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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
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.
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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
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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
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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
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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).
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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)).
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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).
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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).
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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.
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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).
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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).
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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.
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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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