Bahnmaier v. Northern Utah Healthcare Corporation , 402 P.3d 796 ( 2017 )

2017 UT App 105THE UTAH COURT OF APPEALS
CANDIDA S. BAHNMAIER,
Appellant,
v.
NORTHERN UTAH HEALTHCARE CORPORATION AND
RENEL RYTTING,
Appellees.
Opinion
No. 20160102-CA
Filed June 29, 2017
Third District Court, West Jordan Department
The Honorable James D. Gardner
No. 140401429
April L. Hollingsworth, Attorney for Appellant
Michael Patrick O’Brien, Mark D. Tolman, and Paul
R. Smith, Attorneys for Appellees
JUDGE STEPHEN L. ROTH authored this Opinion, in which JUDGES
MICHELE M. CHRISTIANSEN and KATE A. TOOMEY concurred.
ROTH, Judge:
¶1 Candida S. Bahnmaier appeals the district court’s grant of
summary judgment in favor of Northern Utah Healthcare
Corporation (dba St. Mark’s Hospital) and Renel Rytting. We
affirm.
Bahnmaier v. Northern Utah Healthcare Corporation
BACKGROUND1
¶2 Bahnmaier was employed by St. Mark’s Hospital (the
Hospital) as a surgical technician on the Hospital’s
cardiovascular heart surgery team. The initial employment
application Bahnmaier signed in 2005 included the following
acknowledgment: “I UNDERSTAND AND AGREE THAT ANY
EMPLOYEE HANDBOOK WHICH I MAY RECEIVE WILL
NOT CONSTITUTE AN EMPLOYMENT CONTRACT, BUT
WILL BE MERELY A GRATUITOUS STATEMENT OF
FACILITY POLICIES.” (Emphasis in original.) While Bahnmaier
was working for the Hospital, the Hospital adopted a for-cause
employment model, which permitted an employee to be
terminated only for cause. Bahnmaier subsequently signed two
separate employment agreements—a retention bonus agreement
in 2007 and an employee agreement when she joined the
Hospital’s heart surgery team in 2008—each of which provided,
It is understood that all employment, including
EMPLOYEE’S employment, with HOSPITAL is for
an indefinite term and is terminable for cause.
Cause is defined as a reason for disciplinary action
that is not arbitrary, capricious, or illegal that is
based on facts the Hospital reasonably believes to
be true. Nothing in this Agreement will be
construed to obligate HOSPITAL to employ
EMPLOYEE for any particular time or under any
particular terms or conditions of employment.
¶3 The Hospital has a Substance Use Policy, which prohibits
employees from “[r]eporting to work, or being at work, while
under the influence of or while impaired by alcohol.” The policy
1. “Because this matter was decided on summary judgment, we
recite the facts and inferences in the light most favorable to the
nonmoving party.” Mountain West Surgical Center, LLC v. Hospital
Corp. of Utah, 2007 UT 92, ¶ 2, 173 P.3d 1276.
20160102-CA 2 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
requires “leadership” to “conduct an investigation” “[u]pon
notification that any person has a reasonable suspicion that an
employee . . . is violating, or has violated” the Substance Use
Policy and to “take whatever action necessary to protect patients
and employees.” The Hospital’s Code of Conduct provides that
“[r]eporting to work under the influence of . . . alcohol . . . may
result in immediate termination” and that the Hospital “may use
drug testing as a means of enforcing” the Substance Use Policy.
¶4 On May 12, 2011, Bahnmaier was issued a written
warning for showing up to work under the influence of alcohol.
The warning indicated that “[f]urther events will result in
additional disciplinary action up to and including termination.”
Bahnmaier signed the written warning and did not challenge it
or comment on its allegations at that time.
¶5 Less than a year later, on March 29, 2012, Bahnmaier
covered an on-call shift for a co-worker. She was called in for an
emergency open-heart surgery and reported for work at
approximately 7:00 p.m. Suspecting that Bahnmaier was under
the influence of alcohol, Bahnmaier’s supervisor, Rytting, sent
her home and reported the incident to the Executive Director of
Surgical Services, Corbie Petersen.
¶6 Rytting related the following information to Petersen:
When Bahnmaier came in to work, her “eyes looked glazed and
dilated and she had dark makeup smeared under her eyes,”
“[h]er speech was slurred, her eyes darted and she was
staggering.” This led Rytting to believe that Bahnmaier “was
under the influence of some substance.” Soon after, another
surgical technician approached Rytting and told her he also
believed Bahnmaier was under the influence. Rytting called
Bahnmaier into her office and confronted Bahnmaier with her
suspicions. According to Rytting, Bahnmaier initially denied
being under the influence and insisted that she was safe to work.
However, when Rytting gave her the option of taking a drug test
or going home, Bahnmaier told Rytting, “I won’t pass the test, I
know I won’t” and went home.
20160102-CA 3 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
¶7 The next day, on March 30, while Bahnmaier was
working a shift at Timpanogos Hospital—an affiliated hospital
that sometimes traded nursing shifts with the Hospital—the
Hospital’s human resources director contacted the human
resources director at Timpanogos Hospital, Kelly Brimhall, and
requested that he arrange a drug test for Bahnmaier. The drug
test came back negative.
¶8 Brimhall, however, related to Petersen the following
conversation he had with Bahnmaier while he waited with her
for the drug screening company to arrive for the test:
[Bahnmaier] indicated that she was not originally
on-call the previous night, Thursday, but a co-
worker called her and asked that she take his/her
call for the evening. She agreed, but admitted that
by then, she was drunk. During the same evening,
she admitted to being called in for a case and
showing up drunk to the case and having her
supervisor realize that she was drunk and sent her
home for the evening without allowing her [to]
work.
Relying on the reports of Rytting and Brimhall, and “[i]n light of
the prior Written Warning [she] had given to [Bahnmaier],”
Petersen “decided to terminate [Bahnmaier’s] employment with
[the] Hospital . . . effective April 10, 2012.”
¶9 Bahnmaier filed suit against the Hospital and Rytting on
February 6, 2014. The complaint asserted breach of contract and
breach of the duty of good faith and fair dealing against the
Hospital, defamation against Rytting, and negligence and
interference with economic relations against both defendants.
¶10 In Bahnmaier’s deposition, she denied having been
intoxicated and denied that she admitted to Rytting either that
she was intoxicated or that she would fail a drug test. However,
she also stated that she did not recall the details of her
20160102-CA 4 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
conversation with Rytting and admitted that she may have made
a “smart aleck” comment that could have given Rytting the
impression that she did not believe she would pass a drug test.
¶11 The Hospital and Rytting filed a motion for summary
judgment. The district court ruled that Bahnmaier’s negligence
claim was “barred by the economic loss rule because she ha[d]
not alleged a duty independent of any alleged contractual
obligation.” Alternatively, the court held that no trier of fact
could “reasonably find that Defendants breached any possible
duty to Bahnmaier that may have arisen from the Hospital’s
Substance Use Policy and its ‘for cause’ employment termination
policy.” The court further determined that “no trier of fact could
reasonably conclude that Rytting knowingly or recklessly made
a false statement about” Bahnmaier and ruled that Bahnmaier’s
defamation claim was therefore untenable. Because Bahnmaier
conceded that her interference with economic relations claim
was based on the same facts as her defamation claim, the court
also granted summary judgment on that claim. The court
determined that Bahnmaier’s good faith and fair dealing claim
was identical to her contract claim because she alleged only a
breach of express and implied contract terms.2 The court ruled
that Bahnmaier’s breach of contract claim failed because
Bahnmaier had “not raised a genuine dispute of material fact
about whether” Petersen had a reasonable belief that there was
good cause to terminate Bahnmaier. The court further
2. Bahnmaier made no attempt to challenge the district court’s
reasoning for rejecting her good faith and fair dealing claim in
her opening brief, and so we do not address the court’s ruling in
that regard. See Allen v. Friel, 2008 UT 56, ¶ 7, 194 P.3d 903 (“If an
appellant fails to allege specific errors of the lower court, the
appellate court will not seek out errors in the lower court’s
decision.”); Eddy v. Albertson’s, Inc., 2001 UT 88, ¶ 21, 34 P.3d 781(“It is well established that we will not consider matters raised
for the first time in the reply brief.” (citation and internal
quotation marks omitted)).
20160102-CA 5 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
determined that Bahnmaier could not base a breach of contract
claim on the Substance Use Policy because the Hospital had
effectively disclaimed contractual liability for that policy and,
alternatively, because the Hospital had not violated the policy.
The district court therefore granted the defendants’ motion for
summary judgment on all claims. Bahnmaier appeals.
ISSUE AND STANDARD OF REVIEW
¶12 Bahnmaier challenges the district court’s summary
judgment ruling in favor of the Hospital and Rytting. “We
review a district court’s decision to grant summary judgment for
correctness, giving no deference to the district court. Our review
is limited to determining whether the district court correctly
applied the summary judgment standard in light of the
undisputed material facts.” Raab v. Utah Ry. Co., 2009 UT 61,
¶ 10, 221 P.3d 219.
ANALYSIS
I. Breach of Contract
¶13 Bahnmaier first asserts that the district court erred in
determining as a matter of law that the Hospital did not violate
either an implied contract based on its Substance Use Policy or
its express employment contract with Bahnmaier.
¶14 Bahnmaier argues that the Substance Use Policy
constituted an implied contract and that the Hospital’s decision
to terminate her employment without conducting a drug test
violated that contract. Although employee manuals or
statements of policy may be sufficient to create an implied
contract, “Utah law allows employers to disclaim any
contractual relationship that might otherwise arise from
employee manuals.” Tomlinson v. NCR Corp., 2014 UT 55, ¶ 25,
345 P.3d 523. “[A] clear and conspicuous disclaimer, as a matter
of law, prevents employee manuals or other like material from
20160102-CA 6 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
being considered as implied-in-fact contract terms.” Id. (citation
and internal quotation marks omitted). We agree with the
district court that the Hospital effectively disclaimed any
contractual liability for its Substance Use Policy and that, even if
it did not, the Hospital’s actions cannot be construed to have
violated that policy.
¶15 Bahnmaier signed an employment application in 2005
which contained an acknowledgment stating, “I UNDERSTAND
AND AGREE THAT ANY EMPLOYEE HANDBOOK WHICH I
MAY RECEIVE WILL NOT CONSTITUTE AN EMPLOYMENT
CONTRACT, BUT WILL BE MERELY A GRATUITOUS
STATEMENT OF FACILITY POLICIES.” (Emphasis in original.)
This clear and conspicuous disclaimer, as a matter of law,
precluded the Substance Use Policy from being construed as an
implied contract. See id. Nothing in the subsequent employment
contracts Bahnmaier signed abrogated this disclaimer. In fact,
those agreements reaffirmed that the Hospital was not required
to employ her “under any particular terms or conditions of
employment.”
¶16 In any event, there was nothing in the plain language of
the Substance Use Policy that mandated a drug test when an
employee was suspected of a violation or that precluded
termination in the absence of a drug test. See Peterson & Simpson
v. IHC Health Services Inc., 2009 UT 54, ¶ 13, 217 P.3d 716 (“[W]e
determine what the parties have agreed upon by looking first to
the plain language within the four corners of the document.”).
The policy provided that “[u]pon notification that any person
has a reasonable suspicion that an employee . . . has violated[]
this policy, the leadership of the Facility shall conduct an
investigation,” and the Code of Conduct stated that the Hospital
“may use drug testing as a means of enforcing” the Substance
Use Policy. (Emphasis added.) Although the Substance Use
Policy required employees to submit to testing “upon reasonable
suspicion,” there was nothing requiring the Hospital itself to
conduct a test as part of an investigation. And the Code of
Conduct’s use of the word “may” meant that “drug testing” was
20160102-CA 7 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
at the employer’s option. Holmes Dev., LLC v. Cook, 2002 UT 38,
¶ 25, 48 P.3d 895 (“The plain, ordinary, and accepted meaning of
the word ‘may’ is ‘“permissive” or “discretionary,”’ generally
indicating that an individual is either ‘permitted’ or ‘[h]as a
possibility’ to do something.” (alteration in original) (quoting
May, Black’s Law Dictionary 993 (7th ed. 1999))). Thus, even if
the Substance Use Policy could be construed as an implied
contract, it does not support Bahnmaier’s argument that the
Hospital violated the policy when Rytting failed to have
Bahnmaier submit to a drug test.
¶17 Bahnmaier next argues that her termination violated the
“for cause” provisions of her employment contract. Bahnmaier’s
employment agreement provided that she could be terminated
only “for cause” and defined “cause” as “a reason for
disciplinary action that is not arbitrary, capricious, or illegal that
is based on facts the Hospital reasonably believes to be true.”
Bahnmaier asserts that there is a dispute of fact regarding
whether Petersen—the director who ultimately terminated
Bahnmaier’s employment—reasonably believed that Bahnmaier
had violated the Substance Use Policy, because no drug test was
conducted on the night of the alleged violation and because
Petersen’s investigation did not involve speaking to Bahnmaier
or any co-workers who saw her that night. However, it is
undisputed that Petersen received independent reports from
Rytting and Brimhall indicating that Bahnmaier had admitted to
them that she was intoxicated at the time of her shift. It is also
undisputed that less than a year before this incident, Petersen
had disciplined Bahnmaier regarding another violation of the
Substance Use Policy. Further, as discussed above, the Hospital
had no obligation to conduct a drug test as part of its
investigation. While a positive drug test or additional
investigation may have bolstered Petersen’s belief that
Bahnmaier had violated the policy on the night in question, the
information Petersen received from two independent sources
that Bahnmaier herself had admitted to being under the
influence was sufficient on its own to support a reasonable belief
in that regard. Thus, we agree with the district court that “a trier
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of fact could not reasonably conclude that Petersen did not
reasonably believe that Bahnmaier had violated the Substance
Use Policy.”
¶18 Further, we agree with the district court that “a trier of
fact could not reasonably conclude that Petersen’s decision to
terminate Bahnmaier’s employment for that reason was
arbitrary.” The only evidence Bahnmaier presented to
demonstrate the arbitrariness of her termination under these
circumstances was personnel records that she claims indicate
other similarly situated employees were treated more leniently.3
But the records do not support Bahnmaier’s argument.
¶19 In the first example case, the employee was suspended,
not terminated, because her job performance had deteriorated.
She was ordered to take a drug test, but the record does not
indicate the results of that test. Moreover, the record does not
show any evidence of substance abuse apart from her abrupt
changes in behavior, which could have been caused by
something other than drug use. Conversely, in Bahnmaier’s case,
two separate individuals reported that Bahnmaier had admitted
to being under the influence while at work. There is also nothing
in the record to indicate that the employee had been disciplined
previously, as Bahnmaier had. Thus, Bahnmaier’s situation was
not comparable to that of the employee in the first example. In
another example case, an employee, whose termination was
based on improper handling of narcotics, had received a
previous warning for failing to properly chart and dispose of
medications. The Hospital handled that situation the same way
it handled Bahnmaier’s—it gave the employee a warning for her
first violation of the Substance Use Policy and terminated her
when it received reports of a subsequent violation.
3. The Hospital asserts that these records should be disregarded
because they were unauthenticated. For purposes of our
decision, we assume that the records were properly before the
court.
20160102-CA 9 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
¶20 Thus, the records Bahnmaier relies on do not support her
claim that the Hospital’s decision to terminate her was arbitrary.
Moreover, Bahnmaier worked on a heart surgery team, and a
decision to terminate an employee for actions that could impair
her skills and judgment under such circumstances, especially in
light of the prior warning, was not arbitrary.
¶21 For these reasons, we conclude that the district court did
not err by granting summary judgment in favor of the Hospital
on Bahnmaier’s implied and express contract claims.
II. Negligence
¶22 Bahnmaier next challenges the district court’s ruling that
her negligence claims against the Hospital and Rytting were
barred by the economic loss rule. She argues both that the
economic loss rule does not apply to employment cases and that
her claim that she suffered emotional distress removes her case
from the purview of that rule.
¶23 However, we do not need to address the district court’s
analysis of the economic loss rule because we affirm on the
court’s alternative ground for rejecting Bahnmaier’s negligence
claims—that she has failed to demonstrate an issue of fact
regarding whether either Rytting or the Hospital breached a
duty to her. Bahnmaier has not alleged that the defendants
breached any duties to her independent of those raised in her
breach of contract action. Bahnmaier asserted that the Hospital
breached its duty by failing to adhere to its Substance Use Policy
and by terminating her employment without cause and that
Rytting’s breach also involved failure to adhere to the Substance
Use Policy. As discussed in the previous section, the Substance
Use Policy did not require drug testing to confirm an employee’s
substance abuse, and Bahnmaier’s employment was terminated
for cause based on Petersen’s reasonable belief that Bahnmaier
had violated the Substance Use Policy. Thus, Bahnmaier cannot
establish that either the Hospital or Rytting breached any duty to
her. Accordingly, the district court did not err in granting
20160102-CA 10 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
summary judgment in favor of the defendants on Bahnmaier’s
negligence claims.
III. Defamation and Interference with Economic Relations
¶24 Bahnmaier challenges the district court’s ruling on her
defamation and interference with economic relations claims. The
parties agree that Rytting’s statements to Petersen were subject
to a qualified privilege. See Brehany v. Nordstrom, Inc., 812 P.2d
49, 58 (Utah 1991) (“[A] qualified privilege protects an
employer’s communication to employees and to other interested
parties concerning the reasons for an employee’s discharge.”).
This qualified privilege effectively precludes Bahnmaier from
recovering damages for defamatory statements unless she can
show an abuse of the privilege by demonstrating that Rytting
“(1) made a defamatory statement knowing it to be false or
(2) acted in reckless disregard as to its falsity.” See Ferguson v.
Williams & Hunt, Inc., 2009 UT 49, ¶¶ 27–28, 221 P.3d 205.
¶25 Bahnmaier asserts that her deposition testimony that she
did not tell Rytting she would not pass a drug test raises a
question of fact as to whether Rytting either knew that her
statement to Petersen was false or acted in reckless disregard of
its falsity. However, Bahnmaier’s denial was fatally equivocal;
she admitted that she did not actually recall the details of her
conversation with Rytting and that she could have made a
“smart aleck” comment that could have given Rytting the
impression that she would not pass a drug test. We agree with
the district court that no reasonable trier of fact could have
concluded that Rytting knew her statement to Petersen was false
or acted with reckless disregard as to its falsity when Bahnmaier
herself admitted that she could have given Rytting the
impression that she did not believe she would pass a drug test.
Thus, the district court did not err in granting summary
judgment on this claim.
¶26 Finally, because Bahnmaier concedes that the success of
her interference with economic relations claim hinges on the
20160102-CA 11 2017 UT App 105Bahnmaier v. Northern Utah Healthcare Corporation
success of her defamation claim, we affirm the district court’s
summary judgment ruling on the interference claim as well.
CONCLUSION
¶27 We conclude that the Hospital’s Substance Use Policy did
not constitute an implied contract requiring the Hospital to
conduct a drug test upon reasonable suspicion of an employee’s
intoxication and that Bahnmaier failed to raise a genuine issue of
fact as to whether the Hospital violated its “for cause”
employment contract with Bahnmaier. Thus, the district court
did not err in granting summary judgment in favor of the
defendants on Bahnmaier’s contract and negligence claims.
Further, because Bahnmaier failed to raise a genuine issue of fact
as to whether Rytting’s statements to Petersen were knowingly
false or made with reckless disregard as to their falsity, the
district court did not err in granting summary judgment to the
defendants on Bahnmaier’s defamation and interference with
economic relations claims. Accordingly, we affirm the district
court’s ruling.
20160102-CA 12 2017 UT App 105