City of Lakewood v. Brace, No. 95SC196

• Docket Nº: No. 95SC196
• Citation: 919 P.2d 231
• Case Date: June 24, 1996
• Court: Supreme Court of Colorado

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919 P.2d 231 The CITY OF LAKEWOOD, a Colorado Municipal Corporation;
Walter C. Kane, City Manager, in his Official Capacity and
Individually; James M. Zelenski, Assistant City Manager, in
his Official Capacity and Individually; and Linda Shaw,
Gordon Garrett, Norma Beard, David Larkin, Linda Morton, Tom
Leadabrand, Harold Scatterday, Dennis Mateski, and Kathy
Stapleton, in their Official Capacities as Members of the
City Council, City of Lakewood, Colorado, Petitioners,
v.
Richard W. BRACE, Respondent. No. 95SC196. Supreme Court of Colorado,
En Banc. June 24, 1996.
Rehearing Denied July 29, 1996.

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Watson, Nathan & Bremer, P.C., Christina M. Habas, Bernard Woessner, Denver, for Petitioners.

David M. Herrera, Vance O. Knapp, Fort Collins, for Respondent.

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Gale A. Norton, Attorney General, Stephen K. ErkenBrack, Chief Deputy Attorney General, Timothy M. Tymkovich, Solicitor General, Gregg E. Kay, First Assistant Attorney General, Beverly Fulton, Assistant Attorney General, Civil Litigation Section, Tort Litigation, Denver, for Amicus Curiae, State of Colorado.

Justice MULLARKEY delivered the Opinion of the Court.

We granted certiorari in Brace v. City of Lakewood, et al., 899 P.2d 301 (Colo.App.1995), in which the court of appeals dismissed the petitioners' appeal of a partial summary judgment order because that order was not a final, appealable judgment. The petitioners before the court are: the City of Lakewood (Lakewood); Walter C. Kane and James M. Zelenski (individual defendants); and Linda Shaw, Gordon Garrett, Norma Beard, David Larkin, Linda Morton, Tom Leadabrand, Harold Scatterday, Dennis Mateski, and Kathy Stapleton, members of the City Council of Lakewood. The respondent is Richard W. Brace (Brace), a former employee of Lakewood. In brief, Brace instituted this action against the petitioners for his suspension and ultimate termination from Lakewood employment. Brace's complaint raised both state law claims (tort and contract) and federal claims under 42 U.S.C. section 1983 (1994) (section 1983 or federal claims). The petitioners answered, asserting immunity under the Colorado Governmental Immunity Act (CGIA), sections 24-10-101 to -120, 10A C.R.S. (1988 & 1995 Supp.).

The petitioners moved for summary judgment. The motion was denied in part and granted in part by the trial court. Subsequently, the petitioners sought our review of the court of appeals' decision dismissing their appeal of the trial court's order. Four grounds are before us on certiorari review: (1) whether the court of appeals erred in dismissing their appeal of the order denying summary judgment on the qualified immunity defense to Brace's federal claims; (2) if so, whether they are entitled to judgment as a matter of law on that defense; (3) whether the court of appeals erred in dismissing their appeal from the order denying summary judgment on the sovereign immunity defense to Brace's state law claims; and (4) if so, whether the trial court erred in denying summary judgment on the sovereign immunity defense based on the existence of material issues of fact. ¹ We reverse the judgment of the court of appeals and return the case to that court with instructions to remand to the trial court for reconsideration of the summary judgment motion in light of our decision.

I.

Brace was employed by Lakewood in various capacities from August 1983 until he was suspended and ultimately terminated in November 1991. Sometime in April or May 1984, Brace was promoted to the position of Acting Housing Manager of Lakewood. ² Commencing September 1, 1984, Brace was appointed Executive Director and Secretary to the Board of Commissioners of the Lakewood Housing Authority (LHA). ³ During the relevant time period, Walter C. Kane (Kane) held the position of City Manager of Lakewood and James S. Zelenski (Zelenski) held the position of Assistant City Manager

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of Lakewood. Both Kane and Zelenski are individual defendants. On April 21, 1991, Kane directed Brace to transfer $3,011,300 from the City of Lakewood's Private Activity Bond Allocation to the Arapahoe County Single Family Mortgage Revenue bond issue for 1991. At the time, Kane was also serving as the Senior Vice President of Hanifen, Imhoff, Inc., which had been designated as the investment bank for the Arapahoe County Single Family Mortgage Revenue bond issuance. Kane was also the Account Executive in charge of that issuance. Brace perceived Kane's position with Hanifen, Imhoff, Inc. and his affiliation with the bond issuance on behalf of Lakewood to be a conflict of interest. Thus, along with his direct supervisor, David Clark, Brace raised this as a concern to the Lakewood City Attorney's office.

On October 14, 1991, Zelenski suspended Brace from his position as Housing Manager of Lakewood for two days for purportedly violating Lakewood policies and ordinances. Brace did not appeal this suspension. On November 13, 1991, Brace's employment as Housing Manager came to an end. ⁴ Shortly thereafter, Brace was placed on a sixty-day suspension from his position as Executive Director and Secretary to the Board of Commissioners with the LHA. On January 13, 1992, LHA terminated his status as Executive Director and Secretary by passing a resolution that rescinded the resolution passed in 1984 which had originally named him to that position.

During Brace's employment, Lakewood had official policies and procedures which governed personnel decisions such as hiring, firing, and promotion of Lakewood employees. Specific procedures were in place regarding suspension and termination of Lakewood employees. On September 9, 1991, Lakewood passed an ordinance, Ordinance 0-91-45, amending a previous ordinance which had granted certain Lakewood management personnel the right to appeal their removal or suspension (which could only be for cause) to the City Manager. ⁵ The new ordinance no longer required that suspension or termination be for cause only and removed the right to appeal such actions. ⁶ In sum, covered individuals who occupied managerial positions, like Brace, became "at will" employees under the new ordinance. Ordinance 0-91-45 took effect on October 12, 1991, one day prior to Brace's two-day suspension and shortly before his termination from the Lakewood Housing Division.

Brace initiated this action in September 1992. Brace's action centered on his suspension and termination and the inception of Ordinance 0-91-45. In his complaint, Brace alleged that his suspension and subsequent termination were related to his whistleblower status with respect to Kane. Brace also characterized Ordinance 0-91-45 as depriving him of the "right to termination of his employment only upon cause" because "the ordinance purported to terminate appeal rights which were vested property interests prior to the passage of the [ordinance]." Brace stated thirteen claims for relief in his complaint including both federal and state claims. Four of the claims were denominated as contract claims (breach of contract for suspension and termination, and promissory estoppel for suspension and termination), three as torts (wrongful discharge, tortious interference with contract, and intentional infliction of emotional distress), and the remaining six were brought under 42 U.S.C. section 1983,

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and raised assorted constitutional claims. See discussion infra p. 242.

The petitioners moved for summary judgment pursuant to C.R.C.P. 56. Their summary judgment motion was premised on the following four grounds: (1) there were no genuine issues of material fact; ⁷ (2) the CGIA barred Brace from suing Lakewood on claims sounding in tort; (3) the individual defendants were entitled to qualified immunity; and (4) the Colorado Workers' Compensation Act barred Brace's claim of intentional infliction of emotional distress (not relevant herein).

On November 4, 1993, the trial court ruled that there were genuine issues of material fact on Brace's contract claims (claims numbered one to four), and on the section 1983 claims (claims numbered eight to thirteen), therefore, summary judgment was not appropriate on those claims. However, the trial court granted summary judgment with respect to Brace's claims for wrongful discharge, tortious interference with contract, and intentional infliction of emotional distress as against Lakewood only. The trial court found that these three claims were barred by the CGIA because they were tort claims and thus precluded under section 24-10-108, 10A C.R.S. (1995 Supp.), as claims for which sovereign immunity was not waived under the CGIA. The trial court denied summary judgment on the tort claims of wrongful discharge and tortious interference with contract as against the individual defendants. The trial court found that there were genuine issues of material fact whether they acted in a manner that was "willful and wanton" under section 24-10-118(2)(a), 10A C.R.S. (1995 Supp.). The trial court, however, did dismiss Brace's tort claim of intentional infliction of emotional distress against all the defendants because recovery for that claim was barred by the Colorado Workers' Compensation Act. The parties did not request certification of the partial summary judgment motion under C.R.C.P. 54(b). ⁸

The trial court's order is very short. In relevant part, the order provides as follows:

The Court finds that genuine issues of material fact exist with respect to Plaintiff's Claims for Relief numbers one through four and eight through thirteen. Therefore, summary judgment is not appropriate

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with respect to those claims. Colo. R. Civ. P. 56(c).

The Court finds that the Governmental Immunity Act applies in this case. Colo.Rev.Stat. § 24-10-106(1) (1988 & Supp.1993) provides, "[a] public entity shall be immune from liability in all claims for injury which lie in tort or could lie in tort." Therefore summary judgment is appropriately entered in favor of the City of...