The Board of Commissioners of Delaware County a/k/a Delaware County Commissioners v. Beverly J. Evans , 979 N.E.2d 1042 ( 2012 )

FILED
Nov 28 2012, 10:22 am
FOR PUBLICATION CLERK
of the supreme court,
court of appeals and
tax court
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
ROSEMARY L. BOREK RICHARD W. McMINN
Stephenson Morow & Semler John H. Haskin & Associates, LLC
Indianapolis, Indiana Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
THE BOARD OF COMMISSIONERS )
OF DELAWARE COUNTY a/k/a )
DELAWARE COUNTY COMMISSIONERS, )
)
Appellant-Defendant, )
)
vs. ) No. 18A05-1201-PL-14
)
BEVERLY J. EVANS, )
)
Appellee-Plaintiff. )
APPEAL FROM THE DELAWARE CIRCUIT COURT
The Honorable Peter D. Haviza, Special Judge
Cause No. 18C02-1102-PL-1
November 28, 2012
OPINION - FOR PUBLICATION
BRADFORD, Judge
Appellant-Defendant Board of Commissioners of Delaware County (the “Board”)
appeals the trial court’s denial of its motion to dismiss the complaint for breach of
employment contract filed by Appellee-Plaintiff Beverly Evans. We reverse and remand
with instructions.
FACTS AND PROCEDURAL HISTORY
In the first quarter of 2007, Evans answered an advertisement for an open position as
the Board’s Human Resource Director (“H.R. Director”). Evans was interviewed by the
three country commissioners in office at the time, John Brooke, Larry Bledsoe, and Tom
Bennington, who selected Evans to fill the position. On May 14, 2007, Evans and the Board
executed a written employment contract providing that Evans would serve as the H.R.
Director for a term of three years. The contract further provided for the termination of
Evans’s employment only upon the expiration of the contract, by agreement of the parties, or
for good cause with fifteen days’ written notice to Evans.
In November 2008, Don Dunnuck and Todd Donati were elected to the Board,
replacing Commissioners Brooke and Bennington. Commissioner Bledsoe remained in
office. On March 3, 2009, roughly two years into Evans’s three-year employment term,
Evans received notice from the Board that her employment was terminated effective
immediately. The Board did not provide Evans with fifteen days’ written notice of her
termination for good cause as required by her employment contract.
The following provisions of Evans’s employment contract and job description are
relevant to our decision in this matter:
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The Human Resource Director is expected to apply specialized knowledge of
personnel administration to the overall operation of County departments,
exercising independent judgment in developing, interpreting, and applying
County policies, legal requirements and employee benefits programs to
individual cases. The Human Resource Director will assist in developing and
administering personnel policies and procedures and benefit programs, as well
as ensure compliance with local, state and federal regulations.
Appellant’s App. p. 16.
The Incumbent serves as Human Resources Director, responsible for
supervising and directing assigned personnel with planning, implementing, and
coordinating personnel policies and procedures ensuring compliance with
local, state, and federal employment laws and regulation.
….
Supervises assigned personnel, including planning, implementing, and
coordinating personnel policies and procedures ensuring compliance with
various local, state, and federal employment laws, rules, and regulations,
including planning and coordinating training for supervisors and other
personnel, maintaining, reviewing, and providing personnel policy handbooks
and prescribed forms, consulting with department heads, elected officials,
county council, county attorney, and other supervisors resolving problems,
maintaining current knowledge of employment regulations, and distributing
timely notices of relevant legislative policy changes.
Oversees administration of County health insurance programs, including
preparing/distributing pamphlets, explaining coverage and procedures,
enrolling and/or terminating personnel, responding to inquiries,
communicating with insurance representatives to resolve problems, and
monitoring claim investigations. Reviews health insurance programs annually,
researching and identifying competitive, cost-effective coverage options,
preparing analysis reports, and making recommendations to County officials.
….
Incumbent applies specialized knowledge of personnel administration to the
overall operation of County departments, exercising independent judgment in
developing, interpreting, and applying County policies, legal requirements and
employee benefits programs to individual cases.
….
Incumbent assists in developing and administering personnel policies and
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procedures and benefits programs ensuring compliance with related state and
federal regulations. Incumbent receives general supervision, discussing
unusual circumstances with supervisor at incumbent’s discretion. Incumbent’s
work is reviewed primarily for appropriate supervision of assigned operations
and soundness of judgment.
….
Incumbent reports directly to the County Commissioners.
….
Assists elected officials and county attorney in litigation to prepare
documentation for court appearances, periodically appears as representative for
County.
….
Maintains County job classification system, including writing, reviewing, and
updating job descriptions, reviewing reclassification requests, directing and
coaching compensation meetings, and making recommendations to County
Council regarding established job grades and salary increase.
Maintains selection process in hiring new County personnel, including
screening applications, administering exams, interviewing applicants, and
making hiring recommendations. Oversees orientation for new personnel,
preparing forms, and explaining benefit plans and personnel policies and
procedures. Delivers training to elected officials, managers, and supervisors
regarding selection and hiring process.
….
Serves periodically as mediator regarding employee problem resolution and
progressive disciplinary procedures.
Appellant’s App. pp. 47-50.
On February 25, 2011, Evans filed her complaint in Delaware Circuit Court. On May
4 the Board filed a Motion to Dismiss for failure to state a claim pursuant to Indiana Trial
Rule 12(B)(6). The trial court denied the Board’s motion on October 24, and on December
16, certified its interlocutory order for immediate appeal. This court accepted jurisdiction on
February 24, 2012.
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DISCUSSION AND DECISION
I. Standard of Review
“The standard of review of a trial court’s grant or denial of a motion to dismiss for
failure to state a claim is de novo.” PricewaterhouseCoopers, LLP v. Massey, 860 N.E.2d
1252, 1256 (Ind. Ct. App. 2007).
A motion to dismiss under Rule 12(B)(6) tests the legal sufficiency of a
complaint: that is, whether the allegations in the complaint establish any set of
circumstances under which a plaintiff would be entitled to relief. [W]e do not
test the sufficiency of the facts alleged with regards to their adequacy to
provide recovery, [but] we do test their sufficiency with regards to whether or
not they have stated some factual scenario in which a legally actionable injury
has occurred.
A court should accept as true the facts alleged in the complaint, and
should not only consider the pleadings in the light most favorable to the
plaintiff, but also draw every reasonable inference in favor of the nonmoving
party. However, a court need not accept as true allegations that are
contradicted by other allegations or exhibits attached to or incorporated in the
pleading. Courts also need not accept as true conclusory, nonfactual assertions
or legal conclusions.
Lei Shi v. Cecilia Yi, 921 N.E.2d 31, 36-47 (Ind. Ct. App. 2010) (internal citations
omitted).
The pleading considered in this matter consists of Evans’s complaint along with two
exhibits incorporated by reference: the employment contract and the job description. “When
any pleading…is founded on a written instrument, the original, or a copy thereof, must be
included in or filed with the pleading.” Ind. Trial Rule 9.2. “A copy of any written
instrument which is an exhibit to a pleading is a part thereof for all purposes.” Ind. Trial
Rule 10; see Levenstein v. Salafsky, 164 F.3d 345, 347 (7th Cir. 1998) (discussing Fed. R.
Civ. P. 10 and stating, “documents attached to a motion to dismiss are considered part of the
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pleadings if they are referred to in the plaintiff’s complaint and are central to his [or her]
claim”).
The construction of terms of a written contract is a question of law that we review de
novo. Beazer Homes Ind., LLP v. Carriage Courts Homeowners Ass’n, Inc., 905 N.E.2d 20,
22-23 (Ind. Ct. App. 2009).
The goal of contract interpretation is to ascertain and give effect to the parties’
intent. We will determine the intent of the contracting parties by analyzing the
contractual language within the four corners of the document. If that language
is unambiguous, we may not look to extrinsic evidence to expand, vary, or
explain the instrument. A contract is not ambiguous merely because the parties
disagree as to its proper construction.
Id. (internal citations omitted).
II. Discretionary Function
The Board argues that Evans’s employment contract violates “the very essence of
elected government.” Appellant’s Br. p. 9. By binding the Board to its predecessor
members’ choice for H.R. Director, Evans’s contract prevents the Board’s successor
members from implementing the policies desired by the majority of the public who elected
them. (See Figuly v. City of Douglas, 853 F. Supp. 381, 381 (D. Wyo. 1994) (discussing this
“critical facet of democracy”). We agree.
“[A]s a general rule, contracts extending beyond the term of office of the members of
a board of county commissioners are valid, if made in good faith.” Jessup v. Hinchman, 77
Ind. App. 460, 463, 133 N.E. 853, 854 (1922) (citing Bd. of Comm’rs of Pulaski Cnty. v.
Shields, 130 Ind. 6, 10, 29 N.E. 385, 386 (1891)). “[They] are the contracts of the board, and
not of its members.” Moon v. Sch. City of S. Bend, 50 Ind. App. 251, 254, 98 N.E. 153, 154-
6
55 (1912). However, a county board of commissioners does not “ha[ve] the power to limit
the discretionary functions of its successors.” Allen Cnty. Council v. Stellhorn, 729 N.E.2d
608, 612 (Ind. Ct. App. 2000) (citing State ex rel. Scott v. Hart, 144 Ind. 107, 111, 43 N.E. 7,
8 (1896) (“It may be correctly said that the board of commissioners cannot, by contract,
preclude itself or its successors from the right and duty to exercise the powers given it by
statute when in its judgment or discretion it is deemed necessary to do so.”)).
This court has interpreted the term, “discretionary function,” as provided by the
Indiana Tort Claims Act,1 to mean “‘a function involving the formulation of basic policy
characterized by official judgment, discretion, weighing of alternatives, and public policy
choices….’” City of Indpls. v. Duffitt, 929 N.E.2d 231, 236 (Ind. Ct. App. 2010) (quoting
City of Terre Haute v. Pairsh, 883 N.E.2d 1203, 1206-07 (Ind. Ct. App. 2008)). In contrast,
a function involving “only the execution or implementation of already formulated policy” is
not discretionary. Id. See Peavler v. Bd. of Comm’rs of Monroe Cnty., 528 N.E.2d 40, 43-44
(Ind. 1988) (outlining test for determining whether government action is discretionary). We
are guided by this interpretation in concluding that fulfillment of the plain language of
Evans’s employment contract and job description requires the performance of discretionary
functions.
The H.R. Director is charged with “developing [and] interpreting…County policies,
legal requirements and employee benefits programs.” Appellant’s App. pp. 16, 49. The
position’s incumbent is similarly required to “assist in developing…personnel policies and
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procedures and benefit programs,” Appellant’s App. p. 16, and to “supervis[e] and direct[]
assigned personnel with planning… personnel policies and procedures.” Appellant’s App. p.
47. In addition, the H.R. Director is responsible for “screening applications…interviewing
applicants, and making hiring recommendations” for new County personnel. Appellant’s
App. p. 50. The incumbent also “mak[es] recommendations to County Council regarding
established job grades and salary increase[s].” Appellant’s App. p. 50. Moreover, the H.R.
Director “consult[s] with department heads, elected officials, county council, county attorney,
and other supervisors resolving problems,” “[s]erves periodically as mediator regarding
employee problem resolution and progressive disciplinary procedures,” and “periodically
appears as representative for County” in litigation. Appellant’s App. p. 50.
Similar duties were found to be discretionary in Board of Klamath County
Commissioners v. Select County Employees. 148 Or. App 48, 55 (1997). There, the Oregon
Court of Appeals held that an employment contract for a Personnel Director was not binding
against successor board members because the contract’s terms “call[ed] for the performance
of governmental functions.” Id. at 53 (interpreting “governmental function” to mean
“discretionary act,” as that term is used in Oregon’s Tort Claims Act). The contract required
the incumbent
to determine the appropriateness of allocations of personnel and to assess the
training needs, resources, and priorities of the various county departments…to
direct county-wide personnel programs and to interpret the rules, policies and
procedures governing those programs as well as to negotiate, approve and
interpret all collective bargaining agreements entered into by the
1
“A governmental entity or an employee acting within the scope of the employee’s employment is not
liable if a loss results from the performance of a discretionary function.” Ind. Code. § 34-13-3-3(7).
8
county…[and] to recommend new and revised policies, procedures and
regulations to the Commission.
Id. 53-54. These functions, the court concluded, were duties of the Board, which the
commissioners had delegated to their Director of Personnel. Id. at 54. They involved
“making policy judgments, ranking and evaluating policy objectives and making choices
among competing goals and priorities.” Id.
We highlight that, under First Amendment jurisprudence, an individual is considered a
policymaker “if the position held by the individual authorizes, either directly or indirectly,
meaningful input into governmental decision-making on issues where there is room for
principled disagreement on goals or their implementation.’” Opp v. Office of State’s Attorney
of Cook Cnty., 630 F.3d 616, 619 (7th Cir. 2010). Evans’s contract authorizes such input in
performing the duties outlined above. It provides that the H.R. Director “reports directly to
the County Commissioners” but “exercis[es] independent judgment,” “discussing unusual
circumstances with [the Board] at incumbent’s discretion.” Appellant’s App. p. 49. Further,
the H.R. Director’s “work is reviewed primarily for appropriate supervision of assigned
operations and soundness of judgment.” Appellant’s App. p. 49.
Based on these contractual provisions, we conclude that the Board’s predecessor
members delegated to the H.R. Director the Board’s statutory duties to “establish the
procedures to be followed by all county departments, offices, and agencies,” Ind. Code. § 36-
2-3.5-4 (b)(4), and to “supervise county administrative offices….” Ind. Code. § 36-2-3.5-
4(b)(11). Were it to be held valid, Evans’s contract would inhibit the Board, as newly
constituted, from exercising the discretionary powers entrusted to it by the electorate.
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Evans’s contract is therefore void as against public policy, and her complaint fails to state an
actionable claim.
III. Attorney Exception
The Board also argues that Evans’s employment contract is void because it establishes
an attorney-like relationship between the H.R. Director and the Board. While true, a contract
is void where it “involves the employment of an attorney by a board of county
commissioners…for a term extending beyond the time when a change will occur in its
membership,” Jessup, 77 Ind. App. at 463, 133 N.E. at 855 (citing Bd. of Comm’rs of Jay
Cnty. v. Taylor, 123 Ind. 148, 152-53, 23 N.E. 752, 753 (1890)), this doctrine has never been
extended to non-attorney positions. See Shields, 130 Ind. at 12, 29 N.E. at 388; see also
Moon, 50 Ind. App. at 256, 98 N.E. at 155. Because we are able to decide this matter under a
discretionary function analysis, we need not consider expanding the scope of the attorney
exception here.
The judgment of the trial court is reversed and remanded with instructions to dismiss
Evans’s complaint for failure to state a claim upon which relief can be granted.
BAKER, J., concurs.
ROBB, C.J., dissents with opinion.
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IN THE
COURT OF APPEALS OF INDIANA
THE BOARD OF COMMISSIONERS )
OF DELAWARE COUNTY a/k/a )
DELAWARE COUNTY COMMISSIONERS, )
)
Appellant-Defendant, )
)
vs. ) No. 18A05-1201-PL-14
)
BEVERLY J. EVANS, )
)
Appellee-Plaintiff. )
ROBB, Chief Judge, dissenting
I respectfully dissent from the majority’s conclusion that Evans’s complaint
should be dismissed. While I agree with our prior conclusion that “a county board of
commissioners does not ‘ha[ve] the power to limit the discretionary functions of its
successors,’” slip op. at 7 (quoting Allen Cnty. Council v. Stellhorn, 729 N.E.2 608, 612
(Ind. Ct. App. 2000), trans. denied), I disagree with the majority’s conclusion that this is such
an occasion.
Evans’s employment contract does appear to grant her a role in certain discretionary
functions, but I do not believe it goes so far as to limit the discretionary functions of the
commissioners overseeing her position. As the Board states in its appellate brief, “[t]he
human resources director reports to the county commissioners,” “Evans did not have the
11
authority to hire or fire employees,” “significant issues had to be submitted to the county
attorney,” and part of Evans’s role was to advise them “on personnel issues.” Brief of
Appellant at 4, 7. Included in Evans’s job description is that she “mak[es] recommendations
to County Council regarding established job grades and salary increase” and “mak[es] hiring
recommendations.” App. of Appellant at 50. Further, her employment agreement with the
Board states “[t]he Human Resource Director shall report to the Delaware County
Commissioners.” Appendix of Appellant at 15. Read as a whole, the agreement does give
Evans a certain amount of latitude in performing the role of Human Resource Director—such
as “exercising independent judgment in developing, interpreting and applying County
policies, legal requirements and employee benefits programs to individual cases” and
assisting “in developing and administering personnel policies and procedures and benefit
programs, as well as ensur[ing] compliance with local, state and federal regulations,” id. at
162—but that freedom is constrained to certain administrative aspects of the oversight of the
County’s employment relationship with its employees, Evans is still subject to the authority
of the County Commissioners, and the policies she is charged with “developing, interpreting
and applying” are not her own, they are the County’s. The major decision-making authority
remains with the Commissioners. I would therefore conclude Evans’s contract does not limit
2
It is important to note that rather than having an explicit role in forming “public policy,” see slip
op. at 7 (quoting City of Indpls. v. Duffitt, 929 N.E.2d 231, 236 (Ind. Ct. App. 2010)), the role afforded
Evans, while not entirely clear, appears to be in forming employment policies. While employment policies
may include small public policy decisions, as a whole the ability to craft employment policies is
significantly less discretionary than making public policy choices.
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the discretionary authority of the new Commissioners and Evans’s complaint for breach of
her employment contract should not be dismissed.
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