BRESLAUER_V_FAYSTON_SCHL_DIST.93-256; 163 Vt 416; 659 A.2d 1129
NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
order that corrections may be made before this opinion goes to press.
Gail Breslauer Supreme Court
On Appeal from
v. Washington Superior Court
Fayston School District, et al February Term, 1994
Stephen B. Martin, J.
James S. Suskin and Catherine Roberts-Suskin of Suskin & Roberts-Suskin,
P.C., Montpelier, for plaintiff-appellant
Peter B. Joslin and John Davis Buckley of Theriault & Joslin, P.C.,
Montpelier, for defendants-appellees
PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.
DOOLEY, J. Plaintiff Gail Breslauer brought this action against the
Fayston School District, her former employer; Fayston School Board; Robert
Stanton, the former principal of the Fayston School; Andreas Lehner,
principal of the Warren Elementary School; and the Warren School Board. The
complaint centers on plaintiff's attempt to obtain a teaching job in the
Warren Elementary School after leaving a similar position in the Fayston
School. Most of the counts relate to adverse comments about plaintiff which
she alleges were made by Stanton to Lehner and resulted in her not receiving
the Warren teaching job. She alleges that these comments breached a written
agreement between her and Stanton and the Fayston Board and were tortious
under a number of theories. One count against Lehner and the Warren School
Board alleges that they discriminated against her on account of age in not
hiring her, in violation of the Vermont Fair Employment Practices Act. The
superior court granted summary judgment in favor of all defendants except
defendant Stanton. We affirm, in part, and reverse, in part.
Most of the facts are undisputed. Plaintiff was a teacher in the
Fayston School District
from 1974 to 1985, when she took a one year leave of absence. During her
employment with Fayston, she had been very active in the teacher's union and
became president and negotiator for the Valley Teachers' Association, the
collective bargaining representative for teachers in a number of towns
including Fayston and Warren. During her leave of absence, she was
approached by William Lincoln, Superintendent of Schools, to inform her that
the Fayston Board was satisfied with its staff and preferred that she not
return to the Fayston School.
This contact led to the negotiation of a written agreement, which is at
the heart of many of the counts of plaintiff's complaint. The main terms of
the agreement were that: (1) plaintiff would continue on leave of absence for
the 1986-87 school year; (2) during that year she would be paid $12,600 and
could maintain group insurance coverage; (3) she would resign effective June
30, 1987; (4) all reference inquiries, particularly those made to principal
Stanton, were to be referred to superintendent Lincoln "even though he may be
physically out of Vermont;" (5) plaintiff and superintendent Lincoln were to
negotiate a letter of recommendation to cover certain aspects of plaintiff's
experience at Fayston; (6) any derogatory material, and any record of
grievances, was to be removed from plaintiff's personnel file; and (7) the
parties agreed not to discuss or disclose the terms of the settlement or the
issues that might have precipitated the agreement. The agreement was signed
by plaintiff, the chair of the Fayston School Board, superintendent Lincoln,
and principal Stanton.
In May of 1989, plaintiff decided to return to teaching and applied to
fill either of two vacant positions at the Warren Elementary School. She was
interviewed by principal Lehner, who thereafter called principal Stanton for
a reference. By this time, Stanton had left Fayston and had become principal
at the Stowe Elementary School. Stanton's telephone reference was negative.
For example, he said plaintiff "polarized" the staff and caused "negative
relations between the faculty and board." Lehner took notes of this
conversation; the notes were found by a Warren teacher and turned over to
Lehner did not recommend that the Warren Board hire plaintiff in 1989,
and again in
1990 when she applied for another job. He indicated in a deposition that a
Warren teacher told him that the teacher would not be able to work with
plaintiff. He also had a policy of not hiring "expensive" teachers, and
plaintiff's salary would be quite high. He admitted, however, that he
considered the information from Stanton in making his decision.
Plaintiff's amended complaint named the Fayston School Board (the Board)
and the Fayston School District (Fayston), principal Stanton and principal
Lehner and set forth eight counts: (1) breach of contract; (2) violation of
plaintiff's rights of free speech and association because Stanton's actions
were done to retaliate against plaintiff's union activities; (3) defamation;
(4) intentional infliction of emotional distress; (5) violation of public
policy; (6) invasion of privacy; (7) negligence of Fayston in failing to
advise Stanton of his obligations under the contract and to supervise him;
and (8) age discrimination against Lehner in not recommending that plaintiff
be hired. The first seven counts were against the Fayston defendants and
Stanton. Counts 5 & 8 were against Lehner. In response to Lehner's motion
to dismiss the age discrimination count (count 8), plaintiff sought to join
the Warren School Board and amend the count to make the Board the defendant.
The court granted the motion to dismiss (FN1) and denied the motion to join
the Board on the ground that the age discrimination claim was not properly
joined with the remaining counts of the complaint.
The bulk of the case was considered on defendant's motion for summary
judgment. The court dismissed the counts against Fayston related to
Stanton's negative reference (counts 1 through 7), on the grounds that
Fayston could not be responsible for the actions of Stanton once he left its
employ.(FN2) As to count 7, the court ruled specifically that any duty
Fayston had to
supervise Stanton's conduct ended when he left its employ. The court did not
dismiss counts 1 through 7 against Stanton.
On appeal, plaintiff raises four issues: (1) whether Fayston's duty to
train or supervise Stanton continued after Stanton left its employ; (2)
whether Stanton remained the agent of Fayston for purposes of the termination
agreement even after he left its employ; (3) whether the court should have
considered parol evidence on the meaning of the termination contract; and (4)
whether the motion to join the Warren School Board was properly denied.
We first address trial court's decision to dismiss count 7 which charged
that Fayston had a duty of care to ensure that Stanton understood his
obligations under the agreement with plaintiff, that Fayston knew from
Stanton's past conduct that he was likely to give a negative evaluation of
plaintiff, and that Fayston breached this agreement by failing to inform and
supervise him in signing and performing the agreement. Plaintiff argues that
Fayston is liable for any damage that occured as a result of the breach of
this duty even if it occured after Stanton terminated his Fayston employment.
Plaintiff acknowledges that generally Fayston had no duty to control the
conduct of a third person apart from its duty to control the conduct of its
servants. Plaintiff relies on Restatement (Second) Torts 315 (1965) to
establish Fayston's direct duty of care to her:
315. General Principle
There is no duty so to control the conduct of a third person as to
prevent him from causing physical harm to another unless
(a) a special relation exists between the actor and the third person
which imposes a duty upon the actor to control the third person's
(b) a special relation exists between the actor and the other which
gives to the other a right of protection.
The wording of 315 demonstrates the main deficiency in plaintiff's theory.
The section is about "physical harm," see id. at 7(3) (physical harm
means "physical impairment of the human body, or of land or chattels"), but
the gravamen of plaintiff's theory is that Stanton
caused a breach of contract, and the loss of the Warren jobs, by his negative
reference as communicated to Lehner. The injury related to plaintiff's
negligence claim is economic.
In explaining the relationship between tort and contract, Prosser and
[I]f the alleged obligation to do or not to do something that was
breached could not have existed but for a manifested intent, then
contract law should be the only theory upon which liability would
. . . .
. . . Generally speaking, there is no general duty to exercise
reasonable care to avoid intangible economic loss or losses to
others that do not arise from tangible physical harm to persons and
tangible things. This being so, the manifested intent of the parties
should ordinarily control the nature and extent of the obligations
of the parties to a contract of sale, either of real or personal
property, or a contract of service.
W. Keeton et al, Prosser & Keeton on The Law of Torts 92, at 656-57 (5th
ed. 1984) (emphasis in original). The limitation here is logical. Apart
from the knowledge that Stanton might provide a negative evaluation of
plaintiff unless prevented from doing so, there is nothing special about this
contract that imposes on Fayston a duty to train one of its senior managers
in implementing the contract. The contract itself created no duty to train
or supervise. Stanton signed the contract which, under plaintiff's theory of
the case, imposes on him a personal obligation to comply apart from his
employment with Fayston. If we find a duty here, we create a new tort theory
available in any breach of contract case where an economic entity acts
through employees. We find this an unwise expansion of tort liability
In other contexts, we have been careful to maintain a dividing line
between contract and tort theories of recovery. See, e.g., Winey v. William
E. Dailey, Inc., 161 Vt. ___, ___, 636 A.2d 744, 749 (1993) (in construing
consumer fraud law, Court holds that mere breach of contract does not raise
presumption of fraud); Favreau v. Miller, 156 Vt. 222, 229, 591 A.2d 68, 73
(1991) (where personal injury is alleged, "concepts of tort and negligence
law," rather than contract law, "provide the more straightforward way to
describe the respective duties and
liabilities of the parties"); Bevins v. King, 147 Vt. 203, 204, 514 A.2d 1044, 1045 (1986) (fraudulent nonperformance of contract is not a tort); Lyon
v. Bennington College Corp., 137 Vt. 135, 137, 400 A.2d 1010, 1012 (1979)
(conversion action against college for taking of tenure of professor not
maintainable because "contractual rights, which are personal and without
marketability" are not goods that can be converted); Lapoint v. Dumont
Constr. Co,, 128 Vt. 8, 10, 258 A.2d 570, 571 (1969) (law of negligence
inapplicable to breach of contract action). That Fayston failed to discharge
its obligations with reasonable care may be relevant to whether it breached
the contract with plaintiff, the subject we consider under plaintiff's third
claim. See South Burlington School Dist. v. Calcagni, 138 Vt. 33, 44, 410 A.2d 1359,1364 (1980) (party to contract has "implied duty to perform with
care, skill, reasonable expedience and faithfulness"). Fayston's liability,
if it exists at all, must be on the basis that it breached its contractual
obligations to plaintiff and not that this breach has somehow created an
independent tort. The court was correct to dismiss count 7.(FN3)
Plaintiff's second and third claims require us to look at the standards
for granting summary judgment because plaintiff argues that the rest of her
case against Fayston was dismissed prematurely on this motion. Summary
judgment is appropriate where there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law, after giving the
benefit of all reasonable doubts and inferences to the nonmoving party. See
State v. Delaney, 157 Vt. 247, 252, 598 A.2d 138, 141 (1991); V.R.C.P. 56(c).
There is no genuine issue of fact for trial, however, where the record as a
whole could not lead a rational trier of fact to find for the nonmoving
party. See Kelly v. Town of Barnard, 155 Vt. 296, 305
n.5, 583 A.2d 614, 619 n.5 (1990). The standard of review by this Court is
the same as the standard used by the trial court. See Al Baraka Bancorp
(Chicago), Inc. v. Hilweh, No. 93-593, slip op. at 6 (Dec. 16, 1994). With
these standards in mind, we evaluate plaintiff's arguments that the breach of
contract count should not have been dismissed against Fayston.(FN4)
Plaintiff's second claim is that there was sufficient evidence before
the court to create an issue whether Stanton was a servant or agent of
Fayston, with respect to implementing the termination agreement, even after
Stanton left his employ with Fayston. We agree with the trial court that
there was not sufficient evidence.
In making this argument, plaintiff relies almost exclusively on the
following provisions of her termination agreement:
6. The undersigned parties will not publicly discuss or disclose
either the terms of this settlement or the issues which might have
precipitated this agreement;
7. Principal Stanton agrees to refer any employment inquiries to Superintendent
Lincoln. He agrees to refer all inquiries to Superintendent Lincoln as the
Superintendent is best able to speak to her employment performance due to his
knowledge of her employment over many years;
8. The parties agree that all further employment inquiries will be referred to
Superintendent Lincoln even though he may be physically out of Vermont.
9. Superintendent Lincoln will complete a letter of recommendation which will
be completed and submitted to Ms. Breslauer on the date of the signing of this
agreement. Said recommendation will address the following items to highlight
Ms. Breslauer's ability as a teacher. . . .
Most of the terms relevant to this action specify which of the signatories is
responsible for its implementation. Term 8 is drafted to specify the
"parties'" agreement without specifically describing the responsibility for
implementation. The agreement is signed by plaintiff, "William Lincoln,
Superintendent," "Robert Stanton, Principal," and "Martha Benz, School Board
There is no additional language to specify the obligations assumed by the
In this argument, plaintiff distinguishes between her claim for breach
of contract and her tort claims. In order to make Fayston vicariously liable
for torts committed by Stanton, plaintiff must show a master-servant
relationship between Stanton and Fayston. See Restatement (Second) of Agency
219 (1958). A servant is "an agent employed by a master to perform
service in his affairs whose physical conduct in the performance of the
service is controlled or is subject to the right to control by the master."
Id. 2(2). The "essential element in the relationship of master and
servant is the right of control." Minogue v. Rutland Hosp., 119 Vt. 336,
338, 125 A.2d 796, 798 (1956). To be a master, the person "for whom the
service is rendered must consent . . . to ... [it] being performed under his
direction and control." Stevens v. Nurenburg, 117 Vt. 525, 528, 97 A.2d 250,
Plaintiff's theory is that Stanton was acting for Fayston in giving a
reference on plaintiff. In support of this theory, she states that the
termination agreement "included Fayston and Stanton's agreement that Stanton
would act on Fayston's behalf in regard to the handling of `all future
employment inquiries' about appellant." We find no such understanding
between Fayston and Stanton in the wording of the agreement.
Even if plaintiff's characterization of the agreement were accurate, we
must find evidence that Fayston retained a right of control over how Stanton
responded to a reference request once Stanton left its employ. The only
evidence plaintiff points to is the contractual provision that requires
Stanton to refer employment inquiries to Lincoln. She argues that because
the agreement was signed by both Stanton and the school board chair, it
represents an obligation between these parties. We do not agree that the
presence of the contractual agreement creates a right of control that makes
Stanton a servant of Fayston. Even under a liberal view of what constitutes
"control," we cannot find it present here. At best, Stanton could be found
to be an independent contractor with Fayston. See Restatement (Second) of
Agency at 2(3) (independent contractor is one who "contracts with another
to do something for him but who is
not controlled by the other nor subject to the other's right to control with
respect to his physical conduct in the performance of the undertaking"). In
the absence of evidence of the right of control, the court properly granted
summary judgment to Fayston on the tort claims (counts 2 through 6) because
plaintiff failed to show that Stanton acted as Fayston's servant in giving
the reference on plaintiff.
Alternatively, plaintiff argues there was sufficient evidence of a
continuing principal-agent relationship with respect to plaintiff's
agreement so that it was error to grant summary judgment on the breach of
contract claim contained in count 1. Here, she claims she must show only a
principal-agent relationship, a much lighter burden than showing a
master-servant relationship necessary for imputed liability for torts. We
disagree. Agency "results from the manifestation of consent by one person to
another that the other shall act on his behalf and subject to his control,
and the consent by the other so to act." Id. 1(1). Again, we do not
believe there is sufficient manifestation of control to create the
relationship between Stanton and Fayston on which plaintiff relies. See id.
14N, Comment b.
Plaintiff's third claim also relates to the agreement and her position
that Fayston breached its contractual obligations. She claims that the
agreement is ambiguous, and, therefore, the court erred in refusing to
consider extrinsic evidence that the contract continued to bind Fayston even
after Stanton left its employ. The trial court's reasoning on this point was
that the plain language of the agreement contained no provision extending
Fayston's liability beyond the time for which Stanton was an agent. Since
the parol evidence rule prohibits evidence that would "add to" the terms of a
contract, the court found it would be a violation of the rule to allow
evidence of the agency extension.
Our leading precedent on the use of extrinsic evidence in contract
construction is Isbrandtsen v. North Branch Corp., 150 Vt. 575, 556 A.2d 81
(1988). Under Isbrandtsen, the threshold question is whether the contract is
ambiguous, a question of law. Id. at 577, 556 A.2d at 83. In making this
determination, the court may consider "evidence as to the circumstances
surrounding the making of the agreement as well as the object, nature and
subject matter of the writing." Id. at 578, 556 A.2d at 84. Thus,
"[a]mbiguity will be found where a writing in and of itself supports a
different interpretation from that which appears when it is read in light of
the surrounding circumstances, and both interpretations are reasonable." Id.
at 579, 556 A.2d at 84. If a contract is ambiguous, extrinsic evidence may
be relied upon to construe it, without running afoul of the parol evidence
rule. See Milot v. Calkins, 150 Vt. 537, 540, 554 A.2d 260, 262 (1988)
(where contract is ambiguous, court can use parol evidence of parties'
understanding of the terms); Feinstein Bros v. Hotte Granite Co., 123 Vt.
167, 171, 184 A.2d 540, 342 (1962).
Although the contract is silent on the precise issue before us, Fayston
did obligate itself to refer all further employment inquiries to
Superintendent Lincoln, without regard to when those inquiries would arise or
through whom they would come. The best characterization of the situation is
that the parties omitted mention of what happened when persons with knowledge
of plaintiff's performance left Fayston's employ, and we must fill in a
reasonable term under the circumstances. See Restatement (Second) of
Contracts 204 (1981); J. Calamari & J. Perillo, Contracts 3-18 (3d ed.
1987). In such a case, parol evidence is admissible to show what is
reasonable in the circumstances. Restatement (Second) Contracts 204,
Comment e (1981).
One piece of evidence of surrounding circumstances cuts decidedly
against Fayston's argument that the contract is unambiguous. Term 8 requires
employment inquiries to be referred to Lincoln "even though he may be
physically out of Vermont." The language was probably influenced by the fact
that Superintendent Lincoln had announced his resignation as of June 30,
1986, twenty days after the signing of the contract, and was expected to
leave Vermont. Thus, the parties expected that the person most responsible
for implementing the agreement with respect to references would not be in the
employ of Fayston when all or most of that implementation occurred. Unless
Fayston's responsibility for implementation is ephemeral, it is reasonable to
expect that its responsibility continued even after Stanton left its employ.
If this were true of Lincoln, it may also be true of Stanton.
We conclude that the agreement is ambiguous, and the court erred in not
allowing plaintiff to introduce extrinsic evidence to show the agreement of
the parties. In reaching this conclusion, we recognize that it is reasonable
to assume that Fayston would not assume responsibility for the actions of
persons it did not control. We emphasize, however, that this assumption was
nowhere translated into contract language. Fayston could have created that
right of control by a separate agreement with Stanton, or could have created
a right of indemnity. That it did not take these steps in its self-interest
does not necessarily mean its liability ended when Stanton left.
Plaintiff's fourth claim is that the court erred in failing to join the
Warren School Board, and, as a result, dismissing count 8. This count
alleged that one of the reasons plaintiff was not hired by Warren in 1989 and
1990 was that her salary would be high because of her years of prior
experience. It alleged that this policy "has a disparate impact on older
teacher applicants" and, therefore, was age discrimination in violation of
the Vermont Fair Employment Practices Act, 21 V.S.A. 495. The trial court
refused to allow joinder of Warren because the count did not involve the same
transaction or series of transactions as the rest of the counts and there
were no common questions of law and fact.
In order to obtain joinder, plaintiff must fit within V.R.C.P. 20, which
provides in pertinent part:
Rule 20. Permissive Joinder of Parties
(a) Permissive Joinder. . . . All persons may be joined in one
action as defendants if there is asserted against them jointly,
severally, or in the alternative, any right to relief in respect of or
arising out of the same transaction, occurrence, or series of
transactions or occurrences and if any question of law or fact
common to all defendants will arise in the action. . . .
The rule is identical to Fed. R. Civ. P. 20 for purposes of the issue before
us. See Reporter's Notes to V.R.C.P. 20.
The rule must be liberally construed to facilitate joinder of actions
and parties whenever possible. See Staffco, Inc. v. Maricopa Trading Co.,
595 P.2d 31, 35 (Ariz. 1979); Sutterfield v. District Court, 438 P.2d 236, 240 (Colo. 1968) (adopt "broadest possible reading" of rule); Anderson v.
McDonald, 289 S.E.2d 729, 734 (W. Va. 1982) (rule must be "liberally
construed"). In view of the presence of Rule 20(b) allowing the court to
order separate trials "to prevent delay or prejudice," the philosophy of Rule
20(a) "is to allow virtually unlimited joinder at the pleading stage." 7C C.
Wright et al, Federal Practice and Procedure: Civil 2d 1660, at 436
Although the claim against Warren and the claims against the other
defendants are different, they relate to the same decision of Warren not to
hire plaintiff. Thus, plaintiff's complaint has one damage section and does
not distinguish between the injury caused by Stanton and Fayston and that
caused by Warren. It alleges that as a "result of all aforementioned acts
including the breach of contract, constitutional violations and torts,
Plaintiff has suffered severe monetary damage, loss of fringe benefits,
severe emotional and psychological distress, anguish, anxiety and injury."
Where multiple wrongs combine to produce a common injury, the majority
of courts interpreting rules based on Fed. R. Civ. P. 20(a) have held that
the claims arise out of the "same transaction" or "occurrence" or a "series
of transactions or occurrences" and have a question of fact "common to all
defendants." See, e.g., Sutterfield v. District Court, 438 P.2d at 239;
State ex rel. Allen v. Barker, 581 S.W.2d 818, 827 (Mo. 1979); Carr v.
Higdon, 665 S.W.2d 382, 383-84 (Tenn. Ct. App. 1983) (collecting cases). We
find these decisions persuasive and adopt their reasoning.
Despite our conclusion, we would not necessarily reverse a denial of
joinder under Rule 20(a). The trial court has discretion in administering
the rule to ensure fairness to all of the potential parties. See Cobbin v.
City and County of Denver, 735 P.2d 214, 217 (Colo. Ct. App. 1987); England
v. Simmons, 728 P.2d 1137, 1140 (Wyo. 1986). Although the rule
implements a general policy of liberal disclosure, this result is not
necessarily the fairest and most efficient in every case.
Because of its error in construing the rule, the trial court did not
exercise its discretion in acting on plaintiff's motion to join Warren.
Since we are remanding for further proceedings with respect to Fayston, we
remand the denial of the motion to join for reconsideration in light of the
standards and considerations set out above.(FN5)
The dismissal of count 7 of plaintiff's complaint is affirmed. The
dismissal of counts 2 through 6 against defendants Fayston School District
and Fayston School Board is affirmed. The dismissal of count 1 against
defendants Fayston School District and Fayston School Board, and the denial
of the motion to join Warren School Board as a party defendant, are reversed,
and the cause is remanded for proceedings not inconsistent with this opinion.
FOR THE COURT:
FN1. Although plaintiff has contested on appeal the denial of the motion to
join the board, she has not contested the dismissal of count 8 against
FN2. Count 5 alleged that all defendants violated public policies of Vermont
and the United States. This count was dismissed as to all defendants, and
that action is not contested in this appeal. To avoid confusion, we have
included it in the mandate.
FN3. We recognize that plaintiff claims that Stanton did more than simply
violate the contractual provision; her theories include defamation,
intentional infliction of emotional distress, invasion of privacy and
punishment for exercise of free speech and association rights. As stated in
count 7, however, her negligence theory against Fayston relates to training
on the contractual terms and supervision of their implementation, and does
not embody other intentional torts Stanton might have committed.
FN4. We assume for purposes of this case that the underlying agreement
plaintiff seeks to enforce is valid. Defendants have not claimed here, or in
the trial court, that the agreement is unenforceable as against public
policy. See Restatement (Second) of Contracts 178, 179 (1981); Bowman
v. Parma Bd. of Educ., 542 N.E.2d 663 (Ohio 1988). Accordingly, we do not
consider the possibility that such a defense exists.
FN5. As stated in footnote 1, supra, plaintiff did not appeal the dismissal
of count 8 as to Lehner. Thus, count 8, if allowed, must be redrafted to
state a claim against only the Warren School Board.