Gladstone v. American Auto. Ass'n, Inc.

419 So. 2d 1219
CourtSupreme Court of Louisiana
DecidedSeptember 7, 1982
Docket81-C-1923
StatusPublished
Cited by32 cases

This text of 419 So. 2d 1219 (Gladstone v. American Auto. Ass'n, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gladstone v. American Auto. Ass'n, Inc., 419 So. 2d 1219 (La. 1982).

Opinion

419 So.2d 1219 (1982)

Gloriadine GLADSTONE
v.
AMERICAN AUTOMOBILE ASSOCIATION, INC. and The State of Louisiana, Office of Employment Security.

No. 81-C-1923.

Supreme Court of Louisiana.

September 7, 1982.
Rehearing Denied October 15, 1982.

*1220 Frank J. Varela, New Orleans, for applicant-defendant.

Roger J. Larue, Jr., Metairie, James A. McGraw, Willie D. Maynor, Baton Rouge, for respondent-plaintiff.

LEMMON, Justice.

The issue in this case is whether defendant is entitled to a summary judgment dismissing plaintiff's petition to annul a judgment allegedly obtained by fraud and ill practices.

I.

Plaintiff was discharged from her employment with defendant, American Automobile Association (AAA), for alleged violations of a company directive. When she applied for unemployment compensation benefits, the Office of Employment Security ruled that, on the information available at that time, there was no evidence of misconduct which would bar plaintiff from receiving benefits.

The employer appealed. At a hearing before the appeals referee, AAA's personnel manager testified: Plaintiff had been employed by AAA for more than ten years as a sales representative. She sold memberships in AAA on a commission basis for $36.00, which included the annual fee of $26.50 and a one-time enrollment fee of $9.50. During the Christmas season, enrolled members could purchase new memberships for Christmas gifts for only $26.50, with the enrollment fee being waived. During plaintiff's employment, some sales representatives sold new memberships for $26.50 under the guise of gift memberships. In 1978, AAA attempted to curb the practice by issuing a directive which established rigid procedures governing the sale of gift memberships. In November, 1979, sales personnel were reminded of the prohibition against the disguised sale of gift memberships at a sales meeting, from which plaintiff was excused because of her child's hospitalization. In December, 1979, plaintiff was terminated because she sold ordinary *1221 memberships disguised as gift memberships.[1]

The personnel manager further testified that the company, while aware that sales personnel had engaged in similar fraudulent sales in the past, made a concerted effort in 1978 and 1979 to eliminate the practice. He stated that he did not know of any other employees who had been fired for this violation, but pointed out that plaintiff had become careless about documentation and had been placed on probation shortly before her termination because of an altercation with a cashier over the necessity for documentation.

Plaintiff also testified at the hearing, admitting that she had sold ordinary memberships and turned them in as gift orders, but asserted that she and others had done so for years with tacit approval by company supervisors. She further asserted that she had the names of other representatives and that "I'm gonna take this to court if I have to". She insisted that the sales manager was looking for a reason to fire her, because she was a black female and because she had personality clashes with the sales manager and a cashier.

The appeals referee found that plaintiff was discharged for violating the company policy regarding Christmas gift memberships and concluded that the violation constituted misconduct connected with employment under R.S. 23:1601(2). The Board of Review affirmed. The district court, after reviewing the administrative record on judicial review, also affirmed, concluding that the discharge "was justifiable because of [plaintiff's] intentional fraudulent misconduct in selling Christmas gift memberships in December of 1979."

Plaintiff did not appeal from the June 30, 1980 judgment, but instead, on August 13, 1980, filed a motion to annul the judgment. The motion merely alleged that the judgment was obtained by "fraud and ill practices, inasmuch as the facts produced by the defendant, American Automobile Association [were] not a true representation of the reason for the dismissal of the defendant, and further, that the American Automobile Association otherwise misrepresented the facts to the Appeal Referee." The motion requested a remand to the appeals referee for further evidence.

After the trial court sustained the employer's exception of improper use of summary proceedings and converted the matter to an ordinary proceeding, plaintiff filed a supplemental petition, which contained the following allegations:

"a) Petitioner was terminated because of a violation of a directive in force in 1978 and 1979, with regard to the sale of Christmas memberships;
"b) That the directive was issued in 1978, but in fact, the directive was openly violated with the knowledge and tacit approval of supervisory personnel, including Mr. Jack Hyman, District Manager of American Automobile Association.
"c) That in 1979 the directive was again brought up, at which time Mr. Alfredo Cortez was the District Manager;
"d) That notwithstanding the reissuance of the directive, it was again openly violated by many of the employees, none of whom were terminated with the exception of Gloriadine B. Gladstone;
"e) That in 1979, the supervisory personnel were aware of the method that the Christmas memberships were sold, that in fact, the memberships were sold in violation of the directive and no action was taken against any other sales personnel;
"f) That as a matter of fact, the District Manager at the time of the termination of Mrs. Gladstone, Mr. Alfredo Cortez, was attempting to find reason to terminate Mrs. Gladstone, and so advised other personnel;
*1222 "g) That for a period of years, the method in which petitioner was selling Christmas memberships was, in fact, an established and accepted method, and she was not advised that she was doing anything improper until after she sold the memberships and after American Automobile Association accepted the memberships;
"h) That these facts were intentionally not brought to the attention of the Appeals Referee;
"i) Further, petitioner avers that it was not until after the Appeals Referee had rendered a decision that she discovered the evidence necessary to bring this petition."[2]

In response, the employer filed an exception of no cause of action and a motion for summary judgment. The trial court overruled the exception and denied the motion. The court of appeal affirmed, holding that the petition stated a cause of action by alleging that the employer withheld information from the appeals referee which might have altered his conclusions or those of the Board of Review. 402 So.2d 254. We granted certiorari. 405 So.2d 532.

II.

C.C.P. Art. 2004 provides:
"A final judgment obtained by fraud or ill practices may be annulled.
"An action to annul a judgment on these grounds must be brought within one year of the discovery by the plaintiff in the nullity action of the fraud or ill practices."

The action for nullity based on fraud or ill practices is not intended as a substitute for an appeal or as a second chance to prove a claim which was previously denied for failure of proof. The purpose of the action is to prevent injustice which cannot be corrected through new trials and appeals. See Project of Louisiana Code of Practice of 1825 at 97 (Official Reprint, 1938).

In Johnson v. Jones-Journet,

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Bluebook (online)
419 So. 2d 1219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gladstone-v-american-auto-assn-inc-la-1982.