Castelaz v. City of Milwaukee

• Decision Date: 04 March 1980
• Docket Number: No. 77-346,77-346
• Parties: Donald R. CASTELAZ, Plaintiff-Appellant, v. CITY OF MILWAUKEE, City Service Commission, Robert Garnier, Henry Maier, William Panagis, Warren Braaz, Richard Budleman, Pat McLaughlin, John Bechler, O. W. Noeske, William Drew and John Kalwitz, Defendants-Respondents.
• Court: Wisconsin Supreme Court

Page 259

289 N.W.2d 259

94 Wis.2d 513

Donald R. CASTELAZ, Plaintiff-Appellant, v. CITY OF MILWAUKEE, City Service Commission, Robert Garnier Henry Maier, William Panagis, Warren Braaz, Richard Budleman, Pat McLaughlin, John Bechler, O. W. Noeske William Drew and John Kalwitz, Defendants-Respondents.

No. 77-346.

Supreme Court of Wisconsin.

Argued Dec. 3, 1979.

Decided March 4, 1980.

John Sundquist (argued) and Walther & Halling, Milwaukee, on brief, for plaintiff-appellant.

John F. Kitzke (argued), Asst. City Atty., with whom on the brief was James B. Brennan, City Atty., for defendants-respondents.

DAY, Justice.

The plaintiff, Donald R. Castelaz, appeals from a summary judgment entered for the defendants, the City of Milwaukee, the Board of City Service Commissioners (hereinafter the Board) and ten city officials sued both in their official and individual capacities. Although numerous issues have been raised by the parties, we conclude that a single question is dispositive on this appeal. That is, whether Mr. Castelaz should have exhausted his administrative remedies prior to instituting this suit. We conclude that he should have, and accordingly affirm.

This action was commenced on June 17, 1976, approximately two years after Mr. Castelaz's employment with the City of Milwaukee was terminated. The complaint alleged that the defendants violated civil service statutes and rules in Mr. Castelaz's dismissal and in their subsequent failure to reinstate him. He also alleged that his state and federal civil rights had been violated and that the defendants engaged in a conspiracy to wilfully and maliciously injure him in his reputation and profession.

Before answer, on August 18, 1976, the defendants filed a motion to dismiss under sec. 802.06(2)(f), Stats. (1975) ¹ for failure to state a claim upon which relief could be granted. In the alternative, the motion requested that summary judgment be granted under sec. 802.08, Stats. (1975). A brief with attached documents accompanied the motion. The plaintiff filed a brief opposing the motion and attached opposing affidavits on October 21, 1976.

On January 17, 1977, an "amended" motion to dismiss was filed by the defendants alleging procedural defects in the plaintiff's complaint as well as the plaintiff's failure to exhaust his administrative remedies.

The memorandum decision of the trial court concluded that considering all of the materials presented by the parties, there was no genuine issue of fact or law to be tried. The trial court concluded that it could not look beyond the reasons given by the agency for its actions. It found that the termination of the plaintiff was conducted according to the requirements of the civil service statutes and rules. Likewise, it found that there were no grounds for granting a trial on the civil rights or conspiracy claims.

Mr. Castelaz alleged that on September 19, 1972, he was appointed to the position of Project Coordinator for the Milwaukee Model Cities Agency. ² He was required to take the Civil Service Merit exam for that position. He placed first on the examination, and on December 20, 1972, he received a "regular" City Civil Service appointment to that position. These facts are not disputed by the defendants.

He further alleged that he was terminated or laid off, without a hearing, in violation of the civil service rules, and that his termination was obtained by means of an unlawful layoff plan. That plan was alleged to be in violation of the seniority provisions of the civil service rules. The layoff or termination was made " . . . pursuant to a plan, because of plaintiff's frequent and public opposition to unsound politically-motivated City practices and procedures and plaintiff's consistent and public support for the then Model Cities Agency director, John Givens."

Notice of the layoff or termination was given to Mr. Castelaz on May 28, 1974 and was to become effective on June 28, 1974. Mr. Castelaz alleged that he presented written appeals on May 30, 1974, June 3, 1974 and June 10, 1974, which were denied by the City Personnel Director without referring the matter to the entire Board. He alleged that he appealed to the mayor and the chief administrator to the office of the mayor, as well. He has not alleged any constitutional deficiency in the administrative procedures utilized in the layoff or discharge of civil service employees.

Mr. Castelaz alleged that his transfer and reinstatement rights under Civil Service Rule X and secs. 63.25, 63.26, 63.37 and 63.39, Stats. were deliberately subverted and that the individually named defendants concealed positions to which he had reinstatement rights. According to the complaint he was not placed on a transfer or reinstatement list until May 6, 1975 nearly a year after his layoff. He alleged that there were Project Coordinator positions open but that the individual defendants did not inform him of the openings or consider him for the positions. The complaint further asserted that a civil service position of Project Coordinator was deliberately left unfilled and that there was a secret attempt to delete this position by the individual defendants to preclude the plaintiff from asserting rights to the position.

His final three claims alleged that the foregoing actions on the part of the defendants operated to deny him his constitutional rights, and involved a conspiracy to maliciously and wilfully injure him in his reputation and profession under sec. 134.01, Stats. (1975) and the common law. He based his federal civil rights claim on 42 U.S.C. § 1983. His state civil rights claim was based on the Wisconsin Constitution and secs. 111.31-111.36, Stats. (1975) of the Fair Employment Act.

The relief sought for violations of the civil service statutes and rules included reinstatement, back pay, restoration of seniority rights, employment benefits, and attorney fees. For the denial of civil rights and conspiracy, compensatory and punitive damages and attorney's fees were requested against the defendants in their individual capacities.

A few basic facts are not disputed by the parties. The Milwaukee Model Cities Agency was by definition a temporary project program. Its continued existence was dependent upon continued federal funding. At the time Mr. Castelaz was terminated as an employee in the Agency, the Agency was undergoing a reduction in funding. Approximately one year after Mr. Castelaz's termination, the Agency was folded into the Milwaukee Department of City Development.

Mr. Castelaz received a letter terminating his employment dated May 28, 1974 signed by John Givens the Agency's director. Until his termination he had received a very satisfactory performance evaluation by his superiors, and he was recommended highly by the then Agency director, John Givens.

The defendants argue that Mr. Castelaz held an exempt position under sec. 63.27, Stats. (1971) ³ and that he was therefore not guaranteed tenure in his employment. We need not determine whether the position that Mr. Castelaz held was exempt under this section because it is clear from the record, and the defendants concede, that Mr. Castelaz was a regular city civil service employee when he was laid off or terminated.

Absent civil service regulation and laws, a municipal employee has no tenure in his public service. Adamczyk v. Town of Caledonia, 52 Wis.2d 270, 190 N.W.2d 137 (1971). Compare, Richards v. Bd. of Education, 58 Wis.2d 444, 206 N.W.2d 597 (1973).

The defendants argue that Mr. Castelaz, as a regular city civil service employee, was entitled to layoff assistance and reinstatement rights. They contend however, that the job rights of Mr. Castelaz extended only for the duration of the federal funding of the Model Cities Agency; that he was informed of this fact; and that he had no absolute right to continued employment with the city.

The defendants' contention in this regard is correct. Employment under the civil service laws is not an absolute job guarantee. If there are no funds available, or if the position is abolished in good faith or otherwise becomes unnecessary, there is nothing to prevent the termination of civil service employees. State ex rel. Dietrich v. Miller, 25 Wis.2d 371, 130 N.W.2d 768 (1964).

In State ex rel. Thein v. Milwaukee, 229 Wis. 12, 281 N.W. 653 (1938), a civil service employee brought a mandamus action against the city to compel reinstatement of seniority rights and damages for the denial of those rights. The Court examined the power of municipalities to reclassify or abolish civil service positions. The Court said:

"Civil service laws are not intended to prevent good-faith reorganization with a view to securing greater efficiency. The cases referred to by the appellant are authority for the rule that civil service laws are not to be evaded by a sham abolition of an old position for the purpose of ousting an incumbent, but on the other hand the civil service laws are not intended to interfere with a municipality combining the duties of one civil service position with those of another, even though this results in some persons being dropped from the service. State ex rel. Voris v. Seattle, 74 Wash. 199, 133 P. 11." 229 Wis. at 18, 281 N.W. at 656.

It is argued that the placement and removal of persons holding exempt positions is entirely discretionary with the Agency and is not subject to review by the Board, even when the exempt position is filled by a civil service employee.

We do not agree. When an exempt position is filled by a civil service employee he is entitled to the protection of the substantive as well as the procedural rights conferred by those rules. Although the statute refers to exempt and classified positions it must be kept in mind that the civil service laws were designed to protect employees and not positions. The employee accorded civil service status, and the public, have an interest in assuring that a civil service employee is not...