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State of Alaska and Cameron, et al v. Beard (12/3/93), 864 P 2d 538
Notice: This is subject to formal
correction before publication in the Pacific
Reporter. Readers are requested to bring
typographical or other formal errors to the
attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
HAROLD A. CAMERON, SHARON )
McLEOD, WILLIAM B. McMULLEN, ) Supreme Court File No. S-5152
and CAROLINE VENUSTI, ) Superior Court File No.
individually and as employees ) 4FA-87-369 Civil
of the STATE OF ALASKA; and )
THE STATE OF ALASKA, )
Appellants, ) O P I N I O N
) [No. 4032 - December 3, 1993]
BURLE B. BEARD, )
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Jay Hodges, Judge.
Appearances: Randy M. Olsen, Assistant
Attorney General, Fairbanks, and Charles E.
Cole, Attorney General, Juneau, for
Appellants. Thomas R. Wickwire, Fairbanks,
Before: Moore, Chief Justice,
Rabinowitz, Burke, Matthews, and Compton,
MOORE, Chief Justice.
COMPTON, Justice, dissenting in part.
In this appeal, the State and four individual defendant
supervisors challenge the jury's verdict in favor of Burle Beard,
a former Department of Transportation employee, on his claims of
constructive discharge and intentional infliction of emotional
The State maintains that the superior court erred in
interpreting this court's decision in Beard v. Baum, 796 P.2d
1344 (Alaska 1990), as conclusively establishing that Beard was
excused from exhausting the administrative remedies provided
under his collective bargaining agreement. The State also
asserts that Beard's constructive discharge claim was barred by
an earlier workers' compensation Compromise and Release. In the
alternative, the State argues that the superior court erred in
denying its motion for directed verdict/judgment n.o.v. on the
constructive discharge claim.
The individual defendants argue that the court erred in
denying their motions for directed verdict/judgment n.o.v. on the
IIED claims. Alternatively, they argue that the court erred in
denying their motion for summary judgment on the ground that they
were immune from suit as officials of the state. Finally, both
the State and the individual defendants appeal the court's denial
of their motions for a new trial and remittitur.
II. Facts and Proceedings
Except for a one-year interruption due to injury, Burle
Beard worked for the state Department of Transportation (DOT)
from 1966 until he retired in 1986. After 1975, Beard worked in
DOT's Right of Way section in Fairbanks. In all of Beard's job
performance evaluations from 1966 to 1985, his performance was
rated as either acceptable, high acceptable or outstanding.
In April 1985 Beard became the Alaska Public Employees
Association (APEA) building representative. Believing that some
of his supervisors and co-workers were violating DOT personnel
rules, Beard began an informal investigation into departmental
abuses. Beard looked for evidence to back up his suspicions that
DOT personnel routinely falsified time sheets and leave slips and
misused state time and property. He reported his findings to a
number of state and federal agencies.
In June 1985, Caroline Venusti, the DOT personnel
director, learned of Beard's allegations from a labor relations
expert in the Department of Administration. Venusti met with
Beard the same day. Venusti also arranged a meeting between
Beard and William McMullen, the DOT regional director. At this
meeting, Beard outlined his allegations to McMullen, and McMullen
told Beard that he was going to appoint an investigator to review
the situation. McMullen then asked DOT's Internal Review Section
to investigate Beard's claims.
Beard claims that once his allegations of misconduct
became known, his supervisors began a purposeful campaign to
force him off the job. The day following his meeting with
McMullen, an unidentified APEA member asked for a new election
for building representative. Beard was subsequently voted out of
the position. Later that month, Sharon McLeod, a Right of Way
supervisor, completed Beard's annual job performance evaluation
and rated his performance as "low-acceptable." She noted that
Beard spent too much time attending to unassigned and non-job
related tasks and improperly copied the time sheets of another
employee. McLeod also observed that the Federal Highway
Administration had not rescinded its refusal to accept Beard's
appraisals. McLeod's evaluation indicated that Beard would be re-
evaluated quarterly and suggested strictly controlling his work
assignments to ensure that he followed his supervisor's
instructions. Beard grieved this evaluation.
In August, McMullen met with Beard and gave him a copy
of Internal Review's final report concerning Beard's allegations
of departmental abuses. The report concluded that only two of
the twenty-one allegations which Beard had made were
substantiated. Beard expressed his dissatisfaction with these
findings and went public with his allegations.
A month later, Beard met with McMullen, Venusti and
APEA representatives to discuss Beard's continuing campaign to
have his allegations investigated by non-DOT personnel. At the
close of the meeting, Beard agreed only to discuss his
allegations with those individuals or agencies which he had
previously contacted. However he told McMullen that he would
still send a letter concerning his charges to the Fairbanks
District Attorney because he had already drafted it.
McMullen later discovered that Beard had a DOT
secretary type this letter. When confronted with this discovery,
Beard initially lied to McMullen and told him that his girlfriend
had typed the letter. McMullen suspended Beard for thirty days
for lying about the incident. Beard grieved this suspension, and
it was subsequently reduced to seven days through a settlement
between the APEA and the State. Beard received three weeks back
pay as a result of the settlement.
In October McLeod performed a quarterly evaluation of
Beard and rated his performance as "low-acceptable." McLeod
based her negative evaluation on Beard's suspension, his failure
to follow directions when doing appraisals and his need to
develop a "teamwork job attitude." However she also noted that
Beard had fulfilled some of the goals set out in his previous
evaluation. She no longer required Beard to fill out hourly time
sheets but suggested that he be re-evaluated in three months.
Beard grieved this evaluation.
In February 1986 Stephen Sisk, who temporarily replaced
McMullen as acting regional director, gave Beard a written
warning that he would face severe disciplinary action unless he
stopped harassing his co-workers with his continuing allegations
of departmental corruption.1 Beard grieved the warning memo and
requested copies of the underlying complaints.
Also in February, the Division of Personnel concluded
its grievance review of McLeod's July evaluation of Beard. It
ordered DOT to have Beard's evaluation redone by Richard Kendall,
Beard's supervisor in Engineering, because McLeod had only been
Beard's supervisor for 16 days of the annual evaluation period.
Kendall completed the evaluation in March and rated Beard's
performance as acceptable in all categories. Both McLeod and
McMullen added critical comments to the evaluation.
In March McLeod completed her third evaluation of Beard
and rated his job performance as "acceptable" but rated his
interpersonal relationships with co-workers as "unacceptable."
McLeod cited continued disruptive behavior by Beard, referring to
the February warning letter and new employee complaints.2 Beard
again grieved the evaluation.
McMullen issued Beard a final warning about "disruptive
behavior" in May. The warning cited a memo by visiting DOT
director, Milt Lentz, which stated that Beard had initiated a
discussion of the office situation with Lentz and had told him
that he planned to sue the state and buy a sailboat with the
settlement. Also in May, McLeod required Beard to supply a
doctor's certificate to justify his use of sick leave. This was
the first time Beard had ever been asked to provide such a
Beard resigned from DOT in August 1986. According to
Beard, his current supervisor, Jerry Apple, told him that
McMullen was in the process of preparing a termination letter and
suggested that Beard take action to protect himself. Beard
immediately wrote out his resignation and submitted it the next
day. Following Beard's retirement, Apple completed a final
evaluation of Beard which again critically rated his performance.
Beard filed a workers' compensation claim several days
after his resignation. The basis for his claim was "persistent
mental stress with acute and chronic back and neck pain" caused
by "continuous on-the-job harassment."
While this workers' compensation claim was pending,
Beard filed a complaint against McMullen, alleging
misrepresentation, defamation and IIED. McMullen moved to
dismiss the IIED count on the ground that Beard had not exhausted
his administrative remedies under the collective bargaining
agreement. In May 1987, the superior court granted McMullen's
motion and struck this count after Beard failed to file a timely
opposition. Beard filed an opposition one day later which
included an affidavit from Beard's union representative, stating
that he had told Beard that his supervisors' attempt to "harass
him by using work assignments, apportioning the workload and
otherwise structuring his work environment so as to make it as
uncomfortable as possible"was not a grievable matter.
A lengthy exchange of motions between the parties
ensued. Ultimately, the court permitted Beard to add Cameron,
McLeod, Venusti, and the State as defendants. In his amended
complaint, Beard also added claims for, inter alia, constructive
discharge and denial of freedom of speech. The court, however,
rejected the constructive discharge and IIED claims, concluding
that Beard failed to exhaust his administrative remedies.
Beard appealed to this court on this issue and others.
See Beard v. Baum, 796 P.2d 1344 (Alaska 1990) (Beard I). In
July 1990, while this first appeal was pending, Beard endorsed a
Compromise and Release (C&R) of his workers' compensation claim
and received $13,000 in settlement. A month later, this court
issued Beard I. We reversed the superior court's dismissal of
Beard's constructive discharge and IIED claims and remanded the
case for further proceedings. Id. at 1348-50, 1353-54.
On remand, the individual defendants moved for summary
judgment, arguing that Beard had failed to make out prima facie
IIED claims against them. In the alternative, they contended
that their status as state officials shielded them from liability
under Aspen Exploration Corp. v. Sheffield, 739 P.2d 150 (Alaska
1987). The State also moved for summary judgment on Beard's
constructive discharge claim, asserting that Beard had failed to
establish a prima facie case. It also argued that the July 1990
C&R had settled all past, present, or future claims for
compensation between the State and Beard arising out of his
claims of harassment and forced retirement. Finally the State
argued that Beard's constructive discharge claim was barred
because he had failed to exhaust his administrative remedies
under the collective bargaining agreement.3
Judge Hodges denied all these summary judgment motions,
stating generally that "there are factual issues to be resolved."
However, the court did agree to hear argument on the exhaustion
of administrative remedies issue if Beard ultimately prevailed at
At trial Beard testified at length about the activities
of his supervisors after his allegations of corruption became
public. Beard identified McMullen as the driving force of the
effort to force him off the job. He testified that after he
rejected the Internal Review report as a "whitewash," McMullen
told him that "this is going to look awful bad on anyone's
evaluation who proceeds any further than this or brings this up
in any way." According to Beard, McMullen then manipulated him
into lying about who typed his letter to the Fairbanks District
Attorney. He also testified that McMullen told him when he
returned to work after this suspension that he would never be
promoted "in a thousand years."
Beard further contended that his supervisors began
collecting evidence of departmental "disruption"in early 1986 in
order to create a pretext for firing him. Beard contended that
McMullen solicited memos from DOT employees concerning his
comments about the office situation and his grievance settlement
and used these memos as the basis for the February 1986 warning
letter. He also speculated that the handwritten draft of the
final May warning letter circulated in March between McMullen,
Venusti and a labor relations expert in the Department of
Administration indicates that they were planning to engineer
further "disruptive incidents"which would eventually lead to his
termination. Beard suggests that the Lentz memo was the product
of such a plan.4
Both McMullen and Venusti admitted at trial that they
solicited memos from various employees concerning Beard. Venusti
characterized this activity as "preparing a case against an
employee"but denied that it constituted keeping a "secret file"
on Beard in violation of DOT personnel rules and the APEA
contract.5 According to Venusti, she resisted Beard's efforts to
see these memos in order to protect the confidentiality of the
other employees. Both she and McMullen declined to comment on
the Division of Personnel's subsequent determination that the
evidence of disruption underlying the evaluations and warnings
was mostly unfounded.6
Sharon McLeod, Beard's supervisor during most of the
relevant period, testified that her critical assessments of
Beard's job performance were the product of her own observations
and complaints voiced by other DOT employees. She testified that
she did not discuss her evaluations or her management techniques
with either Venusti or Cameron. Harold Cameron, the chief Right
of Way agent at the Fairbanks office, testified that he did not
take an active role in the evaluation process.
The testimony of Richard Kendall, Beard's supervisor in
Engineering, corroborates Beard's story of a prolonged effort to
force him off the job. According to Kendall, McMullen called him
into his office in January 1986 and told him to write a statement
indicating that Beard's activities were disrupting the
Engineering section. Kendall testified that despite his
unwillingness to comply, McMullen insisted that he write the
statement before leaving McMullen's office. After he was
directed to redo Beard's July 1985 evaluation, Kendall testified
that McMullen met with him four or five times and pressured him
to write a negative evaluation of Beard. Kendall testified
that, at one of these meetings, McMullen placed Beard's
uncompleted evaluation form and Kendall's pending grievance for
supervisor pay side-by-side on a desk, indirectly suggesting that
his grievance would be affected if he did not write a negative
evaluation. Kendall provided the following account of one
[McMullen] was pretty intimidating
towards me. He would pound his fist on the
desk and, you know, stare at me for long
periods of time without saying anything. And
then he would get up and walk around the
room, you know, and look at his plaques on
the wall and go stare out the window with his
hands behind his back and kind of rock back
and forth on his heels, and then ask me what
I was going to say in my evaluation again.
And all I could say was, you know, "I've
already told you I'm going to give him a
favorable evaluation." And he said that's
not what he wanted to see and that --well, he
said something about my ability to supervise
and that if I did a good evaluation that he
was going to see just how good a supervisor I
was by coming over to my office unannounced
and go through my files, go through my notes,
go through my calculations. And he said,
"We'll just see what kind of supervisor you
are." It was kind of a threat I thought.
. . . .
. . . [H]e made it very clear . . .
things weren't going to go very smoothly for
me. If I gave Burle a good evaluation, then
that meant that everything I did from that
point on was going to be scrutinized and
there would be possible disciplinary action
According to Kendall, McMullen told him that "Burle's ass is
going down the road."
Kendall further testified that, in response to his
complaints about McMullen's pressure tactics, another DOT
supervisor, Jerry Apple, told him that Cameron had asked him to
do a "hatchet job"on Beard.
At the close of Beard's case in chief, the State moved
for a directed verdict on Beard's claims against the State and
the individual defendants, again arguing that Beard had failed to
present sufficient evidence. Judge Hodges denied this motion.
The jury returned a verdict in favor of Beard, awarding him
$696,571 in lost wages and benefits for the breach of his
employment contract. McMullen, Venusti and Cameron were each
assessed $1,000 in compensatory damages for IIED (no compensatory
damages were assessed against McLeod). The jury awarded no
compensatory damages on Beard's first amendment claim, commenting
that money could not compensate Beard for the loss of his freedom
of speech. The jury also awarded Beard punitive damages as
follows: McMullen -- $70,000; Venusti -- $45,000; Cameron --
$45,000; McLeod -- $1,000.
The State subsequently moved for judgment n.o.v., for a
new trial and for remittitur. Judge Hodges also denied each of
these motions. The court also ruled that this court's decision
in Beard I rendered the exhaustion of remedies issue res
A. Exhaustion of Administrative Remedies
We have repeatedly held that "an employee must first
exhaust his contractual or administrative remedies, or show that
he was excused from doing so, before he may pursue a direct
judicial action against his employer." Casey v. City of
Fairbanks, 670 P.2d 1133, 1136 (Alaska 1983), quoted in Beard I,
796 P.2d at 1348. In Beard I, we reversed the superior court's
decision to strike Beard's constructive discharge and IIED claims
because Beard had presented evidence suggesting that his union
representative had refused to grieve these matters.7 Beard I,
796 P.2d at 1349.
The superior court erroneously interpreted our decision
in Beard I as conclusively deciding the exhaustion issue. Our
decision merely reversed the court's ruling in favor of the State
and did not constitute a final determination that Beard was
excused from pursuing his remedies under the collective
bargaining agreement. See, e.g., Pedersen-Szafran v. Baily, 837
P.2d 124, 126-28 (Alaska 1992).8 Beard never sought summary
judgment on this issue and the State never had an opportunity to
rebut the evidence presented in Beard's opposition. The doctrine
of res judicata does not apply when one party has not had an
opportunity to litigate an issue. See Ferguson v. State Dep't of
Corrections, 816 P.2d 134, 138 (Alaska 1991). We therefore
remand this issue to the superior court for an evidentiary
B. Compromise and Release
The State contends that the July 1990 workers'
compensation C&R bars Beard's constructive discharge claim and
that Judge Hodges thus erred in denying the State's motion for
summary judgment.9 When reviewing the denial of a motion for
summary judgment, we determine whether there are genuine issues
of material fact and whether the moving party deserves judgment
as a matter of law. Criterion Ins. Co. v. Velthauser, 751 P.2d
1, 2 (Alaska 1986).
A release is interpreted in the same manner as any
other contract. Schmidt v. Lashley, 627 P.2d 201, 204 n.7
(Alaska 1981). In the case at bar, the plain language of the C&R
signed by Beard consistently limits its scope to Beard's rights
under the Workers' Compensation Act.10 Only two sentences even
arguably read like a general release of all claims:
By execution of this release the
employee acknowledges his intent to release
the employer and its workers' compensation
insurance carrier from any and all liability
arising out of or in any way connected with
the work-related injury referred to above and
any known or as yet undiscovered
disabilities, injuries or other damages
associated with said injury. This Compromise
and Release shall be effective in discharging
the employer and its workers' compensation
carrier of all liability of whatsoever nature
for all past, present and future workers'
compensation benefits relating to the above-
The California Court of Appeals recently rejected a
broad interpretation of a similar workers' compensation release.
See Pichon v. Pacific Gas & Elec. Co., 260 Cal. Rptr. 677, 686
(Cal. App. 1989). In Pichon, a discharged employee brought suit
against his former employer, alleging, inter alia, breach of
express and implied contract of employment and IIED. A year
after he was terminated, he filed a workers' compensation claim
for injuries to his "psyche, heart, [and] nervous system"
resulting from harassment in the workplace. The workers'
compensation board approved a release of his claim for $42,000.
Id. at 680. The release stated:
[S]aid employee releases and forever
discharges said employer and insurance
carrier from all claims and causes of action,
whether now known or ascertained, or which
may hereafter arise or develop as a result of
Id. at 686. A typewritten addendum to the printed form included
a dismissal with prejudice of the employee's retaliatory
discharge and misconduct claims arising under the California
Labor Code. Id.
The trial court granted summary judgment in favor of
the employer finding that the release barred the employee's
claims. See id. at 680. The California Court of Appeals
We conclude that it was . . . error to
hold that, as a matter of law, the release of
any and "all claims and causes of action . .
. as a result of said injury"included [the
employee's] claims for wrongful termination
which survived summary adjudication. By its
terms, the release was directed to claims
that arose as a result of the injury
described in the release, i.e., the physical
and mental injuries [the employee] suffered
as a result of harassment on the job and the
termination of his employment. We have
concluded that the only claims which survived
summary adjudication and [the employee's]
waiver of any non-economic damages, are
limited to economic damages not caused by
injuries to [the employee's] psyche. We have
also concluded that [the employee] would not
be entitled to recover any lost wages for any
period of time that he was disabled. Thus,
the remaining claims cannot be described as
claims arising as a result of any compensable
injuries to [the employee's] psyche. At the
least, there is an issue of fact as to
whether the parties intended the release to
cover the type of claims [the employee] is
Id. at 687.
We agree with the reasoning of the California Court of
Appeals and conclude that Judge Hodges was correct in denying the
State's motion for summary judgment.11 We emphasize that an
employee is not entitled to recover lost wages in a breach of
contract action for any period of time that the employee was
disabled and received compensation benefits for the disability.
See Pichon, 260 Cal. Rptr. at 687.
C. Constructive Discharge
The State contends that, as a matter of law, there is
insufficient evidence in the record to support the jury's verdict
on Beard's constructive discharge claim.12 In Beard I, we
recognized a cause of action for constructive discharge:
[W]here an employer makes working
conditions so intolerable that the employee
is forced into an involuntary resignation,
the employer is as liable for any illegal
conduct involved therein as if it had
formally discharged the employee.
796 P.2d at 1350; see also Klondike Indus. Corp. v. Gibson, 741
P.2d 1161, 1166 n.5 (Alaska 1987). As we observed in Beard I,
"Beard's claim is that by creating conditions so intolerable as
to force him to resign, the state violated its duty under Article
5(c) of the [collective bargaining agreement] to discharge him
only for just cause."13 796 P.2d at 1350.
To establish constructive discharge, an employee has
the burden of showing that a reasonable person in the employee's
position would have felt compelled to resign. See, e.g.,
Christie v. San Miguel County Sch. Dist., 759 P.2d 779, 783
(Colo. App. 1989); Reihmann v. Foerstner, 375 N.W.2d 677, 683-84
(Iowa 1985); see also Huyen v. Driscoll, 479 N.W.2d 76, 81 (Minn.
App. 1991). However the employee need not prove that the
employer acted with the specific intent of causing the employee
to resign. Hammond v. Katy Indep. Sch. Dist., 821 S.W.2d 174,
177 (Tex. App. 1991); Slack v. Kanawha County Hous. & Redev.
Auth., 423 S.W.2d 547, 558 (W. Va. 1992).
Courts have generally held that criticism of job
performance or other management decisions do not, standing alone,
create intolerable working conditions. See Huyen, 479 N.W.2d at
81 (holding that criticism of job performance is insufficient to
establish intolerable working conditions); Reihmann, 375 N.W.2d
at 683-84 (holding that a reasonable person would not feel
compelled to resign merely because his employer decided to
relocate his office in a neighboring town). However, a number of
courts have upheld constructive discharge judgments where an
employer pursues a sustained campaign against an employee. See
Sterling Drug, Inc. v. Oxford, 743 S.W.2d 380, 382-85 (Ark. 1988)
(upholding constructive discharge judgment where a corporate
employer engaged in a continuous campaign to force an employee to
resign over an 18 month period after the employee reported
pricing violations to a governmental agency); see also Ford v.
Alfaro, 785 F.2d 835, 841-42 (9th Cir. 1986) (holding that an
employee presented a prima facie claim of constructive discharge
where the employer accused the employee of conspiring to file a
complaint with the U.S. Department of Labor; the employer told
her he would "get even"and that he did not want her to work for
him any longer).
Taking the evidence presented at trial in the light
most favorable to Beard, the record indicates that (1) an
unidentified person requested a building representative election
shortly after Beard began making allegations at DOT and that this
election ultimately led to Beard being voted out of office as
union representative; (2) Beard's job performance evaluations
following his investigation were consistently negative although
his previous evaluations had been positive; (3) many of the
alleged incidents forming the basis of these negative evaluations
were later disproved or explained by an independent review panel;
(4) McMullen told Beard that "he would never be promoted in 1,000
years;" (5) McMullen solicited memos from other DOT workers
concerning Beard's comments about the office situation and his
grievance settlement and then exaggerated the substance of these
memos in the February 1986 warning letter; (6) McMullen pressured
Kendall to write a negative evaluation of Beard in March 1986;
(7) Cameron asked one of Beard's supervisors, Jerry Apple, to "do
a hatchet job" on Beard; (8) Venusti kept a "secret file" of
memos concerning Beard's alleged disruptive behavior in violation
of DOT personnel rules and the APEA contract and resisted Beard's
efforts to discover the nature and source of these memos; (9)
Milt Lentz solicited Beard's opinion of the office situation and
then wrote a memo falsely stating that Beard had spontaneously
told him of his plans to sue the state; and (10) one of Beard's
supervisors told Beard that a termination letter was being
prepared and that he should "do something quick"before he was
Although recognizing that some of Beard's allegations
are pure speculation, we conclude that there is sufficient
evidence in the record to support the jury verdict on this issue.
See Sterling, 743 S.W.2d at 385. This is particularly true in
light of Beard's testimony that a DOT supervisor told him that he
was about to be fired and suggested that he take immediate
action. Cf. Sheets v. Knight, 779 P.2d 1000, 1005 & n.5 (Or.
1989) (holding that where an employer tells an employee to resign
or be fired, a court can find the resignation to be a
D. Intentional Infliction of Emotional Distress
To state a cause of action for IIED, a plaintiff must
establish (1) that the defendant's conduct was extreme and
outrageous, (2) that the conduct was intentional or reckless, (3)
that this conduct caused the plaintiff emotional distress, and
(4) that the distress was severe. Teamsters Local 959 v. Wells,
749 P.2d 349, 357 (Alaska 1988). The individual defendants
contend that there is insufficient evidence to support the jury's
IIED verdicts as a matter of law.
We have adopted the definition of extreme and
outrageous conduct set forth in the Restatement (Second) of
Torts. Beard I, 796 P.2d at 1350.
Liability has been found only where the
conduct has been so outrageous in character,
and 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.
Id. (quoting Oaksmith v. Brusich, 774 P.2d 191, 200 (Alaska
1989)). Because the jury found for Beard on this
issue, we will again review the record in the light most
favorable to him. City of Whittier v. Whittier Fuel & Marine
Corp., 577 P.2d 216, 220 (Alaska 1978). Nonetheless, whether
Beard introduced sufficient evidence to support a prima facie
IIED claim against each of the defendants is a threshold question
to which we apply an abuse of discretion standard. King v.
Brooks, 788 P.2d 707, 711 (Alaska 1990); Richardson v. Fairbanks
North Star Borough, 705 P.2d 454, 456 (Alaska 1985).
McMullen contends that his activities do not constitute
"outrageous conduct"as a matter of law. We disagree. In our
view, a reasonable juror could conclude that McMullen's threats,
coupled with his behind the scenes efforts to collect evidence of
disruptive activity by Beard, is sufficiently outrageous to
permit recovery for IIED.
In King v. Brooks, 788 P.2d 707 (Alaska 1990), we held
that an employee stated a prima facie IIED claim against his
supervisor where the supervisor had pursued a "two-year private
vendetta"against the employee, causing him substantial emotional
distress.14 Id. at 711. Similarly the Arkansas Supreme Court has
upheld an IIED judgment against a supervising city director who
engaged in a two-year campaign to force an employee police
officer off the job. Hess v. Treece, 693 S.W.2d 792 (Ark. 1985),
cert. denied, 475 U.S. 1036 (1986).15
McMullen's other arguments are equally unpersuasive.
There is ample evidence in the record that McMullen's activities
caused Beard serious emotional distress. We therefore uphold the
jury's IIED verdict against McMullen.
For the same reasons, we uphold the IIED verdict
against Venusti. The record indicates that Venusti was present
at several of McMullen's meetings with Kendall. She actively
solicited memos from a number of employees concerning Beard's
comments about his allegations and grievance settlement which
were used to bolster the formal warnings issued Beard. She also
resisted Beard's efforts to discover the substance of these
complaints of "disruption" despite the fact that the APEA
contract required such complaints to be shared directly with the
employee on a regular basis. Based on this evidence, a
reasonable juror could conclude that Venusti worked with McMullen
to create a paper trail designed to culminate in Beard's
termination, thereby causing Beard serious emotional distress.
Our review of the record discloses that the evidence
against Cameron is merely speculative and circumstantial.
Nothing of substance connects Cameron to the activities of
McMullen and Venusti or to a plot to drive Beard from his job.16
Cf. Reihmann, 375 N.W.2d at 681 (where court refused to infer
that two defendants had conspired together to force plaintiff's
relocation and expel him from the business because no evidence
connected the actions of each of the defendants beyond their
close business and personal ties). We therefore conclude that
the superior court abused its discretion in denying the motion
for judgment n.o.v. as to Cameron. (4) McLeod
We also conclude that the evidence fails to support an
IIED verdict against McLeod. At trial Beard contended that
McLeod's negative evaluations and harassment tactics (e.g.,
hourly time sheets, quarterly evaluations, limited and controlled
work assignments, or the request for a doctor's verification for
sick leave) were intended to make his job intolerable and to
prevent further investigatory activities. We conclude that
McLeod's conduct does not reach the threshold level of
outrageousness. As the Illinois Court of Appeals has observed:
Personality conflicts, questioning
of job performance and job transfers, whether
for disciplinary or management purposes, are
unavoidable aspects of employment.
Frequently, they produce concern and distress
for the affected employee. Yet, if the
distress from such incidents was deemed so
severe that no reasonable person could be
expected to endure it, nearly all employees
would have a cause of action for intentional
infliction of emotional distress.
Heying v. Simonaitis, 466 N.E.2d 1137, 1144 (Ill. App. 1984); see
also Owens v. Second Baptist Church of La Grange, 516 N.E.2d 712,
717 (Ill. App. 1987) (holding that the fact that a defendant has
authority over the plaintiff does not lessen the plaintiff's
burden of showing the outrageous nature of the employer's
conduct). McLeod, unlike McMullen and Venusti, did nothing more
than what her job required her to do -- supervise and evaluate
Beard's performance. Her conduct, regardless of her motive, is
simply insufficient to sustain an IIED verdict. See Reihmann,
375 N.W.2d at 681 (suggesting that the relevant inquiry is not
whether a defendant was motivated by an improper purpose but
rather whether the methods adopted shock the conscience).
E. Official Immunity
The individual defendants also argue that Judge Hodges
erred in denying their motions for summary judgment based on
official immunity under Aspen Exploration Corp. v. Sheffield, 739
P.2d 150 (Alaska 1987). Their position is without merit. Under
Aspen, the individual supervisors have qualified immunity, which
shields officials from liability only when their acts are "done
in good faith and are not malicious or corrupt." Id. at 158.
Whether Beard's supervisors acted in good faith is a question of
fact which precludes resolution of the issue on summary judgment.17
F. Damages Issues
(1) The IIED awards18
The individual defendants contend that the verdicts
against them and the corresponding punitive damage awards
establish that the jury's deliberations were tainted by passion
and prejudice.19 Alternatively, the individual defendants contend
that the punitive damage awards are excessive and should be
reduced to less than a 3 to 1 ratio of punitive to compensatory
damages. The essence of the defendants' arguments is that the
jury verdicts are "manifestly unfair"because the evidence of
IIED against each individual defendant is so slight and the ratio
between the compensatory and punitive awards is so great.
This court has refused to prescribe a definite ratio
between compensatory and punitive damages. Ben Lomond, Inc. v.
Campbell, 691 P.2d 1042, 1048 (Alaska 1984). Though comparing
punitive and actual damage awards is one way to determine if
punitive damages are excessive, other factors, such as the
magnitude and flagrancy of the offense, the importance of the
policy violated, and the defendant's wealth, are equally
important to the determination. Clary Ins. Agency v. Doyle, 620
P.2d 194, 205 (Alaska 1980)
We will disturb the trial court's denial of a motion
for a new trial or remittitur only for abuse of discretion. Id.
at 204. Here the jury's award was appropriate in light of the
individual defendants' conduct. We therefore affirm the IIED
awards against McMullen and Venusti.
(2) The constructive discharge award
The State contends that Judge Hodges erred in refusing
to grant remittitur on the constructive discharge judgment
against it. The State offers no authority for its position that
the judgment was excessive, merely asserting that a more
appropriate judgment would limit the award to the wages/benefits
Beard would have earned from the time of his resignation until
1991 when the State presumes he would have retired at age 55. On
the record presented, we conclude that Judge Hodges did not abuse
his discretion in denying the State's motion.
To summarize, we conclude that there is sufficient
evidence supporting the jury's constructive discharge judgment
against the State and affirm the superior court's denial of the
State's motion for judgment n.o.v. We also affirm the court's
determination that the workers' compensation release does not bar
Beard's constructive discharge claim. However, because the
superior court erroneously interpreted our decision in Beard I as
conclusively deciding that Beard's failure to exhaust his
administrative remedies was excused, we remand for an evidentiary
hearing on this issue. If the trial judge ultimately finds that
Beard failed to exhaust his administrative remedies, the
constructive discharge judgment naturally would be voided.
We affirm the jury's IIED judgments against McMullen
and Venusti but reverse the IIED judgments against Cameron and
McLeod. We also conclude that the superior court properly denied
the individual defendants' motions for summary judgment based on
official immunity. Finally we affirm the superior court's denial
of the motions for new trial and remittitur.
AFFIRMED in part, REVERSED in part, and REMANDED.
COMPTON, Justice, dissenting in part.
I dissent because the issue of exhaustion of contract
remedies should not be remanded for an evidentiary hearing. This
issue was resolved in the prior appeal. Thus there is no basis
for remanding the issue for redetermination.
The court states:
The superior court erroneously
interpreted our decision in Beard I as
conclusively deciding the exhaustion issue.
Our decision merely reversed the court's
ruling in favor of the State and did not
constitute a final determination that Beard
was excused from pursuing his remedies under
the collective bargaining agreement.
Op. at 14. Although the court suggests that we were reviewing a
Civil Rule 12(b) motion to dismiss in Beard I, we did not so
limit our discussion of the issue:
Beard is excused from grieving his
constructive discharge and intentional
infliction of emotional distress claims under
the CBA because Senkow, his union
representative, refused to file a grievance
for Beard's allegations of harassment
underlying those claims on Beard's behalf.
. . . .
. . . Beard could not comply with
the grievance procedures established by the
CBA because his union representative refused
to represent him. Any such attempt would
have been futile. Under these circumstances,
we hold that Beard is excused from exhausting
his remedies under the CBA for his claims of
constructive discharge and intentional
infliction of emotional distress.
Since the superior court erred in
concluding that Beard was not excused from
exhausting his contractual remedies as to
each of these claims, we must reverse the
superior court's decision striking the claims
unless they are not legally viable.
Beard v. Baum, 796 P.2d 1344, 1349 (Alaska 1990) (emphasis
added). We then concluded that the claim for constructive
discharge was legally viable. Id. at 1350. As to the claim of
IIED, we noted that "[s]ince Beard has presented evidence of
harassment and of emotional distress, his claim for intentional
infliction of emotional distress may be legally viable. . . . On
remand, the court should evaluate this evidence to determine
whether it is sufficient to support Beard's claim." Id. We did
not similarly instruct the superior court to determine whether
Beard was excused from exhausting his contractual remedies.
It is not surprising that the superior court read
Beard I as settling the question of whether Beard was excused
from exhausting his contractual remedies. We did not "merely
reverse" the superior court's decision and remand for further
proceedings. We unqualifiedly and unconditionally held that Beard
was excused from exhausting his contractual remedies.
Bruce Senkow was the former APEA Field Representative
whose affidavit was used by Beard in opposition to the State's
mistitled Motion to Dismiss. In that affidavit, Senkow stated in
essence that he had refused to grieve Beard's claims because they
were not grievable under the contract. The State did not present
any evidence to rebut that statement, or explain that it might
have been incorrect or inaccurate as far as certain claims were
Following our decision in Beard I, the State deposed
Senkow. In its view Senkow's deposition showed that he would
have filed a grievance had Beard asked, but Beard had not. Thus
Senkow's earlier affidavit was either incorrect or inaccurate as
to certain claims. Based on that deposition, the State concluded
that this court had misconceived a material fact. The State
promptly filed a belated Petition for Rehearing, as well as a
Motion for Late Filing of Petition for Rehearing. We granted the
motion, but ultimately denied the petition.
The State's petition was directed solely at the issue
of exhaustion of contractual remedies. The State asserted that
the issue of futility had not been raised below: "There had been
no scrutiny of the facts of Beard's relationship with his union
representative at the trial level before appeal."nor had it been
raised on appeal: "However, the [supreme] court also found, sua
sponte, that Beard was excused from grieving his dispute on the
grounds that Beard's union representative, Senkow, refused to
represent Beard." The State asked this court to "rehear its
decision on the futility of Beard's exercise of his contractual
remedies." We declined to do so.
If the State was correct, this court should have
granted the State's petition for rehearing and afforded
appropriate relief at that time. And it should now admit its
error. However, the remedy is not now to grant in effect the
long ago and far away petition for rehearing. Such a resolution
begs disappointed litigants to continue the fray in the hope that
at some point in the future they will prevail, even though the
issue has long since been decided. Further, it erodes the
confidence trial courts should have in effectuating decisions of
this court. If our decision and resolution of the petition for
rehearing were correct, as I believe it was, there is no
justification for remanding this issue for redetermination.
Regarding the procedural issue, the State argues that
it never had an opportunity to rebut the evidence presented in
Beard's opposition. Op. at 14. I disagree. The court notes
that the State's motion to dismiss was actually a motion for
summary judgment. Op. at 14 n.8. The State acknowledges that
"there were opportunities for the state to defend the dismissal,
both at reconsideration and on appeal, . . ." The State's only
argument is that it did not have the benefit of discovery or
factual determinations. However, the State brought the motion to
dismiss for failure to exhaust, yet failed to respond to Beard's
evidence that he was excused from exhaustion.
Pederson-Szafran v. Baily, 837 P.2d 124 (Alaska 1992),
is not controlling. In Pederson the court noted that the
decision in Szafran v. State, Mem. Op. & J. No. 452 (Alaska, May
10, 1989), was based only on Szafran's affidavit that she was not
afforded grievance rights. Pederson, 837 P.2d at 126. The court
stated only that "'[t]he superior court therefore erred in
dismissing the complaint for lack of subject matter
jurisdiction.'" Id. (quoting Szafran, Mem. Op. & J. No. 452).
Following remand, Szafran filed an amended complaint conceding
that she had received an administrative hearing. Id. at 128.
"[G]iven Szafran's concession in her amended complaint that a
grievance procedure was in fact afforded her, . . . we conclude
that the superior court's grant of summary judgment to the State
was not inconsistent with Szafran I." Id.
In this case the new evidence presented by the State is
a deposition by Senkow, which may contradict his earlier
affidavit. However, differences in context preclude such a
conclusion on this record. This is not a situation in which the
grievant has recanted or changed his or her position. Certainly
Beard has not.
Furthermore, as a practical matter it seems useless to
remand the issue of exhaustion of contract remedies to the
superior court. The court will be asked to determine if an
administrative appeal to Beard's supervisors would have been
futile. These are the same supervisors whom the jury already has
found to have engaged in "outrageous"behavior justifying the
IIED claim and punitive damages. The answer seems obvious.
1. The basis for this warning was a series of remarks Beard
made during an after work gathering at a local bar. Beard told
several DOT employees that he had successfully grieved his 30 day
suspension. He also expressed his hope that his rebuttals to
McLeod's evaluations would be placed in her personnel file.
McMullen learned of these remarks and requested memos from three
employees detailing these comments.
2. McLeod cites six employee complaints of "disruption"in
the March evaluation. These memos, including one by McLeod
herself, briefly recount various comments made by Beard about his
successful grievance settlement.
3. The State based this motion on the February 1991
deposition of Beard's union representative, Bruce Senkow, in
which Senkow allegedly contradicts his earlier affidavit.
4. According to Beard, Milt Lentz completely misrepresented
this conversation with Beard. Beard claims that after a "closed-
door"meeting with Cameron and McLeod, Lentz approached his desk
and immediately asked him about the office situation. Beard
denied telling Lentz he planned to sue the state. He also
testified that Lentz told him that "the people here, the
supervisors here are getting a little bit worried about the
situation because someone might actually investigate it. Well
just be real careful that someone doesn't come up behind you and
blow you away."
5. The APEA contract expressly states that the keeping of a
secret file on an employee is prohibited and requires the
contents of a supervisor's performance logs to be shared with
employees on a regular basis.
6. In October 1986 the Division of Personnel completed its
review of the February 1986 Sisk warning memo and recommended
that all references to the memo and the underlying complaints be
removed from Beard's file. In January 1987 a Division of
Personnel investigator recommended removing the paragraph citing
Beard's disruptive behavior from McLeod's March 1986 evaluation
on the grounds (1) that it was based on the Sisk warning and (2)
that the other complaints were inconclusive. He also recommended
the deletion of comments indicating that Beard had a negative
effect on the productivity of the section.
7. The State's original motion to dismiss on the pleadings
actually functioned as a motion for summary judgment because it
incorporated a number of exhibits outside the pleadings. See
Alaska R. Civ. P. 12(c).
8. In Pedersen, an employee filed an original action
against the State alleging breach of her employment contract.
Her complaint included a statement that she had exhausted the
administrative remedies provided in the applicable collective
bargaining agreement. Id. at 126. The State moved to dismiss
the action for failure to establish subject matter jurisdiction
on the ground that the employee could only appeal the
administrative decision to the superior court. Although the
employee filed an affidavit in opposition, stating that she had
pursued administrative remedies but that a grievance procedure
had not been afforded to her, the superior court dismissed her
case. We reversed, holding that the employee's affidavit was
sufficient to withstand the State's motion to dismiss. Id.
On remand, the employee filed an amended complaint
which conceded that she had been afforded an administrative
hearing. The State then obtained summary judgment on the
exhaustion issue. Id. at 126-27. On appeal, we upheld the
superior court's grant of summary judgment on the ground that our
previous decision did not conclusively determine the employee's
right to bring an independent action. See id. at 128.
9. The State also argues that Beard's exclusive remedy
against the State for injury and lost wages is under the Workers'
Compensation Act. This argument is unpersuasive. The purpose of
the Workers' Compensation Act is to compensate a victim of work-
related injuries for the future economic losses which the worker
will suffer as a result of the injury. Wien Air Alaska v. Arant,
592 P.2d 352, 357 (Alaska 1979), overruled on other grounds by
Fairbanks North Star Borough Sch. Dist. v. Crider, 736 P.2d 770,
775 (Alaska 1987). In his constructive discharge action, Beard
seeks to recover the wages and benefits lost due to the breach of
his employment contract. See also Pichon v. Pacific Gas & Elec.
Co., 260 Cal. Rptr. 677 (Cal. App. 1989) (holding that the
exclusivity provisions of California's workers' compensation act
bar an employee from raising a civil claim for "an _injury'
arising within the course and scope of employment,"not a claim
for "[e]conomic contract damages incurred independent of any
10. Cf. Martech Constr. Co. v. Odgen Envtl. Servs., Inc.,
852 P.2d 1146 (Alaska 1993). In Martech, we interpreted the
scope of a general release very broadly to include all claims
related to the disputed transaction and upheld the trial court's
grant of summary judgment based on the release. In reaching this
decision, we focused on the broad language repeatedly used
throughout the release and concluded that all claims arising out
of the disputed transaction, not explicitly reserved, were
settled as a matter of law. Id. at 1152.
11. The State is incorrect in its claim that Beard must show
that the release should be set aside in order to avoid summary
judgment on this issue. We have previously held that the party
relying on the release must show that the release "was given with
an understanding of the nature of the instrument." Witt v.
Watkins, 579 P.2d 1065, 1069 (Alaska 1978); see also Schmidt, 627
P.2d at 204. Only then does the burden shift to the releasor to
"show by clear and convincing evidence that the release should be
set aside." Witt, 579 P.2d at 1070.
12. We will reverse a trial court's denial of a motion for
judgment n.o.v. only when the evidence, viewed in the light most
favorable to the non-moving party, is such that reasonable
persons could not differ in their judgment. City of Whittier v.
Whittier Fuel & Marine Corp., 577 P.2d 216, 220 (Alaska 1978).
13. This cause of action should be distinguished from the
public policy exception to the employment-at-will doctrine. See
Sterling Drug, Inc. v. Oxford, 743 S.W.2d 380, 382-85 (Ark. 1988)
(discussing the policy concerns courts have relied on in creating
an exception to the general rule that an employee at will may be
discharged without good cause). While most jurisdictions which
have recognized such a cause of action have defined it as a tort,
a small minority have defined it as a breach of an implied
contractual duty not to discharge an employee for an act done in
the public interest. Compare Gantt v. Sentry Ins., 824 P.2d 680
(Cal. 1992) (recognizing tort cause of action) and Wagner v. City
of Globe, 722 P.2d 250 (Ariz. 1986) with Sterling, 743 S.W.2d at
385 (recognizing exclusive contract approach) and Brockmeyer v.
Dun & Bradstreet, 335 N.W.2d 834, 841 (Wis. 1983).
14. In King, the record revealed that King's supervisor (1)
created a special performance evaluation for King; (2) assigned
King extensive overtime and additional responsibilities; (3)
yelled at King and called him a liar; (4) insisted that King
undergo a psychological examination in intimidating
circumstances; (5) delayed King's return to work after he passed
the psychological evaluation; (6) kept King on light duty status
contrary to departmental practice; (7) reduced King's rank and
status and placed him on probationary review for six months; (8)
publicly and falsely accused King of misrepresenting his rank
causing King embarrassment and humiliation; (9) altered and
amended King's past work evaluations; (10) harassed King and
singled him out for negative comments; (11) wrongly accused King
of making a false arrest and tape recorded an interview
concerning the incident; (12) concealed from King a potentially
dangerous situation on campus; and (13) accused King a second
time of false arrest and then sought a letter from the district
attorney stating that King's involvement had been illegal. Id.
at 708-09. On the basis of these facts, we reversed the trial
court's grant of summary judgment in favor of the supervisor.
Id. at 711.
15. In Hess, the city director (1) made numerous unfounded
complaints regarding the officer's performance, (2) conducted
surveillance of the officer's activities, and (3) communicated
his threats to fire the officer via a number of different
sources. Id. at 794-95.
16. At trial, Beard testified that Cameron's approval of
McLeod's evaluations established that he was part of the plot
against him. Beard further suggested that Cameron was aware of
and implicitly condoned the misuse of State time and property
which Beard sought to have investigated. Finally he speculated
that Cameron and McMullen collaborated with Milt Lentz to create
the "disruptive incident"which formed the basis of the May final
warning. None of this speculation is corroborated. The only
evidence even remotely suggesting that Cameron took any action
against Beard is Kendall's testimony that Cameron asked another
DOT supervisor to do a "hatchet job"on Beard. This evidence is
insufficient to establish intentional infliction of emotional
distress as a matter of law.
17. The individual supervisors dropped this issue after the
court denied its summary judgment motion and did not seek to
present the immunity issue to the jury. Therefore they have
waived any further resolution of this issue. See Gates v. City
of Tenakee Springs, 822 P.2d 455, 460 (Alaska 1991).
18. Because we reverse the IIED judgments against Cameron
and McLeod, we only address here the propriety of the awards
against McMullen and Venusti.
19. The State contends that the jury was inflamed by Beard's
comments concerning his stress caused by the litigation process
but offers nothing to back up this contention.