Prager v. LaFaver
| Decision Date | 10 April 1998 |
| Docket Number | Civil Action No. 97-4216-DES. |
| Citation | 5 F.Supp.2d 906 |
| Parties | David PRAGER, III, Plaintiff, v. John D. LaFAVER, Secretary of the Kansas Department of Revenue, in His Personal Capacity, Defendant. |
| Court | U.S. District Court — District of Kansas |
Louis F. Eisenbarth, Alan V. Johnson, Myron L. Listrom, Sloan, Listrom, Eisenbarth, Sloan & Glassman, Topeka, KS, for Plaintiff.
Thomas V. Murray, Barber, Emerson, Springer, Zinn & Murray, L.C., Lawrence, KS, for Defendant.
David Prager, III, a former tax attorney for the Kansas Department of Revenue, brings this 42 U.S.C. § 1983 action seeking damages for the alleged deprivation of his First Amendment free speech rights and Fourteenth Amendment liberty interest.
This matter is before the court on defendant's motion pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss (Doc. 5). In his opposing memorandum, plaintiff suggests that since resolution of the motion requires consideration of matters outside the pleadings, it should be treated as a motion for summary judgment pursuant to Fed.R.Civ.P. 56. The record, however, is insufficiently developed for the court to treat defendant's motion as one for summary judgment since neither party has complied with the requirements of Fed.R.Civ.P. 56 and D.Kan. Rule 56.1. To conclude otherwise would result in a potentially unjust and unfair resolution of this matter. Accordingly, the court shall exclude matters outside the pleadings and treat defendant's motion as a motion to dismiss.
The court has considered the briefs of counsel, plaintiff's factual allegations and applicable law, and determines that oral arguments-would not materially assist the court in its decision.
The court may not dismiss a cause of action for failure to state a claim under Rule 12(b)(6) unless it appears beyond doubt that the claimant can prove no set of facts supporting its claim which would entitle it to relief. H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 249-50, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989). In considering a Rule 12(b)(6) motion, the court must assume as true all well-pleaded facts, as distinguished from conclusory allegations, and must draw all reasonable inferences in favor of the nonmovant. Housing Auth. of the Kaw Tribe v. City of Ponca City, 952 F.2d 1183, 1187 (10th Cir.1991); Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir.1984). The issue in reviewing the sufficiency of a complaint is not whether the plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support its claim. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).
The pertinent allegations in plaintiff's amended complaint, which the court accepts as true, are summarized as follows:
Mr. Prager had been an Attorney III, classified civil service employee with permanent status with the Kansas Department of Revenue since 1988. On October 31, 1996, Mr. Prager delivered a memo to his supervisor, Richard Oxandale, General Counsel for the Department of Revenue. This memo pertained to a corporate income tax appeal ("Tax Appeal A") for which Mr. Prager was responsible. The memo stated that the tax laws had been misinterpreted by Mr. Oxandale and Secretary LaFaver in another tax appeal ("Tax Appeal B"), which was being handled by another attorney in the Department of Revenue. Both Tax Appeal A and Tax Appeal B involved the same issue, namely, whether a federal agreement to extend the federal assessment limitation period extends the time period for a Kansas refund claim under Kan.Stat.Ann. § 79-3230(e).
In his memo of October 31, 1996, Mr. Prager informed Mr. Oxandale that little or no legal research had been done in arriving at the erroneous interpretation of Kan.Stat. Ann. § 79-3230(e) in Tax Appeal B, resulting in an illegal tax refund of $1.0 million to Taxpayer B. Mr. Prager's memo provided three pages of legal analysis, explaining why Kan.Stat.Ann. § 79-3230(e) had been erroneously interpreted by Mr. Oxandale and Secretary Lafaver in Tax Appeal B. Mr. Prager's memo went on to request a meeting with Mr. Oxandale and Secretary LaFaver to discuss their erroneous interpretation of Kan. Stat.Ann. § 79-3230(e) in Tax Appeal B, and to determine that the law should be properly followed in Tax Appeal A. Mr. Oxandale never arranged such a meeting.
On December 18, 1996, Mr. Prager sent a twelve-page letter to Kansas Governor Bill Graves, which included a number of lengthy attachments. The letter to Governor Graves addressed several issues which Mr. Prager alleges were of public concern. One of those issues was a well-publicized income tax controversy involving La Siesta Foods, Inc. Mr. Prager asserted that the tax abatement in the La Siesta case was illegal and that Secretary LaFaver was the one who had agreed to and caused the illegal La Siesta abatement. Mr. Prager also asserted that the Kansas Department of Revenue's administrative process had been circumvented by politics. Finally, Mr. Prager expressed his concern over taxpayers' perception of unfair treatment by the Kansas Department of Revenue.
On January 8, 1997, Secretary LaFaver sent a letter to Mr. Prager, suspending Mr. Prager from his employment with pay pursuant to Kan.Admin.Regs. 1-10-7. In the first sentence of this letter, the Secretary stated, "I am in receipt of your unfortunate correspondence to the Governor regarding an array of tax issues at the Department of Revenue." Referring to Mr. Prager's letter to the Governor, the Secretary went on to say, "You have imagined events that did not occur, and you have characterized actions of the Governor and me that I took with full legal advice as `illegal.'" The Secretary's letter further stated:
That you chose to send such a letter to the Governor without discussing it with the General Counsel or me reflects poorly upon your judgment and your willingness and ability to work as a member of this team. Clearly the letter requires a thorough review of matters alluded to in the letter as well as other matters relating to the fairness and propriety of actions the department has taken in corporate tax litigation.
On February 6, 1997, Mr. Prager filed a timely appeal with the Kansas Civil Service Board, contending that his suspension by Secretary LaFaver was contrary to Kan.Stat. Ann. § 75-2973, the Kansas "whistle-blower" statute. Specifically, Mr. Prager contended that his suspension was in retaliation for his reporting to Mr. Oxandale and Governor Graves that Secretary LaFaver had violated the tax laws in regard to the La Siesta tax case.
On March 17, 1997, Mr. Prager sent another letter to Governor Graves, expressing Mr. Prager's concerns about a possible illegal tax refund in Tax Appeal A. This same issue had also been the subject of Mr. Prager's earlier memo of October 31, 1996, to Mr. Oxandale. The March 17 letter to Governor Graves stated in part:
I am writing to inform you that in a currently pending corporate income tax administrative appeal ("Appeal A") it is apparent that Secretary LaFaver or Richard Oxandale, or both, intend to act so as to violate the law or violate their legal obligation to the State. The anticipated violation is likely to result in substantial injury to the State through the payment of an illegal refund, which could exceed $1.0 million in Appeal A.
. . . . .
In providing professional, legal representation in the course of my employment with the State of Kansas, the State of Kansas has always been and is my client. While Secretary LaFaver and Mr. Oxandale may have their own opinions regarding the La Siesta appeal, Appeal A and B or other tax appeals, it is my duty to differ with their opinions when they cause the tax laws to be violated. Please act to prevent Secretary LaFaver and Mr. Oxandale from causing an illegal refund to be issued in Appeal A.
Mr. Prager sent copies of his March 17 letter to both Secretary LaFaver and Mr. Oxandale.
On May 9, 1997, Secretary LaFaver sent an eleven-page letter to Mr. Prager, advising Mr. Prager that he would be terminated from his employment with the Department of Revenue effective May 16, 1997. In the first paragraph of this letter, the Secretary summarized his reasons for discharging Mr. Prager, saying:
It is my belief that your actions as an attorney with this Department have evinced an overall lack of judgment, insubordination, violation of confidentiality in revealing private tax matters and matters concerning our former attorney-client relationship, acting contrary to the interests of your client and exhibiting personal conduct detrimental to the state service which has caused undue disruption of the normal operation and proper functioning of this Department, all and each of which constitutes gross misconduct on your part, and conduct grossly unbecoming an attorney with this Department.
On June 6, 1997, Mr. Prager filed a timely consolidated appeal with the Civil Service Board, contending that his suspension and termination from employment were unreasonable and in violation of Kan.Stat.Ann § 75-2973. Mr. Prager's appeal to the Civil Service Board is still pending.
On June 12, 1997, an article on Mr. Prager's appeal of his termination from employment was published in The Topeka Capital-Journal. The article in The Topeka Capital-Journal quoted several passages from Secretary LaFaver's termination letter of May 9, 1997, to Mr. Prager, including the following:
`Pursuant to my review of allegations made in your December 18, 1996, letter and memorandum, it has now become apparent to me that you have in fact engaged in a pattern of abusive and at times ruthless tactics in dealing with taxpayers and their representatives, and that this has been occurring for years.
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