Wurtz v. Beecher Metropolitan Dist.

• Decision Date: 02 October 2012
• Docket Number: Docket No. 301752.
• Parties: WURTZ v. BEECHER METROPOLITAN DISTRICT.
• Court: Court of Appeal of Michigan — District of US

298 Mich.App. 75

825 N.W.2d 651

WURTZ

v.BEECHER METROPOLITAN DISTRICT.

Docket No. 301752.

Court of Appeals of Michigan.

Submitted March 13, 2012, at Detroit.

Decided Oct. 2, 2012, at 9:05 a.m.

Charles A. Grossmann, Flint, for plaintiff.

Landry, Mazzeo & Dembinski, P.C., Farmington Hills, (by David B. Landry and Nancy V. Dembinski), for defendants.

Before: WHITBECK, P.J., and JANSEN and KIRSTEN FRANK KELLY, JJ.

JANSEN, J.

Plaintiff appeals by right an order granting summary disposition to defendants in this action under the Whistleblowers' Protection Act (WPA). ¹ We reverse and remand for further proceedings consistent with this opinion.

I. FACTS AND PROCEDURAL HISTORY

This case pertains to the last two years of plaintiff's employment with Beecher Metropolitan District. The district provides water and sewage services to approximately 4,000 residential and commercial customers near Flint. The three individually named defendants, McClain, Corlew, and Thorn, were three of five elected board members for the district at all times relevant to this case.

On February 1, 2000, plaintiff signed an employment contract with the district. The contract provided that the district would employ plaintiff from February 1, 2000, until February 1, 2010, as the district's administrator. The parties do not dispute that plaintiff was employed for the full 10–year period under the contract, nor do the parties dispute that plaintiff received all compensation to which he was entitled under his contract. Rather, plaintiff alleges that he was discriminated against under the WPA when defendants decided to not renew his contract. Plaintiff alleges that, over the course of a two-year period, he engaged in activities that amounted to whistleblowing under the WPA, and that his contract was not renewed as a consequence of his whistleblowing activity.

A. 2008

In May 2008, plaintiff sent a letter to the Genesee County Prosecutor, the Genesee County Sheriff, and the Mt. Morris Township police chief. The letter alleged that McClain, Corlew, and Thorn had violated the Open Meetings Act (OMA).² Specifically, the letter claimed that plaintiff, in his capacity as administrator, had received a billing statement from an attorney indicating that on April 2, 2008, the attorney had met privately with board members McClain, Corlew, and Thorn. Plaintiff, in his letter, inferred that, because this attorney had no existing arrangement with the district, “a majority of the [board] had met privately ... [with the attorney] to discuss public business.” The letter noted that the board had later voted to hire the attorney. The letter also claimed that the attorney, along with McClain, Corlew, and Thorn, had “attended a ... union negotiating session. Neither [plaintiff], nor any other staff, nor the other 2 members of the Board, knew anything in advance about this meeting, which was not scheduled as a special meeting with the appropriate 18–hour notice to the public.” Plaintiff alleged that, because the April 2 meeting and the subsequent union negotiating session were private meetings involving a majority of the board, those meetings violated the OMA.

It is unclear whether the sheriff or police chief responded to the letter, but David Leyton, the Genesee County Prosecutor, did. He wrote that criminal prosecution was but one remedy for OMA violations and that he did not believe that the events described by plaintiff warranted criminal investigation. The prosecutor accordingly did not act on plaintiff's letter.

B. 2009

In January 2009, plaintiff sent a memorandum to McClain, the board president, proposing an extension and alteration of his employment contract. Plaintiff recommended that the district extend his employment to August 1, 2012, and reduce his salary and benefits, which would save the district about $33,000. At its February 11, 2009 meeting, the board told plaintiff that he could present the amended contract to the board, but at its March 11, 2009 meeting, a motion to have “[plaintiff] draw up an employment agreement with [the board's attorney]” failed; McClain, Corlew, and Thorn voted against the motion.

In May 2009, plaintiff expressed disapproval, in a memorandum sent to the board, about the possible expense to taxpayers of the board members' upcoming trip to San Diego for the American Water Works Association (AWWA) conference. Plaintiff noted that the trip was projected to cost taxpayers $29,000, which included trips for the board members to Sea World and the San Diego Zoo. Moreover, the board members were apparently planning on driving to San Diego for the conference; plaintiff noted that “if gas mileage is given [for the board members to drive], as previously requested, that amounts to over $11,000.00, whereas members can fly from Bishop Airport ... for $280.00 round trip.... Another $4,000.00 could be saved for food and lodging for the nearly ten days requested for travelling [by car].” Plaintiff's memorandum requested that the board pass resolutions detailing the method of compensation for travel, and recommended that the board members be reimbursed only for the price of airfare even if they opted to drive to the AWWA conference.

On July 8, 2009, plaintiff asked the board to hold a special meeting to discuss the possibility of “mutually discontinu[ing]” their relationship, and an attempt at that meeting was held on July 15, 2009. Plaintiff, however, refused to meet with the board because the board had its attorney present for the meeting, and plaintiff interpreted the attorney's presence as a breach of the “gentlemen's understanding” that the meeting would be an open dialogue between the board and plaintiff only. Plaintiff indicated that he was “frustrated” with the board, but wanted to continue his employment with the district and expressed his desire to do so.

In August 2009, after the AWWA conference, plaintiff met with members of the Genesee County Sheriff's Office to discuss his belief that the board members had acted improperly or illegally regarding reimbursements for their trip to the AWWA conference. For example, plaintiff was concerned that the board members had gone to the San Diego Zoo, Sea World, and lavish dinners with family and friends, all at taxpayer expense. Additionally, plaintiff told the sheriff's office that four of five board members actually flew to San Diego, but had reported that they drove, accordingly receiving an amount of per diem compensation and reimbursement for mileage that they were not entitled to claim.

Following defendant's meeting with the sheriff's office, a criminal investigation of the board members ensued. At least one article about the board members' reimbursements from the AWWA conference appeared in the Flint Journal. Public attendance at board meetings increased, and at those meetings members of the public began openly questioning board members about their travel expenses.

On November 11, 2009, Thorn made a motion to not extend plaintiff's employment contract beyond its expiration and to begin looking for a new administrator. The motion passed the board three votes to two. McClain, Corlew, and Thorn voted in favor of the motion.

C. 2010

Plaintiff's last day of employment with the district was January 31, 2010. On January 19, 2010, plaintiff filed a complaint alleging that defendants had violated the WPA by not renewing his employment contract; plaintiff alleged that the board's decision to not renew his contract was retaliation for his reporting suspected violations of, inter alia, the OMA, the Freedom of Information Act,³ and other Michigan statutes.

On October 18, 2010, plaintiff served defendants with a request for production of employment contracts and records. Among other things, plaintiff asked for “the written contracts ... [of] non-union employees who were employed anytime with the District between 1990 to the present.” Defendants did not produce these documents.

On November 15, 2010, defendants filed a motion for summary disposition under MCR 2.116(C)(10), in which they argued that plaintiff did not suffer an adverse employment action because “there is no evidence that Defendants discharged, threatened, or discriminated against the Plaintiff regarding his compensation, terms, conditions, location or privileges of employment.” In any case, defendants argued, the board had no obligation to renew plaintiff's contract. Defendants also argued that the board's decision to not renew plaintiff's employment contract was made for the first time in March 2009, well before any of the events surrounding the AWWA conference and reimbursements. That decision, according to defendants, was merely “reiterated” in November 2009, when the board formally voted to not renew defendant's employment.

Concurrent with the time frame of this case, the criminal case against the board members, including McClain, Corlew, and Thorn, related to the AWWA conference expenses and reimbursements, continued. The trial judge dismissed the charges against McClain, and a jury returned verdicts of not guilty in favor of Corlew, Thorn, and the other board members. In its response to defendants' summary disposition motion, plaintiff argued that summary disposition was premature because at the time he served them with discovery requests, the criminal case against McClain, Corlew, and Thorn was still pending, and “the individual Defendants... exercised their 5^th Amendment rights” and did not respond to discovery requests. Plaintiff asserted that “[n]ow, the Defendants, after taking the Plaintiff's deposition, but not allowing their own, [are] refusing to provide the requested information....”

The trial court granted defendants' motion for summary disposition on December 6, 2010. After noting that whether nonrenewal of an employment contract amounts to an adverse employment action under Michigan law appears to be an issue of first impression, the trial court explained:

[I]n this case the contract for the plaintiff did...