Dew v. City of Scappoose, 01-2080.

• Decision Date: 27 September 2006
• Docket Number: 01-2080.,A123026.
• Citation: 145 P.3d 198,208 Or. App. 121
• Parties: Margo DEW, Appellant, v. CITY OF SCAPPOOSE, a municipal corporation, and James D. Huffman, in his personal capacity, Respondents.
• Court: Oregon Court of Appeals

145 P.3d 198

208 Or. App. 121

Margo DEW, Appellant, v. CITY OF SCAPPOOSE, a municipal corporation, and James D. Huffman, in his personal capacity, Respondents.

01-2080.

A123026.

Court of Appeals of Oregon.

Argued and Submitted October 3, 2005.

Decided September 27, 2006.

COPYRIGHT MATERIAL OMITTED

Maureen Leonard argued the cause for appellant. With her on the briefs were Linda L. Marshall and Martha Takaro.

Robert E. Franz, Jr., Springfield, argued the cause for respondent City of Scappoose. On the brief were Jason M. Montgomery and Law Office of Robert E. Franz, Jr.

Ronald B. Terzenbach argued the cause for respondent James D. Huffman. With him on the brief were Daniel M. Holland and Loomis & Holland.

Before LANDAU, Presiding Judge,^* and BREWER, Chief Judge, and DEITS, Judge pro tempore.

LANDAU, P.J.

Plaintiff is the former Chief of Police of the City of Scappoose. She initiated this action against the city and Huffman, a Scappoose city councilor, asserting a variety of claims arising out of the termination of her employment and the circumstances leading up to the termination. Plaintiff settled one of her claims against Huffman and entered into a covenant not to execute as to another. Meanwhile, the city moved for summary judgment on all of the claims against it and moved to dismiss Huffman from the action on the ground that the settlement agreement and covenant not to execute rendered the action moot as to that party. The trial court granted the city's motion for summary judgment and entered judgment dismissing all claims against the city. The court also granted the city's motion to dismiss Huffman from the action. Plaintiff now appeals, assigning error to the trial court's decisions on both motions. We conclude that the trial court erred in granting the motion for summary judgment as to several of the claims. We also conclude that the trial court erred in dismissing the claim against Huffman on mootness grounds. We therefore affirm in part, reverse in part, and remand for further proceedings.

I. FACTUAL BACKGROUND

We state the relevant facts in the light most favorable to plaintiff, the nonmoving party. ORCP 47 C; Jones v. General Motors Corp., 325 Or. 404, 408, 939 P.2d 608 (1997).

A. Facts leading up to the filing of the complaint

In February 1998, the city hired plaintiff to be its police chief. During the time that she occupied that position, defendant Huffman was a city councilor. Huffman also was an attorney in private practice whose practice included representing criminal defendants. On several occasions, according to plaintiff, Huffman attempted to use his position on the city council to benefit his law practice. For example, plaintiff recalls that Huffman pressured her to obtain dismissal of a stalking order against a client. Plaintiff refused to help him.

In 1998, plaintiff filed complaints against Huffman with both the Government Standards and Practices Commission (GSPC) and the Oregon State Bar. Meanwhile, Huffman began criticizing plaintiff at city council meetings and on his personal website. Huffman also made frequent telephone calls to plaintiff that resulted in heated exchanges between them. The city council censured Huffman for his behavior.

Matters came to a head over a public controversy regarding a speech that plaintiff gave at a local high school. Plaintiff took questions from the student audience. An unsigned written question asked why the police in town were so corrupt. Plaintiff asked the students whether the person who wrote the question had "the balls" to admit it and either defend it or provide more information. Then, a student asked why the police "write tickets that are really kind of * * *" and then he started to say "chickenshit," but plaintiff finished the sentence for him. She told him that there are no "chickenshit" tickets because there are no "chickenshit" laws.

Plaintiff later went back to the school and apologized for her language, but that did not end the controversy. Huffman brought the issue before the city council. Many witnesses at the meeting expressed strong discontent with plaintiff and complained that her apology was insincere.

On January 24, 2000, plaintiff met with the city manager, Gillham, who told plaintiff, "You are screwed. Your career is screwed. I don't know what you are going to do. I don't see how you are ever going to recover from this." Gillham gave her the choice of resigning or being fired. Plaintiff refused to resign and, on her way out of Gillham's office, picked up a chair and threw it on the ground. The chair was then blocking the doorway, so she picked it up and threw it out of her way and slammed the door behind her.

The following day, Gillham wrote to plaintiff that he planned to speak with the city's legal counsel before deciding whether to terminate her. In the meantime, Gillham placed plaintiff on administrative leave for one week, citing the "outburst and loss of control in my office" as the sole reason for his decision. Gillham insisted that plaintiff submit to an evaluation by a psychologist approved by the city.

Plaintiff did so. The city's psychologist concluded that plaintiff's outburst was "extraordinary and not representative of [plaintiff's] behavior" and was caused by the repeated public attacks on her character. The psychologist recommended that plaintiff take six to eight weeks off work to engage in psychological counseling. He also recommended "that the City Council act in some meaningful way to manage the seemingly toxic ongoing behavior of Mr. Huffman."

Plaintiff followed the psychologist's recommendation and took some time off work. In the interim, plaintiff filed a workers' compensation claim for work-related stress. SAIF Corporation (SAIF), the city's workers' compensation insurer, accepted the claim.

On March 31, 2000, Gillham sent plaintiff a letter terminating her employment. He explained that the public's expectations for a chief of police are high, and he could not "overlook or excuse even an isolated instance of serious, poor judgment and misconduct. I place throwing office furniture in this category." Although Gillham asserted that throwing office furniture constituted cause for termination, he opted to officially dismiss plaintiff "without cause" so that, under the terms of her employment agreement, she could receive severance pay.

Meanwhile, SAIF and plaintiff settled her workers' compensation claim and executed a Claims Disposition Agreement (CDA), which provided, in pertinent part:

"The parties also agree to the following: Due to limitations related to claimant's accepted adjustment disorder with mixed emotional features, claimant has not returned to, and medical evidence indicates that claimant will not be able to return to, regular employment as defined in OAR 436-110-0005 under the most recent disabling claim opening. Claimant has not refused an offer of appropriate employment with the employment at injury. Medical documentation from claimant's treating psychiatrist indicates that claimant has permanent disability as a result of the adjustment disorder and claimant would have been awarded permanent impairment had the claimant had the claim closed rather than being resolved by this claims disposition agreement."

(Emphasis added.)

B. Facts pertaining to the litigation of plaintiff's claims

On March 5, 2001, plaintiff initiated this action against the city and Huffman for a variety of claims arising out of her termination and the events leading up to it. Plaintiff alleged six claims for relief against the city and two claims against Huffman.

With respect to the city, plaintiff alleged that (1) the city violated 42 USC section 1983 by retaliating against her for exercising her First Amendment right to free speech; (2) the city violated the whistleblowing provisions of former ORS 659.510(2) (1999), renumbered as ORS 659A.203 (2001), and former ORS 659.530 (1999), renumbered as ORS 659A.215 (2001) and amended by Or. Laws 2001, ch. 621, § 45; (3) the city is liable for common-law wrongful discharge; (4) the city violated former ORS 659.436, renumbered as ORS 659A.112 (2001), by discriminating against plaintiff on the basis of a stress-related disability; (5) the city violated former ORS 659.448 (1999), renumbered as ORS 659A.136 (2001) by discriminating against plaintiff based on the results of her psychological exam and inquiries related to her disabled status; and (6) the city violated former ORS 659.410 (1999), renumbered as ORS 659A.109 (2001) by discriminating against her on the basis of her application for workers' compensation benefits.

With respect to Huffman, plaintiff alleged that (1) Huffman violated 42 USC section 1983 by retaliating against her for exercising her rights of free speech; and (2) Huffman is liable for common-law intentional interference with economic relations.

The city answered and alleged a number of affirmative defenses, including that all claims are time-barred. The city then moved for summary judgment on each of the claims against it. The city argued that, among other things, all of plaintiff's claims are barred by the applicable statutes of limitations and that, on the merits, the undisputed facts demonstrate that the city is entitled to judgment on each of those claims as a matter of law. The trial court denied the motion explaining that "[t]here are genuine issues of material fact as to all pending motions that preclude granting any. And even if there were not genuine issues of material fact, still I would hold that the moving parties are not entitled to judgment of law in any respect."

Meanwhile, plaintiff and Huffman entered into an Agreement and Covenant not to Execute. In the agreement, the plaintiff agreed to dismiss her claim against Huffman for intentional interference, while Huffman consented to discontinue his attacks on plaintiff and her character. The parties also agreed to continue to litigate the remaining civil rights claim to...