935 F.2d 1286Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishingres judicata, estoppel, or the law of the case and requiresservice of copies of cited unpublished dispositions of the FourthCircuit.Michael A. DeGIROLAMO, Plaintiff-Appellant,v.SANUS CORPORATION HEALTH SYSTEMS, HowardWaltman, JosephLynaugh, Defendants-Appellees.
No. 90-2146.
United States Court of Appeals, Fourth Circuit.
Argued Feb. 6, 1991. Decided June 17, 1991.
Appeal from the United States District Court for the District of Maryland,at Baltimore. William M. Nickerson, District Judge. (CA-88-26-WN)Raymond Donald Battocchi, McLean, Va., for appellant.Timothy Edward Howie, O'Malley, Miles & Harrell, Upper Marlboro,Md. (Argued), for Appellees; Thomas L. Doran, O'Malley, Miles &Harrell, Upper Marlboro, Md., on brief.D.Md.AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.Before DONALD RUSSELL and NIEMEYER, Circuit Judges, andJAMES B. McMILLAN, Senior United States District Judge for theWestern District of North Carolina, sitting by designation.PER CURIAM:
1Michael A. DeGirolamo, having been discharged from his employment withSanus Corp. Health Systems, sued Sanus and two of its officers, Howard L.Waltman and Joseph T. Lynaugh. His complaint alleges state common lawcounts for abusive discharge, breach of employment contract, and fraud. Thedistrict court granted the defendants' motion for summary judgment and thisappeal followed. Because there is a genuine issue of material fact aboutwhether DeGirolamo was terminated because he refused to engage in illegalconduct, we reverse the judgment on the abusive discharge count. We affirmthe judgment of the district court on the remaining counts.2* DeGirolamo was hired by Lynaugh and Waltman on April 1, 1986, to be theexecutive director of HealthPlus, a health maintenance organization (HMO) anda subsidiary of Sanus. Waltman served as the chairman of the board of directorsof both HealthPlus and Sanus, and Lynaugh as the president. DeGirolamocontends that prior to accepting the position as executive director Waltman promised him that the job would be his as long as his performance was goodand that he could expect his relationship with Sanus to be a long one. After DeGirolamo accepted the job, he received a letter from Waltman dated March18, 1986, which summarized their discussions and reflected their "basicagreement." The letter stated his salary, explained how he might earn a performance bonus, and stated that Waltman would recommend to the boardthat DeGirolamo be awarded stock options. The letter concluded, "We arelooking forward to a long and rewarding relationship."3Several months after taking over as executive director, DeGirolamo learned thatthe federal Office of Personnel Management (OPM) intended to conduct anaudit of HealthPlus and its pricing policies to investigate the possibility thatHealthPlus, in violation of government regulations concerning HMOs, had beenoffering health insurance to certain nongovernment customers at a rate lower than that offered to the federal government. DeGirolamo contends that helearned that HealthPlus had in fact sold health insurance to commercialcustomers at discounted rates not offered to the government and that Waltmanand Lynaugh intended to camouflage this fact. DeGirolamo asserts, "I madeclear to HealthPlus officials that I would not participate in such illegal activities,and urged them to refrain from doing so. I specifically stated that I would not lieto the auditors, and told them not to do so." After stating his intention not to participate in illegal activity, DeGirolamo was told by Waltman not to talk tothe federal auditors.4The audit occurred in September and October of 1986, and the OPM concludedthat HealthPlus had engaged in the improper practice of "discounting." As aresult the OPM directed that HealthPlus pay the federal government over
II$800,000. On January 23, 1987, DeGirolamo was terminated without warningor explanation. Later, defendants advanced the reason that DeGirolamo was not performing adequately.5During DeGirolamo's tenure as executive director, HealthPlus' enrollmentincreased, and its administrative and medical costs, as a percentage of revenues,decreased. As a result, he turned the organization's financial status around byearning a profit of $393,668 in 1986. In 1985, the year before DeGirolamo washired, HealthPlus lost $136,474.6In his complaint, DeGirolamo contends 1) that the defendants wrongfullydischarged him by firing him for refusing to participate in illegal activity, i.e.,concealing the discount pricing of health insurance; 2) that the defendants breached an employment contract by firing him and by not paying him a bonus;and 3) that the defendants committed fraud by making promises regarding hisemployment on which he relied and which they had no intention of keeping.7The tort of abusive or wrongful discharge is recognized in Maryland as a judicially-created exception to the employment at will doctrine. This tortcreates "a cause of action for abusive discharge by an employer of an at willemployee when the motivation for the discharge contravenes some clear mandate of public policy." Adler v. American Standard Corp., 291 Md. 31, 47(1981). In subsequent litigation in the Adler case, we noted that the MarylandCourt of Appeals intended for the abusive discharge tort to be limited in scope,and we therefore concluded that it applied only "to situations involving theactual refusal to engage in illegal activity, or the intention to fulfill a statutorily prescribed duty." Adler v. American Standard Corp., 830 F.2d 1303, 1307 (4thCir.1987).8Without conceding that he was an employee at will, DeGirolamo argues thatthe defendants abusively discharged him in violation of public policy becausehe refused to engage in illegal activity.
1
The defendants contend that he wasnever asked to violate any statute or to participate in any illegal activity. Theydo not dispute, however, that a request was made to DeGirolamo not to engagein the audit process involving the OPM.9Upon reviewing the record, we believe that DeGirolamo has producedsufficient evidence, albeit thin, to create a genuine issue of material fact on thequestion of whether he was fired because of his refusal. DeGirolamo's
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