FRANZEL v. KERR MANUFACTURING COMPANY
Case Details
- Citation
- 234 Mich. App. 600
- Judge(s)
- Before: Hood, P.J., and Griffin and Markey, JJ.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Michigan
- Circuit
- 6th Circuit
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
The court of appeals reversed the jury's $225,000 net damages award for breach of the reinstatement contract, holding that plaintiff was entitled only to nominal damages because she was an at-will employee with no reasonable expectation of continued employment. The court affirmed dismissal of discrimination, harassment, and retaliation claims.
Excerpt
FRANZEL v KERR MANUFACTURING COMPANY Docket No. 201802. Submitted November 3, 1998, at Detroit. Decided March 30, 1999, at 9:00 A.M. Shirley Franzel brought an action in the Wayne Circuit Court against Kerr Manufacturing Company and Rebecca Leinen, Kerr’s vice president of human resources, alleging several claims as a result of Franzel’s second termination from employment. The court, Kay Tertzag, J., granted Leinen’s motion for summary disposition and dismissed the plaintiff’s claims of sexual harassment, hostile work environment sex discrimination, retaliation for attempting to oppose a violation of the Civil Rights Act, and intentional infliction of emotional distress. The jury considered the claims of wrongful discharge, sex discrimination in violation of the Civil Rights Act, and breach of contract for Kerr’s alleged violation of an unconditional offer to the plaintiff to return to work after her first termination from employment. The jury, specifically finding that the plaintiff was not an employee whose employment could be terminated for just cause only, found no wrongful discharge. The jury also found no sex discrimination, but did find that Kerr breached the contract between it and the plaintiff made before the plaintiff returned to work after her first termination from employment. The jury awarded the plaintiff damages but reduced the amount because of the plaintiff’s failure to mitigate her damages. Kerr appealed and the plaintiff cross appealed. The Court of Appeals held: 1. The plaintiff was entitled to only nominal damages for the breach of the at-will employment contract. The court erred in denying Kerr’s motion for remittitur, and that order must be reversed. 2. The jury did not find that the plaintiff had been an at-will employee before her first termination from employment or that following her reinstatement she was an employee whose employment could be terminated for just cause only. 3. The plaintiff was on notice when she signed the reinstatement contract that her employment was at will. 4. The court erred in admitting, over Kerr’s objection, a letter written by Kerr’s counsel to defendant Leinen. The letter was not intentionally presented to the plaintiff by Kerr’s counsel. An unprejudiced person reviewing the evidence would find no justification or excuse for the court’s decision to deny Kerr’s motion to suppress the evidence. The letter was improperly admitted and its contents created undue prejudice against Kerr. The admission of the evidence constituted error requiring reversal of the judgment with regard to the breach of contract claim. 5. The court abused its discretion in permitting an expert witness to testify that the plaintiff is a credible witness and in permitting the witness to testify with regard to matters outside the witness’ field of expertise. The expert witness should not have been allowed to testify with regard to evidence that was subject to the attorney-client privilege and that was erroneously admitted into evidence. 6. The court did not err in finding either no genuine issue of material fact regarding the claims of intentional gender discrimination, sexual harassment, retailiation for opposing a violation of the Civil Rights Act or the failure to state a claim regarding sexual harassment, gender discrimination by defendant Leinen, or intentional infliction of emotional distress. Those orders of summary disposition must be affirmed. Affirmed in part, reversed in part, and remanded. 1. Contracts — Employment at Will — Breach of Contract — Damages. The measure of damages for an employer’s breach of an employment contract involving an at-will employee is nominal damages. 2. Contracts — Damages. Neither mental distress damages nor exemplary damages are available in an action for breach of contract, even if the breach was malicious or wilful. 3. Master and Servant — Employment at Will. An at-will employment relationship is presumed where an employment agreement is silent regarding the type of employment relationship intended. 4. Witnesses — Experts — Opinion Testimony — Appeal. Whether a witness is qualified to render an expert opinion and the admissibility of an expert’s testimony are matters within a trial court’s discretion; an abuse of discretion will be found only if an unprejudiced person, considering the facts on which the trial court acted, would say there was no justification or excuse for the ruling. 5. Witnesses — Experts. The subject matter of an expert’s testimony should be directly related to and within the immediate scope of the witness’ expertise; a prerequisite to the admission of an expert’s testimony is a showing that the expert has knowledge in a particular area that belongs more to an expert than to the common man; an expert should not be permitted to express an opinion where the jury is in as good a position as the expert to determine intelligently the issue involved without enlightenment from the expert (MRE 702). 6. Witnesses — Experts — Work-Product Privilege. Facts known and opinions held by an expert are not work product, but the expert’s arrangement of those facts and opinions in a report, made in direct response to the inquiries of an attorney, is work product protected by the work-product privilege (MCR 2.302[B][4]). 7. Trial — Witnesses — Jury Trial — Witness Credibility — Expert Testimony. The jury is the sole arbiter of witness credibility in a jury trial; expert testimony regarding the credibility of a witness is improper in a jury trial. Allen J. Counard, P.C. (by Allen J. Counard), for the plaintiff. Kell & Lynch, P. C. (by M. V. Kell and Margaret A. Lynch), for Kerr Manufacturing Company. Before: Hood, P.J., and Griffin and Markey, JJ. Per Curiam. Kerr Manufacturing Company (hereafter defendant) appeals by right the jury verdict finding that while defendant did not wrongfully discharge plaintiff Shirley Franzel or commit sexual discrimination against her, defendant did breach the parties’ contract that formed the basis for plaintiff’s return to work in January 1987. Plaintiff cross appeals to determine whether the trial court erred in summarily dismissing plaintiff’s claims under the Civil Rights Act (cra) of intentional gender discrimination, MCL 37.2202(1); MSA 3.548(202)(1), hostile work environment sexual harassment, MCL 37.2103(1); MSA 3.548(103)(i), retaliation for attempting to oppose a violation of the CRA, MCL 37.2701; MSA 3.548(701), gender discrimination by defendant Rebecca Leinen, Kerr’s vice president of human resources, and her claim of intentional infliction of emotional distress. Plaintiff also cross appeals from the trial court’s refusal to enter an order of judgment including costs, attorney fees, or mediation sanctions. We vacate the judgment in favor of plaintiff and affirm regarding the cross appeal. FACTS Plaintiff worked as a sales representative, district manager, and metro market manager for defendant, a dental products manufacturer, from 1981 through July 1986, and again from January 1987 through May 1987. Plaintiff aspired to the position of regional manager, but allegedly defendant and a host of its employees were committed to preventing a woman from reaching upper management. Plaintiff claims that defendant began discriminating and conspiring against her after three January 1986 incidents at a national sales meeting in Marco Island, Florida, where two comments were made during a slide show that insinuated plaintiff had slept her way to her current position, and where another manager, who was vying for the same regional manager promotion, pinched her on the buttocks. Rick Amos, plaintiff’s supervising regional manager, terminated her employment in July 1986 for failing to satisfy the requirements of a February 1986 “performance improvement plan” (pip), also known as probation. In August 1986, plaintiff filed her complaint in state court against defendant Kerr, asserting claims of sexual harassment and sexual discrimination in violation of the CRA, breach of contract, wrongful discharge, negligent evaluation, and retaliatory treatment for filing the lawsuit, but the action was removed to the United States District Court for the Eastern District of Michigan on diversity grounds. After a lengthy trial before Judge Barbara K. Hackett, the federal court jury found that plaintiffs employment could be terminated for just cause only, but issued a verdict of no cause of action. The federal case was subsequently dismissed, however, when plaintiff filed a posttrial challenge to diversity jurisdiction and defendant did not oppose it. Thus, the parties refiled their pleadings in the Wayne Circuit Court and the instant lawsuit proceeded. Rebecca Leinen was also added as a defendant in the state court action. While her federal lawsuit was pending, however, defendant made plaintiff an unconditional offer to return to work. After negotiations, plaintiff agreed and signed a December 11, 1986, letter setting forth the conditions of her reinstatement, including the geographical territories she would service (which did not include the same successful Michigan accounts she had in the past), that Amos would no longer oversee her work, and that she was subject to annual reviews like all other district managers. From the outset, the problems that had plagued plaintiff before her first termination involving extremely late paperwork and expense reports began to reoccur, and plaintiff was again placed on a pip. When plaintiff refused a direct order to (1) retrieve from home some “documentation” that she claimed existed to rebut the allegations in her pip (and support many of the allegations she made against other employees who allegedly sexually harassed her and conspired against her), and (2) return to work with the documentation on the same day, she was suspended. Plaintiff then informed defendant that she could not return to work for medical reasons at the direction of her psychologist, but she refused to submit to an independent medical or psychological examination that defendant requested. Defendant once again terminated her employment, this time for insubordination. In the state court action, the trial court granted defendant Rebecca Leinen’s motion for summary disposition and dismissed plaintiffs claims of sexual harassment, hostile work environment sex discrimination, retaliation, and intentional Infliction of emotional distress. The jury was instructed with regard to the claims of (1) wrongful discharge, (2) sex discrimination in violation of the CRA, and (3) breach of contract for defendant’s alleged violation of the unconditional offer to return to work. The jury found no wrongful discharge (specifically finding that plaintiff was not an employee whose employment could be terminated for just cause only) and no sex discrimination, but it did find that defendant breached the contract between the parties that formed the basis for plaintiff’s return to work in January 1987. The jury awarded plaintiff $425,000 in damages but reduced that amount by $200,000 for failure to mitigate. Defendant appealed, and plaintiff cross appealed to this Court. i A First, defendant Kerr asserts that the trial court committed error requiring reversal in refusing to reduce the jury’s damage award to a nominal amount Defendant argues that the jury’s damage award was purely speculative and that plaintiff was entitled to only nominal damages under Sepanske v Bendix Corp, 147 Mich App 819; 384 NW2d 54 (1985), and Environair, Inc v Steelcase, Inc, 190 Mich App 289, 293; 475 NW2d 366 (1991). These cases support the proposition that even if defendant breached its contract with plaintiff regarding her return to work, nothing in the contract ensured her continued employment because, as the jury found, she was an at-will employee, not an employee whose employment could be terminated for just cause only. Notably, neither mental distress damages nor exemplary damages are available in an action for breach of contract, even if the breach is malicious or wilful. Walker v Consumers Power Co, 824 F2d 499, 504-505 (CA 6, 1987); Valentine v General American Credit, Inc, 420 Mich 256, 259-263; 362 NW2d 628 (1984). We find that plaintiff was entitled to only nominal damages for breach of the at-will employment contract and the trial court erred in denying defendant’s motion for remittitur. In Sepanske, supra at 828-829, this Court affirmed the proposition that the breach of an at-will employment contract entitles the employee to receive only nominal damages because, regardless of the contract terms, the employee had no reasonable expectation of continued employment. In that case, plaintiff Sepanske returned to work after taking a company-approved social service leave of absence but was placed in a different job in a different department, contrary to company policy guaranteeing reinstatement to a former position or one of equal or greater responsibility. The defendant’s personnel manager had also given Sepanske a letter stating that Sepanske was “ ‘scheduled to return to [his] former position’ ” upon completion of his social service leave. Id. at 823. The jury found that Sepanske’s responsibilities regarding his new job were neither greater than nor equal to those regarding his former job, and awarded him $75,206 in damages for future lost earnings. Id. at 824-825. This Court vacated the jury’s damage award and remanded to the district court for entry of a judgment in Sepanske’s favor “for nominal damages only.” Id. at 829. The Court stated: We take an entirely different approach [than the parties] on the issue of damages. We think that plaintiff was entitled to nominal damages only for defendant’s breach of the employment contract. This is not a case of wrongful discharge. Plaintiff’s expectation under the contract was to be restored to his old job or to an at-will position which was equivalent to or better than his position in pension and payroll, but he had no actionable expectation that any such restoration would be permanent. The position was still at will—one which the employer was free to alter or terminate without consequence. The fact that defendant historically had not arbitrarily reclassified positions or terminated employees does not change its right to do so. . . . The jury’s damage assessment in such a situation amounts to pure speculation. There is no tangible basis upon which damages may be assessed where plaintiff’s eccpectation was for an at-will position which could have been changed or from which he could have been terminated without consequence. See Sax v Detroit, G H & M R Co, 129 Mich 502, 506; 89 NW 368 (1902). [Id. (emphasis added).] This Court recently reiterated that Sepanske should not be extended beyond breach of contract actions where at-will employees are entitled to only nominal damages. Hord v Environmental Research Institute of Michigan, 228 Mich App 638, 643-644; 579 NW2d 133 (1998). In Environair, supra at 293-294, we stated that while Sepanske involved an employment relationship, its holding regarding the speculative nature of damages was equally applicable to nonemployment, at-will contractual relationships (e.g., exclusive sales contracts). Our Supreme Court has not affirmatively endorsed Sepanske, but the Court has discussed its holding, if only to distinguish it from a case being considered. In Phillips v Butterball Farms Co, Inc (After Second Remand), 448 Mich 239, 251, n 31, 253; 531 NW2d 144 (1995), the Supreme Court found Sepanske inapplicable where the plaintiff sued her employer in tort for worker’s compensation retaliatory discharge. After quoting pertinent parts of the Sepanske opinion as set forth above, the Supreme Court merely stated that “[t]he claim in Sepanske, however, was premised on breach of contract, not a separate tort.” Id. at 253. Accord Sax, supra at 506; Mallory v Jack, 281 Mich 156; 274 NW 746 (1937) (future damages may not be awarded under employment contracts terminable at will). Notably, the Sax Court stated: There is no foundation for even a guess by a jury upon either question of fact [regarding when the employment contract would end and when it in fact ended], because either could terminate the contract at will, and it was equally impossible to tell how much of the time [the plaintiff, a train brakeman who was injured and subsequently rehired,] would be employed. The jury were [sic] turned, loose into afield of pure speculation and conjecture, without any practical or tangible basis upon which to assess damages. Under such circumstances, none can be assessed. [Sax, supra at 506 (emphasis added).] Plaintiff offers no case law support contrary to Sepanske; rather, she merely emphasizes Judge Shepherd’s position in his dissenting opinion in Sepanske that because the defendant could have fired the plaintiff at any time, it did not mean that the defendant was likely to fire him. Sepanske, supra at 832. In his dissent, Judge Shepherd also argued that public policy and fairness favor placing the burden of proof on the defendant to show that in fact the plaintiff would have been discharged, particularly given that the plaintiff in Sepanske was providing a public service on the defendant’s behalf while on leave before the employment relationship ended. Id. at 833. We find these arguments unpersuasive. B Plaintiff also argues that the reinstatement “contract” between plaintiff and defendant dated December 11, 1986, constituted an employment contract that was terminable for just cause only. Plaintiff asserts that the jury’s special verdict form evidences that the jury found plaintiff to be an at-will employee during her first term of employment but not during her reinstatement. A quick review of the jury’s special verdict form disproves this argument. The following are the questions and the jury’s responses to the special verdict form: Count i: Do you find that Plaintiff has proven by a preponderance of the evidence that the employment relation ship between the Plaintiff and Defendant was such that Plaintiff would not be discharged except for just cause? NO Count n: Do you find that Plaintiff has proved by a preponderance of the evidence that one of the reasons she was discharged was because of her sex? no Count III: Question 1: Do you find that Plaintiff has proved by a preponderance of the evidence that Defendant breached the contract which Plaintiff and Defendant entered into upon her return to work? yes Question 2: Do you find by a preponderance of the evidence that Plaintiff suffered damages as a result of the breach of contract? yes Damages: Question 1: If plaintiff suffered damages, what is the amount of damages you award to Plaintiff? Count ill, Breach of Contract, $425,000 Question 2: Did Plaintiff make a reasonable effort to minimize her damage? NO By what amount do you find the award of damages will be reduced? $200,000 [Emphasis added.] Cleaxly, nothing in the language of the special vexdict foxm xegaxding count I limited the question of at-will ox just-cause employment to eithex plaintiffs first ox second period of employment. c Plaintiff further argues that the language of the reinstatement contract itself establishes the just-cause nature of the employment relationship. A review of the pertinent language in the reinstatement contract that plaintiff signed supports a contrary view: 1. Kerr will unconditionally reinstate you to the position of District Manager within the Michigan market effective January 5, 1987. 2. You will be reinstated at your former salary of $35,000.00 per year. 3. You will be entitled to the normal bonus arrangement available to District Managers. 4. You will be provided with all fringe benefits available to District Managers. 5. You will be subject to annual reviews the same as is provided to all other District Managers. 6. For a period of six (6) months, you will be assigned the following accounts: A. University of Michigan B. Healthco C. Either Patterson or Bignall While the
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