Carter v. Jernigan

• Citation: 227 N.W.2d 131
• Decision Date: 19 March 1975
• Docket Number: No. 56266,56266
• Parties: Harold E. CARTER et al., Appellants, v. Kenneth JERNIGAN, Director, Iowa Commission For the Blind, et al., Appellees.
• Court: United States State Supreme Court of Iowa

Page 131

227 N.W.2d 131

Harold E. CARTER et al., Appellants, v. Kenneth JERNIGAN, Director, Iowa Commission For the Blind, et al., Appellees.

No. 56266.

Supreme Court of Iowa.

March 19, 1975.

Dan Johnston, New York City, and Durward McDaniel, Washington, D.C., for appellants.

Richard C. Turner, Atty. Gen., and Richard E. Haesemeyer, Sol. Gen., for appellees.

Verne Lawyer, Eugene Davis, and Steven C. Cross, Les Moines, for appellee Jernigan.

Roger H. Ivie, Des Moines, for appellee Hemken.

William Wimer, Des Moines, for appellees Bonnell and Johnson.

Heard en banc.

UHLENHOPP, Justice.

The principal question in this appeal is whether the trial court properly sustained defendants' motion for summary judgment. We recently stated the principle governing such motions in Daboll v. Hoden, 222 N.W.2d 727, 731 (Iowa):

Where there is no genuine issue of fact to be decided, the party with a just cause should be able to obtain a judgment promptly and without the expense and delay of a trial. . . . 'In ruling on a motion for summary judgment, the court's function is to determine whether such a genuine issue exists, not to decide the merits of one which does.' Bauer v. Stern Finance Company, 169 N.W.2d (850) at 853.

The burden is upon the party moving for summary judgment to show absence of any genuine issue of a material fact. All material properly before the court must be viewed in the light most favorable to the opposing party.

The legislature established and funded a three-member Iowa Commission for the Blind. Code 1973, ch. 601B; 65th Gen.Assem. ch. 1012, § 1. The commission has authority to appoint a director and assistants. Code, § 601B.3. Under § 601B.6, the commission may perform a variety of functions to help blind people, such as assisting in marketing products of blind workers, ameliorating the condition of blind people by instruction in their homes, ascertaining the causes of blindness, providing vocational training including workshops, and maintaining a center for training, orientation, and adjustment. See 1972 Op.Iowa Atty.Gen. 497.

From discovery depositions of plaintiffs taken by defendants, we learn that two private associations of blind people exist, the American Council of the Blind and the Natinal Federation of the Blind (NFB). Apprently these associations hold conflicting philosophies about the way to help blind people.

The commissioners appointed Kenneth Jernigan as commission director. Mr. Jernigan holds the philosophy of the NFB and has been active in promoting that philosophy and the NFB itself.

Most of the plaintiffs in this suit are blind people. Plaintiffs commenced this action against the commission, the commissioners, and the director, alleging in their petition that defendants converted commission funds and other resources to the use of the NFB and commission officials and employees. Plaintiffs asked the court to enjoin defendants from converting and misusing commission funds and other resources. Defendants answered denying plaintiffs' allegations.

Defendants took discovery depositions of plaintiffs to ascertain what admissible evidence, if any, plaintiffs possess to support their allegations in the petition. The depositions disclose the main basis of the allegations to be plaintiffs' claim that the commission director and employees use commission time and facilities, which would otherwise be directly available to blind people of Iowa, to promote the NFB and to handle its affairs, and also that some commission personnel use commission employees, facilities, telephones, and postage for private purposes. most of the deposition testimony is heasay, but a sprinkling of competent evidence exists in it.

Defendants' discovery depositions of plaintiffs also reveal that plaintiffs are not the individuals who possess personal knowledge about most of the allegations of the petition; defendants and other commission personnel would be the ones personally aware of the truth or falsity of the allegations. Plaintiffs filed interrogatories to discover facts of defendants and also desired to take defendants' depositions.

Defendants filed a three-part motion: (1) for adjudication of a number of specified law points, (2) for summary judgment, and (3) for stay of further proceedings, including discovery by plaintiffs, until the first two parts of the motion were ruled on. Plaintiffs filed a resistance to the motion for summary judgment, supported by affidavits containing some competent evidence and some hearsay. Alternatively, plaintiffs moved for a ruling on the propriety of their interrogatories and a 30-day continuance in which to take depositions of defendants and their agents.

After hearing, the trial court held on the first part of defendants' motion that plaintiffs have standing to sue, that the existence of a crime would not defeat the suit for injunction, but that the depositions taken by defendants do not disclose any unlawful acts by defendants. As to the second and third parts of defendants' motion, the court granted summary judgment to defendants and denied discovery by plaintiffs, stating, 'To offer further discovery would be to permit a fishing expedition into defendants' files without any substantial basis.' Plaintiffs appealed.

Did the trial court properly adjudicate as a law point that the depositions which defendants took do not disclose wrongful acts by defendants? Did the trial court properly grant defendants summary judgment and, in that connection, properly deny discovery by plaintiffs?

I. Adjudication of Law Point. Plaintiffs do not question that the commission has some discretion in carrying out its statutorily prescribed duties. Plaintiffs claim, however, that defendants went beyond this discretion and converted funds and resources in unauthorized ways to promote the NFB and the private interests of commission officials and employees. In their answer, defendants deny these allegations. An issue of fact thus exists under the pleadings.

Plaintiffs appeal from the law-point ruling which was in defendants' favor--that defendants' acts were within their discretion. The court arrived at this ruling by stating, 'The Court has examined the depositions of the plaintiffs and found no acts the plaintiffs contend the defendants did that are unlawful and thus subject to the Court's review.'

One of the principal fact questions in the case is whethr defendants committed acts which were beyond their discretion. The parties framed this fact issue in the pleadings, and the trial court could not resolve the issue on a motion to adjudicate law points. Such motions, authorized by rule 105, Rules of Civil Procedure, serve only to determine questions of law which arise on uncontroverted pleadings and may not be used to resolve fact disputes. Reynolds v. Nowotny, 213 N.W.2d 648 (Iowa); Norland v. Mason City, 199 N.W.2d 316 (Iowa). The court used the motion here as a vehicle to resolve a factual issue which existed under the pleadings. This was error.

II. Motion for Summary Judgment.

We are not involved with the question of whether the treatment philosophy of the American Council of the Blind or of the National Federation of the Blind should prevail. The legislature has entrusted the decision on questions of policy to the commission. Before us is a petition alleging, not that the commission chose the wrong treatment philosophy, but that commission personnel misused funds and resources. The truth may be that a philosophical dispute lies behind this litigation, but we limit ourselves to the issues alleged in the petition and more specifically to whether summary judgment is appropriate to resolve those issues.

The question of whether summary judgment is proper involves two min parts: (a) the rules of law on misuse of public funds and resources by public officers and employees, and (b) the facts--whether under those rules the depositions and affidavits generate a fact issue for trial and in that connection what effect denial of discovery by plaintiffs has upon the decision.

(a) We are in the area of the law relating to alleged wrongful disbursements of public funds and wrongful use of public property. Generally, officials must disburse and use such funds and property only for public purposes. Love v. City of Des Moines, 210 Iowa 90, 230 N.W. 373; State v. Hinshaw, 197 Iowa 1265, 198 N.W. 634. Moreover, they must disburse and use such assets only for purposes contemplated by the authorizing act. Most statements of law are in terms of public funds. The editors state in 63 American Jurisprudence 2d, Public Officers & Employees, § 322 at 821:

Public officers who have charge of public funds and public money are charged with the duty, as trustees, to disburse and expend the money for the purposes and in the manner prescribed by law. They are liable if they divert the trust funds from the governmental purposes for which they were collected.

And in 67 C.J.S., Officers § 118 at 409--410:

A public officer may pay out public funds only where the law requires or permits him to do so, and only in the manner provided by the statute, where the statute directs the manner and method of payment. A public officer has no right to give away public funds, and must deliver such funds or property to the public official or function for whom or which they were intended. Any public officer who wrongfully withholds or misappropriates public funds, or who pays or authorizes the illegal payment of public funds, is personally liable for such misappropriation or illegal payment. Thus it has been held that a public fund, dedicated for a special purpose, may not be diverted to any other purpose except by the authority which dedicated it.

Further in 67 C.J.S., Officers § 132 at 427:

Courts should not discourage actions on the part of citizens to compel a strict observance by public officils of their duties, but, as far as authorized by law, should encourage such practice.

(b) Rule 237 of the Rules of Civil Procedure...