802 F.2d 918 (7th Cir. 1986), 85-2943, Shlay v. Montgomery

Docket Nº:85-2943.
Citation:802 F.2d 918
Party Name:Howard SHLAY, Plaintiff-Appellant, v. James MONTGOMERY, Harold Washington & City of Chicago, A Municipal Corporation, Defendants-Appellees.
Case Date:September 30, 1986
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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802 F.2d 918 (7th Cir. 1986)

Howard SHLAY, Plaintiff-Appellant,


James MONTGOMERY, Harold Washington & City of Chicago, A

Municipal Corporation, Defendants-Appellees.

No. 85-2943.

United States Court of Appeals, Seventh Circuit

September 30, 1986

Argued June 10, 1986.

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Kenneth K. Ditkowsky, Ditkowsky & Contorer, Chicago, Ill., for plaintiff-appellant.

Jennifer A. Keller, Corp. Counsel, Chicago, Ill., for defendants-appellees.

Before WOOD, CUDAHY, and FLAUM, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

Plaintiff-appellant Howard Shlay appeals the district court's grant of summary judgment in favor of defendants-appellees James Montgomery, Harold Washington and the City of Chicago (collectively the "defendants"). Shlay brought this action alleging that his termination as an assistant corporation counsel for Chicago (1) deprived him of his property interest in continued employment without due process, (2) deprived him of his liberty interest in his professional reputation without due process, (3) violated his right to equal protection and due process since he was the victim of selective and arbitrary enforcement of the City's residency requirement, and (4) constituted a politically motivated firing in contravention of the Shakman decree. 1 Shlay also alleges various violations of state law. The district court granted summary judgment to the defendants with respect to Shlay's federal counts and dismissed without prejudice the pendent state claims for lack of jurisdiction. We affirm.


Shlay was hired by the City of Chicago to serve as an assistant corporation counsel in the City's Law Department in 1970. At the time of his hiring, Shlay was a resident of Flossmoor, Illinois, and informed his employer that he did not live within the confines of Chicago. Although when he was terminated Shlay did own a home in the City for convenience, his principal residence remained in Flossmoor during the sixteen years he served as an assistant corporation counsel.

On April 30, 1985, without a hearing, Shlay was terminated allegedly because he was found to be in violation of Chicago's residency requirement. As a condition of employment Chicago mandates that City employees, irrespective of status, be actual residents of the City. Pursuant to City policy, the residency requirement is mandatory

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and by failing to comply an employee is subject to being discharged.

During the course of his employment Shlay executed several documents which required him to list his residence and which articulated the City's policy with respect to its residency requirement. In April 1985, an investigation revealed that Shlay was not complying with the requirement and he was subsequently terminated.

Prior to the effective date of his discharge, Shlay brought the present action asserting violations of the fourteenth amendment and the Shakman decree. Shlay thereafter amended his complaint to add state claims alleging breach of employment contract, unjust enrichment, retaliatory discharge, and violations of both the Illinois Constitution of 1970 and the Illinois Personal Records Act, Ill.Ann.Stat. ch. 48, p 2001 et seq. (Smith-Hurd 1986 Supp.).

The district court subsequently granted summary judgment in favor of the defendants with respect to the federal claims and dismissed the state claims without prejudice. Shlay appeals from the decision of the district court.


Fed.R.Civ.P. 56(c) provides that the district court shall grant summary judgment "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." In determining whether the district court appropriately granted summary judgment, "[a]ll factual inferences are to be taken against the moving party and in favor of the opposing party." International Administrators, Inc. v. Life Insurance Co. of North America, 753 F.2d 1373, 1378 (7th Cir.1985). In instances in which "inferences contrary to those drawn by the trial court might be permissible," the district court's grant of summary judgment must be reversed. Munson v. Friske, 754 F.2d 683, 690 (7th Cir.1985). Once a motion for summary judgment has been made and properly supported, however, the nonmovant does have the burden of setting forth specific facts showing the existence of a genuine issue of fact for trial. See Rule 56(e); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.) (noting that "a bare contention that an issue of fact exists is insufficient to raise a factual issue"), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). Although a requisite, the mere existence of a factual dispute is, nonetheless, not alone sufficient to bar summary judgment. It is well settled that "a factual dispute does not preclude summary judgment unless ... the disputed fact is outcome determinative under the governing law." Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.), cert. denied, 464 U.S. 918, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983). With these principles in mind, we proceed to an examination of the merits of Shlay's appeal.

The first argument Shlay advances is that summary judgment was inappropriate because there is a genuine issue of fact with respect to whether he was discharged in violation of the Employee Retirement Income Security Act ("ERISA"). In pertinent part, 29 U.S.C. Sec. 1140 (1982) makes it

unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act [29 U.S.C. Sec. 301 et seq.], or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension Plans Disclosure Act.

Shlay maintains that the defendants violated this provision of ERISA by discharging him prior to the vesting of his pension rights.

This contention need not detain us long, however. It is undisputed that Shlay failed to advance this theory of recovery in the

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district court. As we have noted on numerous occasions, absent exceptional circumstances, a party's failure to raise an issue in the trial court constitutes a waiver of that issue for purposes of appeal. In re Peter Bear, 789 F.2d 577, 579 (7th Cir.1986); Johnson v. Levy Organization Development Co., 789 F.2d 601, 611 (7th Cir.1986). Because we find that Shlay advances no reason compelling us to examine his theory premised on section 1140 on appeal, we hold that the issue is waived.

Shlay's second claim is that his discharge without a hearing deprived him of a property interest in continued employment in violation of his fourteenth amendment right to due process. See Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972). We disagree. In Roth, the Supreme Court noted that a property interest requires more than a "unilateral expectation" of a benefit and is not created simply because a person may have "an abstract need or desire" for such a benefit. 408 U.S. at 577, 92 S.Ct. at 2709. To the contrary, to have a property interest a person must "have a legitimate claim of entitlement to it." Id. It is also clear that such legitimate claims for entitlements are not derived from the Constitution itself; "[r]ather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law--rules or understandings that secure certain benefits and that support claims of entitlement to those benefits." Id. As we noted in Munson v. Friske, supra, in the employment context this means that a property interest can be created in one of two ways: (1) "by an independent source such as state law securing certain benefits;" or (2) by "a clearly implied promise of continued employment." 754 F.2d at 692.

In the present case, Shlay concedes that he was not a career service employee and that therefore he has no statutory basis for his alleged property right. See, e.g., Mun.Code of Chicago, ch. 25.1, Secs. 25.1-3(6) and (13) (exempting employees of the Law Department from career service employee status). Although acknowledging that his alleged property interest is not statutorily based, Shlay advances two theories upon which he claims we could derive such an interest protected by the fourteenth amendment. First, he argues that at the time he was hired he was given an oral contract for career employment which would allow him to be terminated only for cause. Second, he contends that his property interest can be derived from the fact that he was accorded de facto tenure.

With respect to the oral contract, Shlay contends that

it was agreed and covenanted that the position of assistant corporation counsel was a career position, and while not covered by Civil Service lawyer [sic], ... employees would not be terminated except for cause.... In addition the parties hereto agreed that the plaintiff [Shlay] would not be discriminated against because of race, color, religion, national origin, or age and would be treated fairly and equitably.

First Amended Complaint at 2. Even if we accept as true Shlay's contention that the corporation counsel gave him a career contract, it is of no legal consequence. Shlay cites to no source, and we can find none, which purports to give the corporation counsel the authority to create a career position for a person in Shlay's situation. Any promise for such a position would, therefore, be unenforceable since it is well-established that a city is generally not legally responsible for acts taken by...

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