Fontano v. City of Chicago

• Decision Date: 15 April 1987
• Docket Number: No. 86-1294,86-1294
• Citation: 820 F.2d 213
• Parties: John FONTANO, Plaintiff-Appellant, v. CITY OF CHICAGO, a municipal corporation, and Eugene Barnes, Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 213

820 F.2d 213

John FONTANO, Plaintiff-Appellant, v. CITY OF CHICAGO, a municipal corporation, and Eugene Barnes Defendants-Appellees.

No. 86-1294.

United States Court of Appeals Seventh Circuit.

Submitted April 15, 1987. ^*

Decided May 14, 1987.

Joseph J. Spingola, Joseph J. Spingola, Ltd., Chicago, Ill., for plaintiff-appellant.

E. Wayne Robinson, Acting Corp. Counsel, Chicago, Ill., Mary K. Rochford, Chief Asst. Corp. Counsel, Jennifer A. Keller, Asst. Corp. Counsel, Chicago, Ill., for defendants-appellees.

Before WOOD, COFFEY and RIPPLE, Circuit Judges.

PER CURIAM.

John Fontano was fired from his position with the Chicago Department of Sewers one day before his six-month probationary period was to end. Fontano sued the City of Chicago (City) and his supervisor, Eugene Barnes, claiming that his termination violated various rights which he was entitled to under the United States constitution and Illinois state law. The district court dismissed the complaint for failure to state a federal cause of action and refused to retain jurisdiction over the pendant state claims, 646 F.Supp. 599. The court also denied Fontano's subsequent motion to amend the complaint. Fontano appeals.

I.

The facts, viewed in the light most favorable to Fontano, are as follows. Prior to January 1, 1984, the City employed Fontano as an at-will laborer for the Department of Sewers, a position falling within the classification of Departmental Employment Services (DES). In its 1984 Appropriation Ordinance, the City reclassified Fontano and other DES employees as Probationary Career Services (PCS) employees as of January 1, 1984. The Commissioner of Personnel, Charles Pounian, notified Fontano of this status change in a memorandum dated January 10, 1984. The memorandum informed Fontano that he was to serve a six-month probationary period during which he would be governed by Personnel Rule IX, a copy of which was attached. Rule IX, section 3, provided that, "[a] department head may discharge an employee during the probationary period provided the department head notifies the Commissioner of Personnel in writing." According to section 4 of the Rule, "[a]ny employee who completes a probationary period shall have Career Service status in that title." In addition to the guidelines provided in Rule IX, the memorandum itself informed Fontano that:

B. Your work performance will be rated by your department twice during the six month probationary period. Ratings will be in March and June, 1984. Rating factors include 1) quality and quantity of work, 2) ability to work with others, 3) ability to learn, 4) ability to work safely, 5) initiative and acceptance of responsibility, 6) use of equipment and 7) attendance and punctuality.

If you successfully complete your probationary period you attain full Career Service status in your title [and you will then be entitled to]....

2. Hearings before the Personnel Board in all suspensions of more than 30 days, demotions or discharges.

To Fontano's knowledge, his department never rated his performance during his probationary period. Nonetheless, one day before his probationary period expired, appellee Eugene Barnes, the Acting Commissioner of the Department of Sewers, fired Fontano without giving him any reason. One week later, Pounian notified Fontano by letter that he had been terminated for excessive absenteeism.

Fontano filed suit in the district court, alleging that the defendants deprived him of his constitutional right to due process in violation of 42 U.S.C. Sec. 1983. Fontano claimed that he had obtained a property interest in his expectation of continued employment based upon the combination of his status change, the promise of performance ratings detailed in the January 1984 memorandum, and chapter 25.1, section 25.1-1 of the Municipal Code of Chicago which provides for a merit system of employment. Fontano also alleged violations of state law. The district court dismissed Fontano's due process claim for failure to state a cause of action and dismissed the pendant state claims for lack of jurisdiction. Fontano moved to vacate the district court's order and to file a second amended complaint. The motion was denied. Fontano appeals both the dismissal of his complaint and the denial of his motion to amend.

II.

In order to state a due process claim for his discharge, Fontano must establish that he had a constitutionally protected property interest in the entitlement to continued employment. Perry v. Sindermann, 408 U.S. 593, 599-603, 92 S.Ct. 2694, 2698-2700, 33 L.Ed.2d 570 (1972); Board of Regents of State Colleges v. Roth, 408 U.S. 564, 576-79, 92 S.Ct. 2701, 2708-10, 33 L.Ed.2d 548 (1972). In determining whether Fontano has a property interest, we look to state law. Roth, 408 U.S. at 577, 92 S.Ct. at 2709. As the Supreme Court declared in Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976):

A property interest in employment can, of course, be created by ordinance, or by an implied contract. In either case, however, the sufficiency of the claim of entitlement must be decided by reference to state law.

426 U.S. at 344, 96 S.Ct at 2077 (footnotes omitted); Ohse v. Hughes, 816 F.2d 1144, 1148 (7th Cir. 1987).

The interpretation of state law by a district court judge sitting in the state whose law is in question is entitled to considerable deference. Enis v. Continental Illinois National Bank & Trust Co. of Illinois, 795 F.2d 39, 40 (7th Cir.1986). "Deference is particularly appropriate where the state's supreme court has not spoken to the issue...." Id. Where other district judges in the same state have reached contrary conclusions, as is the case here, however, it is for this court to resolve the contradictions. Id.

The question of whether individuals, such as Fontano, who had been employed by the City for many years before being put on probation under the Career Service scheme, had a property interest in their jobs, has yet to be decided by Illinois courts. See, e.g., Messina v. City of Chicago, 145 Ill.App.3d 549, 561, 99 Ill.Dec. 493, 501, 495 N.E.2d 1228, 1236 (1986). Several federal district courts, however, have addressed the issue. Judge Rovner, in Gutierrez v. City of Chicago, 605 F.Supp. 973 (N.D.Ill.1985), refused to dismiss a similar complaint for failure to state a claim. The judge found that the January 10, 1984 memorandum providing for two performance ratings of probationary employees, combined with the statement that PCS employees would obtain Career Service status at the satisfactory completion of the probationary period, may have created a mutually explicit understanding "that such employees would be fired only for cause." Id. at 977. Judge Rovner found that this "understanding" conflicted with Rule IX, section 3, which allowed for the discharge of a probationary employee at any time provided the reason for the discharge was communicated in writing to the Personnel Commissioner. She therefore refused to dismiss the complaint without more than the City's unsupported assertions regarding the purposes behind the memorandum and the rules. Id. See also Gilberto v. City of Chicago, No. 85 C 2496 (N.D.Ill. Sept. 6, 1985) (Grady, J., following Gutierrez to find that Gilberto had a property interest during probationary period).

In this case, however, Judge Decker rejected the Gutierrez reasoning. Instead, he found there to be no "mutually explicit understanding" between PCS employees and the City regarding their expectation of continued employment since Rule IX, which the memorandum incorporated, provided that a PCS employee could be fired for any reason. Rather than contradictory, Judge Decker found the language in Rule IX and the memorandum compatible; the seven factors in the memorandum merely provided the City with guidelines for evaluating an employee during the transitional context of probationary employment. The judge did not agree that the memorandum created an understanding requiring the City to retain a PCS employee so long as the employee satisfied the seven rating factors. Since Judge Decker found that all of the...