Department of Natural Resources v. Evans

• Decision Date: 19 June 1986
• Docket Number: No. 4-1283,4-1283
• Parties: DEPARTMENT OF NATURAL RESOURCES, State of Indiana, Appellant (Defendant Below), v. Sherry EVANS, Appellee (Plaintiff Below). A 433.
• Court: Indiana Appellate Court

Page 1295

493 N.E.2d 1295

DEPARTMENT OF NATURAL RESOURCES, State of Indiana, Appellant (Defendant Below), v. Sherry EVANS, Appellee (Plaintiff Below).

No. 4-1283 A 433.

Court of Appeals of Indiana,

Fourth District.

June 19, 1986.

Linley E. Pearson, Atty. Gen., Mark J. Tidd, Deputy Atty. Gen., Office of Attorney General, Indianapolis, for appellant.

Ralph Ogden, M. Anne Wilcox, Wilcox & Ogden, Golden, Colo., for appellee.

MILLER, Judge.

In a federal lawsuit, Evans sued the Department of Natural Resources and the Republican State Committee attacking the "Two Percent Club" which conditioned state employment upon payment of two percent of each employee's salary to the Republican Party. The case was settled and the Department agreed not to retaliate against Evans for her participation in the federal lawsuit. Shortly thereafter, Evans applied for a job with the Department. Although Evans was qualified, she was not hired and the evidence indicated she was denied employment in retaliation for the federal lawsuit. At trial, Evans obtained an award of $8,144.00 for lost wages and $50,000 for invasion of "First and Fourteenth Amendment rights to contract." We affirm the award of lost wages and reverse the award of $50,000 which appears to be punitive damages. Additionally, we find the trial court improperly assessed costs against the state.

Affirmed in part, reversed in part.

FACTS

Sherry Evans was one of seven plaintiffs who filed a lawsuit in United States District Court in 1976 against several state agencies, including the Department of Natural Resources (Department), the Republican State Committee (Committee), and several Settlement negotiations resulted in a release agreement dated January 12, 1979 between the state defendants and the seven plaintiffs. The Republican Party and its officers were not parties to the agreement. The release clause stated the defendants agreed not to retaliate against the plaintiffs because of their actions in the Two Percent Club Suit.

of its officials. Evans alleged that the defendants were illegally conditioning state employment upon the payment of two percent of each employee's salary to the Republican party. The case became widely known as the "Two Percent Club Suit". While the suit was pending, Congress passed the Roush Act, 18 U.S.C. Section 601, which criminalized such conduct.

In February, 1979 Evans applied for a job with the Department as a laborer. She was not hired in March, 1979 because she failed to receive political clearance from the Republican State Committee which the Department required. Evans then filed this suit against the Department, alleging it refused to hire her solely because of her participation in the earlier lawsuit, thereby breaching the non-retaliation clause of the settlement agreement.

The case was tried August 16-18, 1983. The trial court concluded the Department had breached the non-retaliation clause of the settlement agreement and awarded Evans lost wages in the amount of $8,144.00, and $50,000.00 for invasion of her First and Fourteenth Amendment right to contract.

The trial court made the following findings of fact and conclusions of law:

"In this case, Sherry Evans (Evans) sues the Department of Natural Resources (Department) for breach of contract.

Evans was a vocal, outspoken, high-media profile plaintiff in a suit against the Department, the Republican Central Committee, and others challenging the unlawful conditioning of State employment upon kicking back of 2% of State salary to the Republican party. The suit, known as the 'Two Percent Club Suit,' and its attendant publicity caused great financial and public perception damage to the Republican party.

On January 12, 1979, Evans and the Department negotiated a settlement of the 'Two Percent Club Suit.' The Repulican [sic] Party Central Committee paid $4,600.00 to settle the suit. The settlement was based upon a release agreement drafted by James Hughes, attorney for the Repulican [sic] Central Committee. The release agreement contained a non-retaliation clause drafted by attorney Ron Ellberger for Evans. The non-retaliation clause is the contract sued upon by Evans. It states:

'The current state defendants agreed not to retaliate directly or indirectly, against any of the individual plaintiffs, or the ISEA because of the filing, prosecution, and settlement of this litigation.'

It is without question that the Department was a state defendant in the 'Two Percent Club Suit' settled with Republican Central Committee money.

On January 19, 1979, the dismissal of the 'Two Percent Club Suit' was approved by the Court.

On February 5, 1979, Evans applied for a position of laborer IV at the Salamonie Reservoir. The application was submitted to Neil Case, manager of the Salamonie Reservoir. There were no other applicants for the job. Evans had political clearance and a recommendation for Mr. Case specifically requesting that Evans be hired because she had previously worked with Mr. Case which was satisfactory and she had completed her degree at Ball State University. Mr. Case, an employee of the Department testified that he was informed by Jack Neal of the personnel department of the Department that Evans' application had been rejected because 'Evans was trouble or a trouble maker.' At this time the situation at the Department had deteriorated to such an extent that Mr. Case had to save all records he had in anticipation of problems and to protect himself from Indianapolis. This was the only denial of The Court finds that at this time in 1979 the personnel division of the Department had to get clearance from the Republican Central Committee before any patronage employee could be hired. The Court further finds that Evans was a patronage employee. The Court further finds that if there were no political clearance, no job could be obtained. The Court further finds that the approval of the Republican Central Committee was based on an oral policy from the Department to the Republican Central Committee. The Court further finds that the Department only acted after receiving political clearance from the Republican Central Committee. The Court further finds that throughout January and February 1979, the Republican Central Committee and the Department knew that if clearance was not given by the Republican Central Committee, an applicant would not be hired. The Court further finds that the Republican Central Committee maintained an extensive dossier on Evans and that the Republican Central Committee had the absolute right by Department policy to give or deny employment for political patronage jobs in the state.

political clearance Mr. Case had ever seen in fifteen years of service to the Department.

Because the Department abdicated its responsibility to hire qualified state workers and gave to the Republican Central Committee approval of political clearance, the Court finds the Department made the Republican Central Committee and its employees the agent of the Department--a non-elected shadow agent.

The Court finds the incredibly evasive testimony of the then Republican Chairman, Bruce Melchert that he did not know a person could not obtain a job without political clearance should be given no weight.

The Court finds that it was just this type of shadow agent government retaliation and evasion that Evans sought to protect herself against when she and her attorney negotiated the non-retaliation clause sued upon.

In less than one month after the Department and Evans obtained approval from the Court, the protection of the non-retaliation clause failed by the direct act of the agent of the Department in failing to grant political clearance to Evans.

No clearance--no job.

The Court finds that when all credible evidence in this case is considered, it unerringly indicates that Bruce Melchert specifically denied Evans' political clearance because of and in retaliation against Evans' prosecution of the 'Two Percent Club Suit.'

Even today, without political clearance from the Republican Central Committee a person cannot be hired at the Department for a patronage job no matter how skilled. Evans compares this system to the entrenched Cook County, Illinois machine.

It is not the purpose of these findings to change the patronage system--that is a matter for the voters, our legislators and the various political parties.

The purpose of these findings is to send a message of unquestioned clarity that if you settle a law suit and then immediately and directly violate the terms of the settlement your behavior breaks the contract settlement and attacks the integrity of the Court and the system which must approve the settlement. The party breaking the contract is responsible for all foreseeable loss especially as in this case when the Department through its agent broke the contract in less than a month.

The Court finds Evans clearly mitigated any loss she might have had. The Court finds that Evans lost wages in the amount of $8,144.00. The Court finds that Evans contends she is entitled to prejudgment interest in the amount of $3,523.00.

The Court finds that the Department broke the settlement contract through the acts of its agent, the Republican Central The nature of relief set out in this Findings of Fact, Conclusions of Law, Opinion, Judgment and Order of the Court has been specifically tailored to fit the nature and extent of the violation of the contract found in this case. This judgment goes no further. The taxpayers and people of the State of Indiana should have a right of action against the Republican Party Central Committee for the loss caused by the behavior of the Republican Party Central Committee in February 1979 in breaking the contract and attacking the integrity of the Court approved settlement.

Committee foreseeably invading Evans' First and Fourteenth Amendment rights to contract with damage in the amount of $50,000.00.

The Republican Central Committee paid to settle the first...