Lujan v. City of Santa Fe

• Decision Date: 24 February 2015
• Docket Number: No. CIV 13–0438 JB/SMV.,CIV 13–0438 JB/SMV.
• Citation: 89 F.Supp.3d 1109
• Parties: Martin LUJAN, Petitioner/Plaintiff, v. CITY OF SANTA FE, Defendant/Respondent.
• Court: U.S. District Court — District of New Mexico

89 F.Supp.3d 1109

Martin LUJAN, Petitioner/Plaintiff

v.CITY OF SANTA FE, Defendant/Respondent.

No. CIV 13–0438 JB/SMV.

United States District Court, D. New Mexico.

Filed Feb. 24, 2015.

As Amended Aug. 4, 2015.

Nathaniel V. Thompkins, New Mexico Firm, LLC, Santa Fe, NM, for Petitioner/Plaintiff.

Luis E. Robles, Robles, Rael & Anaya, P.C., Albuquerque, NM, for Defendant/Respondent.

AMENDED MEMORANDUM OPINION AND ORDER¹

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on the Petitioner Martin Lujan's Appeal Brief, filed September 18, 2013 (Doc. 29)(“Appeal Brief”). The Court held a hearing on October 22, 2013. The primary issues are: (i) whether Administrative Hearing Officer Paula G. Maynes acted fraudulently, arbitrarily, or capriciously when she failed to recuse herself from Plaintiff/Petitioner Martin Lujan's post-termination administrative hearing, or disclose her prior representation of the Defendant/Respondent City of Santa Fe with City Attorney Mark Allen; (ii) whether Ms. Maynes' decision that M. Lujan attempted to obtain City of Santa Fe funds under false pretenses by authorizing the payment of two submitted invoices is fraudulent, arbitrary, or capricious, and supported by substantial evidence; (iii) whether Ms. Maynes' decision that M. Lujan carelessly, negligently, or improperly used City of Santa Fe funds is fraudulent, arbitrary, capricious and supported by substantial evidence; (iv) whether Ms. Maynes' decision that M. Lujan intentionally falsified or mishandled City of Santa Fe records is fraudulent, arbitrary, or capricious, and supported by substantial evidence; (v) whether Ms. Maynes' decision that M. Lujan stole City of Santa Fe funds is fraudulent, arbitrary, or capricious, and supported by substantial evidence; (vi) whether just cause existed for the City of Santa Fe to terminate M. Lujan's employment; and (vii) whether Ms. Maynes' decision was in accord with the law.

The Court will deny M. Lujan's requests in the Appeal Brief in part and grant them in part. First, Ms. Maynes did not act fraudulently, arbitrarily, or capriciously when she failed to recuse herself from M. Lujan's post-termination administrative hearing, or disclose her prior representation of the City of Santa Fe. Second, Ms. Maynes' decision that M. Lujan attempted to obtain City of Santa Fe funds under false pretenses by authorizing payment of two submitted invoices is not fraudulent, arbitrary, or capricious, and substantial evidence supports the decision. Third, Ms. Maynes' decision that M. Lujan carelessly, negligently, or improperly used City of Santa Fe funds is arbitrary and capricious and substantial evidence does not support the decision. Fourth, M. Lujan waived the issue whether Ms. Maynes decision that he intentionally falsified or mishandled City of Santa Fe records was fraudulent, arbitrary, and capricious, and substantial evidence did not support it; if M. Lujan did not waive the issue, however, the Court finds that Ms. Maynes' decision that he intentionally falsified or mishandled City of Santa Fe funds was arbitrary and capricious and substantial evidence did not support it. Fifth, Ms. Maynes' decision that M. Lujan stole City of Santa Fe funds is arbitrary and capricious, and substantial evidence does not support the decision. Sixth, just cause existed for M. Lujan's termination from employment. Seventh, Ms. Maynes' decision was in accord with the law. Consequently, the Court will grant M. Lujan's request in the Appeal Brief regarding Ms. Maynes' conclusions that M. Lujan stole City of Santa Fe funds and carelessly, negligently, or improperly used City of Santa Fe funds, but deny the requests in the Appeal Brief on the remainder of the issues, and leave Ms. Maynes' determination that just cause existed for M. Lujan's termination intact.

FACTUAL BACKGROUND

This case arises out of the City of Santa Fe's termination of M. Lujan's employment after he allegedly attempted to embezzle City of Santa Fe funds. The Court takes its facts from M. Lujan's post-termination administrative hearing that Ms. Maynes conducted. See Reporter's Transcript of Proceedings (Nov. 6, 2012), filed May 23, 2013 (Doc. 8–21); Reporter's Transcript of Proceedings (Nov. 6, 2012), filed May 23, 2013 (Doc. 8–22); Reporter's Transcript of Proceedings (Nov. 6, 2012), filed May 23, 2013 (Doc. 8–23) (collectively “Nov. 6, 2012, Hearing Tr.”); Reporter's Transcript of Proceedings (Nov. 7, 2012), filed May 23, 2013 (Doc. 8–24); Reporter's Transcript of Proceedings (Nov. 7, 2012), filed May 23, 2013 (Doc. 8–25); Reporter's Transcript of Proceedings (Nov. 7, 2012), filed May 23, 2013 (Doc. 8–26); Reporter's Transcript of Proceedings (Nov. 7, 2012), filed May 23, 2013 (Doc. 8–27)(collectively “Nov. 7, 2012, Hearing Tr.”); Reporter's Transcript of Proceedings (Nov. 8, 2012), filed May 23, 2013 (Doc. 8–28); Reporter's Transcript of Proceedings (Nov. 8, 2012), filed May 23, 2013 (Doc. 8–29); Reporter's Transcript of Proceedings (Nov. 8, 2012), filed May 23, 2013 (Doc. 8–30); Reporter's Transcript of Proceedings (Nov. 8, 2012), filed May 23, 2013 (Doc. 8–31)(collectively “Nov. 8, 2012, Hearing Tr.”); Reporter's Transcript of Proceedings (Dec. 3, 2012), filed May 23, 2013 (Doc. 8–32); Reporter's Transcript of Proceedings (Dec. 3, 2012), filed May 23, 2013 (Doc. 8–33); Reporter's Transcript of Proceedings (Dec. 3, 2012), filed May 23, 2013 (Doc. 8–34)(collectively “Dec. 3, 2012, Hearing Tr.”).²

1. M. Lujan's Background with the City of Santa Fe.

M. Lujan was the Municipal Recreation Complex Administrative Manager from approximately January, 2010, until the City of Santa Fe terminated his employment on August 14, 2012. See Nov. 6, 2012, Hearing Tr. at 49:16–20 (Pino, Allen); Nov. 8, 2012, Hearing Tr. at 908:20–909:1 (M. Lujan, Thompkins). M. Lujan also held the position of Interim Division Director for the City of Santa Fe's Recreation Division from October 9, 2010, through August 14, 2012. See Nov. 8, 2012, Hearing Tr. at 908:20–909:1 (M. Lujan, Thompkins). In those capacities, M. Lujan was responsible for helping to create and to manage a multimillion-dollar budget. See Nov. 6, 2012, Hearing Tr. at 49:13–50:24 (Pino, Allen); Dec. 3, 2012, Hearing Tr. at 1029:4–10 (M. Lujan, Allen). M. Lujan was also responsible for reviewing the goods and services that the City of Santa Fe purchased, the quoted prices for those purchases, and the amount that the City of Santa Fe paid for those purchases. See Nov. 6, 2012, Hearing Tr. at 49:13–50:24 (Pino, Allen); id. at 69:25–70:3 (Pino, Allen); Dec. 3, 2012, Hearing Tr. at 1027:9–14 (M. Lujan, Allen). M. Lujan authorized the payments for most of the City of Santa Fe's purchases by signing them. See Nov. 6, 2012, Hearing Tr. at 50:21–24 (Pino, Allen).³ M. Lujan worked for the City Santa Fe in recreation-related positions for eighteen years. See Nov. 8, 2012, Hearing Tr. at 909:5–8 (M. Lujan, Thompkins). During that time, M. Lujan was not demoted, written up, or disciplined in any way. See Nov. 8, 2012, Hearing Tr. at 910:18–21 (M. Lujan, Thompkins).

2. The Events Which Led to M. Lujan's Termination.

The incident that led to M. Lujan's termination involved the City of Santa Fe's sponsorship of the Amateur Athletic Union's 2012 Grand National Wrestling Tournament that took place in Santa Fe from June 6, 2012, to June 9, 2012.See Nov. 8, 2012, Hearing Tr. at 790:6–23 (L. Lujan, Thompkins). The Santa Fe Junior Wrestling Association (“SFJWA”) sponsored the tournament. See Nov. 8, 2012, Hearing Tr. at 771:1–773:25 (L. Lujan, Thompkins). M. Lujan's older brother—Larry Lujan⁴ —is an SFJWA Board member and is the Director of the AAU Grand National Wrestling Tournament. See Nov. 8, 2012, Hearing Tr. at 741:9–21 (L. Lujan, Thompkins).

In 2011, the City of Santa Fe sponsored the Grand National Wrestling Tournament by providing in-kind service contributions and purchasing advertisements in the Tournament's program. See Electronic–Mail Transmission from Martin Lujan to Robert P. Romero at 29 (Feb. 3, 2012), filed May 23, 2013 (Doc. 8–8)(“M. Lujan's Feb. 3, 2012, E-mail”). At all relevant times, the City has a fraud-prevention policy, which states:

An employee should not be involved in the procurement of any goods or services for the City with a business in which a family member ... has a direct financial interest in (owner, partner, officer, director or board member). If the business is one which may be advantageous to the department or City to do business with, the procurement can be handled by the next level up in the chain of command or can be handled by the Purchasing Office. Procurement includes writing and evaluating bids, writing and evaluation of requests for proposals, the acquisition of quotes, and the entering or approval of subsequent purchase requisitions.

City Fraud Prevention Policy Rule 6.3.4, filed May 23, 2013 (Doc. 8–17) (“Anti–Fraud Policy”). Despite R. Romero's knowledge of the Anti–Fraud Policy, and his knowledge of M. Lujan and L. Lujan's familial relationship and their respective positions, R. Romero assigned the brothers to work together on the City of Santa Fe's sponsorship of the 2011 and 2012 Grand National Tournaments. See Nov. 6, 2012, Hearing Tr. at 291:11–18 (Romero, Allen). R. Romero “did not think”⁵ about the Anti–Fraud policy when he tasked M. Lujan with evaluating the sponsorship requests that L. Lujan had submitted, and “didn't expect there to be any fraud.” Nov. 6, 2012, Hearing Tr. at 291:11–292:2 (R. Romero, Allen).

L. Lujan had concerns about working with his brother on the sponsorship requests, because he and his brother “wanted the whole program to go without any problems” and “wanted to show transparency.” Nov. 8, 2012, Hearing Tr. at 867:21–23 (L. Lujan, Allen). L. Lujan did not want people looking at him and his brother, “and pointing fingers, saying that [L. Lujan] was a former city employee.” Nov. 8, 2012, Hearing Tr. at 867:23–868:1 (L. Lujan, Allen). L. Lujan brought the issue...