Dowling, B. v. Pennsylvania Psychiatric Inst.,etal ( 2015 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
BRIAN DOWLING, IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
PENNSYLVANIA PSYCHIATRIC
INSTITUTE, MICHAEL J. FELICE, AND
WANDA GEESEY,
Appellees No. 473 MDA 2014
Appeal from the Order Entered March 4, 2014
In the Court of Common Pleas of Dauphin County
Civil Division at No(s): 2012-CV-10599-CV
BEFORE: BOWES, OTT, and STABILE, JJ.
MEMORANDUM BY BOWES, J.*: FILED JUNE 08, 2015
Brian Dowling appeals from the March 4, 2014 order sustaining a
demurrer filed by Appellees Pennsylvania Psychiatric Institute (“PPI”),
Michael J. Felice, and Wanda Geesey, and dismissing this action. We
reverse.
Mr. Dowling averred the following in his first amended complaint. In
2008, Dowling was hired as the Director of Finance for defendant PPI and
routinely received exceptional or above-average performance evaluations
* This case was reassigned to this author on April 28, 2015.
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from his supervisors. During certain periods, Dowling served as the de facto
Chief Financial Officer (“CFO”).
On September 13, 2010, Dowling interviewed defendant Felice for the
position of CFO. Dowling did not recommend Felice for the position,
concluding that he lacked appropriate interpersonal skills and experience in
two different business areas. Felice nevertheless was hired in 2011 for the
CFO position, and Dowling thereafter trained him.
Felice initially had a positive relationship with Dowling but grew to
resent him as PPI employees continued to seek assistance from Dowling. As
his relationship with Dowling deteriorated, Felice became close with
defendant Geesey, Director of Human Resources for PPI. Geesey disliked
Dowling due to events occurring in 2012.1
1
Specifically, Dowling averred the following. Another PPI employee, R.L.
a/k/a C.L., underwent sex reassignment surgery. In March 2012, shortly
before R.L. was to return to work, Dowling told PPI personnel that he
believed that R.L. should not continue to work with children. R.L., prior to
the operation, worked in the children's unit. Geesey was angered by these
remarks since she thought that Dowling’s objection to R.L.’s assignment to
engage with children arose from R.L.’s gender change. Dowling’s concerns
were actually based upon the fact that R.L. had been accused of sexually
assaulting a former patient who was a minor child.
Since civil litigation accusing R.L. of sex assault against the child was
pending, Dowling suggested that PPI assign R.L. to the adult unit upon R.L.’s
return. PPI continued R.L.’s assignment in the children’s unit, and Dowling
was reprimanded for harassment. Geesey did not believe that Dowling was
sufficiently punished by PPI.
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In 2012, PPI hired an interim Chief Executive Officer and retained MSA
Executive Search ("MSA"), an executive search practice, to find a permanent
CEO. Geesey was appointed by PPI as one of the members of the search
committee and was the only member of the search committee who worked
for PPI. Jane Groves, an Executive Vice President and Senior Advisor for
MSA, subsequently met with PPI personnel, including Dowling, to discuss the
search process. Groves encouraged Dowling to submit his resume for the
position. At that time, Groves told Dowling that “his submission would be
kept confidential, such that no one at PPI would know that Dowling applied
for the job, with the exception of the search committee.” Complaint,
7/11/13, at ¶ 22. On “July 6, 2012, in reliance upon Groves’ express
representation, Dowling submitted his resume for the CEO position.” Id. at
¶ 23.
On Friday July 13, 2012, Groves informed Dowling that she was going
to speak to the search committee about Dowling’s interest in becoming CEO.
On Monday July 16, 2012, Felice, in Geesey’s presence, terminated
Dowling’s employment. When Dowling asked why he was being dismissed,
Felice and Geesey refused to answer. Instead, Dowling was told that July
16, 2012 was his last day at PPI, that security was waiting for him, and that
he was not permitted to retrieve any personal items in his office. Dowling
then spoke with interim CEO William B. Daly, who told Dowling that it was
Felice’s decision to fire Dowling. Daly refused to provide further information.
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Dowling’s personnel file did not contain a reason for his termination
from employment. In firing Dowling, Felice and Geesey failed to abide by
the four-step termination process contained in PPI’s employee handbook.
Those steps included a verbal warning, a written warning, suspension, and
then termination. Dowling had been earning $75,000 a year when he was
fired.
Dowling set forth a breach of contract claim against PPI. He alleged
that PPI breached its employment agreement as well as a “confidentiality
agreement with Dowling,” which caused him damages in excess of the
jurisdictional amount requiring arbitration. Id. at ¶ 32. Dowling also pled a
promissory estoppel cause of action against PPI as follows: 1) “PPI by way of
its agent, made a promise to Dowling that, except for the search committee,
no one at PPI would know if he submitted his resume for the CEO position,
which PPI should have reasonably expected to induce action on his part;” 2)
“Dowling submitted his resume in reliance on this promise;” and 3)
“Injustice can be avoided only by enforcing this promise, because, but-for
this promise, Dowling would still be employed by PPI.” Id. at ¶¶ 35-37.
As to defendants Felice and Geesey, Dowling set forth a claim for
intentional interference with a contractual relationship. Dowling maintained
that he had an employment agreement and/or confidentiality agreement
with PPI; that Geesey, with an intent to harm Dowling, interfered with both
contracts; and that Felice and Geesey, without justification or privilege and
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with actual malice toward Dowling, interfered with these contracts. The
actions by Felice and Geesey were contrary to PPI’s interests and caused
Dowling harm by precipitating his termination of employment with PPI. Id.
at ¶ 43.
The three defendants demurred to the complaint, which was
dismissed. The trial court concluded that Dowling could not maintain an
action for breach of an employment agreement because employment is at
will under Pennsylvania law. As to the causes of action for breach of the
confidentiality agreement contained in the complaint, the trial court ruled
that Dowling had failed to set forth the terms of a contract regarding
confidentiality and that, if he had, it was not supported by consideration. It
also ruled that the promissory estoppel claim could not survive since it was
premised solely upon breach of an employment agreement, which was at-
will and freely terminable by PPI. In this appeal from dismissal of his
complaint Dowling raises these issues:
I. Whether it was an error of law for the Court of Common
Pleas to sustain Appellees' Preliminary Objections in the nature
of a Demurrer as to Appellant's claim for Breach of Contract,
where the contract sued upon was not an employment contract,
but a confidentiality agreement formed orally between Appellant
Dowling and Appellee Pennsylvania Psychiatric Institute's agent,
Jane Groves?
II. Whether the Court of Common Pleas committed an
error of law by sustaining Appellees Preliminary Objections in the
nature of a Demurrer as to Appellant's claim of Promissory
Estoppel, where Appellant has alleged that Appellee
Pennsylvania Psychiatric Institute's agent, Jane Groves,
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promised Appellant confidentiality, where Appellant justifiably
relied on this promise of confidentiality, and harm resulted
therefrom?
III. Whether the Court of Common Pleas committed an
error of law by sustaining Appellees' Preliminary Objections in
the nature of a Demurrer as to Appellant's Interference with
Contractual Relations claim, where Appellant alleged that
Appellees Geesey and Felice interfered with the oral
confidentiality agreement he had entered into with the
Pennsylvania Psychiatric Institute's agent, Jane Groves.
Appellant’s brief at 4.
Dowling has abandoned any claim that PPI breached an employment
agreement between Dowling and PPI. His positions are that there was a
valid, orally-formed confidentiality agreement that was breached by PPI, that
he pled a valid promissory estoppel claim against PPI based upon violation of
the confidentiality agreement, and that his intentional interference with
contractual relations claim was viable since he averred that, for personal
reasons and contrary to PPI’s interests, Felice and Geesey interfered with the
intact employment relationship that Dowling had with PPI.
In light of the arguments raised on appeal, we note that PPI’s brief is
not responsive to them. It insists that the breach of contract cause of action
is not viable since it was premised upon a breach of its employment
contract, which was at will, with Dowling and that a promissory estoppel
claim will not lie when the underlying contract is an at-will employment
contract. It also maintains that the intentional interference with a
contractual relationship cause of action cannot proceed since Geesey and
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Felice, as managers of PPI, had the authority to terminate Dowling on behalf
of PPI, and cannot be held accountable for exercising that authority.
Since a trial court’s “decision to grant or deny a demurrer involves a
matter of law, our standard for reviewing that decision is plenary.” Little
Mountain Community Ass'n, Inc. v. Southern Columbia Corp., 92 A.3d
1191, 1195 (Pa.Super. 2014). Preliminary objections in the nature of a
demurrer can be granted only “when the law is clear that a plaintiff is not
entitled to recovery based on the facts alleged in the complaint.” Id.
Significantly, “when considering a motion for a demurrer, the trial court
must accept as true all well-pleaded material facts set forth in the complaint
and all inferences fairly deducible from those facts.” Id.
On appeal, Dowling maintains that MSA’s employee Groves agreed to
hold in confidence the fact that he submitted his resume for the CEO
position. He continues that this confidentiality agreement was binding on
PPI since it was entered by PPI’s agent, MSA, and that it was supported by
consideration as it conferred a benefit on MSA and PPI.
Specifically, Dowling argues that MSA was an executive search
organization and its job was to “seek out candidates for the job on behalf of
PPI and to get any identified candidate to submit their name for
consideration. Thus, MSA was furthering PPI’s interests when Groves asked
Appellant Dowling to apply for the CEO position.” Appellant’s brief at 13.
Dowling submitted his resume based upon Grove’s promise that it would
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remain confidential within the search committee. Thus, the bargained-for
exchange of “Dowling’s candidacy for PPI’s promise of confidentiality served
as the consideration for [the] oral contract.” Id. The breach of this contract
occurred when Geesey disclosed Dowling’s candidacy to Felice. Id. at 14.
Felice fired Dowling to protect his own position and in contravention to the
interests of PPI, thereby causing Dowling harm. Dowling notes that, since
his causes of action are premised entirely upon breach of the confidentiality
agreement, the law regarding at-will employment in Pennsylvania is
inapplicable.
We first find that Dowling sufficiently pled that PPI was bound by a
confidentiality agreement entered by MSA. As we noted in Petrina v. Allied
Glove Corp., 46 A.3d 795, 799 (Pa.Super. 2012) (citations omitted),
A corporation is a creature of legal fiction, which can act or
“speak” only through its officers, directors, or other agents.
Where a representative for a corporation acts within the scope of
his or her employment or agency, the representative and the
corporation are one and the same entity, and the acts performed
are binding on the corporate principal.
The allegations contained in the complaint, which we must accept as true,
were that PPI entered into an agreement with MSA to have MSA form the
search committee for PPI’s new CEO. These facts were sufficient to aver
that MSA was PPI’s agent for purposes of obtaining a new CEO for PPI.
MSA’s employee, Groves, promised Dowling that, if he submitted his
resume, that fact would remain confidential among the members of the
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search committee. This promise was made during the course and within the
scope of the agency agreement between MSA and PPI and was binding on
PPI.
Additionally, contrary to the trial court, we conclude that Dowling
sufficiently pled a breach of contract claim. “To successfully maintain a cause
of action for breach of contract the plaintiff must establish: (1) the existence
of a contract, including its essential terms, (2) a breach of a duty imposed
by the contract, and (3) resultant damages.” Albert v. Erie Ins.
Exchange, 65 A.3d 923, 928 (Pa.Super. 2013) (quoting McShea v. City of
Philadelphia, 995 A.2d 334, 340 (Pa. 2010)). The essential terms of this
contract were that Dowling would agree to be considered a candidate for the
CEO position, and, in exchange, Groves would ensure that his candidacy
would remain a secret among the members of the search committee.
Furthermore, contrary to the trial court’s conclusion, Dowling set forth
a sufficient basis for a finding that the contract was supported by
consideration. “The requirement of consideration as an essential element of
a contract is nothing more than a requirement that there be a bargained for
exchange. Consideration confers a benefit upon the promisor or causes a
detriment to the promisee.” Cobaugh v. Klick-Lewis, Inc., 561 A.2d
1248, 1250 (Pa.Super. 1989) (citations omitted). Dowling alleged that a
benefit was conferred upon MSA/PPI in that they were seeking a new CEO
and sought as many qualified candidates as possible. In pursuit of that goal,
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Dowling continues, Groves solicited Dowling’s candidacy. Dowling maintains
that a benefit was thereby conferred upon MSA/PPI in entering into the
confidentiality agreement since it obtained another candidate, whom Groves
considered qualified since she solicited Dowling’s resume for the CEO
position. Thus, the averments in the complaint are sufficient to set forth
that there was consideration for the oral contract.
Additionally, we conclude that the inference created by the pled facts
support that the confidentiality agreement was breached by Geesey, a
member of the search committee. The averments were as follows. Dowling
submitted his resume to Groves, and she said on a Friday that she would
discuss Dowling’s candidacy with the search committee. Geesey was a
member of that committee, was the only PPI employee who was a member
of the search committee, Geesey had a close personal relationship with
Felice, and both Geesey and Felice disliked Dowling. Dowling was fired by
Felice the next working day after Groves said that she would contact the
search committee about Dowling’s candidacy. Dowling was fired in the
presence of Geesey. The termination was not performed in conformity with
the requirements for terminating an employee, as outlined in PPI’s
handbook. Additionally, there was no reason given for the termination
verbally, in Dowling’s personnel file, or in the written termination letter.
Dowling’s job performance reviews did not indicate grounds for termination.
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The clear inference created by these averments is that Geesey, in
breach of the oral confidentiality agreement entered by PPI, immediately
informed her friend Felice about Dowling’s candidacy for CEO. Due to
Felice’s and Geesey’s personal animosity against Dowling, Felice was fearful
for his job and fired Dowling. It is settled, as noted supra, that a plaintiff is
entitled to all inferences fairly deducible from the alleged facts. The facts
under consideration herein therefore are sufficient to support an inference
that Geesey breached the confidentiality agreement. Dowling also pled
resultant damages in that he averred that he lost a job where he earned
$75,000 annually once Felice, in violation of the confidentiality agreement,
discovered that Dowling was seeking the CEO position.
The learned dissent would affirm the grant of a demurrer on the basis
that Dowling failed to specifically allege: 1) when Groves told the search
committee about Dowling’s application; and 2) Geesey, a member of search
committee, violated the confidentiality agreement that he entered with
Groves. Dissenting Memorandum at 4, 5.
However, Dowling was required to verify the facts set forth in the
complaint and could not make any allegation that was not actually within his
knowledge. He knew only the following: when Groves told him that she
would tell the search committee about his proposed candidacy; he was fired
the working day after Groves told him that she was going to speak with that
committee; Geesey was a member of the search committee and was present
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when he was fired; and no reason was given for his termination. Since
Dowling could not aver and verify facts that were not known to him, we
must enforce with vigor the mandate to accord him all fairly reasonable
inferences from the facts that were within his knowledge.
The dissent’s conclusion is not persuasive for another reason. Dowling
has not had the opportunity to conduct discovery because the trial court
dismissed his case at the most preliminary stage of the lawsuit. Dowling
should, at the very least, be accorded the opportunity to depose the
individuals who were involved in these events before his action is dismissed.
Through the conduct of depositions and dissemination of interrogatories and
requests for the production of documents, Dowling may well prove his case.
Dowling next argues that he set forth a valid claim of promissory
estoppel. If there is no enforceable agreement between the parties in that
the agreement is not supported by consideration, “the doctrine of
promissory estoppel is invoked to avoid injustice by making enforceable a
promise made by one party to the other when the promisee relies on the
promise and therefore changes his position to his own detriment.” Crouse
v. Cyclops Industries, 745 A.2d 606, 610 (Pa. 2000) (citing Restatement
(Second) Contracts § 90).
In order to maintain an action in promissory estoppel, the
aggrieved party must show that 1) the promisor made a promise
that he should have reasonably expected to induce action or
forbearance on the part of the promisee; 2) the promisee
actually took action or refrained from taking action in reliance on
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the promise; and 3) injustice can be avoided only by enforcing
the promise. As promissory estoppel is invoked in order to avoid
injustice, it permits an equitable remedy to a contract dispute.
Id.
Herein, according to the complaint, the following occurred. Groves
made a promise to keep Dowling’s CEO candidacy confidential, and she
should reasonably have expected to induce him to submit his resume based
upon that promise. Dowling gave Groves his resume in reliance on the
promise that this action would remain confidential, known only to the
members of the search committee. The first working day after Groves said
that she would report Dowling’s candidacy to the search committee
containing Geesey, Dowling was fired in Geesey’s presence by Felice without
reason and in violation of the procedures in the corporate handbook. At the
time, Dowling had been employed for four years at PPI and consistently
received good performance ratings. An injustice would thereby result if the
promise made by Groves was not enforced because breach of that
representation caused Dowling to be terminated. If these allegations are
accepted as true, which they must be, we conclude that they are sufficient
to set forth a promissory estoppel cause of action.
As to Felice and Geesey, we concur with Dowling’s position that he
pled a cause of action for intentional interference with contractual relations.
“[A]n action for intentional interference with the performance of a contract
lies even though the contract interfered with is terminable at the will of the
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parties.” Yaindl v. Ingersoll–Rand Co. Std. Pump–Aldrich Div., 422
A.2d 611, 619 n.6 (Pa.Super. 1980), abrogation on other grounds
recognized in Yetter v. Ward Trucking Corp., 585 A.2d 1022 (Pa.Super.
1991). There are four elements to an intentional interference with a
contractual relationship claim:
(1) the existence of a contractual relationship between the
complainant and a third party; (2) an intent on the part of the
defendant to harm the plaintiff by interfering with that
contractual relationship; (3) the absence of privilege or
justification on the part of the defendant; and (4) the
occasioning of actual damage as a result of defendant's
conduct.
Foster v. UPMC South Side Hosp., 2 A.3d 655, 665-66 (Pa.Super. 2010).
To satisfy the third element, the plaintiff must provide proof that the
defendant's actions were improper. Id.
The complaint avers the existence of an employment contract between
Dowling and PPI. As articulated in Yaindl, supra, an action for intentional
interference with a contractual relationship is viable even if the contract with
which the defendant interfered was terminable at the will of the parties.
Dowling further set forth the following. Felice and Geesey sought to
harm Dowling by terminating the contract between Dowling and PPI and
improperly interfered with that contact. Dowling was performing his job in
an exemplary manner and was not in danger of being fired. Felice
terminated Dowling solely due to the existence of personal malice against
Dowling by Felice and his friend Geesey. Dowling alleged specifically that
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the firing was contrary to PPI’s interest. Geesey and Felice were not
privileged or justified in interfering with Dowling’s employment contract with
PPI since they did so due to unwarranted ill-will and malice rather than
based upon his job performance and to advance PPI’s welfare. These factual
assertions were sufficient to plead a cause of action for intentional
interference with a contractual relationship.
In this respect, we do not agree with PPI’s position that Felice and
Geesey were acting on behalf of PPI and cannot be held accountable for
intentional interference with the employment contract between PPI and
Dowling. See Adams v. USAir, Inc., 652 A.2d 329, 330 (Pa.Super. 1994)
(emphasis added) (“managerial employees acting within the scope of
their employment are not third persons for purposes of satisfying the
elements required to maintain an action for interference with contractual
relations”). According to the averments in the complaint, which we must
accept as true, Felice and Geesey were not acting on behalf of PPI in
connection with the firing; they were acting contrary to PPI’s benefit. As
outlined in the complaint, Dowling’s performance provided no rationale for
the firing, the termination was not conducted in accordance with PPI’s own
handbook, and no reason was ever offered for the termination. Instead, in
firing Dowling, Felice and Geesey were acting solely for personal reasons and
based upon their personal animus toward Dowling. These averments were
sufficient to overcome a demurrer in connection with this cause of action.
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Order reversed. Case remanded. Jurisdiction relinquished.
Judge Stabile joins this memorandum.
Judge Ott files a dissenting memorandum.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 6/8/2015
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