Chaney v. Village of Potsdam, 2005 Ohio 603 (OH 2/11/2005)

• Court: Ohio Supreme Court
• Writing for the Court: Brogan
• Citation: Chaney v. Village of Potsdam, 2005 Ohio 603 (OH 2/11/2005), 2005 Ohio 603, C.A. Case No. 2004-CA-19. (Ohio Feb 11, 2005)
• Decision Date: 11 February 2005
• Docket Number: C.A. Case No. 2004-CA-19.
• Parties: Robert J. Chaney, et al., Plaintiffs-Appellants, v. Village of Potsdam, et al, Defendants-Appellees.

Page 1

2005 Ohio 603

Robert J. Chaney, et al., Plaintiffs-Appellants, v. Village of Potsdam, et al, Defendants-Appellees.

C.A. Case No. 2004-CA-19.

Court of Appeals of Ohio, Second District, Miami County.

Rendered on February 11, 2005.

Civil Appeal from Common Pleas Court, T.C. Case No. 2003-CV-239

David G. Roach, Atty. Reg. #0031977 and Brett R. Bissonnette, Atty. Reg. #0076527, 650 Talbott Tower, Dayton, Ohio 45402, Attorneys for Plaintiffs-Appellants.

Nicholas E. Subashi, Atty. Reg. #0033953 and Lynnette Pisone Ballato, Atty. Reg. #0065455, The Oakwood Building, 2305 Far Hills Avenue, Dayton, Ohio 45419, Attorneys for Defendant-Appellee.

Lawrence E. Barbiere, Atty. Reg. #0027106, 11935 Mason Road, Suite 110, Cincinnati, Ohio 45249, Attorney for Defendant-Appellee.

Amy Thomas, 505 S. High Street, Columbus, Ohio 43215, Attorney Defendant-Appellee.

OPINION

BROGAN, P.J.

{¶ 1} This case involves a second failed lawsuit by several police officers against the Village of Potsdam and its council members. The officers first filed in federal court, but their federal claims were dismissed, and the court refused to exercise jurisdiction over the pendant state claims. See Chaney v. Potsdam (C.A.6 2004), 105 Fed. Appx. 18, 2004 WL 1532252 (affirming district court's grant of summary judgment to defendants). Specifically, the rejected federal claims included: 1) that the officers were suspended and then terminated from employment without due process as required by the Fourteenth Amendment; and 2) that defendants violated the officers' liberty interest in being free from undeserved disparagement by government officials. 105 Fed. Appx. at 23-24.

{¶ 2} Both the United States District Court and the Sixth Circuit Court of Appeals agreed that the officers had no property interest in continued employment. They also agreed that a cause of action for violation of a liberty interest was precluded because the officers failed to request a name-clearing hearing. Id.

{¶ 3} After the federal suit was dismissed, the officers filed a complaint in state court, alleging breach of an employment contract; defamation/slander; and intentional infliction of emotional distress. In Count IV of the complaint, the officers also requested punitive damages, based on the defendants' allegedly malicious actions. Once again, the defendants moved for summary judgment, and the trial court granted their motions. The court first found that the officers did not have a written employment contract with the Village of Potsdam. The court also held that the officers were at-will employees and were subject to termination at any time for reasons not contrary to law. Regarding the defamation claims, the court concluded that all the statements in question were privileged, were not malicious, or were statements of public opinion related to a public issue. Finally, the court rejected the intentional infliction of emotional distress claims because none of the challenged conduct was actionable under applicable law.

{¶ 4} The officers now appeal, raising the following assignments of error:

I. The trial court erred when it granted summary judgment to Village of Potsdam on Plaintiffs' breach of contract claim.

II. The trial court erred when it granted summary judgment to each of the individual defendants on Plaintiffs' claims for defamation.

III. The trial court erred when it granted summary judgment to each of the individual defendants on Plaintiffs' claims for intentional infliction of emotional distress.

{¶ 5} We find all three assignments of error without merit, and will affirm the judgment of the trial court.

I

{¶ 6} The first assignment of error deals with breach of contract, and relates only to the Village of Potsdam. Potsdam is a very small town of about 203 residents, located in Miami County, Ohio. It has no grocery stores or gas stations, and the only functioning business is a beauty shop. Further, Potsdam does not have a stoplight; instead, there is a four-way stop at the intersection of Ohio Route 721 and Cross Street, which are the two main streets in town. Until October, 1999, the Potsdam Police Department consisted of a part-time Sheriff, who worked about ten hours a month, and a few auxiliary deputies, who worked about twenty hours per month. The deputies were basically volunteers, who were only paid $25 per month, regardless of the number of hours they worked. Potsdam did not have any particular crime problems, other than some speeding.

{¶ 7} The governing forces in Potsdam are the Village Council (Council), which consists of six citizens, and the Mayor, who votes on Council matters in the event of a tie. There are also various village committees, including a safety committee. At some point, the safety committee discussed the possibility of obtaining funding to deal with certain issues like speeding and stop sign violations. Police Chief, Robert Chaney, was a committee member, and mentioned that grants were available to help with such things. Subsequently, Chaney told Council in April, 1999, about grants that might be obtained from the Department of Justice. Council then gave Chaney permission to apply for a grant. The grant program was administered by the Office of Community Oriented Policing Services (COPS Office), a division of the Department of Justice.

{¶ 8} On May 20, 1999, Potsdam submitted an application for a COPS Universal Hiring Program grant. Although both Chaney and the Potsdam Mayor, Dan Smiley, signed the application, a dispute exists about what input Smiley had into the document. Chaney claims that Smiley helped fill out the application, but Smiley denies providing any information. Instead, Smiley contends his involvement was limited to signing the forms. This dispute is not material, for reasons we will explain later.

{¶ 9} In any event, the application requested funding for three new full-time and four new part-time officers. Based on COPS statistics, this would have given Potsdam ten times the average officer-per-resident ratio for the State of Ohio.

{¶ 10} Under the grant program, COPS provides funding for three years, and applicants are required to contribute a smaller amount during the same period. The total cost of the new officers' salaries and fringe benefits for three years was $400,381. Of that amount, the grant would provide $293,067, and Potsdam's share was $107,314. However, at the end of three years, Potsdam was also required to retain and fund all the officers on its own. As part of the application, Potsdam agreed to devise a plan to retain the increased hiring level with state and local funds after the grant ended. Potsdam also had to certify that it would abide by its submitted retention plan.

{¶ 11} COPS applicants were specifically asked if they had assurances from their local government that the officers would be retained after federal support ended. Chaney checked "no" to this question, and then explained that:

{¶ 12} "[t]hrough the combined resources provided by the village's general fund, a proposed tax levy, and police mergers, sufficient funds will be available to retain officers."

{¶ 13} This response was a joint effort of Chaney and Sarah Niswonger, the clerk for the Council, who typed budgetary information into the grant application. When Niswonger saw that part of the application, she contacted Chaney because she did not understand what the Justice Department wanted to know. They discussed what had been brought up in safety committee meetings, such as tax levies, and what had been discussed in Council meetings, and together came up with the wording.

{¶ 14} The COPS grant advisor for Potsdam was an individual named Andy Dorr. Based on the large officer to resident ratio, Dorr asked Chaney during a July 19, 1999 telephone call to explain whether the high number of officers was justified. At that time, Chaney told Dorr that a merger between Potsdam and Union Township was "imminent," and that Potsdam was also contemplating mergers with a couple of other neighboring jurisdictions. According to Chaney, the mergers would result in Potsdam being responsible for law enforcement services to about 25,000 residents. Based on Chaney's statement that the merger with Union Township was "imminent," Dorr decided that the number of requested officers was reasonable, and processed the grant for approval. Dorr later testified that in the absence of the "imminent" merger with Union Township, he would have recommended that Potsdam be awarded only one full-time officer.

{¶ 15} Chaney's recollection of the conversation differs. Chaney denied that some type of merger was a prerequisite for getting the grant. He also denied telling Dorr that a merger with Union Township was imminent. According to Chaney, Dorr simply wondered about what the merger was, due to a concern that two groups with COPS funds not merge, i.e., so COPS could avoid a "double-dipping" situation.

{¶ 16} When the application was submitted, no mergers were pending with any other police departments or townships. There was apparently never any discussion of a tax levy. Moreover, Potsdam's general fund was sufficient to accommodate the twenty-five percent match for the first year of the program, but was not adequate to retain the officers at the end of the grant period.

{¶ 17} The COPS grant was awarded on September 1, 1999, with effective dates from September 1, 1999 to August 31, 2002. Subsequently, on September 16, 1999, the Council tabled a resolution to merge police services with the Village of Laura, due to issues raised by Chaney and Smiley. Council then accepted the COPS grant at a meeting on October 4, 1999. At this meeting, Chaney told Council that acceptance of the grant would require implementation of a hiring procedure, including an oral review board. During the same meeting, Chaney presented five candidates for patrolman, and Council voted, upon motion, to accept the individuals as patrolmen. The individuals in question were ...