Figuly v. City of Douglas

Citation853 F. Supp. 381
Decision Date24 May 1994
Docket NumberNo. 93-CV-1046-B.,93-CV-1046-B.
PartiesAlfred J. FIGULY, Plaintiff, v. The CITY OF DOUGLAS, a municipal corporation, H.R. Johnston, individually, Ray Haskins, individually, and John Does I-X, individually, Defendants.
CourtU.S. District Court — District of Wyoming

Roger E. Shumate, Murane & Bostwick, Casper, WY, for plaintiff.

Michael K. Davis, Yonkee & Toner, Sheridan, WY, for defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

BRIMMER, District Judge.

The above-entitled matter having come before the Court upon Defendants' Motion for Summary Judgment and the Plaintiff's Opposition thereto, and the Court having reviewed the materials on file herein, having heard argument from the parties, and being fully advised in the premises, FINDS and ORDERS as follows:

Background

This is a wrongful discharge case. The plaintiff, Alfred J. Figuly, was the City Administrator of the City of Douglas, Wyoming, until June 14, 1993. Mr. Figuly alleges that he was wrongfully terminated from his position. The details surrounding his termination are as follows.

Effective March 28, 1989, Mr. Figuly was hired as the City Administrator with a salary of $42,500 per year. Figuly was given a three year contract that provided for an annual performance evaluation and severance pay in the amount of three months' salary. In addition, at the time he was employed, Figuly signed a document entitled "Contract" which stated that the terms of the city personnel manual applied to his employment.

Each year, with the exception of 1993, the city council and the mayor evaluated Figuly's performance. This process resulted in the creation of a new contract every year. Over time, the severance pay provision of the contract was increased from three to eighteen months. Figuly contends that this increase in the severance pay amount was granted in lieu of salary increases.

During his tenure, Figuly carried out the directives of the city council, including raising funds and planning and implementing projects for city improvements. Before the 1990 municipal elections, Figuly dealt with mayor-to-be Ray Haskins regarding a dispute over a zoning violation and with city council member H.R. Johnston regarding the Douglas Community Club. Figuly contends that these dealings were the beginnings of personal vendettas against him.

In April of 1992, the city council and Mayor Haskins completed Figuly's performance evaluation which unanimously gave Figuly "strong overall ratings." Subsequently, the parties entered into contract negotiations which resulted in an agreement to extend the contract term to April of 1994 and included the increase in severance pay to eighteen months. Mayor Haskins then vetoed the contract. That veto was overridden by a council vote of two to one.

Soon after, city council elections took place and a Mr. Trent Kaufman won a seat on the council.1 Figuly contends that almost immediately, council members Johnston and Kaufman began to take steps to breach his contract. Figuly alleges that Kaufman forced James Hardee, the city attorney who had drafted Figuly's contracts, to resign and then persuaded the council to hire Tom Campbell as the new city attorney. Figuly contends that Johnston called for an executive session to discuss the procedure for voiding his employment contract with the city. On January 25, 1993, the council approved Johnston's motion to declare Figuly's contract void, but agreed that he should continue to serve at the pleasure of the mayor and city council with his present pay and benefits. Figuly states that he was given no notice or opportunity to be heard before this action was taken. Figuly's after-the-fact protest of the action was of no avail.

Subsequently, the council failed to perform Figuly's annual performance evaluation and, on June 14, 1993, voted to terminate him as City Administrator, effective immediately, and granted him 30 days' severance pay.

Figuly has filed this suit, bringing claims of breach of contract, breach of implied contract, breach of the implied covenant of good faith and fair dealing, the tort of outrage, negligence, defamation, and civil rights violations under 42 U.S.C. § 1983. This Court has subject matter jurisdiction over the § 1983 claim under 28 U.S.C. § 1331 (1988) and over the state law claims under 28 U.S.C. § 1367(a) (West Supp.1993). The defendants have moved for summary judgment. That motion is currently before the Court.

Standard of Review

"By its very terms, the Rule 56(c) standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there is no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986) (emphasis in original).

The trial court decides which facts are material as a matter of law. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id. at 248, 106 S.Ct. at 2510; see also Carey v. United States Postal Service, 812 F.2d 621, 623 (10th Cir.1987). Summary judgment may be entered "against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986); Carey, 812 F.2d at 623. The relevant inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Carey, 812 F.2d at 623. In considering a party's motion for summary judgment, the court must examine all evidence in the light most favorable to the nonmoving party. Barber v. General Elec. Co., 648 F.2d 1272, 1276 n. 1 (10th Cir.1981).

Discussion
A. The Breach of Contract and Breach of Implied Contract Claims

The defendants argue that there was no breach of contract in this case because Figuly's April 18, 1992, contract was voidable and was properly voided by the incoming council on January 25, 1993. The defendants also argue that after that time, Figuly was an at-will employee who could be terminated without cause. Accordingly, the Court must determine whether Figuly's contract was voidable and, if so, whether the city council properly voided it. The Court must also consider whether any other contract existed between Figuly and the city which would provide a basis for his breach of contract claims.

1. The Voided Contract
a. Wyoming Law and Public Policy

One of the most important characteristics of our democratic form of government is the authority of our elected officials to make changes mandated by the electorate. The ability of incoming officials to change policies, procedures, and even key personnel of their predecessors, allows the incoming officials to implement their own policies, those policies desired by the majority of the public who elected them. To allow a prior government or official to bind his successors by creating contracts or other commitments which extend beyond his term would be contrary to this critical facet of democracy. To be certain, it would be neither practical nor desirable for all government contracts to terminate upon the completion of the term of the officials which made them. Nevertheless, the need for newly elected officials to effectuate change is an important public policy which cannot be ignored by courts interpreting government contracts.

The Wyoming Supreme Court has recognized that, as a matter of public policy, the elected successors of a governmental body should be free to exercise their independent judgment in contracting and should not be bound by the contracts of their predecessors. See Kautza v. City of Cody, 812 P.2d 143 (Wyo.1991); Mariano & Assoc. v. Board of County Commissioners of Sublette County, 737 P.2d 323 (Wyo.1987); MacDougall v. Board of Land Commissioners of Wyoming, 48 Wyo. 493, 49 P.2d 663 (1935); Hyde v. Board of County Commissioners of Converse County, 47 Wyo. 101, 31 P.2d 75 (1934). In Mariano, the court held that, subject to applicable state statutes,

any contract with a unit of government of the state of Wyoming which extends beyond the term of office of the governmental decisionmakers ... can be subject to challenge if, in consideration of the facts and circumstances, the necessity and benefit to the governmental unit did not justify the extended term when the agreement was made.

Mariano, 737 P.2d at 329 (emphasis added). In other words, a contract extending beyond the term of the contracting authority may be voidable by the government, or void on the attack of a third party, "if the agreement is not reasonably necessary or of a definable advantage to the governing body." Id. at 331-32.2

In Mariano, the Sublette County Board of Commissioners contracted with the accounting firm of Mariano & Mortenson to perform its annual county audits for the 1984 and 1985 fiscal years. Id. at 323. Mortenson subsequently left the firm and then approached the Board on his own to perform the 1985 audit. The Board, which had commenced a new term of office, accepted Mortenson's offer and terminated its existing contract with Mariano. Mariano sued, claiming that by accepting Mortenson's bid, the Board breached his contract. Id. at 324. The Wyoming Supreme Court, holding that no facts demonstrated why a two-year contractual term was necessary or of benefit to the government, affirmed the lower court's decision granting summary judgment in favor of the Board. Id. at 330-31.

In holding that nothing was shown to justify the two year contract in Mariano, the court enumerated circumstances under which the extended contract might be reasonably necessary and of definable advantage:

We could postulate a call for bids whereby a price for
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