Novak v. Joye, Locklair & Powers, P.C. ( 2010 )

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Loretta C. Novak, Appellant,

v.

Joye, Locklair & Powers, P.C., Richard Scott Joye, John Wesely Locklair, III, and Delton W. Powers, Jr., Respondents.

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Appeal From Georgetown County
J. Michael Baxley, Circuit Court Judge

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Unpublished Opinion No. 2010-UP-225
Submitted March 1, 2010 – Filed April 1, 2010   

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AFFIRMED AS MODIFIED

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Bonnie Travaglio Hunt, of North Charleston, for Appellant. 

Lovic A. Brooks, III, of Columbia, for Respondents.

CURETON, A.J.:  Loretta C. Novak filed suit against the respondents, alleging wrongful termination in violation of a clear mandate of public policy and civil conspiracy.  The circuit court dismissed her complaint for failure to state facts sufficient to constitute a cause of action.^[1] Specifically, the circuit court found the respondents neither violated the criminal law by firing Novak nor required Novak to violate the law as part of her employment. 

Novak appeals the circuit court's dismissal of her complaint for wrongful termination in violation of public policy, arguing the trial court erred in finding she failed to state facts sufficient to constitute a cause of action.  We disagree.  We modify the circuit court's order as described below and affirm^[2] the dismissal. 

Initially, we recognize Novak argues the novel issue in her complaint rendered it ineligible for dismissal pursuant to Rule 12(b)(6).  We decline to address this argument because it is not preserved for our review.  See Wilder Corp. v. Wilke, 330 S.C. 71, 76, 497 S.E.2d 731, 733 (1998) ("It is axiomatic that an issue cannot be raised for the first time on appeal, but must have been raised to and ruled upon by the [circuit court] to be preserved for appellate review."). 

With regard to the merits of the dismissal, a defendant may offer the defense that the plaintiff has "fail[ed] to state facts sufficient to constitute a cause of action" by motion instead of in a responsive pleading.  Rule 12(b), SCRCP.  However, the defendant must make this motion before pleading.  Id. In deciding whether the circuit court properly granted a motion to dismiss pursuant to Rule 12(b)(6), SCRCP, the appellate court must consider whether the complaint, viewed in the light most favorable to the plaintiff, states any valid claim for relief.  Gentry v. Yonce, 337 S.C. 1, 5, 522 S.E.2d 137, 139 (1999).  If the facts and inferences raised by the complaint would entitle the plaintiff to relief on any theory, then a dismissal for failure to state a claim is improper.  Id. 

South Carolina has recognized the doctrine of at-will employment since 1936.  See Shealy v. Fowler, 182 S.C. 81, 87, 188 S.E. 499, 502 (1936).  Generally, under this doctrine an employer may discharge an employee for good reason, no reason, or bad reason without incurring liability.  Ludwick v. This Minute of Carolina, Inc., 287 S.C. 219, 221, 337 S.E.2d 213, 214 (1985) (citing H.G. Wood, Master and Servant (1877)).  However, an employer may nonetheless become liable in tort to the discharged employee under the public policy exception, which protects the employee when "the retaliatory discharge of an at-will employee constitutes violation of a clear mandate of public policy."  287 S.C. 225, 337 S.E.2d at 216. 

Our supreme court has held the criminal law clearly expresses public policy, and consequently, discharges violating the criminal law or based upon the employee's refusal to violate the criminal law fall within the public policy exception.  Garner v. Morrison Knudsen Corp., 318 S.C. 223, 226, 456 S.E.2d 907, 909 (1995).  The Garner court expressly declined to hold that the criminal law was the sole expression of public policy, leaving the boundaries of the public policy exception somewhat flexible.  Id.  However, South Carolina courts have declined to enforce the Rules of Professional Conduct as the public policy of the state.  Weatherford v. Price, 340 S.C. 572, 580-81, 532 S.E.2d 310, 314-15 (Ct. App. 2000). 

Novak successfully alleged facts supporting retaliatory termination but failed to identify a clearly stated public policy.  A party claiming wrongful termination in violation of public policy must assert 1) she was discharged from at-will employment, 2) the discharge was retaliatory, and 3) the discharge violated a "clear mandate of public policy."  Ludwick, 287 S.C. at 225, 337 S.E.2d at 216.  Novak's allegations support only two of these elements.  In her complaint, Novak presented facts establishing the respondents terminated her at-will employment.  She also alleged facts supporting her argument the discharge was in retaliation for her performance.  However, her reliance on the rule "that attorneys take direct responsibility for matters of professional responsibility and ethics in regard to the handling of legal matters for clients" as public policy is misplaced.  This requirement exists in the South Carolina Rules of Professional Conduct, which appear in Rule 407, SCACR, but have not been codified by the Legislature.  Because the Rules of Professional Conduct are not enforceable as public policy, Novak failed to allege facts sufficient to meet the third element of wrongful termination in violation of public policy.  See Weatherford, 340 S.C. at 580-81, 532 S.E.2d at 314-15.  Consequently, the circuit court did not err in dismissing her complaint under Rule 12(b)(6). 

In restricting its analysis of the public policy element to whether Novak's termination violated criminal law or whether the respondents asked Novak to violate the criminal law, the circuit court relied on Lawson v. S.C. Dep't of Corr., 340 S.C. 346, 350, 532 S.E.2d 259, 260-61 (2000).  We find no indication our supreme court intended its opinion in Lawson to overrule or limit its opinion in Garner.  Accordingly, we modify the circuit court's decision to omit the statement that Lawson limited the public policy exception to terminations involving violations of the criminal law. Even without this limitation, in light of Weatherford, we find the circuit court properly dismissed Novak's complaint because it failed to enunciate any clear mandate of public policy violated by her termination. Therefore, the decision of the circuit court is

AFFIRMED AS MODIFIED. 

GEATHERS, J., concurs.

PIEPER, J., concurring in result only:  I concur in result because I would find Novak failed to preserve any of her issues for appellate review. 

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[1] Neither Novak nor her counsel appeared at the hearing on the respondents' motion to dismiss.  Although the circuit court's final order recognized this failure to appear, the dismissal was based solely upon Novak's failure to state a claim. 

[2] We decide this case without oral argument pursuant to Rule 215, SCACR.