This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C6-01-1474

 

LeeAnn Petrovic,

Appellant,

 

vs.

 

Ridgeview Country Club, a

Minnesota non-profit corporation,

Respondent.

 

Filed April 24, 2002

Affirmed in part, reversed in part, and remanded

Willis, Judge

 

St. Louis County District Court

File No. C300600170

 

Timothy A. Little, Courtney, LaCourse and Little, P.A., 600 Missabe Building, Duluth, MN  55802 (for appellant)

 

John D. Kelly, Dale O. Harris, Hanft Fride, P.A., 1000 U.S. Bank Place, 130 West Superior Street, Duluth, MN  55802 (for respondent)

 

            Considered and decided by Willis, Presiding Judge, Shumaker, Judge, and Parker, Judge.*


U N P U B L I S H E D   O P I N I O N

WILLIS, Judge 

Appellant sued her former employer, claiming (1) sexual harassment in violation of the Minnesota Human Rights Act, (2) retaliation and constructive discharge in violation of Minnesota’s whistleblower statute, and (3) common-law defamation.  She challenges the district court’s grant of summary judgment against her, arguing that the district court misapplied the law and improperly resolved genuine issues of material fact in employer’s favor.  Because we find that the district court properly applied the law but engaged in improper fact-finding regarding appellant’s sexual-harassment claim, we affirm in part, reverse in part, and remand. 

FACTS

Appellant LeeAnn Petrovic worked for respondent Ridgeview Country Club (RCC) as a server.  In 1998, RCC’s general manager scheduled Petrovic to work at a club member’s gambling party.  The club member asked Petrovic beforehand whether she would be uncomfortable working if strippers attended the party.  She said that she would not be.  In her deposition, Petrovic said that during the evening, she observed several strippers dance, rub up against and kiss people, “and that kind of thing.”  As the evening progressed, Petrovic testified that she became “uncomfortable” and asked the general manager for permission to leave the party.  He refused her request.  Petrovic testified at her deposition that, at the party, she told the general manager that she never wanted to work at a function like that again.

Approximately two weeks later, Petrovic told one of RCC’s board members that she hoped that RCC would never host a function like the gambling party again.  Petrovic did not tell the board member that the nature of the party offended her.  Although she talked to the board member about a particular guest’s behavior at the party, she testified that she did not know “if it would actually be called a complaint.”

Petrovic testified that later that year she waited on a club member who, in the presence of one of RCC’s board members, made sexually suggestive remarks to her that offended her.  Petrovic did not respond to the remarks and walked away from the table.  She said that she told the general manager that she did not want to return to the table but that he responded that she had to.  Petrovic returned, and the club member then “basically just ignored” her.  Petrovic testified that the same club member directed offensive conduct toward her on other occasions and that other club members treated her similarly.   

In 1999, RCC hosted another gambling party.  Petrovic testified that when the general manager told her about the party, she said that she did not want to work at the party, but the general manager told her that there was no one else available.  Petrovic said that she did not try to tell a board member that she did not want to work at the party or that the prospect of working at the party offended or disgusted her.   

Later that same year, Petrovic asked board members to meet with her regarding concerns she had about the honesty of the general manager.  Beginning in 1995, Petrovic and several other employees had repeatedly complained to RCC board members that RCC’s general manager stole or attempted to steal from club members and guests.  The employees alleged that the general manager, among other things, padded guest checks and inflated head counts at club parties.  In her 1999 meeting with board members, Petrovic told them that she was afraid that the general manager would set her up for stealing.  The following day, Petrovic resigned.  She testified that a day later she told a board member:

I just couldn’t work with [the general manager] anymore and watch what he was doing * * * .  I was afraid he was going to put the blame on me and people would think that I was stealing.

 

After she resigned, Petrovic filed a complaint against RCC, alleging (1) sexual harassment in violation of the Minnesota Human Rights Act, (2) common-law defamation, (3) retaliation and constructive discharge in violation of Minnesota’s whistleblower statute, and (4) unpaid overtime in violation of the Fair Labor Standards Act (FLSA). 

Petrovic moved to amend her complaint to add a claim for punitive damages, and RCC moved for summary judgment.  The district court granted RCC’s motion with respect to the sexual harassment, whistleblower, and defamation claims but stayed entry of judgment pending resolution of the FLSA claim.  Consequently, the court did not address Petrovic’s motion to amend her complaint.  Petrovic and RCC settled the FLSA claim.  This appeal followed.

D E C I S I O N

I.

            A motion for summary judgment shall be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that either party is entitled to a judgment as a matter of law.  On appeal, [this] court must view the evidence in the light most favorable to the party against whom judgment was granted.

 

Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citations omitted).     

Sexual harassment under the Minnesota Human Rights Act

            It is an unfair employment practice for an employer to discriminate against an employee because of that employee’s sex.  Minn. Stat. § 363.03, subd. 1(2)(c) (2000).  The term “discriminate” includes sexual harassment.  Minn. Stat. § 363.01, subd. 14 (2000).

“Sexual harassment” includes unwelcome sexual advances, requests for sexual favors, sexually motivated physical contact or other verbal or physical conduct or communication of a sexual nature when * * * that conduct or communication has the purpose or effect of substantially interfering with an individual’s employment * * * or creating an intimidating, hostile, or offensive employment * * * environment.

 

Id. at subd. 41.  A hostile work environment means sexual harassment “sufficiently severe or pervasive so as to alter the conditions of * * * employment and create an abusive working condition.”  Bersie v. Zycad Corp., 417 N.W.2d 288, 291 (Minn. App. 1987) (quotations omitted), review denied (Minn. May 5, 1988).

               To prevail on a claim of sexual harassment, an employee must first establish a prima facie case, that is, prove that:

1)        the employee is part of a protected group; 

2)        the employee is subjected to unwelcome sexual harassment; 

3)        the harassment is based on sex; 

4)        the harassment affected a term, condition, or privilege of employment;  and

5)        the employer knew or should have known of the harassment and failed to take remedial action.

 

Costilla v. State, 571 N.W.2d 587, 595 (Minn. App. 1997) (citation omitted), review denied (Minn. Jan. 28, 1998). 

            Petrovic argues that RCC subjected her to a hostile work environment by forcing her to work at the gambling parties, where sexual conduct occurred in her presence, and by subjecting her to other unwelcome sexual conduct.  She contends, among other things, that the district court erred in granting summary judgment to RCC on her sexual-harassment claim because the court improperly resolved genuine issues of material fact in RCC’s favor.  We agree.

            Regarding the gambling parties, the district court found that each time Petrovic

was asked whether she was willing to work or was offended by them she volunteered to work the parties.  The only evidence as to why was good tip-income.  She did not complain about them. 

 

The district court concluded that Petrovic’s comments evinced a sense of humor and perspective about the parties that belied her claim of sexual harassment. 

            But a district court’s function in ruling on a motion for summary judgment is not to decide issues of fact; it is solely to determine whether genuine issues of material fact exist.  DLH, Inc. v. Russ, 566 N.W.2d 60, 70 (Minn. 1997).  Despite Petrovic’s testimony that she asked not to work the gambling parties and that she complained to RCC’s management about the parties, the district court improperly made factual findings that Petrovic volunteered to work the parties and that she did not complain about them.  We therefore reverse and remand Petrovic’s sexual-harassment claim for further proceedings.  Because we conclude that the district court improperly decided issues of fact, we do not reach Petrovic’s claim that the district court erred in applying the law regarding her claim of sexual harassment or RCC’s contention that MHRA’s statute of limitations bars the claim with respect to the 1998 party.           

Whistleblower claims:  retaliation and constructive discharge

Minnesota’s whistleblower statute provides that “[a]n employer shall not discharge, discipline, * * * or penalize an employee regarding the employee’s compensation, terms, conditions, location, or [employment] privileges” because the employee, in good faith, reports a violation or suspected violation of law to the employer.  Minn. Stat. § 181.932, subd. 1 (2000). 

To establish a prima facie case under the whistleblower statute, an employee must show that (1) she engaged in statutorily‑protected conduct; (2) the employer took adverse action against her; and (3) there was a causal connection between the protected activity and the adverse action.

 

Bersch v. Rgnonti & Assocs., Inc., 584 N.W.2d 783, 786 (Minn. App. 1998) (citation omitted), review denied (Minn. Dec. 15, 1998).

            Petrovic claims that after RCC’s board confronted the general manager about her allegations, he retaliated against her by complaining to the board that Petrovic “has a history of disrupting past employers” and a history of “lying,” and he placed the first of two negative notes in her personnel file.  Petrovic also contends that, after she quit her job, the general manager added a second negative note to her personnel file and made untrue statements about her to a prospective employer.

RCC contends that Petrovic engaged in no statutorily protected conduct.  The whistleblower act, RCC argues, exists to protect the public; because RCC is a private club, the club manager’s allegedly illegal actions affect only club members and their guests.  But a whistleblower claim need not be limited to reports that implicate public policy.  Anderson-Johanningmeier v. Mid-Minn. Women’s Ctr., 637 N.W.2d 270, 277 (Minn. 2002).  We conclude, however, that even if Petrovic established that she engaged in statutorily protected conduct, she did not show that RCC took adverse action against her because of that conduct or that a causal connection exists between Petrovic’s “whistleblowing” and the alleged adverse action. 

Petrovic testified that a week after her 1999 report to RCC’s board that she believed that the general manager stole from club members and guests and that he may set her up for stealing, the general manager placed the first of two negative notes in her personnel file in retaliation for that report.  The first note, dated May 1999, states: 

LeeAnn seems to be particularly negative in her attitude already this season.  It is a touchy subject since LeeAnn sees others’ faults but tends not to see her own very well.  Asked [another employee] to talk to her in a friendly manner, [the other employee] did and things are better. 

 

The second note, dated a few months later, states, in part:  “[Petrovic] is very negative in her comments about anything that has to do w[ith] RCC.” 

The content of the two notes does not support Petrovic’s claim that the general manager retaliated against her with negative performance reviews.  The first note ends positively, stating that “things are better.”  The second note goes on to speculate that upcoming surgery, a temporary situation that causes most people at least some worry, may have caused Petrovic’s “negative” attitude.  

Petrovic testified that RCC did not reduce her work hours, cut her wages, or penalize or sanction her at any time.  She failed to establish a causal connection between her 1999 report to the board members and the notes in her personnel file, particularly because Petrovic and other employees had been complaining to board members about the general manager’s alleged dishonesty since 1995.           

Petrovic also contends that RCC subjected her to intolerable working conditions that forced her to quit her job.  To prove constructive discharge, a plaintiff must show that the employer created intolerable working conditions with the intention of forcing the employee to resign or that the employer could reasonably foresee that its actions would result in the employee’s resignation.  Pribil v. Archdiocese of St. Paul & Minneapolis, 533 N.W.2d 410, 412 (Minn. App. 1995).  Circumstances that make work less enjoyable or more stressful, without more, do not establish the “compulsion to quit” necessary to prove a constructive-discharge claim.  See Hanenburg v. Principal Mut. Life Ins. Co.,
118 F.3d 570, 575 (8th Cir. 1997) (analyzing under the Minnesota Human Rights Act employee’s claim that she was constructively discharged for discriminatory reasons).    

Petrovic testified that she quit the day after she informed the board that she did not think she could work at RCC any longer because she was afraid that the general manager would frame her for stealing.  But Petrovic offered no evidence that anyone ever accused her of stealing.  She testified that the board did not cut her hours, penalize, or sanction her at any time.  Under the circumstances, Petrovic failed to show that RCC created intolerable working conditions with the intention of forcing her to quit her job. 

Summary judgment on a claim is mandatory against a party who bears the burden of proof and who fails to establish an essential element of the claim; such a failure renders all other facts immaterial.  Lloyd v. In Home Health, Inc., 523 N.W.2d 2, 3 (Minn. App. 1994).  Because Petrovic failed to prove essential elements of her whistleblower claims, the district court did not err in granting summary judgment in favor of RCC.  

Common-law defamation

            For a statement to be defamatory,

it must be communicated to someone other than the plaintiff, it must be false, and it must tend to harm the plaintiff’s reputation and to lower [her] in the estimation of the community.

 

Frankson v. Design Space Int’l, 394 N.W.2d 140, 142 (Minn. 1986) (quotation omitted).  “[S]tatements that cannot be interpreted reasonably as stating facts” are not actionable.  Geraci v. Eckankar, 526 N.W.2d 391, 397 (Minn. App. 1995) (citations omitted), review denied (Minn. Mar. 14, 1995).  Minnesota courts apply a four-factor test to distinguish between actionable statements of fact and protected statements of opinion.  The test considers the statements’ “(1) specificity and precision, (2) verifiability, (3) literary and social context * * *, and (4) public context.”  Id. (citation omitted).  “Whether a statement can be interpreted as stating facts or can be proven false is a question of law.”  Id.  We review questions of law de novo.  Morton Bldgs., Inc. v. Comm’r of Revenue, 488 N.W.2d 254, 257 (Minn. 1992).

Petrovic claims that the general manager defamed her when he stated, after she resigned, that she had “female problems” and “mental problems,” “fell off the wagon,” and was “hitting the bottle.”  Whether Petrovic had “female problems” may be verifiable.  The phrase “mental problems” specifically infers that Petrovic lacks mental competence.  See Capan v. Daugherty, 402 N.W.2d 561, 563-64 (Minn. App. 1987) (noting that asserting that someone “is not dealing with a full deck and needs help” infers mental incompetence).  One can establish mental competence, and thus the general manager’s statement that Petrovic has “mental problems” is sufficiently verifiable to be actionable.  Id. at 564.  Likewise, “fell off the wagon” and “hitting the bottle” commonly and specifically refer to drinking alcohol, an assertion that can also be verified.      

But given the literary, social, and public context of the statements, no one could have reasonably interpreted any of them as stating fact.  For example, Petrovic testified that a club bartender said that the general manager told him, after Petrovic resigned, that Petrovic was sick and on medication, that she had a lot of problems, and that she had been hitting the bottle.  Petrovic testified that the bartender “just laughed because I don’t think he believed it.”  Deposition testimony reveals that none of the employees trusted the general manager.  If others do not reasonably believe that the statements express facts, the statements are not actionable.  Bebo v. Delander, 632 N.W.2d 732, 739-40
(Minn. App. 2001), review denied (Minn. Oct. 16, 2001).       

            Petrovic also claims that the general manager told a prospective employer that she was not eligible for rehire because she walked out in the middle of a shift. 

In the context of employment recommendations, the courts generally recognize a qualified privilege between former and prospective employers as long as the statements are made in good faith and for a legitimate purpose. 

 

Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 257 (Minn. 1980).  But a former employer who acts with malice abuses, and loses, the privilege.  Hunt v. Univ. of Minn., 465 N.W.2d 88, 92-93 (Minn. App. 1991).  Whether a qualified privilege exists is a question of law.  Id. at 92.   

            The general manager testified at his deposition that when he was asked whether Petrovic was eligible for rehire, he said that she was not

[b]ecause she resigned without any notice and it is my policy not to rehire staff who quit without giving me any notice or walk out in the middle of a shift. 

 

Petrovic admits that she left RCC without notice; she claims that the general manager said she walked out in the middle of a shift.  But even if he said that she walked out in the middle of a shift, the general manager’s words do not show that he harbored ill-will towards Petrovic, and he did not use exaggerated language.  See id. (“Malice may be shown by extrinsic evidence of personal ill will, or by intrinsic evidence such as the exaggerated language of the statement or the extent of the statement’s publication.”).  Such an absence of extrinsic or intrinsic evidence of malice supports a determination that the general manager did not abuse his qualified privilege.  Because Petrovic failed to raise a genuine issue of material fact regarding her defamation claim, the district court did not err in granting summary judgment in RCC’s favor.  

II.

            Petrovic argues that because RCC deliberately disregarded her rights, the district court should have allowed her to amend her complaint to include punitive damages. 

The decision whether to permit a party to amend the pleadings is within the district court’s discretion, and [this court] will not disturb that decision absent a clear abuse of that discretion. 

 

Bebo, 632 N.W.2d at 740 (citation omitted).  Because the district court granted summary judgment in RCC’s favor on all claims, the court did not address Petrovic’s motion to amend her complaint.      

      “This court's review is necessarily limited to issues which the record establishes were actually raised in, and decided by, the [district] court.”  Waldner v. Peterson, 447 N.W.2d 217, 219 (Minn. App. 1989) (citation omitted).  The district court should address this issue on remand.            

            Affirmed in part, reversed in part, and remanded.

           



* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.