Carl Peterson v. City of River Rouge ( 2017 )


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  •                           STATE OF MICHIGAN
    COURT OF APPEALS
    CARL PETERSON,                                                       UNPUBLISHED
    May 11, 2017
    Plaintiff-Appellant,
    v                                                                    No. 329551
    Wayne Circuit Court
    CITY OF RIVER ROUGE, SUSAN JOSEPH,                                   LC No. 14-011738-CK
    RIVER ROUGE PENSION BOARD, JEFF
    BOWDLER, MARK HOGAN, ROBERT
    FOLLBAUM, DANNY DOTSON, MARK
    PRUNEAU, DENNY CORA, and JOSEPH
    MCCARROLL,
    Defendants-Appellees.
    Before: TALBOT, C.J., and K. F. KELLY and BORRELLO, JJ.
    PER CURIAM.
    Plaintiff filed this action against the city of River Rouge (the “City”), its Deputy Clerk
    Susan Joseph, the River Rouge Pension Board (the “Board”), board members Jeff Bowdler,
    Mark Hogan, Robert Follbaum, Danny Dotson, Mark Pruneau, Denny Cora, and the Board’s
    legal counsel, Joseph McCarroll, after the Board decided in June 2013 to retroactively convert
    plaintiff’s duty disability pension to a regular retirement pension, effective on his 50th birthday,
    October 7, 2007. Plaintiff’s complaint included claims for breach of contract, superintending
    control, violation of the Whistleblowers Protection Act (“WPA”), MCL 15.361 et seq., tortious
    interference and civil conspiracy.1 On September 16, 2015, the trial court granted defendants’
    motions for summary disposition and dismissed plaintiff’s claims. For the reasons set forth in
    this opinion, we affirm.
    A. BACKGROUND
    Plaintiff was formerly employed by the City as a police officer. In 1994, the City
    approved plaintiff’s duty disability pension. The resolution granting him duty disability
    1
    Plaintiff also brought a claim under the Michigan Freedom of Information Act, but that claim
    was dismissed by stipulation and is not at issue on appeal.
    -1-
    retirement stated that the pension would convert to a reduced regular retirement pension when he
    reached “voluntary retirement age” pursuant to the collective bargaining agreement (“CBA”).2
    The City Charter provides that voluntary retirement age is 55, but the CBA states that a 10-year
    vested pension becomes payable when the member attains the age of 50. A retirement handbook
    distributed to members states that a member becomes eligible for retirement at age 50, with 10
    years of service. The same handbook states that a duty disability pension converts to a regular
    retirement pension when the recipient reaches the age of 55. At the time of plaintiff’s duty
    disability retirement, the City’s actuary calculated plaintiff’s pension payment based on
    conversion at age 55.
    In 2003, plaintiff inquired about the conversion of his pension from duty disability to
    regular retirement. Defendant McCarroll, the Board’s legal counsel, responded that the
    conversion would take place on plaintiff’s 50th birthday. The Board did not thereafter convert
    plaintiff’s pension from duty disability to a regular pension when he reached age of 50 in
    October 2007. Defendants maintain that this omission was an oversight that came to the Board’s
    attention in 2013. In April 2013, the Board voted against recalculating plaintiff’s pension based
    on conversion at age 50. However, the Board reconsidered and, in June 2013, voted for the
    retroactive conversion. Plaintiff contends that the retirement handbook states the correct
    conversion age of 55. He alleges that McCarroll, motivated by personal animus against plaintiff,
    instigated the Board to deprive him of his right to receive the duty disability pension until the age
    of 55. McCarroll’s alleged animus against plaintiff stems from an incident in 1992 or 1993,
    when plaintiff made a traffic stop and determined that McCarroll was driving while intoxicated.
    Plaintiff also alleges that the Board voted to convert his pension at age 50 in retaliation for an
    incident in 1994, when he informed the mayor that members of the police and fire departments
    were responsible for the death of an inmate in the city’s lockup facility.
    Plaintiff filed this lawsuit against defendants. His claims for tortious interference and
    civil conspiracy apply only to defendants Joseph and McCarroll. He did not specify the
    defendants for his claims of breach of contract, superintending control, and violation of the
    WPA.
    The City and Joseph filed a joint motion for summary disposition pursuant to MCL
    2.116(C)(7) (statute of limitations for the WPA claim and governmental immunity for the tort
    claims against Joseph), (C)(8), and (C)(10). The City argued that the CBA controlled the issue
    of voluntary retirement age for purposes of determining the age at which plaintiff’s duty
    disability pension converted to a regular pension, and that the relevant age under the CBA was
    age 50, notwithstanding conflicting provisions in the City Charter and the retirement handbook.
    The City therefore argued that plaintiff was not entitled to relief from the Board’s decision to
    recalculate plaintiff’s pension based on conversion at age 50, but if he were, the only appropriate
    relief would be an order of superintending control against the Board, not the City. The City also
    2
    The parties agree that the CBA for the period July 1, 1991, through June 30, 1994, governs
    plaintiff’s duty disability retirement.
    -2-
    argued that plaintiff’s tort claims against Joseph were without merit because Joseph committed
    no wrongful acts.
    The Board, McCarroll, and the individual Board members (collectively the “Board
    defendants”) also jointly moved for summary disposition under MCR 2.116(C)(7), (8), and (10).
    The Board defendants echoed the arguments asserted by the City and Joseph, and also argued
    that the Board members were entitled to quasi-judicial governmental immunity. The trial court
    granted defendants’ motions.
    Plaintiff moved for imposition of a sanction of default against defendants. Plaintiff
    contended that some e-mails were not included among the documents produced by defendants in
    discovery. Plaintiff also requested production of audio recordings of Board meetings.
    Defendants responded that the audio recordings were not kept after the minutes of the meetings
    were transcribed and approved, in accordance with guidelines set by the Michigan Municipal
    League. Plaintiff alleged that defendants destroyed evidence knowing that it would be relevant
    to the impending litigation. The trial court denied plaintiff’s motion. This appeal ensued.
    B. STANDARDS OF REVIEW
    A trial court’s decision on a motion for summary disposition is reviewed de novo on
    appeal. Rusha v Dep’t of Corrections, 
    307 Mich. App. 300
    , 304; 859 NW2d 735 (2014). The trial
    court dismissed the WPA claim pursuant to MCR 2.116(C)(7). Summary disposition is proper
    under MCR 2.116(C)(7) when there is no factual dispute and plaintiff’s claim is barred by an
    applicable statute of limitations. Fane v Detroit Library Comm, 
    465 Mich. 68
    , 74; 631 NW2d
    678 (2001). As to the remaining claims, the court considered evidence outside the pleadings;
    therefore, we construe the motions as having been granted pursuant to MCR 2.116(C)(10).
    Cuddington v United Health Servs., Inc., 
    298 Mich. App. 264
    , 270-271; 826 NW2d 519 (2012).
    “In reviewing a motion brought under MCR 2.116(C)(10), we review the evidence submitted by
    the parties in a light most favorable to the nonmoving party to determine whether there is a
    genuine issue regarding any material fact.” 
    Id. C. ANALYSIS
    Plaintiff alleged five distinct claims in his complaint: (1) breach of contract, (2)
    superintending control, (3) violation of the WPA, (4) tortious interference, (5) civil conspiracy.
    Plaintiff alleged some claims only against Joseph and McCarroll—i.e. tortious interference and
    civil conspiracy—but he did not delineate if the other claims applied to specific defendants. We
    proceed by addressing each claim in turn without delineating whether the claims applied to
    specific defendants unless otherwise noted.3
    I. BREACH OF CONTRACT
    3
    In his second question presented plaintiff notes that the court erred in granting summary
    disposition on Count VI as to defendants the Board and McCarroll. However, Count VI was the
    FOIA claim that the parties stipulated to dismiss.
    -3-
    Plaintiff argues that the trial court erred in granting summary disposition on his breach of
    contract claim.
    Plaintiff advances numerous arguments as to why the Board erred in determining that the
    voluntary retirement age was age 50. However, resolution of all of plaintiff’s arguments turns on
    whether the City Charter, the CBA, or the retirement handbook controls when plaintiff’s duty
    disability retirement converts to a regular retirement based on the “voluntary retirement age.”
    Clearly, the retirement handbook does not control because it expressly states that the Charter and
    the CBA “control and govern the rights and benefits under the Retirement System.” It further
    states that if the Charter conflicts with the CBA, the CBA controls. The handbook also
    contradicts itself with respect to voluntary retirement age. This leaves a conflict between the
    City Charter, article 11, § 184(t), and the CBA, article XXI, § 2(B)(6).
    The city council’s resolution approving plaintiff’s duty disability retirement provided that
    his status would be “periodically re-examined . . . until he reaches (a) voluntary retirement age . .
    . in the applicable collective bargaining agreement which specifies the date he is placed in a
    regular retirement.” It is well settled in Michigan that: “If there is a conflict between PERA
    [Public Employment Relations Act, MCL 423.201 et seq] and another statute, charter provision
    or constitutional provision affecting mandatory bargaining subjects, the provisions of PERA and
    Const 1963, art 4, § 48, must dominate . . . .” AFSCME Council 25 v Wayne Co, 
    292 Mich. App. 68
    , 86; 811 NW2d 4 (2011). Additionally, “the duty ‘to perform in accordance with the terms of
    a collective bargaining agreement prevails over conflicting (charter) provisions.” Local 1383
    Int’l Ass’n of Fire Fighters v City of Warren, 
    411 Mich. 642
    , 662; 311 NW2d 702 (1981),
    quoting Pontiac Police Officers Ass’n v City of Pontiac (After Remand), 
    397 Mich. 674
    , 677, 685;
    246 NW2d 831 (1976).
    Under established precedent, where the city charter and CBA conflict with respect to a
    mandatory subject of bargaining under PERA, the CBA prevails. Retirement benefits are a
    mandatory subject of bargaining. Detroit Police Officers Ass’n v City of Detroit, 
    391 Mich. 44
    ,
    63-64; 214 NW2d 803 (1974). Accordingly, the CBA prevails over the City Charter. The
    charter states that a member receives a duty disability pension until he reaches “voluntary
    retirement age.” Article 11, § 184(t) of the City Charter defines “voluntary retirement age” as
    age 55 “in the case of a new member” and, “[i]n the case of an original member . . . [as] the age
    at which he acquires 25 years of credited service, or age 55 years, whichever is the younger age.”
    Article XXI, § 2(B)(6), of the CBA states that the retirement pension is payable “on ten (10) year
    vesting is payable after age fifty (50) . . . .” Accordingly, voluntary retirement age is 50 years,
    which is therefore the age at which the duty disability pension converts to a regular retirement
    pension. Hence, in this matter, plaintiff’s pension converted on his 50th birthday, October 7,
    2007. The Board’s adjustment of plaintiff’s pension was therefore supported by the evidence,
    was not contrary to law, was not arbitrary and capricious, and was not an abuse of discretion.
    Plaintiff’s breach of contract claim therefore failed as a matter of law and summary disposition
    was proper.
    Plaintiff’s argument that the City alone determines eligibility for pension benefits is
    erroneously premised on his position that the City had discretion to determine his eligibility on
    an ad hoc basis. Plaintiff argues that the actuarial statement, which calculated his duty disability
    pension based on conversion to a retirement pension at age 55, formed the basis of his contract
    -4-
    with the City. Plaintiff emphasizes that the Michigan Constitution declares that public employee
    pensions are a matter of contract. Const 1963, art IX, § 24, provides that “[t]he accrued financial
    benefits of each pension plan and retirement system of the state and its political subdivisions
    shall be a contractual obligation thereof which shall not be diminished or impaired thereby.”
    However, this does not establish that the City had a contractual obligation to set age 55 as the
    date of converting plaintiff’s duty disability pension to a retirement pension. The actuarial
    statement does not establish a contractual obligation. “A valid contract requires five elements:
    (1) parties competent to contract, (2) a proper subject matter, (3) legal consideration, (4)
    mutuality of agreement, and (5) mutuality of obligation.” AFT Michigan v Michigan, 
    497 Mich. 197
    , 235; 866 NW2d 782 (2015) (citations omitted). “Contracts necessarily contain promises: a
    contract may consist of a mutual exchange of promises . . . or the performance of a service in
    exchange for a promise.” 
    Id. at 235-236.
    Id. (citations omitted). 
    The actuarial calculation is not
    a contract because it does not involve an exchange of promises or an exchange of performance
    for promise. Plaintiff had no obligations under the actuarial report. Plaintiff’s entitlement to
    pension benefits derived from his employment contract, in which he performed the services of a
    police officer in exchange for compensation, including retirement benefits, pursuant to the CBA.
    Plaintiff also argues that the handbook was written after the CBA was ratified; therefore,
    the authors of the handbook knew that the CBA set voluntary retirement age at 50. Plaintiff
    contends that the authors must have understood that the CBA did not change the voluntary
    retirement age as it pertained to officers who retired on a duty disability pension. However, the
    handbook advises members to familiarize themselves “with the terms of your collective
    bargaining agreement which will control in the event of any conflict with the information
    presented in this handbook.” The handbook also advises that the CBA controls if it conflicts
    with the City Charter. Plaintiff suggests that the correct conversion age is a question of fact for
    the jury. We disagree because the CBA controls as a matter of law.4
    Plaintiff argues that the Board did not have authority to make the determination regarding
    age and retirement. However, as discussed above, the CBA governed the voluntary age of
    retirement; thus, the Board’s discretion was irrelevant. Moreover, authority to apply the terms of
    the CBA fell within the broad authority delegated to the Board under the City Charter to manage
    the retirement system.
    Similarly, plaintiff’s argument that the Board violated its own procedural rules lacks
    merit. Plaintiff cites Robert’s Rules of Order for the rule that “[a]n affirmative vote in the nature
    of a contract when the party to the contract has been notified of the outcome” is not subject to
    reconsideration. Plaintiff and the Board were not parties to a contractual relationship. The
    4
    In a similar argument plaintiff argues that a “Summary Plan Description (SPD)” controls over
    the actual retirement plan. To the extent that plaintiff argues that the handbook controls over the
    CBA, this argument is devoid of merit. As discussed above, under PERA, the CBA is
    controlling. See AFSCME Council 
    25, 292 Mich. App. at 86
    . Furthermore, the handbook
    explicitly states that members should familiarize themselves with the CBA and that the CBA
    controls if there are any discrepancies.
    -5-
    Board’s decision determined plaintiff’s contractual pension rights in accordance with the CBA’s
    provision on voluntary retirement age. Robert’s Rules of Order does not invalidate the Board’s
    actions, and in any event, the Board’s general procedural did not take precedence over the CBA.
    In sum, pursuant to established case law, the CBA governed the resolution of when
    defendant’s retirement converted to a standard retirement. The Board did not err in applying the
    terms of the CBA. Therefore, summary disposition as to plaintiff’s breach of contract claim was
    proper.
    II. SUPERINTENDING CONTROL
    Plaintiff argues that the trial court should have granted his claim for a writ of
    superintending control against the City. This argument fails as a matter of law.
    “A superintending control order enforces the superintending control power of a court
    over lower courts or tribunals.” MCR 3.302(A). “If another adequate remedy is available to the
    party seeking the order, a complaint for superintending control may not be filed.” MCR
    3.302(B). To invoke a court’s power of superintending control, a plaintiff generally must
    establish both the lack of an adequate legal remedy and the failure of the lower court to perform
    a clear legal duty. Recorder’s Court Bar Ass’n v Wayne Circuit Court, 
    443 Mich. 110
    , 134; 503
    NW2d 885 (1993). Here, the City did not have “a clear legal duty” to prevent conversion of
    plaintiff’s pension until he reached age 55. Plaintiff contends that this remedy is appropriate
    because the City Charter does not confer on the Board the authority to set age and service
    requirements for retirement pensions or for conversion of duty disability pensions to retirement
    pensions. As discussed previously, however, these requirements are a mandatory subject of
    bargaining under PERA, and are therefore settled by the CBA, which sets the voluntary
    retirement age as 50. Plaintiff has failed to cite any case law which allows this Court to set
    aside, nullify or ignore the terms and conditions of a valid CBA. Accordingly, the trial court did
    not err in granting the summary disposition on the claim for superintending control.
    III. WPA
    The trial court dismissed plaintiff’s WPA claims under MCR 2.116(C)(7), because it was
    not timely filed within the statutory limitations period under the WPA.
    The WPA, MCL 15.362, precludes an employer from taking adverse action against an
    employee based on the employee’s report of a violation of a law or regulation to a public body.
    “The elements of a cause of action under the WPA are (1) the plaintiff was engaged in a
    protected activity as defined by the act, (2) the plaintiff was discharged or discriminated against,
    and (3) a causal connection exists between the protected activity and the discharge or adverse
    employment action.” Truel v City of Dearborn, 
    291 Mich. App. 125
    , 138; 804 NW2d 744 (2010).
    A person claiming violation of the WPA “may bring a civil action for appropriate injunctive
    relief, or actual damages, or both within 90 days after the occurrence of the alleged violation of
    this act.” MCL 15.363(1).
    Here, in addition to failing to articulate the protected activity that he was engaged in the
    alleged wrongful conduct in this case involved the Board’s determination that plaintiff’s
    disability pension converted at age 50, which occurred on November June 20, 2013. Plaintiff
    -6-
    filed his complaint on September 12, 2014, which was outside the 90-day WPA limitations
    period. MCL 15.363(1). Moreover, there was insufficient evidence to create a genuine issue of
    material fact regarding a causal connection between plaintiff’s conduct in the early 1990’s and
    the Board’s application of the CBA in 2013. Accordingly, the trial court did not err in
    dismissing plaintiff’s WPA claims.
    IV. TORTIOUS INTERFERENCE/CIVIL CONSPIRACY
    Plaintiff argues that the trial court erred in granting summary disposition on his tortious
    interference5 claim.
    “In Michigan, tortious interference with a contract or contractual relations is a cause of
    action distinct from tortious interference with a business relationship or expectancy.” Health
    Call of Detroit v Atrium Home & Health Care Servs, Inc, 
    268 Mich. App. 83
    , 89; 706 NW2d 843
    (2005). “The elements of tortious interference with a contract are (1) the existence of a contract,
    (2) a breach of the contract, and (3) an unjustified instigation of the breach by the defendant.”
    
    Id. at 89-90.
    Moreover, “[t]o maintain a cause of action for tortious interference, the plaintiff
    must establish that the defendant was a ‘third party to the contract rather than an agent of one of
    the parties acting within the scope of its authority as an agent.” Lawsuit Fin, LLC v Curry, 
    261 Mich. App. 579
    , 593; 683 NW2d 233 (2004).
    In this case, plaintiff’s tortious interference claim failed. As discussed above, plaintiff’s
    rights to pension benefits was governed by the CBA and under the terms of the CBA, plaintiff’s
    duty disability retirement converted at age 50. Accordingly, there was no evidence to show
    breach of contract and plaintiff’s tortious interference claims failed as a matter of law. Health
    Call of 
    Detroit, 268 Mich. App. at 89
    . Moreover, none of the named defendants were third
    parties, but instead were agents of the City. Accordingly, the tortious interference claims failed
    for this reason as well. See 
    Curry, 261 Mich. App. at 593
    .
    Similarly, plaintiff’s civil conspiracy claims failed as a matter of law. “A civil
    conspiracy is a combination of two or more persons, by some concerted action, to accomplish a
    criminal or unlawful purpose, or to accomplish a lawful purpose by criminal or unlawful means.”
    Admiral Ins Co v Columbia Cas Ins Co, 
    194 Mich. App. 300
    , 313; 486 NW2d 351 (1992). If a
    plaintiff fails to establish any tortious conduct, the plaintiff’s conspiracy action must also fail.
    
    Id. In this
    case, there was no evidence to support that any of the named defendants engaged in
    unlawful or tortious conduct given that the Board’s decision was grounded in the terms of the
    CBA. Accordingly, plaintiff’s civil conspiracy claims failed as a matter of law.
    5
    Plaintiff did not distinguish whether his claim was for tortious interference with a contract or
    with a business relationship; however, because he did not have a business relationship with any
    of the parties we address it as a contractual claim. Even if plaintiff did allege a business
    relationship claim, that claim would fail where there was no evidence that any defendant
    committed a per se wrongful or unlawful act with the purpose of interfering in the business
    relationship of another. See Health Call of Detroit v Atrium Home & Health Care Servs, Inc,
    
    268 Mich. App. 83
    , 89; 706 NW2d 843 (2005).
    -7-
    In sum, the CBA governed in this case and the CBA provided that the voluntary
    retirement age was 50. Accordingly, all of plaintiff’s substantive claims failed as a matter of law
    and we need not address plaintiff’s ancillary arguments that the trial court erred in determining
    the scope of the review of the Board’s decision, that the Board is not a real party in interest, and
    that governmental immunity does not apply to bar some of his claims.
    V. SANCTIONS
    Plaintiff argues that the trial court erred in denying his motion for entry of a default
    against defendants as a sanction for destroying evidence. The trial court’s decision on a motion
    to sanction a party for spoliation of evidence is reviewed for an abuse of discretion. Brenner v
    Kolk, 
    226 Mich. App. 149
    , 160-161; 573 NW2d 65 (1997).
    “A trial court has the authority, derived from its inherent powers, to sanction a party for
    failing to preserve evidence that it knows or should know is relevant before litigation is
    commenced.” Bloemendaal v Town & Country Sports Ctr, Inc, 
    255 Mich. App. 207
    , 211; 659
    NW2d 684 (2002). “Even when an action had not been commenced and there is only a potential
    for litigation, the litigant is under a duty to preserve evidence that it knows or reasonably should
    know is relevant to the action.” 
    Id. at 212
    (citation and quotation marks omitted). When
    determining an appropriate sanction, the trial court must tailor the sanction to the misconduct.
    
    Brenner, 226 Mich. App. at 163-164
    . A “trial court properly exercises its discretion when it
    carefully fashions a sanction that denies the party the fruits of the party’s misconduct, but that
    does not interfere with the party’s right to produce other relevant evidence.” 
    Bloemendaal, 255 Mich. App. at 212
    . Sanctions may include dismissal of the action (for extreme cases), “exclusion
    of evidence that unfairly prejudices the other party[,] or an instruction to the jury that it may
    draw an inference adverse to the culpable party from the absence of the evidence.” 
    Brenner, 226 Mich. App. at 161
    . Default is analogous to dismissal where the plaintiff seeks a sanction against
    the defendant.
    Plaintiff alleged that defendants deliberately destroyed evidence despite knowing that
    plaintiff intended to initiate litigation. Plaintiff identified audio recordings of meetings, e-mails
    between Joseph and Comerica dated March 13 and March 14, and other e-mails that might have
    come within plaintiff’s discovery request. Plaintiff emphasizes that his counsel put Joseph on
    notice of impending litigation in an e-mail sent on January 17, 2014. However, the audio
    recordings of the April, May, and June 2013 Board meetings were discarded, respectively, in
    May, June, and July 2013, before Joseph received the e-mail warning. Plaintiff identified three
    e-mails omitted from defendants’ discovery production, but there is no basis for inferring that
    this represents a deliberate effort to conceal evidence rather than an inadvertent oversight. There
    is no explanation regarding the disposition of the Board members’ written notes, but there is no
    basis for inferring that they were deliberately suppressed. Accordingly, there is no evidentiary
    support for plaintiff’s accusation that defendants engaged in egregious misconduct.
    The allegedly lost evidence is related to plaintiff’s allegations that defendants violated his
    pension rights at the instigation of McCarroll, Joseph, and other persons acting with vindictive
    motives. As previously discussed, however, defendants’ recalculation of plaintiff’s pension was
    based on the terms of the CBA. This was not a discretionary decision potentially affected by
    individuals’ subjective opinions of plaintiff. Accordingly, the content of the recordings, notes,
    -8-
    and e-mails could not have helped plaintiff obtain a more favorable outcome. Under these
    circumstances, neither default, nor a less severe sanction, was appropriate. Therefore, the trial
    court did not abuse its discretion in denying plaintiff’s motion for a sanction of default.
    Affirmed. No costs awarded. MCR 2.719(A).
    /s/ Michael J. Talbot
    /s/ Kirsten Frank Kelly
    /s/ Stephen L. Borrello
    -9-