Fellhauer v. City of Geneva

• Citation: 154 Ill.Dec. 649,142 Ill.2d 495,568 N.E.2d 870
• Decision Date: 22 February 1991
• Docket Number: No. 69559,69559
• Parties: , 154 Ill.Dec. 649, 59 USLW 2534, 6 IER Cases 395 P. Reginald FELLHAUER, Appellee, v. The CITY OF GENEVA et al. (Richard Lewis, Indiv. and as Mayor of the City of Geneva, Appellant).
• Court: Illinois Supreme Court

Page 870

568 N.E.2d 870

142 Ill.2d 495, 154 Ill.Dec. 649, 59

USLW 2534, 6 IER Cases 395

P. Reginald FELLHAUER, Appellee, v. The CITY OF GENEVA et al. (Richard Lewis, Indiv. and as Mayor of the City of Geneva, Appellant).

No. 69559.

Supreme Court of Illinois.

Feb. 22, 1991.

Gary L. Starkman, of Arvey, Hodes, Costello & Burman, Chicago, for appellant.

Stephen M. Cooper and Peter M. Storm, of the Law Offices of Cooper & Storm, Geneva, for appellee.

Chief Justice MILLER delivered the opinion of the court:

Plaintiff, P. Reginald Fellhauer, brought the present action in the circuit court of Kane County against the City of Geneva and Richard Lewis, individually and as mayor of the City of Geneva. Plaintiff, the former director of the Geneva electrical department, alleged that Mayor Lewis engaged in a series of acts that ultimately resulted in the termination of plaintiff's employment with the city. The circuit judge dismissed the portion of the amended complaint against defendant Lewis for failure to state a cause of action. The appellate court reversed the circuit court's judgment and remanded the cause action for further proceedings. (190 Ill.App.3d 592, 137 Ill.Dec. 846, 546 N.E.2d 791.) We allowed defendant Lewis' petition for leave to appeal (107 Ill.2d R. 315(a)). The plaintiff's claims against the City of Geneva are not at issue in the present appeal.

On review of an order dismissing a complaint for failure to state a cause of action, all well-pleaded facts and inferences are accepted as true. (Szajna v. General Motors Corp. (1986), 115 Ill.2d 294, 298-99, 104 Ill.Dec. 898, 503 N.E.2d 760; Acorn Auto Driving School, Inc. v. Board of Education of Leyden High School District No. 212 (1963), 27 Ill.2d 93, 96, 187 N.E.2d 722.) Plaintiff was appointed director of electrical services of the City of Geneva in 1974, and he served in that position until he was discharged, in 1986. As director of that department, plaintiff was the chief administrator of the city's electrical operations. The city owns and operates an electrical distribution system, purchasing power from electric utility companies and selling it to city residents. During 1984 and the spring of 1985, plaintiff participated in negotiations with the Wisconsin Electric Power Company (WEPCO) for the sale of power to the city. The negotiations culminated in an agreement, signed April 23, 1985, under which WEPCO would sell electric power to the city. The rate agreed to by the parties was lower than that charged by the city's previous supplier, the Commonwealth Edison Company.

In late 1984 and early 1985, defendant Richard Lewis was a candidate for the office of mayor of the City of Geneva. Lewis had previously served on the Geneva city council as an alderman. In February 1985, Lewis asked plaintiff to "slow down" the course of the negotiations with WEPCO so that Lewis' opponent, the city's acting mayor, would not benefit from their successful completion. Plaintiff responded that he would not interfere with the progress of the negotiations.

Lewis was elected mayor of Geneva, and he assumed office in May 1985. Following his election, Lewis solicited from vendors contributions to a fund for the retirement of his campaign debt. Plaintiff alleges that a number of vendors asked him whether they were required to make contributions as a condition of doing business with the city. Plaintiff told the vendors that they need not do so, and plaintiff later referred the question to the city attorney for clarification.

Soon after he became mayor, defendant Lewis asked plaintiff to "sell out" the city's existing contract with WEPCO and negotiate a better contract with Commonwealth Edison, the city's former supplier of electricity. Plaintiff responded that such action would be a breach of the city's contractual commitment with WEPCO. According to the amended complaint, Lewis then proceeded to negotiate personally with representatives of Edison in an attempt to obtain a more favorable agreement. In private meetings, Lewis made available to Edison certain documents prepared by the city's consultants analyzing both the WEPCO agreement and Edison's new proposals. On December 6, 1985, plaintiff wrote to the Wisconsin attorney who represented the city in its dealings with WEPCO, questioning the propriety of Lewis' conduct. Upon learning of the correspondence, Mayor Lewis ordered plaintiff to end his involvement with power supply matters and instructed the Wisconsin attorney to have no further contact with plaintiff.

In January 1986, plaintiff attempted to inform the aldermen who served on the city council's electric committee and utility committee of the circumstances surrounding the power supply issue. Mayor Lewis learned of plaintiff's efforts to communicate directly with the council members and directed plaintiff to cease doing so. Lewis also suggested that plaintiff seek other employment. On January 20, 1986, Mayor Lewis told plaintiff that he intended to discuss the power supply issue with the city council and instructed plaintiff "not to say anything." In a subsequent letter to the mayor, plaintiff requested clarification of his duties and of the information that he could divulge to the city council members. Following receipt of the letter, Mayor Lewis terminated plaintiff's employment with the city. As provided by statute, the plaintiff's discharge was later submitted to the city council for its approval. The council ratified the mayor's decision by a divided vote.

Plaintiff commenced the present action in the circuit court of Kane County on February 18, 1986. Plaintiff sought awards of compensatory damages from both Lewis and the City of Geneva under the theory of retaliatory discharge. Plaintiff also requested an award of punitive damages, alleging that defendants were guilty of willful and wanton misconduct. The trial court later granted the defendants' separate motions to dismiss the complaint for failure to state a cause of action.

Plaintiff thereafter filed an amended complaint. Count I alleged that defendants owed to plaintiff a duty of good faith and fair dealing and a duty not to discharge plaintiff in bad faith or for reasons violative of public policy. Plaintiff alleged that defendants breached those duties by discharging him in retaliation for his refusal to interfere with the course of negotiations between the city and WEPCO, for his refusal to cooperate in Mayor Lewis' efforts to solicit campaign contributions from city vendors, and for his refusal to withhold from the city council information pertaining to the power supply issue. Plaintiff further alleged that his conduct was consistent with public policy and local ordinance. Count II, brought against the city alone, was also for retaliatory discharge. It contained the additional allegation that plaintiff was discharged for his refusal to commit official misconduct, as defined by statute (Ill.Rev.Stat.1985, ch. 38, par. 33-3). Count III of the amended complaint was against Lewis individually and sought recovery for wrongful interference with an employment relationship. In count III, plaintiff alleged that defendant Lewis "embarked on a course of conduct" designed to result in plaintiff's discharge from his position as director of electrical services, and plaintiff repeated the allegations of count II concerning his refusal to accede to Lewis' improper requests. In addition, plaintiff alleged that Lewis filed a false statement of charges against plaintiff in the proceeding before the city council. Counts IV and V were brought under section 1983 of the Civil Rights Act of 1871 (42 U.S.C. § 1983 (1982)) and alleged that Lewis and the city, respectively, violated plaintiff's rights by engaging in the conduct alleged in the preceding counts. Finally, in count VI, plaintiff alleged that both defendants had acted with malice, and plaintiff sought an award of punitive damages.

On defendant Lewis' motion, the circuit judge dismissed counts I, III, IV, and VI of the amended complaint for failure to state a cause of action. (See Ill.Rev.Stat.1987, ch. 110, par. 2-615.) Those portions of the complaint were dismissed with prejudice, and the judge made the finding required by Rule 304(a) (107 Ill.2d R. 304(a)) for an immediate appeal of the order.

The appellate court reversed the judgment and remanded the cause for further proceedings. The appellate court found that the plaintiff stated a cause of action against defendant Lewis under each of the three substantive theories pleaded in the amended complaint. The appellate court refused to consider defendant's arguments that his acts were authorized by statute. The court believed that those contentions raised affirmative matters that were not cognizable under a section 2-615 motion to dismiss.

A majority of the appellate panel declined to follow the contrary holding in Morton v. Hartigan (1986), 145 Ill.App.3d 417, 99 Ill.Dec. 424, 495 N.E.2d 1159, and ruled in this case that an action for retaliatory discharge may be brought against supervisory personnel as well as against the employer. (190 Ill.App.3d at 602-03, 137 Ill.Dec. 846, 546 N.E.2d 791.) With respect to the merits of the plaintiff's claim, the appellate court determined that the allegations made in the present case were sufficient to state a cause of action for retaliatory discharge. The court believed that the public policy embodied in the official misconduct provisions found in article 33 of the Criminal Code of 1961 (Ill.Rev.Stat.1987, ch. 38, pars. 33-1 through 33-3) was implicated by plaintiff's allegations that he was discharged in retaliation for his refusal to delay the WEPCO negotiations and for his refusal to cooperate with Mayor Lewis' efforts to raise funds to retire his campaign debt. The appellate court denied the third ground on which plaintiff sought to base his claim for retaliatory discharge, however. The court did not believe that communication with the city council on...