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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Crowley v. State, Dept. of Health & Social Services, Office of Children's Services (7/1/2011) sp-6573

Crowley v. State, Dept. of Health & Social Services, Office of Children's Services (7/1/2011) sp-6573, 253 P3d 1226

        Notice:  This opinion is subject to correction before publication in the PACIFIC REPORTER. 
        Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303 
        K   Street,   Anchorage,   Alaska   99501,   phone   (907)   264-0608,   fax   (907)   264-0878,   email 
        corrections@appellate.courts.state.ak.us. 

                THE SUPREME COURT OF THE STATE OF ALASKA 

KAREN CROWLEY,                                ) 
                                              )       Supreme Court No. S-13699 
                       Appellant,             ) 
                                              )       Superior Court No. 3AN-04-13315 CI 
        v.                                    ) 
                                              )       O P I N I O N 
STATE OF ALASKA,                              ) 
DEPARTMENT OF HEALTH &                        )       No. 6573 - July 1, 2011 
SOCIAL SERVICES, OFFICE OF                    ) 
CHILDREN'S SERVICES,                          ) 
                                              ) 
                       Appellee.              ) 
                                              ) 

               Appeal from the Superior Court of the State of Alaska, Third 
               Judicial District, Anchorage, William F. Morse, Judge. 

               Appearances: Karen Crowley, pro se, Anchorage, Appellant. 
               Joan M. Wilkerson, Assistant Attorney General, and Daniel 
                S. Sullivan, Attorney General, Juneau, for Appellee. 

               Before:    Carpeneti, Chief Justice, Fabe, Winfree, Christen,
 
               and Stowers, Justices. 
 

               CARPENETI, Chief Justice.
 

I.      INTRODUCTION 

               A terminated employee appeals the superior court's Rule 41(b) dismissal 

of her contract claims against her former employer. Because the employee showed neither 

an   objective   nor   a   subjective   breach   of the   implied   covenant   of   good   faith   and   fair 

dealing, we affirm. 

----------------------- Page 2-----------------------

II.     FACTS AND PROCEEDINGS 

        A.      Facts 

                In November 2000, the Office of Children's Services (OCS) hired Karen 

Crowley as a non-permanent social worker.             OCS appointed her to a full-time social 

worker position in June 2001, and gave her permanent status in December 2001 after a 

six-month probation. 

                Toward the end of Crowley's probationary period, Crowley's supervisor, 

Deborah Allen, began receiving complaints about Crowley's job performance.  In June 

2002, Allen placed her concerns about Crowley in a letter to OCS Manager James Steele. 

Her letter cited "grave concerns about [Crowley's] judgment," as well as concerns about 

her   "ethical   behavior."    She   wrote   that   Crowley   had   lied   on   multiple   occasions,   in 

situations ranging from work equipment usage to case management. Allen stated that she 

had substantiation from other supervisors and staff managers to support her claims. 

                In August 2002, after receiving a complaint from a foster parent about 

Crowley,      OCS    Staff   Manager     Ed   Sheridan     began    investigating    Crowley's     job 

performance.     He issued his report in December 2002.           The report investigated seven 

specific allegations against Crowley, including (1) telling an intake worker that there 

were no child protection issues of concern in the "B.R." case, even though the child's 

father had an extensive criminal background and there was a restraining order against the 

father; (2) misrepresenting "critical facts" during a review of the "R.C." case, including 

providing inconsistent statements about R.C.'s behavioral problems and failing to meet 

contact standards; (3) authorizing an extended visitation between a mother and two 

children without permission from Crowley's supervisor, Deborah Allen; (4) failing to 

follow   OCS   policies   and   procedures   after  Crowley   received   a   report   of  a   "physical 

altercation" between a parent and child, including not investigating the incident; (5) 

misrepresenting Crowley's qualifications on her employment application; (6) leaving a 

                                                 -2-                                            6573
 

----------------------- Page 3-----------------------

supervised visit early and asking the foster parent to supervise the rest of the visitation, 

as well as asking the foster parent to transport the child's mother to an appointment 

following a previous visit; and (7) providing inaccurate and incomplete information to 

union representatives during a personnel investigation. 

                Sheridan looked into at least 12 of Crowley's cases for the investigation. 

Relying on a combination of written evidence and interviews with OCS staff, social 

workers, and foster parents, Sheridan found evidence supporting all seven allegations. 

The report also described numerous lesser examples of incompetence, such as failure to 

follow   proper   procedures   in   at   least   seven   cases   in   the   previous   year,   and   keeping 

"incomplete and unacceptable notes." Sheridan concluded that "[t]he evidence supports 

poor     judgment,     ineffective    and   misleading     communications,        incompetence       and 

insubordination   on   the   part   of   Ms.   Crowley."    He   concluded   that   "Ms.   Crowley   is 

incompetent in her position as a Social Worker.  To continue her employment with the 

Division   of   Family   and   Youth   Services   would  place   Alaska's   children   at   risk   and 

compromise the Division's mission." 

                On December 20, 2002, Acting Director Tom Cherian terminated Crowley 

from her employment. 

        B.      Proceedings 

                Crowley filed an employment suit against OCS in December 2004, alleging 

breach of the implied covenant of good faith and fair dealing, wrongful retaliation, and 

discrimination   based   on   age   and   race.   In August   2006,   the   superior   court   granted 

summary judgment to OCS on all counts.  Crowley appealed the judgment to this court 

in January 2007.   We sustained the superior court's grant of summary judgment on the 

discrimination claims, but reversed and remanded Crowley's claim that the State had 

                                                  -3-                                             6573
 

----------------------- Page 4-----------------------

breached the implied covenant of good faith and fair dealing.1                 We also remanded the 

retaliation claim, which we recognized as "a species of a good faith and fair dealing 
claim."2 

                 The remaining issues were tried before Superior Court Judge William F. 

Morse in October 2009.           Crowley was the sole witness testifying on her own behalf. 

During   her   testimony,   Crowley   disputed   each   of   the   major   findings   in   Sheridan's 

investigative report. At the close of Crowley's case-in-chief, OCS moved for involuntary 
dismissal of the action under Alaska Rule of Civil Procedure 41(b).3   The State argued 

        1        See Crowley v. State, Dep't of Health & Soc. Servs., Office of Children's 

Servs., Mem. Op. & J. No. 1323, 2008 WL 5352309, at *6 (Alaska, Dec. 24, 2008). 

        2       Id. at *4, *6. 

        3        Rule 41(b) provides: 

                 For failure of the plaintiff to prosecute or to comply with 
                 these rules or any order of court, a defendant may move for 
                 dismissal of an action or of any claim against the defendant. 
                 After the plaintiff, in an action tried by the court without a 
                jury,    has   completed      the   presentation     of   the  plaintiff's 
                 evidence, the defendant, without waiving the right to offer 
                 evidence in the event that a motion is not granted, may move 
                 for a dismissal on the ground that upon the facts and the law 
                 the plaintiff has shown no right to relief.  The court as trier of 
                 the   facts   may     then   weigh     the   evidence,     evaluate    the 
                 credibility   of   witnesses   and   render   judgment   against   the 
                plaintiff even if the plaintiff has made out a prima facie case. 
                 Alternately, the court may decline to render any judgment 
                 until   the   close   of   all   the   evidence. If   the   court   renders 
                judgment on the merits against the plaintiff, the court shall 
                 make findings as provided in Rule 52(a).  Unless the court in 
                 its order for dismissal otherwise specifies, a dismissal under 
                 this   subdivision   .   .   .   operates   as   an   adjudication   upon   the 

                                                    -4-                                              6573
 

----------------------- Page 5-----------------------

that there were two ways to violate the implied covenant of good faith and fair dealing 

- either subjectively or objectively - and Crowley had provided insufficient testimony 

to support either.     The superior court granted the motion, finding that Crowley had not 

proven by a preponderance of the evidence that OCS had violated the implied covenant 

by terminating Crowley's employment. On December 4, 2009, the superior court entered 

final judgment in favor of OCS. 

                Crowley appeals. Though represented by counsel in the trial court, she has 

appeared pro se before this court. 

III.	   STANDARD OF REVIEW 
                We review Civil Rule 41(b) decisions for abuse of discretion.4  Whether an 

employer's action breached the covenant of good faith and fair dealing is a question for 
the trier of fact.5   We review the trial court's factual findings for clear error, and will 

reverse only if we have "a definite and firm conviction on the entire record that a mistake 
has been made, although there may be evidence to support the finding."6 

IV.	    DISCUSSION 

        A.	     The   Superior   Court   Did   Not   Err   As   A   Matter   Of   Procedure   In 
                Granting The Involuntary Dismissal. 

                Crowley   first   challenges   the   superior   court's   dismissal   on   procedural 

        3	      (...continued)
 

                merits.
 

        4       Fletcher v. Trademark Constr., Inc., 80 P.3d 725, 729 (Alaska 2003) (citing 

Farmer v. State, 788 P.2d 43, 50 (Alaska 1990)). 

        5       Luedtke   v.   Nabors   Alaska   Drilling,   Inc.,   834   P.2d   1220,   1223   (Alaska 

1992). 

        6       Fletcher,   80   P.3d   at   729   (quoting  Crittell   v.   Bingo,   36   P.3d   634,   638 

(Alaska 2001)) (internal quotation marks omitted). 

                                                   -5-	                                           6573
 

----------------------- Page 6-----------------------

                                                     7 
grounds.   She argues under Rogge v. Weaver  that (1) a trial judge may not grant a Rule 

41(b) motion if the plaintiff has made out a prima facie case, and (2) she made a prima 

facie case that OCS breached the implied covenant of good faith and fair dealing.  We 

disagree and find no error. 

                First,Rogge was decided before our adoption of the current wording of Rule 
41(b).    Following a rule change in 1987,8 Rule 41(b) now provides that "[t]he court as 

trier of the facts may . . . weigh the evidence, evaluate the credibility of witnesses and 

render judgment against the plaintiff even if the plaintiff has made out a prima facie 
case."9 

                In this instance, Crowley's argument fails for a more fundamental reason: 

She did not make out a prima facie case on her claim.               The superior court found that 

Crowley provided insufficient evidence to prove that OCS breached the implied covenant 

of good faith and fair dealing.  As discussed below, we agree. 

        B.	     The Superior Court Did Not Err In Finding That Crowley Did Not 
                Prove A Subjective Breach Of The Implied Covenant. 

                Every employment contract in Alaska is subject to the implied covenant of 
good faith and fair dealing.10    While lacking a precise definition, the covenant "generally 

requires employers to treat like employees alike and act in a manner that a reasonable 

        7       368 P.2d 810 (Alaska 1962). 

        8       Alaska Supreme Court Order No. 798 (Jan. 14, 1987). 

        9       (Emphasis added.) While we acknowledge the rule change, we note that, 

where a plaintiff has made out a prima facie case, an involuntary dismissal should be 
entered only with great caution. 

        10      See Smith v. Anchorage Sch. Dist., 240 P.3d 834, 844 (Alaska 2010) (citing 

Mitchell v. Teck Cominco Alaska, Inc., 193 P.3d 751, 760 (Alaska 2008)). 

                                                  -6-	                                           6573
 

----------------------- Page 7-----------------------

person   would   regard   as   fair."11   The   covenant   has   two   components,   a   subjective 

component and an objective component.12             If an employer breaches either component, 

the employer breaches the implied covenant.13 

                 The subjective component focuses on the employer's motives.14                  When 

alleging the employer subjectively breached the implied covenant of good faith and fair 

dealing, an employee must prove that the employer's termination decision was "actually 

. . . motivated by an improper or impermissible objective" - that the decision "was 
actually made in bad faith."15       This includes, for example, "discharg[ing] an employee 

for the purpose of depriving him or her of one of the benefits of the [employment] 
contract."16    The   employee's   own   speculation   is   insufficient   to   show   a   breach;   the 

subjective element focuses on the employer's true motives and not on the employee's 
personal feelings of unfairness.17       Even if the employee proves that the employer was 

        11      Mitchell, 193 P.3d at 760-61. 

        12      Id. at 761. 

        13      Cf. Pitka v. Interior Reg'l Hous. Auth., 54 P.3d 785, 789 (Alaska 2002) 

("Breach of the implied covenant may be either subjective or objective.") (citing Era 
Aviation, Inc. v. Seekins, 973 P.2d 1137, 1139 (Alaska 1999)). 

        14      Id. (citing Era Aviation, 973 P.2d at 1141). 

        15      Era Aviation, 973 P.2d at 1141. 

        16      Id.  (quoting Ramsey v. City of Sand Point, 936 P.2d 126, 133 (Alaska 

1997)).   Firing an employee to prevent him from getting his contractual share of future 
profits would be an example.          See Luedtke v. Nabors Alaska Drilling, Inc., 834 P.2d 
1220, 1224 (Alaska 1992) (citing Mitford v. de Lasala, 666 P.2d 1000, 1007 (Alaska 
1983)). 

        17      Era Aviation, 973 P.2d at 1141 (citing Ramsey, 936 P.2d at 133). 

                                                  -7-                                            6573
 

----------------------- Page 8-----------------------

mistaken,   we   will   not   find   a   subjective   breach   as   long   as   the   employer   made   its 
determination in good faith.18 

                Before the superior court, Crowley alleged that Ed Sheridan conducted his 

investigation in bad faith, and that Crowley's supervisor, Deborah Allen, treated Crowley 

in a bad-faith manner prior to the investigation.  We take each allegation in turn. 

                1.	      Crowley       did   not   prove     that   Ed    Sheridan      conducted      his 
                        investigation in bad faith. 

                OCS fired Crowley largely on the basis of Sheridan's investigative report. 

In the superior court, Crowley argued that Sheridan conducted his investigation in bad 

faith.  She alleged that Sheridan may have intentionally found against her on all counts 

in order to lay a foundation for removing her.  The superior court disagreed.   Nothing in 

Crowley's testimony suggested that Sheridan conducted his investigation in bad faith. 

Furthermore, although the report was unfavorable to Crowley in finding support for the 

allegations against her, the superior court found this insufficient to conclude that the 

report was done in bad faith.        The report gave no indication that Sheridan was biased 

against Crowley, or that he conducted the investigation in a "structurally improper" 

fashion. 

                On   appeal,   Crowley   claims   that   the   superior   court   clearly   erred   in   its 

findings.  First, Crowley argues that Sheridan's report was based on interviews with co- 

                                                                                                        19 
workers who lacked firsthand knowledge. She cites to Willard v. Khotol Services Corp. 

for the proposition that relying on information from secondhand sources gives rise to 

        18      Peterson v. State, Dep't of Natural Res., 236 P.3d 355, 369 (Alaska 2010) 

(citing Holland v. Union Oil Co. of Cal., Inc., 993 P.2d 1026, 1035 (Alaska 1999)). 

        19       171 P.3d 108 (Alaska 2007). 

                                                   -8-                                                6573 

----------------------- Page 9-----------------------

issues of material fact.20     OCS counters, and we agree, that Crowley's claim is directly 

contradicted by the record. To reach his conclusions, Sheridan interviewed many sources 

from both within and outside of OCS, such as foster parents and other social workers. 

Many had firsthand knowledge from working with Crowley directly, leaving Crowley 

with no basis for her claim. 

                Second, Crowley claims that the allegations Sheridan investigated were not 

true.    She implies that if the allegations were false, Sheridan's substantiation of the 

allegations constituted bad faith.       OCS contends that the actual truth of the allegations 

is   immaterial   to   a   finding   of  whether   or   not   Sheridan   acted   in   bad   faith. Citing   to 
Peterson v. State, Department of Natural Resources,21 the State argues that Sheridan 

made a good-faith determination that Crowley should be fired, while Acting Director 

Cherian relied in good faith on Sheridan's findings.  As both parties acted in good faith, 

there was no breach of the implied covenant. 

                We     find  OCS's     argument     persuasive.    An     employer     may   reject   the 
employee's version of events in favor of the accounts of other witnesses.22                  Even if a 

factual finding in an investigation is later found to be inaccurate, this does not constitute 

bad faith as long as the employer had substantial reason to believe that misconduct 
occurred.23    Sheridan's investigation yielded overwhelming evidence that Crowley had 

exhibited poor work performance and that she had violated OCS procedures.  From this, 

        20      Id. at 116. 

        21      236 P.3d 355. 

        22      See id. at 369; Holland, 993 P.2d at 1035. 

        23      Peterson, 236 P.3d at 369. 

                                                   -9-                                            6573
 

----------------------- Page 10-----------------------

Sheridan could have reasonably determined that Crowley should be fired, and OCS's 
good-faith reliance on this report did not breach the implied covenant.24 

               2.	     Crowley did not prove that Deborah Allen treated her in a bad- 
                       faith manner. 

               Before   the   superior   court,   Crowley   argued   that   Allen,   her   immediate 

supervisor,   micromanaged   her   work.       Due   to   Allen's   management   style   Crowley 

requested a new supervisor, and Allen became outwardly upset.  Crowley testified that 

Allen developed a nose bleed and said that Crowley "will be sorry."              She claimed that 

both Allen's micromanaging and her negative reaction to Crowley's transfer request 

constituted "animus," and that this animus subjectively breached the implied covenant. 

The superior court found no evidence that Allen had acted in bad faith, as Crowley had 

given only her word in support of her claims. 

               It is unclear from Crowley's briefing whether Crowley has appealed the 

superior court's conclusion regarding Allen's possible animus.             To the extent that she 

has,   we   do  not  find   that  the  superior  court   clearly  erred.   Crowley's     subjective 

impressions do not prove a subjective breach of the covenant of good faith and fair 

dealing, and before the superior court Crowley offered only speculation that Allen acted 
in bad faith.25  In addition, Allen's behavior toward Crowley before the investigation is 

largely tangential to Crowley's termination itself. A subjective breach focuses on the 

        24     See id.  We note, as well, that Crowley's brief does little to call the results 

of the investigation into question.       She alleges four facts in support of her claim that 
Sheridan's findings were false, but two of these cite to exhibits that were not in the 
superior court record.      Under Alaska Rule of Appellate Procedure 210(a), "[m]aterials 
never presented to the trial court may not be added to the record on appeal."             As to the 
other two, one was not raised below, and both are insufficiently briefed. 

        25     See Pitka v. Interior Reg'l Hous. Auth., 54 P.3d 785, 789 (Alaska 2002). 

                                                -10-	                                           6573 

----------------------- Page 11-----------------------

employer's   motive   for   firing,   and   Allen   did   not  fire   Crowley,   even   if   she   played   a 

tangential role in the events leading up to the firing. 

                 Overall, the superior court did not clearly err in its findings of fact, and 

Crowley did not prove a subjective breach of the implied covenant of good faith and fair 

dealing. 

        C.	      The Superior Court Did Not Err In Finding That Crowley Did Not 
                 Prove An Objective Breach Of The Implied Covenant. 

                 The objective component of the implied covenant focuses on the employer's 

conduct.   It "prohibits the employer from dealing with the employee in a manner that a 
reasonable person would regard as unfair."26           Under the objective component, employers 

must treat like employees alike, and cannot terminate an employee on unconstitutional 
grounds or for reasons violating public policy.27             A pattern of harassing conduct may 

breach   the   implied   covenant,   as   constituting   disparate  treatment.28         In   addition,   an 

employee may not be terminated in express violation of the employee's contract terms.29 

                 In   the   trial   court,   Crowley   alleged   only   one   specific   violation   of   the 

objective component - that Deborah Allen was present in the interviewing room when 

Sheridan      conducted      his  interviews     during    the   investigation     of  Crowley's      work 

performance,   thereby   "taint[ing]   the   entire   investigation."         But   Crowley   failed   to 

        26       Smith v. Anchorage Sch. Dist., 240 P.3d 834, 844 (Alaska 2010) (quoting 

Mitchell   v.   Teck   Cominco   Alaska   Inc.,   193   P.3d   751,   761   (Alaska   2008))   (internal 
quotation marks omitted). 

        27      Id. 

        28       See Charles v. Interior Reg'l Hous. Auth., 55 P.3d 57, 63 (Alaska 2002). 

        29       Cf.   Ramsey   v.   City   of   Sand   Point,   936   P.2d   126,   133   (Alaska   1997) 

(affirming superior court's grant of summary judgment to employer where employer 
terminated at-will employee whose contract expressly provided for termination without 
cause). 

                                                   -11-	                                             6573
 

----------------------- Page 12-----------------------

establish that Allen was in fact present at any interview other than Crowley's interview, 

at which Crowley's union representative was also present.  Before the superior court the 

State argued that "[t]here is no evidence in the record that Ms. Allen was present when 

any [of] these other people were interviewed, and any suggestion that that happened is 

. . . completely unsubstantiated and entirely speculative."               Because Crowley has not 

pointed to anything in the record, other than her mere allegation, to show that Allen was 

allowed to sit in on Sheridan's interviews with other witnesses, there is no factual support 

for Crowley's allegation of bad faith. 

                We conclude that the superior court did not err in rejecting Crowley's claim 

that Allen was present when Sheridan conducted his interviews of co-workers. 

                In addition to her argument that Allen's presence in the interviewing room 

constituted an objective breach of the implied covenant, Crowley raises before us four 
objective breach arguments that were not raised below.30                  These claims are waived. 

Though Crowley is pro se, "apro se litigant who fails to raise an issue below should not 
be able to raise the issue on appeal absent plain error."31 

        30       She claims that Allen treated her in a manner that a reasonable person 

would consider unfair, that Sheridan denied her progressive discipline in violation of her 
contract, and that Allen's unit "did not make monthly contact standards."  Crowley also 
claims disparate treatment, arguing that she was treated differently from a co-worker of 
equal status who was "impaired from performing to agency standards." 

        31       Thoeni   v.   Consumer   Elec.   Servs.,   151   P.3d   1249,   1257   (Alaska   2007) 

(citation omitted).     We will consider arguments not raised in the trial court if the issue 
is   "(1)   not   dependent   on   any   new   or   controverted   facts;   (2)   closely   related   to   the 
appellant's trial court arguments; and (3) could have been gleaned from the pleadings." 
Id. (quoting McConnell v. State, Dep't of Health & Soc. Servs., Div. of Med. Assistance, 
991 P.2d 178, 183 (Alaska 1999)). Crowley's other objective breach claims do not meet 
this standard. 

                                                   -12-                                               6573 

----------------------- Page 13-----------------------

V.      CONCLUSION 

               Because   the   superior   court   did   not   abuse   its   discretion   in   finding   that 

Crowley proved neither a subjective nor an objective breach of the covenant of good faith 

and fair dealing, we AFFIRM the superior court's Rule 41(b) dismissal of Crowley's 

claims. 
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