Blubaugh v. Turner 1992 WY 166 842 P.2d 1072 Case Number: 92-112 Decided: 12/07/1992 Supreme Court of Wyoming
Cite as: 1992 WY 166, Wyo., 842 P.2d 1072
R. Michael BLUBAUGH and Mary J. Blubaugh, husband and wife,
Appellants (Plaintiffs),
v.
Ken W. TURNER and Schlumberger
Well Services, a Division of Schlumberger Technology Corporation, aTexas corporation, Appellees
(Defendants).
Appeal from District Court, Uinta County, John D. Troughton,
J.
Mark W.
Harris of Harris, Morton and Cowan, P.C., Evanston, for appellants.
V.
Anthony Vehar and Sharon M. Rose of Vehar, Beppler, Lavery, Rose & Boal,
P.C., Evanston,
for appellees.
Before MACY, C.J., and THOMAS, CARDINE, URBIGKIT
and GOLDEN, JJ.
MACY, Chief
Justice.
[1.] This is an appeal from
an order granting a summary judgment in favor of the appellees, Ken W. Turner
and Schlumberger Well Services, upon the court's conclusion that, as a matter of
law, the circumstances surrounding the signing of a receipt and release
agreement by the appellant, R. Michael Blubaugh, which released Schlumberger
Well Services from liability resulting from Mr. Blubaugh's termination of
employment, did not rise to a level of duress sufficient to void the
release.
[2.] We
affirm.
[3.] The appellants present
the issue for review in this generic fashion:
I.
Did the
district court err in granting summary judgment to appellees and dismissing
appellants' causes of action against appellees?
A. Did
the district court err in finding that appellants failed to establish as a
matter of law the facts which constitute a factual issue of
duress?
B. Did
the district court err in finding that there was no genuine issue of material
fact relating to the appellant's claim of duress?
[4.] The material facts are
not in dispute. On November 30, 1988, Mr. Blubaugh was summoned to Schlumberger
Well Services' Denver, Colorado, office and told that either he could resign or
he would be terminated from his district manager position at Schlumberger Well
Services' Evanston,
Wyoming, office. Mr. Blubaugh was
presented with an agreement entitled "Receipt and Release," which provided,
among other things, that he would resign on December 1, 1988, and release
Schlumberger Well Services from any and all claims in consideration of the
payment of $35,943, which included his normal separation pay plus $4,560.78. As
additional consideration, Mr. Blubaugh was to, and did, receive outplacement
counseling. The release agreement also provided that, in return for the
consideration offered, which was accepted "in full compromise, settlement, [and]
satisfaction of all claims," Mr. Blubaugh agreed to "Release and forever
Discharge" Schlumberger Well Services, its employees, servants, agents, and
representatives from any and all liability, claims, or causes of action, if any,
arising out of or relating to his employment, resignation, or termination,
including claims arising from alleged unlawful and/or discriminatory employment
practices, breach of contract, and tortious actions which Schlumberger Well
Services may have allegedly committed.
[5.] Prior to leaving the
Denver office to return to his home in Evanston, Mr. Blubaugh met
with an outplacement counselor provided by Schlumberger Well Services. On
December 1, 1988, Mr. Blubaugh signed the receipt and release agreement and
delivered it to the Evanston office along with his letter of
resignation. Several months after Mr. Blubaugh signed the agreement, he
contacted Schlumberger Well Services and requested, and received, additional
compensation for his moving expenses.
[6.] On September 4, 1990,
the appellants filed their complaint, alleging several causes of action and
seeking damages for Mr. Blubaugh's termination. The appellees responded with
motions to dismiss and for a summary judgment on the grounds that the
appellants' assertions against Ken Turner, as a co-employee, failed to state a
claim upon which relief could be granted and that the appellants' claims were
barred by virtue of the release agreement, payment, and accord and satisfaction.
The appellants sought to avoid the release by claiming that it was the product
of duress and violative of Article 19, Section 7 of the Wyoming Constitution.
Mr. Blubaugh stated in his affidavit in resistance to the appellees' motions
that he was advised that, if he did not resign and sign the release, he would be
fired and would loose the opportunity to receive outplacement counseling and the
additional $4,560.78 separation pay. Mr. Blubaugh also stated that he was not
given an opportunity to negotiate any of the terms of the release agreement and
that at that time he was in a state of shock and distraught from being told that
either he could resign or he would be fired.
[7.] On April 28, 1992, the
court entered its order granting a summary judgment in favor of the appellees.
The court concluded that Article 19, Section 7 of the Wyoming Constitution
forbids employee/employer releases only for personal injuries occurring during
the course of employment and that the appellants' complaint and supporting
affidavits did not constitute duress and were insufficient as a matter of law to
invalidate the release.
[8.] On appeal, the
appellants do not question the court's decision concerning the claim against Mr.
Turner or its determination that the release was not voidable on constitutional
grounds. Accordingly, we will confine this opinion to the issue of whether the
undisputed material facts in the record on appeal constitute such duress as to
invalidate the release agreement between Mr. Blubaugh and Schlumberger Well
Services as a matter of law.
[9.] The appellants assert
that, under the circumstances of this case, their claim of duress must be
measured by the concept of economic duress. Whether particular facts are
sufficient to constitute economic duress is a question of law. Whether these
circumstances exist is a question of fact. Gruver v. Midas International
Corporation, 925 F.2d 280 (9th Cir. 1991). The Tenth Circuit Court of Appeals,
when applying Wyoming law to a duress defense to avoid the
enforcement of an agreement, said:
The
Wyoming test
for duress is not inconsistent with the test for economic duress developed in
those states which have expressly recognized economic duress as grounds for
avoiding a settlement agreement.
Applied
Genetics International, Inc. v. First Affiliated Securities, Inc., 912 F.2d
1238, 1242 (10th Cir. 1990). This Court, however, has not directly had the
opportunity to adopt what is commonly known as the "economic duress" doctrine.
We take this opportunity now to do so and embrace the three-prong test employed
by many courts to determine whether economic duress exists. Under this test,
economic duress occurs when (1) a party involuntarily accepts the terms of
another, (2) circumstances permit no other alternative, and (3) such
circumstances are the result of coercive acts of the other party. Zeilinger v.
Sohio Alaska Petroleum Company, 823 P.2d 653, 657 (Alaska 1992); Totem Marine Tug & Barge, Inc. v.
Alyeska Pipeline Service Company, 584 P.2d 15, 21 (Alaska 1978). Economic
duress does not exist, however, unless a person has been the victim of a
wrongful act and has no reasonable alternative but to agree with the terms of
another or be faced with a serious financial hardship. Totem Marine Tug &
Barge, Inc., 584 P.2d at 21. What constitutes a coercive act or reasonable
alternative is a question of fact depending upon the circumstances of each case.
First National Bank of Cincinnati v. Pepper, 454 F.2d 626, 632-33 (2d
Cir. 1972), appeal after remand, 547 F.2d 708 (2d Cir. 1976); Austin Instrument,
Inc. v. Loral Corporation, 29 N.Y.2d 124, 324 N.Y.S.2d 22, 24, 272 N.E.2d 533,
535 (N.Y.Ct.App. 1971). Ordinarily, those people who are claiming coercion are
attempting to avoid the consequences of a modification or breach of a contract
or a settlement and release of a contract, as in this case. A person may not
have a reasonable alternative or remedy when the delay in pursuing the remedy
would cause immediate or irreparable serious loss or financial ruin. Applied
Genetics International, Inc., 912 F.2d 1238; Centric Corporation v.
Morrison-Knudsen Company, 731 P.2d 411 (Okla. 1986).
[10.] A summary judgment is appropriate when no
genuine issue of material fact exists to preclude disposition of a case as a
matter of law. W.R.C.P. 56. A genuine issue of material fact exists when a
disputed fact, if proved, would have the effect of establishing or refuting an
essential element of the cause of action or defense asserted by the parties.
Allmaras v. Mudge, 820 P.2d 533, 535 (Wyo. 1991). The party moving for summary
judgment bears the initial burden of establishing a prima facie case for a
summary judgment. If the movant carries this burden, the party opposing the
summary judgment must come forward with specific facts to demonstrate that a
genuine issue of material fact does exist. Boehm v. Cody Country Chamber of
Commerce, 748 P.2d 704, 710 (Wyo. 1987).
[11.] When the appellees supported their
motions to dismiss and for a summary judgment with competent evidence that Mr.
Blubaugh signed a release discharging Schlumberger Well Services and its
employees from any and all liability for terminating his employment, they
carried the burden of establishing a prima facie case for a summary judgment. In
an effort to avoid the effect of the release, Mr. Blubaugh stated in his
affidavit in opposition to Schlumberger Well Services' motion for a summary
judgment that (1) the only alternative he had to signing the release was to be
fired and lose the $4,560.78 additional separation pay and the opportunity to
have outplacement counseling, (2) he did not have the opportunity to negotiate
the terms of his release, (3) he was in shock and distraught, (4) he was not
told that he had a right to file a grievance, and (5) he was not told that he
had a right to consult with an attorney.
[12.] After considering the parties' briefs and
materials submitted in support of and in opposition to the motions, and after
hearing oral arguments on the motions on two separate occasions, the court found
and concluded in part:
Defendants'
actions in offering Plaintiff R. Michael Blubaugh the alternative of resigning
and executing the Receipt and Release agreement did not rise to such a level
that Plaintiff R. Michael Blubaugh was deprived of the exercise of his free
will. To constitute legal duress Plaintiff R. Michael Blubaugh must have acted
against his will, and have had no other viable alternative. But that was not the
case. Plaintiff R. Michael Blubaugh could have allowed Defendant Schlumberger to
fire him and then sought relief from the courts or Plaintiff R. Michael Blubaugh
could have resigned, obtained the severance pay to which he was entitled in any
event without signing any release and then sought relief from the
courts.
It cannot be
maintained, and Plaintiffs have not presented any evidence whatsoever, that
walking away with $31,382.22 as opposed to $35,943.00 placed such an economic
hardship on Plaintiffs as to obliterate Plaintiff R. Michael Blubaugh's ability
to exercise his free will. Nor is the fact that Plaintiff R. Michael Blubaugh
was upset, or in what he terms as shock, a sufficient basis to invalidate the
receipt and release.
Plaintiffs'
allegations of duress as contained in their affidavits simply do not constitute
duress and are insufficient as a matter of law to invalidate the
release.
. . .
.
With regard to
Plaintiffs' claim against the co-employee defendant, . . . such co-employee
defendant was protected by the language of the Receipt and Release agreement and
pursuant to the provisions of that agreement, Plaintiff R. Michael Blubaugh
released all claims against the co-employee defendant.
[13.] Even assuming arguendo that Mr. Blubaugh
was wrongfully discharged from his employment and that he was coerced into
signing the receipt and release agreement, circumstances must be present which
would permit no other alternative to satisfy the third element of economic
duress. In Totem Marine Tug & Barge, Inc., the Alaska Supreme Court
held:
Economic duress does
not exist, however, merely because a person has been the victim of a wrongful
act; in addition, the victim must have no choice but to agree to the other
party's terms or face serious financial hardship. Thus, in order to avoid a
contract, a party must also show that he had no reasonable alternative to
agreeing to the other party's terms, or, as it is often stated, that he had no
adequate remedy if the threat were to be carried out.
584
P.2d at 22.
[14.] We agree with the learned and perceptive
judge who entered the order granting the summary judgment on the basis that the
appellants failed to present specific facts which rise to the level of economic
duress sufficient to invalidate the receipt and release agreement. The
appellants wholly failed to present anything which would in any way indicate
that, if they did not sign the agreement, they would face such immediate
financial ruin that they could not seek a remedy to provide redress to them for
the alleged wrongful termination. The mere fact that an agreement is entered
into when a person is in shock and distraught is not sufficient to constitute
economic duress. Emotional distress is not the equivalent of duress. Horgan v.
Industrial Design Corporation, 657 P.2d 751 (Utah 1982).
[15.] Mr. Blubaugh also complains that he was
not told that he had a right to consult with an attorney or negotiate the terms
of the receipt and release agreement. Negotiations through counsel are not the
sine qua non of a valid contract, Oglesby v. Coca-Cola Bottling Company of
Chicago/Wisconsin, 620 F. Supp. 1336, 1343 (N.D.Ill. 1985), nor does the failure
to be able to negotiate the terms of a release amount to duress. Horgan, 657
P.2d 751. Mr. Blubaugh was not compelled by duress to sign the release against
his will.
[16.] The facts of this case are not unlike
those in Horgan, wherein the Utah Supreme Court stated in its concluding
remarks, which are applicable in this case:
To constitute legal
duress defendant must have acted against his will, and have had no other viable
alternative. But that was not the case, as plaintiff could have sought relief
from the courts or perhaps have obtained his termination compensation without
signing a release. What we apparently have here is someone who was initially
satisfied with his settlement, but who, upon subsequent reflection, concludes
that he could have gotten more out of the deal and therefore attempts to renege
on it. However, it is well settled that the mere fact of an improvident or bad
bargain or a feeling of latent discontent is not a sufficient basis to avoid the
effect of an otherwise valid release.
657
P.2d at 754.
[17.] We hold that the undisputed material
facts in the record on appeal do not constitute such duress as to invalidate the
receipt and release agreement between Mr. Blubaugh and Schlumberger Well
Services and that the appellees are, therefore, entitled to a summary judgment
as a matter of law.
[18.] Affirmed.
Citationizer Summary of Documents Citing This Document
Cite |
Name |
Level |
| 1999 10CIR 812, 181 F.3d 1163, | Gibson v. Wal-Mart Stores Inc. | Cited |
Wyoming Supreme Court Cases |
| Cite | Name | Level |
| 2005 WY 95, 117 P.3d 1200, | KEITH L. DOBSON & ASPEN CONSTRUCTION COMPANY, INC. V. PORTRAIT HOMES, INC. | Cited |
| 2007 WY 64, 156 P.3d 964, | DANIEL M. PITTARD V. GREAT LAKES AVIATION | Cited |
Citationizer: Table of Authority
Cite |
Name |
Level |
| 1990 10CIR 375, 912 F.2d 1238, | Applied Genetics Intern., Inc. v. First Affiliated Securities, Inc. | Discussed |
Oklahoma Supreme Court Cases |
| Cite | Name | Level |
| 1986 OK 83, 731 P.2d 411, 57 OBJ 3083, | Centric Corp. v. Morrison-Knudsen Co. | Cited |
The Utah Supreme Court Decisions |
| Cite | Name | Level |
| 657 P.2d 751, | Horgan v. Industrial Design Corp. | Cited |
Wyoming Supreme Court Cases |
| Cite | Name | Level |
| 1987 WY 188, 748 P.2d 704, | Boehm v. Cody Country Chamber of Commerce | Cited |
| 1991 WY 139, 820 P.2d 533, | Allmaras v. Mudge | Cited |
|