Bostwick v. Baxter et al

Filing 13

ORDER signed by Judge Rudolph T. Randa on 12/4/2013 DENYING 4 MOTION to Dismiss Counts III, IV, V, VI, and VII of Plaintiff's Amended Complaint. Telephonic Scheduling Conference set for 2/4/2014 at 10:00 AM (Central Time) before Judge Rudolph T. Randa, the Court will intitiate the call. (cc: all counsel)(cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
SCOTT BOSTWICK,
Plaintiff,
-vs-

Case No. 13-C-1036

WATERTOWN UNIFIED SCHOOL DISTRICT,
BOARD OF EDUCATION OF THE WATERTOWN
UNIFIED SCHOOL DISTRICT, KATE LAPIN,
CASSANDRA SCHUG, IVAN THOMPSON,
DOUGLAS KEISER, ROBERT BAXTER,
and PAUL VANCE,
Defendants.
DECISION AND ORDER

After ten years as the principal of Watertown High School, Scott Bostwick was
placed on administrative leave and eventually fired pursuant to what he claims was a
trumped-up investigation designed to drive him into resignation or retirement. The
defendants removed from state court, and now they move to dismiss portions of
Bostwick’s nine-count complaint. As discussed below, the defendants’ motion is
directed towards claims that arise under state law. The Court may exercise jurisdiction
over these claims because they are supplemental to Bostwick’s federal claims. 28
U.S.C. § 1367(a). The Court accepts the following, well-pleaded allegations in the
complaint as true for purposes of this Rule 12(b)(6) motion. Vill. of DePue v. Exxon
Mobil Corp., 537 F.3d 775, 782 (7th Cir. 2008).
Bostwick was the principal of Watertown High School from May 2002 until

late September 2012. The Watertown Unified School District renewed Bostwick’s
contract five times. The most recent contract covered the 2011-12 and 2012-13 school
years. During most of Bostwick’s tenure, Douglas Keiser was Superintendent and
Bostwick’s immediate supervisor.

Cassandra Schug became the District’s new

Superintendent for the 2011-12 school year.
Early in Schug’s tenure as Superintendent, Bostwick heard rumors that she had
plans to replace him and two other high profile senior administrators.

Bostwick

approached Schug about the matter and she assured him that she had no desire to
replace him. Bostwick had reason to doubt the sincerity of Schug’s assurances, so he
requested a meeting to find out where he stood regarding retirement and benefit
options. On February 17, 2012, Bostwick attended that meeting with Schug and Ivan
Thompson, the District’s recently-named Human Resources Director. Soon after the
meeting began, Schug and Thompson advised Bostwick that they were investigating
him for alleged age and sex discrimination against older female staff members. Schug
and Thompson presented Bostwick with a retirement agreement and threatened him by
indicating that if he did not sign it they would keep investigating, which would likely
result in his termination. Bostwick denied engaging in any misconduct. Although
Thompson told Bostwick it looked like he was guilty of the charges, Thompson and
Schug refused to tell Bostwick what he was accused of doing. Bostwick later learned
that a secret investigation against him had begun late in 2011.
For several months, Schug and Thompson continued refusing Bostwick’s
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requests for information regarding the allegations against him. Schug and Thompson
then expanded their investigation, and on June 12, 2012, they presented Bostwick with
a 27-page document entitled “Findings of Fact & Conclusions,” detailing 42 things
which Bostwick had allegedly done wrong over the course of his tenure at Watertown.
None of these issues were registered as formal complaints, and most of them had never
been brought to the attention of Bostwick or anyone in administration or human
resources.

Thirty-two of the 42 issues had nothing to do with age or sex

discrimination.
Bostwick was then placed on administrative leave and banned from District
property. Over the rest of the summer, Schug and Thompson continued revising their
findings, conducting more interviews and adding allegations. For months during the
summer of 2012, Bostwick tried to respond to the charges against him. Among other
things, Bostwick met with Schug and Thompson for more than 10 hours over several
days. Bostwick was not required to participate in these meetings. Rather, the District
agreed to meet with him to get his side of the story in person only after multiple
requests by Bostwick. Prior to that time, the District indicated that it was going to
proceed with a final investigation report without his personal input. The District
produced its last version of the findings on August 23, 2012, along with Schug’s
recommendation that the Board of Education of the Watertown Unified School District
fire Bostwick. The Board scheduled a hearing for September 25-26, 2012.
Prior to receiving the first copy of the findings in June 2012, Bostwick sent a
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letter directly to the Board, through its President Kate Lapin, detailing the harassment
he was suffering at the hands of Schug and Thompson in connection with the
investigation. On June 14, 2012, Bostwick followed-up with another letter directed to
the Board which he identified as a “formal complaint” of harassment. Bostwick
asserted that he was being harassed on the basis of his age by attempts to force him
into retirement. Instead of conducting a hearing within thirty days, as required by
Board policy, Lapin engaged Paul Vance to conduct a third-party investigation. In the
course of his investigation, Vance communicated with Bostwick only once. Bostwick
attempted to provide additional information to support his allegations of harassment.
However, Vance ignored multiple attempts by Bostwick to communicate in the first
half of September 2012.

After promising that he would be willing to consider

additional evidence, Vance simply stopped communicating with Bostwick’s counsel.
Vance reported his findings to Schug, Thompson, Lapin, and the Board in a closed
door session on September 12, 2012, concluding that the investigation against
Bostwick was completely justified, and that some or all of the 42 complaints against
him were meritorious and credible. After the September 25-26 hearing, the Board
voted to terminate Bostwick.
In their motion, the defendants argue that Bostwick’s claims for intentional
infliction of emotional distress (count VII), slander/libel (count IV), and civil
conspiracy (count III) are barred by the exclusive remedy provision of Wisconsin’s
Worker’s Compensation Act, Wis. Stat. § 102.03(2). As relevant here, an employer’s
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obligation to pay worker’s compensation arises when, at the time of the injury, the
employee is performing service growing out of and incidental to his or her
employment, and the accident or disease causing injury arises out of the employment.
§ 102.03(1). Bostwick does not dispute that his injuries arose out of his employment.
Instead, Bostwick argues that the Act does not apply because he was injured while he
was away from work on administrative leave; in other words, he was not “performing
service growing out of and incidental to his . . . employment” at the time he was
injured by the defendants’ conduct. § 102.03(1)(c)1. This language — growing out of
and incidental to employment — is used interchangeably with the phrase “course of
employment.” Weiss v. City of Milwaukee, 559 N.W.2d 588, 592 (Wis. 1997). Both
formulations refer to the “time, place, and circumstances” under which the injury
occurred. Id. An injury arises in the course of employment when it takes place within
the period of the employment at a place where the employee reasonably may be, and
while he or she is fulfilling his or her duties or engaged in doing something thereto.
Id. (citing Professor Larson’s treatise on workers’ compensation law).
Wisconsin courts have held that claims for intentional infliction of emotional
distress, defamation, and conspiracy are barred by the Act. See, e.g., Jenson v. Empl.
Mut. Cas. Co., 468 N.W.2d 1 (Wis. 1991) (IIED); Farady-Sultze v. Aurora Med. Ctr.
of Oshkosh, Inc., 787 N.W.2d 433 (Wis. Ct. App. 2010) (IIED and defamation); Wolf
v. F&M Banks, 534 N.W.2d 877 (Wis. Ct. App. 1995) (defamation); Becker v.
Automatic Garage Door Co., 456 N.W.2d 888 (Wis. Ct. App. 1990) (defamation);
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Mudrovich v. Soto, 617 N.W.2d 242 (Wis. Ct. App. 2000) (civil conspiracy).
However, these cases either assumed or specifically held that the injury occurred while
the plaintiff was acting in the course of employment.

In Jenson, the Wisconsin

Supreme Court held that a claim by a village clerk against the village board president
for intentional infliction of emotional distress was barred by the WCA, but only
because the attacks took place at village board meetings and in the confines of the
village hall. Thus, the “undisputed facts” led “overwhelmingly to the conclusion” that
the clerk was performing services “growing out of and incidental to . . . her
employment” at the time of injury. Id. at 8. In Farady-Sultze, Wolf, and Becker, the
course of employment requirement was simply not discussed, as the courts seemed to
assume that the injuries occurred while the employee was performing service growing
out of and incidental to his employment. In Mudrovich, the court of appeals held that
the course of employment factor was satisfied because the alleged injury arose out the
plaintiff’s employment.

617 N.W.2d at 246 (“Because the remarks resulting in

Mudrovich’s claimed injury arose out of his employment, we conclude that Mudrovich
was performing services growing out of and incidental to his employment at the time
of the injury”). This syllogism makes sense in most cases where the employee is
injured at work, but it does not always follow that an injury caused by the employment
relationship occurs while the employee is acting in the course of employment.
The defendants argue that all of Bostwick’s injuries occurred in the course of
employment because he was injured while he was still employed by the district; and
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even while he was on administrative leave, Bostwick continued to attend meetings and
participate in the investigative process. However, it is difficult to pinpoint the exact
timing of many of the alleged injuries, and since Bostwick was on administrative leave
for an extended period of time, it is even more difficult to draw the connection that the
injuries occurred at a point in time when Bostwick was performing service growing
out of and incidental to his employment. This result may seem anomalous in light of
the obvious work-connection of Bostwick’s injuries, but Wisconsin courts have not
adopted Professor Larson’s “quantum theory” of work connection, under which the
weakness of the course of employment factor can be made up by the strength of the
arising out of employment factor. N. Assur. Co. of Am. V. LIRC, 455 N.W.2d 915
(Wis. Ct. App. March 1, 1990) (Unpublished opinion). Other jurisdictions view the
two concepts “as a whole to define the injury-employment connection,” Calovecchi v.
State of Michigan, 611 N.W.2d 300, 303 (Mich. 2000), but the Court is obliged to
follow Wisconsin law, so the course of employment requirement cannot be ignored.
Roe v. City of Milwaukee, 26 F. Supp. 2d 1119, 1123 (E.D. Wis. 1998) (a “federal
court’s task in exercising supplemental jurisdiction over state claims is to mirror or
predict, on the basis of existing state precedent, if any, how a state court would rule on
such claims”). Construing Bostwick’s allegations in the light most favorable to him,
the Court is unable to conclude that any or all of his injuries coincided with a time
during which he was acting in the course of employment.
In the alternative, the defendants argue that the conspiracy claim should be
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stricken to the extent that it is premised on Bostwick’s separate claim for tortious
interference with contract (count II) because Bostwick cannot recover twice for the
same injury. Fed. R. Civ. P. 12(f). Litigants are allowed to plead in the alternative,
Fed. R. Civ. P. 8, so the Court will not strike the claim. “To the extent that [plaintiff]
will not be able to prevail under both theories of recovery, it need not embrace one
over the other at this earlier stage of the proceedings.

Double recovery is not

threatened in the pleadings stage . . . .” River West Meeting Assoc., Inc. v. Avaya, Inc.,
No. 03 C 1023, 2004 WL 422683, at *3 (N.D. Ill. March 4, 2004).
Finally, Paul Vance moves to dismiss the claims directed solely at him: breach
of fiduciary duty (count V) and misrepresentation (count VI). Vance argues that there
can be no fiduciary relationship in the absence of a duty to act solely on behalf of one
person above all others. This is wrong. A fiduciary duty can arise when a party
assumes an obligation to act as a third-party neutral. See, e.g., Black v. Metro Title,
Inc., 712 N.W.2d 395, 398 (Wis. Ct. App. 2006) (“An escrow agent acts as a neutral
third party. The escrow agent owes a fiduciary duty to both parties of the escrow
contract”); In re Appeal of Sheaffer, 686 N.E.2d 1382, 1390 (Ohio Ct. App. 1996)
(“Brokers who have been entrusted with earnest money have a fiduciary duty to
remain the neutral agent of both parties even though the broker may also be the agent
of one of the parties in the underlying transaction”); Matter of Estate of Shano, 869 P.
2d 1203, 1208-09 (Ariz. Ct. App. 1993) (attorney for personal representative of estate
has derivative fiduciary duty of neutrality and impartiality to successors of decedent’s
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estate). Bostwick’s allegations plausibly establish the existence of a fiduciary duty.
Doe v. Archdiocese of Milwaukee, 700 N.W.2d 180, 194 (Wis. 2005) (“A fiduciary
relationship arises from a formal commitment to act for the benefit of another . . .”).
The Court also rejects Vance’s argument that Bostwick failed to plead enough facts in
support of his misrepresentation claim, to wit, that in the summer of 2012, Vance
falsely represented to Bostwick that he was conducting a thorough and good faith
investigation of Bostwick’s harassment complaint and that Bostwick relied on this
representation in cooperating with Vance’s investigation. This is more than enough to
meet the requirements of Rule 9. Borsellino v. Goldman Sachs Group, Inc., 477 F.3d
502, 509 (7th Cir. 2007) (“Rule 9(b) requires that facts such as the identity of the
person making the misrepresentation, the time, place, and content of the
misrepresentation, and the method by which the misrepresentation was communicated
to the plaintiff be alleged in detail”).
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY
ORDERED THAT:
1.

The defendants’ motion to dismiss [ECF No. 4] is DENIED;

2.

Pursuant to Federal Rule of Civil Procedure 16(b), a telephonic

scheduling conference is scheduled for February 4, 2014 at 10:00 a.m. (Central
Time). Please be available at that time. The Court will initiate the call.
3.

The purpose of the conference call is to establish a scheduling order

which will limit the time: (a) to join other parties and to amend the pleadings; (b) to
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file motions; (c) to complete discovery;
4.

The scheduling order may also: (a) modify the timing for disclosure

under Rules 26(a) and 26(e)(1) and of the extent of discovery to be permitted; (b)
provide for the disclosure or discovery of electronically stored information; (c) include
any agreements the parties reach for asserting claims of privilege or protection as trial
preparation material after information is produced; (d) the date or dates for conferences
before trial, a final pretrial conference, and trial; and (e) any other matters appropriate
in the circumstances of the case;
5.

The time limitations set forth in the scheduling order may only be

modified for good cause and with the Court’s consent. Fed. R. Civ. P. 16(b)(4);
6.

The parties should be prepared to discuss the matters listed in Civil

Local Rule 16(a)(1). Please refer to Attachment A. Special attention should also be
given to Rule 26(f)(1), which requires the parties to conduct a settlement/discovery
conference at least twenty-one (21) days prior to the initial scheduling conference
described above. The Rule 26(f) conference may be conducted by telephone. Rules
26(f)(2) and (3) mandate that the parties, within fourteen (14) days of their conference:
(a) file a written report outlining the proposed discovery plan they have developed at
their Rule 26(f) conference; and (b) make the required initial disclosures under Rule
26(a) regarding witnesses and documents. In addition to the matters specified in Rules
26(f)(2) and (3), the Court requests that the proposed discovery plan submitted by the
parties include one or two sentences stating the nature of the case;
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7.

The written report must include the telephone numbers where the parties

can be reached for this call.
8.

In addition, Judge Randa is participating in the Seventh Circuit

Electronic Discovery Pilot Program and has adopted the Principles Relating to the
Discovery of Electronically Stored Information. Counsel should be fully prepared to
discuss methods and techniques to accomplish cooperative fact-finding in their case at
the initial status conference. Before the initial status conference, counsel must also
meet and discuss the Principles Relating to the Discovery of Electronically Stored
Information. At the initial status conference, counsel must be prepared to discuss
what agreements they have reached regarding discovery of Electronically Stored
Information (“ESI”) and what area of disagreement they have with regard to discovery
of ESI. After discussing the matter with counsel, the Court will determine whether to
enter the Standing Order Relating to the Discovery of Electronically Stored
Information in their particular case. (Please refer to Attachments B & C).
Dated at Milwaukee, Wisconsin, this 4th day of December, 2013.

BY THE COURT:

__________________________
HON. RUDOLPH T. RANDA
U.S. District Judge

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