Mowery v. City of Carter Lake, No. 19-2014

CourtCourt of Appeals of Iowa
Writing for the CourtBOWER, Chief Judge.
PartiesDOREEN DENISE MOWERY, Plaintiff-Appellee, v. THE CITY OF CARTER LAKE, IOWA, a Municipality, GERALD WALTRIP, JOHN "PAT" PATERSON, MARY SCHOMER, FRANK CORCORAN, and RONALD CUMBERLEDGE, Individuals, Defendants-Appellants.
Decision Date03 March 2021
Docket NumberNo. 19-2014

DOREEN DENISE MOWERY, Plaintiff-Appellee,
v.
THE CITY OF CARTER LAKE, IOWA, a Municipality, GERALD WALTRIP,
JOHN "PAT" PATERSON, MARY SCHOMER, FRANK CORCORAN, and
RONALD CUMBERLEDGE, Individuals, Defendants-Appellants.

No. 19-2014

COURT OF APPEALS OF IOWA

March 3, 2021


Appeal from the Iowa District Court for Pottawattamie County, Timothy O'Grady, Judge.

The defendants appeal an adverse judgment in this action by a former employee for breach of contract, promissory estoppel, and retaliatory discharge in violation of public policy. AFFIRMED ON CONDITION AND CASE REMANDED.

Robert M. Livingston and Kristopher K. Madsen of Stuart Tinley Law Firm, LLP, Council Bluffs, for appellants.

Marc A. Humphrey of Humphrey Law Firm, P.C., Des Moines, for appellee.

Heard by Bower, C.J., and Tabor and Mullins, JJ.

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BOWER, Chief Judge.

Former city clerk Doreen Mowery sued the City of Carter Lake, Gerald "Jerry" Waltrip, John "Pat" Paterson, Mary Schomer, Frank Corcoran, and Ronald Cumberledge (collectively "the defendants") for breach of contract, promissory estoppel, and retaliatory discharge in violation of public policy. The defendants appeal an adverse jury verdict, contending the district court erred in failing to direct a verdict in their favor on each claim or, in the alternative, to order remittitur of duplicate damages awarded by the jury.

The defendants assert that, assuming there was a contract which provided for severance if Mowery's employment was "terminated" during the five-year term, "this case is a case where [Mowery] was not reappointed [as city clerk]. She wasn't terminated. She wasn't fired. She wasn't discharged." The jury rejected the defendants' argument, finding specifically the failure to reappoint Mowery was a violation of public policy and Mowery's refusal "to pay dual compensation to Councilwoman Mary Schomer" was "a determining factor for her termination on January 18, 2016." There is substantial evidence to support the jury's findings and conclusions. However, the jury awarded duplicative damages for back pay. We affirm on all issues except remittitur, and we conditionally affirm the trial court's denial of the defendants' motion for new trial.

I. Background Facts and Proceedings.

Pursuant to Carter Lake City Ordinance 20.01, "At its first meeting in January following the regular city election the [city] council shall appoint by majority vote a city clerk to serve for a term of two years." Compensation is "as established by resolution of the council."

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Mowery was appointed city clerk in 1978, 1980, 1982, 1984, and 1986. Waltrip was elected as mayor in 1986. Waltrip and Mowery had a very contentious relationship. Mowery resigned her position in 1988 due to Waltrip's treatment of her. Waltrip remained mayor through 1993.

In 2002, Mowery was approached by Carter Lake's city clerk to help with getting the city's financial books in order and board meeting minutes completed, which had not been kept current for about two years. Mowery was working for an accounting firm at the time. The city arranged to pay the accounting firm for Mowery's time during the two months it took her to complete the tasks.

While she was helping the city, then-Mayor Emil Hauser asked Mowery to return to Carter Lake as city clerk. Mowery did not want to leave her well-compensated employment with the accounting firm to return to the city clerk position unless given some assurances against arbitrary removal. The mayor told her to write up "what it would take" for her to return. Mowery provided a list, which included, in part, a "[five]-year contract with a [six]-week severance package to include full pay, reimbursement for unused vacation and sick pay, and complete benefits (health, dental, vision, life)"; an annual salary with a 2% pay increase annually on January 1 for the term of the contract; three weeks of vacation starting January 2003; funds to attend professional organizations; and a list of priorities and expectations from the mayor and council. The mayor and council approved,

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and Mowery returned as city clerk on June 3, 2002, and was reappointed in 2004 and 2006.1

On January 11, 2007, the city council approved a "Letter of Understanding-Compensation" signed by then-Mayor Russell Kramer and Mowery. The 2007 letter of understanding provided, in part:

1. Employee was hired to serve as the City Clerk, effective June 3, 2002.
2. Employee is an employee-at-will, serving at the pleasure of the Mayor and City Council, as set out in the Code of Iowa and City Ordinances. This is not a contract for employment.
3. The position of City Clerk is a salaried position, ineligible for overtime and comp time . . . [setting out salary and annual increases through January 1, 2012].
4. Additional benefits are as follows: [setting out vacation, administrative leave, holidays and sick leave, health insurance, and life insurance].
5. Employee will be evaluated on an annual basis at the same time as the other City Department Heads.
6. If the Employee's services are terminated by the Employer, the Employee will be granted a [four]-month severance package to include full pay, reimbursement for unused vacation and sick pay, and complete benefits of health, dental, vision, and life insurance.
7. Employer agrees to budget funds for attendance at [professional organizations.]
8. This Letter of Understanding contains all the terms of employment between the parties. Any changes must be in writing to be effective.

Mowery and the mayor signed the letter of understanding on February 9. Mowery was appointed in 2008, 2010, and 2012.

On May 21, 2012, the city council approved a new "Letter of Understanding-Compensation," which was signed by Mayor Kramer and Mowery. The following terms were included:

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1. Employee was appointed to serve as the City Clerk, effective upon mutual agreement of compensation package and by council approval on June 3, 2002.
2. Employee is an employee-at-will, serving at the pleasure of the Mayor and City Council, as set out in the Code of Iowa and City Ordinances. This is not a contract for employment.
3. The position of City Clerk is a salaried position, ineligible for overtime and comp time. The current salary for the position is $68,500.00 annually. Pay increases will be conditioned upon continuing employment, and satisfactory reviews, of the Employer. Pay increases will be given effective January 1 of each year and will be negotiated with the council prior to January 1 of each year.
4. Additional benefits are as follows:
a. [Two hundred] hours of vacation annually (effective on January 1 of each year) with no carryover of unused hours. Upon retirement or resignation the employee will be paid for any unused vacation time.
b. [Eighty] hours of annual administrative leave, with no carryover of unused administrative leave, effective on January 1 of each year.
c. Holiday leave will be granted as set out in the Employee Handbook.
d. Employee shall earn four hundred eighty (480) hours of sick leave per year with no carryover of unused hours, beginning in the tenth year of employment and every year thereafter.
e. Upon retirement or resignation the employee will be paid for any unused sick time. . . .
. . . .
5. A performance evaluation will be conducted by the Mayor and Council on an annual basis at the same time as the other City Department heads.
6. If the Employee's services are terminated by the Employer, during the five-year term of this agreement, the Employee will be granted [twelve] months' severance pay. Severance package to include full pay, reimbursement for unused vacation and sick pay and complete benefits of health, dental, vision and life insurance.
. . . .
8. This Letter of Understanding contains all of the terms of employment between the parties. Any changes must be in writing to be effective.
9. The term of this Letter of Understanding is for a five year period beginning June 3, 2012 and ending June 2, 2017.

In the fall of 2013, Waltrip was again elected mayor of Carter Lake. Prior to Waltrip taking office in January 2014, a woman who worked on his election

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campaign dropped several boxes at the city clerk's counter with the comment, "These are for Doreen so she can pack up her stuff." However, Mowery was reappointed in 2014 and continued to serve as city clerk. Cumberledge was a member of the council at the time and voted "no" on Mowery's appointment. Mowery and Waltrip's working relationship remained difficult. Waltrip did not approve of the council's use of letters of understanding. He was vocal about his belief that Mowery had "too much authority." The minutes from a December 16, 2014 council meeting note: "Council member [Ed] Aldmeyer stated that since the mayor has taken office, he believes he has been bullying the city clerk. He also thinks the mayor has a target on the clerk's position and her since before he took office."

In November 2015, three new members were elected to the city council—Schomer, Corcoran, and Paterson. They would join incumbent council members Cumberledge and Barbara Melonis. At the time of her election, Schomer was employed as a librarian in the Carter Lake Library and was paid by the city.

Mowery's duties as city clerk included being the city treasurer "responsible for the safe custody of all funds of the City in the manner provided by law" and the "accurate account of all disbursements, money or property, specifying date, to whom, and from what fund paid."2 Mowery received a comment from a citizen concerned whether Schomer could be paid as both a city council member and as a librarian.3 Mowery informed the person the city had done it before but referred

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the person to the city attorney, the league of municipalities, and the attorney general. Mowery then received a call from the league of municipalities, which Mowery directed to City Attorney Joe Thornton and asked him to "take care of the matter."

On November 10, 2015, Thornton wrote a memorandum addressed to the mayor and city...

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