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Denis v. P&L Campbell, Inc.
State: Illinois
Court: 5th District Appellate
Docket No: 5-03-0341 Rel
Case Date: 05/06/2004
                NOTICE
Decision filed 05/06/04.  The text of this decision may be changed or corrected prior to the filing of a Petition for Rehearing or the disposition of the same.
 

NO. 5-03-0341

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT


FRANCIS DENIS,

             Plaintiff-Appellant and Cross-Appellee,

v.

P&L CAMPBELL, INC.,

             Defendant-Appellee and Cross-Appellant.

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Appeal from the
Circuit Court of
Williamson County.

No. 98-L-130

Honorable Phillip G. Palmer and
Honorable Ronald R. Eckiss,
Judges, presiding.



JUSTICE KUEHN delivered the opinion of the court:

Francis Denis (Denis) appeals from the trial court's March 25, 2003, judgmentfollowing a bench trial in which the trial court concluded that the conduct that led to hisemployment termination amounted to insubordination and was, therefore, not subject to thetermination process mentioned in the employee handbook. P&L Campbell, Inc. (Campbell),cross-appeals from the trial court's earlier denial of its motion to dismiss, in which the trialcourt concluded that the employee handbook amounted to an employment contract.

An at-will employee can essentially be terminated without reference to a specifictermination process. Some employee handbooks, if sufficiently clear on a terminationprocedure, can convert an at-will employment situation into a contractual employmentsituation. Once an employee is deemed a contractual employee, then for situations coveredin the handbook, any termination must occur at the conclusion of the process set forth in thehandbook.

At issue in this case is whether the employee handbook amounted to a contract ofemployment or whether Denis was an at-will employee. If we determine that the handbookconstituted a contract, then we must determine if Denis's behavior fell outside the coverageof the employee handbook, so that an automatic termination was appropriate.

Campbell owned and operated a Harley-Davidson shop in Marion, Illinois. Denis hadbeen employed by Campbell for more than 14 years. As of May 1998, Denis was the servicemanager and also served as an unpaid officer of the Harley Owners Group, a nonprofitcorporation sponsored by Campbell. Upset over Campbell's handling of another employee,Denis resigned his position as an unpaid officer of the nonprofit corporation. In doing so, heallegedly had a confrontation on May 11, 1998, with Linda Campbell, during which he told herto stick certain books "up her ass." As a result of this conduct, Denis's employment wasterminated.

Prior to Denis's termination, Campbell had drafted and implemented an employeehandbook. The handbook had general provisions, as well as pages dedicated to each namedemployee, detailing each employee's job duties. One of Denis's job duties was to "[b]e politeand courteous to customers and co[]workers." The same requirement was also listed in thegeneral section. Another general provision stated:

"Failure to follow any of the guidelines set forth in the Employee Handbook or the JobDescriptions will result in disciplinary action which is:

1. Verbal warning

2. Written warning

3. Grounds for dismissal[.]"

Denis filed suit against Campbell for lost income, lost benefits, and damages, allegingthat his termination by Campbell was improper and violated the employee handbook provisionsfor disciplinary action. As the case proceeded toward a trial, each side filed a motion for asummary judgment. In an order dated April 19, 2000, and file-stamped April 24, 2000, JudgePalmer denied both motions, stating that because the disciplinary language of the employeehandbook was subject to more than one interpretation, the interpretation should be left to thejury. The parties and the judge who heard the trial, Judge Eckiss, all contend that Judge Palmerhad entered an order concluding that the employee handbook created a contract between theemployer and the employee. From later orders and comments made by Judge Eckiss justbefore and during the trial, we believe that the order denying the summary judgment motionsis the order claimed to be the one in which Judge Palmer ruled that the employee handbook wasa contract. In this order, Judge Palmer does not make an explicit finding that the employeehandbook was a contract between the employer and the employee. However, Judge Palmerdoes consider whether language contained within the employee handbook was ambiguous. Because Judge Palmer could not have considered extrinsic evidence absent a contract, itappears that, without a specific ruling, Judge Palmer implicitly found that the employeehandbook created a contract. In ruling on motions in limine on March 19, 2002, Judge Eckissindicated: "[A]ccording to Judge Palmer's ruling there is a contract. The jury issue[] is[,][W]hat is the intent of the parties as to discipline[?]" Later, during the trial, Judge Eckissnoted, "[T]here is no question that this was a binding, enforceable agreement based on JudgePalmer's ruling."

Thereafter, on May 15, 2002, Campbell filed a motion to dismiss Denis's first amendedcomplaint, alleging again that the employee handbook did not constitute a contract. On July1, 2002, Judge Eckiss denied the motion.

The case was tried without a jury before Judge Eckiss. Following the trial, he entereda judgment on March 25, 2003, in which he stated, "The employee handbook *** is anenforceable contract." He further indicated that the contract contained a three-stepdisciplinary process but that the handbook did not cover all the matters that could arisebetween an employer and his employee. Therefore, if the handbook covered a specific matterand discipline was warranted, then the employer would be obligated to follow the three-stepprocess. The order went on to state that the issue to be determined was whether Denis'sactions were covered by the handbook, which would necessitate the three-step disciplinaryprocess. Judge Eckiss concluded that the alleged behaviors were not covered by the employeehandbook. He then went on to determine that based upon the witnesses and testimony he heard,he believed that Denis did tell his employer to shove books "up her ass" and that such astatement constituted insubordination not covered by the employee handbook. Judge Eckissexplained that this level of insubordination went beyond the required behavior of being "politeand courteous to customers and co[]workers." Because the behavior fell outside the employeehandbook, Judge Eckiss concluded that Campbell had properly fired Denis, and the courtentered a judgment in Campbell's favor.

The trial court denied Denis's posttrial motion on May 1, 2003. Denis appeals. Campbell cross-appeals.

In its cross-appeal, Campbell asks us to determine that the employee handbook did notconstitute a contract and that Judge Palmer's and Judge Eckiss's rulings to the contrary wereerroneous. In his appeal, Denis asks us to find that the trial court erred in determining thatDenis's behavior was outside the employee handbook, and he asks us to conclude that the trialcourt should have determined that such a theory constituted an affirmative defense which hadbeen waived by Campbell.

We first address the issue raised in the cross-appeal. We lack jurisdiction to consideran appeal from a denial of a motion to dismiss in this particular setting. The denial of themotion to dismiss was an interlocutory order. Supreme Court Rule 306 (166 Ill. 2d R. 306)only provides a couple of categories of orders denying a motion to dismiss from which a partycan seek interlocutory relief in the appellate court. Appropriate situations for appeal involveforum non conveniens motions (166 Ill. 2d R. 306(a)(2)) and motions relative to thejurisdiction of the courts (166 Ill. 2d R. 306(a)(3)). Additionally, because Campbell receiveda judgment on the merits of the case, Campbell cannot appeal an earlier denial of a motion todismiss. Davis v. International Harvester Co., 167 Ill. App. 3d 814, 819, 521 N.E.2d 1282,1285 (1988).

Accordingly, Campbell's cross-appeal must be stricken.

While a cross-appeal was not appropriate, Campbell maintained the right to advance itsposition in support of the trial court's judgment, including a position previously advanced andrejected in a motion to dismiss. People ex rel. Barrett v. Bradford, 372 Ill. 63, 65-66, 22N.E.2d 691, 693 (1939); Pate v. City of Sesser, 75 Ill. App. 3d 233, 240, 393 N.E.2d 1146,1152 (1979). Therefore, we address this argument.

Campbell seems to contend that the ruling on the issue of whether or not the employeehandbook was a contract had been made by Judge Eckiss in denying its motion to dismiss undersection 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)). While it isclear that Judge Eckiss made this ruling by denying the motion and further as a findingcontained within his judgment order following the trial, it is also clear that he did so on thebasis of Judge Palmer's prior order to that effect. Judge Eckiss never issued an order specificin his reasoning on this issue, whereas Judge Eckiss did issue detailed orders with respect tothe remaining issues in the case.

In determining the appropriateness of a summary judgment, the trial court strictlyconstrues all the evidence in the record against the movant and liberally in favor of theopponent. Purtill v. Hess, 111 Ill. 2d 229, 240, 489 N.E.2d 867, 871 (1986). The court mustconsider all pleadings, depositions, admissions, and affidavits on file to decide if there is anyissue of material fact. Myers v. Health Specialists, S.C., 225 Ill. App. 3d 68, 72, 587 N.E.2d494, 497 (1992). When the trial court is presented with a motion to dismiss a case for thefailure to state a cause of action pursuant to section 2-615 of the Code of Civil Procedure, thecourt must determine whether the complaint sets forth sufficient facts that, if established,could entitle the plaintiff to relief. Bryson v. News America Publications, Inc., 174 Ill. 2d 77,86, 672 N.E.2d 1207, 1214 (1996). The trial court must accept all well-pleaded facts in thecomplaint as true and draw reasonable inferences from those facts that are favorable to theplaintiff. Bryson, 174 Ill. 2d at 86, 672 N.E.2d at 1213. On an appeal of an order ruling on asummary judgment motion or a section 2-615 motion, courts review the matters on a de novobasis. Myers, 225 Ill. App. 3d at 72, 587 N.E.2d at 497; Jackson v. Michael Reese Hospital& Medical Center, 294 Ill. App. 3d 1, 9, 689 N.E.2d 205, 211 (1997).

Judge Palmer's implied determination that the employee handbook constituted acontract was premised upon the case of Duldulao v. Saint Mary of Nazareth Hospital Center,115 Ill. 2d 482, 505 N.E.2d 314 (1987). Accordingly, we turn to this case.

In Duldulao v. Saint Mary of Nazareth Hospital Center, a former hospital employeefiled a lawsuit against the hospital for wrongful termination, citing the employee handbook. Duldulao, 115 Ill. 2d at 484, 505 N.E.2d at 315. At issue was whether the employee handbookcreated contractual terms binding the hospital to a particular procedure for terminating theplaintiff's employment. Without addressing the precise terms of the Saint Mary of NazarethHospital Center handbook relative to termination, we note that the terms are extremelyspecific, with variations for probationary and permanent employees.

The general employment relationship rule is that the relationship, assuming no fixedduration, is terminable at will by either party. Duldulao, 115 Ill. 2d at 489, 505 N.E.2d at 317-18. The Illinois Supreme Court, after reviewing cases on the topic nationwide, adopted themajority rule that this general rule is merely a presumption which can be overcome by ademonstration that the parties had contracted to the contrary. Duldulao, 115 Ill. 2d at 489,505 N.E.2d at 318. Adopting an approach taken by a Minnesota court, the supreme court heldthat an employee handbook or other statement creates enforceable contractual rights if thefollowing traditional contractual elements are present:

1. The language of the employee handbook contains a promise "clear enough thatan employee would reasonably believe that an offer has been made."

2. The statement must be distributed to the employee in a way "that the employeeis aware of its contents and reasonably believes it to be an offer."

3. The employee must accept the offer by either "commencing or continuing towork after learning of the policy statement." Duldulao, 115 Ill. 2d at 490, 505N.E.2d at 318.

Based upon these requirements, the court concluded that the Saint Mary of Nazareth HospitalCenter employee handbook constituted a contract with its employees and that the plaintiffcould expect to be disciplined according to the terms of the handbook. Duldulao, 115 Ill. 2dat 490-91, 505 N.E.2d at 318. Important to the court's analysis of the issue was the fact thatthe employee handbook contained no disclaimers to negate the promises made. Duldulao,115 Ill. 2d at 491, 505 N.E.2d at 319. By this, it seems clear that the court meant that thehandbook contained no disclaimers that the handbook was not to be construed as a contract.

The employee handbook in question contained no disclaimers. At issue is thedisciplinary paragraph. The handbook was disseminated to employees, and Denis did continuework after receiving the handbook. What we must determine is whether the language of theemployee handbook relative to discipline is sufficiently clear so that Denis would reasonablybelieve that a contractual offer had been made and whether, after Denis received the handbook,he reasonably believed it to be an offer.

Judge Palmer made a determination that the language of Campbell's employee handbookwas ambiguous. We agree. There is no way to ascertain if Campbell intended its disciplinarycourse to strictly follow the three possibilities set forth in the handbook. Judge Palmer thenmakes a jump in his analysis where he determined that if one possible interpretation favoredDenis, then the language was sufficiently "clear" to convey the offer to him. Duldulao v. SaintMary of Nazareth Hospital Center does not stand for this proposition. In essence, JudgePalmer was apparently relying upon the contractual tenet that ambiguous language is construedagainst the drafter of that language. However, contractual interpretation rules cannot beutilized in establishing the very existence of a contract. Chesnick v. Saint Mary of NazarethHospital, 211 Ill. App. 3d 593, 598, 570 N.E.2d 545, 548 (1991) (citing Anders v. MobilChemical Co., 201 Ill. App. 3d 1088, 1097, 559 N.E.2d 1119, 1124 (1990)).

The language at issue is ambiguous and subject to several interpretations. Thus, wecannot find that the language was sufficiently "clear" to convey the offer to Denis. Therefore,we find that the employee handbook at issue was not a contract between Campbell and Denis.

Because our determination of this issue renders the remaining trial issues moot, we donot address them.

For the foregoing reasons, the judgment of the circuit court of Williamson County infavor of Campbell is hereby affirmed.

Affirmed.

CHAPMAN, P.J., and WELCH, J., concur.

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