Fitzgerald v. City of Ottawa, Kan.
| Decision Date | 18 August 1997 |
| Docket Number | No. 96-4221-KHV.,96-4221-KHV. |
| Court | U.S. District Court — District of Kansas |
| Parties | David FITZGERALD, Plaintiff, v. CITY OF OTTAWA, KANSAS, Defendant. |
Todd N. Thompson, Michael David Witt, Law Offices of Todd N. Thompson, Lawrence, KS, for David Fitzgerald.
Michael K. Seck, Fisher, Patterson, Sayler & Smith, Overland Park, KS, Robert L. Bezek, Jr., Bezek, Lowry & Hendrix, Ottawa, KS, for City of Ottawa, Kan.
Plaintiff David Fitzgerald filed this action against his former employer, the City of Ottawa, Kansas (the "City"), claiming that defendant breached their Separation Agreement by failing to pay plaintiff amounts agreed under the contract. Plaintiff also claims that defendant wrongfully denied him access to an ICMA pension account which he had accumulated during his employment. Plaintiff claims $55,863.26 in total damages, $30,396.70 of which he attributes to defendant's conversion of the ICMA proceeds and $10,622.56 of which he attributes to a penalty for non-payment of wages under K.S.A. § 44-315.
This matter comes before the Court on Defendant's Motion to Dismiss or, in the Alternative, Motion for Summary Judgment (Doc. # 39) filed June 2, 1997. In that motion, defendant requests that the case be dismissed pursuant to Fed.R.Civ.P. 12(b)(1) or that the Court grant summary judgment for defendant under Fed.R.Civ.P. 56. Defendant's principal argument is that the Court lacks subject matter jurisdiction because plaintiff has artificially inflated his damage claim in order to obtain federal court jurisdiction. Specifically, defendant argues that payments due under the parties' Severance Agreement do not constitute "wages" for purposes of K.S.A. § 44-315 and that plaintiff lacks standing to claim damages for conversion of the ICMA account because the Franklin County District Court set aside the proceeds of that account to plaintiff's ex-wife.
By its Order (Doc. # 45) filed July 26, 1997, the Court sustained as unopposed defendant's motion to dismiss for lack of subject matter jurisdiction. After consulting with the parties, however, the Court ascertained that plaintiff's failure to oppose defendant's motion was excusable. The Court therefore vacated and set aside its July 26 order and ordered plaintiff to show cause why his complaint should not be dismissed for lack of subject matter jurisdiction. See Order to Show Cause (Doc. # 49) filed August 1, 1997. Plaintiff has now responded and the Court thus revisits the issues raised by Defendant's Motion to Dismiss or, in the Alternative, Motion for Summary Judgment (Doc. # 39) filed June 2, 1997.
Defendant first seeks dismissal of plaintiff's complaint for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1). Federal courts are courts of limited jurisdiction and may only exercise jurisdiction when specifically authorized to do so. Castaneda v. I.N.S., 23 F.3d 1576, 1580 (10th Cir.1994). A court lacking jurisdiction must dismiss the cause at any stage of the proceeding in which it becomes apparent that jurisdiction is lacking. Scheideman v. Shawnee County Bd. of County Comm'rs, 895 F.Supp. 279, 280 (D.Kan.1995), citing Basso v. Utah Power and Light Co., 495 F.2d 906, 909 (10th Cir. 1974); Fed.R.Civ.P. 12(h)(3). The party who seeks to invoke federal jurisdiction bears the burden of establishing that such jurisdiction is proper. Basso, 495 F.2d at 909. When federal jurisdiction is challenged, plaintiff bears the burden of showing why the case should not be dismissed. Jensen v. Johnson County Youth Baseball, 838 F.Supp. 1437, 1439-40 (D.Kan.1993).
Challenges to jurisdiction under Fed. R.Civ.P. 12(b)(1) generally take two forms facial attacks on the sufficiency of jurisdictional allegations or factual attacks on the accuracy of those allegations. Holt v. United States, 46 F.3d 1000, 1002-3 (10th Cir.1995). Defendant's motion falls within the latter category because both parties have relied on evidence outside the complaint. The Tenth Circuit has set forth the following standard in such event:
[A] party may go beyond allegations contained in the complaint and challenge the facts upon which subject matter jurisdiction depends. When reviewing a factual attack on subject matter jurisdiction, a district court may not presume the truthfulness of the complaint's factual allegations. A court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1). In such instances, a court's reference to evidence outside the pleadings does not convert the motion to a Rule 56 motion.
Id. at 1003 (citations omitted). In this case, the Court need not look far beyond the allegations of the complaint and the Severance Agreement itself. As the Court explains more fully below, even taking plaintiff's allegations as true, plaintiff has failed to adequately allege facts which support federal court jurisdiction — specifically, he has failed to meet the minimum amount in controversy requirement of 28 U.S.C. § 1332.1
Plaintiff resides in Denver, Colorado. Defendant is a municipality incorporated in the State of Kansas. Plaintiff worked as a police officer for the City for 13 years. On April 5, 1995, the parties entered into a Separation Agreement and Release (the "Agreement"). Plaintiff had counsel at the time, and his attorney recommended that he sign the Agreement. Plaintiff understood from the Agreement that he was no longer going to work for the City as of April 5, 1995, and he in fact has not performed any work for the City since that time.
In the Agreement, the parties agreed, among other things, that the City would provide severance pay over several months in exchange for plaintiff's resignation and release of all claims against the City. The Agreement contained the following provisions:
2. The CITY shall continue to pay EMPLOYEE compensation that is equal to his full salary for a total of six months following the date of this SEPARATION AGREEMENT AND RELEASE, and shall continue his health insurance through such period.
3. The CITY shall, in addition, pay EMPLOYEE a sum equal to EMPLOYEE'S accumulated and unused sick, vacation and personal leave as of the date of this SEPARATION AGREEMENT AND RELEASE.
Plaintiff contends that the payments are due because of the Agreement and not because of any work that he performed in the six months following his resignation. Indeed, the City would not have paid plaintiff for unused sick leave and vacation pay if he had continued to work for the City.
The Agreement also contained a confidentiality clause which required plaintiff not to disclose any information about the agreement to any current or former city employee. That clause stated:
8. EMPLOYEE and CITY agree that the terms and conditions of this SEPARATION AGREEMENT AND RELEASE shall remain confidential as between the parties and they shall not disclose them to any other person, except as required by law or pursuant to court order. The parties acknowledge that EMPLOYEE had discussed the terms of this agreement before the signatures hereunder were entered, and before confidentiality became required as a part of the AGREEMENT. EMPLOYEE specifically agrees hereafter that he shall not disclose information regarding this SEPARATION AGREEMENT AND RELEASE to any current or former employee of CITY, from the date of this AGREEMENT.
On April 14, 1995, the City made an initial payment of $10,847.57 under the Agreement. That check was a public record and a third party, upon proper request, could have obtained the information contained in the check.
After plaintiff resigned, he saw another city employee, Larry Wilson, at the grocery store. Wilson was aware of plaintiff's dispute with the City and was interested in the amount of sick leave the City had allowed plaintiff when he resigned. Wilson asked plaintiff if he had received a check from the City. Plaintiff answered that he had and that a copy of the check was in his car. Wilson retrieved the check and copied it. Plaintiff knew that Wilson had seen the check and intended for him to do so.
The City contends that plaintiff breached the Agreement when he disclosed the amount of the check to Wilson, and when it learned of the alleged breach, it stopped making payments under the Agreement. Plaintiff contends that he did not disclose anything about the existence of the Agreement or its terms. He states that the check was in the same format as any regular payroll check and that he did not tell Wilson that the City had issued the check pursuant to the Agreement. Plaintiff sues the City to recover the remaining payments due under the Agreement. Defendant counter-claims, asserting that it is entitled to recover the first payment because plaintiff breached the confidentiality clause of the Agreement.
Plaintiff also claims that defendant converted the proceeds of his pension account (the "ICMA account"). The account had an approximate value of $17,831 at the time of plaintiff's resignation. On February 8, 1995, the Franklin County District Court entered a divorce decree which directed plaintiff to pay his former wife $15,511.50, and if he did not do so within a specified period, ordered that the ICMA account be set aside to her. Plaintiff failed to make the necessary payments, and on June 21, 1995, the Franklin County District Court entered an order which set aside the ICMA account to plaintiff's wife.
In its motion to dismiss or for summary judgment, defendant claims that the Court does not have subject matter jurisdiction because plaintiff has artificially inflated his damages to meet the amount in controversy requirement for diversity jurisdiction. Alternatively, defendant seeks a declaration that plaintiff breached the Agreement, that plaintiff is entitled to no further payments, and that plaintiff owes the City for the first payment.
Plaintiff claims...
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