Kathy D. Palmore v. Linda K. Neal ( 2014 )

                                AT NASHVILLE
                                     April 23, 2014 Session
                    KATHY D. PALMORE v. LINDA K. NEAL ET AL.
                       Appeal from the Circuit Court for Wilson County
                          No. 2013-CV-253       C.L. Rogers, Judge
                     No. M2013-02153-COA-R3-CV - Filed June 12, 2014
    Former employee brought an action for retaliatory discharge and intentional interference with
    employment. The trial court dismissed the complaint pursuant to Tenn. R. Civ. P. 12.02(6).
    Having determined the complaint failed to state a claim upon which relief can be granted, we
    affirm the dismissal.
      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed
    J. M ARK R OGERS, S P. J., delivered the opinion of the Court, in which F RANK G. C LEMENT,
    J R., P.J., M.S., and A NDY D. B ENNETT, J., joined.
    Robert D. MacPherson, Lebanon, Tennessee, for the appellant, Kathy D. Palmore.
    Jeffrey R. Thompson, Knoxville, Tennessee, for the appellees, Linda K. Neal and Wilson
    County, Tennessee.
             Kathy D. Palmore (“Plaintiff”), a former employee of the Wilson County Circuit
    Court Clerk’s Office, filed this action against Linda K. Neal (“Ms. Neal”), the Clerk of
    Circuit Court for Wilson County, and Wilson County, Tennessee (“the County”). Plaintiff
    asserts claims against Ms. Neal, in her official capacity, and the County for statutory
    retaliatory discharge, pursuant to Tennessee Code Annotated § 50-1-304, (the
    “Whistleblower Act”); she additionally asserts a second claim against Ms. Neal in her
    individual capacity for intentional interference with employment for the wrongful
    procurement of Plaintiff’s termination of employment.
            Plaintiff’s employment was terminated on July 20, 2012.1 She alleges that prior to her
    termination, Ms. Neal determined that child support payments the Clerk’s Office had
    received in trust for remittance pursuant to court orders had been erroneously remitted to the
    wrong parties and, as a consequence, the intended recipients had not received the court
    ordered child support. Ms. Neal believed that Plaintiff, and possibly other deputy clerks, were
    responsible for the errors. As alleged in the complaint, Plaintiff states that Ms. Neal insisted
    she reimburse the Clerk’s Office in the amount of the funds erroneously disbursed, that being
    $1,124.91, instead of Ms. Neal attempting to recover the funds from the party who received
    the erroneous disbursements. Plaintiff also alleges that Ms. Neal told her she would be fired
    if she did not reimburse the Clerk’s Office as requested. The complaint goes on to state that
    Plaintiff refused to remit the funds and, on July 20, 2012, Plaintiff’s employment with the
    Circuit Court Clerk’s Office was terminated by Ms. Neal due to Plaintiff’s refusal to pay the
    sums as demanded.
           As a direct result of the termination of her employment, Plaintiff states that she
    suffered, and will in the future suffer, lost earnings and benefits, severe anxiety, humiliation,
    and emotional distress. Based upon the aforesaid, Plaintiff sought compensatory and punitive
    damages, reasonable attorney’s fees and costs.
           The defendants filed a joint motion to dismiss the complaint pursuant to Tenn. R. Civ.
    P. 12.06(6) asserting the complaint failed to state a claim for which relief could be granted.
          A hearing on the joint motion to dismiss was held on August 14, 2013; an Order of
    Dismissal was entered on August 22, 2013.2 The order states:
            The Complaint on its face does not contain nor meet the legal requirement
            under the Whistleblower statute of illegal activity. There is no reference to a
            violation of the criminal codes or regulations, state or federal. An employee
            that negligently causes loss or damage to her employer is liable for such loss
            of damage. [Ms. Neal] is obligated by the duties of her elected office to
            manage and control Deputy Clerks and the functions of her office. Therefore
             Because this appeal arises from a Tenn. R. Civ. P. 12.02(6) dismissal for failure to state a claim
    upon which relief could be granted, we assume the factual allegations stated in the complaint are true. Webb
    v. Nashville Area Habitat for Humanity, Inc., 
    346 S.W.3d 422
    , 426 (Tenn. 2011). Thus, the material facts
    referenced in this opinion come from the complaint.
             Judge Clara Byrd entered an Order of Recusal on May 7, 2013. Presiding Judge David E. Durham
    entered an Order of Interchange on May 16, 2013, in which Circuit Court Judge C.L. Rogers was assigned
    the case and he presided over the proceedings at issue.
           as a matter of law the Complaint on its face does not assert the appropriate
           claim for violation of the Tennessee Whistleblower Act, no illegal activity.
           [Ms. Neal] acted within her duties and authority of termination. No other
           person outside the employment relationship acted in this matter. The
           Complaint on its face makes out no intentional interference with employment
           as defined under the law.
    The trial court found that Plaintiff failed to state a claim for which relief could be granted
    under the law and dismissed the complaint.
           Thereafter, Plaintiff timely filed this appeal.
                                        S TANDARD OF R EVIEW
           The standards by which Tennessee courts are to assess a Tennessee Rule of Civil
    Procedure 12.02(6) motion to dismiss are well established. As our Supreme Court stated in
    Webb v. Nashville Area Habitat for Humanity, Inc., 
    346 S.W.3d 422
    , 426 (Tenn. 2011), “[a]
    Rule 12.02(6) motion challenges only the legal sufficiency of the complaint, not the strength
    of the plaintiff’s proof or evidence.” Id. “The resolution of a 12.02(6) motion to dismiss is
    determined by an examination of the pleadings alone.” Id.
            By filing a motion to dismiss the defendant “admits the truth of all of the relevant and
    material allegations contained in the complaint, but . . . asserts that the allegations fail to
    establish a cause of action.” Id. (citations omitted). Nonetheless, courts are not required to
    accept as true assertions that are merely legal arguments or “legal conclusions” couched as
    facts. Riggs v. Burson, 
    941 S.W.2d 44
    , 44-48 (Tenn. 1997). When a complaint is challenged
    by a Rule 12.02(6) motion, the complaint should not be dismissed for failure to state a claim
    unless it appears that the plaintiff can prove no set of facts in support of his or her claim that
    would warrant relief. Doe v. Sundquist, 
    2 S.W.3d 919
    , 922 (Tenn. 1999) (citing Riggs v.
    941 S.W.2d 44
    , 47 (Tenn. 1997)). Making such a determination is a question of law.
    Our review of a trial court’s determinations on issues of law is de novo, with no presumption
    of correctness. Id. (citing Stein v. Davidson Hotel Co., 
    945 S.W.2d 714
    , 716 (Tenn. 1997)).
                                               A NALYSIS
                                     I. R ETALIATORY D ISCHARGE
          Plaintiff asserts a cause of action for retaliatory discharge in violation of the
    Tennessee Public Protection Act (“the TPPA”), codified at Tennessee Code Annotated §
    501-1-304, often referred to as Tennessee’s “Whistleblower Act.” See, e.g., Sykes v.
    Chattanooga Hous. Auth., 
    343 S.W.3d 18
    , 24 (Tenn. 2011). The Act provides in pertinent
    part: “(b) No employee shall be discharged or terminated solely for refusing to participate in,
    or for refusing to remain silent about, illegal activities . . . . (d)(1) Any employee terminated
    in violation of subsection (b) shall have a cause of action against the employer for retaliatory
    discharge and any other damages to which the employee may be entitled.” Id. (quoting Tenn.
    Code Ann. § 50-1-304). This statute creates a narrowly crafted exception to the
    long-established common law employment-at-will doctrine, which recognizes “the
    concomitant right of either the employer or the employee to terminate the employment
    relationship at any time, for good cause, bad cause, or no cause at all, without being guilty
    of a legal wrong.” Stein v. Davidson Hotel Co., 
    945 S.W.2d 714
    , 716 (Tenn. 1997) (citing
    Harney v. Meadowbrook Nursing Center, 
    784 S.W.2d 921
    , 922 (Tenn.1990); Watson v.
    Cleveland Chair Co., 
    789 S.W.2d 538
           The four essential elements of a claim under the Whistleblower Act the plaintiff must
    prove are:
           (1)    the plaintiff was an employee of the defendant;
           (2)    the plaintiff refused to participate in or remain silent about
                  illegal activity;
           (3)    the defendant employer discharged or terminated the plaintiff’s
                  employment; and
           (4)    the defendant terminated the plaintiff's employment solely for
                  the plaintiff’s refusal to participate in or remain silent about the
                  illegal activity.
    Sykes v. Chattanooga Hous. Auth., 343 S.W.3d at 26-27 (citations omitted) (emphasis
          At issue is whether the complaint identified an illegal activity in which either
    defendant engaged; thus, we will begin our analysis with the second element.
           The Whistleblower Act defines “illegal activities” as “activities that are in violation
    of the criminal or civil code of this state or the United States or any regulation intended to
    protect the public health, safety or welfare.” Tenn. Code Ann. § 50-1-304(3). Under both the
    TPPA and common law, the “illegal activity” or violation by the employer must implicate
    important public policy concerns. Williams v. Greater Chattanooga Pub. Television Corp.,
    349 S.W.3d 501
    , 515 (Tenn. Ct. App. 2011). Accordingly, an employee must identify “an
    unambiguous constitutional, statutory or regulatory provision” as evidence of the public
    policy that the employee’s discharge violates. Gossett v. Tractor Supply Co., Inc., 320
    S.W.3d 777, 788 (Tenn. 2010) (citing Guy, 79 S.W.3d at 535 (quoting Chism, 762 S.W.2d
    at 556); Crews, 78 S.W.3d at 862.
           The trial court concluded that the complaint did not contain nor meet the legal
    requirement under the Whistleblower statute of illegal activity; the trial court stated, “there
    is no reference to a violation of the criminal codes or regulations, state or federal.” The
    court’s conclusion is based in part on the trial court’s findings stated in the Order of
    Dismissal, which read in pertinent part:
           From within the four corners of the Complaint, the facts are:
           1(a)   Plaintiff was a Deputy Clerk, formerly employed at the Circuit Court
                  Clerk’s Office, Wilson County, Tennessee.
           (b)    Defendant, Wilson County.
           (c)    Defendant, Linda K. Neal, the duly elected Circuit Court Clerk.
           2.     Plaintiff Deputy Clerk negligently caused a loss of child support monies
                  to [Ms. Neal’s] Office. Monies were paid out to the wrong individuals.
           3.     [Ms. Neal] informed Plaintiff Deputy Clerk she would be personally
           liable for causing such loss. Plaintiff Deputy Clerk refused. [Ms. Neal]
           terminated Plaintiff’s employment.
            On appeal, Plaintiff attempts to craft an illegal activity allegation based upon the
    Tennessee Governmental Tort Liability Act (“GTLA”), Tenn. Code Ann. § 29-20-101, et
    seq. Specifically, Plaintiff contends the defendant’s activities, Ms. Neal’s efforts to hold
    Plaintiff liable for the child support funds erroneously remitted, were in violation of
    Tennessee Code Annotated § 29-20-310(b), which reads: “No claim may be brought against
    an employee or judgment entered against an employee for damages for which the immunity
    of the governmental entity is removed by this chapter[.]”
           Plaintiff’s contention is based on the novel theory that no claim could be asserted
    against her personally because she was a county employee and, pursuant to Tenn. Code Ann.
    § 29-20-205, her act of remitting the child support funds to the wrong recipient removed the
    County’s immunity. Thus, relying on the holding in Drake v. Manson, 
    1999 WL 767722
    , *2
    (Tenn. Ct. App. Sept. 29, 1999), she reasons that she became immune when the County lost
    its immunity. As Plaintiff correctly notes, when the government’s immunity is removed under
    the GTLA, a corresponding immunity is conferred on the government employee, in this case
    Plaintiff. Drake, 
    1999 WL 767722
    , *2 (Tenn. Ct. App. Sept. 29, 1999) (“because when the
    immunity from suit normally enjoyed by governmental entities is removed under the
    provisions of the [GTLA] . . . a corresponding immunity is conferred upon the government
    employees whose alleged negligence gave rise to the cause of action.”).
            We agree with Plaintiff’s assertion that she would be immune from a claim, if one
    were asserted against her, for the act of erroneously remitting trust funds to the wrong party;
    however, that principle is irrelevant to the issues here for no claim has been asserted against
           We also acknowledge Plaintiff’s argument that Ms. Neal demanded that she pay the
    damages personally and, if she did not, she would be fired; however, the quid pro quo offer,
    or demand, does not constitute a claim under the GTLA. Therefore, we find Plaintiff’s
    reliance upon the GTLA, specifically Tennessee Code Annotated § 29-20-310(b) misplaced,
    as there has been no claim, no civil action filed against her as is contemplated under the
    GTLA. The statute specifically states“[n]o claim may be brought against an employee . . .
    .” Tenn. Code Ann. § 29-20-310(b) (emphases added). Plaintiff contends the term “claim”
    embraces liability distinct from that associated with litigation and should be interpreted to
    include claims against public employees leveled by their own government-entity-employer;
    however, she cites no authority for this proposition and we are not aware of any such
    authority. We therefore decline Plaintiff’s offer that we interpret the term “claim” as used in
    Tenn. Code Ann. § 29-20-310(b) to include any demand for payment.
            The foregoing considered, we affirm the trial court’s holding that Plaintiff failed to
    state a claim for statutory retaliatory discharge for which relief can be granted.
            It is well settled that an individual has a property interest in his or her labor and has
    the right to work without unjustified interference. See Forrester v. Stockstill, 
    869 S.W.2d 328
    , 330 (Tenn.1994); Ladd v. Roane Hosiery, Inc., 
    556 S.W.2d 758
    , 760 (Tenn.1977);
    Large v. Dick, 
    343 S.W.2d 693
    , 694 (Tenn.1960). One who intentionally interferes with this
    right, causing the employee to be discharged, is liable in tort for the resulting damages. Dukes
    v. Brotherhood of Painters, 
    235 S.W.2d 7
     (Tenn. 1950).
           A claim for intentional interference with employment “contemplate[s] a three-party
    relationship - the plaintiff as employee, the corporation as employer, and the defendants as
    procurers or inducers,” Nelson v. Martin, 
    958 S.W.2d 643
    , 647 (Tenn. 1997) overruled on
    other grounds Trau-Med of Am., Inc. v. Allstate Ins. Co., 
    71 S.W.3d 691
     (Tenn. 2002)
    (emphasis added). In order to recover, the plaintiff must prove that the defendant
    intentionally and without justification procured the plaintiff’s discharge from his or her
            Plaintiff alleged in the complaint that Ms. Neal, “acting with purely selfish and
    malicious motives, intentionally and unjustifiably interfered with the plaintiff’s employment
    relationship with the County by procuring her termination on the spurious ground that the
    plaintiff failed to pay the sums that Neal had demanded that the plaintiff pay.” Plaintiff relies
    on Ladd v. Roane Hosiery, Inc. to contend these allegations are sufficient to survive a Rule
    12.02(6) challenge.
            The plaintiff in Ladd alleged that a supervisor induced the corporation to terminate
    her contract of employment with the corporation. When the supervisor filed a Tenn. R. Civ.
    P. 12.02(6) motion to dismiss, the court held that the allegations that the supervisor had
    neither reason, nor excuse for doing so, and was actuated through a spirit of vindictiveness
    and malice, were sufficient to state a claim that the supervisor unlawfully and without
    justification procured the plaintiff’s discharge. Ladd, 556 S.W.2d at 760.
          The factual allegations as to Ms. Neal in the complaint at issue fail to state that Ms.
    Neal procured or induced another to terminate her employment; this is because Ms. Neal,
    who serves as the Circuit Court Clerk, is the alter ego of her employer. Plaintiff was
    employed as a deputy clerk and she served at the will of the Circuit Court Clerk, see Tenn.
    Code Ann. § 8-20-109, and Ms. Neal is the Circuit Court Clerk.
           As noted earlier, a claim for intentional interference with employment contemplates,
    inter alia, a three-party relationship; the employee, the employer, and a third party who
    procures or induces the employer to fire the employee. Nelson, 958 S.W.2d at 647. What is
    missing in the challenged complaint is a third party that was induced or procured by Ms. Neal
    to terminate Plaintiff’s employment. Ms. Neal, acting in her official capacity as the Circuit
    Court Clerk, acted alone to terminate Plaintiff’s employment; thus, Ms. Neal induced no one
    but herself to terminate Plaintiff’s employment.
            For the foregoing reasons, we affirm the trial court’s holding that the complaint failed
    to state a cause of action for intentional interference with employment.
                                         I N C ONCLUSION
           The judgment of the trial court is affirmed, and this matter is remanded with costs
    of appeal assessed against Kathy D. Palmore.
                                                      J. MARK ROGERS, SPECIAL JUDGE