Opinion
Civil No. 99-1700 (MJD/JGL)
November 28, 2001
MEMORANDUM OPINION AND ORDER
Before the Court are the motions of Defendants Badiners Jewelers and Marc Badiner and the City of Minneapolis and Sergeant Nelson for summary judgment. Plaintiff has also moved for summary judgment as to Counts I, III, and IV.
Factual Background
On November 26, 1997, Plaintiff David Ehrlich received authorization from Badiners Jewelers to take a man's watch and a tennis bracelet from the store, without paying for them, for the purpose of showing the items to his girlfriend for approval. If Plaintiff chose to keep the jewelry, he agreed to make arrangements for payments, otherwise, he was to return the jewelry. This practice is known as taking items "on approval" or "on memo", and is common in the jewelry business. On November 27, 1997, Plaintiff returned to Badiners Jewelers and received authorization to take a women's watch on approval as well. On December 23, 1997, Plaintiff again went to Badiners Jewelers and received authorization to take a pair of earrings and another bracelet on approval.
Throughout 1998, Badiners Jewelers attempted to obtain payment from Plaintiff for the jewelry that he received on approval. Plaintiff allegedly explained to Badiners Jewelers staff that he did not have the money to pay for the jewelry, and he did not have the jewelry because he gave it to his girlfriend, who had moved to California.
After Plaintiff had the jewelry in question for over one year without receiving any payment, Marc Badiner discussed the situation with Charles Dodge, a Minneapolis Police Sergeant that also provides off-duty security to Badiners Jewelers. Sgt. Dodge suggested to Marc Badiner that he report the incident to the Minneapolis Police Department. In mid January 1999, Badiners Jewelers did file a police report with Sgt. Dodge, complaining of theft by swindle.
The complaint from Badiners Jewelers was eventually assigned to Defendant Sgt. E.T. Nelson, a sergeant in the Minneapolis Police Department's forgery and fraud department. Sgt. Nelson was assigned the complaint because he had been the investigating officer in three prior cases involving Plaintiff. After receiving the case, Sgt. Nelson contacted Badiners to obtain information regarding the complaint. Nelson Dep. 19. Sgt. Nelson then called Plaintiff, who stated that he was making arrangements with Badiners for payment of the jewelry. Id. 21. Sgt. Nelson told Plaintiff to have Badiners Jewelers call and verify the payment arrangements. Id. When Marc Badiner called Sgt. Nelson to inform him that payment had not been made, Sgt. Nelson submitted the case for prosecution in early February 1999. Id. 25. The county attorney deferred prosecution on the complaint, however, because additional information was needed; specifically sales receipts. Id. 26.
The prior cases also took place in 1997, and involved charges of theft by swindle and check forgery. Plaintiff had approached area businesses, and asked if they would sponsor a basketball team. Three area businesses agreed, and wrote checks to Plaintiff in various amounts. Thereafter, Plaintiff altered the checks. For example, he received one check in the amount of $100, and altered it to $1,000 and thereafter cashed it. Plaintiff was convicted as to these charges. Skarda Aff., Exs. 3-5. Plaintiff also pleaded guilty to a charge of theft by misrepresentation for a sum over $35,000 in June 2000. Id. Exs. 12-14. Finally, Plaintiff was charged by complaint for another theft by swindle, in which he obtained a $5,000 advance from a credit card, using a false name. Id. Ex. 15.
In April 1999, Plaintiff filed for bankruptcy. Sgt. Nelson did become aware of the bankruptcy filing at one point, but based on his knowledge of the prior cases involving Plaintiff Sgt. Nelson decided to continue his investigation. In the summer of 1999, Sgt. Nelson again submitted the complaint to the county attorney for prosecution, and the matter was again deferred for want of more information. Id. 36. On this occasion, the county attorney sought clarification of how an individual would be given jewelry by a jeweler, without payment arrangements. Id. In the meantime, in July 1999, the debt to Badiners Jewelers was discharged in Plaintiff's bankruptcy proceedings. Skarda Aff., Ex.
In October 1999, Marc Badiner read an article about Plaintiff in the Jewish World newspaper. In the article, Plaintiff was described as an up and coming talent as a Jesse Ventura impersonator. See Lyons Affidavit, Ex. A. The article also stated that Plaintiff had recently signed a contract with KQRS Morning Show, doing his Ventura impersonation, and that he and the "KQ gang" would be traveling to Las Vegas for broadcasts from that city. Id. After reading the article, Marc Badiner called Sgt. Nelson to inquire into the investigation of Plaintiff. M. Badiner Dep. 31. Badiner also mentioned the Jewish World article, and eventually gave a copy to Sgt. Nelson. Nelson Dep. 43. Believing that Plaintiff was employed by KQRS, Sgt. Nelson called the station's program director, David Hamilton, to obtain additional personal information on Plaintiff. Id. 45.
Hamilton confirms that he had a phone conversation with Sgt. Nelson regarding Plaintiff. During this conversation, Hamilton told Sgt. Nelson that Plaintiff had called the station a number of times to do his Jesse Ventura impersonation, and that the radio staff was impressed with his talents. Plaintiff was never paid for such appearances, however, nor had the station ever entered into a contract with Plaintiff. Plaintiff was invited to go to Las Vegas, at the expense of the station, to do his impersonation during one of the Las Vegas broadcasts. Other than hotel and airfare, Plaintiff received no payment from the radio station. Hamilton also stated that Sgt. Nelson did ask for Plaintiff's phone number, and that during the course of the conversation, Sgt. Nelson told him that "I don't think you want your radio station associated with this guy", meaning Plaintiff, because of Plaintiff's past criminal history. Hamilton Dep. 19. Prior to Sgt. Nelson's phone call, however, Hamilton stated that he had heard that Plaintiff was "unstable and had had problems with the law in the past." Id. 20. After speaking with Sgt. Nelson, Hamilton called Plaintiff and told him he couldn't go on the Las Vegas trip. Id. 26.
Charges were eventually filed on February 3, 2000. Skarda Affidavit, Exs. 6-8. After his arrest on these charges, Plaintiff claims that Sgt. Nelson tipped the media regarding Plaintiff and his past criminal history. The basis for this claim is that when Plaintiff asked Channel 5 TV reporter Katie Boo if she had heard about the case from Sgt. Nelson, she nodded her head. Plaintiff Dep. 117.
On October 24, 2000 Plaintiff was convicted in state court of swindling Badiners Jewelers in an amount in excess of $500. Skarda Aff., Exs. 9 and 10. Specifically, the state district court found that "[t]he State has proved beyond a reasonable doubt that the Defendant [Plaintiff] took the men's Parsifal watch, making false representation to the Badiner's and secondly swindling Badiner's all in the sum of over $500." Skarda Aff., Ex. 10 p. 5.
Plaintiff filed this action against the Defendants alleging five causes of action: Violation of 11 U.S.C. § 524 (Count I); Invasion of Privacy (Count II); 42 U.S.C. § 1983 Violation of Civil Rights (Count III); Interference with Economic Relations (Count IV); and Slander (Count V). Count I is asserted only against the Badiners defendants.
Standard for Summary Judgment
Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Unigroup, Inc. v. O'Rourke Storage Transfer Co., 980 F.2d 1217, 1219-20 (8th Cir. 1992). To determine whether genuine issues of material fact exist, the court determines materiality from the substantive law governing the claim. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Disputes over facts that might affect the outcome of the lawsuit according to applicable substantive law are material. Id. A material fact dispute is "genuine" if the evidence is sufficient to allow a reasonable jury to return a verdict for the non-moving party. Id. at 248-49.
1. Count I — Violation of 11 U.S.C. § 524
In his Complaint, Plaintiff alleges that the Badiners defendants failed to cease collection efforts after Plaintiff's debt to it was discharged in his bankruptcy proceeding in violation of the Bankruptcy Act, 11 U.S.C. § 524. This section provides:
(a) a discharge in a case under this title — . . . 2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of debt is waived . . .
Prior to discharge, the Bankruptcy Act also provides that a bankruptcy petition filed under section 301, 302 or 303 acts as a stay against "any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case . . ." Id. § 362(a). An individual injured by a violation of the automatic stay provision is entitled to recover actual damages. Id. § 362(h). It is Plaintiff's position that the investigation pursued by Sgt. Nelson, with the assistance of the Badiner defendants, was in fact defendants attempt to collect a debt in contravention to the Bankruptcy Act.
While the bankruptcy laws protect a debtor from further collection efforts after a bankruptcy petition is filed or a debt is discharged, these laws provide exceptions for criminal conduct. For example, a debt that is obtained by false pretenses, a false representation or actual fraud is not dischargeable in bankruptcy. Id. § 523(a)(2)(A). In addition, the automatic stay provisions do not "operate as a stay — . . . of the commencement or continuation of a criminal action or proceeding against the debtor." Id. § 362(b)(1). These exceptions in the law make clear that the "bankruptcy courts ` were not created as a haven for criminals." Evans v. Bank or Eureka Springs et al., 245 B.R. 852, 857 (W.D.Ark. 2000). For Plaintiff to prevail on this claim, he would have to show that the criminal prosecution exceptions of the Bankruptcy Act do not apply because the criminal prosecution was done in bad faith, or for the purpose of collecting a dischargeable debt. Id.
Plaintiff alleges that Marc Badiner told Plaintiff that if he paid his debt to Badiners Jewelers, he would drop the criminal charges against him. He further asserts that the Badiner defendants continued their collection efforts by sending him monthly bills, by getting him fired from his job at Trestman Music, and by using Sgt. Nelson as "collection muscle" in the form of threats of criminal prosecution.
The record clearly indicates that Marc Badiner did not refer the matter to the Minneapolis Police Department for criminal investigation until after he had attempted to collect on the debt for over one year. The record also shows that the Badiners defendants filed its police report before Plaintiff filed for bankruptcy. Thus, when Plaintiff finally did file his bankruptcy petition, the criminal investigation had already begun. The record also indicates that there was a sufficient basis upon which to commence a criminal investigation, based on the amount of jewelry taken on approval, and based on the fact that Plaintiff was also being investigated for other theft by swindle and forgery charges. Plaintiff was later convicted on such charges. Based on the foregoing, the Court finds that Plaintiff has failed to raise a genuine issue that the criminal investigation was commenced, or continued, in bad faith. Accordingly, any effort on the part of the Badiners defendants to assist the criminal investigation cannot support a claim under § 524.
Plaintiff also claims that the Badiner defendants engaged in conduct apart from the criminal investigation that constitutes a violation of § 524. Specifically, Plaintiff claims that Badiners Jewelers sent him a bill on a monthly basis for the jewelry, citing to the transcript of the criminal proceeding. The testimony concerning monthly billing was as follows:
THE COURT: Did you ever send him a bill saying you owe us whatever it is, 5700, 6400 dollars?
THE WITNESS: I believe my bookkeeper may have.
THE COURT: Would this have been —
THE WITNESS: A monthly thing?
THE COURT: Yes.
THE WITNESS: Yes.
Tr. T. 40. While the above testimony indicates that Plaintiff may have been sent monthly billings, there is no testimony as to the time frame for such billings. Thus, this testimony does not sufficiently establish that billings were sent after the bankruptcy petition was filed or the debt discharged. In addition, the Court notes that Plaintiff has not produced any such billings. Accordingly, Plaintiff has failed to raise a genuine issue that monthly billings were sent to Plaintiff after the bankruptcy petition was filed. Plaintiff also claims that Marc Badiner called Plaintiff's employer at Trestman Music, and had him fired as a means to put pressure on Plaintiff to pay his debt to Badiners Jewelers. This allegation is again based solely on Marc Badiner's testimony at Plaintiff's criminal trial. The Badiner defendants argue that this evidence is also insufficient to support a violation of § 524. The relevant testimony is as follows:
Q. And you conceded to me previously that your company contacted his employer Mr. Trestman at the time of the bankruptcy and he was subsequently fired from that job where he was manager of a music business?
A. Yes.
Tr. T. 37. The Court finds that the above testimony merely establishes that Badiners Jewelers contacted Trestman Music and that he was fired, not that he was fired because of the contact made by Badiners Jewelers. Because Plaintiff has failed to put forth any other evidence to support his assertion that Badiners Jewelers was responsible for his termination from Trestman Music, the Court agrees that Plaintiff has failed to raise a genuine issue that the Defendants violated the Bankruptcy Act. Summary judgment in favor of Defendants is warranted as to Count I.
2. Count II — Invasion of Privacy, Count V — Slander
In Count II of his Complaint, Plaintiff alleges that Defendants' reckless conduct resulted in an unreasonable intrusion upon Plaintiff's seclusion and upon his right to privacy. Complaint ¶ 42. In Count V, Plaintiff alleges that Defendants slandered Plaintiff by publicizing to third parties that there was an investigation concerning Plaintiff and "his ripping off $6000 from a local jewelry store." Id. ¶ 56. Both the Badiner defendants and the City of Minneapolis have moved for summary judgment on these claims, and Plaintiff did not respond to this aspect of either Defendants' motions. Accordingly, the Court will construe Plaintiff's failure to respond with respect to these claims as conceding that summary judgment in favor of Defendants is appropriate as to Counts II and V.
3. Count III — 42 U.S.C. § 1983 VIOLATION OF CIVIL RIGHTS
42 U.S.C. § 1983 states:
Every person who under color of any statute, ordinance, regulation, custom, or usage, of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity . . .
Moreover, "Section 1983 itself creates no rights; rather it provides `a method for vindicating federal rights elsewhere conferred.'" Kendall v. City of Chesapeake, 174 F.3d 437, 440 (4th Cir. 1999) (quoting Albright v. Oliver, 510 U.S. 266, 271 (1994)). Plaintiff argues that Defendants City of Minneapolis and Sgt. Nelson deprived Plaintiff of his property while denying his constitutional right to due process of law. Specifically, Plaintiff alleges that Sgt. Nelson deprived him of his constitutionally protected right to employment when he contacted KQRS.
In his Complaint, Plaintiff originally alleged that Sgt. Nelson violated his civil rights by physically inserting himself as a police officer absent a state court order, in violation of a federal bankruptcy court order, and in the process disclosed personal and private information to the radio station, and that he threatened to bring felony charges against Plaintiff in an attempt to collect a debt. In response to Defendants' motion for summary judgment, Plaintiff bases his § 1983 claim solely on the argument that Defendants deprived him of his constitutional right to obtain employment.
Defendants City of Minneapolis and Sgt. Nelson argue they are entitled to summary judgment as to this claim because Sgt. Nelson is protected by qualified immunity. "Qualified immunity shields government officials from suit unless their conduct violated clearly established constitutional or statutory right of which the reasonable person would have known." Lambert v. City of Dumas, 187 F.3d 931, 935 (8th Cir. 1999). In ruling on whether a police officer is entitled to qualified immunity, the Court must first consider the threshold question of whether the facts alleged, taken in the light most favorable to the injured party, show the officer's conduct violated a constitutional right. Saucier v. Katz, 533 U.S. 194, 121 S.Ct. 2151, 2156 (2001).
Plaintiff alleges that Defendants deprived him of the right to obtain employment, and that such right to obtain employment is a property right protected by the Constitution, citing to Morfeld v. Kehm, 803 F.2d 1452, 1454 (8th Cir. 1986). In Morfeld, the court recognized the long standing rule that the deprivation of a property interest, "for example a right to employment" is an element of a § 1983 claim, in turn citing to Perry v. Sindermann, 408 U.S. 593 (1972).
Perry involved a college professor that claimed that his employer decided not to rehire him in violation of his First Amendment rights, and that he was not afforded a hearing in violation of his rights to procedural due process. The Court held that although the professor was not a tenured professor, he nonetheless raised a genuine issue as to whether the college's de facto tenure program provided him certain procedural protections. Id. 408 U.S. at 599-600.
By contrast, Plaintiff was not an employee of KQRS, and he has put forth no evidence, other than his subjective belief that the Las Vegas trip would provide income potential, that he was legitimately entitled to employment with KQRS or any other employer. To show a protectible property interest, however, Plaintiff must show "more than a unilateral expectation of it. He must, instead, have a legitimate claim to it." Board of Regents v. Roth, 408 U.S. 564, 577 (1972). Because Plaintiff has established only that he had an expectation of earning income rather than a legitimate claim, Plaintiff has failed to raise a genuine issue that he was deprived of a constitutional right to employment. Accordingly, no further inquires need be made as Plaintiff has not established a prima facie claim under § 1983. See, Saucier, 121 S.Ct. at 2156.
Even if Plaintiff had alleged the deprivation of a constitutional right, an officer is nonetheless entitled to qualified immunity if it is shown that such right was not clearly established. Saucier, 121 S.Ct. at 2156. This inquiry must be made in light of the specific context of the case. Id. "The relevant, dispositive inquiry in determining whether a right is clearly established is whether it would be clear to a reasonable officer that his conduct was unlawful in the situation he confronted." Id.
The concern of the immunity inquiry is to acknowledge that reasonable mistakes can be made as to the legal constraints on particular police conduct. It is sometimes difficult for an officer to determine how the relevant legal doctrine . . . will apply to the factual situation the officer confronts. An officer might correctly perceive all of the relevant facts but have a mistaken understanding as to whether [interfering with one's employment prospects] is legal in those circumstances. If the officer's mistake as to what the law requires is reasonable, however, the officer is entitled to the immunity defense.
Id.
The facts construed in Plaintiffs' favor show that prior to the Badiner complaint being forwarded to him, Sgt. Nelson was involved in other criminal investigations involving Plaintiff, concerning charges of theft by swindle. The facts also show that Plaintiff had taken a significant amount of jewelry, without ever making payment for such jewelry, more than one year before a criminal complaint was lodged. Based on these facts, the Court finds that a reasonable officer would have conducted a criminal investigation concerning Plaintiff and the Badiners Jewelry store. The facts also show that Plaintiff was not an employee of KQRS, and that no employment offer was forthcoming. Armed with such facts, the Court finds that a reasonable officer conducting a criminal investigation would not have known that by telling the KQRS station manager of Plaintiff's legal troubles and/or that the station would not want to associate with Plaintiff, such officer would be violating Plaintiff's constitutional rights. Accordingly, qualified immunity applies, and the § 1983 claim must be dismissed.
Plaintiff attempts to argue that the commencement of a criminal investigation regarding the Badiners Jewelers was not reasonable, based on a letter from Plaintiff's expert, Walt Powers. The Court will not consider such opinion, however, because it has not been presented in affidavit form. See, Federal Rules of Civil Procedure 56(e).
4. Count IV — Interference with Contract and Prospective Economic Relations
The elements of a cause of action for wrongful interference with contract are: (1) the existence of a contract; (2) the alleged wrongdoer's knowledge of the contract; (3) intentional procurement of its breach; (4) without justification; and (5) damages. Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn. 1994) (quoting Furlev Sales and Assoc. v. North American Automotive Warehouse, Inc., 325 N.W.2d 20, 25 (Minn. 1982)).
The City of Minneapolis and Sgt. Nelson assert that Plaintiff is barred from bringing this claim against Sgt. Nelson as he is protected by official immunity. In Minnesota, a police officer is entitled to official immunity from state law claims when such police officer is charged by law with duties that require the exercise of judgment or discretion. Johnson v. Morris, 453 N.W.2d 31, 41 (Minn. 1990). Official immunity may be defeated only by proof that the officer acted willfully or with malice. Watson v. Metropolitan Transit Commission, 553 N.W.2d 406, 412 (Minn. 1996). An officer is said to have acted willfully or maliciously if he "intentionally commits an act that he or she then has reason to believe is prohibited." Rico v. State, 472 N.W.2d 100, 107 (Minn. 1991).
The Court finds that Plaintiff has failed to raise a genuine issue that Sgt. Nelson acted willfully or with malice when he contacted KQRS. Plaintiff's main argument is that the investigation should not have continued after he filed for bankruptcy, and the fact that it did indicates the criminal investigation was merely a tool for collecting a debt. However, as discussed above, the Bankruptcy Act does not provide a haven for criminal conduct. Also, the Court has found that the commencement and continuation of the criminal investigation was reasonable. Therefore, the fact that Plaintiff filed for bankruptcy protection does not sufficiently raise a genuine issue that the criminal investigation was done willfully or maliciously. Accordingly, Sgt. Nelson is entitled to official immunity with respect to Plaintiff's state law claims of interference with contract, and prospective contractual relations.
With respect to the Badiner defendants, the Court finds that the record does not sufficiently raise a genuine issue that any of the Badiner defendants directed Sgt. Nelson to contact David Hamilton, or that any of the Badiner defendants knew Sgt. Nelson would contact David Hamilton. Accordingly, Plaintiff has failed to raise a genuine issue that the Badiner defendants intentionally interfered with his alleged contract with KQRS. To prevail on his claim that the Badiner defendants tortiously interfered with his prospective business relationships, Plaintiff must prove that Defendants committed a wrongful act that improperly interfered with Plaintiff's prospective business relationships. Sip-Top, Inc. v. Ekco Group, Inc., 86 F.3d 827, 832 (8th Cir. 1996). Plaintiff argues that as the Badiners defendants got him fired from Trestman Music, it can be reasonably inferred that the Badiners defendants were also trying to interfere with Plaintiff's employment prospects with KQRS. However, as discussed above, Plaintiff has not raised a genuine issue that the Badiners caused his employment with Trestman to be terminated. As Plaintiff has failed to put forth evidence to support his assertion that Sgt. Nelson was merely doing the "bidding" of the Badiner defendants, rather than conducting a legitimate criminal investigation, summary judgment in favor of the Badiner defendants is appropriate.
IT IS HEREBY ORDERED THAT:
1. Defendant Badiner Jewelers and Marc Badiner's motion for summary judgment is GRANTED.
2. Defendant City of Minneapolis and Sgt. E.T. Nelson's motion for summary judgment is GRANTED.
3. Plaintiff's motion for summary judgment is DENIED.
4. Plaintiff's Complaint is DISMISSED WITH PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.