Paad v. Oxford, Village of, et al

Filing 28

ORDER granting in part and denying in part 23 Defendants' Motion for Summary Judgment. Signed by District Judge George Caram Steeh (MBea) (Main Document 28 replaced on 6/10/2014) (MBea).

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

MARION PAAD,
Plaintiff,
Case No. 12-CV-15574
vs.
HON. GEORGE CARAM STEEH
VILLAGE OF OXFORD,
MAUREEN HELMUTH, individually,
and JOE YOUNG, individually;
Defendants.
_____________________________/
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION FOR
SUMMARY JUDGMENT (DOC. # 23)
INTRODUCTION
Plaintiff Marion (“Pat”) Paad filed this 42 U.S.C. § 1983 action following the
termination of her employment with defendant Village of Oxford. Plaintiff alleges that
the defendants improperly caused criminal charges to be brought against her, which
they used as a cover for their own misconduct and as justification for plaintiff’s
termination. Now before the court is defendants’ motion for summary judgment. For
the reasons that follow, the motion is denied in part and granted in part.
BACKGROUND
Ms. Paad worked for the Village of Oxford, Michigan in an administrative capacity
from at least 2000 until the termination of her employment in March 2011. Her duties
included handling payments in cash for both taxes and utilities. In 2007, she received a
promotion to Deputy Clerk for the Village. In October 2010, following the termination of
the Clerk by the Village Council, Ms. Paad was appointed to the position of Acting Clerk

for the Village. The Village Council had the exclusive authority to terminate her
employment as Acting Clerk.
When the position for a new permanent Village Clerk was posted, plaintiff applied
for the position. She was scheduled for her second interview in January 2011.
However, on January 25, 2011, Maureen Helmuth–Ms. Paad’s friend, former City
Treasurer, and then-current Village Councilwoman, met with plaintiff’s boss to disclose
her alleged discovery from approximately five years earlier that Ms. Paad had taken
cash tax/utility payments to pay her own delinquent bills.1
Ms. Helmuth has explained that the timing of her decision to disclose Ms. Paad’s
alleged embezzlement stemmed from her concern that Ms. Paad would receive the
Clerk’s position and potentially subject the Village to further financial misappropriation.
In any event, after Ms. Helmuth told Village Manager Joe Young about the 2006 events,
Mr. Young suspended Ms. Paad with pay pending investigation. A special meeting of
the Village Council was convened in late January. Plaintiff requested to meet in closed
session with the Council, and did so. Neither Ms. Helmuth nor Mr. Young were in that
meeting. At the conclusion of the meeting, the Village Council voted to suspend plaintiff
without pay pending investigation.

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Ms. Helmuth testified at deposition that she was in the Treasurer position when she
first discovered this, and that at that time she and Ms. Paad were close friends. Rather
than report Ms. Paad at that time, Ms. Helmuth personally loaned either $ 6,800 or $7,800
to Ms. Paad for Ms. Paad, wholly or in part to become current on her mortgage. The
parties dispute whether this money was used to pay back “borrowed” money from the
Village. Ms. Helmuth did not tell anyone about the loan at the time she made it to Ms.
Paad.
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The following month, plaintiff was demoted back to the position of Deputy Clerk.
This position, unlike that of Acting Clerk, reported to Village Manager Young.
Meanwhile, following a meeting with Joe Young, Village Chief of Police Neymanowski
had referred the matter to the Michigan State Police. In March 2011, Ms. Paad was
charged with embezzlement. Mr. Young testified that it was only after the determination
was made to prosecute Ms. Paad that he terminated her employment with the Village.
Not surprisingly, Ms. Paad’s version of pertinent facts portrays Ms. Helmuth and
Mr. Young in a different light. Ms. Paad denies the alleged embezzlement, describing
Helmuth and Young as Village employees who regularly misappropriated taxpayer
monies and properties. Plaintiff describes Helmuth as a mean alcoholic who would
refer to the former Village Clerk, a man named Dan Luick who is legally blind, as “Helen
Keller.” Plaintiff describes Young as a “flim-flam man who plays fast and loose with
taxpayers’ monies,” who has been fired from other municipalities for violations of their
rules and regulations. Plaintiff, in short, describes herself as a scapegoat.
Plaintiff further describes a period of time during which defendant Joe Young
served as the Oxford Village Treasurer, and she and former Village Clerk Dan Luick
served as “de facto ‘deputy treasurers.’” She states that Michigan Works volunteers
and/or interns actually performed the “leg work” for Young, who was rarely in the office
but insisted on being the volunteers’ sole supervisor, and that she witnessed taxpayers’
money being lost and misappropriated. She asserts that she then determined to go
“outside of the chain of command,” and scheduled a meeting with the Village Council
Pro-Tem President, Tom Benner, in mid-September 2010 to describe the problems at
work. Plaintiff and Dan Luick met with Benner and described their concerns about the
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handling of the taxpayers’ payments. Plaintiff testified at deposition that the next day,
Young came to her desk and angrily told her that if she had a problem, she was to come
to him and not go over his head. Plaintiff states that Luick’s employment was
terminated within 45 days and she was suspended within four months, after Young and
Helmuth concocted a “phony story to falsely blame Pat Paad for all the monies that
were missing.” Plaintiff’s Brf. At 4.2 Plaintiff emphasizes that in deposition, neither
Young nor the police chief could recount any confession she made concerning the
alleged embezzlement, and highlights that she was acquitted of the accusation in her
criminal trial.
Ms. Paad’s trial was in May 2012, at which both Ms. Helmuth and Mr. Young
testified. Ms. Paad did not testify, and as noted above, was acquitted of the charges.
The instant lawsuit was filed in December 2012, alleging that her prosecution
represented violations of the Fourth and/or Fourteenth Amendment (Count I); state law
malicious prosecution (Count II); and violations of the First Amendment (Count III).
Before the court is defendants’ motion for summary judgment.
ANALYSIS
Standard of Review
The entry of summary judgment is appropriate when the record demonstrates
that there are no genuine issues as to any material fact in dispute and the moving party

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Defendants point to portions of Paad’s deposition to support their contention that
Paad has made up this rationale for her termination. Defendants appear to suggest that
Paad actually thought she was terminated because she did not support Maureen Helmuth’s
plan to step down from the Village Council and move back into the Treasurer position.
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is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Sadie v. City of
Cleveland, 718 F.3d 596, 599 (6th Cir. 2013).
The standard for determining whether summary judgment is appropriate is
"'whether the evidence presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must prevail as a matter of law.'"
Amway Distributors Benefits Ass’n v. Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir.
2003) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). The
evidence and all reasonable inferences must be construed in the light most favorable to
the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). "[T]he mere existence of
some alleged factual dispute between the parties will not defeat an otherwise properly
supported motion for summary judgment; the requirement is that there be no genuine
issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)
(emphasis in original); see also National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d
900, 907 (6th Cir. 2001).
If the movant establishes by use of the material specified in Rule 56(c) that there
is no genuine issue of material fact and that it is entitled to judgment as a matter of law,
the opposing party must come forward with "specific facts showing that there is a
genuine issue for trial." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968);
see also McLean v. 988011 Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere
allegations or denials in the non-movant's pleadings will not meet this burden, nor will a
mere scintilla of evidence supporting the non-moving party. Anderson, 477 U.S. at 248,

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252. Rather, there must be evidence on which a jury could reasonably find for the nonmovant. McLean, 224 F.3d at 800 (citing Anderson, 477 U.S. at 252).
Discussion
(i) First Amendment Claim
Defendants first argue for summary judgment on plaintiff’s First Amendment
claim. As articulated by case law relied on by defendants, a successful First
Amendment retaliation claim requires that (1) the statements were protected by the First
Amendment; (2) that there was an adverse employment action; and (3) that the adverse
action was motivated at least in part in response to the exercise of the protected
speech. See Fox v. Traverse City Area Public Schools Bd. of Educ., 605 F.3d 345, 349
(6th Cir. 2010) (citation omitted).
In arguing that plaintiff did not engage in protected speech, defendants rely on
Garcetti v. Ceballos, 547 U.S. 410 (2006) and caselaw in line with Garcetti, quoting from
that decision: “when public employees make statements pursuant to their official duties,
the employees are not speaking as citizens for First Amendment purposes.” Id. at 421.
Defendants also cite Fox, 605 F.3d at 348; Haynes v. City of Circleville, 474 F.3d 357
(6th Cir. 2007); and Weisbarth v. Geauga Park Dist., 499 F.3d 538 (6th Cir. 2007) for
this principle. Asserting that “there can be no doubt but that Plaintiff’s statements were
made in her role as Deputy Clerk and/or Acting Clerk pursuant to her own
admissions...her speech ‘is therefore unprotected as a matter of law because all of the
speech at issue in this case, like the speech at issue in Garcetti, was made pursuant to
[her] official duties.’” Defendant’s Brf. at 16 (quoting Haynes, 474 F.3d at 364.)

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Plaintiff, in contrast, contends that her speech was made as a citizen. She
asserts this case is controlled by the case of Handy-Clay v. City of Memphis, 695 F.3d
531 (6th Cir. 2012) and that defendants are being disingenuous in disregarding that
case. Plaintiff’s counsel, in fact, asserts that Handy-Clay is the “reason [he] took this
case and filed this lawsuit.”
In Handy-Clay, the plaintiff was appointed as “FOIA/public records coordinator”
for the City of Memphis. She announced that employees were getting paid for time they
were actually off work and filing false paperwork to cover it up. She was fired a day
later. The plaintiff in Handy-Clay then filed a § 1983 action based on the First
Amendment, which was dismissed on a Fed. R. Civ. P. 12(b)(6) motion by the district
court. On appeal, the plaintiff successfully distinguished her facts from those in the
then-recent opinion of Garcetti. The Sixth Circuit determined that certain facts allowed
plaintiff’s claim to survive: the facts that (1) she went to an outside agency–the City
Council–to report the violations; (2) her speech was not an “every day communication”
in the course of her job; and (3) her speech was not just “quintessential employee beef.”
That court gave considerable weight to the fact that plaintiff’s speech addressed a
“public concern,” i.e. taxpayer dollars being paid to municipal employees.
In the instant case, considering the facts in the light most favorable to plaintiff,
she went outside of her chain of command, and made complaints about issues other
than her employment situation. The court is convinced that circumstances in this case
sufficiently analogous with Handy-Clay that judgment for defendants on the First
Amendment claim on this basis is inappropriate. Additionally, this case is easily

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distinguished from the Fox case, where the plaintiff’s statements were made to her
supervisor about her job situation. See Fox, 605 F.3d at 349.
Defendants alternatively assert that plaintiff cannot meet the causation
requirement for such a claim; that the adverse employment action was taken as a
response to her alleged report to Benner. However, again considering the evidence in a
light most favorable to plaintiff, there is evidence that she was warned of Young’s
anticipated response to her report; and that Young, in fact, responded in a very negative
way after learning of plaintiff’s report. Furthermore, the employment of plaintiff’s
associate (Dan Luick) was terminated within 45 days, and plaintiff has offered evidence
that Young and Helmuth met for an extended period on the day she was eligible for and
anticipated appointment to the clerk position, but following the Young-Helmuth meeting,
ended up facing a criminal prosecution. While this circumstantial evidence is not crystal
clear, the court is convinced that the plaintiff has met the requirements for establishing a
question of fact on each of the First Amendment retaliation prongs at issue in this case.
Finally, defendants make the argument that qualified immunity protects them
from this claim. However, as plaintiff points out, the law concerning first amendment
free speech rights in the workplace was well-established long before the facts at issue
in this litigation took place. The court is convinced that under the circumstances present
here, plaintiff’s First Amendment retaliation claim must survive summary judgment
under precedent such as Handy-Clay.
(ii) Malicious Prosecution
a) Federal Claim

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Plaintiff makes a Fourth and/or Fourteenth Amendment claim under § 1983
relating to her prosecution for embezzlement. Such a claim must show that the
defendant made or influenced a decision to prosecute; that there was a lack of probable
cause for the prosecution; and that the plaintiff suffered a deprivation of liberty. See
Gregory v. City of Louisville, 444 F.3d 725, 748-50 (6th Cir. 2006). Finally, the
proceeding must be resolved in the plaintiff’s favor. Heck v. Humphrey, 512 U.S. 477,
484 (1994).
In this claim plaintiff alleges, essentially, that defendants acted in concert to
pursue improper criminal charges against her, of which she was acquitted. Defendants
argue in their motion for summary judgment that this claim suffers from several
deficiencies, such as the fact that plaintiff was never incarcerated or detained.
However, as clarified by the case of Sykes v. Anderson, 625 F.3d 294 (6th Cir. 2010), if
the public official defendants made false statements to the prosecutor which were relied
upon for the prosecution, the determination by a magistrate or judge that there was
probable cause to proceed, based on those lies, does not then immunize the public
officials; in fact, telling lies to cause criminal prosecution constitutes a “seizure”
sufficient for a malicious prosecution claim. Furthermore, accepting the facts in a light
most favorable to the plaintiff requires rejection of the defendants’ qualified immunity
defense, since Helmuth’s claims of a “confession” by plaintiff could not have been made
in “good faith.” Similarly, qualified immunity could not be used by Young as a shield if
his statements to the prosecutor were untruthful. Considering the record in favor of
plaintiff, as this court must at this juncture, allows the plaintiff to survive the motion on
this claim as well.
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b) State Claim
Defendants contend that both Helmuth and Young are entitled to absolute
immunity from plaintiff’s state law claim of malicious prosecution under Mich. Comp.
Laws Ann. § 691.1407(5), which provides that
A judge, legislator, and the elective or highest appointive executive official
of all levels of government are immune from tort liability for injuries to
persons or damages to property if he or she is acting within the scope of
his or her judicial, legislative, or executive authority.
However, again considering the facts in the light most favorable to the plaintiff, the issue
of whether Helmuth and Young’s acts were taken “within the scope” of their authority
comes into question. Plaintiff has pointed to deposition testimony of Young in which he
stated that he had no personal knowledge of anything stolen by plaintiff. Plaintiff’s
Exhibit 2 at p. 5. However, plaintiff also refers to notes taken by Young at the meeting
with Captain Neymanowski in which Young wrote that plaintiff “confessed to having
taken the money.” See Plaintiff’s Response Brf. At 5; Deposition of Young at p. 75.
Defendants also cite Odom v. Wayne Co., 482 Mich. 459 (2008), a case that
addressed state law claims of false arrest and imprisonment and malicious prosecution
against governmental actors. That decision stands for the proposition that
governmental immunity applies if the acts are taken during the course of employment
and are within the scope of the actor’s authority. The court is convinced that there is a
question of material fact as to whether Young’s acts were taken “within the scope” of his
authority. Moreover, lying about plaintiff’s “confession” to induce prosecution cannot be
found within the scope of either defendant’s authority. Thus, the court finds the

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individual defendants are not entitled to summary judgment on this claim on the basis of
statutory immunity.
Finally, defendants cite Mich. Comp. Laws Ann. § 691.1407 for immunity for the
Village of Oxford from the plaintiff’s state law claims.3 This statute grants immunity
when it is engaged in the exercise or discharge of a governmental function, subject to
limited exceptions which do not apply to this case. Defendants contend that “as it is
undisputed that the Village was engaged in the operation of a governmental function–an
activity that is expressly or impliedly mandated by constitution, statute, local charter or
ordinance–immunity bars Plaintiff’s state law claim.” In response, without citation to any
applicable authority, plaintiff asserts only that the Village of Oxford “ratified” the acts of
its Village Council and Manager, which thus make it “liable for the acts of the individual
Defendants herein.” Plaintiff’s citations do not support her arguments on this issue, and
the court finds no question of material fact as to whether the Village of Oxford is entitled
to immunity from the state claims in this case. Judgment will enter for the Village as to
only plaintiff’s state law claim of malicious prosecution.
CONCLUSION
For the reasons given above, the court hereby GRANTS IN PART AND DENIES
IN PART defendants’ motion for summary judgment. The motion is granted only as to
the Village of Oxford on plaintiff’s state law claim of malicious prosecution. The motion
is denied as to all other claims.
IT IS SO ORDERED.
3

The court notes no such argument is made on behalf of the municipal defendant
with respect to the constitutional claims.
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Dated: June 10, 2014
s/George Caram Steeh
GEORGE CARAM STEEH
UNITED STATES DISTRICT JUDGE
CERTIFICATE OF SERVICE
Copies of this Order were served upon attorneys of record on
June 10, 2014, by electronic and/or ordinary mail.
s/Marcia Beauchemin
Deputy Clerk

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