Fittshur v. Village of Menomonee Falls

• Decision Date: 10 August 1994
• Docket Number: No. 93-2896,93-2896
• Citation: 31 F.3d 1401
• Parties: Robert T. FITTSHUR, Plaintiff-Appellant, v. VILLAGE OF MENOMONEE FALLS, Sentry Insurance Company, a mutual company and Scottsdale Insurance Company, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1401

31 F.3d 1401

Robert T. FITTSHUR, Plaintiff-Appellant, v. VILLAGE OF MENOMONEE FALLS, Sentry Insurance Company, a mutual company and Scottsdale Insurance Company Defendants-Appellees.

No. 93-2896.

United States Court of Appeals Seventh Circuit.

Argued Feb. 23, 1994.

Decided Aug. 10, 1994.

Daniel R. Dineen, Milwaukee, WI (argued), for Robert T. Fittshur.

Philip C. Reid, Cook & Franke, Milwaukee, WI (argued), for Village of Menomonee Falls and Scottsdale Ins. Co.

Barbara A. O'Brien, Borgelt, Powell, Peterson & Frauen, Milwaukee, WI, for Sentry Ins. Co.

Before POSNER, Chief Judge, and COFFEY and KANNE, Circuit Judges.

COFFEY, Circuit Judge.

Robert Fittshur brought an action under 42 U.S.C. Sec. 1983, against the Village of Menomonee Falls, Wisconsin, and its insurers (collectively, "the Village"). Fittshur stated a variety of claims, among them that the Village, in terminating his employment as an assistant assessor, deprived him of a property interest in his job and a liberty interest in his opportunity to pursue new employment, without due process of law. Fittshur appeals the grant of summary judgment to the Village. We affirm.

BACKGROUND

The Village hired Fittshur as an assessment technician in the assessor's office in April 1969. After a 120-day probationary period, Ed Vogt, who at that time was the Village assessor, informed Fittshur that he would be retained as a regular employee. In February 1985, Fittshur was promoted to the position of assistant assessor.

In early 1989, Fittshur purchased, and planned to develop, two acres of wetland real estate located on Harding Drive in Menomonee Falls. Soon afterwards, the local newspaper, The Menomonee Falls News, reported that residents living near the wetland objected to its development. Some residents were reported as lamenting that, had they known that the land was for sale, they might have purchased it themselves; they accused Fittshur of having benefitted from "inside knowledge" he gained as an assistant assessor. According to the article, Fittshur claimed to have read about the availability of the land in a newspaper report and to have discussed the purchase of it with his "boss." In fact, Fittshur had not obtained prior approval for the transaction.

Fittshur's supervisors, however, did have a general knowledge of his real estate dealings. Fittshur had discussed some of these dealings with Russell Weber, the Village assessor at the time of Fittshur's dismissal, who often said, "[W]hat you do on your own time is your own business." Richard Farrenkopf, the village manager at the time of Fittshur's dismissal, was also familiar with Fittshur's previous real estate dealings and had never raised objections to them. In 1979, when Farrenkopf was assistant village manager, a newspaper article was published suggesting that Fittshur's employment by the Village was in conflict with his private efforts to obtain a zoning variance from the Village Planning Commission. Fittshur was not disciplined for that incident; on the contrary, then Village Manager Gottlieb informed Fittshur that he was "free to do what [he] wanted on [his] own time." Thereafter, Fittshur regularly appeared before the Village Planning Commission on private business. Farrenkopf had knowledge of these appearances once he became village manager, if not sooner.

Whatever their feelings about Fittshur's previous dealings, Weber and Farrenkopf did not respond favorably to the newspaper report concerning Fittshur's purchase of the Harding Drive property. On April 28, 1989, Weber sent Fittshur a terse memorandum directing him to refrain immediately from purchasing real estate for resale in the Village. On May 1, Fittshur met with Weber and Farrenkopf and explained that pending transactions prevented him from complying with Weber's instruction. Specifically, Fittshur said that he had already entered into a contract to purchase land from the estate of Julia Kletsch and had recently put several of his own properties up for sale. On May 4, Farrenkopf issued a memorandum to Fittshur, stating:

On at least two occasions in the past ..., I have discussed with you conflict of interest, impropriety, and the appearance of impropriety as a municipal employee. We had discussed in detail your real estate The Falls News article of last week concerning your proposed development of the [Harding Drive property] is an illustration of the "appearance" of impropriety in that it appears you are using "insider" information in your real estate activities. While my investigation confirms this is NOT the case, the public perception remains that "something is wrong."

activities, and I cautioned you on actions that reflected adversely on the Village....

* * * * * *

I am ordering that you refrain from being involved directly or indirectly in any real estate transaction or development within the Village of Menomonee Falls except for the sale or purchase of a personal residence.

Farrenkopf's memorandum also directed Fittshur to submit a list of all his past and present real estate transactions in Menomonee Falls.

In a May 8, 1989, memorandum to Weber and Farrenkopf, Fittshur defended his actions, noting that he had not violated a formal code of ethics (none was in place) and that no other employees of the Village were subject to restrictions on their outside business activities. Invoking his right to privacy, Fittshur refused to disclose any information to Weber and Farrenkopf concerning his real estate transactions. Furthermore, Fittshur indicated that he would continue to engage in real estate transactions, since any prohibition on such activity would violate his right to contract. Fittshur eventually completed his purchase of the Kletsch property as well as the sale of several of his properties.

After receiving Fittshur's May 8 memorandum, Farrenkopf hired Alpha Omega Security (Alpha) to conduct an investigation for the Village into Fittshur's real estate dealings. During the course of the investigation, which extended through the summer of 1989, Alpha contacted a number of people who had been involved in real estate transactions with Fittshur. Several of them were told by Alpha that the Village was investigating Fittshur because of evidence that he had taken advantage of the elderly in his transactions, had made improper use of assessed valuations and other Village records, had forged signatures on land-sale contracts, and had committed other unspecified "improprieties" in his real estate dealings.

In November 1989, Alpha completed its investigation and apprised Farrenkopf of its findings. The record does not disclose Alpha's findings. It does indicate, however, that Alpha did not find that Fittshur had used "inside information" either in his purchases of the Schwartz and Harding Drive properties or in any subsequent real estate transactions. On November 20, Farrenkopf met with Fittshur, questioned him about his use of Village information in his private real estate transactions, and gave him the option of resigning or being discharged. Fittshur refused to resign and was discharged the following day. Farrenkopf gave no explanation for his action. Nor had Fittshur been warned that such action was imminent; on the contrary, Weber had recently given Fittshur a complimentary performance evaluation and had discussed the possibility of promoting him to the position of deputy assessor.

Thomas Schmidt, an assistant assessor who worked with Fittshur, understood from observing Fittshur at work and from conversations with Weber that Fittshur was fired for exploiting in private real estate transactions information he had gained as an assistant assessor for the Village. The reasons for Fittshur's termination quickly became "general knowledge." John Ugrotzi, assessor for the City of Oak Creek, Wisconsin, said that Weber told him at a professional gathering in 1991 that Fittshur had been terminated for "buying real estate on city time."

In January 1991, Fittshur filed this suit against the Village under 42 U.S.C. Sec. 1983. He alleged that the Village's termination of his employment without prior notification and a disciplinary hearing deprived him of a property right in his employment without due process of law. Fittshur also alleged that the Village's dissemination of false information concerning the reason for his discharge deprived him of a liberty interest in pursuing his occupation. In granting summary judgment to the Village, the district

court found that Fittshur did not have a constitutionally protected property interest in his job and that, although Fittshur had a constitutionally protected liberty interest in pursuing his occupation, the Village did not deprive Fittshur of that interest. This appeal followed.

DISCUSSION

We review the grant of summary judgment de novo. Hickey v. A.E. Staley Mfg., 995 F.2d 1385, 1388 (7th Cir.1993). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). We view the record and all justifiable inferences drawn from it in the light most favorable to the party against whom judgment was entered. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 2513-14, 91 L.Ed.2d 202 (1986).

Fittshur asserts a constitutional right to due process of law. As the Supreme Court stated in Cleveland Board of Education v. Loudermill, 470 U.S. 532, 541, 105 S.Ct. 1487, 1492-93, 84 L.Ed.2d 494 (1985), a court confronting a procedural due process question must make two separate inquiries. First, the court must determine whether the plaintiff possesses a protected life, liberty, or property interest as a matter of substantive law. If the...