Speckman v. City of Indianapolis

• Decision Date: 15 June 1987
• Docket Number: No. 49A04-8605-CV-155,49A04-8605-CV-155
• Citation: 508 N.E.2d 1336
• Parties: David L. SPECKMAN, Appellant (Plaintiff Below), v. CITY OF INDIANAPOLIS, Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 1336

508 N.E.2d 1336

David L. SPECKMAN, Appellant (Plaintiff Below), v. CITY OF INDIANAPOLIS, Appellee (Defendant Below).

No. 49A04-8605-CV-155.

Court of Appeals of Indiana,

Fourth District.

June 15, 1987.

Rehearing Denied July 30, 1987.

James S. Downing, Peterson Haramy Cline & Shoup, Indianapolis, for appellant.

Gary W. Bippus, Asst. Corp. Counsel, City-County Legal Div., Indianapolis, for appellee.

MILLER, Judge.

David L. Speckman, employed as a director of Brookside Community Center for the City of Indianapolis Department of Parks and Recreation, was discharged by the City following Speckman's voluntary payment of an $88.00 rental fee to the City on February 17, 1982. Speckman claims he paid this sum to the City to prevent prosecution of his assistant, Barry Owens, after Owens allegedly rented the center to a group for social and recreational purposes, collected the fee, and failed to turn the rental fee over to the City. Owens resigned. Speckman brought four claims against the City alleging his discharge without a pre-termination hearing was defamatory and contrary to public policy (Count I), a breach of his employment contract (Count II), and a deprivation of both his property interest in continued employment (Count III) and liberty interest in his name and reputation (Count IV). The City moved to dismiss, under Trial Rule 12(B)(6), Counts II, III and IV and moved to strike, under Trial Rule 12(F), paragraphs related to discharge in Count I. After a hearing, the trial court granted the City's combined motion. ¹

Speckman appeals and argues the grant of the City's T.R. 12(B)(6) motion to dismiss for failure to state a claim upon which relief may be granted was erroneous as a matter of law because Speckman established he was not an at-will employee and had an enforceable employment contract which required just cause for discharge. Speckman also argues he established a constitutionally protected property interest in continued employment and therefore due process requires a pre-termination hearing. Further, Speckman argues he established a constitutionally protected liberty interest in his good name, reputation, honor and integrity and due process requires a pre-termination hearing.

We find Speckman's complaint alleged sufficient facts (1) to establish he had a valid, enforceable employment contract, (2) to establish he was not an at-will employee, and (3) to survive the City's 12(B)(6) motion. Therefore, we reverse the trial court's dismissal, and remand with instructions to reinstate Counts II, III, and IV of Speckman's amended complaint.

FACTS

David L. Speckman was employed by the City of Indianapolis Department of Parks and Recreation and was initially discharged on December 19, 1979. Speckman notified the City of his wrongful discharge claim and negotiations resulted in a settlement agreement signed March 17, 1981. This agreement provided in part:

"NOW, THEREFORE, it is agreed that in consideration of the mutual covenants and agreements herein set forth, the parties hereto do hereby agree as follows:

1. The City of Indianapolis hereby reinstates David L. Speckman as an employee 2. Effective with his reinstatement, David L. Speckman shall be credited with 274 hours of accrued sick pay;

of the City of Indianapolis in its Department of Parks and Recreation effective March 9, 1981. David L. Speckman will be employed as Assistant Director, Municipal Gardens, and will be paid an annual salary equal to that paid Director, i.e., presently $13,165.41. In the event the position of Director, Municipal Gardens, becomes vacant during David L. Speckman's tenure of employment with the City of Indianapolis, he shall possess the right of first refusal to the vacancy;

3. Effective with his reinstatement, David L. Speckman shall be credited with 93.38 hours of accrued paid vacation time;

4. The City of Indianapolis shall pay to David L. Speckman as damages the sum of $7114.00. David L. Speckman hereby agrees to accept the said sum in full settlement of all claims or demands which he may have against the City of Indianapolis. Upon payment of the full amount hereinbefore specified, David L. Speckman shall execute and deliver to the City of Indianapolis a release of all claims, debts or demands, including specific claims of tortious conduct such as libel, slander and defamation of character, which he may have against the City of Indianapolis from the beginning of time to the day of the date of such release;

5. That upon reinstatement, David L. Speckman shall strive to competently perform the duties required of him as an employee of the City of Indianapolis and the City of Indianapolis shall deal with David L. Speckman as it would any other employee pursuant to the City of Indianapolis Personnel Policies and Procedure Manual;

6. By execution of this Settlement Agreement, the City of Indianapolis does not admit the violation of any law, the commission of any tort or the breach of any contractual term." (Record, p. 22-23).

Speckman returned to work on March 9, 1981 as assistant director of Municipal Gardens and was later promoted to center director at Brookside Community Center. Ten months after returning to work, Speckman was on paid vacation leave from December 5, 1981 through December 22, 1981 when questions arose concerning facility rental and rental fees. Speckman's assistant, Barry Owens, allegedly rented Brookside Center while Speckman was on vacation in violation of City procedures by failing to issue a permit and to turn over the rental fee to the City. When Speckman returned to work, Owens was on paid vacation leave. When Owens returned to work, the Department of Parks and Recreation gave Owens the choice to resign or be prosecuted, and he resigned effective January 29, 1982.

Speckman was a personal friend of Owens and feared Owens would be prosecuted. Three weeks after Owens resigned, Speckman voluntarily came forward and tendered to the City on February 17, 1982 the $88.00 rental fee allegedly withheld by Owens. Speckman's discussion at that time with his supervisors led to an employee disciplinary report, which stated in part:

"Explain specific circumstances requiring disciplinary action.

On Wed. Feb. 17, 1982, all the factors involved in the mishandling of public monies was revealed when David Speckman indicated that he held the $88.00 (illegible) between R.C.A. and Brookside Center. At that time, it was learned that Barry Owens rec'd the money in Dec. 81 and a week or so later supposedly gave it to David Speckman. At this point, Barry Owens, Assistant Director to David Speckman, resigned on Jan. 14, 1982 and now Mr. Speckman is being charged with the following: For not making proper deposit or notifying Supervisor pertaining to the $88.00 and the permit. Comment: David Speckman did turn in the $88.00 and was given a receipt and change for a one-hundred dollar bill on 2-17-82.

Disciplinary Action Taken:

Discharge group III(46) unlawful or negligence of handling public monies. Termination, effective February 22, 1982." (Record, p. 25)

Speckman was discharged for "unlawful or negligent handling of public monies" on February 22, 1982. No pre-termination hearing was held.

During the months of February and March, 1982, the City, through employees Joseph Wynns, Parks Department Administrator of Recreation, and Virginia Burnett, permit office supervisor, made statements to the press and to other employees that Speckman had engaged in dishonest or criminal activity in handling public funds and that he had collected and failed to turn over to the City money from groups renting the Center for recreational and social purposes.

On March 5, 1985, Speckman filed an amended wrongful discharge action alleging he was entitled to, but did not receive, a pre-termination hearing and that his discharge was defamatory and contrary to public policy (Count I) and in breach of the settlement agreement and contrary to the City of Indianapolis Personnel Policies and Procedures Manual (Count II). Speckman also claimed the City's failure to provide him with a pre-termination hearing deprived him of his property interest in continued employment (Count III) and his liberty interest in his good name and reputation (Count IV). Speckman sought reinstatement, back pay and fringe benefits, restoration of seniority, damages for pain and mental anguish, damages to reputation, and costs.

On April 11, 1985, the City filed a Combined Motion to Dismiss and to Strike Portions of Plaintiff's Amended Complaint, a T.R. 12(B)(6) motion alleging Counts II, III, and IV failed to state a claim upon which relief could be granted, and a T.R. 12(F) Motion to Strike Paragraphs 9, 13, and 15 of Count I as redundant, immaterial, impertinent, or scandalous.

The trial court heard oral argument on the City's combined motion to dismiss and strike and granted the motion on May 6, 1985. The order book entry reads:

Parties by Counsel, Arguments heard, Court orders Defendant to produce personnel file of Barry Owens. Court grants Defendant's motion to dismiss as to Counts II, III, and IV of Plaintiff's amended complaint. Court grants motion to strike as to paragraphs # 9, 13 and 15 of Count I of Plaintiffs amended complaint. (Record, p. 47)

The trial court denied Speckman's motion to revise the above entry to create a final judgment, then granted Speckman's Motion to Voluntarily Dismiss with prejudice Count I in order to render the trial court's earlier dismissal a final judgment subject to appeal.

Issues

Speckman now raises three issues on appeal:

I. Whether the trial court's dismissal of Count II for failure to state a claim upon which relief could be granted was erroneous as a matter of law because Speckman's complaint alleged facts which established an enforceable written employment contract with the City.

II. Whether the trial court's dismissal of Count III for failure to state a claim upon which relief could be granted was erroneous as...