Marciano v. Strategic Management Solutions, LLC

1 This memorandum opinion was not selected for publication in the New Mexico Reports. Please see 2 Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please 3 also note that this electronic memorandum opinion may contain computer-generated errors or other 4 deviations from the official paper version filed by the Court of Appeals and does not include the 5 filing date. 6 IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO 7 VINCENT A. MARCIANO, 8 Plaintiff-Appellant, 9 v. NO. 30,193 10 STRATEGIC MANAGEMENT SOLUTIONS, LLC, 11 Defendant-Appellee. 12 APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY 13 Sheri A. Raphaelson, District Judge 14 Timothy L. Butler 15 Santa Fe, NM 16 for Appellant 17 Rubin Katz Law Firm, P.C. 18 Frank T. Herdman 19 Joseph P. Turk 20 Santa Fe, NM 21 for Appellee 22 MEMORANDUM OPINION 23 BUSTAMANTE, Judge. 1 Plaintiff Vincent A. Marciano was terminated from his position at Defendant 2 Strategic Management Solutions, LLC (SMSI). Plaintiff sued, and the district court 3 dismissed all five counts of his complaint with prejudice pursuant to Rule 1-012(B)(6) 4 NMRA. We examine each count in the order they were pleaded, providing 5 background facts as necessary throughout the Opinion. We reverse in part and affirm 6 in part. 7 DISCUSSION 8 We review de novo a district court’s decision to dismiss a case for failure to 9 state a claim under Rule 1-012(B)(6). See Valdez v. State, 2002-NMSC-028, ¶ 4 , 132 10 N.M. 667 , 54 P.3d 71 . “In reviewing a district court’s decision to dismiss for failure 11 to state a claim, we accept all well-pleaded factual allegations in the complaint as true 12 and resolve all doubts in favor of sufficiency of the complaint.” Id. Dismissal is only 13 appropriate if, even viewing the facts in this manner, Plaintiff “can neither recover nor 14 obtain relief under any state of facts provable under the claim.” Id. (internal quotation 15 marks omitted). 16 A. Count 1: Retaliation 17 Count 1 of Plaintiff’s first amended complaint was for “retaliation,” which we 18 understand to mean retaliatory discharge. To state a claim for retaliatory discharge, 19 an employee is required to allege facts demonstrating [2] 1 that [he was] discharged because [he] performed acts that public policy 2 has authorized or would encourage, or because [he] refused to do 3 something required by an employer that public policy would condemn. 4 The employee[] must show a causal connection between [his] actions and 5 [his] subsequent discharge. In addition, in cases involving discharge for 6 reporting illegal activity, or “whistleblowing,” employees must show that 7 their actions furthered a public interest rather than a private one. 8 Garrity v. Overland Sheepskin Co., 1996-NMSC-032 , ¶ 15, 121 N.M. 710 , 917 P.2d 9 1382 (citations omitted). The district court dismissed this count from the original 10 complaint because it concluded that the count failed to allege any act in furtherance 11 of public interest. In its dismissal of this count as pleaded in the first amended 12 complaint, the court simply referred back to its original order of dismissal. 13 The district court’s determination that Plaintiff engaged in no act in furtherance 14 of public policy ignores the rules governing motions to dismiss and is contrary to the 15 allegations in the complaint. The district court stated that there was “no indication 16 whatsoever that . . . Plaintiff [was] going to make a complaint to an outside agency 17 about these behaviors, or that he was even making an internal complaint.” (Emphasis 18 added.) However, in his original complaint, Plaintiff alleged that he had sent a letter 19 to SMSI pointing out problems that “potentially compromise[d] the public’s interest 20 in national security.” Plaintiff reiterated this allegation in his amended complaint. 21 Three days later, Plaintiff was removed from the project he had been working on and [3] 1 was placed on paid administrative leave. Fifteen days after sending the letter, he was 2 terminated. 3 Taking the allegations as true and resolving all doubts in favor of the 4 sufficiency of the complaint, these allegations support a claim for retaliatory 5 discharge. The district court did not decide whether disclosing information potentially 6 detrimental to national security is encouraged by public policy. As SMSI does not 7 argue otherwise, we assume without deciding that it is. Plaintiff’s communication to 8 SMSI can therefore be considered to be an act in furtherance of public policy. The 9 short time between that communication and the adverse actions against him supports 10 a reasonable inference of a causal link. The facts as alleged could also support a 11 determination that Plaintiff’s actions were primarily in furtherance of a public, not a 12 purely private, purpose. Whether Plaintiff can develop evidence to support these 13 allegations is a question for the fact finder. 14 SMSI contends that Plaintiff’s complaint is foreclosed by the district court’s 15 determination that SMSI was already aware of the alleged misconduct. We are not 16 persuaded. The district court’s reading of the original complaint is strained and 17 contrary to our standard. The order states that Plaintiff sent a letter “to the president 18 ‘. . . reminding him that . . .’ the behaviors for which the senior management were 19 disciplined ‘. . . are improper and potentially compromise the public’s interest in [4] 1 national security.[’]” In fact, the complaint alleged that the letter “remind[ed] him that 2 SMSI managers have security clearances as a requirement of doing business with 3 DOE, LANS, and that certain behaviors on the part of senior management . . . 4 potentially compromise the public’s interest in national security.” Viewing this in the 5 light most favorable to sufficiency, Plaintiff was drawing SMSI’s attention to the 6 ramifications of management’s actions on national security. Additionally, the court 7 reasoned that the “As you are aware” language from Plaintiff’s letter to SMSI showed 8 that Plaintiff knew he was not conveying new information to SMSI. The district court 9 took the quote out of context. The letter actually said that “As you are aware, because 10 [SMSI] senior managers at issue have security clearances . . ., some of this behavior 11 is decidedly not proper and potentially compromises the public’s interest in national 12 security.” The letters can be reasonably interpreted to indicate that Plaintiff was only 13 reminding SMSI that their employees had security clearances as a prelude to his 14 complaint. When the complaint is read in the light most favorable to its sufficiency, 15 as our standard requires, it is reasonable to construe it to allege that Plaintiff acted in 16 furtherance of a public policy. Finally, SMSI cites no authority, and we are aware of 17 none, that would render Plaintiff’s communication ineffective if SMSI was already 18 aware of the information in his complaint. See In re Adoption of Doe, 100 N.M. 764 , 19 765, 676 P.2d 1329, 1330 (1984). We therefore reverse the dismissal of Count 1. [5] 1 B. Count 2: Breach of Contract 2 Count 2 of the first amended complaint alleged a breach of contract. The 3 district court interpreted this count as being based on two theories: (1) that Plaintiff’s 4 at-will status was modified when he was placed on paid administrative overhead, and 5 (2) that the discrimination and harassment policy altered Plaintiff’s at-will status. 6 The district court dismissed this count on both theories. 7 Generally, an employment contract for an indefinite period is terminable by 8 either party at any time for any or no reason. See Hartbarger v. Frank Paxton Co., [9] 115 N.M. 665, 668 , 857 P.2d 776, 779 (1993). However, a contract may explicitly 10 provide otherwise. See id. Additionally, a restriction on an employer’s ability to 11 discharge an employee may be implied when the employer’s actions are sufficient to 12 give the employee a reasonable expectation that termination will be for good cause 13 only. See id. at 672 , 857 P.2d at 783 . 14 Plaintiff failed to state a claim for breach of an express contract. He argues that 15 an alleged promise to keep him on administrative overhead from September 16 to 16 October 3 created an express contract. Specifically, he alleged that SMSI promised 17 that if there was “no direct billable opportunity identified [by October 3,]” Plaintiff’s 18 employment would be terminated. Notably, Plaintiff has not alleged that SMSI 19 promised not to terminate him. To the contrary, he has alleged a promise to terminate [6] 1 him unless he found new work within a two-week period. From the circumstances, 2 these facts can only reasonably be read to indicate that, far from trying to protect 3 Plaintiff’s job until October 3, SMSI was actually preparing to terminate him. 4 Plaintiff has also failed to state a claim for breach of an implied employment 5 contract. As we understand it, Plaintiff’s claim for breach of an implied contract is 6 based on a draft policy for handling employee claims of harassment and the manner 7 in which SMSI had addressed previous allegations of discrimination and harassment. 8 Plaintiff argues that, together, SMSI’s conduct and the draft policy led him to form a 9 reasonable expectation “as to the degree and nature of any expected process, 10 procedure[,] and discipline.” Plaintiff contends that “his demotion, re[]assignment, 11 reduction in salary, SMSI’s failure to investigate[,] and other acts and omissions 12 breached his implied contract of employment.” 13 The circumstances as alleged do not support a reasonable belief that SMSI’s 14 ability to terminate employees was in any way restricted. Plaintiff acknowledges that 15 the draft discrimination and harassment policy had been distributed only for purposes 16 of review. He is careful at all times to qualify that the policy was a “draft” policy, and 17 he does not allege that at any point prior to his termination the policy was adopted. 18 He also does not allege that SMSI was required to adhere to the draft policy prior to [7] 1 termination of employees or that the policy in any other way limited SMSI’s ability 2 to terminate employees at will. 3 Even if an implied contract existed, Plaintiff does not argue that it was breached 4 by his termination. The cause of action for breach of an implied employment contract 5 “applies only to . . . the employer’s unabridged right to terminate [an] employee.” 6 Hartbarger, 115 N.M. at 672 , 857 P.2d at 783 . Accordingly, the implied cause of 7 action could not apply to “his demotion, re[]assignment, reduction in salary, [or] 8 SMSI’s failure to investigate.” Furthermore, Plaintiff does not argue that he was 9 terminated for harassment or discrimination, but instead that SMSI failed to 10 investigate allegations made against him. Even under our deferential standard, these 11 allegations are insufficient to state a claim for breach of an implied employment 12 contract. We affirm dismissal of Count 2. 13 C. Count 3: Breach of the Implied Covenant of Good Faith and Fair Dealing 14 Count 3 of Plaintiff’s complaint claimed that SMSI breached the implied 15 covenant of good faith and fair dealing. As Plaintiff acknowledges, “no such 16 covenant exists if the employment relationship is at-will.” See Silva v. Am. Fed’n of 17 State, Cnty. & Mun. Employees, 2001-NMSC-038, ¶ 10 , 131 N.M. 364 , 37 P.3d 81 . 18 As we have held that Plaintiff did not allege facts that would support a claim of breach 19 of an express or implied employment contract, his employment was at-will. He [8] 1 therefore has no cause of action for breach of the implied covenant of good faith and 2 fair dealing. [9] 1 D. Count 4: Tortious Interference 2 Count 4 of Plaintiff’s complaint is for tortious interference with prospective or 3 existing contractual relations. Interference with prospective contracts and with 4 existing contracts are separate claims, Guest v. Berardinelli, 2008-NMCA-144, ¶ 32 , [5] 145 N.M. 186 , 195 P.3d 353 , and we therefore address them separately. 6 To state a claim for intentional interference with an existing contractual 7 relation, Plaintiff was required to allege that (1) SMSI had knowledge of a contract 8 between Plaintiff and H&P, Inc.; (2) performance of the contract was refused; (3) 9 SMSI played an active and substantial part in causing Plaintiff to lose the benefits of 10 the contract; (4) damages flowed from the breached contract; and (5) SMSI induced 11 the breach without justification or privilege. Additionally, Plaintiff must allege that 12 SMSI interfered either through improper means or improper motive. Id. 13 Plaintiff alleged that he entered into a contract with H&P to perform services 14 for H&P on the CMRR project. Performance of this contract was contingent on 15 Plaintiff “being able to work things out with SMSI.” Plaintiff indicated that he had 16 discussed with his supervisor the possibility of working on the CMRR project through 17 H&P. Plaintiff also alleged that SMSI met with CMRR and that, as a result, CMRR 18 forbid Plaintiff to participate in the CMRR project through H&P. Although poorly 19 pleaded, we believe that Plaintiff has also alleged an improper motive—retaliation for [10] 1 his comments to SMSI’s president about the behavior of senior management. These 2 allegations are sufficient to overcome the low barrier of a motion to dismiss. 3 We see no indication in the pleadings that any prospective contract existed. 4 However, a contract to be an at-will employee is treated as a prospective contract. See 5 Zarr v. Wash. Tru Solutions, LLC, 2009-NMCA-050, ¶ 17 , 146 N.M. 274 , 208 P.3d 6 919. To state a claim for intentional interference with prospective contractual 7 relations, Plaintiff was required to allege that SMSI damaged him “by either (1) 8 inducing or otherwise causing [H&P] not to enter into or continue a prospective 9 relation with [him] or (2) preventing [him] from acquiring or continuing a prospective 10 relation with [H&P].” Guest, 2008-NMCA-144, ¶ 32 . To the extent that Plaintiff’s 11 alleged contract with H&P was for at-will employment, the allegations that support 12 his claim for intentional interference with an existing contract are also sufficient, when 13 taken as true, to state a claim for intentional interference with a prospective 14 contractual relation. We therefore reverse the dismissal of Count 4 as to both the 15 express and prospective contract claims. [11] 1 E. Count 5: Prima Facie Tort 2 Count 5 of Plaintiff’s complaint, pleaded in the alternative, was for prima facie 3 tort. To state a claim for prima facie tort, Plaintiff was required to allege “1. An 4 intentional, lawful act by [SMSI]; 2. An intent to injure the [P]laintiff; 3. Injury to 5 [P]laintiff; and 4. [A lack] of justification or insufficient justification for [SMSI’s] 6 acts.” Schmitz v. Smentowski, 109 N.M. 386, 394 , 785 P.2d 726, 734 (1990). Any of 7 the allegations we have identified to support reversal of the above counts are also 8 sufficient to state a claim for prima facie tort as an alternative theory. Accordingly, 9 we reverse the dismissal of Count 5. 10 CONCLUSION 11 For the foregoing reasons, we reverse the district court’s order dismissing 12 Counts one, four, and five. We affirm the order as to the dismissal of Counts two and 13 three and remand for further proceedings consistent with this Opinion. 14 IT IS SO ORDERED. [15] 16 MICHAEL D. BUSTAMANTE, Judge [12] 1 WE CONCUR: [2] 3 CELIA FOY CASTILLO, Chief Judge [4] 5 JONATHAN B. SUTIN, Judge