Cartwright v. Scheels All Sports, Inc. , 370 Mont. 369 ( 2013 )

June 18 2013
DA 12-0299
IN THE SUPREME COURT OF THE STATE OF MONTANA
2013 MT 158BRANDON W. CARTWRIGHT,
Plaintiff and Appellant,
v.
SCHEELS ALL SPORTS, INC.,
Defendant and Appellee.
APPEAL FROM: District Court of the Eighth Judicial District,
In and For the County of Cascade, Cause No. ADV 08-1118(C)
Honorable Kenneth R. Neill, Presiding Judge
COUNSEL OF RECORD:
For Appellant:
Antonia P. Marra, Marra, Sexe, Evenson & Bell, P.C.,
Great Falls, Montana
For Appellee:
Carey E. Matovich, Jesse G. Myers, Matovich, Keller & Murphy, P.C.,
Billings, Montana
Submitted on Briefs: March 6, 2013
Decided: June 18, 2013
Filed:
__________________________________________
Clerk
Justice Laurie McKinnon delivered the Opinion of the Court.
¶1 Brandon W. Cartwright appeals from a judgment entered against him by the
Eighth Judicial District Court, Cascade County, on his wrongful discharge complaint
against Scheels All Sports, Inc. A jury found that Scheels did not wrongfully discharge
Cartwright from employment, and the court entered judgment awarding Scheels the costs
it incurred defending this action. We affirm.
¶2 The issues on appeal are:
¶3 1. Did the District Court err when it failed to grant summary judgment to
Cartwright on liability and allowed Scheels to argue that it had “good cause” to discharge
Cartwright?
¶4 2. Did the court err by failing to sanction Scheels for discovery abuse and
destruction of evidence?
¶5 3. Did the court err when it failed to allow Cartwright to amend the pleadings to
add a claim for punitive damages under § 39-2-905(2), MCA?
¶6 4. Did the court erroneously allow Scheels’ expert witness to testify as to ultimate
issues of fact and law, invading the province of the jury?
¶7 5. Did the court err in allowing witnesses to testify to rumors heard at Scheels
about Cartwright?
BACKGROUND
¶8 Brandon Cartwright was employed at Scheels’ store located in Great Falls,
Montana, from 1996 to 2007. During that time, Cartwright was promoted to the “lead”
assistant manager position in the store. By all accounts, he was a good worker.
2
¶9 Beginning in 2001 and continuing through the date of trial, Cartwright dated and
lived with one of the nine other assistant managers at the Great Falls Scheels store.
During the winter, spring, and early summer of 2007, he also had a “sexual fling” with J.,
another assistant manager at the Great Falls Scheels store. J. discussed the affair with
several co-workers, some of whom then became uncomfortable working with Cartwright
because his live-in girlfriend, also their co-worker, was unaware of what was going on.
Darin Werner, the store manager, asked Cartwright about the situation in March and
August of 2007, but Cartwright denied having a sexual relationship with J. In August of
2007, Cartwright and yet another assistant manager, Carri Blockyou, had a heated
exchange concerning the situation. Shortly thereafter, Blockyou resigned.
¶10 On September 1, 2007, Werner called Cartwright and J. into his office for a
meeting. Werner asked them about the rumors regarding their relationship. Both
Cartwright and J. denied being involved in a romantic relationship, and Cartwright
became angry. Werner fired both Cartwright and J.
¶11 Cartwright applied for and was found eligible to receive unemployment benefits.
Scheels appealed to the Board of Labor Appeals, which affirmed. The eligibility decision
included a determination that Cartwright had not been terminated due to his own
misconduct.
¶12 In August of 2008, Cartwright filed this suit, in which he alleges that Scheels
discharged him in violation of the Wrongful Discharge from Employment Act (WDEA),
Title 39, chapter 2, part 9, MCA. Cartwright maintains he was fired because he had a
relationship with J. and because he refused to discuss that relationship with Werner. In
3
response, Scheels contends Cartwright was fired (1) because of the effects his
relationships were having on the assistant manager team’s ability to work together, (2)
because the other assistant managers had lost trust in him, and (3) because he swore at
Werner when Werner asked him about his relationship with J.
¶13 In the District Court, Cartwright moved for summary judgment on the issue of
liability, based on having been found eligible for unemployment benefits. The District
Court denied that motion, and also denied Scheels’ cross-motion for summary judgment
on whether Cartwright was fired for good cause. However, the court granted Scheels’
motion for summary judgment on Cartwright’s claim that his discharge was based on his
refusal to violate public policy. In a later order, the court denied Cartwright’s motion to
amend the pleadings to add a claim for punitive damages.
¶14 This case was tried to a jury over the course of five days. At the end of trial, the
jury found that Scheels did not wrongfully terminate Cartwright. Cartwright appeals.
DISCUSSION
ISSUE 1
¶15 Did the District Court err when it failed to grant summary judgment to Cartwright
on liability and allowed Scheels to argue that it had “good cause” to discharge
Cartwright?
¶16 This Court reviews a summary judgment ruling de novo, using the same
M. R. Civ. P. 56 criteria applied by the district court. Eastgate Village Water and Sewer
v. Davis, 2008 MT 141, ¶ 18, 343 Mont. 108, 183 P.3d 873. Summary judgment should
be rendered only when no genuine issues of material fact exist and the moving party is
entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3).
4
¶17 In his motion for summary judgment, Cartwright argued to the District Court that,
because he was found eligible for unemployment benefits, the question of whether he was
wrongfully discharged is settled under the doctrines of issue preclusion and claim
preclusion. He makes the same argument on appeal.
¶18 This argument is specifically prohibited by statute. Section 39-51-110, MCA,
provides that a finding of fact or law, judgment, conclusion, or order made under the
unemployment insurance law may not be conclusive or binding or used as evidence in
any separate or subsequent action or proceeding in another forum, regardless of whether
they involve the same or related parties or the same facts.
¶19 Even without § 39-51-110, MCA, the District Court was correct in denying
Cartwright summary judgment on grounds of issue or claim preclusion. Issue preclusion
and claim preclusion bar a party from relitigating an issue that already has been litigated
and decided in a prior suit. We apply a four-element test to determine whether
relitigation is barred:
1. Was the issue decided in the prior adjudication identical to the issue
raised in the action in question?
2. Was there a final judgment on the merits in the prior adjudication?
3. Was the party against whom preclusion is asserted a party or in privity
with a party to the prior adjudication?
4. Was the party against whom preclusion is asserted afforded a full and
fair opportunity to litigate the issue that may be barred?
5
Rooney v. City of Cut Bank, 2012 MT 149, ¶ 17, 365 Mont. 375, 286 P.3d 241. Here, the
District Court determined that “the issue decided in the administrative hearing [for
unemployment benefits] is not identical to the issues surrounding ‘good cause.’ ”
¶20 The District Court was correct. In the unemployment benefits proceedings, the
administrative agency determined whether Cartwright had been discharged for
misconduct. See § 39-51-2303, MCA. “Misconduct” includes willful or wanton
disregard of the rights, title, and interests of a fellow employee or the employer;
deliberate violations or disregard of standards of behavior that the employer has the right
to expect of an employee; carelessness or negligence that causes or is likely to cause
serious bodily harm to the employer or a fellow employee; and carelessness or negligence
to a degree or that reoccurs to a degree that shows an intentional or substantial disregard
of the employer’s interest. Section 39-51-201(19), MCA. In a wrongful discharge
action, in contrast, employer liability generally hinges upon whether the employer had
good cause to terminate the plaintiff. See § 39-2-904, MCA. Under the WDEA, “good
cause” is defined as “reasonable job-related grounds for dismissal based on a failure to
satisfactorily perform job duties, disruption of the employer’s operation, or other
legitimate business reasons.” Section 39-2-903(5), MCA.
¶21 Cartwright also argues that he was entitled to summary judgment on the issue of
liability because his conduct at issue was off-duty, out-of-office conduct. This is a
misstatement of Scheels’ case. As stated above, Scheels’ position was that Cartwright’s
semi-secret relationship with J., an assistant manager at the store, while he lived with and
dated another assistant manager at the store, was causing disruption of the store’s
6
operations. Scheels’ justification for terminating Cartwright’s employment went beyond
Cartwright’s off-duty, out-of-office conduct, and centered on the effects of that conduct
in the workplace.
¶22 We hold that the District Court did not err when it failed to grant summary
judgment on liability to Cartwright and allowed Scheels to proceed to trial on the
question of whether it had good cause to discharge Cartwright under the WDEA.
ISSUE 2
¶23 Did the court err by failing to sanction Scheels for discovery abuse and
destruction of evidence?
¶24 M. R. Civ. P. 37 allows a court to impose sanctions for a party’s failure to make
discovery. We review sanction orders under a deferential abuse of discretion standard,
because the trial court is in the best position to know whether the parties have disregarded
the rights of opposing parties during litigation, and which sanctions for such conduct are
most appropriate. Lewistown Propane Co. v. Moncur, 2002 MT 349, ¶ 22, 313 Mont.
368, 61 P.3d 780.
¶25 In this case, Cartwright learned during discovery that, by January of 2008, Scheels
had deleted his emails and data on the computer he had used at work. Cartwright says
this left him unable to impeach the testimony of assistant manager Carri Blockyou and
deprived him of evidence that he was well-regarded by his co-workers up until the day he
was fired. Citing Oliver v. Stimson Lumber Co., 1999 MT 328, ¶¶ 31-32, 297 Mont. 336,
993 P.2d 11, as authority for parties’ legal duty to preserve evidence that could possibly
be relevant at trial, Cartwright asked the District Court to grant him default judgment as a
7
sanction for Scheels’ destruction of those electronic records, which he contended
constituted discovery abuse.
¶26 Scheels’ response to Cartwright’s motion for sanctions included an affidavit
signed by Ben Nichols, Scheels’ lead System Administrator. Nichols averred that
Scheels’ standard practice is to deactivate a terminated employee’s electronic accounts
upon notice of termination, so that the terminated employee will not have access to his or
her accounts. Nichols further averred that, when Scheels’ Information Services
Department is notified that an employee has been terminated, the employee’s email
account is deleted and the employee’s emails are placed into a queue for at least 30 days,
after which time they are destroyed. Any information left by a terminated employee on a
desktop computer is eventually deleted when more room is needed on the computer for
other uses. In Cartwright’s case, his emails were discarded before January of 2008, in
compliance with Scheels’ standard practice.
¶27 The District Court denied Cartwright’s request for a sanction of default judgment.
Although the court allowed that Cartwright may have been prejudiced by the destruction
of the email and word processing documents, it determined that alone was not sufficient
to impose a sanction of default judgment. The court found that the fact of the pending
administrative proceeding for unemployment benefits during the fall of 2007 was not
enough to put Scheels on notice that Cartwright’s files would become relevant to a civil
proceeding (this one) that had not yet been filed. The court further found that Scheels did
not actively conceal evidence from Cartwright, but that it failed to retain the records
pursuant to a pre-existing policy. Finally, the court noted that Cartwright had not alleged
8
that the emails or documents which were deleted contained any “smoking gun” that
would show Scheels’ “actual” reasons for Cartwright’s termination.
¶28 Cartwright has not made any showing of an attempt to conceal evidence or of bad
faith when his electronic files were destroyed. Instead, the evidence was that the records
were discarded pursuant to Scheels’ pre-existing and routine practice and that Scheels
had no knowledge of potential litigation prior to destruction. Further, numerous trial
witnesses testified to the subject that Cartwright has indicated would be shown in the
electronic records: that he generally got along well with other employees at the store.
¶29 We hold that the District Court did not err when it declined to sanction Scheels for
discovery abuse and destruction of evidence.
ISSUE 3
¶30 Did the court err when it failed to allow Cartwright to amend the pleadings to add
a claim for punitive damages under § 39-2-905(2), MCA?
¶31 Grant or denial of a motion to amend a pleading is a discretionary ruling that we
review for abuse of discretion. Denton v. First Interstate Bank of Commerce, 2006 MT
193, ¶ 17, 333 Mont. 169, 142 P.3d 797.
¶32 Under his proposed amendment to the pleadings, Cartwright would have added a
claim that Scheels’ violation of his right to privacy under the Montana and United States
Constitutions—as alleged in another of his claims against Scheels—justified an award of
punitive damages under § 39-2-905(2), MCA. That provision of the WDEA allows a
terminated employee to recover punitive damages otherwise allowed by law “if it is
established by clear and convincing evidence that the employer engaged in actual fraud
9
or actual malice in the discharge of the employee in violation of § 39-2-904(1)(a), MCA,”
which, in turn, prohibits discharge “in retaliation for the employee’s refusal to violate
public policy.”
¶33 The District Court denied the motion to amend the pleadings. It reasoned that, in
its rulings on the various motions for summary judgment, it already had rejected
Cartwright’s claim that his discharge was in retaliation for his refusal to violate public
policy. As a result, the court concluded it already had foreclosed the possibility of
Cartwright recovering punitive damages.
¶34 We agree with the District Court. In its summary judgment order, the court had
observed that § 39-2-903(7), MCA, defines “public policy” for purposes of the WDEA
very narrowly, as “a policy in effect at the time of the discharge concerning the public
health, safety, or welfare established by constitutional provision, statute, or administrative
rule.” The court stated Cartwright had failed to address this statute, and that there was no
indication Cartwright was invoking a policy concerning “the public health, safety, or
welfare.” Accordingly, the court denied Cartwright’s motion for summary judgment and
granted Scheels summary judgment on violation of § 39-2-904(1)(a), MCA.
¶35 Inasmuch as Cartwright’s claim for punitive damages would have been based on
his claim that he was terminated as a result of his refusal to violate public policy, the
District Court was correct that its order granting Scheels summary judgment on the
violation of public policy claim foreclosed the possibility of Cartwright recovering
punitive damages. We hold that the District Court did not abuse its discretion when it
denied Cartwright’s motion to amend the pleadings.
10
ISSUE 4
¶36 Did the court erroneously allow Scheels’ expert witness to testify as to ultimate
issues of fact and law, invading the province of the jury?
¶37 Trial courts are vested with great latitude in ruling on the admissibility of expert
testimony. Nelson v. Nelson, 2005 MT 263, ¶ 31, 329 Mont. 85, 122 P.3d 1196. We
review a district court’s rulings on the admissibility of expert testimony for abuse of
discretion. Weber v. BNSF Ry. Co., 2011 MT 223, ¶ 18, 362 Mont. 53, 261 P.3d 984.
¶38 Before trial, Cartwright moved in limine to exclude the testimony of Scheels’
human resource management expert, Linda Brown, on grounds that her opinions
encompassed the ultimate facts and law. The District Court denied that motion.
Specifically, in response to Cartwright’s argument that Brown should not be allowed to
testify to whether Cartwright’s fellow assistant managers believed him to be truthful, the
court ruled that the expected testimony would not speak to Cartwright’s propensity to tell
the truth but, rather, to the perception of his credibility by the other assistant managers
and by Scheels’ management.
¶39 At trial, Cartwright objected to portions of Brown’s testimony, claiming that
testimony invaded the province of the jury. Specifically, he objected to the following
testimony on direct examination of Brown:
Q. Should those actions at that September 1st meeting have affected in any
way the ultimate determination by Scheels?
[CARTWRIGHT’S COUNSEL]: Objection, Your Honor; this is
speculation. It goes beyond the expertise of the witness, and it answers the
question for the jury. It invades province.
THE COURT: Overruled.
THE WITNESS: Well, I think it is very much related to some of the
human resource practice that I get involved in, sadly, frequently, where that
11
unprofessional, inappropriate exchange with your boss, the president, that’s
got to impact your judgment about that person’s continued leadership
ability. Seeing that interaction that challenged the authority first of all, of
your immediate manager, but then to me as the president, I mean, I’m
putting myself in his shoes, and certainly that kind of anger, the profanity,
those are all inappropriate behaviors.
And in this case specifically behaviors that were identified in the
Scheels policy manual that would be prohibited. So that had to—they had
to apply their policies.
Q. Would termination under these circumstances be consistent with
generally accepted human resource practice?
A. My—
[CARTWRIGHT’S COUNSEL]: Objection, Your Honor; invades the
province of the jury.
THE COURT: Overruled.
THE WITNESS: In my 30 some years in this profession, any—I’ve been
thinking about this—any time that I have been involved in a situation where
there has been that kind of insubordination, and I think this was an
egregious example of insubordination, I’ve seen employees lose their jobs
for less, it would be considered an appropriate response to terminate
someone.
¶40 M. R. Evid. 702 provides that an expert who has specialized knowledge that will
assist the trier of fact to understand the evidence or to determine a fact in issue may
testify in the form of an opinion or otherwise. M. R. Evid. 704 goes on to state that
testimony in the form of an opinion otherwise admissible is not objectionable because it
embraces an ultimate issue to be decided by the trier of fact. “However, those rules have
limitations pursuant to case law,” says Cartwright.
¶41 Citing State v. Harris, 247 Mont. 405, 808 P.2d 453 (1991), Cartwright points out
that an expert witness may not offer a determination of who is credible or truthful. He
quotes a portion of Brown’s testimony in which she stated Cartwright had lost credibility
with his coworkers after he repeatedly denied information J. had shared willingly with
coworkers. This is the same line of argument Cartwright presented in his pretrial motion
12
in limine. He has not now cited to any trial testimony in which Brown offered an opinion
on the credibility of any witness’ trial testimony. Rather, the testimony in question goes
to the opinions of Cartwright’s co-workers, at the time of his discharge, regarding his
credibility with them.
¶42 Cartwright also relies on Kizer v. Semitool, 251 Mont. 199, 824 P.2d 229 (1991),
and Heltborg v. Modern Mach., 244 Mont. 24, 795 P.2d 954 (1990). His reliance on
those cases is misplaced. In both Kizer and Heltborg, expert witnesses offered legal
conclusions that the employers violated the implied covenant of good faith and fair
dealing—the very issue to be decided by the juries—and we concluded that testimony
was inadmissible. Kizer, 251 Mont. at 207, 824 P.2d at 233; Heltborg, 244 Mont. at
32-33, 795 P.2d at 959. Cartwright has pointed to no testimony offering a similar legal
conclusion by expert witness Brown on the ultimate question presented to the jury in this
case—whether Scheels terminated him without good cause.
¶43 Finally, Cartwright cites Young v. Horton, 259 Mont. 34, 855 P.2d 502 (1993), for
the proposition that an expert may not invade the province of the jury by stating opinions
that go to an ultimate issue of fact. But in Perdue v Gagnon Farms, Inc., 2003 MT 47,
¶ 28, 314 Mont. 303, 65 P.3d 570, we recognized that “an expert witness may properly
testify as to an ultimate issue of fact.” What an expert cannot do is to render a legal
conclusion or improperly apply the law to the facts. Perdue, ¶ 28.
¶44 Brown did not testify as to ultimate issues of law. Her testimony did not track the
legal elements of wrongful discharge set forth at § 39-2-904, MCA. Cartwright’s briefs
fail to point out any portion of the WDEA to which Brown testified. She did not offer an
13
opinion on whether Scheels had good cause for discharging Cartwright. Instead, the
questions posed to Brown by Scheels’ counsel focused on Brown’s expert assessment of
Werner’s and Cartwright’s actions in the context of accepted human resource practices.
¶45 We conclude Cartwright has failed to establish that Brown’s testimony constituted
impermissible credibility determinations of witnesses regarding disputed facts, or
improper or inadmissible legal conclusions. We hold that the District Court did not abuse
its discretion by allowing Brown to testify as she did.
ISSUE 5
¶46 Did the court err in allowing witnesses to testify to rumors heard at Scheels about
Cartwright?
¶47 A district court has broad discretion in determining whether evidence is relevant
and admissible. Nelson, ¶ 31. We review rulings on evidentiary matters, including
motions in limine, for abuse of discretion. Malcolm v. Evenflo Co., 2009 MT 285, ¶ 29,
352 Mont. 325, 217 P.3d 514.
¶48 Cartwright points out that M. R. Evid. 802 disallows the use of hearsay testimony,
except as otherwise provided by statute or rule. Without identifying specific testimony to
which he objects, he argues that his co-employees should not have been allowed to testify
to the substance of specific rumors they heard about him. In the face of Scheels’
response that he failed to object to all such testimony at trial, he maintains this issue was
preserved by his filing of a motion in limine on this subject prior to trial.
¶49 In denying Cartwright’s motion in limine, the District Court stated the motion
could not be granted without knowing the specific testimony at issue; therefore, the
14
proper way to handle the matter would be through objections at trial. The court further
stated that evidence concerning Cartwright’s conduct leading to the assistant managers’
loss of trust in him would be critical to Scheels’ defense of its termination decision.
¶50 A statement does not fit within the definition of hearsay if it is not offered to prove
the truth of the matter asserted, but is offered instead to show the statement’s effect on
the witness’ state of mind at the time the witness heard the statement. Murray v.
Talmage, 2006 MT 340, ¶ 13, 335 Mont. 155, 151 P.3d 49; Moats Trucking Co. v.
Gallatin Dairies, Inc., 231 Mont. 474, 479, 753 P.2d 883, 886 (1988). Our review of the
transcript convinces us that the testimony of Cartwright’s co-workers regarding
workplace rumors was not offered to prove that a sexual triangle including Cartwright
existed, or that the rumors were true. Rather, that testimony was offered to show the
effect the rumors had on the listeners and on Scheels’ workplace and business. For
example, Scheels assistant manager Sarah Lawson testified that the rumors that were
circulating caused her to feel a division between those who knew and those who did not
know of the “fling.” Assistant manager Colin Pearson testified that those aware of the
romantic triangle did not know who to trust or who to talk to, and that they spent a lot of
time with rumors instead of doing their jobs. This testimony provided context for the
concerns and actions on the part of Scheels’ management that followed.
¶51 We hold that Cartwright has not demonstrated any instances in which the District
Court abused its discretion in admitting the testimony of witnesses as to rumors they
heard at Scheels about Cartwright.
CONCLUSION
15
¶52 Cartwright has failed to establish error by the District Court under any of the
issues he has raised on appeal. The judgment entered by the District Court is affirmed.
/S/ LAURIE McKINNON
We Concur:
/S/ MICHAEL E WHEAT
/S/ BETH BAKER
/S/ JIM RICE
/S/ BRIAN MORRIS
16