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Hunter v. Town of Mocksville

United States District Court, M.D. North Carolina

February 21, 2017

TOWN OF MOCKSVILLE, NORTH CAROLINA; ROBERT W. COOK, in his official capacity as Administrative Chief of Police of the Mocksville Police Department and in his individual capacity; and CHRISTINE W. BRALLEY, in her official capacity as Town Manager of the Town of Mocksville and in her individual capacity, Defendants, and THE INTERLOCAL RISK FINANCING FUND OF NORTH CAROLINA, Intervenors.


          THOMAS D. SCHROEDER, District Judge.

         This case is before the court on various post-trial motions of the parties and a proposed intervenor following a jury verdict for Plaintiffs and the court's award of equitable relief in this action for wrongful discharge in violation of the First Amendment under 42 U.S.C. § 1983 and State law. The purpose of this memorandum opinion and order is to resolve all outstanding motions so that a final judgment may be entered.

         I. BACKGROUND

         A more complete recitation of the background is set forth in the court's August 12, 2016 memorandum opinion and order (Doc. 176) and need not be repeated here.

         Based on this court's rulings on post-trial equitable relief, and incorporating the information submitted by the parties at the court's request (Doc. 178), Plaintiffs' recovery against the Town of Mocksville (“Town”) and Defendants Robert W. Cook and Christine W. Bralley[1] as to Plaintiffs' First Amendment Free Speech claim under § 1983 (first claim for relief) and wrongful termination claim under North Carolina law (third claim for relief) is as follows:

Kenneth L. Hunter:
Compensatory Damages: $805, 706
Front Pay: $211, 893
Rick A. Donathan:
Compensatory Damages: $310, 830
Front Pay: $197, 523
Jerry D. Medlin:
Compensatory Damages: $288, 293
Front Pay: $176, 299

         In addition, on their § 1983 claims each Plaintiff was awarded, and shall recover, $10, 000 in punitive damages against Defendants Cook and Bralley, individually, for a total of $20, 000 per Plaintiff. (Doc. 167.)

         In the current motions before the court, the following issues are raised. First, Plaintiffs Donathan and Medlin ask the court to reconsider its denial of reinstatement of their employment. (Doc. 191.) Second, the Interlocal Risk Financing Fund of North Carolina (“Fund”), the Town's municipal risk pool trust carrier which provides liability coverage for the Town, moves to intervene in order to argue that its policy limits total insurance coverage for Plaintiffs' combined claims to $1 million. (Doc. 195.) Third, the Town argues that its governmental immunity makes it liable only to the extent it has insurance coverage and that the court is precluded from awarding judgment for any amount in excess of such coverage. (Doc. 186.)

         Each issue will be addressed in turn.

         II. ANALYSIS

         A. Motion for Reconsideration and Reinstatement

         Plaintiffs Donathan and Medlin move the court to reconsider its post-trial decision to deny their request for reinstatement to their previous employment as lieutenants in the Mocksville Police Department (“MPD”). (Doc. 191.) Both men had been promoted to that position just before their termination. They argue that since the court's ruling, two factual circumstances relied upon by the court have changed: Town Manager Bralley retired from her position, and even more recently a MPD lieutenant has departed, thus creating an open position. (Doc. 204-1 at 2.)[2] The Town continues to oppose reinstatement. It relies on the opinion expressed by its current Chief of Police, Todd Penley, that reinstatement “would result in hostility and antagonism within the [MPD]” because the litigation has “damaged the relationships between the plaintiffs and individuals in the local law enforcement community to such an extent that reinstatement of the plaintiffs would jeopardize public safety.” (Doc. 197-1 at 2.) The Town also argues that no funding exists to create a new officer position and states that it does not wish to terminate any current officer in order to reinstate either Plaintiff. (Id.) Of course, to the extent there is an opening within the MPD, the latter concerns would be moot.

         As the court acknowledged earlier, reinstatement is the preferred remedy. (Doc. 176 at 11.) Reinstatement was declined in part because there was no position available, Defendants indicated there was no budget money to fund additional positions, and the Town Manager opposed it. The Town also presented evidence that, in its view, a working relationship would be infeasible in light of all that has transpired. That was based in part on the opinion of Bralley, who has since left. (See Doc. 170-1 at 1 (Bralley testifying that the trial “damaged the relationships between the plaintiffs and individuals employed by the Town, ” making reinstatement “unworkable”).) Chief Penley also stated that mutual trust is vital to effective police work (Doc. 170-2 at 2), that the events of the case “damaged the relationships between the plaintiffs and individuals in the local law enforcement community, ” and that reinstatement “would result in hostility and antagonism within the Department” (id. at 1-2).

         As to Medlin, there is evidence that his relationship with the MPD following these events has only deteriorated. On August 28, 2016, after trial in this case, Medlin posted on social media that Mocksville is a “crooked [expletive] hole of a town.” (Doc. 197-1 at 2.) On November 13, 2016, he offered another online posting that questioned law enforcement's actions as to an active investigation, an action Medlin seems to acknowledge was at best ill-advised. (Id.) Chief Penley finds these statements “unprofessional and incompatible with employment as a Mocksville police officer.” (Id.) The Town argues that these actions reinforce its concern that Medlin lacks trust within the MPD.

         The court accepts the Town's statement that trust within a law enforcement department is serious. See Wootten v. Virginia, No. 6:12-cv-00013, 2016 WL 7496145, at *3 (W.D. Va. Dec. 30, 2016) (finding unique need for deference to law enforcement decisionmaking as to personnel in the chain of command), appeal docketed, No. 17-1117 (4th Cir. Jan. 26, 2017). MPD officers testified at trial that Medlin was “insubordinate” because he refused to follow orders (Doc. 37-1 at 3-4; Doc. 37-2 at 5), used MPD property for personal use (Doc. 37-1 at 3-4, 6), and colluded with Hunter to intimidate fellow MPD employees (id. at 3-4; Doc. 37-2 at 5). An additional problem for Medlin is that he is no longer certified as a law enforcement officer and thus lacks the minimum qualification to be an MPD officer. (Doc. 197-1 at 2.) Considering the complete record as to Medlin and considering his negative post-trial comments about the Town and ongoing law enforcement, the court will not change its ruling.

         Donathan is in a more favorable posture, however. Testimony at trial revealed he is a decorated officer. Donathan received the “Silver Star” in 2007 for his involvement in saving several elderly residents of a nursing home during a fire. For his actions, he was inducted into the National Police Hall of Fame and received a letter of commendation from then-President George W. Bush. Donathan also received the “outstanding officer of the year award” in 2002 and 2007. The Davie County Sheriff, Andy Stokes, whom the court found credible, testified that he knew Donathan personally when they both worked the nursing home fire and was “very impressed” by him. The trial evidence revealed that Donathan was invited to Chief Cook's house a month before he was terminated, told he was a good officer, promoted to lieutenant, and advised that he was likely to be promoted to captain. Cook warned him, however, that he needed to adhere to MPD politics. (Doc. 43-2 at 8.)

         Concerns of trust expressed as to Medlin[3] are not evident with respect to Donathan. At trial, Defendants contended that they terminated Donathan largely because he was distracted by his operation of his personal business. The jury necessarily rejected this conclusion, and in any event there is no indication that Donathan still operates this business.[4] Unlike Medlin, Donathan remains a certified law enforcement officer, ready to go to work. It has been over five years since his termination. Unlike as to Medlin, the Town has not offered any specific example of animosity as to Donathan; indeed, Chief Penley encountered him after the trial and told him he has “no preconceived notions” about him and an “open door” if he wished to talk. (Doc. 197-1 at 2-3.) Any lingering resentment within the MPD as to Donathan has likely dissipated, and he would start with a new Chief of Police who was not involved in the MPD at the time of the events leading to his termination. It is thus difficult to say that the employment relationship is irreparably damaged as to Donathan. Moreover, Chief Penley's concerns about any damaged relationships between other Plaintiffs and local law enforcement do not appear to be an issue with respect to Donathan.

         However, the Town acknowledged during the February 1, 2017 telephonic hearing that the only MPD position presently available is at the entry level.[5] Despite the court's inquiry, counsel for Plaintiffs would not commit that Donathan (or Medlin) was interested in that position. As the court noted before, it is disinclined to order immediate reinstatement to a position where there are no funds to support it or it would require the displacement of a current employee. (Doc. 176 at 11-12 (citing Duke v. Uniroyal, Inc., 928 F.2d 1413, 1423 (4th Cir. 1991); Roush v. KFC Nat'l Mgmt. Co., 10 F.3d 392, 398 (6th Cir. 1993)).) The court will therefore not require the Town, which operates a small police department, to fund a new position or displace a current lieutenant.

         Having carefully considered Plaintiffs' request in light of the new circumstances and conscious of the law's preference for reinstatement, the court will order that the Town reinstate Donathan to a lieutenant's position upon the next available opening. Until then, Donathan will be entitled to the equitable relief of front pay up to the expiration of that award. Spagnuolo v. Whirlpool Corp., 717 F.2d 114, 121 (4th Cir. 1983) (explaining that district court's order that the employer reinstate employee to a comparable position if it so chose and pay the employee-plaintiff in the meantime was “fully authorized”); Patterson v. Am. Tobacco Co., 535 F.2d 257, 269 (4th Cir. 1976) (ordering that employees who were unlawfully denied promotions receive pay until they “obtain a job commensurate with their status”); see also Briseno v. Cent. Tech. Cmty. Coll. Area, 739 F.2d 344, 348 (8th Cir. 1984) (remanding to district court to order that plaintiff be reinstated to a comparable position and be paid “monthly payment equal to the difference between what he would have earned in a comparable position and the amount that he earns in mitigation of damages” until he is placed in that position).

         If Donathan is returned to his former position, his award of front pay must be prorated, as the remedies are mutually exclusive. His front pay award of $197, 523 was broken down into future loss of compensation and benefits ($89, 063), future loss of retirement benefits ($88, 631), and future loss of supplemental separation allowance ($19, 829). (Doc. 178-2.) The court will exercise its authority to make a reasonable approximation of present value in determining front pay, Xiao-Yue Gu v. Hughes, STX Corp., 127 F.Supp.2d 751, 763 (D. Md. 2001), and will simply divide Donathan's total award of front pay ($197, 523) by the number of months it covered (21) to arrive at a prorated amount of $9, 405 per month. He is thus entitled to that monthly amount until he is reinstated or until the 21 month front pay period expires, whichever occurs first.

         B. Intervention by the Fund

         The Town enjoys sovereign immunity from damages claims arising from actions of their officers and employees committed while performing a governmental function. Clayton v. Branson, 153 N.C.App. 488, 493, 570 S.E.2d 253, 256-57 (2002). Under North Carolina law, the Town waives its immunity to the extent it has purchased insurance. N.C. Gen. Stat. § 160A-485; Combs v. Town of Bellhaven, 106 N.C.App. 71, 73, 415 S.E.2d 91, 92 (1992). Beyond the extent of its insurance coverage, however, there is no waiver. Wilhelm v. City of Fayetteville, 121 N.C.App. 87, 89, 464 S.E.2d 299, 300 (1995); see also Cunningham v. Riley, 169 N.C.App. 600, 602, 611 S.E.2d 423, 424 (2005) (“A county may waive sovereign immunity by purchasing liability insurance, but only to the extent of coverage provided.” (citations omitted)). North Carolina law prohibits the entry of judgment against a municipality to the extent of the municipality's immunity. See N.C. Gen. Stat. § 160A-485(c) (“No judgment may be entered against a city in excess of its insurance policy limits on any tort claim for which it would have been immune but for the purchase of liability insurance pursuant to this section.”). Thus, the parties agree that it is incumbent on the court to determine the extent of the Town's insurance coverage before entering final judgment.

         The Fund seeks to intervene as of right, and permissively, pursuant to Federal Rules of Civil Procedure 24(a)(2) and (b)(1)(B), respectively, to argue the limits of coverage. (Doc. 195.) It argues that failure to permit intervention would impair its ability to protect the Fund's interests. (Doc. 196 at 2.) Plaintiffs oppose intervention, contending that the motion is untimely and unnecessary because the Fund's position is adequately advocated by Defendants. (Doc. 202 at 2-3.) It argues further that if intervention is permitted, no additional delay or briefing should be allowed. (Id. at 3.)

         “Under Rule 24(a)(2), a district court must permit intervention as a matter of right if the movant can demonstrate ‘(1) an interest in the subject matter of the action; (2) that the protection of this interest would be impaired because of the action; and (3) that the applicant's interest is not adequately represented by existing parties to the litigation.'” Stuart v. Huff, 706 F.3d 345, 349 (4th Cir. 2013) (quoting Teague v. Bakker, 931 F.2d 259, 260-61 (4th Cir. 1991)). Under Rule 24(b), the court may permit anyone who “has a claim or defense that shares with the main action a common question of law or fact” to intervene on timely motion. Fed.R.Civ.P. 24(b)(1)(B). “In exercising its discretion, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights.” Fed.R.Civ.P. 24(b)(3). Thus, where a movant seeks permissive intervention as a defendant, the movant must satisfy three requirements: (1) the motion must be timely; (2) the defenses or counterclaims must have a question of law or fact in common with the main action; and (3) intervention must not result in undue delay or prejudice to the existing parties. See Wright v. Krispy Kreme Doughnuts, Inc., 231 F.R.D. 475, 479 (M.D. N.C. 2005); Solo Cup Operating Corp. v. GGCY Energy LLC, Civil No. WDQ-12-3194, 2013 WL 2151503, at *2 (D. Md. May 15, 2013); Shanghai Meihao Elec., Inc. v. Leviton Mfg. Co., 223 F.R.D. 386, 387 (D. Md. 2004).[6] Trial courts are directed to construe Rule 24 liberally to allow intervention, where appropriate. Feller v. Brock, 802 F.2d 722, 729 (4th Cir. 1986) (noting that “liberal intervention is desirable to dispose of as much of a controversy involving as many apparently concerned persons as is compatible with efficiency and due process” (citations and internal quotation marks omitted)); Capacchione v. Charlotte-Mecklenburg Bd. of Educ., 179 F.R.D. 505, 507 (W.D. N.C. 1998) (same).

         The scope of coverage under the Fund's insurance policy is surely an interest in the action that would be impaired by the court's interpretation of the policy. Plaintiffs argue, nevertheless, that the Town is an adequate advocate for the Fund's position. In light of the potential conflict of interest between the Town, as insured, and the Fund, as insurer, ...

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