Mitchell v. Coldstream Laboratories, Inc.

337 S.W.3d 642, 2010 CCH OSHD 33,094, 2010 Ky. App. LEXIS 171, 2010 WL 3717282
CourtCourt of Appeals of Kentucky
DecidedSeptember 24, 2010
Docket2009-CA-001885-MR
StatusPublished
Cited by19 cases

This text of 337 S.W.3d 642 (Mitchell v. Coldstream Laboratories, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mitchell v. Coldstream Laboratories, Inc., 337 S.W.3d 642, 2010 CCH OSHD 33,094, 2010 Ky. App. LEXIS 171, 2010 WL 3717282 (Ky. Ct. App. 2010).

Opinion

OPINION

COMBS, Judge:

Appellant, Timothy Mitchell, appeals from an order of the Fayette Circuit Court pursuant to Kentucky Rule(s) of Civil Procedure (CR) 12.02(f) dismissing on the pleadings his counterclaims against his former employer, Coldstream Laboratories, Inc. Mitchell contends that the court erred *644 by prematurely concluding that he had failed to state a claim. After considering counsels’ arguments and pertinent law, we are compelled to agree. Consequently, we vacate and remand for further proceedings.

Coldstream Laboratories is a contract pharmaceutical development company and a small volume generic drug manufacturer. In July 2007, Coldstream hired Mitchell as an at-will employee to serve as the company’s Vice President for Quality and Regulatory Compliance. Following a brief suspension, he was discharged on February 10, 2009.

On March 13, 2009, Coldstream Laboratories filed a civil action against Mitchell and its former Vice President of Finance, Thomas I. Evans. Coldstream alleged that in late 2008 and early 2009, Mitchell and Evans colluded to deprive the company of a legitimate and lucrative business opportunity. As an executive team, they allegedly used Coldstream’s equipment, confidential information, and other resources surreptitiously to create a competing business venture. Coldstream charged that Mitchell and Evans each breached his fiduciary duty and duty of loyalty to the company and that each of them had breached a confidentiality agreement. Along with its complaint, Coldstream filed a motion requesting entry of a restraining order and a temporary injunction. By agreement of the parties, Coldstream’s action against Evans was eventually dismissed with prejudice.

On May 18, 2009, Mitchell filed his answer denying Coldstream’s allegations. He also filed a counterclaim alleging that he had been wrongfully discharged. Referring specifically to his interaction with an investigator from the Federal Drug Administration, Mitchell alleged that he had been discharged for his “refusal to violate the law in the course of his employment” and that his dismissal was “contrary to a fundamental and well defined public policy.” Answer and Counterclaim at 3. He also stated that his discharge had been “connected to his protected and lawful actions .... ” Id. at 4. Finally, Mitchell alleged that his discharge violated federal whistleblower laws. Id. at 4.

Coldstream promptly moved to dismiss the counterclaim pursuant to CR 12.02(f). In its memorandum, it argued that the facts as alleged did not support Mitchell’s counterclaim and that Mitchell had filed the counterclaim without identifying any legal basis for it. Arguing in the alternative, Coldstream contended that Mitchell should be ordered to provide a more definite statement pursuant to the provisions of CR 12.05.

During a hearing on the motion, the Fayette Circuit Court observed that “Coldstream is entitled to know what they’re being accused of.” The court was apparently concerned by Mitchell’s failure to provide more specific information relative to his allegations after Coldstream had filed its motion to dismiss. At the conclusion of the hearing, the court ordered that Mitchell’s counterclaim be dismissed. Mitchell filed a timely motion to alter, amend, or vacate the order, which was denied. This appeal followed.

A motion to dismiss is governed by a rigorous and sweeping standard which dictates that it should be granted only where “it appears the pleading party would not be entitled to relief under any set of facts which could be proved in support of his claim.” Pari-Mutuel Clerks’ Union v. Kentucky Jockey Club, 551 S.W.2d 801 (Ky.1977). When considering the motion, the allegations contained in the pleading are to be treated as true and must be construed in a light most favorable to the pleading party. See Gall v. *645 Scroggy, 725 S.W.2d 867 (Ky.App.1987). The test is whether the pleading sets forth any set of facts which — if proven — would entitle the party to relief. If so, the pleading is sufficient to state a claim. See CR 8.01. Since the trial court is not required to make factual findings, the determination is purely a matter of law. James v. Wilson, 95 S.W.3d 875 (Ky.App.2002). Consequently, we review the decision of the trial court de novo. Revenue Cabinet v. Hubbard, 37 S.W.3d 717 (Ky.2000).

On appeal, Mitchell contends that the court erred by granting Coldstream’s motion to dismiss his counterclaim for failure to state a claim. He claims that he pled “all the minimal requirements under the law for both wrongful termination and for a violation of the Whistleblower laws.” Appellant’s Brief at 2. He argues that his counterclaim specifically stated a claim for wrongful discharge because he provided some factual background, alleging in short but plain statements that he was terminated “for his refusal to violate the law in the course of his employment” and that he was wrongfully discharged “contrary to a fundamental and well defined public policy, as set forth in the law.” Answer and Counterclaim at 3.

The discharge of an at-will employee generally does not support an action for wrongful termination in Kentucky. Wymer v. JH Properties, Inc., 50 S.W.3d 195 (Ky.2001). However, as Mitchell correctly notes in his brief, a narrow public policy exception to our “terminable-at-will” doctrine was established by the Supreme Court of Kentucky in Firestone Textile Co. Div., Firestone Tire and Rubber Co. v. Meadows, 666 S.W.2d 730 (Ky.1983). While recognizing employers’ interest in having a cause of action for wrongful discharge “clearly defined and suitably controlled,” Firestone permitted the action to continue where: (1) the discharge is contrary to a fundamental and well-defined public policy and (2) the policy is evidenced by a constitutional or statutory provision. Firestone, 666 S.W.2d at 733 (citing Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 335 N.W.2d 834 (1983)). Whether a public policy is fundamental, well-defined, and evidenced by existing law is a question of law for the court to decide. Grzyb v. Evans, 700 S.W.2d 399 (Ky.1985). A claim for wrongful discharge can be based on an employee’s failure or refusal to violate the law. Id.

In support of his contentions on appeal, Mitchell relies upon our decision in Follett v. Gateway Regional Health System, Inc., 229 S.W.3d 925 (Ky.App.2007). In Follett,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

University of Kentucky v. Caitlin Huff
Court of Appeals of Kentucky, 2024
Willie Settle v. Jimmy Franconia
Court of Appeals of Kentucky, 2023
Angela J. Watkins v. Vanna R. Brittain
Court of Appeals of Kentucky, 2023
Taylor v. Davies
W.D. Kentucky, 2021
Dan Gibson v. Ron Jones Individually
Court of Appeals of Kentucky, 2021
Herndon v. Wilson
524 S.W.3d 490 (Court of Appeals of Kentucky, 2017)
Conn v. Deskins
238 F. Supp. 3d 924 (E.D. Kentucky, 2017)
Clinton Burton v. Zwicker & Associates, PSC
577 F. App'x 555 (Sixth Circuit, 2014)
Webster County Board of Education v. Franklin
392 S.W.3d 431 (Court of Appeals of Kentucky, 2013)
Snowden v. City of Wilmore
412 S.W.3d 195 (Court of Appeals of Kentucky, 2013)
Taylor v. Barlow
378 S.W.3d 322 (Court of Appeals of Kentucky, 2012)
Pierce v. Bennett
835 F. Supp. 2d 288 (W.D. Kentucky, 2011)
Chavez v. Dakkota Integrated Systems, LLC
832 F. Supp. 2d 786 (W.D. Kentucky, 2011)

Cite This Page — Counsel Stack

Bluebook (online)
337 S.W.3d 642, 2010 CCH OSHD 33,094, 2010 Ky. App. LEXIS 171, 2010 WL 3717282, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mitchell-v-coldstream-laboratories-inc-kyctapp-2010.