Colby v. Umbrella, Inc., No. 06-088.

• Docket Nº: No. 06-088.
• Citation: 2008 VT 20, 955 A.2d 1082
• Case Date: March 07, 2008
• Court: United States State Supreme Court of Vermont

955 A.2d 1082 2008 VT 20 Kerri L. COLBY
v.
UMBRELLA, INC., Jennifer (Townsend) Grant. Michelle Fay, and State of Vermont, Agency of Human Services, Department for Children and Families, Child Development Division. No. 06-088. Supreme Court of Vermont. March 7, 2008. Appellees' Motion to Amend Denied April 2, 2008. Appellees' Motion to Correct Granted April 25, 2008.

[955 A.2d 1085]

Deborah T. Bucknam and Jennifer Bucknam Black of Deborah Bucknam Associates, St. Johnsbury, for Plaintiff-Appellant.

William H. Sorrell, Attorney General, Montpelier and David R. Groff, Assistant Attorney General, Waterbury, for Defendants-Appellees.

Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.

JOHNSON, J.

¶ 1. In this suit for wrongful termination, plaintiff Kerri Colby appeals the superior court order denying her motion to amend the complaint and dismissing her claims against defendant State of Vermont. We reverse and remand.

¶ 2. Defendant Umbrella, Inc. is a Vermont corporation that provides support services to domestic violence victims and operates a state-sponsored childcare resource center. Plaintiff was employed by Umbrella's child-care-resource center from February 2000 to October 2002. In October 2002, her employment with the center was terminated. Plaintiff alleges that she was wrongfully terminated as a result of: (1) expressing concerns about what she considered to be a discriminatory new mission statement, and (2) her qualifying disability under the Vermont Fair Employment Practices Act (FEPA).

¶ 3. On May 6, 2005, plaintiff filed a complaint in Essex Superior Court naming

955 A.2d 1086

the following as defendants: Umbrella, Inc.; Umbrella's executive director, Michelle Fay; plaintiff's direct supervisor, Jennifer Townsend; and the Department for Children and Families (DCF) Child Development Division. Plaintiff claimed that she was wrongfully terminated in violation of 42 U.S.C. § 1983, FEPA, and public policy. On May 9, 2005, the State moved to dismiss the claims against it pursuant to Vermont Rule of Civil Procedure 12(b)(6). In response, plaintiff filed a memorandum in opposition and a motion to amend the complaint. The amended complaint: (1) added Kimberly Keiser, Director of DCF's Child Development Division as a defendant, (2) alleged Keiser's personal involvement in plaintiff's termination, (3) alleged the State was plaintiff's employer for purposes of FEPA, and (4) added an intentional infliction of emotional distress (IIED) claim against all defendants. On January 19, 2006, the superior court denied plaintiff's motion to amend and granted the 12(b)(6) motion dismissing all claims against the State. Plaintiff now appeals, claiming that the court abused its discretion in denying her motion to amend and in prematurely dismissing her § 1983, FEPA, and IIED claims against the State.

¶ 4. We begin with plaintiff's argument that the court's denial of her motion to amend the complaint was an abuse of discretion. Under the rules of civil procedure, leave to amend the complaint "shall be freely given when justice so requires." V.R.C.P. 15(a); Lillicrap v. Martin, 156 Vt. 165, 170, 591 A.2d 41, 43-44 (1989). In considering motions under Rule 15(a), trial courts must be mindful of the Vermont tradition of liberally allowing amendments to pleadings where there is no prejudice to the other party. Tracy v. Vinton Motors, Inc., 130 Vt. 512, 513, 296 A.2d 269, 271 (1972). "The principal reasons underlying the liberal amendment policy are (1) to provide maximum opportunity for each claim to be decided on its merits rather than on a procedural technicality. (2) to give notice of the nature of the claim or defense, and (3) to enable a party to assert matters that were overlooked or unknown to him at an earlier stage in the proceedings." Bevins v. King, 143 Vt. 252, 255, 465 A.2d 282, 283 (1983). In rare cases, however, denial of a motion under Rule 15(a) may be justified based upon a consideration of the following factors: "(1) undue delay; (2) bad faith: (3) futility of amendment; and (4) prejudice to the opposing party." Perkins v. Windsor Hosp. Corp. 142 Vt. 305, 313, 455 A.2d 810, 815 (1982). On appeal, we review the trial court's decision on a motion to amend for an abuse of discretion. Id.

¶ 5. The trial court denied plaintiff's motion to amend the complaint, reasoning that despite plaintiff's amendments, the complaint failed to state any claim against the State for which relief could be granted and was therefore futile. See V.R.C.P. 12(b)(6). In determining whether a complaint can survive a motion to dismiss under Rule 12(b)(6), courts must take the factual allegations in the complaint as true, and consider whether "it appears beyond doubt that there exist no facts or circumstances that would entitle the plaintiff to relief." Alger v. Dep't of Labor & Indus., 2006 VT 115, ¶ 12, 181 Vt. 309, 917 A.2d 508 (quotations omitted).¹

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Motions to dismiss for failure to state a claim are disfavored and are rarely granted. Gilman v. Me. Mut. Fire Ins. Co., 2003 VT 55, ¶ 14, 175 Vt. 554, 830 A.2d 71 (mem.).

¶ 6. Keeping in mind the generous standard governing Rule 15(a) motions to amend, we first consider plaintiff's addition of Keiser, director of the Child Care Services Division, as a defendant in her proposed amended complaint. As the trial court noted, under Vermont law, claims based on the actions of a state employee must generally lie against the state, not the individual employee who allegedly committed the harm. 12 V.S.A. § 5602(a); Amy's Enters. v. Sorrell, 174 Vt. 623, 624, 817 A.2d 612, 616 (2002) (mem.). Plaintiff alleged, in the proposed complaint, that Keiser "maliciously and wrongfully terminated" her in violation of 42 U.S.C. § 1983. In order to sustain a § 1983 claim, "a litigant ... must first establish that the challenged conduct constitutes `state action.'" United States v. Int'l Bhd. of Teamsters, 941 F.2d 1292, 1295 (2d Cir. 1991). State action, in turn, requires both: (1) "an alleged constitutional deprivation `caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible,'" and (2) "that `the party charged with the deprivation ... be a person who may fairly be said to be a state actor.'" Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40, 50, 119 S.Ct. 977, 143 L.Ed.2d 130 (1999) (quoting Lugar v. Edmondson Oil Co., 457 U.S. 922, 937, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982)). The trial court determined that plaintiff's amendments were futile because, in its estimation, she failed to make factual allegations demonstrating that her termination involved state action.

¶ 7. We cannot agree with the court that plaintiff failed to allege sufficient facts establishing state action to sustain a § 1983 claim. To fulfill the state-actor requirement under § 1983, the claimant must demonstrate "personal involvement" of the defendant in the alleged constitutional violations. Moffitt v. Town of Brookfield, 950 F.2d 880, 886 (2d Cir.1991). Although plaintiff's amended complaint specifically asserted that Keiser had "personal involvement in the decision to wrongfully terminate Plaintiff." the court apparently ignored this allegation and focused instead on statements in her affidavit attached to a memorandum in response to the State's opposition to the amendment to the effect that Keiser's subordinate was directly involved in her termination. The court, however, was required to "restrict its inquiry to the facts alleged in the [proposed] complaint" when deciding whether the amendment was futile under Rule 12(b)(6), and simply should have taken plaintiff's factual allegation of Keiser's personal involvement as true rather than determining that allegations of personal involvement by subordinates are insufficient to fulfill the state actor requirement. See Wentworth v. Crawford & Co., 174 Vt. 118, 121, 807 A.2d 351, 352 (2002). The "complaint need only set out a short and plain generalized statement of the claim from which the defendant will be able to frame a responsive pleading," 5B C. Wright & A.

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Miller. Federal Practice and Procedure § 1357, at 564 (3d ed. 2004), and thus, despite the lack of detailed allegations regarding Keiser's role in the termination, adding her as a defendant was not a futile amendment. See, e.g., Boyce v. Nationwide Mut. Ins. Co., 842 F.Supp. 822, 824 (E.D.Pa.1994).

¶ 8. In its order denying the motion to amend, the trial court failed to address plaintiff's proposed amendments to her FEPA claim. Plaintiff argues that the amended complaint stated a legally cognizable claim under FEPA and thereby met notice-pleading requirements under Rule 8(a). Plaintiff alleged in her amended complaint that she had a "qualified disability" under FEPA at all times relevant to her claims, that the defendants failed to reasonably accommodate that disability, and that plaintiff's termination was a "direct and proximate result of [her] disability." Furthermore, she asserted that the State "is an employer under the definition of employer under 21 V.S.A. § 495," and that it was therefore "liable for the wrongful actions of Defendants ... in the termination of Plaintiff." Again, in considering whether the court erred in denying plaintiff's motion to amend for futility, we are mindful of the low threshold for withstanding a 12(b)(6) motion to dismiss. See Levinsky v. Diamond, 140 Vt. 595, 600-01, 442 A.2d 1277, 1280-81 (1982) (explaining that 12(b)(6) dismissal is inappropriate "unless it appears beyond doubt that there exist no circumstances or facts which the plaintiff could prove about the claim made in [her] complaint which would entitle [her] to relief").

¶ 9. Under FEPA, it is unlawful for "any employer ... to discriminate ... against a qualified disabled individual." 21 V.S.A. § 495(a)(1). While plaintiff did not prove her "qualified disability" in...