SILBERSTEIN v. PRO-GOLF OF AMERICA, INC
Case Details
- Citation
- 278 Mich. App. 446
- Judge(s)
- Before: BECKERING, P.J., and SAWYER and FORT HOOD, JJ.
- Procedural Posture — the stage the case had reached
- jury verdict
- State
- Michigan
- Circuit
- 6th Circuit
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Employee won wrongful discharge claim in violation of public policy after refusing to commit accounting fraud. Court affirmed judgment of $850,000 in damages (economic and emotional injury) plus attorney fees, costs, and interest totaling $1,320,168.43.
Excerpt
SILBERSTEIN v PRO-GOLF OF AMERICA, INC Docket No. 275195. Submitted February 12, 2008, at Detroit. Decided April 1, 2008, at 9:10 a.m. Leave to appeal sought. Ronald N. Silberstein brought an action in the Oakland Circuit Court against Pro-Golf of America, Inc., and others, seeking damages for wrongful discharge from employment in violation of public policy, tortious interference with an advantageous business relationship or expectancy, and conversion. Pro-Golf of America, Inc., filed a counterclaim against the plaintiff, alleging breach of contract, breach of fiduciary obligations, and fraud. The defendants moved for summary disposition on all the counts and the plaintiff moved for summary disposition of the counterclaim. The court, Rae Lee Chabot, J., granted summary disposition in favor of the plaintiff with regard to the claims of breach of contract and breach of fiduciary obligations, but denied summary disposition with regard to the fraud claim. The motion to dismiss the claim of wrongful termination was denied in part and the motion to dismiss the claim for conversion was granted. The court ruled that there was sufficient evidence to show that the defendants’ claim that the plaintiff was terminated because of a work force reduction was a pretext and the jury should consider the issue. The court also ruled that, because the after-acquired-evidence doctrine serves to limit damages, not to limit claims, the doctrine was not applicable with regard to the motion for summary disposition, but it could be considered in determining damages. The court’s order provided that summary disposition was granted in favor of the plaintiff regarding the counterclaim concerning purported referral fees or kickbacks. At trial, the court, Charles W. Simon, Jr., J., refused to admit evidence of alleged kickbacks and the jury returned a verdict for the plaintiff. The court entered a judgment for the plaintiff and denied the defendants’ subsequent motions for a new trial, judgment notwithstanding the verdict, and remittitur. The defendants appealed. The Court of Appeals held,-. 1. The trial court properly instructed the jury that the plaintiff had the burden to prove that “one of the reasons” for his discharge was his refusal or failure to violate the law. He was not required to prove that his refusal or failure to violate the law was “the” exclusive reason for his discharge. 2. The trial court did not err in denying the defendants’ motion for a directed verdict. There was more than enough evidence presented to allow a reasonable juror to conclude that one of the reasons for the plaintiffs termination from employment was his refusal or failure to violate the law. 3. The trial court properly granted the plaintiffs motion for summary disposition with regard to the counterclaim for disgorgement because there was no genuine issue of material fact to support the claim. 4. The evidence of alleged kickbacks was properly excluded by the trial court on the basis that the evidence was not admissible. 5. The trial court properly exercised its discretion in declining to instruct the jury on after-acquired evidence. 6. The trial court properly denied the motion for remittitur. The evidence supported use of a discount rate of 4.5 percent in reducing the award of future damages to present cash value. There was sufficient evidence to support the award of damages for emotional injury. Affirmed. 1. Labor Relations — At-Will Employment — Discharge in Violation of Public Policy. A cause of action for wrongful discharge from at-will employment may be implied where the alleged reason for the discharge was a failure or refusal to violate a law in the course of employment; such failure or refusal need only be one of the reasons for the employee’s discharge and need not be the single reason for the discharge. 2. Damages — Future Damages — Present Cash Value. The civil jury instruction regarding reducing an award of future damages to its present cash value provides for the use of a five percent discount rate for such purposes; there is a rebuttable presumption in favor of the use of the five percent rate (M Civ JI 53.03). 3. Evidence — Emotional Damages. A plaintiff may testify regarding his or her own subjective feelings in order to place damages for emotional injury at issue. Morris & Doherty, P.C. (by E. Michael Morris), for the plaintiff. Jeffery D. Meek & Associates (by Jeffery D. Meek) for the defendants. Before: BECKERING, P.J., and SAWYER and FORT HOOD, JJ. PER CURIAM. In this action seeking damages for wrongful discharge, defendants appeal as of right the November 8, 2006, judgment entered in plaintiffs favor. Defendants also appeal the March 20, 2006, order granting, in part, plaintiffs motion for summary disposition and the December 6, 2006, order denying defendants’ motion for remittitur. We affirm. In August of 1999, defendant Ajay Sports, Inc. (Ajay), hired plaintiff Ronald Silberstein as its chief financial officer (CFO) and chief administrative officer (CAO). Thereafter, plaintiff became the CFO and CAO for defendants Pro-Golf International, Inc. (PGI), Pro-Golf, com, Inc. (PGC), and Pro-Golf of America, Inc. (PGOA). Ajay is the publicly traded parent company of PGI, PGC, and PGOA, a franchise company. Tom Itin is the chief executive officer (CEO) and chairman of the board for all four corporate defendants. Defendants terminated plaintiffs employment on January 5, 2004. Itin testified that Ajay and its subsidiary companies suffered financially from 1999 to 2003, and that the board of directors voted to discharge plaintiff in order to reduce costs. Plaintiff subsequently filed a complaint against defendants, alleging wrongful discharge in violation of public policy, tortious interference with an advantageous business relationship or expectancy, and conversion. Specifically, plaintiff alleged that Itin pressured him to “cook the books” by making accounting entries in violation of securities and franchise laws and regulations, and that defendants discharged him because of his refusal to do so. Defendants then filed a motion for summary disposition on all counts, arguing that plaintiffs termination did not fall under the public-policy exception to the at-will employment doctrine, that he was terminated because of poor performance and work force reductions, and that his termination was justified by after-acquired evidence of his own misconduct. Defendants alleged that during discovery, they learned that plaintiff stored pornography on his company computer, sexually harassed other employees, received “kickbacks,” and made “questionable” expense charges. In March of 2004, PGOA filed a counterclaim against plaintiff, alleging breach of contract, breach of fiduciary obligations, and fraud. The counterclaim alleged that plaintiff breached his confidentiality agreement with PGOA, that he received “kickbacks” from PGOA’s independent auditors, and that he used PGOA funds to reimburse himself for personal expenses. PGOA asked that plaintiff disgorge any benefits that he wrongfully retained. Plaintiff subsequently filed a motion for summary disposition with regard to PGOA’s counterclaim. Following a February 2006 hearing, Judge Rae Lee Chabot ruled on both parties’ motions for summary disposition. The court stated, in relevant part: All right, as to Plaintiffs motion for summary disposition as to the counter-claim, as to the breach of contract claim, the Court is granting that motion. [Defendants] have failed to present any evidence that Plaintiff breached the confidentiality agreement other than speculation. ... Regarding the breach of fiduciary duty claim, this is also dismissed, or granted, as Defendants have failed to provide sufficient evidence in support of this claim. However, the claim for fraud relating to the expense account, the summary disposition is denied. There is sufficient evidence that Plaintiff has charged certain items to the corporate Defendants during his employment and has failed to return those items after his termination, thus, that portion of the motion is denied. All right, regarding [Defendants’] motion for summary disposition. Again, I’m going to grant in part and deny in part. The motion to dismiss the claim for wrongful termination is denied as Plaintiff has alleged he was terminated due to his refusal to violate not only generally accepted accounting principles [GAAP], but also Sarbanes-Oxley, as well as SEC and FTC rules and regulations. However, to the extent that Plaintiff claims he was terminated for failure to disobey GAAP this claim is dismissed pursuant to [Suchodolski v Michigan Consolidated Gas Co, 412 Mich 692; 316 NW2d 710 (1982)]. All right, [Defendants’] assertion that Plaintiff was terminated due to a work force reduction is denied as sufficient [evidence] has been presented to indicate this was a pretext for the wrongful termination such that the issue should be decided by the ultimate fact finder. [Defendants’] assertion that Plaintiffs claim is barred by the After Acquired Evidence Doctrine is also denied. This doctrine serves to limit damages, not to limit claims. Thus, that portion of the motion is denied but it may be considered as to damages. Finally, regarding Plaintiffs claim for conversion, this claim is dismissed ... as Plaintiff has failed to sufficiently allege or to present substantively admissible evidence in support of this claim. I think I hit them all. The court issued its findings in an order dated March 20, 2006, reiterating that plaintiffs motion for summary disposition was granted with regard to PGOA’s counterclaim “concerning purported ‘referral fees’ and/or ‘kickbacks At trial, Judge Charles W Simon, Jr., refused to admit evidence of plaintiffs alleged “kickbacks” in light of the March 20, 2006, order. The jury returned a verdict in favor of plaintiff, awarding him $700,000 in economic damages and $150,000 in damages for emotional injury. Thereafter, the trial court issued an amended judgment for $1,320,168.43, including the $850,000 jury verdict, attorney fees, costs, and interest. Defendants subsequently filed a motion for a new trial, judgment notwithstanding the verdict (JNOV), and remittitur. Following a December 6, 2006, hearing, the trial court denied the motion. I Defendants first argue that the trial court improperly instructed the jury on the public-policy exception to the at-will employment doctrine. We disagree. Claims of instructional error are generally reviewed de novo on appeal. Cox v Flint Bd of Hosp Managers, 467 Mich 1, 8; 651 NW2d 356 (2002). But, when the standard jury instructions do not adequately cover an area and a party requests a supplemental instruction, the trial court is obligated to give the instruction if it properly informs the jury of the applicable law and is supported by the evidence. Bouverette v Westinghouse Electric Corp, 245 Mich App 391, 401-402; 628 NW2d 86 (2001). The determination whether a supplemental instruction is applicable and accurate is within the trial court’s discretion. Stoddard v Manufacturers Nat’l Bank of Grand Rapids, 234 Mich App 140, 162; 593 NW2d 630 (1999). Generally, employment relationships are terminable at will, with or without cause, “at any time for any, or no, reason.” Suchodolski, supra at 695. There is, however, an exception to the at-will employment doctrine “based on the principle that some grounds for discharging an employee are so contrary to public policy as to be actionable.” Id. A cause of action for wrongful discharge may be implied “where the alleged reason for the discharge of the employee was the failure or refusal to violate a law in the course of employment.” Id. Defendants argue that this public-policy exception only applies where the reason for the employee’s discharge was the failure or refusal to violate the law and that the trial court improperly instructed the jury that defendants were liable for wrongful discharge if one of the reasons for plaintiffs discharge was the refusal or failure to violate the law. In so arguing, defendants rely on our Supreme Court’s pronouncement in Suchodolski, supra at 695, that “a cause of action for wrongful termination .. . has been found to be implied where the alleged reason for the discharge of the employee was the failure or refusal to violate a law... Id. (emphasis added). Suchodolski, however, sets forth the facts that a plaintiff must allege to bring a cause of action for discharge in violation of public policy. Contrary to defendants’ argument, Suchodolski does not address a plaintiffs burden of proof on a claim of discharge in violation of public police. In Pratt v Brown Machine Co, 855 F2d 1225 (CA 6, 1988), the plaintiffs brought a claim for public-policy discharge, relying in part on our Supreme Court’s decision in Suchodolski. Pratt, supra at 1227, 1236. In Pratt, the district court instructed the jury that the plaintiffs were required to prove that the employee’s refusal to violate the law “ ‘was a determinative factor in the [employer’s] decision to terminate the employment relationship.’ ” Id. at 1236 (emphasis added). On appeal, the court determined that this was a proper instruction on the parties’ relative burdens of proof. Id. at 1238. Defendants additionally argue that the trial court erred in basing its jury instructions on the instructions for other types of employment actions. But, as plaintiff correctly asserts, courts of this state have recognized that public-policy claims are analogous to claims made under § 2 of the Whistleblowers’ Protection Act (WPA), MCL 15.362, and that the WPA is analogous to antiretaliation provisions of other employment-discrimination statutes. In fact, restrictions on an employer’s ability to terminate an at-will employment agreement are most often found in explicit legislation, such as the WPA and § 701 of the Civil Rights Act (CRA), MCL 37.2701. Suchodolski, supra at 695. See also Dudewicz v Norris Schmid, Inc, 443 Mich 68, 79-80; 503 NW2d 645 (1993), overruled in part on other grounds Brown v Detroit Mayor, 478 Mich 589 (2007). The model civil jury instruction for WPA claims states, in part: [The] protected activity must be one of the motives or reasons defendant [discharged / or / threatened / or / discriminated against] the plaintiff. Protected activity does not have to be the only reason, or even the main reason, but it does have to be one of the reasons that made a difference in defendant’s decision to [discharge / or / threaten / or / discriminate against] the plaintiff. [M Civ JI 107.03 (original emphasis omitted, new emphasis added).] The model jury instruction for employment-discrimination claims states, in part: Your verdict will be for the plaintiff if you find that defendant [discharged / failed to hire / failed to promote / failed to train / harassed / [other]] the plaintiff, and that [religion / race / color / national origin / age / sex / height / weight / marital status] was one of the motives or reasons which made a difference in determining to [discharge / fail to hire / fail to promote / fail to train / harass / [other]] the plaintiff [M Civ JI 105.04 (original emphasis omitted, new emphasis added).] It is apparent that employment claims analogous to the claim at issue do not require the plaintiff to show that the protected trait or activity is the exclusive reason for discharge. If plaintiffs bringing a claim of discharge in violation of public policy were required to meet such a high burden of proof, as defendants assert, employers could avoid liability simply by raising other, contributing reasons for discharge. Accordingly, we conclude that the trial court properly instructed the jury with regard to plaintiffs burden of proof on his claim of wrongful discharge. II Next, defendants argue that the trial court erred in denying their motion for a directed verdict. We disagree. A trial court’s decision on a motion for a directed verdict is reviewed de novo on appeal. Sniecinski v Blue Cross & Blue Shield of Michigan, 469 Mich 124, 131; 666 NW2d 186 (2003). We review all the evidence presented up to the time of the motion in the light most favorable to the nonmoving party to determine whether a question of fact existed. Id., Zantel Marketing Agency v Whitesell Corp, 265 Mich App 559, 568; 696 NW2d 735 (2005). “If reasonable jurors could honestly have reached different conclusions, this Court may not substitute its judgment for that of the jury.” Wiley v Henry Ford Cottage Hosp, 257 Mich App 488, 491; 668 NW2d 402 (2003). In challenging the trial court’s denial of their motion for a directed verdict, defendants again rely on our Supreme Court’s decision in Suchodolski. In that case, the plaintiff alleged that he was discharged for attempting to report his employer’s improper accounting practices. Suchodolski, supra at 694. The plaintiff relied on two sources to establish that he was discharged in violation of public policy: the internal code of ethics of the Institute of Internal Auditors and the Public Service Commission’s regulation of the accounting systems of public utilities. Id. at 696. The Suchodolski Court found that neither source was sufficient to establish public policy and that the plaintiffs allegations involved nothing more than “a corporate management dispute” with regard to internal accounting practices. Id. In this case, however, plaintiff alleged that Itin pressured him to violate laws and regulations specifically designed to protect the public, i.e., the Sarbanes-Oxley Act, the Securities Exchange Act, and the Code of Federal Regulations. Section 302 of the Sarbanes-Oxley Act requires that all publicly traded companies such as Ajay file financial information with the Securities Exchange Commission (SEC), and that all such information be true and fairly representative of the financial condition of the company. PL 107-204, § 302, 116 Stat 745, 15 USC 7241; see 15 USC 78(m). Likewise, the rules and regulations promulgated by the Federal Trade Commission (FTC) require franchisors such as PGOA to provide accurate written financial disclosures to potential franchisees. 16 CFR 436. At trial, plaintiff testified that Itin pressured him to “cook the books” with regard to three accounting transactions: the “Vero Beach Sale,” “Franchise Fees,” and the “MBNA Advance.” According to plaintiff, the proceeds from the sale of the Vero Beach property should have been recorded on the books of PGI, the company that sold the property. But, Itin insisted that the proceeds be recorded on PGOA’s books instead. Kathy Dix, a certified public accountant (CPA) and former controller for defendants, testified that she was present when Itin instructed plaintiff to make the Vero Beach entry incorrectly. In December of 2003, defendants received two franchise fees and an advance from MBNA Corporation. Several CPAs testified that the franchise fees could not be recorded as income before PGOA performed its obligations to the franchisees and that the MBNA advance could not be recorded as income. Nonetheless, Itin instructed plaintiff to record the franchise fees and the MBNA advance as income for 2003. Joseph White, the former president of PGOA and PGI, testified that Itin put pressure on plaintiff to record the franchise fees and the MBNA advance in violation of FTC and SEC regulations. According to White’s testimony, plaintiffs refusal to record the MBNA advance as income was, in his opinion, “the straw that broke the camel’s back.” Viewing this evidence in the light most favorable to plaintiff, defendants cannot establish that no question of fact existed regarding the reason for plaintiffs termination. There was more than enough evidence presented at trial for a reasonable juror to conclude that one of the reasons for plaintiffs termination was refusal or failure to violate the law. Therefore, we conclude that the trial court properly denied defendants’ motion for a directed verdict. III Defendants also argue t
Similar Rulings
Browse Related
Facing something similar at work?
Court rulings like this one are useful, but every situation is different. Take 2 minutes to see which laws may protect you — it's free, private, and no account is required to start.
This ruling information is sourced from public court records via CourtListener.com. Case outcomes, claim types, and summaries are extracted using AI analysis and may be incomplete or inaccurate. It is provided for informational and educational purposes only and does not constitute legal advice.
See something wrong, or named in this ruling and want it corrected or redacted? Request a correction.