Woerth v. City of Flagstaff

• Decision Date: 07 August 1990
• Docket Number: CA-CV,No. 1,1
• Parties: Richard WOERTH, Plaintiff-Appellant/Cross-Appellee, v. CITY OF FLAGSTAFF; Dean Treadway and Barbara Jean Treadway, husband and wife, in their individual and official capacity; Frank Abeyta and Margaret Abeyta, husband and wife, in their individual and official capacity, Defendants-Appellees / Cross-Appellants. 88-553.
• Court: Arizona Court of Appeals

Page 297

808 P.2d 297

167 Ariz. 412

Richard WOERTH, Plaintiff-Appellant/Cross-Appellee, v. CITY OF FLAGSTAFF; Dean Treadway and Barbara Jean Treadway, husband and wife, in their individual and official capacity; Frank Abeyta and Margaret Abeyta, husband and wife, in their individual and official capacity, Defendants-Appellees / Cross-Appellants.

No. 1 CA-CV 88-553.

Court of Appeals of Arizona Division 1, Department A.

Aug. 7, 1990.

Review Denied April 23, 1991.

[167 Ariz. 414] Law Office of Lance F. Jacobs by Lance F. Jacobs, Scottsdale, for plaintiff-appellant/cross-appellee.

Mangum, Wall, Stoops & Warden by Robert B. Van Wyck, Flagstaff, for defendants-appellees/cross-appellants.

OPINION

McGREGOR, Judge.

Appellant/cross-appellee Richard Woerth (Woerth) appeals from summary judgment in favor of appellees/cross-appellants City of Flagstaff (Flagstaff), Dean Treadway (Treadway) and Frank Abeyta (Abeyta) (collectively, defendants) on Woerth's claims for breach of employment contract, breach of the implied covenant of good faith and fair dealing, wrongful discharge, and intentional interference with contract. Defendants cross appeal from the trial court's denial of their motion for attorneys' fees.

I.

Flagstaff hired Woerth as a firefighter on June 6, 1984. By January 1986, Woerth had attained the status of permanent employee in Flagstaff's classified service.

On January 8, 1986, federal prosecutors unsealed a criminal indictment alleging that Woerth, individually and in conspiracy with others, had possessed cocaine with the intent to distribute it and had distributed it. Specifically, the indictment alleged that Woerth had distributed a small usable quantity of cocaine to two Flagstaff firefighters on two occasions in the summer of 1985. As a result of the indictment, Treadway, Flagstaff's fire chief, and Abeyta, Flagstaff's city manager, placed Woerth on suspension with pay. Flagstaff then conducted an internal investigation of the possible distribution and use of cocaine within the Flagstaff fire department.

Basing its decision upon the results of the internal investigation, Flagstaff decided to discharge Woerth. On February 3, 1986, Abeyta provided Woerth with written notice of intent to dismiss on the grounds that Woerth violated several Flagstaff personnel rules by possessing, using, distributing and/or arranging for the distribution of illegal drugs to firefighters and others in violation of state and federal law. Woerth requested and received a pre-termination hearing. He failed to convince Flagstaff to retain him, and Abeyta sent Woerth written notice of termination effective February 11, 1986.

Woerth appealed Abeyta's decision to the Flagstaff Personnel Board (the Board). ¹ The Board conducted an adversarial hearing at which Flagstaff and Woerth presented evidence. The Board found that Flagstaff established the following facts by a preponderance of the evidence:

1. During the summer of 1985, Richard Woerth possessed, used, and distributed cocaine to two other firefighters at the O'Shanigan's bar in Flagstaff.

2. During the summer of 1985, Richard Woerth possessed and used cocaine in Page, Arizona.

3. Early in 1984 Richard Woerth used and possessed cocaine at Paul Zanzucchi's house in Flagstaff, Arizona, at a time prior to entering City employment. ²

4. At a time determined by the evidence to be immediately prior to entry on [sic] City employment, but during the examination and selection process, at Matt Zanzucchi's house in Flagstaff, Arizona, Richard Woerth possessed and used cocaine.

5. In approximately December 1984 Richard Woerth purchased and possessed a saleable quantity of cocaine for approximately $1800-$2000 at Matt Zanzucchi's house.

The Board determined that Woerth's conduct violated Flagstaff personnel rules because it discredited and was detrimental to the fire department and recommended that Abeyta should sustain the decision to dismiss Woerth. In a letter dated December 9, 1986, Abeyta and Treadway informed Woerth that they concurred with the Board's recommendation and would not reinstate Woerth as a Flagstaff firefighter.

Woerth subsequently filed a complaint in superior court against Flagstaff for breach of employment contract, breach of the implied covenant of good faith and fair dealing, and wrongful discharge, and against Treadway and Abeyta for intentional interference with contract. In a detailed minute entry, the trial court explained its reasons for granting summary judgment in favor of defendants. Applying an administrative review standard, the trial court held that because the Board's findings and recommendation were not arbitrary, capricious, or an abuse of discretion, Flagstaff was entitled to judgment as a matter of law on Woerth's breach of contract claim. The court also found that no material disputed facts related to the claim for breach of the implied covenant of good faith and fair dealing or the claim for wrongful discharge. Finally, the court held that Woerth failed to identify material disputed issues of fact related to his claim against the individual defendants for intentional interference with contract.

The court, however, denied defendants' request for attorneys' fees, stating that "[w]hile the Court would ordinarily be predisposed to grant attorney's fees in this matter, I feel it would be a hardship on the Plaintiff to pay even a symbolic amount."

Woerth filed a timely appeal, and defendants filed a timely cross-appeal. We have jurisdiction pursuant to A.R.S. §§ 12-120.21.A.1 and -2101.B.

II.

Woerth claims that the trial court erred in granting summary judgment because material facts remain in dispute. When reviewing a summary judgment on appeal, we view the facts and reasonable inferences in a light most favorable to the party against whom the trial court granted summary judgment. United Bank of Arizona v. Allyn, 167 Ariz. 191, 195, 805 P.2d 1012, 1016 (App.1990); Cecil Lawter Real Estate School v. Town & Country Shopping Center Co., 143 Ariz. 527, 533, 694 P.2d 815, 821 (App.1984). If no genuine issues of material disputed facts remain and the moving party is entitled to judgment as a matter of law, we must affirm the decision of the trial court. United Bank, 167 Ariz. at 195, 805 P.2d at 1016.

In Arizona, employment is presumed "at-will" in the absence of a definite term of employment. Arizona recognizes three exceptions to the employment at-will doctrine: (1) the "personnel policy manual" exception; (2) the public policy exception; and (3) the good faith and fair dealing exception. Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370, 375-76, 710 P.2d 1025, 1030-31 (1985). We examine each in turn.

A. Breach of Contract

The parties agree that Flagstaff's personnel policies constituted a contract of employment between Woerth and Flagstaff and that the personnel policies governed that contractual relationship. The parties also agree that, as a non-probationary classified employee, Woerth could be discharged only "for cause." ³ Woerth does not dispute that Flagstaff complied with the dismissal procedures set out in the Flagstaff personnel policies. See Flagstaff, Az., Ordinance No. 1116, Section 105 (1981). Woerth argues, however, that the trial court erred by applying an administrative review standard to the Board's factual findings and to its determination that cause existed for Woerth's discharge. We disagree.

Municipal personnel boards, merit boards, and civil service commissions are not judicial bodies, but administrative bodies performing judicial functions. In re Farish, 18 Ariz. 298, 303-304, 158 P. 845, 847-48 (1916). The decision of an administrative body is final unless a statute authorizes an appeal. ⁴ See Arizona Department of Economic Security v. Holland, 120 Ariz. 371, 372, 586 P.2d 216, 217 (App.1978). No statute authorizes an appeal from municipal personnel board decisions. Nevertheless, under appropriate circumstances, an employee dissatisfied with a city personnel board decision may bring a special action pursuant to Rule 1, Rules of Procedure for Special Actions. See City of Tucson v. Mills, 114 Ariz. 107, 109, 559 P.2d 663, 665 (App.1976); see also Keith v. Civil Service Board, 57 Ariz. 85, 89, 111 P.2d 57, 59 (1941) (use of writ of certiorari to obtain review of city civil service board decision).

The scope of judicial review of city personnel board decisions, however, is limited:

The superior court, in reviewing an administrative determination, may only decide whether the administrative action was illegal in that it was arbitrary, capricious or involved an abuse of discretion. Only where the administrative decision is unsupported by competent evidence may the trial court set it aside as being arbitrary and capricious. The court should neither consider the propriety of the Commission's findings nor substitute its judgment for that of the Commission.

Mills, 114 Ariz. at 111, 559 P.2d at 667 (citations omitted).

However Woerth chose to label his claim, in reality he sought to have the trial court or a jury determine whether Flagstaff had cause to discharge him. The Board, however, made factual findings related to Woerth's actions and decided that Woerth's actions constituted cause for his discharge. Under those circumstances, the only remedy available to Woerth to challenge the propriety of the Board's decision is by special action. ⁵ Therefore, although Woerth denominated this action an original rather than a special action, the trial court properly reviewed Woerth's breach of contract claim under the administrative review standard. See Mills, 114 Ariz. at 111, 559 P.2d at 667.

The record provides competent evidence to support the Board's factual determinations and its conclusion that Woerth's activities constituted cause to dismiss Woerth. Indeed, Woerth does not contend on appeal that the Board's factual findings were unsupported by competent evidence. Absent that showing, neither the trial court...