Wall et al v. Sentry Insurance A Mutual Company

Filing 15

Opinion and Order - Defendant's Amended Motion to Dismiss (Dkt. 8 ) is GRANTED IN PART AND DENIED IN PART. Defendant's motion is GRANTED as to Plaintiff Wall's claim for common law wrongful discharge and as to Plaintiff Pickett's claim for common law wrongful constructive discharge based on allegations of sex discrimination and retaliation. Defendant's motion is DENIED as to Plaintiff Pickett's claim for common law wrongful discharge based on allegations that she was retaliated against for taking protected medical leave. Defendant's request for attorney fees is DENIED. Signed on 1/26/2015 by Judge Michael H. Simon.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

ANGELA WALL, JENNIFER PICKETT,
Plaintiffs,

Case No. 3:14-cv-01887-SI
OPINION AND ORDER

v.
SENTRY INSURANCE, a mutual company,
Defendant.
Stephen L. Brischetto and Mathew C. Ellis, 621 SW Morrison Street, Suites 1025 and 1050,
Portland, OR 97205. Of Attorneys for Plaintiffs.
Mictchell C. Baker and Alexander A. Wheatley, FISHER & PHILLIPS LLP, 111 SW Fifth
Avenue, Suite 4040, Portland, OR 97204. Of Attorneys for Defendant.
Michael H. Simon, District Judge.
Plaintiffs, Angela Wall and Jennifer Pickett (collectively “Plaintiffs”), maintain this
action against Defendant Sentry Insurance (“Sentry” or “Defendant”). Before the Court is
Defendant’s Amended Motion to Dismiss1 (Dkt. 8) Plaintiff Wall’s claim for common law

1

Defendant’s Motion to Dismiss (Dkt. 6) and Amended Motion to Dismiss (Dkt. 8) are
identical except for certain citations to relevant Oregon statutes. Defendant’s Motion to Dismiss
(Dkt. 6) is therefore dismissed as moot.
PAGE 1 – OPINION AND ORDER

wrongful discharge and Plaintiff Pickett’s claim for common law wrongful constructive
discharge. For the reasons discussed below, the Court grants in part Defendant’s motion.
STANDARDS
A motion to dismiss for failure to state a claim may be granted only when there is no
cognizable legal theory to support the claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs.,
Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint’s factual
allegations, the court must accept as true all well-pleaded material facts alleged in the complaint
and construe them in the light most favorable to the non-moving party. Wilson v. HewlettPackard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d
992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint
“may not simply recite the elements of a cause of action, but must contain sufficient allegations
of underlying facts to give fair notice and to enable the opposing party to defend itself
effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from
the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office
Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the
plaintiff’s legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S.
662, 678-79 (2009).
A complaint must contain sufficient factual allegations to “plausibly suggest an
entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the
expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial
plausibility when the pleaded factual content allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663 (citing Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 556 (2007)).
PAGE 2 – OPINION AND ORDER

BACKGROUND
Plaintiffs, Angela Wall and Jennifer Pickett, are former employees of Sentry Insurance.
Each asserts claims for violations of Or. Rev. Stat. (“ORS”) § 659A.030 and for common law
wrongful discharge. Ms. Wall alleges that her general manager, Ford McMurtry, subjected her to
unwanted advances and comments of a sexual nature and retaliated against her for opposing his
discriminatory practices. Ms. Pickett also alleges that McMurtry subjected her to unwanted
sexual advances and comments, to different treatment based upon gender, and to retaliation for
opposing unlawful employment practices.
DISCUSSION
Defendant moves to dismiss both Plaintiffs’ claims for common law wrongful discharge
on the grounds that: (1) wrongful discharge is an “interstitial tort” only available if a claimant
lacks an adequate statutory remedy; and (2) that ORS § 659A.885(3) provides the full panoply of
relief available at common law, thus precluding Plaintiffs from asserting a claim for wrongful
discharge. 2
A. Adequate Statutory Remedy
The Court must decide the oft-raised issue of whether a plaintiff who alleges common
law wrongful discharge is precluded from bringing that claim because there is an adequate
statutory remedy. Defendant argues that controlling Oregon Supreme Court precedent, as

2

In its reply brief (Dkt. 13), Defendant concedes that the “portion of Ms. Pickett’s
wrongful constructive discharge claim that is based on Ms. Pickett’s allegation that she was
retaliated against for taking protected medical leave nine months before she resigned her position
is not displaced by an adequate statutory remedy.” Accordingly, Defendant’s Amended Motion
to Dismiss is denied as to Defendant Pickett’s claim for common law wrongful constructive
discharge regarding these allegations, and the Court addresses only Plaintiffs’ common law
wrongful discharge claims regarding sex discrimination and retaliation.

PAGE 3 – OPINION AND ORDER

interpreted by a long line of cases in this district, requires a finding that Plaintiffs’ claims for
common law wrongful discharge are precluded. Defendant contends that the test for whether a
claim for common law wrongful discharge is precluded under Oregon law is disjunctive: it
requires a showing that either (1) an existing remedy adequately protects the public interest in
question, or (2) the legislature has intentionally abrogated the common law remedies by
establishing an exclusive remedy. See Arnold v. Pfizer, Inc., 970 F. Supp. 2d 1106, 1145 (D. Or.
2013); Draper v. Astoria Sch. Dist. No. 1C, 995 F. Supp. 1122, 1130-31 (D. Or. 1998). Plaintiff
contends that the appropriate test, as articulated by the Oregon Court of Appeals, is conjunctive:
the Defendant must demonstrate both that the provided remedy is adequate and that the
legislature intended the statute to abrogate preexisting common law remedies. See Kemp v.
Masterbrand Cabinets, Inc., 257 Or. App. 530, 537-38 (2013); Olsen v. Deschutes County, 204
Or. App. 7, 14 (2006). See also Neighorn v. Quest Health Care, 870 F. Supp. 2d 1069, 1106 (D.
Or. 2012) (discussing cases applying the disjunctive and conjunctive tests).
Plaintiffs concede in their Response to Defendant’s Motion to Dismiss (Dkt. 9) that
ORS § 659A.885(3) provides the full range of legal and equitable remedies available under the
common law for claims of sex discrimination. Pl.’s Opp’n at 3-4. Accordingly, the only relevant
question for the Court is whether Oregon law requires the conjunctive test articulated by the
Oregon Court of Appeals or the disjunctive test articulated by federal courts in this district.
In Draper, Judge Stewart provided an exhaustive analysis of the development of the tort
of wrongful discharge in Oregon, as well as the relevant case law concerning when a statutory
remedy precludes such a claim. 995 F. Supp. at 1127-31. In finding that Oregon law requires a
disjunctive test for determining when a statutory remedy precludes a claim for common law
wrongful discharge, Judge Stewart explained:

PAGE 4 – OPINION AND ORDER

In attempting to navigate a course through the confusing landscape
of Oregon appellate cases on wrongful discharge, this court
observes that the underlying purpose of that tort in this state is not
to vindicate the individual interests of the employee by assuring
that he or she receives the maximum possible recovery, but rather
to protect important public policies by punishing conduct that
thwarts those interests.
Given the stated purpose of this tort in Oregon, and given that it
was created to establish only a narrow exception to the
employment-at-will doctrine, this court concludes that a claim for
common law wrongful discharge is not available in Oregon if (1)
an existing remedy adequately protects the public interest in
question, or (2) the legislature has intentionally abrogated the
common law remedies by establishing an exclusive remedy
(regardless of whether the courts perceive that remedy to be
adequate). This court will follow that view until the Oregon
Supreme Court clarifies the governing standards.
Id. at 1130-31.
The Court agrees with Judge Stewart’s thorough and well-reasoned analysis in Draper: if
an adequate statutory remedy exists, a common law wrongful discharge claim based on the same
conduct is precluded. See Cantley v. DSMF, Inc., 422 F. Supp. 2d 1214, 1222 (D. Or. 2006)
(“Until the Oregon Supreme Court clarifies the governing standards, this court will continue to
follow its analysis in Draper.”). Moreover, since Draper, almost every federal judge in this
district has confronted this issue and many of the resulting decisions have been accompanied by
thorough analysis of this question. On this point there is almost uniform agreement among the
other judges in this district with Judge Stewart’s reasoning in Draper. See, e.g., Arnold, 970 F.
Supp. 2d at 1145-46 (D. Or. 2013); Neighorn, 870 F. Supp. 2d at 1106-08 (D. Or. 2012); Shaw v.
R.U. One Corp., 822 F. Supp. 2d 1094, 1097-99 (D. Or. 2011); Duran v. Window Prods., Inc.,
2011 WL 1261190, *1-4 (D. Or. Mar. 29, 2011); Ventura v. Johnson Controls, Inc., 2010 WL
3767882, *11-12 (D. Or. Sept. 16, 2010); Reid v. Evergreen Aviation Ground Logistics Enters.,
Inc., 2009 WL 136019, *15-20 (D. Or. Jan. 20, 2009); Battan v. Allwest Underground, Inc., 2008
PAGE 5 – OPINION AND ORDER

WL 4191467, *3-6 (Sept. 5, 2008); James v. Evergreen Int’l Airlines, Inc., 2008 WL 2564804,
*5-7 (D. Or. June 23, 2008); Delima v. Home Depot U.S.A., Inc., 2008 WL1882842, *29 (D. Or.
April 23, 2008); Cameron v. T–Mobile USA, Inc., 2008 WL 918480, *4-5 (D. Or. March 31,
2008); Walters v. Roll'N Oilfield Indus., Inc., *4 (Feb. 15, 2008); Bernsten v. Dollar Tree Stores,
Inc., 2007 WL 756744, *9 (D. Or. March 6, 2007); Bates v. Lucht's Concrete Pumping, Inc.,
2007 WL 656428, *1 (D. Or. Feb. 26, 2007); Navarette v. Nike, Inc., *1 (D. Or. Jan. 26, 2007);
Wilson v. Southern Oregon Univ., 2006 WL 2668468,* 3 (D. Or. Sept. 15, 2006). But see Willis
v. Comcast of Oregon II, Inc., 2007 WL 3170987, *1-2 (D. Or. Oct. 25, 2007) (implicitly
following Olsen's test that a common law wrongful discharge claim is not precluded unless there
is both an adequate statutory remedy and legislative intent to abrogate a common law cause of
action for wrongful discharge based on the same conduct).
Opposing this conclusion, Plaintiffs argue that because this Court has jurisdiction on the
basis of diversity of citizenship, it must apply state substantive law as articulated by the Oregon
Court of Appeals in its recent decision in Kemp. 257 Or. App. at 537-541 (applying the
conjunctive test). A federal court sitting in diversity, however, is not bound by the decisions of a
state intermediate appellate court if it determines that the state’s highest court would reach a
different conclusion. McCubbrey v. Veninga, 39 F3d 1054, 1055 (9th Cir. 1994). Following
Judge Stewart’s analysis in Draper and the many cases in this district following it, the Court is
not convinced that the Oregon Court of Appeals decision in Kemp portends the Oregon Supreme
Court’s direction on this issue. See Duran, 2011 WL 1261190, at *3 (declining to adopt the
Oregon Court of Appeals’ conjunctive test until the Oregon Supreme Court has clarified the
issue); Reid, 2009 WL 136019, at *19-20 (same); Hull v. Ivey Imaging LLC, 2008 WL 5071100,
*2-3 (D. Or. Nov. 21, 2008) (holding that the court continues to apply the disjunctive test

PAGE 6 – OPINION AND ORDER

pending the Oregon Supreme Court speaking more conclusively on the matter); Adams v. Home
Depot USA, Inc., 2007 WL 4565163, *29 (D. Or. Dec. 19, 2007) (holding that in light of prior
analysis and the lack of contrary persuasive reasons, “this court continues to require either a
show of adequate statutory remedies or a specific legislative intent to abrogate the common law,
but not both”) (emphasis in original); Henry v. Portland Dev. Comm'n, 2006 WL 4008709, *6
(D. Or. Oct. 18, 2006) (holding that a “federal court is not bound by the decisions of a state
intermediate appellate court if it determines that the state's highest court would reach a different
conclusion. Here, the Oregon Supreme Court . . . has not conclusively spoken on this issue”).
Accordingly, because Plaintiffs have an adequate statutory remedy under ORS § 659A.885,
Plaintiffs’ claims for common law wrongful constructive discharge must be dismissed.
B. Attorney Fees
Defendants seek attorney fees under ORS § 20.105, which states in relevant part:
the court shall award reasonable attorney fees to a party against
whom a claim, defense or ground for appeal or review is asserted,
if that party is a prevailing party in the proceeding and to be paid
by the party asserting the claim, defense or ground, upon a finding
by the court that the party willfully disobeyed a court order or that
there was no objectively reasonable basis for asserting the claim,
defense or ground for appeal.
ORS § 20.105(1). This section, however, does not provide a right to attorney fees for all
prevailing parties as a matter of course. Instead, “attorney’s fees may be awarded only as a
sanction against the non-prevailing parties in meritless actions filed for an improper purpose.”
Gerke v. Travelers Cas. Ins. Co. of Am., 2013 WL 6241983, *6 (D. Or. Dec. 3, 2013). Given the
often conflicting case law between the federal and state courts in this district on whether a
statutory remedy precludes a claim for common law wrongful discharge, the Court finds that
Plaintiffs’ did not lack an objectively reasonable basis for asserting their claims. See Farrington
v. Pepsi-Cola Bottling Co. of Bend, 2004 WL 817356, *2 (D. Or. Feb. 25, 2004) (“The question
PAGE 7 – OPINION AND ORDER

of whether a terminated (or constructively discharged) employee can bring a common law
wrongful termination claim is, frankly, a gnarly one. Oregon courts have been grappling with it
for almost thirty years.”). Accordingly, Defendant’s request for attorney fees is denied.
CONCLUSION
Defendant’s Amended Motion to Dismiss (Dkt. 8) is GRANTED IN PART AND
DENIED IN PART. Defendant’s motion is GRANTED as to Plaintiff Wall’s claim for common
law wrongful discharge and as to Plaintiff Pickett’s claim for common law wrongful constructive
discharge based on allegations of sex discrimination and retaliation. Defendant’s motion is
DENIED as to Plaintiff Pickett’s claim for common law wrongful discharge based on allegations
that she was retaliated against for taking protected medical leave. Defendant’s request for
attorney fees is DENIED.
IT IS SO ORDERED.
DATED this 26th day of January, 2015.
/s/ Michael H. Simon
Michael H. Simon
United States District Judge

PAGE 8 – OPINION AND ORDER