In re McKibben
| Decision Date | 23 April 1999 |
| Docket Number | Adversary No. A-96-5068.,Bankruptcy No. 95-51088 |
| Citation | 233 BR 378 |
| Parties | In re Billy and Tommie McKIBBEN, Debtors. Tommie Lois McKibben v. Titus County Appraisal District, J.W. Terrell, Jr. Toby Abney, Jack Blackburn, Hulen Mike Reynolds and Gaylon Thompson. |
| Court | U.S. Bankruptcy Court — Eastern District of Texas |
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Glen Patrick, McNally & Patrick, L.L.P., Tyler, TX, for the debtors.
William M. Buechler and Cynthia S. Buechler, Austin, TX, for defendants.
In this adversary proceeding, Tommie Lois McKibben seeks damages from the Titus County Appraisal District pursuant to 11 U.S.C. § 525. She alleges that the Appraisal District wrongfully terminated her employment as a result of her bankruptcy filing. Section 525 provides in pertinent part that:
.. a governmental unit may not., terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title.., solely because such .., debtor is or has been a debtor under this title . . .
Tommie Lois McKibben seeks actual damages from the Appraisal District for her lost wages that resulted from the alleged unlawful termination of her employment.
Additionally, she seeks damages from the individual members of the Board of Directors of the Appraisal District pursuant to 42 U.S.C. § 1983. She alleges that the individual board members deprived her of her right, guaranteed by § 525 of title 11, to not be discriminated against in her employment because of her bankruptcy filing. Section 1983 provides in pertinent part that:
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State . . . subjects, or causes to be subjected, any citizen of the United States . . . to the deprivation of any rights . . . secured by the Constitution and laws, shall be liable to the party injured in an action at law . . .
In addition to joint liability for actual damages, she seeks punitive damages, costs and attorneys fees from the individual board members of the Appraisal District.
Prior to the trial of this case, the Defendants moved the Court to dismiss the case for failure to state a claim upon which relief can be granted. The Motion challenged the Court's jurisdiction and raised the defense of qualified immunity for the individual defendants. The Motion to Dismiss was heard by the late C. Houston Abel wherein he determined that jurisdiction was proper and deferred a ruling on the defense of qualified immunity with a requirement that Plaintiffs' replead that cause of action. The Plaintiffs did amend their pleadings and Defendants then filed a Motion for Summary Judgment which again asserted the defense of qualified immunity as to the individual board members. The Motion for Summary Judgment was also denied on the basis that the Defendants were not able to demonstrate that as a matter of law, they were entitled to assert the defense of qualified immunity. The individual Defendants, while denying the merits of the case, maintain their defense of qualified immunity in this action.
Prior to the trial of this case, the parties stipulated to the following facts:
1. Titus County Appraisal District is a political subdivision of the State of Texas.
2. Tommie Lois McKibben was employed as the chief appraiser of the Titus County Appraisal District from September 1991 to March 4, 1996.
3. On August 28, 1995 Tommie Lois McKibben filed a voluntary petition under Chapter 13 of the United States Bankruptcy Code.
4. Tommie Lois McKibben was terminated from her employment as chief appraiser of the Titus County Appraisal District on March 4, 1996 by the unanimous vote of the Board of Directors.
5. The Board of Directors of the Titus County Appraisal District on March 4, 1996 consisted of J.W. Terrell, Jr., Toby Abney, Jack Blackburn, Hulen Mike Reynolds and Gaylon Thompson.
6. At the time Tommie Lois McKibben's employment was terminated she was receiving an annual salary of $42,650.00, an annual car allowance of $3,600.00, medical insurance at an annual cost of $2,325.00 and a retirement benefit of $2,968.00 per year.
The case came before the Court and was heard pursuant to regular setting and following the presentation of evidence, the parties were instructed to file briefs after which the matter would be taken under advisement. This opinion constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052 and disposes of all issues in the adversary proceeding.
11 U.S.C. § 525(a) prevents a governmental unit from terminating a person's employment as a result of filing bankruptcy. Section 101(27) of the Bankruptcy Code defines governmental unit to include a State or department, agency or instrumentality of a State. The parties stipulated that the Titus County Appraisal District is a political subdivision of the State of Texas. Accordingly, the Appraisal District is a governmental unit under § 525 of title 11.
In a case such as this, it is unlikely that a governmental unit, aware of the provisions of § 525(a) will admit that the only reason for its action was the bankruptcy. In re Metro Transp. Co., 64 B.R. 968 (Bkrtcy.E.D.Pa.1986). One must look to the objective evidence presented and draw reasonable inferences from that evidence as to the subjective intent of the parties involved. This Court was presented with considerable testimony and documentary evidence from which an analysis can be made.
Plaintiff served as chief appraiser of the Titus County Appraisal District for four and one-half years. In May of 1994 Plaintiff's overall job performance was rated as "very good" by the Board of Directors of the Appraisal District. (Exhibit 15). In July of 1995 the Directors listed Plaintiff's job performance as "above average" and noted that the "overall development of the Appraisal district improved." (Exhibit 16). In July of 1995 the Directors approved the budget for the upcoming year which included an increase in salary for Plaintiff. The Directors noted a need for improvement in public relations in the July 1995 job evaluation. This concern was noted in her rating as to that aspect of her job, but it was still rated as satisfactory. In fact, as to each factor used to rate her performance, the lowest rating given was satisfactory. In no job evaluation presented to the Court was she ever given an unsatisfactory rating in any factor of job performance. The Board Members testified that the assistant chief appraiser, Matt Davis, was the primary source of public relations problems for the District.
On November 22, 1995, the Mount Pleasant Daily Tribune printed a front page article disclosing Plaintiff's bankruptcy. (Exhibit 17). Mike Reynolds was quoted in the article as being unsure how the bankruptcy would affect Plaintiff's job. "I will have to study it," he said. "It is a grave concern but I'm not sure what it means." In the same article Mike Reynolds stated that Plaintiff's work had been satisfactory "on all accounts" and credited Plaintiff with "dramatically improving the district." Toby Abney testified that the bankruptcy was embarrassing to the Plaintiff, to the Appraisal District, to everyone including himself. Jack Blackburn didn't like surprises. The portion of his deposition testimony that was read into evidence revealed that he was surprised by the bankruptcy filing. Gaylon Thompson was shocked by the amount of the debt. J.W. Terrell admitted on cross examination that he was concerned with the way the Plaintiff was viewed in the public.
The first meeting of the Board of Directors after the November 22, 1995 article was held on January 22, 1996. Plaintiff testified that in the meetings prior to January of 1996, she was not excluded from executive sessions unless the Board was evaluating her performance. However, beginning with the January 22, 1996 meeting the Board excluded Plaintiff from at least a portion of the executive sessions.
The defendants' testified that the Plaintiff's bankruptcy was not discussed during the executive sessions of the Board meetings. However, their testimony concerning the executive sessions is inconsistent and conflicts with the documentary evidence. Exhibit 4, the agenda for the January 22, 1996 meeting, shows that one of the items to be considered at the meeting was a complaint from Mr. Cromwell against an employee of the district. (Exhibit 4). The minutes of the January 22, 1996 meeting show that Philip Cromwell presented a letter to the Board (Exhibit 11). The letter was introduced into evidence as Exhibit 21. (Exhibit 21). In the letter, Mr Cromwell called on the Board to discharge Plaintiff as chief appraiser for resorting to bankruptcy protection.1 Plaintiff testified that after the letter was given to the Board they went into executive session. Before Plaintiff was excluded from the executive session she heard Mr. Abney asked Mr. Blackburn if he saw the second page of the letter to which Mr. Blackburn replied yes. Mr. Abney admitted during the first day of the trial that this exchange took place at the January 22, 1996 meeting.
Exhibit 11 shows that the Board went into executive session on January 22, 1996 to consider litigation and personnel matters. All of the defendants who testified during the first two days of the trial stated that they could not remember any discussions about personnel during the executive session of the January 22, 1996 meeting. However, during the third day of the trial Mr Terrell claimed that Plaintiff was excused from the January 22, 1996 executive meeting because he had some things he wanted to say to the rest of the Board about the Plaintiff And yet, Mr. Terrell had testified earlier that he did not remember what was said about personnel at the January 22, 1996 meeting.
Exhibit 11 also shows that at the conclusion of the January 22, 1996 meeting Plaintiff was informed that a...
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