Hammer et al v. City of Sun Valley et al

Filing 70

MEMORANDUM DECISION AND ORDER denying 44 Motion for Reconsideration; granting in part and denying in part 45 Motion to Amend/Correct; taking under advisement 47 Motion for Summary Judgment; finding as moot 48 Motion for Summary Judgment. Signed by Judge Edward J. Lodge. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (dmc)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

SHARON R. HAMMER and JAMES R.
DONOVAL, husband and wife,
Plaintiffs,

Case No. 1:13-CV-00211-EJL
MEMORANDUM DECISION AND
ORDER

v.
CITY OF SUN VALLEY; NILS RIBI, in
his individual and official capacity; and
DEWAYNE BRISCOE, in his individual
and official capacity,
Defendants.

Pending before the Court in the above-entitled matter are Plaintiffs’ Motion for
Reconsideration, Plaintiffs’ Renewed Motion to Amend/Correct the Scheduling Order and
Motion for Leave to Amend the Complaint, and Motions for Summary Judgment filed by
both sides. (Dkts. 44, 45, 47, 48.) These matters are ripe for the Court’s consideration.
Having fully reviewed the record herein, the Court finds that the facts and legal arguments
are adequately presented in the briefs and record. Accordingly, in the interest of avoiding
further delay, and because the Court conclusively finds that the decisional process would not
be significantly aided by oral argument, the Motions shall be decided on the record before
this Court without oral argument.

MEMORANDUM DECISION AND ORDER - 1

FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs Sharon R. Hammer and James R. Donoval, husband and wife, filed a
Complaint against Defendant City of Sun Valley (“Sun Valley” or “the City”) as well as
Defendants Nils Ribi and DeWayne Briscoe in both their individual and official capacity.
(Dkt. 1.) The Complaint raised fourteen claims relating to allegations concerning events
occurring during and after Ms. Hammer’s employment as the City Administrator of Sun
Valley from June 1, 2008 until January 19, 2012. (Dkt. 1.) Defendants filed a Motion for a
Judgment on the Pleadings seeking to dismiss all but two of the claims pursuant to Federal
Rule of Civil Procedure 12(c). (Dkt. 18, 41.) This Court entered a Memorandum Decision
and Order granting the Defendants’ Motion for Judgment on the Pleadings as to Counts 1-8,
10, and 12-14. (Dkt. 41.)1 The claims remaining for trial are Counts 9 and 11 alleging a
§ 1983 claim of Deprivation of Due Process against all Defendants and Assault of Ms.
Hammer against Mr. Ribi individually. Thereafter, Plaintiffs filed the instant Motion for
Reconsideration and Motion to Amend. (Dkt. 44, 45.) Both sides have also filed Motions for
Summary Judgment. (Dkt. 47, 48.) The Court finds as follows.
STANDARD OF LAW
Federal Rule of Civil Procedure 60(b) provides that the Court may reconsider a
final judgment and any order based on: “(1) mistake, surprise, or excusable neglect; (2)
newly discovered evidence; (3) fraud; (4) a void judgment; (5) a satisfied or discharged

1

The Court’s Order provides a full recitation of the factual basis underlying this
matter that is incorporated herein.
MEMORANDUM DECISION AND ORDER - 2

judgment; or (6) extraordinary circumstances which would justify relief.” School Dist.
No. 1J, Multnomah County, Or. v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993).
Under Rule 60(b)(6), the so-called catch-all provision, the party seeking relief “must
demonstrate both injury and circumstances beyond [her] control that prevented [her] from
proceeding with the action in a proper fashion.” Latshaw v. Trainer Wortham & Co., Inc.,
452 F.3d 1097, 1103 (9th Cir. 2006). In addition, the Ninth Circuit has confirmed that
“[t]o receive relief under Rule 60(b)(6), a party must demonstrate extraordinary
circumstances which prevented or rendered [the party] unable to prosecute [its] case.” Lal
v. California, 610 F.3d 518, 524 (9th Cir. 2010). This Rule must be “used sparingly as an
equitable remedy to prevent manifest injustice and is to be utilized only where
extraordinary circumstances prevented a party from taking timely action to prevent or
correct an erroneous judgment.” Id. (quoting United States v. Washington, 394 F.3d 1152,
1157 (9th Cir. 2005)). Any Rule 60(b) motion must be brought within a reasonable time
and no later than one year after entry of judgment or the order being challenged. See Fed.
R. Civ. P. 60(c)(1).
DISCUSSION
1.

Motion for Reconsideration
Plaintiffs argue the Court should reconsider its ruling granting the Motion for a

Judgment on the Pleadings for seven reasons. (Dkt. 44.) Several of those reasons were raised
previously in Plaintiffs’ briefing on the Motion for Judgment on the Pleadings. (Dkt. 21.) In
particular the Plaintiffs’ arguments that 1) any prospective waiver of constitutional rights
MEMORANDUM DECISION AND ORDER - 3

violates public policy, 2) there was no consideration paid for the release of the
constitutional/non-contract claims, 3) Defendants Ribi and Briscoe are individually liable,
and 4) Mr. Donoval has an independent claim not subject to the Supplemental Release. (Dkt.
21.) The Court finds these arguments were appropriately addressed in its prior Order and
Plaintiffs have offered no basis under Rule 60 for reconsideration of the same. As such, the
Court denies the Motion to Reconsider as to these arguments. As to the remaining arguments,
the Court finds as follows.
A.

Rule 12(c) Motion

Plaintiffs argue the Rule 12(c) Motion was not the proper mechanism for the
circumstances in this case because it was based on the Defendants’ affirmative defense and
the Supplemental Release which was an attachment to their Answer; not an insufficiency in
the Plaintiffs’ Complaint itself. (Dkt. 44.) The Supplemental Release was not, Plaintiffs
contend, even mentioned in the Complaint. Defendants maintain the Court’s consideration
of the Supplemental Release in ruling on the Motion was proper. (Dkt. 51 at 3.) The Court
has again reviewed the record in regards to this argument and finds as follows.
The Complaint itself discusses the Employment Agreement which was attached to the
Complaint. (Dkt. 1-5, Ex. 4.) In their Answer, Defendants discuss the Supplemental Release
and raise an affirmative defense that some or all of Plaintiffs’ claims are barred by release
and/or payment. (Dkt. 11 at ¶ 21 and Ex. A.) After the Motion for Judgment on the Pleadings
was filed, Plaintiffs requested that the Motion be converted to one for summary judgment in
regards to the “waiver argument.” (Dkt. 21 at 36) (Dkt. 22.) The Court denied the Plaintiffs’
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request and found that it could properly consider documents attached to the pleadings on a
Rule 12(c) Motion without converting it to a motion for summary judgment. (Dkt. 41 at 7-8.)
In doing so, the Court specifically stated that it has not considered any extrinsic evidence
because the motion before the Court was a legal question going to the sufficiency of the
pleadings. (Dkt. 41 at 8.)
The Court has reviewed its prior Order in light of the parties’ briefing on the Motion
to Reconsider and concludes, that based on the reasoning stated therein, that it properly
considered the Supplemental Release in ruling on the Rule 12(c) Motion. In ruling on such
a motion to dismiss, the Court may consider the pleadings, documents attached to the
pleadings, and documents incorporated by reference in the pleadings. United States v.
Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (citing Van Buskirk v. CNN, 284 F.3d 977, 980
(9th Cir. 2002)). The court considered only these materials in ruling on Defendants’ Rule
12(c) motion for dismissal on the pleadings. Furthermore, the Court properly articulated that
the standard for a Rule 12(c) motion is the same as the standard governing a Rule 12(b)(6)
motion, which Plaintiffs do not contest. The Court applied that standard in ruling on the
Defendants’ Rule 12(c) Motion in this case. Accordingly, the Court denies Plaintiffs’ Motion
to Reconsider.
B.

Interpretation of the Supplemental Release and Employment Agreement

Plaintiffs argue the Court erred in its review and interpretation of the Supplemental
Release and the Employment Agreement. (Dkt. 44.) Specifically, Plaintiffs argue because the
Court went outside of the four corners of the Supplemental Release by using the Employment
MEMORANDUM DECISION AND ORDER - 5

Agreement to interpret the terms of the Supplemental Release, the Court should have also
considered the extraneous materials provided by the Plaintiffs. Further, Plaintiffs now argue
the Supplemental Release contained a latent ambiguity. Defendants respond arguing the
language of the two documents is plain and unambiguous and, therefore, the Court properly
declined to look at extrinsic evidence. (Dkt. 51 at 6.)
The Court concluded in its Order that the Employment Agreement and Supplemental
Release are clear and unambiguous. (Dkt. 41 at 11.) The Court then went on to find that the
express unambiguous language plainly, clearly, and unambiguously waived and/or released
Ms. Hammer’s claims arising from a termination without cause. (Dkt. 41 at 13.) That
Plaintiffs disagree with this conclusion (Dkt. 44 at 6), does not give rise to a basis for
reconsideration under Rule 60. Further, the Court’s ruling rejected Plaintiffs’ argument raised
again in this Motion that the terms were ambiguous and that the Court should have
considered the Plaintiffs’ testimony because there were questions of fact as to their intent.
As such, this is not a basis for reconsideration.
Plaintiffs’ argue that a latent ambiguity exists as to the intent of the parties when they
entered into the Employment Agreement which requires that this Court consider extrinsic
evidence when determining the intent of the parties. (Dkt. 44 at 8-9.) A “latent ambiguity”
exists where an instrument is clear on its face, but loses that clarity when applied to the facts
at issue.” Knipe Land Co. v. Robertson, 259 P.3d 595, 601 (Idaho 2011). “Although parol
evidence generally cannot be submitted to contradict, vary, add or subtract from the terms
of a written agreement that is deemed unambiguous on its face, there is an exception to this
MEMORANDUM DECISION AND ORDER - 6

general rule where a latent ambiguity appears.” Id. (citing Salfeety v. Seideman (In re Estate
of Kirk), 907 P.2d 794, 801 (Idaho 1995)).
In this case, however, the Court determined that the contract was unambiguous. (Dkt.
41.) Where the contract is unambiguous, the intent of the parties is determined from the plain
meaning of the words. Clear Lakes Trout Co. Inc. v. Clear Springs Foods, Inc., 106 P.3d
443, 446 (Idaho 2005). Again, the fact that Plaintiffs disagree with that conclusion does not
create an ambiguity nor give rise to a basis for reconsideration.
C.

Claims Not Arising out of the Termination

Plaintiffs argue the Court mistakenly dismissed claims that did not arise out of the
termination of employment; such as claims that arose before and after Ms. Hammer’s
employment ended and which are completely separate from her termination including Counts
1-6, 8, and 10. Plaintiffs assert that the Supplemental Release, as interpreted by the Court,
is limited to claims arising from a termination without cause. (Dkt. 44 at 9-10.)2
In their initial briefing on the Motion to Dismiss, Defendants distinguish between
waiver and release of claims. (Dkt. 27.) As to the former, Defendants argued that at the time
she executed her Employment Agreement, Ms. Hammer waived the claims arising from a
termination without cause under Section 3.A. (Dkt. 27 at 2.) Specifically, the state-law based

2

Plaintiffs’ reply brief does not include Count 6 – retaliation relating to Plaintiffs’
political association – in its argument on this point, citing only to Counts 1-5, 8, and 10.
(Dkt. 57 at 7.) This claim goes to allegations of hostile actions by the Defendants towards
Mr. Donoval in the summer of 2010 when he ran for the state senate and Mr. Donoval’s
involvement representing Ms. Hammer in this case beginning in November of 2011 and
extending through January of 2012. (Dkt. 1 at 69-72.)
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claims for retaliation, breach of contract, and negligent infliction of emotional distress
(Counts 2, 13, 14) and the constitutional based claims (Counts 3, 4, 6-8, 10, and 12) which
Defendants argued were plead to be resulting from her termination without cause. (Dkt. 27
at 2.) Defendants further argue that Ms. Hammer released all claims when she accepted
receipt of the severance payment on January 23, 2012. (Dkt. 27 at 3.) This release,
Defendants contend, was of all claims irrespective of whether the claim arose from a
termination without cause. Defendants agree, however, that she did not release any claims
that did not yet exist; which is why they did not seek dismissal of the liberty interest claim
raised in Count 9 or the state law assault claim in Count 11. (Dkt. 27 at 4.)
The Court’s Order concluded that the express and unambiguous language of the
Release and Employment Agreement was that Ms. Hammer had waived and/or released “any
and all claims for damages of any kind arising from a termination without cause....” (Dkt. 41
at 13.) The Court dismissed all of the claims except Count 9 and 11 because the facts giving
rise to those claims appeared to have arose after Ms. Hammer signed the release and/or were
unrelated to the termination of employment.
Now on reconsideration, Plaintiffs argue the claims raised in Counts 1-6, 8, and 10
arise from facts other than the termination without cause and/or facts that occurred after Ms.
Hammer signed the release. (Dkt. 44 at 10-11.) In particular, Plaintiffs point to the claims
stemming from the publications in the newspaper about the investigation into Ms. Hammer,
the forensic audit and its relation to Ms. Hammer, and the pursuit of criminal charges.

MEMORANDUM DECISION AND ORDER - 8

Counts 1 and 2 allege gender discrimination/harassment and retaliation against Sun
Valley relating to Mr. Ribi’s actions towards Ms. Hammer. (Dkt. 1 at 58-60.) Counts 3-6
allege retaliation against all Defendants under § 1983. (Dkt. 1 at 61-72.) Both Counts 8 and
10 are alleged against all defendants claiming unconstitutional bias deprivation of property
and civil conspiracy under § 1983 and § 1985. (Dkt. 1 at 73-76, 78-79.) These claims were
dismissed as they are based primarily on allegations related to Ms. Hammer’s termination
which the Court determined had been waived/released. Furthermore, the § 1983 claim in
Count 9, which was not dismissed, encompasses the claims and allegations which Plaintiffs
argue on reconsideration should have survived the Motion to Dismiss. For these reasons, the
Court finds Plaintiffs have failed to show a basis for granting their Rule 60 Motion to
Reconsider.
2.

Renewed Motion to Amend
Plaintiffs have filed a renewed Motion to Amend the Scheduling Order and to file an

amended complaint. (Dkt. 45, 58.) In this Motion, Plaintiffs ask that the Scheduling Order
be amended so as to allow them to file their Motion to Amend the Complaint. Plaintiffs argue
good cause exists to amend the Scheduling Order to allow Plaintiffs to correct the deficiency
in their pleadings as found by the Court in its June 17, 2014 Order granting the Rule 12(c)
Motion. Defendants argue that good cause has not been shown to allow amendment to the
scheduling order and that their proposed amended complaint is futile. (Dkt. 52.)

MEMORANDUM DECISION AND ORDER - 9

The Court will allow amendment of the Scheduling Order and consider the Plaintiffs’
Motion to Amend the Complaint. While Defendants are correct that the original complaint
draws upon evidence that occurred some time ago and that an amendment could have been
raised sooner, the Court finds good cause exists to allow the amendment to the Scheduling
Order so that the Motion to Amend the Complaint can be decided on the merits.
Leave to amend pleadings “shall be freely given when justice so requires.” Fed. R.
Civ. P. 15(a). Courts apply Rule 15 with “extreme liberality.” Eminence Capital, LLC v.
Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (citations omitted). In determining whether
a motion to amend should be granted, the court generally considers five factors: (1) undue
delay; (2) bad faith; (3) futility of amendment; (4) prejudice to the opposing party; and (5)
whether the plaintiff has previously amended the complaint. United States v. Corinthian
Colls., 655 F.3d 984, 995 (9th Cir. 2011) (citation omitted). These factors are not weighted
equally: “futility of amendment alone can justify the denial of a motion” to amend. Ahlmeyer
v. Nev. Sys. of Higher Educ., 555 F .3d 1051, 1055 (9th Cir. 2009).
The proposed amended complaint in this case contains additional allegations at ¶ 266
and ¶ 267. (Dkt. 45.) These paragraphs, Plaintiffs argue, address the lack of any allegations
regarding their intent as to the City Administrator Employment Agreement and Release.
Defendants’ assert that the proposed amended complaint is futile as it does not cure the
deficiencies found in the Court’s Order dismissing all but two of the claims. (Dkt. 52.)
Specifically, Defendants argue the new materials included in and with the proposed amended
complaint are inadmissible parol evidence and irrelevant to resolving the basis for the
MEMORANDUM DECISION AND ORDER - 10

dismissal of those claims. As such, Defendants contend, leave to amend is futile and should
be denied. Plaintiffs maintain that because the Court considered the employment agreements
when interpreting the Release, it should have considered all of the patrol evidence including
that submitted by Plaintiffs. (Dkt. 58.)
The Plaintiffs’ arguments in support of its Motion to Amend in regards to the
consideration of parol evidence and a latent ambiguity are the same as those raised and
considered and rejected in the Court’s prior Order and herein. For the same reasons, this
Court concludes that the Plaintiffs’ proposed amended complaint is futile. As such, the
Motion to Amend is denied.
3.

Motions for Summary Judgment
Plaintiffs’ Motion for Summary Judgment goes to Counts 8 and 13. (Dkt. 48.) Those

counts were dismissed in the Court’s June 17, 2014 Order. (Dkt. 41.) As such, the Court finds
Plaintiffs’ Motion for Summary Judgment to be moot.
Defendants’ Motion for Summary Judgment seeks an order as to claims remaining
following the Court’s June 17, 2014 Order – Counts 9 and 11. (Dkt. 47.) The Court will rule
upon Defendants’ Motion for Summary Judgment in a separate order in due course.
ORDER
NOW THEREFORE IT IS HEREBY ORDERED as follows:
1.

Plaintiffs’ Motion for reconsideration (Dkt. 44) is DENIED.

2.

Plaintiffs’ Renewed Motion to Amend the Scheduling Order and Amend the
Complaint (Dkt. 45) is GRANTED IN PART AND DENIED IN PART.

MEMORANDUM DECISION AND ORDER - 11

3.

Plaintiffs’ Motion for Summary Judgment (Dkt. 48) is MOOT.

4.

Defendants’ Motion for Summary Judgment (Dkt. 47) is UNDER
ADVISEMENT.

DATED: July 28, 2015

Honorable Edward J. Lodge
U. S. District Judge

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