
USCA1 Opinion

	




          March 29, 1993    UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 92-2137                               JAMES CENSULLO, ET AL.,                                Plaintiffs, Appellees,                                          v.                                 BRENKA VIDEO, INC.,                                Defendant, Appellant.                                 ____________________          No. 92-2193                                   JAMES CENSULLO,                                Plaintiff, Appellant,                                          v.                                 BRENKA VIDEO, INC.,                                 Defendant, Appellee.                                 ____________________                    APPEALS FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF NEW HAMPSHIRE                [Hon. Martin F. Loughlin, Senior U.S. District Judge]                                          __________________________                                 ____________________                                        Before                              Torruella, Circuit Judge,                                         _____________                            Coffin, Senior Circuit Judge,                                    ____________________                              and Boudin, Circuit Judge.                                          _____________                                _____________________               Robert E.  Murphy, Jr.,  with whom Wadleigh,  Starr, Peters,               ______________________             _________________________          Dunn & Chiesa, was on brief for appellant Brenka Video, Inc.          _____________               Vincent  A. Wenners,  Jr.,  with whom  James  W. Craig,  and               _________________________              _______________          Craig,  Wenners,  Craig &  Casinghino,  P.A., were  on  brief for          ____________________________________________          appellee James Censullo.                                 ____________________                                    March 29, 1993                                 ____________________                    TORRUELLA, Circuit  Judge.  These appeals  arise out of                               ______________          plaintiff  James Censullo's  suit  for  wrongful termination  and          other claims.    Censullo won  in a  jury trial  on the  wrongful          termination ground only.  Appellant Brenka Video in appeal number          92-2137 asks this court to reverse  the denial of its motions for          directed  verdict and  judgment notwithstanding the  verdict, and          remand  the case to enter  judgment for Brenka  Video on wrongful          termination.   Appellant James Censullo in  appeal number 92-2193          first asks us to rule that Brenka Video was required to indemnify          David Bowders, Censullo's  immediate supervisor,  for the  amount          awarded against him in  default judgment.  Censullo next  asks us          to reverse the  exclusion of a newspaper article  as hearsay.  We          affirm the judgments in both appeals.                                      THE FACTS                                      THE FACTS                                      _________                    On November 14, 1989,  Censullo's wife gave birth to  a          gravely ill child in New Hampshire.  The child was transferred to          Boston  Children's Hospital,  accompanied by  the Censullos.   On          November  20,  the  child  underwent  a  six  and  one-half  hour          operation, following  which his chances of  survival were thought          to  be slim at  best.  The  parents stayed at  the hospital until          after November 24.                    Brenka Video,  a distributor  of home  videos, employed          James Censullo,  pursuant to  an employment contract,  as manager          for the New England region until November 24, 1989.  On that day,          Censullo was contacted by his supervisor, David Bowders.  Bowders          sought to determine when Censullo would return to work.  Censullo                                         -3-          explained  that his son's condition was very serious, and thus he          did not know when he would return to work.  Bowders told Censullo          that he  needed to straighten  out his priorities,  and determine          whether it would be "better to suffer one loss or two," referring          to the losses of a  son and a job.  Censullo later called Bowders          supervisor, David  Perrier, who  concurred  that Censullo  should          separate    his   personal    problems    from    his    business          responsibilities.                    Bowders  called  Censullo  back, saying  that  Censullo          would  receive  a  telegram shortly  as  a  result  of the  phone          conversations and for "going  over my head."  The  telegram which          arrived  later that day, stated that  Censullo was terminated for          poor  performance.    Brenka  Video contends  that  Censullo  had          already  been  placed on  probation  because  he needed  frequent          redirection, reprimand, and intervention by supervisors.                    On November 30, an article appeared in the Boston Globe          entitled "A Heart of Stone" detailing Censullo's termination from          Brenka  Video.  On the same day, Brenka Video reinstated Censullo          and  placed  him on  "administrative  leave."   Censullo  did not          comply  with  the terms  of  the  administrative leave,  and  was          terminated again on December 14.                    Censullo sued  Brenka Video,  Bowders, and  Perrier for          wrongful termination, breach of contract, and other claims.  When          Bowders  failed to  appear,  the district  court entered  default          judgment against him totaling $250,000.   The district court also          refused to  require Brenka  Video to indemnify  Bowders for  this                                         -4-          judgment.                      The case proceeded to  trial against Perrier and Brenka          Video.   Censullo  sought  to introduce  the article  entitled "A          Heart  of Stone" to show  Brenka Video's motive  in rehiring him.          The district court excluded the opinion portions  of the article,          but admitted the factual portions into evidence.                    The  jury  found  for  Censullo only  on  the  wrongful          termination claim,  and assessed  $73,000 in damages.   The  jury          found for Brenka  Video on the  breach of contract  claims.   The          district court denied Brenka Video's motions for directed verdict          and  for judgment  notwithstanding  the verdict.   These  appeals          followed, and we address them in turn.                                APPEAL OF BRENKA VIDEO                                APPEAL OF BRENKA VIDEO                                ______________________                    Brenka  Video contends  that the  district  court, upon          motions  for directed  verdict and  judgment notwithstanding  the          verdict, should have  reversed the jury  verdict for Censullo  on          wrongful termination.   According  to Brenka Video,  only at-will          employees can make a claim for wrongful termination, and Censullo          could not have been an at-will employee.                    We review the district  court's decisions on motions to          direct a verdict and for judgment notwithstanding the  verdict on          the same standard.   We examine  the evidence  in the light  most          favorable to  the  plaintiff, and  determine whether  there is  a          total  lack of evidence in support of  plaintiff's case.  Mayo v.                                                                    ____          Schooner Capital Corporation, 825 F.2d 566,  568 (1st Cir. 1987).          ____________________________          The  district  court  properly  grants  these  motions  when  the                                         -5-          evidence  allows  a  reasonable  person  to  arrive  at  only one          conclusion.  Conway v. Electro  Switch Corporation, 825 F.2d 593,                       ______    ___________________________          598 (1st Cir. 1987).                    Under the  governing  law of  New Hampshire,  employees          fall into two classes:  contract employees and at-will employees.          Panto  v. Moore  Business Forms,  Inc., 547  A.2d 260,  267 (N.H.          _____     ____________________________          1988).    Contract employees  are limited  in their  remedies for          breach by the terms of  the contract.  Id.  In  contrast, at-will                                                 ___          employees are  limited in their  remedies to claims  for wrongful          termination.1   Cloutier v. Great Atlantic & Pacific Tea Co., 436                          ________    ________________________________          A.2d 1140, 1143 (N.H. 1981).                    Censullo was a contract employee until November 24.  We          must determine whether  the evidence could support a finding that          Censullo's  status  changed  after  November  24  to  an  at-will          employee, such that the second termination could be wrongful.  As          the  jury found a wrongful  termination, we view  the evidence in          the light  most favorable to  this finding.   In this  light, the          evidence sufficiently supports the jury finding.                    The president of Brenka  Video sent Censullo a telegram          on the same day that the "A Heart of Stone" article appeared.  It          informed Censullo that the initial termination had been reversed,                                        ____________________          1  While an employer has great discretion to terminate an at will          employee,  he may not  do so when  he is motivated  by bad faith,          malice  or retaliation.  Cloutier v. Great Atlantic & Pacific Tea                                   ________    ____________________________          Co.,  436 A.2d  1140, 1143  (N.H. 1981).   To  state a  claim for          ___          wrongful termination,  the employee  must also  show that  he was          terminated   for  doing  something   that  public   policy  would          encourage,  or refusing to do something  that public policy would          condemn.   Id.   As  these elements  of the  wrongful termination                     ___          claim are not in dispute here, we discuss them no further.                                           -6-          that Censullo  had not been removed from  Brenka Video's payroll,          could continue to  cash his  paychecks, and was  relieved of  his          working responsibilities.  The president assured Censullo that "I          will  personally  get  back to  you."    The  next day,  Censullo          received  a telegram  from  Brenka Video's  controller explaining          that  Censullo had  not  at any  time  been removed  from  active          employee  status,  but  was considered  to  be  on an  indefinite          administrative leave.   When Censullo's "personal  situation" was          resolved,  Censullo was to meet with Brenka Video to "discuss the          conditions  and  standards"   of  continued   employment.     The          controller  asked   Censullo  to  check  in   with  Brenka  Video          regularly.                     In the ensuing period,  Censullo did not contact Brenka          Video.   He cashed two paychecks  and kept two others.   He later          explained that  he considered himself  at all times  a terminated          employee,  and cashed two checks  as severance pay.   On December          14, Censullo received  another communication terminating him  for          failure to comply with the administrative leave.                    Censullo's own views  notwithstanding, we believe  that          the jury could find that Censullo became an at-will employee as a          result of  the telegrams from  Brenka Video's principals.   Those          telegrams relieved Censullo of  the job he had contracted  to do,          and  placed him in a  nebulous administrative leave  status.  The          parties  would later fix the  terms of continued  employment.  As          the telegrams contained no terms limiting Brenka Video's power to          terminate  Censullo,  the jury  reasonably  could  find that  the                                         -7-          telegrams created an at-will relationship.                    Brenka  Video asserts  that while  the telegrams  could          constitute an offer of at-will employment status, such status was          not  effective until Censullo accepted  the offer, which he never          did.   While we agree  that Censullo  bore the burden  of showing          acceptance of the offer, see Panto, 547 A.2d at  264, we disagree                                   ___ _____          as to  whether Censullo actually met  his burden.   In Panto, the                                                                 _____          New Hampshire  Supreme Court  found that an  employee accepted  a          change in employment status by merely performing as called for by          the  change.  Id. at 265.  In this case, the jury could find that                        ___          Censullo had accepted the  change in status by doing  nothing and          cashing  his paychecks, which is  what the telegram  asked him to          do.   Censullo  did  not comply  with  the telegram  from  Brenka          Video's controller urging Censullo to  check in with the  company          periodically.  The letter from Brenka Video's president, however,          indicated that the company would be  in touch with Censullo.  The          jury could  have determined  that the letter  from the  president          more accurately stated the requirements of the change in status.                    The jury  could have found from  the evidence presented          at trial that Censullo became  an at-will employee after November          24.   Therefore, a finding  of wrongful  termination was  proper.          The district court did not err in failing to grant Brenka Video's          motions for directed verdict and for judgment notwithstanding the          verdict.                                 APPEAL OF JAMES CENSULLO                               APPEAL OF JAMES CENSULLO                               ________________________                    Censullo's  first argument  on  appeal is  that  Brenka                                         -8-          Video  is   vicariously  liable  for  the   tort  of  intentional          infliction of emotional distress  committed by its employee David          Bowders.    Censullo's  current  claim   of  vicarious  liability          deviates from his  original claim of indemnification.  We address          it  in an abundance  of caution, however,  noting that Censullo's          complaint  at  least   contained  an  allegation   of  respondeat          superior.  For reasons that parallel those of the district court,          we find the current claim meritless.                    Censullo presented this issue  to the district court in          a "Motion to Assess Damages and for Indemnification," seeking  to          recover  for the default  against Bowders through indemnification          of  Bowders from  Brenka Video.   The  district court  denied the          motion because  Censullo cited  no authority for  the proposition          that  an employer must indemnify an employee.  The district court          noted that normally, when  the negligence of an agent  is imputed          to  the principal, the principal  may recover from  the agent the          amount paid as indemnification.   Furthermore, the district court          already ruled that the state workmen's compensation scheme barred          Censullo from  recovering from  Brenka Video for  the intentional          infliction  of emotional  distress.   The court  thus found  that          granting the  motion would  allow Censullo to  recover indirectly          from Brenka Video when he could not do so directly.                    The district  court correctly found that  the workmen's          compensation statute bars  employees from  suing their  employers          for personal injuries arising out of the employment relationship.          O'Keefe  v. Associated Grocers of  N.E., Inc., 424  A.2d 199, 201          _______     _________________________________                                         -9-          (N.H.  1980).   Emotional  distress  is  a personal  injury,  not          subject  to recovery in a common law action under state workmen's          compensation statute.  See Bourque  v. Town of Bow, 736 F.  Supp.                                 ___ _______     ___________          398, 404 (D.N.H. 1990).                    The district court also correctly held, in granting the          default judgment, that Censullo  could sue his co-employee acting          as a supervisor for intentional infliction of emotional distress.          Thompson  v.  Forest, 614  A.2d  1064,  1067  (N.H. 1992)  (under          ________      ______          workmen's  compensation scheme,  co-employee  not immunized  from          suit for intentional torts).   While Thompson authorizes Censullo                                               ________          to raise a claim of  intentional infliction of emotional distress          against his  co-employee Bowders, it  does not authorize  such an          action against Brenka  Video, his employer.  Indeed, according to          a leading commentator, "when  the intentional injury is committed          by a  co-employee the better  rule is that  an action in  damages          will not lie against the employer . . . ."  2A Arthur Larson, The                                                                        ___          Law  of Workmen's Compensation    68.00 (1992).   Because we find          ______________________________          that  Censullo  has  not  stated   a  valid  claim  on  vicarious          liability, we affirm the district court's order.                    Censullo's second argument,  the only one  remaining in          this appeal,  relates to the  admission of the  newspaper article          entitled  "A  Heart   of  Stone."    As  Censullo  conceded  that          resolution  of this issue is unnecessary unless we were to remand          the case for a new  trial, and we have found no reason  to do so,          we do not reach this issue.                                      CONCLUSION                                      CONCLUSION                                      __________                                         -10-                      Cases 92-2137 and 92-2193 are dismissed.                                         -11-
