claim.
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