Price v. Dewey-Humboldt, Town of et al

Filing 20

ORDER granting in part and denying in part 15 Plaintiff's Motion to Amend. It is ordered granting amendments to Counts 3 and 4, and denying amendments to and dismissing Counts 2, 5, 6, 7, and 8. The claims remaining in this action are Counts 1, 3, and 4. Signed by Judge Frederick J Martone on 10/19/12.(TLJ)

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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Dennis Price, Plaintiff, 10 11 vs. 12 Town of Dewey-Humboldt, et al., 13 Defendants. 14 ) ) ) ) ) ) ) ) ) ) ) ) No. CV-12-8086-PCT-FJM ORDER 15 16 17 On June 26, 2012, we entered an order granting defendants’ partial motion to dismiss. 18 We now have before us plaintiff’s motion to amend the complaint (doc. 15), defendants’ 19 response (doc. 16), and plaintiff’s reply (doc. 17). Defendants contend that the motion to 20 amend must be denied because the amendments would be futile. 21 Count 3 – Free Speech, First Amendment 22 In Count 3 of the amended complaint, plaintiff alleges that defendants terminated him 23 in retaliation for exercising his first amendment right to report defendants’ wrongdoing. We 24 dismissed that claim as against the individual defendants based on our conclusion that the 25 complaint failed to implicate either Hiles or McBrady in the decision to terminate plaintiff. 26 Plaintiff attempts to cure this deficiency by adding factual allegations that defendants Hiles 27 and McBrady were personally involved in the decision to terminate him. Amended Compl. 28 ¶¶ 39-48. Defendants do not contend that these new allegations are insufficient to cure the 1 pleading deficiencies. Instead, they argue that the motion to amend should be denied because 2 it is untimely. We disagree. We are at the early stages of this litigation and the amendment 3 was filed in accordance with our Rule 16 scheduling order. There is no suggestion that any 4 prejudice has resulted. We also reject defendants’ conclusory statement that the Town 5 Council’s actions in terminating plaintiff fall within “the scope of legislative immunity.” 6 Response at 4. This is insufficient in itself to oppose the motion to amend. Plaintiff’s motion 7 to amend Count 3 is granted. 8 Count 4 – Free Speech - Arizona Constitution 9 Plaintiff alleges in amended Count 4 that his right to free speech under the Arizona 10 Constitution, Article 2, § 6, was violated when he was terminated for engaging in 11 whistleblowing activity. Defendants argue that this claim must be dismissed because 12 Arizona courts do not recognize a damages remedy for violations of the Arizona 13 Constitution. Even if we assume this is true, plaintiff requests equitable as well as monetary 14 relief. Therefore, defendants’ argument is insufficient to show that plaintiff’s amendment 15 to Count 4 would be futile. Count 5 – Breach of Contract 16 17 In amended Count 5 plaintiff asserts a new claim for breach of contract. He alleges 18 that the “Town’s policies, procedures, customs, and usages created a contractual relationship 19 with Plaintiff,” Amended Compl. ¶ 96, and that he “relied on contractual provisions,” id. ¶ 20 98. Defendants argue that these allegations are insufficient to establish a facially plausible 21 claim for breach of contract. 22 Under the Arizona Employment Protection Act (“AEPA”), employment relationships 23 are at-will unless modified by the parties either in a written contract, employment handbook 24 or manual, expressly restricting the right of either party to terminate the employment 25 relationship. A.R.S. § 23-1501(A)(2) 26 Plaintiff alleges that the Town “has a policy that accords a review or an appeal to non- 27 probationary employees who were dismissed from employment,” Amended Compl. ¶ 53, and 28 a policy, practice, or custom that prevents its non-probationary employees from being -2- 1 terminated without cause, id. ¶ 54, or alternatively deems non-probationary employees 2 “permanent employees,” id. ¶ 55. Under AEPA, it is not enough to show a practice or 3 custom. Plaintiff must establish a written contract, expressly restricting the right of a party 4 to terminate the employment relationship. And while such an agreement can be contained 5 in an employee handbook, plaintiff’s speculation that the Town has a “policy, practice, 6 custom, or usage” that prevents non-probationary from being terminated without cause,” id. 7 ¶ 54, is insufficient to state a plausible claim under Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 8 S. Ct. 1937, 1949 (2009). Plaintiff’s motion to amend Count 5 is denied. Count 6 – Breach of Covenant of Good Faith and Fair Dealing 9 10 In amended Count 6, plaintiff proposes to state a claim for breach of the covenant of 11 good faith and fair dealing. For the same reasons discussed above, we deny plaintiff’s 12 motion to amend Count 6. Count 7 - Intentional Interference With Contract 13 14 Plaintiff asserts a new claim for the tort of intentional interference with contractual 15 relations in amended Count 7.1 He alleges that there was an employment contract between 16 the Town and himself, and that Hiles and McBrady interfered with that contract when they 17 caused the Town to terminate his employment. 18 “[A] cause of action in tort is available to a party to any contract, at-will or otherwise, 19 when a third party improperly and intentionally interferes with the performance of that 20 contract.” Wagenseller v. Scottsdale Mem’l Hosp., 147 Ariz. 370, 387, 710 P.2d 1025, 1042 21 (1985). Generally, an employee acting within the scope of his employment cannot be liable 22 for interference with his employer’s contract because he stands in the shoes of his employer 23 and not as a third party. 24 First, we have already concluded that plaintiff has failed to sufficiently plead that a 25 contract existed between the parties. Moreover, there is no “third party” in this case. 26 Plaintiff acknowledges that “[a]t all times pertinent to this Complaint, Hiles and McBrady 27 28 1 Plaintiff incorrectly designated this claim as Count 6. -3- 1 were acting within the course and scope of their official duties with the Town.” Amended 2 Compl. ¶ 10. Therefore, acting on behalf of the Town, they could not have interfered with 3 the Town’s contract. That Hiles and McBrady were Town council members rather than 4 employees, is a distinction without a difference. Finally, plaintiff has not alleged that Hiles 5 or McBrady’s actions were “improper” within the meaning of Wagenseller, 147 Ariz. at 388, 6 710 P.2d at 1043 (holding that improper conduct includes acting maliciously or for purely 7 private advantage). Plaintiff’s motion to amend Count 7 is denied. Count 8 – Due Process Violation – 42 U.S.C. § 1983 8 9 Plaintiff alleges in amended Count 82 that his termination violated his 14th 10 Amendment right to due process. In order to assert such a claim, plaintiff must establish a 11 property interest in his continued employment. See Bd. of Regents v. Roth, 408 U.S. 564, 12 576, 92 S. Ct. 2701, 2708 (1972). Plaintiff alleges only that the “Town has a policy, practice, 13 custom, or usage that prevents its nonprobationary employees from being terminated without 14 cause.” Amended Compl. ¶ 54. This conclusory and speculative allegation is insufficient 15 to state a plausible claim. Plaintiff’s motion to amend Count 8 is denied. Count 2 – Violation of A.R.S. § 23-1501(3)(D) 16 17 Plaintiff alleges in amended Count 2 that his termination violates A.R.S. § 23- 18 1501(3)(D). On September 29, 2012, the Arizona Legislature amended § 23-1501 to 19 eliminate § 23-1501(3)(D). See 2012 Ariz. Legis. Serv. Ch. 321 § 30 (H.B. 2571) (West). 20 Therefore, the cause of action under § 23-1501(3)(D) is no longer viable. Amended Count 21 2 is dismissed.3 22 IT IS ORDERED GRANTING IN PART AND DENYING IN PART plaintiff’s 23 motion to amend (doc. 15). It is ordered granting amendments to Counts 3 and 4, and 24 25 2 26 3 27 Plaintiff incorrectly designated this claim as Count 7. We note that plaintiff’s claim in Count 1 for wrongful discharge under A.R.S. § 231501(3)(C) has also been modified by amendment. We do not dismiss this claim, however, because the substance of the claim remains cognizable by amended sections of the statute. 28 -4- 1 denying amendments to and dismissing Counts 2, 5, 6, 7, and 8. The claims remaining in this 2 action are Counts 1, 3, and 4. 3 DATED this 19th day of October, 2012. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5-

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