Shaddix v. United Ins. Co. of America
Shaddix v. United Ins. Co. of America
Opinion
The plaintiff, Harry Shaddix, appeals from the dismissal of his fraud action against the defendants, United Insurance Company of America ("United") and its regional manager. We reverse and remand.
Our supreme court has transferred this case to this court pursuant to §
In his complaint, Shaddix alleged that while he worked for United, certain company employees "induced [him] intocontinuing his employment with United by representing to [him] that he would be taken care of as to his job and that he would be given relief as to policy lapses that had been charged to his commission reserves account." (Emphasis added.) Shaddix further alleged that United and its employees suppressed the fact that many or all of the lapsed insurance policies that were charged to his commission reserve account could have been lapsed so that they would not have affected his reserve account. He alleged that the misrepresentations and suppression were intentional, and that because of his reliance upon what he was told "he continued his employment with United and was thereby caused to suffer emotional distress and mental anguish." (Emphasis added.)
The trial court held that because Shaddix was an employee-at-will, he suffered no actionable injury as a result of relying on the alleged false representations or as a result of the suppression of facts. Shaddix argues that the employment-at-will doctrine is not applicable to this case, and, therefore, that the trial court erred in dismissing his lawsuit.
A dismissal governed by Rule 12(b)(6), Ala.R.Civ.P., should be granted sparingly, and is properly granted only when it appears beyond a doubt that the plaintiff cannot prove any set of facts which would entitle him or her to relief. Garrett v.Hadden,
Shaddix's complaint clearly alleges damages resulting from misrepresentations that, he says, induced him tocontinue his employment to his detriment. Shaddix claims damages for emotional distress because, he says, he continued to work for United as a result of the alleged misrepresentations and suppression when he otherwise would have left its employ. The employment-at-will *Page 1099
doctrine provides "that an employment contract terminable at the will of either the employer or the employee may be terminated by either party at any time with or without cause."Grant v. Butler,
"[Even if] Alfa had based the termination of [the plaintiff's] contract on her failure to cooperate in the investigation, the fraud claim would still fail. . . . Alfa had the right under the employee-at-will doctrine to terminate Salter's contract, even if it did so maliciously or for some other improper reason."
561 So.2d at 1054. In this case, however, Shaddix's employment was not terminated, he does not allege wrongful termination or any damages resulting therefrom, and he does not attempt to state a cause of action for breach of contract. Shaddix complains only that United's alleged misrepresentations and suppressed facts regarding its future conduct were false, i.e., he alleges promissory fraud.
The elements necessary to establish a cause of action for promissory fraud are as follows:
Howard v. Wolff Broadcasting Corp.,"(1) that the defendant made a false representation of a material fact; (2) that the false representation was relied upon by the plaintiff; (3) that the plaintiff was damaged as a proximate result of the reliance; (4) that the representation was made with a present intent to deceive; and (5) that when the representation was made the defendant intended not to perform in accordance with it."
Our supreme court has allowed other employees-at-will to maintain actions for fraud. In Winn-Dixie Montgomery, Inc. v.Henderson,
United interprets Alabama law to provide that an employee-at-will cannot maintain any action alleging fraud or misrepresentation against his or her employer. We reject that interpretation.2 Any other result would allow Alabama's employers to defraud their employees with impunity, relying upon the employment-at-will doctrine to provide them with virtual immunity in actions arising within the scope of the employment contract.
After reviewing the allegations of Shaddix's complaint, and construing them in his favor, we conclude that, apart from any connection with his employee-at-will status, Shaddix could have maintained a cause of action for promissory fraud with resulting injury to himself. The employee-at-will doctrine is not applicable in this case, and, therefore, the trial court erred in relying upon the law relative to terminations of employees-at-will in dismissing this case. The judgment dismissing the complaint is reversed, and the cause is remanded for further proceedings.
Shaddix's request for an "award of costs" is denied.
The foregoing opinion was prepared by SAM A. BEATTY, Retired Justice, Supreme Court of Alabama, while serving on active duty status as a judge of this court under the provisions of §
REVERSED AND REMANDED.
All the judges concur.
Reference
- Full Case Name
- Harry Shaddix v. United Insurance Company of America
- Cited By
- 5 cases
- Status
- Published