Opinion
CV 03-964-PA.
May 19, 2004
DANA L. SULLIVAN, ELIZABETH JOFFE, McKanna Bishop Joffe Sullivan, LLP, Portland, OR, Attorneys for Plaintiff.
KAREN M. VICKERS, Bullivant Houser Bailey, Portland, OR, Attorneys for Defendants.
OPINION AND ORDER
Plaintiff Eric Oja brings this action for breach of contract, due process violations, breach of duty of good faith and fair dealing, promissory estoppel, fraud, and negligent misrepresentation against defendants Blue Mountain Community College (Blue Mountain), Michael Shea, and Travis Kirkland Plaintiff claims that Blue Mountain's decision to withdraw a job offer violated his procedural due process rights and breached an agreement.
Defendants move for summary judgment. Plaintiff concedes summary judgment on his claim for tortious breach of the duty of good faith and fair dealing, and on his claims for negligent misrepresentation and fraud as to Shea. I grant summary judgment on plaintiff's remaining claims.
BACKGROUND
Plaintiff taught physics at McMinnville High School from August 1993 to June 2002. During that time, he also worked as an adjunct mathematics instructor at Linfield College and Chemeketa Community College.
In spring 2002, Blue Mountain sought applications for eleven positions, including a full-time instructor in physics. In early May 2002, plaintiff applied for the physics instructor position. Plaintiff was under contract to teach at McMinnville High School for 2002-03. He wanted to teach at Blue Mountain because of potential career advancement and because his parents planned to retire in the Pendleton area.
Blue Mountain interviewed plaintiff by telephone in the first week of May. The hiring committee then interviewed plaintiff on campus on June 10, 2002.
On June 11, defendant Shea, who was Blue Mountain's Vice President of Human Resources, telephoned plaintiff at McMinnville High School. Shea offered plaintiff the physics instructor position and discussed salary and benefits. Shea testified that he told plaintiff that "the president had to approve it and it had to go to the board." Shea Depo., at 28 (cited in Defts.' Reply to Concise Stmt. of Facts, at 2). Plaintiff denies that Shea told him that the Board need to approve the job. Plaintiff states that Shea told him that the job was "as official as it gets," and would be secure unless the "whole college [goes] under." Although Shea denies it, plaintiff states that Shea advised him to sell his house and move to Pendleton.
Shea told Mary Van Etta, a human resources employee at Blue Mountain, to prepare an offer letter and employment contract for plaintiff. Shea also obtained interim president McCarrell's approval for the salary offered plaintiff, $48,116.
On June 11, 2002, plaintiff submitted a letter of resignation to the McMinnville School District. He states that he wanted to give the school enough time to find a replacement teacher.
On June 14, 2002, plaintiff talked to Van Etta about an employment contract. Van Etta told plaintiff that she would send him a contract later that day. Van Etta also offered to verify plaintiff's employment for potential real estate lenders.
On June 15, 2002, plaintiff entered into an agreement to sell his house in McMinnville to his sister.
Blue Mountain's interim president, Paul McCarrell, sent plaintiff a letter dated June 18, 2002. The letter stated in part,
Michael Shea, our Administrator for Human Resources, has forwarded to me the Screening Committee's recommendation that you be hired as an Instructor of Physics for the Science Department at Blue Mountain Community College. I have reviewed your background and am pleased to support the committee's recommendation. . . . .
. . . .
If you wish to accept this offer, please sign and return all four (4) copies of the contract by July 8, 2002. I will be recommending your employment to the Board of Education at their July 17, 2002 meeting.
Compl., Ex. 1, at 1-2 (emphasis added).
With the letter, McCarrell enclosed contracts for plaintiff to sign. The contract offered a salary of $48,116 for September 1, 2002, to June 30, 2003. Plaintiff was to be on probation for four years. The contract included lines for the signatures of Blue Mountain's president and the chair of the Blue Mountain Board of Education.
Plaintiff signed the Blue Mountain contract, dated it June 25, 2002, and returned it to Blue Mountain. Plaintiff assumed that McCarrell's letter meant that he had the job and that the Board's approval was a mere formality, a "rubber stamp."
On July 1, 2002, defendant Travis Kirkland became president of Blue Mountain. Kirkland was concerned that the Governor of Oregon would veto the education budget bill, which could cost Blue Mountain more than a million dollars. Kirkland learned within a week of becoming president that the Board would be considering approval on eleven positions, representing about $550,000 in salaries and benefits, at the July 17, 2002 Board meeting. At his deposition, Kirkland stated, "It made no sense to me, given the soft financial situation, to take on another half-million dollars worth of personnel, particularly if I was looking at turning around and laying them off, perhaps. Once you've hired somebody, you incur a whole new set of responsibilities that I thought were very unwise to incur." Vickers Aff., Ex. B, at 9.
On July 12, 2002, plaintiff closed on the sale of his McMinnville house, and on the purchase of a house in Pendleton.
At the Board meeting on July 17, 2002, the eleven positions were taken off the consent agenda because of doubts about funding the positions. Shea tried to notify the eleven persons whose contracts were not approved. Shea was not able to reach plaintiff because plaintiff had already moved to Pendleton and did not have telephone service.
On July 18, 2002, plaintiff learned from a newspaper article that the Board had placed the new employment contracts on hold pending the governor's decision on the budget bill. On July 19, 2002, Shea told plaintiff that the article was accurate, but said his "sources" thought that the governor would probably not veto the budget bill. Shea told plaintiff that if the budget bill did pass, the Board would be called immediately into a special session and plaintiff would then have his job.
In early August 2002, a faculty member told plaintiff that Kirkland intended to disavow the employment contracts regardless of whether the governor vetoed the budget bill. Plaintiff telephoned Kirkland to say that plaintiff and his family were in a precarious position. Kirkland responded that he could not make any commitments, and that even if the governor did not veto the bill, there was no guarantee that Blue Mountain would hire plaintiff.
On August 5, 2002, plaintiff telephoned Kirkland again. Kirkland said that Blue Mountain might offer plaintiff a quarterto-quarter contract. Plaintiff said that he needed to discuss it with his wife. Plaintiff telephoned Kirkland later that evening and said he would not accept a quarterly contract.
On August 8, 2002, the governor announced that he would veto parts of the education budget bill. Plaintiff called Kirkland to ask about the effect of the veto. Kirkland said that no final decision had been made and promised to notify plaintiff the next day about the college's decision.
On August 9, 2002, Shea telephoned plaintiff and said that the best he could offer plaintiff was a quarterly job at the full-time salary. Shea stated that the position could be authorized each quarter, but there was no guarantee beyond one quarter.
Plaintiff asked McMinnville High School about going back to his previous job, but the school had already hired a replacement. Plaintiff obtained a job teaching math at Dayton High School for the 2002-03 school year. The annual salary was $43,032, about $7,000 less than his previous job, with higher insurance premiums and pension payments. Plaintiff is now apparently teaching at McMinnville High School again.
STANDARDS
The court must grant summary judgment if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). If the moving party shows that there are no genuine issues of material fact, the nonmoving party must go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
The substantive law governing a claim or defense determines whether a fact is material. T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). The court should resolve reasonable doubts about the existence of an issue of material fact against the moving party. Id. at 631. The court should view inferences drawn from the facts in the light most favorable to the nonmoving party. Id. at 630-31.
DISCUSSION
I. Due Process Claim
Plaintiff claims that defendants violated 42 U.S.C. § 1983 by depriving him of property without due process of law. I agree with defendants that plaintiff did not have a protected property interest in the physics instructor position.
This court has summarized the applicable law:
The Fourteenth Amendment protects against the deprivation of property or liberty without due process. See, e.g., Brady v. Gebbie, 859 F.2d 1543, 1547 (9th Cir. 1988). An employee has a protected property interest in continued employment only if the employee has a "reasonable expectation or a `legitimate claim of entitlement' to it, rather than a mere `unilateral expectation.'" Brady, 859 F.2d at 1547-48 (quoting Board of Regents v. Roth, 408 U.S. 564, 577 (1972)). As explained in Brady, whether an Oregon public employee has a property interest in continued employment depends on state law:
A legitimate claim of entitlement arises if it is created by "existing rules or understandings that stem from an independent source such as state law.". . . Thus, "[s]tate law defines what is and what is not property" that is subject to the due process clause of the Fourteenth Amendment.Brady, 859 F.2d at 1548 (citations omitted).
See also Trivoli v. Mult. Co. Rural Fire Protection, 74 Or. App. 550, 554, 703 P.2d 285 (1985) ("The existence of a property interest in public employment is determined by reference to state law"). Under Oregon law, a probationary teacher does not have a property interest in his or her job, "at least in the absence of a contract giving the teacher greater rights than does the statute." Maddox v. Clackamas Cty. Sch. Dist. No. 25, 51 Or. App. 639, 643, 626 P.2d 924 (1981), aff'd as mod., 293 Or. 27, 643 P.2d 1253 (1982).Axelsen v. Hillsboro Union High School Dist. No. 3, 898 F. Supp. 719, 722-23 (D. Or. 1995).
Under Oregon law, plaintiff did not have a valid employment contract until the Blue Mountain Board of Education approved it.See Or. Rev. Stat. § 341.290(1). The Board has the power to employ personnel and to "define their duties, terms and conditions of employment." Id. The Board's practice of allowing Blue Mountain to make an employment offer before the Board approves the offer does not contradict or modify the Board's authority to have the final say on employment contracts.
The June 18, 2002 letter from interim president McCarrell to plaintiff stated that McCarrell would recommend that the Board approve plaintiff's employment at the July 17, 2002 meeting. Plaintiff assumed that the Board's approval was just a formality, but that assumption was based only on plaintiff's unilateral expectation.
Defendants also argue that even if plaintiff had a protected property interest, he received all the process that was due to him. If a protected property interest is at stake, procedural due process requires that a person who is subject to adverse government action receive notice of the charges against him, an explanation of the public entity's evidence, and an opportunity to be heard. See Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 546 (1985).
Here, assuming plaintiff had a protected property interest, I conclude that plaintiff received sufficient process under the circumstances. He was able to talk to Shea and Kirkland frequently about his job offer, and Shea and Kirkland told plaintiff that the Board had refused to approve the employment contract because of Blue Mountain's economic problems.
C. Shea and Kirkland Are Entitled to Qualified Immunity
Defendants contend that Shea and Kirkland, the individual defendants, are entitled to qualified immunity. I agree with defendants because reasonable officials under these circumstances could have believed that they were not violating plaintiff's constitutional rights by failing to approve plaintiff's employment contract. Qualified immunity protects "`all but the plainly incompetent or those who knowingly violate the law.'"Burns v. Reed, 500 U.S. 478, 494-95 (1991) (quoting Malley v. Briggs, 475 U.S. 335, 341 (1986)).
Plaintiff contends that defendants have not timely raised qualified immunity. Defendants filed an amended answer on January 12, 2004, which includes the affirmative defense of qualified immunity. Because plaintiff has not shown that the delay prejudiced him, defendants may raise this affirmative defense on summary judgment. Magana v. Commonwealth of the N. Mariana Islands, 107 F.3d 1436, 1446 (9th Cir. 1997); Camarillo v. McCarthy, 998 F.2d 638, 639 (9th Cir. 1993) (failure to assert qualified immunity defense in answer does not waive the defense if assertion at summary judgment does not prejudice plaintiff).
II. Violation of Or. Rev. Stat. § 659.815
Plaintiff's second claim alleges that Blue Mountain violated Oregon Revised Statute § 659.815(1), which provides:
No person, firm, company, corporation, or association of any kind employing labor, shall, either in person or through any agent, manager or other legal representatives, induce, influence, persuade or engage workers to change from one place to another in this state or bring workers of any class or calling into this state to work in any of the departments of labor by:
(1) Any false or deceptive representation or false advertising, concerning the amount or character of the compensation to be paid for any work, or as to the existence or nonexistence of a strike, lockout or other labor troubles pending between employer or employees.
Neither the parties nor I could find decisions construing or even citing this statute. I conclude that plaintiff has not shown that defendants violated this statute in their posting of vacancies. There is no evidence that Blue Mountain knew it could not fund the instructor position when it placed the advertisement, or that Shea knew the Board would not approve the position when he offered the job to plaintiff in June 2002.
III. Breach of Contract
Plaintiff contends that he entered into a binding employment contract with Blue Mountain, and that Blue Mountain breached that contract by failing to hire him. I have concluded as a matter of law that there was no binding contract because the Board did not approve it, so there is no claim for breach of contract.
Even if the contract was binding on Blue Mountain, the physics instructor position would have been an at-will job. When the employment contract is for an at-will position, there is no breach of contract claim available to the prospective employee.See Slate v. Saxon, Marquoit, Bertoni Todd, 166 Or. App. 1, 4-6, 999 P.2d 1152, 1154 (2000).
IV. Promissory Estoppel
Plaintiff contends that until July 19, 2002, Blue Mountain failed to notify plaintiff that the approval of the new president and Board were conditions precedent to its performance under plaintiff's employment contract. Plaintiff alleges that in reliance on Blue Mountain's representations, he resigned from his job with McMinnville High School, sold his house, and purchased a house in Pendleton.
Defendants argue that McCarrell, the interim president, stated in the June 18, 2002 letter to plaintiff that McCarrell would recommend that the Board agree to employ plaintiff. I agree with defendants that a close reading of the letter and the contract show that McCarrell did not agree to employ plaintiff but rather stated that he would recommend that the Board employ plaintiff. This is indicated by contract's blank signature line for the Chair of the Board.
Plaintiff knew that Board approval was legally required, but argues that this as a mere formality. Plaintiff cites alleged statements by Shea to the effect that the job was secure, which Shea denies. Assuming Shea did make such statements, casual or unauthorized comments cannot create a binding employment agreement. See Butler v. Portland General Elec. Co., 748 F. Supp. 783, 792 (D. Or. 1990), aff'd sub nom. Flynn v. Portland General Elec. Co., 958 F.2d 377 (9th Cir. 1992) (table, text in Westlaw). The promissory estoppel claim fails because it was not reasonable for plaintiff to believe that he had a binding contract with Blue Mountain based on McCarrell's statement that McCarrell would recommend plaintiff's employment to the Board.
V. Breach of Implied Duty of Good Faith and Fair Dealing
Plaintiff contends that Blue Mountain, through Shea and Kirkland, violated the implied duty of good faith and fair dealing by failing to recommend to the Board that it approve plaintiff's employment contract.
The duty of good faith and fair dealing does not apply to the termination of an at-will employment relationship. Elliott v. Tektronix, Inc., 102 Or. App. 388, 396, 796 P.2d 361, 365 (1990). Here, the physics instructor position was to have been at-will. I also agree with defendants that plaintiff cannot benefit from the collective bargaining agreement because he was not working as an instructor for Blue Mountain.
VI. Negligent Misrepresentation
Plaintiff contends that Blue Mountain, Shea, and former interim president McCarrell negligently assured plaintiff that his job was certain. Plaintiff alleges that there was a "special relationship" between plaintiff and Shea and McCarrell, creating a special duty to refrain from making negligent misrepresentations to plaintiff.
To determine whether Blue Mountain had a special relationship to plaintiff, the court examines the nature of the parties' relationship and compares that relationship with others in which the law imposes a duty to protect the other party. Onita Pacific Corp. v. Trustees of Bronson, 315 Or. 149, 160, 843 P.2d 890, 896 (1992).
The Oregon Supreme Court has ruled that there was not a special relationship between a temporary professor and the university that employed the professor. Conway v. Pacific University, 324 Or. 231, 244, 924 P.2d 818, 826 (1996). Under Conway, there was no special relationship here.
Plaintiff contends that Blue Mountain acted as a "nongratuitous supplier of information" and therefore owed a duty to exercise reasonable care to avoid misrepresenting facts. Plaintiff cites Or. Rev. Stat. § 341.290 as authority for his argument that Blue Mountain owed him a special duty of care. Under that statute, boards of community college districts should "[p]rovide and disseminate to the public information relating to the program, operation and finances of the community college." Or. Rev. Stat. § 341.290(9). I agree with defendants that this statute does not create a special relationship between plaintiff and Blue Mountain. The statute provides that the Board should disseminate information to the public about its finances and operation, but there is no evidence that Board charges a fee for such information. The Board is not a "non-gratuitous" supplier of information. I conclude as a matter of law that there was no special relationship between plaintiff and Blue Mountain.
VII. Intentional Misrepresentation
Plaintiff contends that Shea intentionally made misrepresentations of fact to plaintiff about the certainty of his employment with Blue Mountain.
To establish intentional misrepresentation, a plaintiff must show
(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that the representation should be acted upon by the listener in the manner reasonably contemplated; (6) the listener's ignorance of the representation's falsity; (7) the listener's reliance on the truth of the representation; (8) the listener's right to rely thereon; and (9) the listener's consequent and proximate injury.Maier v. Pacific Heritage Homes, Inc., 72 F. Supp.2d 1184, 1196 (D. Or. 1999). "If the misrepresentation is a promise, then the plaintiff must show that the defendant either did not intend to perform when he made the promise or that the he made the promise with reckless disregard as to whether he could perform."Id. The plaintiff must prove misrepresentation by clear and convincing evidence. Riley Hill General Contractor v. Tandy Corp., 303 Or. 390, 392, 402, 737 P.2d 595, 597 (1987).
Plaintiff contends that under Arboireau v. Adidas-Salomon AG, 347 F.3d 1158 (9th Cir. 2003), he has presented sufficient evidence of fraud against Blue Mountain to survive summary judgment. In Arboireau, an employee brought an action for fraud against his former employer, contending that the employer failed to disclose plans to transfer the employee's job from the United States to Germany. The Ninth Circuit reversed a grant of summary judgment for the employer, holding that a jury could find that the employer had misled the employee by failing to disclose what the court termed "a likely material contingency."
Here, plaintiff contends that even before he was offered a job, defendants were aware that Blue Mountain had financial problems. Plaintiff contends that defendants intentionally concealed the college's financial problems to entice him into accepting the job.
Unlike the employer in Arboireau, Blue Mountain is a public entity. As noted above, Oregon law required that the Board approve plaintiff's employment. Plaintiff knew that the position depended on the Board's approval, although he assumed that the Board's approval was a foregone conclusion. Under these circumstances, I conclude that plaintiff has failed to present clear and convincing evidence of fraud.
CONCLUSION
Defendants' motion for summary judgment (#20) is granted. Any pending motions are denied as moot.
IT IS SO ORDERED.