John Cahak v. Rehab Care Group, Inc.--Appeal from 414th District Court of McLennan County

IN THE

TENTH COURT OF APPEALS

No. 10-06-00399-CV

John Cahak,

Appellant

v.

Rehab Care Group, Inc.,

Appellee

From the 414th District Court

McLennan County, Texas

Trial Court No. 2004-3169-3

MEMORANDUM Opinion

John Cahak sued Rehab Care Group, Inc., his former employer, for breach of contract and fraudulent and negligent misrepresentation. The trial court granted Rehab s traditional and no-evidence motions for summary judgment. Cahak appeals. We will affirm.

Standards of Review

We review a trial court s summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In reviewing a summary judgment, we must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). We must consider all the evidence in the light most favorable to the nonmovant, indulging every reasonable inference in favor of the nonmovant and resolving any doubts against the motion. See id. at 756.

A no-evidence motion for summary judgment is essentially a motion for pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006); see also Humphrey v. Pelican Isle Owners Ass n, 238 S.W.3d 811, 813 (Tex. App. Waco 2007, no pet.). Once such a motion is filed, the burden shifts to the nonmoving party to present evidence raising an issue of material fact as to the elements specified in the motion. Tamez, 206 S.W.3d at 583. A genuine issue of material fact exists if more than a scintilla of evidence establishing the existence of the challenged element is produced. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Id. (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). On the other hand, the evidence amounts to no more than a scintilla if it is so weak as to do no more than create a mere surmise or suspicion of fact. Id. When determining if more than a scintilla of evidence has been produced, the evidence must be viewed in the light most favorable to the nonmovant. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004).

Background and Evidence

Rehab provided rehabilitative services for hospitals. In 1997, Cahak was hired as the program director for Rehab s comprehensive rehabilitation unit at Hillcrest Baptist Medical Center in Waco. Cahak s employment was at will. After an accreditation mock survey in November 2002 in which Cahak was found to be deficient in several areas, Rehab removed Cahak as the program director at Hillcrest as of December 6, 2002. Hillcrest s director of rehabilitation services wrote a December 19 letter to Rehab that questioned Rehab s decision to remove Cahak.

Rehab did not fire Cahak at that time; it placed him on an as needed basis, with Rehab having no obligation to provide Cahak with fulltime employment. Rehab gave him two options. First, he could continue his employment with Rehab as needed, and Rehab would help Cahak develop his management skills so that he might be more effective in the future. Second, should Cahak not want to participate in the management development plan, he could take a six-week severance plan that would include a separation plan and release. Cahak chose the first option and also went on short-term disability status to have knee surgery.

Cahak met with his superiors on January 6, 2003, to discuss his situation, after which he sent an email setting forth his understanding of the meeting, which he described as looking at issues, possible solutions and possible opportunities. Cahak then had knee surgery. A January 14 letter to Cahak from Rehab requested him to notify Rehab one week before he intended to return to work. On March 18, Cahak s physician released him to return to work when Cahak felt comfortable to do so. Rehab wrote an April 10 letter to Cahak requesting a response by April 15 regarding his return to work. Meanwhile, Cahak had been working part-time at another local hospital. When Cahak did not respond to Rehab s April 10 letter, Rehab terminated his employment on April 23.

Cahak sued Rehab, asserting that his at-will status became contractual when he chose the option to continue employment with Rehab and claiming he relied to his detriment on Rehab s misrepresentations about his continued employment with Rehab. Cahak s theory is that, because Hillcrest was upset with Rehab s removal of Cahak, Rehab fraudulently induced Cahak to continue his employment with Rehab until Hillcrest had renewed its contract with Rehab.

Cahak presents two issues on appeal: (1) whether Rehab s offer to continue Cahak s employment so long as he participated in a management development plan altered his as-will status; and (2) whether Rehab s representations entitled Cahak to the benefits of continued employment or alternatively to the previously offered severance package.

Discussion

Texas adheres to the employment-at-will doctrine, which provides that, absent a specific agreement to the contrary, employment may be terminated by the employer or the employee at will, with or without cause. Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex. 1998); East Line & Red River Ry. Co. v. Scott, 72 Tex. 70, 10 S.W. 99, 102 (1888). To defeat the strong presumption of at-will employment, the employee has the burden to show that the employer unequivocally indicated a definite intent to be bound not to terminate the employee except under clearly specified circumstances or conditions. Midland Jud. Dist. Community Supervision & Corrections Dep t v. Jones, 92 S.W.3d 486, 488 (Tex. 2002). General comments that an employee will not be discharged as long as his work is satisfactory do not in themselves manifest such an intent, nor do statements that an employee will be discharged only for good reason or good cause when there is no agreement about what those terms encompass. Brown, 965 S.W.2d at 502.

Cahak contends that Rehab s offer to continue Cahak s employment so long as he participated in a management development plan, and his acceptance of it, altered his at-will status. But Cahak admitted in his deposition that Rehab never guaranteed that he would be employed for a certain period of time; in his mind, he could have left Rehab at any time with appropriate notice. He also said that he had been considering employment opportunities outside of Rehab, but his primary goal was to stay with Rehab. Moreover, Rehab s letter to Cahak formally notifying him of his removal stated that Rehab had no obligation to provide [him] with full time employment.

Because Cahak produced no evidence that Rehab unequivocally indicated a definite intent to be bound not to terminate him without cause i.e., that his at-will status was altered by agreement the trial court did not err in granting summary judgment on Cahak s breach of contract claim. None of Rehab s statements or the representations, assurances, or conditions overcome the strong presumption that Cahak s at-will status continued after he was removed as Hillcrest program director. We overrule his first issue.

Cahak alternatively alleged claims for fraudulent or negligent misrepresentation, basically asserting that he relied on Rehab s false assurance of continued and apparently indefinite employment and that he thereby suffered damages. But an at will employee is barred from bringing a cause of action for fraud against his employer based upon the employer s decision to discharge the employee.[1] See Leach v. Conoco, Inc., 892 S.W.2d 954, 960-61 (Tex. App. Houston [1st Dist.] 1995, writ dism d w.o.j.); see also Crow v. Rockett Special Utility Dist., 17 S.W.3d 320, 329-330 (Tex. App. Waco 2000, pet. denied) ( If an at-will employee such as Crow were allowed to assert that his employer's policies constitute fraudulent representations, then the at-will employment doctrine would be effectively eviscerated. ), disapproved on other grounds by Binur v. Jacobo, 135 S.W.3d 646, 651 n.11 (Tex. 2004). An at-will employee s claim for fraudulent inducement is also precluded as a matter of law. Miller v. Raytheon Aircraft Co., 229 S.W.3d 358, 381 (Tex. App. Houston [1st Dist.) 2007, no pet.); Brown v. Swett & Crawford of Tex., Inc., 178 S.W.3d 373, 379-80 (Tex. App. Houston [1st Dist.] 2005, no pet.). Cahak s fraud claim based on an alleged assurance that his employment would continue with Rehab is therefore precluded as a matter of law because his employment was at will. The trial court properly granted summary judgment on Cahak s fraud claim.

To establish a negligent misrepresentation claim, the plaintiff must also prove that the defendant misrepresented an existing fact rather than a promise of future conduct. See Federal Land Bank Ass n v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991); Miller, 229 S.W.3d at 379; Dallas Firefighters Ass n v. Booth Research Group, Inc., 156 S.W.3d 188, 194 (Tex. App. Dallas 2005, pet. denied). Thus, in addition to failing for the same reason as his fraud claim, Cahak s negligent misrepresentation claims fail as a matter of law because the alleged promise of continuing employment was a promise of future conduct, rather than statements of existing fact. Miller, 229 S.W.3d at 379-80. The trial court did not err in granting summary judgment on Cahak s negligent misrepresentation claim.

Having overruled Cahak s issues, we affirm the trial court s summary judgment.

BILL VANCE

Justice

Before Chief Justice Gray,

Justice Vance, and

Justice Reyna

Affirmed

Opinion delivered and filed August 6, 2008

[CV06]

[1] Because Cahak was an at-will employee, his reliance on two cases involving contracting parties is misplaced. See Spoljaric v. Percvial Tours, Inc., 708 S.W.2d 432, 433 (Tex. 1986) (plaintiff worked for defendant under a two-year employment contract); Formosa Plastics Corp. USA v. Presidio Engineers & Contractors, Inc., 960 S.W.2d 41, 43-44 (Tex. 1998) (construction contract).