Beales v. Hillhaven, Inc.

825 P.2d 212, 108 Nev. 96, 7 I.E.R. Cas. (BNA) 260, 1992 Nev. LEXIS 23
CourtNevada Supreme Court
DecidedJanuary 24, 1992
Docket20668
StatusPublished
Cited by20 cases

This text of 825 P.2d 212 (Beales v. Hillhaven, Inc.) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Beales v. Hillhaven, Inc., 825 P.2d 212, 108 Nev. 96, 7 I.E.R. Cas. (BNA) 260, 1992 Nev. LEXIS 23 (Neb. 1992).

Opinions

[98]*98OPINION

By the Court,

Mowbray, C. J.:

Norma Beales, sixty-two years old at the time of trial, was first hired at the Reno Convalescent Center (RCC) on April 27, 1971, as office manager. Beales was hired, pursuant to an employee handbook, as a permanent employee, subject to a ninety-day probationary period. With respect to this matter, RCC and respondent Hillhaven, Inc. are the same entity. To avoid confusion, “Hillhaven” will be used exclusively below.

On February 23, 1972, Beales became the acting administrator. After passing the state licensing examination, Beales became the actual full administrator of Hillhaven, in which position she remained until her termination of employment on June 16, 1986.

Alan Oppenheim became the district director of the Nevada District, and Beales’ immediate supervisor, on January 15, 1986. Beales reported directly to Oppenheim and Oppenheim reported to Gary McGuire, the director of operations. Oppenheim testified that, when he first became district director, McGuire told him that Hillhaven was having problems with nursing hours per patient day and accounts receivable figures.

As the administrator of Hillhaven, Beales was responsible for keeping nursing hours per patient day under 2.75 hours and the aged accounts receivable to under five percent. On February 12, 1986, Oppenheim wrote Beales a memorandum critical of her handling of nursing hours per patient day and accounts receivable. On March 5, 1986, Oppenheim sent another critical memorandum to Beales regarding communication and management problems.

[99]*99On April 14, 1986, Oppenheim wrote two memoranda to Beales placing her on probation and setting forth requirements as to accounts receivable and nursing hours per patient day. During this same time period, in mid-April and early May, Beales received letters from Ed Laskey (vice-president of operations), Oppenheim, and Neil Elliot (president, convalescent division) congratulating her for fifteen years of dedicated service. Elliot’s letter stated that the residents are especially appreciative of her efforts because the continuity of a stable staff means so much to them. In the beginning of May, Beales attended the monthly meeting of administrators where she received a fifteen-year diamond pin and congratulations for her services as a long-standing and loyal employee.

On May 7, 1986, Oppenheim wrote Beales a memorandum stating that although nursing hours spent per patient day showed improvement, they remained short of the facility objective. The memorandum extended the probationary period through May 31, 1986.

Each fiscal year the administrator and Hillhaven’s management would agree on performance objectives and state them in a Management Objective Form (MBO). Beales negotiated the yearly MBO with Oppenheim (for fiscal year 86/87 — June 1, 1986, to May 31, 1987) and Oppenheim signed off on it on May 6, 1986. As to the accounts receivable, the MBO stated that Hillhaven would “attain 60 day receivable outstanding to $5,000.00 by 8/86 and maintain thereafter” at fiscal year 1985-86 levels. On May 27, 1986, Beales and Oppenheim renegotiated a new MBO forecast for 1986-87 in which the accounts receivable goal and the goal for nursing hours per patient day were lowered. Oppenheim testified at trial that the reason both the accounts receivable and nursing hours per patient day levels were lowered in the second MBO was that McGuire “felt that was totally unachieveable [sic] for the history of Reno and he increased that percentage to help the facility make it more realistic.”

Mike Jacobs, the prior district director, testified that he considered the MBO a binding agreement between himself and the administrator, and that it was part of the employment contract. Jacobs further testified that, in his opinion, Beales followed established practice and procedure and was aware of her accounts receivable and made an effort to collect them. In apparent contradiction, Oppenheim testified that MBOs are not part of the contract for performance, but rather guidelines.

On June 16, 1986, Oppenheim told Beales that she was to be terminated. He told her that since she had been a good long-term employee, she could resign. Beales telephoned her attorney and [100]*100then turned in a written resignation. Subsequently, the jury would find that the resignation was involuntary and of no legal effect.

About three months after Beales left Hillhaven, she obtained a position as a nursing home administrator with ARA Convalescent in California for $36,000.00 per year. Beales left this job because the facility burned down. On December 1, 1987, Beales took a position at the Riverside Nursing Home (Riverside) in Reno. Beales had a written contract for $40,000.00 per year, which contained a provision for termination by either party with fifteen days notice. The owner of Riverside terminated the contract on January 29, 1988.

Approximately three months later, Beales went to work as an administrator of the Mission Terrace Nursing Home in Santa Barbara, California, at a salary of $50,000.00 per year. Soon thereafter, however, she left Mission Terrace. According to Beales, she left after witnessing numerous violations of patient and employee rights. Beales returned to Reno and sought employment in her field until the trial of this action in 1989. She was unable to find employment.

Eventually, Ms. Beales had her day in court. Both the facts recited above and substantial additional evidence were presented at trail. The jury concluded that Ms. Beales had been wronged and awarded her $32,821.42 in past damages and $208,476.00 in future damages. The future damage award was considerably less than the maximum figure of $315,791.00 calculated by Dr. Cargill, an expert witness for Beales.

Beales’ contention on appeal is that the district court erred when it granted Hillhaven’s NRCP 41(b) motion to dismiss her bad faith discharge tort. See Bates v. Cottonwood Cove Corp., 84 Nev. 388, 391, 441 P.2d 622, 624 (1968). Beales argues that her contract allowed discharge only for dishonest or unethical conduct, and that her discharge for “poor performance” gave rise to a bad faith tort.1 See K Mart Corp. v. Ponsock, 103 Nev. 39, 49, 732 P.2d 1364, 1370 (1987).

Beales’ argument lacks merit. We have previously restricted the bad faith discharge tort to those “rare and exceptional cases that the duty is of such a nature as to give rise to tort liability.” Id. at 49, 732 P.2d at 1370. See also Western States Minerals v. Jones, 107 Nev. 116, 819 P.2d 206 (1991). We cannot conclude that the facts of the present case are so exceptional as to give rise to a bad faith discharge tort.

[101]*101Hillhaven raises several issues by way of cross-appeal. Hillhaven’s first contention is that the jury was inadequately instructed as to the duty to mitigate damages.

The usual damage formula in wrongful discharge cases is that “the employee is entitled to recover the present value of the difference, over the term of the contract, between the agreed-upon wages and the amount which the employee could have earned if he had, with reasonable diligence, searched for similar employment.” 22 Am.Jur.2d

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Bluebook (online)
825 P.2d 212, 108 Nev. 96, 7 I.E.R. Cas. (BNA) 260, 1992 Nev. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/beales-v-hillhaven-inc-nev-1992.