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Wagenseller v. Scottsdale Memorial Hosp.

Court of Appeals of Arizona, First Division, Department D

June 21, 1984

Catherine Sue WAGENSELLER, Plaintiff-Appellant,
SCOTTSDALE MEMORIAL HOSPITAL; Donald A. Andrews and Jane Doe Andrews, his wife; Neal Brown and Jane Doe Brown, his wife; John W. Holmes and Jane Doe Holmes, his wife; and Kay Smith, a single person, Defendants-Appellees.

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Thomas V. Rawles, Mesa, and Fennemore, Craig, von Ammon, Udall & Powers, P.C. by John D. Everroad, R.C. Mitten, Phoenix, for defendants-appellees.



This case arises out of the discharge of a registered nurse, Catherine Sue Wagenseller, by her former employer, Scottsdale Memorial Hospital. It involves questions concerning the construction of employment-at-[148 Ariz. 244]

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will contracts and whether the employer was required to follow certain published personnel policies relating to the discharge.

Ms. Wagenseller was hired by the hospital in 1977 to work in its emergency department and her duties were concerned with the coordination, training and evaluation of paramedics. One of her supervisors was another nurse, Kay Smith, who is an appellee in this case. Mrs. Smith and Ms. Wagenseller apparently enjoyed a normal working relationship until May of 1979. At about that time they went on a rafting and camping trip down the Colorado River with a large group of other people, many of whom worked for hospitals. According to Ms. Wagenseller, as the trip progressed Mrs. Smith urinated, defecated and bathed publicly, engaged in heavy drinking and "grouped up" with men from another boat. Some members of the rafting group composed a vulgar parody on the song, "Moon River," which concluded with the performers "mooning," that is dropping their pants and displaying their bare buttocks to the audience. Mrs. Smith and others also performed "Moon River" on one occasion at the hospital following the trip for the emergency room staff. When Ms. Wagenseller had been asked to join in, she had told the others to "forget it."

During the river trip Ms. Wagenseller had disassociated herself insofar as possible from the group and her friendship with Mrs. Smith cooled. According to Ms. Wagenseller this eventually led to a number of unfair accusations about her performance at work and her eventual discharge.

While the appellees concede that some of the events of the rafting trip occurred they believe that Wagenseller magnifies their significance. They admit the occurrence of the mooning incident at the hospital. The hospital, on the basis of alleged substandard job performance by Wagenseller, discharged her in October, 1979. Since the trial court granted summary judgment against the appellant we accept the facts and inferences as advanced by Wagenseller as if they were true. Hall v. Motorists Insurance Corp., 109 Ariz. 334, 509 P.2d 604 (1973). As we note below, not all the established facts will support the inferences that Wagenseller would have the finder of fact draw.

Wagenseller sued various hospital administrators, Kay Smith and Scottsdale Memorial Hospital. She alleged that the hospital had denied her due process and had acted arbitrarily by firing her without following the procedures incorporated in its personnel manual. She also alleged that Smith had interfered with an advantageous relationship, that a termination for refusing to participate in the "Moon River" skit violated her first amendment rights, that her fourteenth amendment rights were also violated because she did not get a fair hearing before she was terminated and that the hospital breached her employment agreement for no justifiable reason. The trial court granted summary judgment for all defendants on all grounds.


It is the general rule that an employee at will can be terminated at any time for any reason. See The Dover Copper Mining Co. v. Doenges, 40 Ariz. 349, 12 P.2d 288 (1932) (dealing with an independent contractor); Larsen v. Motor Supply Co., 117 Ariz. 507, 573 P.2d 907 (App.1977). The appellant argues that all of these decisions really deal with questions of the duration of employment and not the reasons for termination. Her analysis in this respect requires an overly refined reading of the decisions and we reject it. For example, the court in The Dover Copper Mining Co. v. Doenges, supra, speaks of such contracts being "terminable at pleasure by either party," a phrase which connotes both the time of and the reasons for discharge.


A number of well reasoned cases recognize that an employee-at-will cannot be terminated for a reason that contravenes some clear and important public policy. Good examples of these are found in Frampton v. Central Indiana Gas Co., 260 Ind. 249, 297 N.E.2d 425 (1973) (employee[148 Ariz. 245]

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terminated for filing a workman's compensation claim); Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980) (employee fired for refusing to participate in an illegal price fixing scheme), and O'Sullivan v. Mallon, 160 N.J.Super. 416, 390 A.2d 149 (Law Div.1978) (X-ray technician fired for refusal to illegally perform catheterization).

The appellant argues that similar public policies apply here. She lists the Arizona statutes proscribing indecent exposure, public sexual indecency, adultery, lewd and lascivious acts, disorderly conduct, criminal nuisance, and possession and use of dangerous drugs as expressions of important policies that Smith violated. We start with the observation that no matter what inference is put on the evidence there is nothing that will support the conclusion that Smith committed public sexual indecency, adultry, lewd and lascivious acts or any offense involving dangerous drugs. The appellees say that the appellant is precluded from arguing that the Moon River skit constituted the specific crime of indecent exposure and that she cannot now raise the issue for the first time on appeal. Whether or not Mrs. Smith's behavior was discussed in the trial court in terms of specific statutory violations, we will address the issue because the behavior was clearly characterized for the trial court as a violation of public policy.

While we can readily characterize the "mooning", alleged defecation and urination as tasteless behavior, a serious question arises as to whether they rise to a violation of A.R.S. § 13-1402, the statute which penalizes indecent exposure. That statute requires one to expose the genitals or anus in a manner that is reckless as to whether other reasonable persons present would be offended or alarmed by the act. Even assuming that these acts constitute a violation, in the context in which they occurred they appear to be relatively minor transgressions. The appellant was given a full opportunity to develop these matters and she has shown nothing about them that presents a truly serious threat to the public morals, peace and welfare. It is difficult, indeed, to imagine any county attorney causing an arrest and prosecution for what Smith allegedly did. We agree with the New Jersey court when it wrote in Pierce v. Ortho Pharmaceutical Corp., 166 N.J.Super. 335, 342, 399 A.2d 1023, 1026 (1979), rev'd 84 N.J. 58, 417 A.2d 505 (1980), that the public policy exception to the rule that employees terminable at will can be fired for any or for no reason should be "tightly circumscribed so as to apply only in cases involving truly significant matters of clear and well-defined public policy...."

What is most significant to us, however, is that the appellant was never required to participate in any objectionable conduct. Taking the evidence in the light most favorable to the appellant, there is simply no dispute that what happened was that appellant disapproved of her supervisor's tasteless behavior. When the supervisor felt the sting of that disapproval she reacted in a petty and unfair manner to the point where a personality conflict blossomed and the appellant was unfairly dismissed. We see no public policy considerations in this state of affairs that would call into play the exception to the rule that employees-at-will can be discharged for any reason.

The appellant argues that Ariz. Const. art. XX, which guarantees that no one shall be molested in person or property on account of his or her mode of religious worship or lack of the same, was violated because her disapproval of Smith's conduct was based on moral convictions founded in turn on religious beliefs. We think her argument is too attenuated. Wagenseller was not required to do or refrain from doing anything. While we can readily envision situations where the invocation of art. XX to protect a job would be perfectly appropriate, this case is not one of them. No one interferred with the appellant's mode of worship.

[148 Ariz. 246]

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The appellant argues that the evidence of Smith's vengence and harassing tactics, coupled with the inaccuracy of the reasons given for appellant's discharge, support a cause of action for malicious discharge as recognized by Geary v. United States Steel Corp., 456 Pa. 171, 319 A.2d 174 (1974) and O'Neill v. ARA Services, Inc., 457 F.Supp. 182 (E.D.Pa.1978). We do not find it necessary to determine whether Arizona recognizes a cause of action for malicious discharge. The appellant neither pled this cause of action nor presented it with sufficient precision as a separate issue to the court below to permit us to consider it now. Payne v. Payne, 12 Ariz.App. 434, 471 P.2d 319 (1970).


Wagenseller argues that it is a general rule of contract law that every contract contains an implied obligation of fair dealing. She acknowledges that Moore v. Home Insurance Co., 601 F.2d 1072 (9th Cir.1979), which in turn relied on Larsen v. Motor Supply Co., supra, would seem to exclude the application of the general rule to the employment-at-will context but then quotes the following passage from Moore:

This is not to say that the employer's contractual duty of fair dealing has no meaning.

601 F.2d at 1074, to infer that Moore somehow supports her position. In Moore the employer conceded that firing an employee solely to avoid the payment of pension benefits would violate a duty of fair dealing. Moore, in essence, is simply an expression of the public policy exception discussed above in a circumstance where such exception applies. While we might well hold that one cannot terminate an employee-at-will to avoid the payment of a pension because to do so violates an important public policy, that is not the case before us.


The appellant proceeds on to argue that every employment-at-will contract contains an implied covenant not to terminate in bad faith or with malice or in retaliation. She relies on two cases. The first is Cleary v. American Airlines, Inc., 111 Cal.App.3d 443, 168 Cal.Rptr. 722 (1980) where eighteen years of longevity and accrued employee benefits were involved. It is clear that those factors, which are not really raised here, had a significant impact on the court's departure from the common law rule. The other case appellant relies on is on Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974), which held that such terminations are not in the best interests of the economic system or the public good. In the recent decision of Leikvold v. Valley View Community Hospital, 141 Ariz. 544, 688 F.2d 170 (1984), the Supreme Court of Arizona reserved judgment on the viability of a claim for bad faith discharge as approved in Monge. Division 2 of this court, in Daniel v. Magma Copper Co., 127 Ariz. 320, 620 P.2d 699 (App.1980) specifically rejected the rule of Monge and carefully articulated good and sufficient reasons for doing so. We agree with Division 2.


Scottsdale Memorial Hospital had a published personnel manual which read in ...

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