Harvey v. Regional Health Network , 2018 SD 3 ( 2018 )

#28200-a-GAS
2018 S.D. 3
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
SHIRLEY HARVEY and
DON HARVEY, Plaintiffs and Appellants,
v.
REGIONAL HEALTH NETWORK,
INC.; REGIONAL HEALTH, INC.;
RAPID CITY REGIONAL HOSPITAL,
INC.; TIMOTHY SUGHRUE; DALE
GISI; SHERRY BEA SMITH; and
KATHEYRN L. SHOCKEY, Defendants and Appellees.
****
APPEAL FROM THE CIRCUIT COURT OF
THE SEVENTH JUDICIAL CIRCUIT
PENNINGTON COUNTY, SOUTH DAKOTA
****
THE HONORABLE JANE WIPF PFEIFLE
Judge
****
GARY D. JENSEN
BRETT A. POPPEN of
Beardsley, Jensen & Lee,
Prof, LLC
Rapid City, South Dakota Attorneys for plaintiffs and
appellants.
JEFFREY G. HURD
SARAH BARON HOUY of
Bangs, McCullen, Butler,
Foye & Simmons, LLP
Rapid City, South Dakota Attorneys for defendants and
appellees.
.
****
ARGUED NOVEMBER 7, 2017
OPINION FILED 01/03/18
#28200
SEVERSON, Justice
[¶1.] The director of a senior care facility terminated an employee after two
coworkers reported that the employee had slapped and secluded a resident in the
facility. The employee maintained that the accusations were false and invoked the
employer’s grievance procedure. The employer sustained its decision to terminate
the employee. Thereafter, the employee brought suit against the employer and
certain management staff for slander, malicious prosecution, intentional infliction
of emotional distress, punitive damages, wrongful discharge, negligent infliction of
emotional distress, loss of consortium, and breach of contract. The employer and
management staff moved for summary judgment on all causes of action, which
motion the circuit court granted. The employee appeals. We affirm.
Background
[¶2.] Regional Health, Inc. is the parent company of Regional Health
Network, Inc. Regional Network operates multiple acute care and senior care
facilities, including Golden Ridge Regional Senior Care located in Lead, South
Dakota. Shirley Harvey worked as a personal care attendant at Golden Ridge from
March 2001 until her termination on June 8, 2012. While at Golden Ridge, Harvey
received regular performance evaluations. Those evaluations praised Harvey on
her care of the residents and her work ethic. For example, her March 2012
evaluation noted that she goes above and beyond for residents; is flexible and
willing to help whenever needed; is willing to help find improvements, keeps the
director informed in a timely manner, supportive of change, and encourages others
about change; and ensures resident safety and provides appropriate care.
-1-
#28200
[¶3.] Harvey’s personnel file also included conference statements
summarizing meetings between Harvey and management. In 2011, one statement
indicated that Harvey was not supportive of coworkers, that coworkers did not want
to work with Harvey due to her attitude toward them, and that coworkers are afraid
to work with Harvey. In her deposition, Harvey explained that the coworker
referred to in the conference statements was likely Jessica Strong Edstrom. Harvey
did not approve of Edstrom’s rough demeanor, the fact that Edstrom did not pull
her weight at work, and that Edstrom smoked cigarettes, drank energy drinks, and
took several breaks.
[¶4.] It is undisputed that because of Harvey’s interactions with her peers,
Harvey received coaching sessions about her communication style and coworker
support. In February 2012, Harvey received a corrective action for her continued
negative interactions with coworkers. Then in April 2012, Harvey received another
corrective action after she and Edstrom had a heated dispute related to a resident
needing help. The dispute resulted in Harvey and Edstrom being required to meet
with Kathe Shockey and Joelle Meade. Shockey was the human resources director
at Golden Ridge and at the Lead-Deadwood Regional Hospital. Joelle Meade was
the director at Golden Ridge. Harvey and Edstrom relayed their versions of the
incident to Shockey and Meade. Meade told them they were both at fault. Shockey
commented about the repeated issues related to Harvey’s communication style.
When Edstrom expressed that she was afraid to address anything with Harvey,
Harvey laughed out loud and made light of the issue. Shockey informed Harvey
-2-
#28200
that she was being inappropriate, and later when Harvey did not change her
behavior, Shockey told Harvey that she was acting unprofessional.
[¶5.] In response to Shockey’s comments to Harvey during the April 2012
incident, Harvey filed a grievance against Shockey. She alleged that Shockey had
humiliated and degraded her at the April 2012 meeting. But the grievance policy
did not apply to Harvey’s issue. Therefore, Harvey was informed that her grievance
would not be processed. She, however, was also told that she could issue a
complaint against Shockey. Harvey did not issue a complaint.
[¶6.] Harvey also struggled interacting with coworker Joelle Ellenbecker.
According to Harvey, Ellenbecker was angry at her because Harvey and her
husband had complained to Meade and Shockey about several employees’ tattoos,
piercings, and baggy pants. After Harvey complained, Golden Ridge enforced
stricter grooming standards, which required Ellenbecker to take out her nose
piercing.
[¶7.] On June 1, 2012, Ellenbecker and Edstrom reported to Meade that
they saw Harvey slap a resident on the hand and mouth and put that same resident
in the resident’s room for approximately ten minutes after an incident involving
food. Harvey now claims Ellenbecker and Edstrom made the reports only after
Meade solicited them in response to a conversation Meade had overheard about
certain employees needing to be fired. Regardless, it is undisputed that the resident
allegedly slapped and secluded by Harvey has dementia and is known to be difficult
to work with. Harvey often cared for the resident and had been known for being
able to calm the resident.
-3-
#28200
[¶8.] It is also undisputed that neither Edstrom nor Ellenbecker reported
the alleged abuse immediately. When Edstrom and Ellenbecker reported the
alleged abuse to Meade, they claimed that other residents and other employees
were present when the incident occurred. Meade asked Edstrom and Ellenbecker to
provide written statements, which statements they provided on June 4, 2012.
[¶9.] In response to Edstrom’s and Ellenbecker’s verbal reports, Meade
contacted Shockey and Rita Stacey. Stacey was the director of nursing. They
discussed the allegations. According to Shockey, Meade recommended that Harvey
be terminated. Meade later testified that she did not recall making that
recommendation without first speaking to Harvey. Meade, however, conceded that
during her investigation of the allegations, she did not ask other employees if they
had witnessed Harvey mistreat any residents; nor did she question any residents.
[¶10.] On June 4, Shockey sent an email to Dale Gisi. Gisi was the vice
president of human resources for Regional Health, Inc. Shockey informed Gisi of
the allegations against Harvey and noted that Meade had not visited with Harvey.
Shockey told Gisi that Meade was “requesting termination” of Harvey.
[¶11.] On June 5, Meade called the Department of Health to ask how to make
a report of abuse. Meade had not yet met with Harvey. An email within the
Department’s files documenting the call indicated that Meade reported to the
Department that “a CNA had been verbal with and slapp[ed] a resident with
dementia[.]” The email further indicated that Meade said she had been told by
Regional’s legal department and lawyers that she was to contact the Department.
She explained that she had waited to call until the reporting employee had provided
-4-
#28200
a written statement. Meade informed the Department that she would send her
report regarding the allegations as well as the employee’s statement reporting the
alleged abuse by the CNA. Meade later testified that she did not send the
Department Edstrom’s and Ellenbecker’s statements or her report regarding the
abuse within five days as required by ARSD 44:70:01:07. But she claimed that she
initially reported the allegations of abuse because she was required to do so under
mandatory reporting laws.
[¶12.] On June 6, Meade and Shockey met with Harvey. Harvey denied
slapping the resident. She admitted that she tapped the resident’s hand and that
she had taken the resident to the resident’s room because the resident was using
bad language. Following the interview with Harvey, Meade opined that she
believed the accusations were true. Meade later testified that she relied on her
recent observations of a change in behavior between Harvey and the resident.
According to Meade, Harvey showed less tolerance for and increased frustration
with the resident. Meade also relied on the allegations, especially by Ellenbecker
whom she found credible. Meade recommended that Harvey be terminated.
[¶13.] According to Meade, prior to terminating Harvey, she met with
Shockey, Rita, Sherry Bea Smith, and Regional’s legal department. Smith was the
administrator of the Golden Living Center. Gisi also participated. Meade later
explained that the group reviewed the information gathered and made a
“consensual decision” to terminate Harvey.
[¶14.] On June 8, Meade presented Harvey a corrective action form
indicating her termination for: “Gross misconduct—seclusion of a resident
-5-
#28200
involuntarily in their room as a result of misbehavior. Reported by multiple sources
that employee slapped the hands and mouth of resident.” Termination was based
on “progressive discipline actions.” Harvey refused to sign the corrective action
form and the form indicating her change in employee status.
[¶15.] On June 19, 2012, Harvey submitted an employee grievance form. She
described her grievance as:
On 6-6-12, it was read to me 2 pages of allegations with no
chance to defend myself. I was refused copies of these
allegations. These allegations were so serious as to terminate
my position on 6-8-12. Why were they not brought before me
after each incident was supposedly to have happened?
She described the “[d]esired [s]olution” as:
1) I want and need my name cleared. I have been doing care-
giving since 1999; please see attached paper. 2) I would like all
people involved with these allegations and[sic] dealt with
accordingly. 3) I wish for the residents’ care, safety, and
security; without them being afraid of reprimand.
On June 25, Meade reviewed Harvey’s grievance and replied in writing:
I have reviewed the grievance that was submitted to me by
Shirley Harvey. Legal counsel was consulted regarding the
matter at hand. Legal counsel supports the decision for
terminating and indicated there is validity in the action taken
based on reported incidences. The identity of the witnesses will
not be revealed to the former employee.
Meade later testified that she made the decision to sustain the termination based
on her recent investigation of the accusations.
[¶16.] Shockey mailed Meade’s reply to Harvey. Shockey’s letter informed
Harvey that “[t]his completes Step One of the grievance procedure” and that Harvey
could appeal to Step Two. On June 28, 2012, Harvey appealed Meade’s decision.
Harvey wrote that the allegations never happened and that she never did and never
-6-
#28200
would hurt or cause harm to residents. She questioned why she was being refused
the names of her accusers. She requested her “record to be cleared of all these false
accusations and fabricated lies.”
[¶17.] On July 2, 2012, Smith emailed Shockey that she had reviewed
Harvey’s appeal. Smith explained that “[i]t is imperative that there is a ‘no
tolerance’ approach to any level of resident abuse, be it physical, seclusion, or
intimidation.” Smith supported Harvey’s termination “[b]ased on eye witness
accounts of both inappropriate physical contact and imposed seclusion[.]” Smith
later testified that she did not independently identify or interview witnesses. She
relied on the documents obtained and her discussions with Shockey and Meade
during the investigation.
[¶18.] On July 6, 2012, Harvey appealed Smith’s decision. She denied that
the abuse ever happened. She called the “so called witnesses to the incidents”
vicious. She claimed that there are “many, many good, credible and reputable folks”
willing to testify against the false accusations. Harvey named no particular
witness. Harvey also detailed her awards as caregiver of the year. She encouraged
those involved to review every angle of the case. She explained that she loved what
she did and the people she took care of. She challenged the credibility of the alleged
accuser, listing the failings of that employee as compared to Harvey’s quality work
ethic. Harvey asked for the situation to be rectified.
[¶19.] On August 17, 2012, Timothy Sughrue, the CEO of Regional Health
Network, and Gisi issued a letter to Harvey denying her appeal. Glenn Bryant as
Regional Health’s chief operations officer was required to participate in the
-7-
#28200
grievance procedure. He later testified that he recommended to Gisi and Sughrue
that Harvey’s appeal be denied. Bryant claimed he relied on his discussions with
Shockey and Smith regarding the allegations. Sughrue claimed that he relied on
the information that had been provided to him and also considered his discussions
with Bryant, Smith, and the legal department. Gisi testified that he based his
decision on his conversations with Shockey and Smith and the information he
obtained about Harvey’s termination from Shockey. Shockey had provided Gisi the
documentation from the investigation that outlined the accusers’ allegations and
contained timelines related to the allegations. Shockey informed Gisi that she
supported Harvey’s termination. Shockey referred to the information obtained by
Edstrom, Ellenbecker, Meade, and Harvey. She recognized that Edstrom and
Harvey “had conflict” in the past and that both Harvey and Edstrom were “in the
final steps of corrective action.” Shockey remarked that of the employees
documenting the incident, Ellenbecker was high performing and trustworthy.
Shockey opined that “the accounts documented . . . are valid and have accurately
represented actual, witnessed incidents.”
[¶20.] In the letter denying her appeal, Sughrue and Gisi informed Harvey
that they found that she inappropriately secluded a resident and slapped the hand
and mouth of a resident. They also noted Harvey’s previous corrective actions in
February and April 2012. According to the letter, Harvey’s termination “follows
Regional Health’s progressive discipline process as outlined in policy.” Sughrue and
Gisi informed Harvey that her termination was “appropriate based on the
investigation and conclusion regarding gross misconduct.”
-8-
#28200
[¶21.] After her termination, Harvey sought unemployment benefits.
Regional Health objected based on Harvey’s gross misconduct. After a hearing
during which Shockey, Meade, Ellenbecker, Edstrom, and Harvey testified, the
administrative law judge for the Department of Labor found that Harvey’s conduct
did not rise to the level of gross misconduct necessary to disqualify her from
receiving unemployment benefits. Regional Health appealed, and the circuit court
affirmed the Department’s decision.
[¶22.] Also following her termination, Harvey was prosecuted for felony elder
abuse. In August 2012, the Department of Health had submitted Meade’s June
report of possible elder abuse to the Lawrence County States Attorney’s Office for
investigation. The Lawrence County State’s Attorney’s Office forwarded the
Department’s information to the Lead Police Department. Officer Jeremiah
Fredricksen investigated the allegations. He interviewed Ellenbecker, Harvey,
Meade, Edstrom, and others and issued a report. Based on his investigation,
Officer Fredricksen did not believe that Harvey’s actions were abusive in nature.
He recommended that no further action be taken.
[¶23.] State’s Attorney John Fitzgerald disagreed with Officer Fredricksen’s
recommendation. He convened a grand jury, which indicted Harvey on charges of
felony elder abuse. Harvey’s case proceeded to a jury trial. At the conclusion of the
State’s case, Harvey moved for a judgment of acquittal. The circuit court granted
her motion, concluding that “the State has failed to establish any injury at all.”
[¶24.] In December 2013, Harvey and her husband brought suit against
Regional Health Network, Inc., Regional Health, Inc., Rapid City Regional Hospital,
-9-
#28200
Inc., Timothy Sughrue, Dale Gisi, Sherry Bea Smith, and Katheryn Shockey. We
will collectively refer to the defendants as “Regional Health” unless reference to a
particular defendant is necessary. Harvey and her husband alleged causes of action
for slander, intentional infliction of emotional distress, malicious prosecution,
wrongful termination, negligent infliction of emotional distress, breach of contract,
loss of consortium, and punitive damages. After several years of discovery, Harvey
moved for partial summary judgment on her claim for breach of contract. Regional
Health moved for summary judgment on all causes of action asserted by Harvey
and her husband. The circuit court held a hearing on March 15, 2017. The court
denied Harvey’s motion and granted Regional Health summary judgment in all
respects.
[¶25.] Harvey appeals, challenging the circuit court’s decision granting
Regional Health summary judgment. She argues that disputed issues of material
fact exist on each cause of action.
Standard of Review
[¶26.] As we recently stated in State v. Wayfair Inc.:
We review a summary judgment de novo. Heitmann v. Am.
Fam. Mut. Ins. Co., 2016 S.D. 51, ¶ 8, 883 N.W.2d 506, 508
(citing Ass Kickin Ranch, LLC v. N. Star Mut. Ins. Co., 2012
S.D. 73, ¶ 7, 822 N.W.2d 724, 726). We determine whether there
are any “genuine issues of material fact” in the case and
“whether the law was correctly applied.” Id. (quoting Ass Kickin
Ranch, 2012 S.D. 73, ¶ 6, 822 N.W.2d at 726). If there are no
genuine issues of material fact, “our ‘review is limited to
determining whether the [circuit] court correctly applied the
law.’” Id.
2017 S.D. 56, ¶ 13, 901 N.W.2d 754, 760. In reviewing whether there is a genuine
issue of material fact, “[w]e view the evidence ‘most favorably to the nonmoving
-10-
#28200
party and reasonable doubts should be resolved against the moving party.’”
Dowling Family P’ship v. Midland Farms, LLC, 2015 S.D. 50, ¶ 9, 865 N.W.2d 854,
859 (quoting Peters v. Great W. Bank, Inc., 2015 S.D. 4, ¶ 5, 859 N.W.2d 618, 621).
Analysis
1. Slander
[¶27.] Slander is defined as: “a false and unprivileged publication, other than
libel, which: (1) Charges any person with crime, . . . (3) Tends directly to injure him
in respect to his office, profession, trade, or business, . . . or (4) By natural
consequence, causes actual damage.” SDCL 20-11-4. For purposes of summary
judgment, we assume that the publications against Harvey were false. We note
that Harvey did not bring suit against the persons accusing her of slapping and
secluding a resident, namely Edstrom and Ellenbecker. Nonetheless, according to
Harvey, Regional Health slandered her when it published the false accusations to
the Department of Health, the victim resident’s husband, Officer Fredricksen, and
internally. Harvey concedes that Regional Health’s communications were
conditionally privileged under SDCL 20-11-5(3) because the Department, the
husband, law enforcement, and the company are “person[s] interested therein[.]”
But she asserts that Regional Health, Sughrue, Gisi, Smith, and Shockey lost their
privilege when they had no reasonable grounds for believing the accusations to be
true and acted in reckless disregard of the truth.
[¶28.] Under SDCL 20-11-5(3), “[a] privileged communication is one made:
. . . [i]n a communication, without malice, to a person interested therein, by one who
is also interested, or by one who stands in such relation to the person interested as
-11-
#28200
to afford a reasonable ground for supposing the motive for the communication
innocent, or who is requested by the person interested to give the information[.]”
(Emphasis added.) The statute further provides that “malice is not inferred from
the communication or publication.” Id. Instead, “there must be a specific showing
of malice which requires proof of reckless disregard for the truth or actual malice.”
Petersen v. Dacy, 1996 S.D. 72, ¶ 8, 550 N.W.2d 91, 93; accord Schwaiger v. Avera
Queen of Peace Health Servs., 2006 S.D. 44, ¶ 10, 714 N.W.2d 874, 878. The
plaintiff bears the burden of proving malice sufficient to destroy the privilege.
Kieser v. Southeast Prop., 1997 S.D. 87, ¶ 15, 566 N.W.2d 833, 838. Actual malice
can be proved with evidence that the defendant entertained serious doubts as to the
truth of his or her publications. Id. But “[r]eckless conduct is not measured by
whether a reasonably prudent man would have published, or would have
investigated before publishing.” Dacy, 1996 S.D. 72, ¶ 8, 550 N.W.2d at 93 (quoting
Janklow v. Viking Press, 459 N.W.2d 415, 419 (S.D. 1990), overruled on other
grounds by Paint Brush Corp., Parts Brush Div. v. Neu, 1999 S.D. 120, 599 N.W.2d
384). “[T]he evidence must permit the conclusion that the defendant actually had a
high degree of awareness of probable falsity.” Janklow, 459 N.W.2d at 419 (citing
Garrison v. Louisiana, 379 U.S. 64, 85 S. Ct. 209, 13 L. Ed. 2d 125 (1964)).
[¶29.] Harvey contends that the circuit court erroneously required her to
prove malice by clear and convincing evidence. She directs this Court to the circuit
court’s statement: “I do not find clear and convincing evidence of malice here[.]” In
Harvey’s view, although one must prove malice by clear and convincing evidence to
-12-
#28200
pursue a claim for punitive damages, Harvey needed only to identify a genuine
issue of material fact regarding malice to pursue her slander claim.
[¶30.] From our review of the entire transcript from the hearing, the court
applied the correct burden of proof. The court and the attorneys for both parties
repeatedly used the phrase “clear and convincing evidence” when discussing malice.
But the court at the outset recognized the controlling standard. It referred to Dacy,
and said, “A specific showing of malice is required for purposes of raising a genuine
issue of material fact.” See 1996 S.D. 72, ¶ 8, 550 N.W.2d at 93. The court then
granted Regional Health’s motion for summary judgment, concluding that Harvey
failed to make a specific showing that any of the defendants engaged in reckless
disregard for the truth or that they entertained serious doubts regarding the truth
of the communications.
[¶31.] Harvey next claims that the court erred in granting summary
judgment because disputed issues of material fact exist on the question whether
Regional Health had no reasonable grounds to believe the accusations. Harvey
relies on the evidence that she had a heated, contentious relationship with Edstrom
and Ellenbecker, that Regional Health knew Edstrom was “worthless and had no
business working [at Golden Ridge],” that Edstrom had been repeatedly disciplined,
that both Edstrom and Ellenbecker reported the allegations after the fact, and that
Regional Health did not ask other staff or residents about the allegations. Harvey
also claims that disputed issues of material fact exist on whether Regional Health
acted in reckless disregard for the truth because—had Regional Health not
-13-
#28200
deliberately avoided learning the truth—it would have learned from employees
Karin Tyler and Heidi Covell that the allegations were false.
[¶32.] Viewing Harvey’s evidence in a light most favorable to her, she has not
met her burden of proof. Because malice cannot be inferred, Harvey must make a
specific showing these defendants—Regional Health, Sughrue, Gisi, Smith, and
Shockey—at the times they made the publications, did not believe that Harvey had
slapped and secluded the resident or had no reasonable grounds for believing the
accusations were true. We recognize that the Department of Labor ultimately
concluded that Harvey did not engage in gross misconduct and that the circuit court
acquitted Harvey of the charges of felony elder abuse. But those legal
determinations do not establish that Regional Health, Sughrue, Gisi, Smith, and
Shockey did not believe and had no reasonable grounds for believing—at the time
they published the accusations—that Harvey had slapped and secluded a resident.
See Dacy, 1996 S.D. 72, ¶ 14, 550 N.W.2d at 94. As the circuit court recognized at
the summary judgment hearing, Harvey conflates whether the incidents actually
happened with whether the defendants believed they actually happened.
[¶33.] Even so, Harvey insists that Regional Health, Sughrue, Gisi, Smith,
and Shockey acted in reckless disregard for the truth because they did not—as
Harvey claims—“walk down the hallway to talk with staff and residents” and
Sughrue, Gisi, Smith, and Shockey did not promptly interview staff and residents
as part of a legitimate investigation. But “it is settled that proof of a reckless
disregard for the truth establishing malice requires more than proof of a defendant’s
failure to investigate.” Peterson v. City of Mitchell, 499 N.W.2d 911, 916 (S.D.
-14-
#28200
1993). Likewise, we do not measure the defendants’ conduct “by whether a
reasonably prudent man would have published, or would have investigated before
publishing.” Dacy, 1996 S.D. 72, ¶ 8, 550 N.W.2d at 93 (quoting Janklow, 459
N.W.2d at 419); accord Schwaiger, 2006 S.D. 44, ¶ 18, 714 N.W.2d at 882.
Therefore, even if we accept that these defendants were unreasonable and negligent
in their investigation of the accusations against Harvey, that does not create a
dispute of material fact on the question whether Regional Health, Sughrue, Gisi,
Smith, and Shockey entertained serious doubts as to the truth of the publications or
acted in reckless disregard for the truth.
[¶34.] The record reveals that at the time these defendants made the
publications, they knew that two employees had made independent accusations
against Harvey. They knew one employee had a negative work history and that
issues existed between Harvey and that employee. They also knew, via Meade’s
report, that Meade tended to believe the accusations based on her personal
observations of Harvey’s increased frustration with the resident. Meade also
reported that she believed Ellenbecker to be credible and noted that Ellenbecker’s
work history was positive. Gisi, Shockey, Smith, and Sughrue were also aware that
Harvey admitted to tapping (not slapping) and to taking the resident to the
resident’s room. Because Harvey directs us to no evidence that Regional Health,
Sughrue, Gisi, Smith, and Shockey in fact entertained serious doubts as to the truth
of the publications or that they had no reasonable grounds for believing the
accusations at the time of publications, the circuit court did not err when it
concluded that Harvey failed to meet her burden of proof.
-15-
#28200
[¶35.] Alternatively, Harvey claims that the court erred when it granted
summary judgment because a disputed issue of material fact exists on the question
whether Regional Health can be held directly liable for the conduct of Ellenbecker,
Edstrom, and Meade under the doctrine of respondeat superior. Harvey claims that
Ellenbecker, Edstrom, and Meade made intentionally slanderous publications at
least in part to further their employer’s business. She relies on the fact that state
law and Regional Health policies require employees to report abuse against
residents. Thus, in Harvey’s view, even though Edstrom and Ellenbecker had
personal motivation to slander Harvey, they did not act purely for personal motive.
[¶36.] Harvey directs this Court to no authority to support her claim that
Regional Health may be held directly liable for Edstrom’s and Ellenbecker’s
slanderous communications based on the doctrine of respondeat superior. Harvey
quotes the two-prong test restated in Kirlin v. Halverson, 2008 S.D. 107, 758
N.W.2d 436, and Bernie v. Catholic Diocese of Sioux Falls, 2012 S.D. 63, ¶ 9, 821
N.W.2d 232, 237. That test examines “whether the purpose of the act was to serve
the principal and whether the act was foreseeable.” Bernie, 2012 S.D. 63, ¶ 9, 821
N.W.2d at 237. Harvey notes that whether an employee’s wrongful acts were
within the scope of employment is a question of fact for a jury, citing Kirlin, 2008
S.D. 107, ¶ 16, 758 N.W.2d at 445. She then emphasizes that a jury must
determine whether Edstrom’s and Ellenbecker’s acts were done at least in part to
further Regional Health’s business. In her view, because state law and Regional
Health policies require employees to report abuse, Edstrom’s and Ellenbecker’s
-16-
#28200
reports of abuse, even though false, at least in part carried out the objective of their
employment.
[¶37.] Generally whether an intentional tort is within the scope of
employment is a question of fact, but there are occasions “where [an agent’s]
digression from duty is so clear-cut that the disposition of the case becomes a
matter of law.” Bernie, 2012 S.D. 63, ¶ 13, 821 N.W.2d at 239 (quoting Doe v.
Norwich Roman Catholic Diocesan Corp., 268 F. Supp. 2d 139, 142 (D. Conn. 2003)).
Therefore, we must determine if Edstrom’s and Ellenbecker’s false reports of abuse
against a nursing home resident were “wholly motivated by [their] personal
interests.” Id. ¶ 9. This is because “[i]f the agent acted with intent to serve solely
his own interest, the act was not within the scope of employment and the principal
is not liable.” Id.
[¶38.] Here, we cannot say that making a false report of abuse against a
coworker was part of Edstrom’s or Ellenbecker’s duties or within Regional Health’s
business. Indeed, Harvey claims that Edstrom and Ellenbecker falsely reported the
abuse because they wanted to get Harvey fired. To conclude otherwise would mean
that any employee’s false report against another employee for wrongdoing would
expose the employer to liability for slander. Because Edstrom’s and Ellenbecker’s
false reports of abuse were solely within their own interests, we need not consider
whether falsely reporting abuse was foreseeable.
[¶39.] In regard to Meade, Harvey claims that Regional Health should be
held liable because Meade “solicited the accusations and reported them to the
[Department of Health]”; she “selectively investigated the accusations and then
-17-
#28200
stated them as her own to” the Department and the police department; and because
Regional Health admitted that Meade was acting within the scope of her
employment when she investigated the allegations of abuse, terminated Harvey,
and handled Harvey’s termination grievance. But it is undisputed that Meade did
not make the accusations against Harvey. On the contrary, Meade’s actions, for
which Harvey seeks to make Regional Health liable, relate not to the intentional
tort of slander (because Meade did not make the accusations) but to Meade’s
negligent investigation of the accusations. Further, Harvey only offers the
conclusory statement that Meade adopted the accusations as her own and
thereafter slandered Harvey. Because Meade did not make the accusations and
because a failure to investigate does not establish malice necessary to prove a
reckless disregard for the truth, there is no issue of material fact in dispute on the
question whether Regional Health can be held liable for Meade’s acts.
[¶40.] The circuit court properly granted summary judgment against
Harvey’s slander claim.
2. Intentional Infliction of Emotional Distress
[¶41.] To survive Regional Health’s motion for summary judgment on her
claim for intentional infliction of emotional distress, Harvey must “demonstrate
that there was an issue of material fact as to each of the elements” of the claim. Fix
v. First State Bank of Roscoe, 2011 S.D. 80, ¶ 19, 807 N.W.2d 612, 618. The
elements are:
(1) an act by the defendant amounting to extreme and
outrageous conduct; (2) intent on the part of the defendant to
cause the plaintiff severe emotional distress; (3) the defendant’s
conduct was the cause in-fact of plaintiff’s distress; and (4) the
-18-
#28200
plaintiff suffered an extreme disabling emotional response to
defendant’s conduct.
Anderson v. First Century Fed. Credit Union, 2007 S.D. 65, ¶ 38, 738 N.W.2d 40, 51-
52. Because Harvey’s evidence viewed in a light most favorable to her does not
identify extreme and outrageous conduct by Regional Health, we address only the
first element.
[¶42.] In Harris v. Jefferson Partners, L.P., we explained:
The question whether the defendant’s conduct was extreme and
outrageous is initially for the trial court. Richardson v. East
River Elec. Power Coop., 531 N.W.2d 23, 27 (S.D. 1995).
Comment d to the Restatement (Second) of Torts § 46 (1965)
explains that recovery is permissible only where the actor’s
conduct was “extreme and outrageous.” Proof under this tort
must exceed a rigorous benchmark. The conduct necessary to
form intentional infliction of emotional distress must be “so
outrageous in character, and so extreme in degree, as to go
beyond all possible bounds of decency, and be regarded as
atrocious, and utterly intolerable in a civilized community.” Id.
See Stene v. State Farm Mut. Auto. Ins. Co., 1998 S.D. 95, ¶ 32,
583 N.W.2d 399, 404; Tibke v. McDougall, 479 N.W.2d 898, 906-
07 (S.D. 1992). Liability for this tort will “not extend to mere
insults, indignities, threats, annoyances, petty oppression, or
other trivialities.” Restatement (Second) of Torts § 46 cmt. d.
2002 S.D. 132, ¶ 11, 653 N.W.2d 496, 500.
[¶43.] Harvey argues that “[f]alsely accusing a caregiver of slapping and
secluding a disabled nursing home resident—felony elder abuse—goes far beyond
insult or triviality.” She relies on the fact Regional Health submitted its mandatory
five-day investigative report to the Department four months late and
misrepresented in that report that Regional Health had interviewed residents. She
also highlights that the Department of Labor concluded that she did not engage in
gross misconduct, and the circuit court held that Harvey did not commit felony elder
-19-
#28200
abuse. In Harvey’s view, Regional Health violated corporate policies, state laws,
and state administrative rules.
[¶44.] Although Harvey ultimately prevailed in her unemployment claim and
was acquitted of felony charges, we cannot say that Regional Health’s conduct
surrounding Harvey’s termination was “so extreme in degree as to go beyond all
possible bounds of decency, and to be regarded as atrocious, and utterly intolerable
in a civilized community.” Tibke, 479 N.W.2d at 907 (quoting Restatement (Second)
of Torts § 46 cmt. d). We also recognize that the investigation into the accusations
against Harvey before reporting to the Department of Health was at best
inadequate and conclusory. In fact, the manner in which Golden Ridge handled the
report of abuse violated the Department of Health’s rules and resulted in an
investigation by the Department into Golden Ridge’s policies. It is further troubling
that Meade immediately recommended termination when at least one of Harvey’s
accusers arguably had a motive to get Harvey fired. But on the evidence before us,
we cannot say that reasonable minds could differ in finding that Regional Health’s
conduct was not extreme and outrageous. The court did not err when it granted
Regional Health summary judgment on Harvey’s IIED claim.
3. Malicious Prosecution
[¶45.] A claim for malicious prosecution requires the plaintiff to prove:
(1) The commencement or continuance of an original criminal or
civil judicial proceeding; (2) its legal causation by the present
defendant against plaintiff, who was defendant in the original
proceeding; (3) its bona fide termination in favor of the present
plaintiff; (4) the absence of probable cause for such proceeding;
(5) the presence of malice therein; (6) damage conforming to
legal standards resulting to plaintiff.
-20-
#28200
Danielson v. Hess, 2011 S.D. 82, ¶ 9, 807 N.W.2d 113, 115-16 (quoting Heib v.
Lehrkamp, 2005 S.D. 98, ¶ 21 n.8, 704 N.W.2d 875, 884 n.8). Because Harvey has
not demonstrated a material issue of fact in dispute on the question of legal
causation, we address only that element.
[¶46.] Regional Health must be “the proximate and efficient cause of
maliciously putting the law in motion.” Id. ¶ 10 (quoting Leisinger v. Jacobson,
2002 S.D. 108, ¶ 14, 651 N.W.2d 693, 698). If “the state’s attorney or an officer of
the law pushes the prosecution forward, that defendant is not liable.” Id. Here,
State’s Attorney John Fitzgerald pushed the prosecution forward. Yes, the
Department referred the matter for criminal investigation because Regional Health
reported the alleged abuse, and the Department arguably did not have full and
complete reports from Regional Health. But when Officer Fredricksen
independently investigated the allegations, Regional Health provided full and
complete reports. Harvey does not dispute this. In fact, Officer Fredricksen armed
with a more complete picture than that given to the Department recommended that
Harvey not be prosecuted. Despite the recommendation, State’s Attorney
Fitzgerald convened a grand jury to seek an indictment against Harvey. Because
State’s Attorney Fitzgerald’s independent decision to present it to a grand jury and
the grand jury’s decision to indict legally caused Harvey’s prosecution, Regional
Health cannot be liable for malicious prosecution. The circuit court did not err
when it granted Regional Health summary judgment on Harvey’s claim for
malicious prosecution.
-21-
#28200
4. Punitive Damages
[¶47.] There exists no independent cause of action for punitive damages.
Rather, to pursue her claim for punitive damages, Harvey was first required to
make a preliminary showing of a reasonable basis to support that punitive damages
may be proper. Stabler v. First State Bank of Roscoe, 2015 S.D. 44, ¶ 37, 865
N.W.2d 466, 484. This requires clear and convincing evidence that there is a
reasonable basis to believe that there had been willful, wanton, or malicious
conduct on the part of the defendant. Id. Because we previously concluded that the
circuit court did not err when it summarily dismissed Harvey’s intentional tort
claims, the court likewise properly dismissed Harvey’s request to submit a claim for
punitive damages.
5. Wrongful Termination
[¶48.] Harvey concedes that she is an at-will employee. But she argues that
the whistleblower exception to the at-will doctrine applies in this case. She asserts
that she was a whistleblower because she complained to her supervisors about
“unsafe staff performance.” According to Harvey, the whistleblower protection is
broad, and this Court should recognize the public policy in protecting employees
that ensure our elderly have safe care.
[¶49.] It is well settled that “a cause of action for wrongful discharge arises
on behalf of an employee where an employer’s motivation for termination
contravenes a clear mandate of public policy.” Dahl v. Combined Ins. Co., 2001 S.D.
12, ¶ 8, 621 N.W.2d 163, 166 (quoting Niesent v. Homestake Min. Co., 505 N.W.2d
781, 783 (S.D. 1993)). But “[t]o state a cause of action under this exception, the
-22-
#28200
employee must plead and prove that a substantial public policy may have been
violated.” Id. ¶ 11 (quoting Niesent, 505 N.W.2d at 783).
[¶50.] Here, Harvey does not request this Court to adopt a new public policy
exception; nor does she suggest that she complained of unlawful or criminal
conduct. Rather, she requests that this Court expand the whistleblower exception
beyond the language in Dahl to include her complaints about coworkers and a
recommendation that security cameras be purchased. This we will not do. Harvey
has not identified a substantial public policy that may have been violated. And to
conclude otherwise would eviscerate the at-will doctrine in favor of judicial
management of employee/management relations.
6. Negligent Infliction of Emotional Distress
[¶51.] In Blaha v. Stuard, we recognized that the first element in a claim of
negligent infliction of emotional distress is that the defendant engaged in negligent
conduct. 2002 S.D. 19, ¶ 19, 640 N.W.2d 85, 90. For negligence to exist, there must
be a breach of a legal duty imposed by statute or common law. Id. Here, Harvey
claims that Regional Health owed a duty to her “as they would anybody else, to
investigate and have a basis for accusing her of felony elder abuse.” But Regional
Health did not accuse Harvey of felony elder abuse.
[¶52.] Nonetheless, Harvey also relies on SDCL 20-11-1, which provides that
“[e]very person is obligated to refrain from infringing upon the right of others not to
be defamed.” The statements Harvey claims to be defamatory were made by
Edstrom and Ellenbecker; yet Harvey did not bring suit against them. She brought
suit against Regional Health, Sughrue, Gisi, Smith, and Shockey. Because we
-23-
#28200
affirmed the circuit court’s decision to grant summary judgment dismissing
Harvey’s slander claim, and Harvey has not identified a legal duty imposed by
statute or common law, the circuit court properly granted Regional Health
summary judgment on Harvey’s claim of negligent infliction of emotional distress.
7. Breach of Contract
[¶53.] Harvey argues that the circuit court erred when it held that Regional
Health’s Fair Treatment/Grievance Procedure did not create an enforceable
contract. She recognizes that Regional Health specifically reserved the right to
terminate at will in the employee handbook. But she claims that Regional Health’s
separate Fair Treatment/Grievance Procedure policy did not use similar reserving
language and therefore created a contract requiring Regional Health to investigate
the decision to terminate her. Harvey then claims that Regional Health breached
the contract when it failed to follow the mandates of the grievance procedure and
investigate the employment decision at each step in the grievance process.
[¶54.] In response, Regional Health argues that the grievance procedure did
not change Harvey’s at-will employment. It relies on this Court’s holding in
Butterfield v. Citibank of S.D., 437 N.W.2d 857 (S.D. 1989). In that case, we
recognized two possible ways language in an employee handbook could indicate that
the employer surrendered the statutory power to terminate employees at will. Id.
at 859. One way exists when the employee handbook explicitly states that
discharge will occur for cause only or uses other comparable language. Id.
Alternatively, “a ‘for cause only’ agreement may be implied where the handbook
contains a detailed list of exclusive grounds for employee discipline or discharge
-24-
#28200
and, a mandatory and specific procedure which the employer agrees to follow prior
to any employee’s termination.” Id.
[¶55.] The existence of a contract is a question of law. Humble v. Wyant,
2014 S.D. 4, ¶ 40, 843 N.W.2d 334, 343. From our review, nothing in Regional
Health’s employee handbook explicitly surrendered its right to terminate Harvey at
will. Likewise, nothing in the language of the employee handbook supports an
implied agreement to terminate for cause only. The handbook contains no detailed
list of exclusive grounds for employee discipline or discharge or mandatory
procedure Regional Health agreed to follow prior to terminating Harvey.
[¶56.] But Harvey distinguishes Butterfield because, in her view, Butterfield
addressed only whether a pre-termination agreement could alter the employment
relationship. She claims that this case concerns a post-termination agreement
separate from the employee handbook and asks this Court to follow Zavadil v. Alcoa
Extrusions, Inc., 363 F. Supp. 2d 1187 (D.S.D. 2005), and Meyers v. Am. States Ins.
Co., 926 F. Supp. 904 (D.S.D. 1996). In Zavadil, the District Court for South
Dakota concluded that the employer’s peer review policy and procedures created an
enforceable contract for an employee discharged at-will. 363 F. Supp. 2d at 1193.
In the district court’s view, the specific language of the peer review policy and the
described procedures contained no disclaimers against waiving the at-will doctrine
and instead gave the employees the option of using a review process to review
“termination actions to ensure that a policy or practice was applied properly and
consistently[.]” Id.; accord Meyers, 926 F. Supp. at 913 (reduction in staff section
within manual created mandatory procedures the employer agreed to follow).
-25-
#28200
[¶57.] Regional Health’s employee handbook contains a section titled, “Fair
Treatment/Grievance Procedure” and identifies Regional Health’s desire “that the
employee work with their supervisor through an informal communication process of
discussion, information gathering, and resolution with the supervisor.” If, however,
“an issue or complaint cannot be resolved with the supervisor after the information
communication process and the concern deals with the application or interpretation
of a Regional Health policy, the employee can exercise a formal grievance
procedure.” The employee handbook refers the employee to the Fair
Treatment/Grievance Procedure policy. That policy indicates that Regional Health
“provides employees with an opportunity . . . to appeal management decisions
regarding the dispensing of discipline, without fear of retaliation, through a fair
treatment/grievance resolution procedure.” Termination of employment is an
appropriate complaint/grievance under the policy. “The grievance procedure is
considered an internal affair.” The policy then directs the employee to utilize a
four-step process. Each step of the process identifies the persons tasked with
reviewing or investigating the complaint and the steps the employee can take upon
dissatisfaction at any given level. The fourth level denotes the final decision of the
employer.
[¶58.] Although the language of the grievance policy gives Harvey the right to
appeal Regional Health’s decision to terminate her, it does not restrict Regional
Health from terminating her for no cause and without notice. Also, unlike the
policy examined in Zavadil, the grievance policy here does not mandate that
Regional Health review termination actions to ensure its policies and procedures
-26-
#28200
were applied properly and consistently. Rather, the Fair Treatment/Grievance
Procedure policy creates self-imposed policies to address a broad range of matters
related to employee dissatisfaction when management interprets or applies a work-
related policy.
[¶59.] We also note that the Fair Treatment/Grievance Procedure policy is
part of the employee handbook. The employee handbook incorporates it and
provides that Regional Health’s publications “are not to be regarded as a promise to
provide specific terms and conditions of employment.” Regional Health repeatedly
and explicitly reserved its right to terminate at will in its handbook. It informed
employees that “Regional Health does not guarantee continued employment to
employees and reserves the right to terminate or lay off employees for any lawful
reason with or without notice.” In regard to corrective action and discipline, the
handbook informs employees that Regional Health “can skip steps and terminate an
employee even if no previous warning was provided” and that it “reserves the
absolute right to determine what action or conduct will result in discipline, and
what level of discipline will be assessed[.]” From our review of the grievance
procedure in relation to the employee handbook, we conclude that Regional Health
did not intend to bind itself to a different employment relationship and surrender
its statutory right to terminate Harvey at will. The circuit court did not err when it
granted Regional Health summary judgment on Harvey’s breach of contract claim.
Conclusion
[¶60.] Because the circuit court did not err when it granted Regional Health
summary judgment and dismissed Harvey’s claims, we affirm.
-27-
#28200
[¶61.] GILBERTSON, Chief Justice, and ZINTER and JENSEN, Justices,
concur.
[¶62.] KERN, Justice, deeming herself disqualified, did not participate.
-28-