Dearborn v. City of Frankfort
| Decision Date | 09 December 2016 |
| Docket Number | NO. 2014-CA-001801-MR,2014-CA-001801-MR |
| Parties | DAVID DEARBORN; DAN MCCOY; AND JERALD CRAWFORD APPELLANTS v. CITY OF FRANKFORT APPELLEE |
| Court | Kentucky Court of Appeals |
TO BE PUBLISHED
APPEAL FROM FRANKLIN CIRCUIT COURT
The officers were hired as police officers for the City in 1991 and 1992. As part of their recruitment process, Dearborn and Crawford were provided with a form entitled "Application Information for Position of Patrol Officer Recruit" that offered, among other things, an education incentive of up to $800 per year above their annual starting salary of $17,170. McCoy received a different informational form entitled "Salary and Fringe Benefits for Patrol Officer Recruit," which also provided for an education incentive up to $800 after one year. Each form provided information on a variety of other benefits in addition to the education incentive, including health, dental and life insurance. The officers allege they received all the benefits specified in these forms other than the education incentive pay.
The officers testified in their depositions that Stephanie Bowman, who worked in the City's personnel department, advised them that based on their having obtained their bachelor degrees and having 120 hours of study they would be eligible for the maximum education incentive of $800 annually. They testified this incentive was part of their consideration in deciding to accept employment with the City instead of other police departments. Bowman testified that she did not recall meeting with any of the officers to discuss these issues.
After being offered employment and accepting, each officer received a "Conditions of Employment" form from the City. This form stated in part:
In consideration for being employed as a police officer for the City of Frankfort's Police Department, and for the training, equipment, salary, and other unspecified benefits received through the Frankfort Police Department, I understand and agree to the following conditions of employment . . .
Below that statement, the form included many provisions clarifying the officers' obligations to the City, including provisions requiring them to repay the cost of training under certain circumstances. Each provision contained space for it to be initialed by the officers. The form further specified:
I understand and agree that all terms and conditions of employment remain in full effect and unchanged and that I am in no way guaranteed any right to continued employment. All civil service, City of Frankfort Policies and Procedures, and Frankfort Police Department Rules & Regulations and General Orders relating to police officers are in full effect during my employment with the City of Frankfort. I further understand that these conditions of employment have no effect on the authority of the Chief of Police or citizens of Frankfort to invoke disciplinary actions against me in accordance with the Police Department and City of Frankfort Policies, City of Frankfort legislation, and state statutes.
Each officer signed and properly initialed his form. McCoy signed his form on January 24, 1991 and began work on January 29, 1991; Dearborn signed his form on April 6, 1992 and began work on April 27, 1992; and Crawford signed his form on April 14, 1992 and began work on April 27, 1992.
On May 22, 1991, the Frankfort City Commission passed Ordinance No. 13, amending the Frankfort Code of Ordinances (Frankfort Code) § 2.36.150 which stated as follows:
Ordinance No. 13 retained the above language but limited the education incentive to "city personnel employed prior to November 1, 1990." Ordinance No. 13 became effective when it was published on May 28, 1991. Kentucky Revised Statutes (KRS) 83A.060(9).
After Ordinance No. 13 took effect, employees employed on or after November 1, 1990, were entitled to an alternative education incentive that rewarded them for completing additional education, rather than for the education they already had. Frankfort Code § 2.36.150(2). Employees hired before that time could opt into the new incentive program but would then be barred from receiving education incentive pay under the old program. Frankfort Code § 2.36.150(3).
The officers allege they never received any education incentive pay. The officers learned the incentive amount was not included in their paychecks in 1991 or 1992. The officers allege they complained to their supervisors and others, but only Dearborn's deposition testimony is provided to support this allegation. The officers never filed any formal action to address this issue until after they retired in 2012 and filed the instant complaint.
In the officers' complaint, they alleged breach of contract, negligent misrepresentation and violation of Kentucky's wage and hour law. In the City's answers to the complaint and answers to interrogatories, it admitted each officer entered into a written contract for employment as a police officer with the City, but did not admit the contracts included the education incentive benefits.
The parties filed competing motions for summary judgment. The circuit court granted summary judgment to the City on the following grounds: (1) Ordinance No. 13 precluded the officers from receiving the education incentive because they were all hired after November 1, 1990; (2) the conditions of employment agreement is void because it lacks the mayor's signature; and (3) the education incentive is not a wage for purposes of the wage and hours law. The circuit court did not decide whether the officers' claims were also barred by the statute of limitations.
The officers filed a motion to vacate, which the circuit court denied. The circuit court acknowledged that the officers were contract employees of the City, but noted that their contract did not incorporate the education incentive and, thus, it had to look to Ordinance 13 to determine the City's obligations.1 The circuit court also ruled that the negligent misrepresentation claim was barred by the statute of limitations.
"The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App. 1996). Summary judgment "should only be used 'to terminate litigation when, as a matter of law, it appears that it would be impossible for the respondent to produce evidence at the trial warranting a judgment in his favor and against the movant.'" Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 483 (Ky. 1991) (quoting Paintsville Hospital Co. v. Rose, 683 S.W.2d 255, 256 (Ky. 1985)).
On appeal the officers argue: (1) the $800 education incentive should be implied as a term of the contract because the contract is silent or ambiguous and the benefits documents and oral representations provide the needed terms; (2) if the written contract incorporated the Frankfort Code, McCoy should still receive the education incentive pay because the previous ordinance was in effect when he was hired and shows the City's intent; (3) the officers should recover under the doctrine of equitable estoppel and negligent misrepresentation even if the written contracts were invalid; (4) the officers' claims are not barred by the relevant statute of limitations because the City's conduct chilled their ability to initiate a formal action and the officers are entitled to damages for each pay period that occurred within the past fifteen years from the filing of their complaint; and (5) the education incentive pay constituted wages under Kentucky's wage and hours law.
"To prove a breach of a contract, the complainant must establish three things: 1) existence of a contract; 2) breach of that contract; and 3) damages flowing from the breach of contract." Metro Louisville/Jefferson Cty. Gov't v. Abma, 326 S.W.3d 1, 8 (Ky.App. 2009). We affirm because the officers have failed to prove the existence of a contract entitling them to education incentive pay.2
The reasoning of the circuit court in its order granting summary judgment to the City is both persuasive and an accurate recitation of the law:
Frankfort follows a city manager form of Government. Still, the Mayor must sign certain documents and instruments. Any delegation of the city manager's duties or responsibilities to subordinate officers and employees shall be made by municipal order except that all bonds, notes, contracts, and written obligations of the city according to the KRS 83A.150(9). None of the [officers'] contracts were signed by the Mayor. Indeed, the "contracts" were signed by only one party—each [officer] himself. . . . Rights to wages and benefits for city and state workers do not arise from common law contract; rather they arise from statutory law. Thus, a city employee is not entitled to a benefit by virtue of its mention in an agreement. Rather, the city employee is entitled to a benefit because it was enacted by alegislative body. Consequently, that legislative body may amend or repeal the law.
Pursuant to KRS 82.082(1) "[a] city may exercise any power and...
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