Opinion
No. 03A01-9510-CH-00372.
June 10, 1996.
Appeal from the Knox Chancery Court.
JERROLD L. BECKER and SAMUEL W. BROWN, Knoxville, for Appellant Sheila Faye Smith and for Appellant Diane Kinsey.
LEWIS R. HAGOOD, ROBERT N. TOWNSEND and DOUGLAS G. BREHM, Knoxville, for Appellees.
OPINION
These plaintiffs jointly filed a single complaint against the appellees for damages allegedly arising out of their refusal to remain silent concerning or to participate in alleged illegal activities connected with their employment. They alleged collectively or singly (1) breach of contract, (2) violations of the Tennessee Human Rights Act, Tenn. Code Ann. § 4-21-101 et seq., (3) invasion of privacy, (4) intentional infliction of emotional distress, (5) tortious interference with contractual and non-contractual rights of employment, and (6) retaliatory discharge in violation of common law and the Public Protection Act of 1990, Tenn. Code Ann. § 50-1-304, et seq. The plaintiffs were admittedly at-will employees.
The complaint was in course ordered to be severed. In each case all of the asserted claims were dismissed either on motion or voluntarily. Each plaintiff appeals only the adverse ruling on her claim for common law retaliatory discharge, the propriety of which is presented for review. In the interest of economy and good practice, these appeals were by consent consolidated.
The retaliatory discharge action was dismissed pursuant to Rule 12.02, T. R. C. P. for failure to state a claim. Since a Rule 12 motion tests the legal sufficiency of a complaint, all properly pleaded allegations are assumed to be true. Alexander v. Inman, 825 S.W.2d 102 (Tenn.Ct.App. 1991). Each plaintiff restated her complaint, but the prolixity of each (18 pages) remained constant under the asserted guise of `pragmatism.' To the extent possible, we have sought to extract the well-pleaded allegations relevant to the issue of retaliatory discharge.
The plaintiff Kinsey alleges she was "retaliated against for making claims of sex discrimination in violation of the Tennessee Human Rights Act," and for complaining about overloading the adolescent psychiatric program which she alleged was in violation of the regulations promulgated by the Joint Commission on Accreditation of Health Care Organizations and the State Department of Mental Health.
The latter allegation prompted the filing of an affidavit of the defendant Kestner, President of the defendant Kestner Groups, Inc. He deposed that (1) the Lighthouse Treatment Center is not an entity, but merely a trade name, (2) it is exempt from the requirement to obtain a Certificate of Need, (3) it is accredited by the JCAHO, even though such accreditation was not required.
No countervailing affidavits or other documentary evidence were filed by the plaintiffs, and the Chancellor apparently treated the Rule 12.02 motion as one for summary judgment under Rule 56, which provides, as paraphrased, that in Rule 12.02 motions alleging failure to state a claim where matters outside the pleading are presented to the Court — here, the Kestner Affidavit — the motion shall be treated as one for summary judgment.
The cases are clear on the point that when a party is "faced with a motion for summary judgment based upon affidavits, that party may not rest upon her pleadings to defeat the motion. Mason v. Pearson, 668 S.W.2d 656 (Tenn.Ct.App. 1983).
We say `apparently treated,' since the memorandum opinion, incorporated in the judgment, recites that the affidavit was considered, notwithstanding the Opinion prima facie referred to the motion to dismiss or to strike without expressly treating it as one for summary judgment.
In reviewing a summary judgment, the court must view all the pleadings and affidavits in a light most favorable to the opponent of the motion and all conclusions of fact derived therefrom must be similarly construed. Wyatt v. Winnebago Industries, 566 S.W.2d 276 (Tenn.App. 1976).
We conclude, therefore, that the motion for summary judgment was properly granted as to the specific allegation that the retaliatory discharges were in response to the plaintiff's criticism that the adolescent psychiatric program was overloaded.
The appellants argue that the allegations of their complaints, assumed to be true under Rule 12.02, are sufficient to establish a prima facie case of actionable retaliatory discharge. They do not brief the issue of summary judgment, which is essentially dispositive; rather, they argue that the alleged violations of laws and regulations concerning the accreditation process involve considerations of public policy. In Anderson v. Standard Register Co., 857 S.W.2d 555 (Tenn. 1993), the Supreme Court recognized that an employee's refusal to violate public policy resulting in his at-will discharge was actionable. Anderson, a truck driver, was discharged for refusing to violate the Motor Carriers Act. The hurdle confronting the plaintiffs is the unrefuted Kestner Affidavit, previously discussed. Thus it is that the plaintiffs accuse the defendants of violating laws, rules and regulations to which they are not subject. Hence, public policy is not implicated. Moreover, we are mindful of the mandated instruction in Harvey v. Middlebrook Nursing Home, 784 S.W.2d 921 (Tenn. 1990) that the courts have no license to enlarge on the employee-at-will rule or create other exceptions to public policy or common law in the absence of some constitutional or legislative precedent.
The issue of whether the common law claim of retaliatory discharge is pre-empted by the Human Rights Commission Act is not briefed by the appellants, and we therefore pretermit it.
The judgment is affirmed in each case, with costs assessed to the appellants.
_________________________________ WILLIAM H. INMAN, SENIOR JUDGE
CONCUR:
____________________________________ HERSCHEL P. FRANKS, JUDGE
____________________________________ DON T. McMURRAY, JUDGE
DISSENTING OPINION
I do not agree that we should pretermit the issue of the common law claim for retaliatory discharge.
The issue framed in appellants' joint brief is:
"The Trial Court erred in ruling that the appellants' claims for common law retaliatory discharge failed to state a claim upon which relief could be granted."
Plaintiffs in their individual and "joint" briefs clearly raise the issue of whether the complaint stated a claim for common law retaliatory discharge. The Trial Judge said:
The complaint[s] does not state a cause of action for retaliatory discharge as a matter of law, at least none that are not preempted by the Tennessee Human Rights Commission Act.
Thus, the issue on appeal is as stated by appellants.
Accepting the allegations of the complaint as true and in the most favorable light to the plaintiffs, defendants retaliated against plaintiffs for objecting to the alleged fraudulent practices, i.e., the scheme alleged was that where a patient "had used up" her insurance benefits for psychiatric or psychological treatments but had remaining drug abuse coverage, the management would direct the employees "to assess" the patients as being drug and/or alcohol abuse dependent in order to collect the additional insurance, although drug and alcohol abuse was not present.
The Tennessee Human Rights Act deals with discrimination on the basis of race, creed, color, religion, sex, age, or national origin. T.C.A. § 4-21-101 would not preempt this claim.
T.C.A. § 50-1-304 reads in pertinent part:
(a) No employee shall be discharged or terminated solely for refusing to participate in, or for refusing to remain silent about, illegal activities.
(b) As used in this section, "illegal activities" means activities which are in violation of the criminal or civil code of this state or the United States or any regulation intended to protect the public health, safety, or welfare.
Any employee terminated in violation of subsection (a) shall have a cause of action against the employer for retaliatory discharge and any other damages to which the employee may be entitled . . .
The Tennessee Supreme Court has determined that this statute does not preempt a similar action at common law. Hodges v. S.C. Toof, Inc., 833 S.W.2d 896, 899 (Tenn. 1992) determined that the statutory remedy is cumulative because the common law tort of retaliatory discharge was recognized in the Clanton v. Cain Sloan Co., 677 S.W.2d 441 (Tenn. 1984), before the 1986 amendment giving a remedy for discharge due to employee's jury service; Reynolds v. Ozark Motor Lines, Inc., 887 S.W.2d 822, 825 (Tenn. 1994) cited Hodges and found that the legislation itself stated that its remedy was not intended to be exclusive.
Any employee terminated in violation of subsection (a) shall have a cause of action against the employer for retaliatory discharge and any other damages to which the employee may be entitled." T.C.A. § 50-1-304(c). (Emphasis added).
Appellee's reliance on England v. Fleetguard, Inc., 878 F. Supp. 1058 (M.D. Tenn. 1995), for the proposition that the charges of fraud would be preempted by the Tennessee Human Rights Act (THRA), is misplaced. Fleetguard held that the statutory remedies were the sole and exclusive remedies available to an employee claiming a retaliatory discharge on the basis of religious discrimination. The Act applies to discrimination on the on the basis of race, creed, color, religion, sex, age or national origin but would not apply to retaliatory discharge for refusing to go along with fraud.
Note that insurance fraud is criminalized in T.C.A. § 39-14-133:
False or fraudulent insurance claims. — Any person who intentionally presents or causes to be presented a false or fraudulent claim, or any proof in support of such claim, for the payment of a loss, or other benefits, upon any contract of insurance coverage, or automobile comprehensive or collision insurance, or certificate of such insurance or prepares, makes, or subscribes to a false or fraudulent account, certificate, affidavit or proof of loss, or other documents or writing, with intent that the same may be presented or used in support of such claim, is punished as in the case of theft.
The complaints allege that plaintiffs were concerned and believed that "criminal and civil sanctions" could be imposed upon them. Chism v. Mid-South Milling Co., Inc., et al., 762 S.W.2d 552 (Tenn. 1988) instructs that public policy warrants protection from retaliatory discharge where employees are discharged for refusing to falsify records or acquiesce in mislabeling of unsafe or defective products. The case emphasized the possibility of personal liability. Id. 556. I believe in the spirit of Chism that this case should not be dismissed on the basis that it fails to state a claim upon which relief may be granted.
________________________ HERSCHEL P. FRANKS, J.