Summary
discussing tort of wrongful discharge
Summary of this case from Guarascio v. New Hanover Health Network, Inc.Opinion
No. COA02-956
Filed 1 July 2003
1. Appeal and Error — appealability — interlocutory order — governmental or sovereign immunity — substantial right
Although defendant's appeal of the denial of his motion for summary judgment on plaintiff's breach of contract action is an appeal from an interlocutory order, appeals raising issues of governmental or sovereign immunity affect a substantial right and are immediately reviewable on appeal
2. Public Officers and Employees — termination of deputy sheriff — breach of contract — at-will employee — public policy violation
The trial court did not err by denying defendant sheriff's motion for summary judgment on plaintiff deputy sheriff's breach of contract action arising out of plaintiff's termination from employment after he began to investigate allegations that another deputy had committed perjury and made false reports in connection with a number of criminal prosecutions, because plaintiff is not precluded as a matter of law from maintaining his action for breach of contract where defendant terminated his employment for reasons that violate public policy even though plaintiff's employment was at will.
Judge MARTIN dissenting.
Appeal by defendants from order entered 8 May 2002 by Judge James Baker, Jr., in Buncombe County Superior Court. Heard in the Court of Appeals 16 April 2003.
Carter Kropelnicki, P.A., by Steven Kropelnicki, Jr., for plaintiff-appellee. Long, Parker, Warren Jones, P.A., by Robert B. Long, Jr., and W. Scott Jones, for defendant-appellants.
Plaintiff brought this action seeking compensatory and punitive damages from defendant Medford, individually and as Sheriff of Buncombe County, and damages against Western Surety Company in the amount of $20,000 as surety upon defendant Medford's official bond. In summary, Plaintiff alleged in his complaint that from December 1994 until 27 April 2000, he was employed by defendant Medford as a deputy sheriff and, at all times relevant to the complaint, was the lieutenant in charge of the Internal Affairs Division of the Buncombe County Sheriff's Department.
Plaintiff alleged that he was instructed by defendant Medford to investigate the conduct of another deputy in the department as a result of a February 1998 incident in which the deputy was involved. In the course of this investigation, Plaintiff determined that the deputy had committed serious acts of misconduct which included making false reports and committing perjury. Plaintiff reported his findings to Medford in writing. Notwithstanding Medford's receipt of Plaintiff's report, the deputy was not discharged. However, defendant Medford did advise the Buncombe County district attorney of the deputy's perjury, and, as a result, the district attorney was required to disclose such conduct to other persons facing criminal charges in the Buncombe County courts in which the deputy was a witness.
Plaintiff alleged that on 27 April 2000, Medford terminated Plaintiff's employment without any just cause and that such termination was motivated solely by Medford's malice toward him for reporting the deputy's misconduct. Plaintiff asserted claims for breach of contract and for "a tort of wrongful discharge."
Upon Medford's motion, Plaintiff's claims against him in his individual capacity were dismissed. Defendants filed an answer, denying the material allegations of the complaint and asserting sovereign immunity as a bar to Plaintiff's claims. Defendants subsequently moved for partial summary judgment asserting (1) that there was no evidence of the existence of an employment contract between Plaintiff and Medford and the employment relationship was at will; and (2) that sovereign immunity limited any tort claim against Defendants to $20,000, the amount of the bond purchased by Medford. The trial court granted Defendants' motion with respect to the tort claim, thus limiting Plaintiff's potential recovery on that claim, but denied it with respect to the claim for breach of contract.
Before addressing Medford's argument, we note that "appeals raising issues of governmental or sovereign immunity affect a substantial right sufficient to warrant immediate appellate review." Wood v. N.C. State Univ., 147 N.C. App. 336, 337-338, 556 S.E.2d 38, 39 (2001), disc. review denied, 355 N.C. 292, 561 S.E.2d 887 (2002) (quoting Price v. Davis, 132 N.C. App. 556, 558-559, 512 S.E.2d 783, 785 (1999)). Thus, although this appeal is interlocutory, it is properly before us.
Defendant has assigned error to the denial of his motion for summary judgment on Plaintiff's contract claim, arguing that there can be no claim for breach of contract since the plaintiff's employment was at will. Here, the deputy sheriff plaintiff was fired by the Sheriff after he began to investigate allegations that another deputy had committed perjury and made false reports in connection with a number of criminal prosecutions. In its order on Defendants' motion for summary judgment, the trial court reached the following pertinent conclusion:
1) There is no genuine issue of material fact that Plaintiff's contract with the Defendant Medford was an employment at will contract, which fact does not preclude Plaintiff from proceeding with his cause of action for breach of contract and Defendants' Motion for Partial Summary Judgment on Plaintiff's cause of action for breach of contract should therefore be denied.
We have carefully reviewed the arguments made and authorities relied upon by the parties, and agree that the plaintiff is not precluded, as a matter of law, from maintaining his action for breach of contract, where the defendant terminated his employment for reasons that violate public policy, even though his employment was at will. Thus, for the reasons explained below, we affirm the denial of summary judgment on this basis.
We read the cases, particularly Sides v. Duke University, 74 N.C. App. 331, 329 S.E.2d 819 (1985), disc. review denied, 314 N.C. 331, 335 S.E.2d 13 (1985), and Coman v. Thomas Manufacturing Co., 325 N.C. 172, 381 S.E.2d 445 (1989), and subsequent Court of Appeals cases, as recognizing that an employment relationship, even at will, is essentially contractual. In Sides, this Court held that an at will employee could proceed with both a claim in tort and a claim for breach of contract, where her employment was terminated due to her refusal to give false testimony, a reason that violated public policy. The plaintiff here relies on Sides, where this Court, in recognizing an action based on a contract theory, stated the following:
Even if the employment contract was at will, for the same public policy reasons stated above, we hold that defendant Duke had no right to terminate it for the unlawful purposes alleged in the complaint, and that plaintiff's claim for breach of contract with resulting damages has been sufficiently alleged against the defendant Duke.
Sides, 74 N.C. App. at 344-345, 328 S.E.2d at 828. The defendant argues, despite this language, that Coman and several later cases from this Court permit only an action in tort for wrongful discharge in violation of public policy.
We disagree with this interpretation, since, rather than rejecting a breach of contract theory, the Supreme Court in Comanappears to have acknowledged the possibility of such a claim. In Coman, the employee was fired when he refused to falsify his trucking logs. In allowing the claim to proceed, the Supreme Court, relied upon Sides and stated the following :
We approve and adopt the following language from Sides:
[W]hile there may be a right to terminate a contract at will for no reason, or for an arbitrary or irrational reason, there can be no right to terminate such a contract for an unlawful reason or purpose that contravenes public policy. A different interpretation would encourage and sanction lawlessness, which law by its very nature is designed to discourage and prevent.
Coman, 325 N.C. at 175, 381 S.E.2d at 447 (emphasis added). In light of this language, as well as the remainder of the discussion in Coman, we do not believe that the Supreme Court implicitly rejected any claim for breach of contract. While the Court in Coman did not label the plaintiff's claim as one for breach of contract, the word "tort" does not appear in the majority opinion. Even the dissent in Coman refers to the at-will doctrine as defining North Carolina law regarding "employment contracts of indefinite duration." 325 N.C. 179, 381 S.E.2d at 449. More important, however, is that in the discussion, both by the majority and the dissent, the Court was addressing the circumstances under which it may not be permissible for an employer to terminate such an employment agreement.
The defendant also relies on Houpe v. City of Statesville, 128 N.C. App. 334, 497 S.E.2d 82 (1998), disc. review denied, 348 N.C. 72, 505 S.E.2d 871 (1998). We do not believe that Houpe applies here, because the plaintiff in Houpe alleged breach of an existing contract of employment. As the Supreme Court pointed out in Coman, the cause of action for wrongful termination in violation of public policy was created as an exception to the general rule that in North Carolina an employee may be terminated at will, unless there is a contract or other protection by law. When the employee alleges a more extensive contract, as the employee did in Houpe, he may have no need to turn for recourse to the Coman exception to the at will doctrine. The Court in Houpe upheld "the trial court's denial of defendants' [12(b)(6)] motion with respect to plaintiff's claims of wrongful termination [in tort], breach of contract, [and other claims]." Id, 128 N.C. App. at 352, 497 S.E.2d 94. Although the Court allowed the plaintiff to proceed with both types of claims, the analysis based on the allegations of a contract with terms beyond the mere employment relationship is simply inapposite here. In more recent decisions, this Court has reached similar conclusions in cases involving allegations of written contracts. Thus, none are applicable here. See, Trexler v. Norfolk S. Ry. Co., 145 N.C. App. 466, 550 S.E.2d 540 (2001); Doyle v. Asheville Orthopaedic Assocs., P.A., 148 N.C. App. 173, 557 S.E.2d 577 (2001).
Even more recently, in Paquette v. County of Durham, ___ N.C. App. ___, 573 S.E.2d 715 (2002), disc. review denied, No. 91P03, 2003 N.C. LEXIS 480 (N.C. May 1, 2003), the plaintiff alleged a claim in tort for wrongful discharge and a claim for breach of contract seeking unpaid wages, as well as claims alleging discrimination. The plaintiff was a probationary employee, who"did not have a contractual right to continued employment," even on an at will basis, and did not allege that she did. Her breach of contract claim was for unpaid wages alone. This Court reversed the dismissal of the contract claim and remanded that claim, noting that "[t]he relationship of employer and employee is essentially contractual in its nature," and held the claim was not barred by sovereign immunity. 155 N.C. App. at 420, 573 S.E.2d at 718. As for the tort claim for wrongful discharge, the Court affirmed the dismissal, but on the grounds that the plaintiff had not alleged a waiver of immunity by the defendants. The claims in Paquette were so different from those raised by the plaintiff here, that we do not believe this case applies.
In sum, we interpret the cases since Sides and Coman as allowing a discharged, public at will employee, like the plaintiff here, to proceed with either a claim for breach of contract under the public policy exception to the at will doctrine or a claim in tort if the entity has waived immunity, or both. Here, the plaintiff alleged both. Regarding these claims, the superior court denied the defendants' motion for summary judgment on the first claim, and allowed it on the second, as to any amount exceeding the surety bond. Certainly Medford's conduct, if Plaintiff's allegations are true — terminating Plaintiff for reporting serious misconduct including perjury and falsification of evidence by another deputy — violated public policy. If the plaintiff has inadequate recourse, the result, in effect, penalizes him for honestly performing his duties, and rewards others whose actions, if proved, undermined the integrity of a number of investigations and prosecutions of crime in the county. As the Supreme Court noted in Coman, this "interpretation would encourage and sanction lawlessness," which we do not wish to do. Thus, we affirm the trial court in all respects, and remand for further proceedings.
AFFIRMED.
Judge ELMORE concurs.