Romack v. Public Service Co. of Indiana

499 N.E.2d 768, 3 I.E.R. Cas. (BNA) 990, 1986 Ind. App. LEXIS 3128

• Court: Indiana Court of Appeals
• Decided: November 10, 1986
• Docket: 4-985 A 251
• Status: Published

Opinions

YOUNG, Judge.

Jay H. Romack appeals the trial court's entry of summary judgment in favor of Public Service Company of Indiana, Inc. (PSI) on Romack's claims of fraud, constructive fraud, negligent misrepresents tion, retaliatory discharge and denial of due process. Romack makes the following arguments on appeal:

1) The trial court erred when it refused to consider his supplemental affidavit in ruling on his motion to correct errors;

2) His discharge was unlawful because it violated an enforceable oral contract of employment which could not be terminated "at will" by PSI.

3) Summary judgment was inappropriate on the wrongful discharge claim because his discharge was in retaliation for the performance of a statutory right or duty;

4) The trial court erred in granting PSI's motion for summary judgment because the pleadings and evidence supported a cause of action under theories of fraud, constructive fraud, negligent misrepresentation and denial of due process; and

5) Material issues of fact existed which precluded the entry of summary judgment on his various claims.

We affirm.

In 1977, Romack applied for the position of Corporate Security Manager at PSI but did not receive the position. However, two years later, PSI contacted Romack concerning an available position. At that time, Romack was a Captain of the Indiana State Police with twenty-five years of service to his credit. Romack informed PSI that he had "permanent employment" with the State Police and would not consider leaving his position there unless the new job offered the same "permanency" of employment, advancement and benefits. An employee of PSI told Romack that if he came to work for PSI, he would have "such permanent employment." (R. 296-297) With these assurances, Romack terminated his employment with the Indiana State Police and began working for PSI on September 24, 1979 as an Operations Security Supervisor at the Marble Hill Nuclear Generating construction site.

As a result of his employment with PSI, Romack purchased a house trailer and rented a tract of land near his place of employment. Later, Romack purchased a home in that locality and moved his family to the area. PSI requested that Romack take this action so he and his family would "become a part of the community.'" Romack was reimbursed for the relocation costs occasioned by the first move in 1979 pursuant to PSI policy. In January of 1981, Romack sought reimbursement for the relocation costs associated with moving his family to the area. These expenses were reimbursed in February of 1981 and PSI also paid the cost of having a moving company transport Romack's household goods to the new home. The total amount paid or reimbursed by PSI was approximately $4,694.72.

On July 30, 1982, Romack was discharged by PSI. Romack requested that he be given a position elsewhere in the company because he was 52 years old and suffering from a work-related back injury. His request was denied because PSI thought it would be better if a "clean break" was made. (R. 300) Romack subsequently filed this action asserting that he was terminated because his attempts to deal with bomb threats and alcohol and drug problems at the construction site were slowing down the work progress and costing PSI additional money because of delays. Romack also asserted that he was not an employee at will and had been unlawfully discharged. PSI moved for summary judgment on all of Romack's claims and the trial court granted the motion. Romack appeals.

When reviewing a summary judgment we must accept as true the facts alleged by the non-moving party. Eby v. York-Division, Borg-Warner (1988), Ind. App., 455 N.E.2d 6283, 626. This leads to an examination of what facts were placed before the trial court and capable of consideration in this action. Romack argues that the pleadings, his first set of affidavits and his supplemental affidavit which was presented with his motion to correct errors, are all proper for consideration. We disagree.

Error normally cannot be based upon evidence that was not before the trial court at the time it rules on a motion for summary judgment. Johnson v. Rutoskey (1984), Ind.App., 472 N.E.2d 620, 623. However, new evidence that could not, with reasonable diligence, have been discovered and produced earlier may be presented by affidavit with a motion to correct errors. Ind.Rules of Procedure, Trial Rules 59(A)(6) and 59(H)(1). See also Johnson, supra at 628. Trial Rule 59(H)(1) affidavits cannot be used to present evidence that a party neglected to present during the summary judgment proceeding. Mid-States Aircraft Engines, Inc. v. Mize Co., Inc. (1984), Ind.App., 467 N.E.2d 1242, 1245. Romack was given ample opportunity to present additional evidence both at the summary judgment hearing and after the hearing. Romack refused these opportunities. After the court entered summary judgment, Romack filed his motion to correct errors and supplemental affidavit. The evidence presented in the supplemental affidavit was not newly discovered and could have been presented to the trial court prior to its ruling on PSI's motion for summary judgment. Under these circumstance es, the trial court had no basis upon which it could have properly considered the supplemental affidavit and necessarily refused to consider it in ruling on Romaeck's motion to correct errors. Likewise, we cannot consider the facts provided in the supplemental affidavit when reviewing the trial court's action since the affidavit was properly excluded from consideration at the trial court level. With this restriction in mind, we examine the remainder of Ro-mack's arguments.

Romack asserts that his employment with PSI was not "at will" because PSI had promised him "permanent employment," ie., employment for the remainder of his working days. Even if the employment was initially at will, Romack argues that he gave PSI additional consideration beyond his services which modified the nature of the employment. Therefore, Romack argues that his discharge from PSI was wrongful. PSI counters that Romaeck's discharge was not wrongful because he was at all times an employee at will who could be discharged with or without cause at any time.

In Indiana, an employee at will may be discharged for any reason or no reason at all. Hamblen v. Danners, Inc. (1985), Ind.App., 478 N.E.2d 926, 928. The employment relation is at will unless there is a promise of employment for a fixed duration or the employee has given independent consideration beyond his services in exchange for the employment. Ham-blen, supra. An employment at will relationship may be converted to one requiring good cause before termination if the employee, in exchange for permanent employment, 'provides independent consideration that results in a detriment to him and a corresponding benefit to the employer. Streckfus v. Gardenside Terrace Co-op, Inc. (1985), Ind.App., 481 N.E.2d 428, 425; Hamblen, supra at 928; Ohio Table Pad Co. of Indiana, Inc. v. Hogan (1981), Ind. App., 424 N.E.2d 144. Therefore, in order to prevail in an action for wrongful discharge, the employee must show either that he has an employment contract which provides for employment of a specific duration or that his at will employment was converted to one which required good cause before his employment could be terminated. Ewing v. Board of Trustees of Pulaski Mem. Hosp. (1985), Ind.App., 486 N.E.2d 1094, 1098.

In the present case, Romack argues that, because PSI gave him oral assurances of permanent employment, he was not an employee at will. Such a promise is insufficient to establish a contract for permanent employment since the period of employment is not for a definite or fixed duration. Romack was under no obligation to continue his employment with PSI and could have retired or quit at any time. Although he told PSI that he "would continue working permanently for PSI as my 'second career' for the remainder of my work life" (R. 299), this statement creates no obligation for him to do so and does not clarify or set the duration of employment. See Ohio Table Pad Co., Inc. v. Hogan, supra at 145; Streckfus, supra. Considering only the evidence most favorable to Romack, the employment contract must be treated as one for an indefinite term.

Romack argues, however, that he gave additional valuable consideration to PSI in exchange for the promise of permanent employment. The consideration consisted of purchasing a trailer and moving to an area closer to the work site. Later upon the insistence of PSI, he purchased another home, assumed another mortgage and relocated his family. Romack asserts that these actions were additional consideration which altered the nature of the original contract. Romack concedes, however, that these actions were taken after his initial employment with PSI. He provides us no evidence that at the time he took these actions he did so in exchange for an additional promise by PSI to continue his employment on a permanent basis and to discharge him only for cause. Thus, the moves were not independent consideration for the asserted promise of permanent employment. In addition, we note that while moving one's household to a new location will constitute sufficient consideration for an agreement to provide moving expenses, "it will not support a contract of permanent employment so as to impose the requirement of good cause upon the right to terminate the employee." Ohio Table Pad Co., supra at 146. The evidence is undisputed that Romack received reimbursement for his moving expenses. The evidence clearly reveals that Romack was an employee at will who could be discharged by PSI for any reason or for no reason at all. Summary judgment on the wrongful discharge claim was appropriate since the undisputed evidence shows that Romack was an employee at will, and his discharge was not unlawful.

Romack next argues that the trial court erred in granting summary judgment because Romack was discharged for exercising a right conferred upon him by statute or protected by a statute. The trial court found that no facts were pleaded that supported the application of the public policy exception to the doctrine of employment at will. We agree.

Normally, an employee at will may be discharged without cause. However, an exception exists when the employee is discharged solely for exercising a statutorily conferred right. Morgan Drive Away, Inc. v. Brant (1986), Ind., 489 N.E.2d 933, 935; Campbell v. Eli Lilly & Co. (1980), Ind. App., 413 N.E.2d 1054, 1061. This exception has been narrowly construed by the Indiana Supreme Court. In Morgan Drive Away, Inc., supra, our supreme court refused to extend the public policy exception to a situation in which an employee was discharged after bringing a small claims action for the payment of services rendered. The court stated:

The employment at will doctrine has steadfastly been recognized and enforced as the public policy of this State....

Revision or rejection of the doctrine is better left to the legislature. We therefore decline this opportunity to extend [the statutory right exception] to the facts of the instant case.

Id. at 984. Subsequently, the United States Court of Appeals, Seventh Circuit, applying Indiana law, determined that an airline co-pilot who refused to fly an unsafe airplane did not fall within the ambit of the "statutory right" exception. The court acknowledged that the Indiana Code required aircraft to operate within federal standards of airworthiness. However, the statute did not create a right on the part of pilots or other crew members to refuse to fly an aircraft they believed was not airworthy. The court stated:

The Indiana tort of wrongful termination does not protect "whistle blowing" as such, ... unless a statute creates a right to blow a particular whistle, and Indiana's aviation statute does not.

Buethe v. Britt Airlines, Inc. (1986), 7th Cir., 787 F.2d 1194, 1196, citing Campbell v. Eli Lilly & Co. (1980), Ind.App., 413 N.E.2d 1054, 1059-62.

In Campbell, supra, an employee was discharged for reporting purported violations of the Food and Drug Administration (FDA) regulations. The employee argued that since the manufacturer was under a duty to report relevant required data to the FDA, it necessarily became a duty of the employees to carry out that mandate. The employee concluded that if employees were discharged for reporting violations which affected the integrity of the data supplied to the FDA, an important public policy would be thwarted. Campbell, supro at 1059-60. The court, however, determined that the statute created no duty or right for Campbell to report the alleged violations. Thus, the court concluded that the statutory right exception did not apply.

The present case is closely analogous to both Buethe and Campbell. Ro-mack presented the following evidence to the trial court. He was hired as an Operations Security Supervisor and later was given responsibility for construction security. Prior to his termination there were numerous instances of bomb threats, on-site drug use, on-site alcohol use and on-site theft. Efforts to handle these problems resulted in the personnel being impeded in their employment activity. Romack's supervisor "refused to acknowledge the importance of such occurrences and prevented [Romack] from taking necessary steps to clarify and rectify the existing situation." (R. 298) As a result of Romack reporting these problems to his superior, friction arose which ultimately led to Romack's termination. Romack also states that these problems affected the health and safety of employees in the surrounding area.

Romack does not favor us with any details as to the problems until his second affidavit, which as previously discussed was untimely and therefore may not be considered. We are therefore left with the facts stated above. Romack also cites several sections of the Atomic Energy Act of 1954 in support of his statutory right argument. An examination of these sections fails to disclose any duty or right on which Romack can rely. The sections speak merely in terms of general policy goals and confer no rights on individuals. Similarly, the OSHA regulations relied on require the employer to provide a safe place to work, free from hazards likely to cause death or harm. Romack's affidavit fails to present any factual evidence as to the disagreements between himself and his supervisors. There is no evidence that PSI refused to provide a safe work place. The evidence and reasonable inferences lead to but one conclusion: Romack and his supervisors disagreed in the manner in which the problems were to be dealt with and the importance and severity of the problems. Thus, although Romack's argument that Indiana has stated a public policy in the area of worker safety and that workers cannot be discharged for reporting violations is plausible, Romack fails to present any factual evidence of what was taking place or occurring at the construction site or that he was indeed discharged because of his efforts to deal with these problems.¹ We are therefore compelled to find that the facts presented by Romack did not support the application of the public policy exception to the at will employment doctrine.

Romack asserts that he had a valid action under the theories of fraud, constructive fraud and negligent misrepresentation. Summary judgment was properly entered on these theories. A fraud ac tion requires the misrepresentation of past or existing facts. It cannot be based on promises of future performance. Eby, su-pro at 628. The promises and statements made by PSI were not statements of past or existing facts, They were promises to do or not to do some act in the future and do not support an action based on fraud.²

Romack also has no action for constructive fraud³ Constructive fraud may be based on promissory misrepresentations. However, it must be shown that the promisee suffered a detriment and the promisor obtained some advantage. Eby, supra at 628. Although Romack's special qualifications may have been a benefit to the employer, he presents no evidence of a detriment to himself. Romack shows that he left his employment with the State Police in order to accept employment with PSI. Leaving one job to accept another did not constitute a sufficient independent detriment to support a constructive fraud claim since Romack would had to have left his State Police position in order to accept employment with PSI under any employment conditions. See Okio Table Pad Co., supra at 146. The only other "detriments" relied on by Romack consisted of moving costs and expenses incurred in establishing a new residence, including additional mortgages. The evidence before the trial court indicated that the moving expenses had been reimbursed. The costs incurred in purchasing a new home are not considered a sufficient independent detriment to the employee because these actions merely place the employee in a position of being able to accept and perform the job by living near his place of work. See Ohio Table Pad Co., supra at 146. PSI was therefore entitled to summary judgment on this count.

With regard to the claim for negligent misrepresentation, the basic issue is whether PSI, through its agents, made false representations to Romack on which he relied to his detriment. supra at 628. As previously discussed, Romack presents no evidence of an independent detriment. As the trial court noted, the facts would support a claim for moving expenses but not a claim for the enforcement of a promise of permanent employment. Under the circumstances presented, even a claim for moving expenses would not be warranted since the only evidence was that the expenses had already been reimbursed.

Romack's final claim is that PSI violated his 14th Amendment due process rights by discharging him without pri- or notice or a hearing. Due process claims in the realm of employment are based on the idea that the employment creates a property interest. Bishop v. Wood (1976), 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684. Before due process protections are applied two elements must be shown to exist: 1) state action; and 2) a constitutionally protected liberty or property interest. Wilson v. Board of Ind. Employment See. Div. (1979), 270 Ind. 302, 385 N.E.2d 488, 443, cert. denied 444 U.S. 874, 100 S.Ct. 155, 62 LEd.2d 101. Romack's argument fails on both elements.

Romack's initial appellate brief failed to present any argument or facts to support the existence of state action. He argued solely that a protected property interest was at stake. Romack's failure to present argument on this element resulted in his failing to show a violation of due process. His attempt to argue this element in his reply brief comes too late. See Ind. Rules of App.Proc., Rule 8.3(A)(7); Lambert v. Yellowbird, Inc., (1986), Ind.App., 496 N.E.2d 406. Romack also failed to show that a protected property interest was involved. It is settled law that a discharged employee is not deprived of any constitutionally protected property interest where he is an employee at will. Wood, supra; McQueeney v. Glenn (1980), Ind. App., 400 N.E.2d 806, 810-11. As previously discussed, Romack was an employee at will and therefore had no property interest in his employment. PSI was entitled to summary judgment on this claim.

For the foregoing reasons, the trial court's decision is affirmed.

MILLER, J., concurs. CONOVER, P.J., dissents with separate opinion.

1 . We note that Romack's second affidavit discussed the facts that Romack followed the policy of giving workers an option of leaving the work site or assisting in a search whenever a bomb threat was received. However, his superiors wanted to ignore the bomb threats in order to stop the work interruptions. These facts, if timely presented, would have bolstered Ro-mack's argument that he was discharged for fulfilling a statutory duty, i.e., providing for and assuring worker safety as required by OSHA regulations. However, we do not address that situation since we are limited to a review of the evidence before the trial court at the time of the summary judgment.

2 . Romack's reliance on First Nat. Bank of New Castle v. Acra (1984), Ind.App., 462 N.E.2d 1345, is misplaced. In Acra, the court held that an action for fraud would lie where a bank stated that it would work with a borrower on a loan situation for an additional six months and that the borrower's account was fine when in fact the bank had placed a hold on the account. The court noted that a promise to do something in the future is generally not sufficient to support an action for fraud, but where the promise is coupled with a history of past dealings the promise may support an action for fraud. In Acra, the bank had worked with the borrower on various loans from 1975-81. During that period the bank had extended these loans several times. Thus the bank's statement that it would work with the borrower for six more months could be construed as more than a promise in light of the parties past dealings.

In the present case, there are no past dealings by which PSI's statement may be interpreted. They are simply promises to do a future act and are factually disimilar from the promise and events in Acra.

3 . The trial court determined that Romack had no action for constructive fraud because he presented no facts of mutual mistake, undue influence or duress. This conclusion is based on an erroneous reading of Blaising v. Mills (1978), 176 Ind.App. 141, 374 N.E2d 1166. Blaising does not require proof of mistake, undue influence or duress in order to prove constructive fraud. The case merely states that constructive fraud may be based on those theories. Id. at 1169. See also, Brown v. Brown (1956), 235 Ind. 563, 135 N.E.2d 614. However, summary judgment was proper as a matter of law because Romack failed to present evidence of an independent detriment.