Thompson v. Better-Bilt Aluminum Products Co.

832 P.2d 203, 171 Ariz. 550, 115 Ariz. Adv. Rep. 3, 7 I.E.R. Cas. (BNA) 1017, 1992 Ariz. LEXIS 43
CourtArizona Supreme Court
DecidedJune 18, 1992
DocketCV-91-0159-PR
StatusPublished
Cited by91 cases

This text of 832 P.2d 203 (Thompson v. Better-Bilt Aluminum Products Co.) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thompson v. Better-Bilt Aluminum Products Co., 832 P.2d 203, 171 Ariz. 550, 115 Ariz. Adv. Rep. 3, 7 I.E.R. Cas. (BNA) 1017, 1992 Ariz. LEXIS 43 (Ark. 1992).

Opinion

OPINION

FELDMAN, Chief Justice.

Plaintiffs Jason and Alia Thompson petitioned this court to review a court of appeals memorandum decision. Defendant Better-Bilt Aluminum Products Company, Inc. (Better-Bilt) filed a cross-petition for review. We granted review to address the standards for recovering consequential and punitive damages in this wrongful termination case. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3) and A.R.S. § 12-120.24.

FACTS AND PROCEDURAL HISTORY

Jason Thompson (Thompson) began working at Better-Bilt’s Prescott plant in April 1981. On May 3, 1985, Thompson was injured in the course of his employment and thereafter received workers’ compensation benefits while recuperating. He returned to work in July 1985, but found that he had not recovered sufficiently to perform his duties and went back on workers’ compensation leave.

In the fall of 1985, Thompson encountered Susie Dale (Dale), Better-Bilt’s personnel assistant, at a Prescott grocery store on a Saturday afternoon. At trial, Thompson and Dale gave conflicting accounts of the date and content of their discussion. According to Thompson, he saw Dale on October 5, the date of his wife’s birthday. Dale asked Thompson how he was doing and when his doctors thought he could return to work. Thomp *552 son replied, “They all seem to think I probably won’t be able to do that work again, but everything is up in the air right now, [they’re] even talking about vocational rehabilitation.”

Dale did not include a specific date in a written statement she prepared, but testified at trial that she believed the meeting occurred on September 28. She testified that she had inquired only about Thompson’s health, and that he had responded:

You know I’ll probably never be able to work over there again. I am not even able to rake my yard. I can’t do any physical type of work. In fact they are trying to get me into a vocational rehabilitation program. Some type of office/computer training.

Both Thompson and Dale agreed that neither of them had used the word “quit” during the conversation.

The following Monday, Dale related Thompson’s comments to her supervisor, Richard Bonney, Better-Bilt’s plant personnel manager. Bonney testified that he took Thompson’s statement as a “voluntary termination.” According to company records, Thompson was discharged as of October 1, 1985. Thompson, however, was not notified that his employment had been terminated, and, at trial, did not agree that he had submitted a voluntary termination.

While employed by Better-Bilt, Thompson was covered by a group health insurance policy purchased by Better-Bilt, which also paid most of the monthly premium for coverage for Thompson’s wife and dependents. In mid-October, Thompson’s wife, Alia, was hospitalized and required surgery. On November 4, 1985, Thompson went to see Dale at Better-Bilt and attempted to obtain insurance forms to file a claim for his wife’s medical expenses. Dale informed him that he and his family no longer had insurance coverage because he had resigned from his employment. In addition, because he had been terminated as of October 1, the thirty-one day time period for converting his group coverage to personal coverage had expired. As a result, the Thompsons were without insurance coverage for Alia’s medical expenses.

In January 1986, Thompson’s attorney wrote to Better-Bilt demanding that Thompson be reinstated, but Better-Bilt did not comply with this demand. In April 1986, Thompson sued Better-Bilt, asserting a variety of claims. At trial, the court directed verdicts for Better-Bilt on Thompson’s claim for intentional interference with a contractual relationship and Thompson’s request for punitive damages. In addition, the court dismissed the counts alleging concealment and breach of the covenant of good faith and fair dealing.

Thompson’s claims for wrongful termination and breach of the employment contract were submitted to the jury. The court gave the jury three forms of verdict: (1) for Thompson on the wrongful termination claim; (2) for Thompson on the breach of contract claim; and (3) for Better-Bilt on both claims. Reporter’s Transcript (R.T.) Apr. 12, 1988, at 909-10. The jury returned a verdict for Thompson on the wrongful termination claim, awarding Thompson $5,000 in wages, $5,000 for mental anguish and emotional distress, $5,000 for medical care, and $700 for post-termination vacation and bonus pay. 1 The trial court denied Better-Bilt’s motion for judgment notwithstanding the verdict or a new trial.

Better-Bilt appealed and Thompson cross-appealed. The court of appeals reversed the judgment of the trial court and remanded for retrial, holding that the trial *553 judge’s jury instructions on wrongful termination were confusing and incorrectly stated the law. Thompson v. Better-Bilt, No. 1 CA-CV 88-436 (Ct.App. Dec. 4, 1990). 2 In a memorandum decision, the court of appeals also held, in part, that because Better-Bilt owed Alia Thompson no duty of care, the trial court had erred in permitting the jury to consider damages suffered by her. 3 The court also held that the trial court had correctly directed a verdict for Better-Bilt on the punitive damage claim.

We granted review to resolve the following issues:

1. Whether the duty of care owed by an employer to its employee to take reasonable steps to notify the employee of his discharge also extends to the members of the employee’s family who are covered by an employment medical insurance policy and who might suffer damage as a result of an unknowing cessation of coverage.

2. Whether there was reasonable evidence to submit the issue of punitive damages to the jury when there is evidence that the Defendant had a deliberate policy of discharging employees on either workers’ compensation leave or medical disability leave.

DISCUSSION

A. Alia Thompson’s Medical Expenses

Thompson argues that Better-Bilt owed Alia a legal duty to notify her of the cessation of her medical coverage, and that its breach of that duty makes it liable for her medical expenses. Echoing the dissent in the court of appeals, Thompson argues that such a duty would not result in “wide and unreasonably attenuated liability ... because the group of potential plaintiffs is narrowly circumscribed and easily identified.” Petition for Review at 10-11. Moreover, the duty would not “require the employer to send out an additional notice to the employee’s family; only a single notice is required to be sent to the employee, but the liability for failure to comply with the duty extends to the family members as well.” Id. at 11.

Better-Bilt patterns its argument on the court of appeals’ reasoning, phrasing the issue as “whether BETTER-BILT owed ALIA THOMPSON a duty to notify Jason Thompson that he was terminated so he could convert insurance coverage to a personal policy.” Response to Petition for Review at 8.

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832 P.2d 203, 171 Ariz. 550, 115 Ariz. Adv. Rep. 3, 7 I.E.R. Cas. (BNA) 1017, 1992 Ariz. LEXIS 43, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thompson-v-better-bilt-aluminum-products-co-ariz-1992.