Nelson v. Target Corp.

334 P.3d 1010

2014 UT App 205

Susan NELSON, Plaintiff and Appellant

v.TARGET CORPORATION, Defendant and Appellee.

No. 20121059–CA.

Court of Appeals of Utah.

Aug. 28, 2014.

Lincoln W. Hobbs and Sarah H. Orme, for Appellant.

Robert O. Rice and Liesel B. Stevens, for Appellee.

Judge STEPHEN L. ROTH authored this Opinion, in which Judge GREGORY K. ORME and Senior Judge PAMELA T. GREENWOOD concurred.¹

Opinion

ROTH, Judge:

¶ 1 This case involves several claims arising from Target Corporation's decision to terminate its employment of Susan Nelson for taking a customer's wallet. Nelson sued Target for breach of contract, negligent and intentional infliction of emotional distress, and defamation. Each claim hinged in part on Nelson's assertion that Target conducted a deficient investigation, basing its decision to terminate her solely on video surveillance footage of the incident. The district court granted Target summary judgment on each claim. It concluded that Nelson was an at-will employee who could be terminated for any reason, that Nelson had failed to identify any outrageous behavior during the investigation that caused her emotional distress, and that any alleged defamatory statements made during the investigation were shielded by a conditional privilege. The court also denied Nelson's rule 56(f) motion for additional discovery and her request to add a claim for breach of the covenant of good faith and fair dealing. We affirm.

BACKGROUND

¶ 2 Nelson began working at a Target retail store in Orem, Utah, in January 1997. When she was hired, Nelson signed an acknowledgment form confirming that she had read Target's team member handbook (the handbook). According to the handbook, each new employee had a ninety-day learning period:

The first 90 days are when you learn your responsibilities and get acquainted with your fellow team members. It's a chance for you and Target to see whether we make a good fit, whether you're happy with your job and if your Team Leader is happy with your performance. If not, either you or Target may decide your employment shouldn't continue beyond this 90–day learning period.

¶ 3 But the handbook also stated that all Target employees “are ‘at-will’ team members, which means that team members can terminate the employment relationship at any time, for any or no reason,” and “Target reserves the same right.” The handbook instructed employees that they “should not ... interpret any verbal or written statement, policies, practices or procedures, including this handbook, as altering their ‘at-will’ status.” And the handbook further provided that it was “not a contract” and “doesn't guarantee ... employment for any particular length of time, or limit how employment may end.”

¶ 4 Nelson was fired on February 25, 2011, after Target security officers determined that she took a customer's wallet. The customer had contacted Target's security department on February 18 to report that her wallet was missing and that she may have left it at a checkout lane after paying for her groceries. Target's security team reviewed the store's video surveillance footage to determine what had happened. Video footage from a checkout location showed Nelson putting the customer's wallet in her purse. In the video, Nelson, who was shopping after her shift ended that day, takes her own wallet out of her purse to pay for groceries. Nelson notices another wallet a previous customer apparently left at the checkout stand near the credit card reader, glances at the cashier as the cashier turns away, picks up the customer's wallet with her right hand while her own wallet is still in her left, and quickly places it in her purse, which is in the shopping cart next to her. Nelson then finishes paying for her groceries with her own wallet still in her hand, puts her wallet back in her purse on top of the customer's wallet, and leaves the store.

¶ 5 A Target security officer called Nelson at home after reviewing the video. Nelson confirmed that she had the wallet, and the security officer asked her to return it. The officer stated in a deposition that Nelson seemed surprised by his question and returned the wallet within ten minutes. Nelson claimed that she put the wallet in her purse because she mistook it for her own.

¶ 6 Jason Turner, Target's store security chief, investigated the wallet incident. He interviewed the security officer and viewed several store surveillance videos of the event. After reviewing “the video over and over and over again to eliminate any of the possibilities that it could have been an accident,” Turner concluded that there was “no way” Nelson could have taken the wallet by mistake.

¶ 7 Turner interviewed Nelson about the incident on February 25, 2011. As required by company policy, a human resources representative was also present at the interview. After some initial questioning, Turner left the room to allow Nelson time to complete a written statement explaining why she took the wallet. Nelson wrote that she took the wallet inadvertently and did not realize she had it until she went home. Turner returned, reviewed Nelson's statement, listened to Nelson explain her version of the incident, and told Nelson he did not believe her. After Nelson refused to amend her written statement, Turner left the room and returned with a supervisor who informed Nelson that Target was dismissing her.

¶ 8 In April 2011, Nelson sued Target for breach of contract, negligent and intentional infliction of emotional distress, and defamation. In the complaint, Nelson alleged that “she inadvertently picked up a wallet, resembling her own,” and “immediately returned” it when she realized her mistake. She further alleged that Turner “interrogated [her] at length and repeatedly accused [her] of being dishonest” even though he knew or should have known that Nelson was telling the truth. Nelson claimed that Turner's questioning caused her “to suffer emotional distress,” that Turner “communicated to third persons ... information that was untruthful and harmful to [Nelson's] business reputation,” and that Target “violated the express and implicit terms of [Nelson's] contract of employment that she would be treated fairly in connection with her termination.”

¶ 9 Target moved for summary judgment on all of Nelson's claims. Nelson opposed the motion, filed a rule 56(f) motion requesting leave to depose two additional witnesses, and moved to amend her complaint to add a claim for breach of the covenant of good faith and fair dealing. The court granted Target's motion for summary judgment on each claim. The court observed that the handbook “explicitly includes an at-will disclaimer” and that Nelson had not identified any “specific manifestation of an intent to change the terms of her at-will employment.” With respect to the emotional distress claim, the court concluded that “the facts do not demonstrate any conduct by [Target], or [its] agent, Mr. Turner, so outrageous and intolerable that it would offend accepted standards of morality and decency.” Finally, the court determined that any allegedly defamatory statements were shielded by a “conditional privilege” that applied while Target conducted its internal investigation of the wallet's disappearance and that Nelson could not demonstrate that Target abused that privilege.

¶ 10 The district court also denied Nelson's rule 56(f) motion because “there was adequate time to conduct the discovery sought during the discovery period” and “Nelson has failed to show that the additional discovery sought would uncover disputed material facts.” Finally, the court denied Nelson's motion to amend, concluding that the “amendment would be futile because the covenant of good faith and fair dealing cannot be construed to change an indefinite-term, at-will employment contract into a contract that requires an employer to have good cause to justify a discharge.” (Citation and internal quotation marks omitted.)

ISSUES AND STANDARDS OF REVIEW

¶ 11 Nelson raises three issues on appeal. First, she argues that the district court improperly granted Target's motion for summary judgment because “factual issues existed” on each of her claims. We review the district court's decision to grant or deny summary judgment for correctness, viewing “the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party.” Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation and internal quotation marks omitted).

¶ 12 Second, Nelson argues that her motion to amend should have been granted because her proposed claim for breach of the covenant of good faith and fair dealing “would have withstood a motion to dismiss.” “Whether to grant or deny a motion to amend is a matter within the broad discretion of the trial court and we [will not] disturb its ruling unless [the appealing party] establishes an abuse of discretion resulting in prejudice.” Pride Stables v. Homestead Golf Club, Inc., 2003 UT App 411, ¶ 11, 82 P.3d 198 (alterations in original) (citation and internal quotation marks omitted). Here, however, the district court denied Nelson's motion to amend as futile, concluding that the proposed amendment would not survive a motion to dismiss. “Whether a claim can withstand a motion to dismiss is a question of law, and we therefore review the trial court's underlying determination regarding the legal sufficiency of the claim for correctness.” Shah v. Intermountain Healthcare, Inc., 2013 UT App 261, ¶ 6, 314 P.3d 1079.

¶ 13 Finally, Nelson contends that the court “abused its discretion by denying [her] rule 56(f) motion for additional time to complete discovery.” We review the decision to deny a rule 56(f) motion for “an abuse of discretion,” and we will not disturb the district court's ruling unless “the denial of the motion exceed[s] the limits of reasonability.” Petersen v. Riverton City, 2010 UT 58, ¶ 25, 243 P.3d 1261 (alteration in original) (citation and internal quotation marks omitted).

ANALYSIS

¶ 14 We...