James Balbach v. Akron Metropolitan Housing Authority

• Decision Date: 06 February 1987
• Docket Number: 87-LW-0397,12292
• Parties: James BALBACH, et al., Plaintiffs-Appellees, v. AKRON METROPOLITAN HOUSING AUTHORITY, et al., Defendants-Appellants.
• Court: Ohio Court of Appeals

James BALBACH, et al., Plaintiffs-Appellees, v. AKRON METROPOLITAN HOUSING AUTHORITY, et al Defendants-Appellants.

No. 12292.

87-LW-0397 (9th)

Court of Appeals of Ohio, Ninth District Summit

February 6, 1987

Appeal from Judgment entered in the Common Pleas Court County of Summit, Ohio; Case Nos. CV 83 11 3447, CV 83 11 3509.

Timothy A. Shimko, Cleveland, for plaintiffs.

Nickolas Andreeff and Richard Cunningham, Akron, for defendants.

DECISION AND JOURNAL ENTRY

This cause was heard upon the record in the trial court. Each error assigned has been reviewed and the following disposition is made:

CASTLE Presiding Judge.

Defendants-appellants, Janet Purnell, Frank Fela and the Akron Metropolitan Housing Authority (AMHA), appeal the trial court's order entering judgment on the jury's verdict rendered in favor of plaintiffs-appellees, James Balbach, Dr Leon Friedman and Larry Bramlett.

Appellees were administrative employees for AMHA. Appellee Friedman had been employed by the Akron Board of Education since 1952 as personnel manager. In 1979, David Levey, then executive director of the AMHA, asked Friedman to leave the School Board and become personnel supervisor at the AMHA. The testimony revealed that Friedman was assured by Levey that the job was non-political. He was also given a copy of the 1977 AMHA Employment Policy Manual which contained a clause providing that an employee could only be discharged for "just cause." (This Manual was amended in 1981.) No fixed durational period of employment was specified at this time. Friedman accepted the job. In August of 1982, Levey resigned under allegations of corruption. Purnell was hired to replace him. Friedman was terminated in November of 1982. His letter of termination stated that his "philosphy was not compatible with that of the executive director." Plaintiff's Exh. # 5; T. 214.

Appellee Bramlett had been employed as a maintenance superintendent at the Cathedral of Tomorrow in Cuyahoga Falls. He was solicited for his job at AMHA by a friend of the then legal counsel for AMHA, Herbert Newman. At a job interview with Levey and Newman, he was assured of the non-political nature of the position of AMHA Operations Administrator. He was also assured of job security and given a copy of the 1977 Employee Policy Manual. T. 807. He was not hired for any fixed or definite period of time. He left his job at the Cathedral to work at AMHA. On April 11, 1983, Janet Purnell terminated him and replaced him with someone who later obtained an architectural license.

At the time he was solicited to work for AMHA, appellee Balbach was vice-president and chief fiscal officer with Euclid National Bank. Like Friedman and Bramlett, he was assured of the non-political nature of the position and given a copy of the 1977 Manual. Also as in the case of his co-plaintiffs, no fixed duration of employment was specified. He left his job at Euclid National to become finance administrator at AMHA. He was terminated by Purnell along with Bramlett, "for the good of the agency." T. 2237-38.

On November 22, 1983, Balbach and Bramlett filed a complaint against appellants. On November 30th, Friedman filed a separate action. The complaints contained counts for breach of implied contract, wrongful discharge, and libel and slander. The actions were subsequently consolidated and an amended complaint was filed including an additional count alleging violations of appellees' constitutional rights in contravention of Section 1983, Title 42, U.S.Code.

Attached to the appellees' complaint was a document entitled "AMHA Personnel Policy Manual." This manual was adopted by the AMHA Board of Trustees in 1981. It was an amended version of the 1977 manual which was in effect when appellees were hired. Appellees maintained that this document was part of a contract of employment which existed between themselves and appellant, AMHA. Pages fifteen and sixteen of the 1981 manual provide for a graduated disciplinary procedure to be followed prior to an employee's termination. Purnell did not observe this disciplinary procedure before terminating appellees, and they claimed that this constituted a breach of the purported contract.

Shortly before the trial, the judge held a motion hearing. At the commencement of this motion hearing, he made the following pronouncement:

" * * *.

"Subsequent to pretrial procedures, including a review of the admissions contained in the pleadings and briefs of Counsel, all Counsel requested that the Court advise them prior to trial as to whether the AMHA, by its executive director, had the unlimited authority to terminate the Plaintiffs' employment at will and without any proof of fault by an employee.

"Based upon a review of the current law, the Court makes the following finding.

"The Personnel Policy Manual, which was duly adopted by the Board of Directors, clearly recognizes and supports the inclusion (sic) that the Plaintiffs possess property rights in continued employment with the AMHA irrespective of any finding based upon current public policy.

"The Court finds that the Plaintiffs do possess such constitutionally protected property rights and they may not be deprived of such rights except pursuant to constitutionally adequate due process procedures.

"These require due notice of alleged wrongful acts, an opportunity to respond, and before discharge, a hearing and determination that the charges are true and support the proposed discharge.

"This is my ruling. This is and will be my ruling with respect to the matters requested by all Counsel for all the parties in this case, and this ruling is now being placed upon the record herein."

" * * *." Transcript of Motion Hearing at 2-3.

The case proceeded to trial. Near the conclusion of appellees' case, the libel and slander count was settled with appellants' insurer and voluntarily dismissed. At the close of all the evidence, appellees voluntarily dismissed their wrongful discharge claims. The trial court then entertained cross motions for directed verdicts. It granted the motion of appellees stating:

" * * *.

"First the motion of the Defendant for a directed verdict with respect to the claims to the^with respect to the claim of the Plaintiff, based upon some contract premise, is overruled.

"The Court finds that the Personnel Policy Manual which was duly adopted by the Board of Trustees or its directors of the AMHA and, obviously, was intended by the parties that would be the parties effective^it was intended by the employer that the Akron Metropolitan Housing Authority and the employees, that would be all employees, that this should form the basis of the relationship between the Akron Metropolitan Housing Authority and all employees; and that this clearly recognizes and supports the conclusion that the Plaintiffs herein, as do all other employees of the Akron Metropolitan Housing Authority, possess constituted (sic) protected property rights in continued employment, and they may not be deprived of such rights, except pursuant to constitutional adequate due process procedures.

"Now, the^really, the contention of the Defendants in this case is that this actual manual applies, apparently, to everybody else except the three Plaintiffs in this case. They haven't said as much, but what it amounts to is that. In other words, practically every other employee there has the rights as provided for in the manual to not be discharged except to be by following the procedure set forth in the manual, and, really, based upon some failure to comply with some of the duties that they were to perform in connection with this case.

"I perceive, really, what the contention of the Defendants are that this really is a contract, the manual is a contract as it applies to all the other employees; but I think classified and unclassified, so that each of them would have the right to the enforcement of the provisions of this manual in law, provided they are not given them by the Akron Metropolitan Housing Authority directly. The manual itself specifies it applies to all employees, so that I find the matter of law that this manual really constitutes a contract as far as the employee^as far as the Plaintiffs are concerned in this particular case; that I see no place at all in the document that really speaks for itself that excludes them, and I am satisfied that they are included under the manual. So that, therefore, the^we find that the manual does constitute a contract and that the three Plaintiffs in this case actually are covered by and, therefore, part of that particular contract.

"So that the motion for the^by the Plaintiffs are made here and now will be sustained, and the jury will be so advised."

" * * *." T. 2447-2450.

Only the issue of damages was submitted to the jury. The jury returned verdicts in favor of all the appellees. It awarded all the appellees together a total of $597,500 in compensatory damages against appellants collectively; $150,000 in punitive damages against Purnell individually; and $60,000 in punitive damages against Fela individually.

Augmented by the trial court's post-trial award of prejudgment interest and attorney fees, the total damages came to $1,000,126.49. We reverse.

Assignments of error one and two both pertain to the trial court's disposition of the cross motions for directed verdicts and will therefore be addressed together.

ASSIGNMENTS OF ERROR

"I.The trial court erred in failing to grant defendants' motions for a directed verdict."

"II.The trial court erred in directing a verdict for plaintiffs on all issues of liability."

Ohio law follows the general rule that an employee who is hired for an indefinite term may be discharged at any time, with or without cause. Phung v. Waste...