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City of Fairbanks v. Rice (3/17/00) sp-5253
City of Fairbanks v. Rice (3/17/00) sp-5253
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts, 303 K Street,
Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
CITY OF FAIRBANKS, MICHAEL )
PULICE, and PATRICK B. COLE, ) Supreme Court No. S-8469
)
Appellants, ) Superior Court No.
) 4FA-95-1582 CI
v. )
) O P I N I O N
JIMMY RICE and LEE DeSPAIN, )
) [No. 5253 - March 17, 2000]
Appellees. )
______________________________)
)
LEE DeSPAIN, )
)
Cross-Appellant, ) Supreme Court No. S-8470
)
v. )
)
CITY OF FAIRBANKS, MICHAEL )
PULICE, and PATRICK B. COLE, )
)
Cross-Appellees. )
______________________________)
)
JIMMY RICE, )
)
Appellant, ) Supreme Court Nos. S-8479/8489
)
v. )
)
CITY OF FAIRBANKS, MICHAEL )
PULICE, and PATRICK B. COLE, )
)
Appellees. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Mary E. Greene, Judge.
Appearances: John M. Eberhart and Paul J.
Ewers, Deputy City Attorneys, Fairbanks, for
City of Fairbanks, Patrick B. Cole, and
Michael Pulice. Edward R. Niewohner,
Niewohner & Associates, P.C., and Kenneth P.
Ringstad, Paskvan Law Offices, P.C.,
Fairbanks, for Jimmy Rice. Thomas R.
Wickwire, Fairbanks, for Lee DeSpain.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
1. INTRODUCTION
Jimmy Rice and Lee DeSpain sued the City of Fairbanks
(their former employer) and two city employees alleging violations
of the Alaska Whistleblower Act resulting in their constructive
discharge, and violations of their civil rights under 42 U.S.C. §
1983 of the federal Civil Rights Act. A jury returned verdicts for
Rice and DeSpain. The city and its employees appeal; Rice and
DeSpain cross-appeal. We affirm because sufficient evidence
supports the verdicts, because the city was not entitled to
qualified immunity on the Whistleblower Act claim, and because the
superior court did not err in rejecting the defendants' claim that
Rice and DeSpain failed to exhaust their administrative remedies.
We find no prejudicial error in the parties' other appeal and
cross-appeal issues.
2. FACTS AND PROCEEDINGS
Jimmy Rice and Lee DeSpain were firefighters employed by
the City of Fairbanks, Department of Public Safety (fire
department). Both were members of the Fairbanks Fire Fighters
Association, affiliated with the International Association of Fire
Fighters.
In 1994 DeSpain and Rice reported that Michael Pulice,
the city's Director of Public Safety and their indirect supervisor,
was overstating his "comp" time. The Fairbanks City Council
discussed the report on February 13, 1995. The next day Pulice
telephoned Fairbanks attorney Brett Wood, knowing that Wood had
represented Rice and DeSpain. According to Wood, Pulice threatened
during the telephone conversation to retaliate against DeSpain and
Rice for their report and other activities unrelated to their
employment, and insinuated that he might "set them up" or entrap
them. Wood informed City Manager Patrick Cole of the call and
asked that Rice and DeSpain be placed on administrative leave until
the issue was resolved. Cole declined to do so.
Three other circumstances contributed to animosity
between Rice and DeSpain and the city: the city and Pulice
allegedly tried to weaken or discredit the fire fighters' union,
Rice and DeSpain engaged in surveillance of Pulice, and Rice told
then City Manager Mark Boyer that Pulice had had an extra-marital
affair with Pulice's administrative assistant.
Rejecting the city's recommendation to submit the issue
to dispute resolution, DeSpain and Rice resigned, claiming that
they were concerned about retaliation and "intolerable" working
conditions. When they resigned, DeSpain and Rice had each been
employed for at least twenty years with the fire department.
Rice and DeSpain sued the city, former City Manager Cole,
and Public Safety Director Pulice. They claimed in their various
complaints that the city, Cole, and Pulice had violated the Alaska
Whistleblower Act,1 resulting in the plaintiffs' constructive
discharge and the loss of a promotion for Rice, and that Cole and
Pulice had violated the plaintiffs' federal constitutional rights
of free speech.2 DeSpain also sued Pulice for defamation, alleging
that Pulice had told attorney Wood that DeSpain was involved in an
extramarital affair.
The case was tried before a jury. The superior court
effectively dismissed the Whistleblower Act claims against Pulice
and Cole individually when it allowed the jury to consider those
claims only against the city. The court instructed the jury to
consider the § 1983 claims against Pulice and Cole.
The jury found for DeSpain on his civil rights claims
against Cole and Pulice, on his Whistleblower Act claim against the
city, and on his defamation claim against Pulice. It awarded
DeSpain damages of $142,901 on his § 1983 and Whistleblower Act
claims and damages of $8,050 on his defamation claim. The jury
found for Rice on his civil rights claims against Cole and Pulice,
and on his Whistleblower Act claim against the city. It awarded
Rice damages totaling $353,001.3
The superior court granted Cole's motion for a judgment
notwithstanding the verdict (JNOV), concluding that Cole was
entitled to qualified immunity on the § 1983 claims -- the only
claims the jury considered against him. The superior court
concluded, "[a]t worst, Cole failed to do as much as he could have
to investigate the allegations. However, reasonable people with a
clear understanding of the law could not disagree that Cole could
have reasonably believed his conduct was lawful."
As a prevailing party, Cole moved for attorney's fees;
the superior court awarded him $5,139. The court awarded Rice
attorney's fees of $48,040.94 against the city and $346,739.25
against Pulice. It awarded DeSpain attorney's fees of $168,114.12
against Pulice on DeSpain's successful § 1983 claim.
The court entered judgments for Rice and DeSpain against
the city and Pulice, and for Cole against Rice and DeSpain. The
city and Pulice (and Cole to the extent issues affect him) appeal
from the denials of their motions for summary judgment, directed
verdict and JNOV on the constructive discharge issue; denial of
qualified immunity to the city on the Whistleblower Act claims;
denial of summary judgment against Rice and DeSpain because they
did not exhaust their administrative remedies; and denial of
defendants' new trial motion. They claim errors in the judgments;
in awarding attorney's fees to Rice and DeSpain on their civil
rights claims; in denying summary judgment and remittitur on the
defamation claim; and in calculating Cole's award of attorney's
fees. The Fairbanks Office of the City Attorney represents the
city, Cole, and Pulice on appeal, and unless context requires
otherwise, we refer collectively to them as "the city."
DeSpain and Rice appeal the JNOV entered against them in
favor of Cole on the civil rights claim; they also appeal being
precluded from asserting a Whistleblower Act claim against Cole
individually. Rice appeals being precluded from asserting a
Whistleblower Act claim against Pulice individually; he also
appeals from evidentiary rulings and raises issues regarding
mitigation of damages. DeSpain also challenges trial time limits
the superior court imposed and the denial of discovery master fees.
3. DISCUSSION
1. The City's Appeal: S-8469
1. The constructive discharge issue
Rice and DeSpain asserted in their Whistleblower Act and
§ 1983 claims that they had been constructively discharged. The
jury found that the fire department constructively discharged Rice
and DeSpain. The city argues that Rice and DeSpain's decisions to
resign were unreasonable as a matter of law. It asserts that the
evidence does not support the constructive discharge finding and
that the issue should have been dismissed on summary judgment, or
by entry of a directed verdict or JNOV.4
We review denial of a motion for summary judgment de
novo.5 We will reverse denial of a motion for a directed verdict
or JNOV only if the evidence, viewed in the light most favorable to
the nonmoving party, is such that reasonable people could not
differ in their judgment.6
To prove constructive discharge,7 employees must show
that reasonable persons in their position would have felt compelled
to resign.8 The city argues that the employees' evidence does not
support a finding that they reasonably felt compelled to quit.
To support their claims, Rice and DeSpain offered their
own testimony and the testimony of attorney Wood and a former
police officer. Wood testified that Pulice called him shortly
after they reported Pulice's comp time abuses and that Pulice told
Wood he "had them set up," and that he was "well-versed in
entrapment." Wood testified:
Q. Did [Pulice] use the words "set up" at
any time?
A. Excuse me. Mr. Pulice told me that he
had them set up.
Q. Did he use that in the present tense, the
past tense, the future tense; how was
that used?
A. Past tense.
Q. That he had them set up?
A. He had them set up.
Q. What did you take that to mean?
. . . .
A. [I]n the context of the statements about
being well versed in entrapment and
statements -- well, he stated that he'd
taken great pains to make a case against
them. And when he said that they had
them set up -- you have to understand,
Mr. Niewohner, this man is the chief of
police of the City of Fairbanks. He's a
commissioned police officer. I took it
to mean that he had them set up for some
sort of a crime or something like that. I
mean, that was the way I took it.
Rice and DeSpain testified that they took the threat
seriously. Rice testified that, after the telephone call, he began
imagining numerous ways in which he might be framed or otherwise
edged out of his position. He described ways in which he felt he
was vulnerable to criticism from Pulice and how he could be set up
on the job because of Pulice's access to the fire department and
the police department evidence room. His concerns were amplified
because Pulice was the chief of police and Rice's boss, as well as
the acting city manager at the time of the telephone call. DeSpain
also testified about ways he believed Pulice could entrap him or
"set [him] up."
Rice and DeSpain supported the reasonableness of their
interpretation of Pulice's words with the testimony of a former
police officer, Mike Nielsen, who had worked closely with Pulice
for over twenty years. Nielsen stated that he had advised them to
take Pulice's threats very seriously, and pointed out to them that
Pulice had access to evidence which would easily enable him to
frame them with a crime. Nielsen testified: "He had the evidence
key. If he wanted to go down and get evidence, he could drop a
baggy of marijuana in the back of their car and call an anonymous
tip."
On appeal the city claims that this evidence supports
only a subjective, unreasonable belief that conditions were so
intolerable as to require resignation. It also argues that such
single, trivial, or isolated acts of misconduct are generally
insufficient to support a constructive discharge claim.9
We are unwilling to say that the evidence is insufficient
as a matter of law to support a finding that the resignations were
reasonable. We assume for discussion's sake that an irrational and
unsupported fear of framing would not support a finding of
constructive discharge. But fear created by an actual threat of
framing and bolstered by evidence of means and will is sufficient
to support the jury's verdict. It was for the jury to evaluate the
city's allegation that Rice and DeSpain's behavior was inconsistent
with their claims and any weakness in plaintiffs' evidence.10 The
superior court did not err in declining to grant the city summary
judgment, a directed verdict, or a JNOV on this issue.
2. Cole's qualified immunity
Rice and DeSpain asserted claims against the city, Cole,
and Pulice under the Alaska Whistleblower Act.11 The superior court
allowed the jury to consider the Whistleblower Act claims against
only the city, and not against Cole and Pulice. The jury found the
city liable.
The Whistleblower Act claim against the city was based in
part on the acts of former City Manager Cole. Those acts also
provided the factual basis for DeSpain's and Rice's § 1983 civil
rights claims against Cole. The jury found Cole liable under §
1983 for those acts. But after concluding that Cole was entitled
to qualified immunity, the superior court granted Cole a JNOV on
the § 1983 claims. The city argues that if Cole was entitled to
immunity on the § 1983 claims of retaliatory conduct, reasonable
people likewise had to find that the city was entitled to immunity
under the Alaska Whistleblower Act because the city acted through
Cole.
The city relies on AS 09.65.070(d)(2), which grants
discretionary function immunity to municipalities.12 This immunity
is qualified and does not bar liability for a municipality's
discretionary act if that act is alleged to have violated a
statute.13 The city requested a jury instruction on qualified
immunity in context of the Whistleblower Act claims. But the
requested instruction was not given.
It is unnecessary to decide whether it was error in
context of Cole's acts to reject the city's request for a qualified
immunity instruction, because Pulice's acts provided an alternative
basis for holding the city liable on the Whistleblower Act claim.
Pulice did not assert a qualified immunity defense, and the city
does not argue on appeal that Pulice was entitled to immunity.
Because the jury found Pulice liable for doing the same things
which potentially made the city, as Pulice's employer, vicariously
liable under the Whistleblower Act, Cole's possible immunity would
not have excused the city.
3. Exhaustion of administrative remedies
The city argues that Rice and DeSpain failed to exhaust
their administrative remedies under their collective bargaining
agreement (CBA) with respect to their Whistleblower Act claims and
the constructive discharge issue. The city also argues that Rice
failed to exhaust his administrative remedies as to his assertion
that the city failed to promote him. Rice and DeSpain argue that
Whistleblower Act and § 1983 claims do not require exhaustion of
state administrative remedies, and that the city waived the
failure-to-exhaust issue with respect to constructive discharge.
The CBA required the parties to arbitrate disputes that
could not be resolved through internal grievance procedures.14 Rice
initially pursued a grievance but resigned before it was resolved.
The superior court ruled that exhaustion was not required and
denied the city's motion for summary judgment. We review for abuse
of discretion a trial court's decision whether to require
exhaustion of administrative remedies.15
We first conclude that the exhaustion requirement does
not apply to a damage claim under the Alaska Whistleblower Act.
The city correctly argues that an employee must exhaust contractual
or administrative remedies before pursuing direct judicial action.16
This general rule includes exhaustion of contractual remedies such
as grievance procedures.17 But the Whistleblower Act provides for
remedies that would not have been available under the city's CBA
grievance procedure.18 We have previously held that arbitration
does not afford an exclusive remedy where a statute provides for
relief unavailable through arbitration.19
The legislature intended to discourage and remedy
retaliation against whistleblowers by authorizing them to bring
civil actions.20 We therefore think it unlikely that the
legislature intended to require that whistleblowing employees
administratively exhaust their Whistleblower Act claims. In Public
Safety Employees Ass'n v. State,21 we held that employees' claims
for failure to maintain fit premises and for harassment were
arbitrable under a collective bargaining agreement, but claims for
retaliatory rent and waiver of statutory rights were not
arbitrable.22 Under the express provisions of that agreement, only
claims involving interpretation or application of the agreement's
terms were arbitrable.23 Having drawn this distinction between
arbitrable and non-arbitrable claims, we concluded that the
employees were not precluded from exercising their statutory
remedies under the Uniform Residential Landlord-Tenant Act for even
arbitrable claims because that act explicitly barred waiver of
rights or remedies under the act, and afforded remedies that were
unavailable under the act.24
Although a constructive discharge claim is arbitrable,25
here the employees alleged constructive discharge only to support
their Whistleblower Act and § 1983 claims, not to support a
wrongful termination cause of action. The claims they asserted do
not require exhaustion of administrative remedies. And the facts
underlying the Whistleblower Act claim and any constructive
discharge intertwine. We will not require employees to sever those
issues and arbitrate one before proceeding judicially on the
other.26 Likewise, Rice was not required to pursue a failure-to-
promote administrative claim because his assertion that he was not
promoted is closely aligned with his Whistleblower Act and § 1983
claims.27
State v. Beard (Beard IV) is not contrary.28 We there
held that Beard's constructive wrongful discharge claim was
foreclosed by his failure to exhaust his administrative remedies29
and held that requiring exhaustion "promotes judicial efficiency by
affording an institution an opportunity to correct its own errors,
so as to render judicial action unnecessary."30 But a Whistleblower
Act claim is not the equivalent of a constructive wrongful
discharge claim. The superior court correctly noted that to
sustain Whistleblower Act claims, employees must show that they
were discharged or deprived of employment benefits because of their
whistleblower activities. This additional showing of retaliation
makes a Whistleblower Act claim more akin to a civil rights claim
under § 1983, to which no exhaustion requirement applies. And by
its very nature, because it is based on allegedly retaliatory
conduct, a judicial Whistleblower Act claim is predictably less
likely to be avoided by arbitration.
Therefore, we hold that it was not an abuse of discretion
to refuse to dismiss Rice's claims for failure to exhaust
administrative remedies.
4. New trial for alleged litigation misconduct
The city argues that because Rice and DeSpain and their
counsel engaged in deliberate misconduct with respect to rules of
evidence, trial procedure, protective orders, and evidentiary
rulings, it was error to deny the city's new trial motion.
The superior court denied the city's new trial motion
because the city failed to move for a mistrial first; the court
observed that the city chose to take its chances with the jury it
had.
The superior court agreed that Rice's attorney had
engaged in misconduct at trial by repeatedly disregarding in limine
orders and by failing to seek court permission before introducing
"bad acts" evidence under Alaska Evidence Rule 404(b). The court
also observed that Rice and DeSpain "felt free to say anything they
wanted on the stand and frequently violated court orders when doing
so." But these observations do not establish that the failure to
grant a new trial was an abuse of discretion.
Reversal of a trial court's denial of a new trial motion
is appropriate only in exceptional circumstances to prevent a
miscarriage of justice.31 The city points to no misconduct which
so prejudiced the city that a miscarriage of justice will result
absent a new trial. Instead, the city merely argues that although
"no single incident, in and of itself, provided grounds for
granting a new trial, the cumulative effect does." The trial judge
is in the best position to determine whether misconduct can be
cured only by granting a new trial, and whether the failure to
timely request lesser remedies indicates a tactical choice. The
superior court evidently believed that the city was content with
the jury until it returned the verdict. We are not convinced that
the superior court erred in resolving the motion.
5. Alleged errors in entering the judgments
The city next raises procedural issues. It argues that
the special verdict forms were ambiguous because they did not
require the jury to specify which of three alternative grounds were
the basis for finding that Pulice was liable. It argues that
ambiguities in the special verdict forms should be resolved in
favor of the defendants. But we do not find special verdict
Interrogatory 4 or Interrogatory 8 to preclude entry of judgment
against the city and Pulice. Only three claims for relief were
submitted to the jury: the Whistleblower Act claims, the § 1983
claims, and DeSpain's defamation claim. Because the superior court
did not allow the jury to consider Whistleblower Act claims against
Pulice (or Cole), the jury's verdicts require us to conclude that
the jury found against Pulice on the § 1983 claims. We perceive no
ambiguity.
6. Attorney's fees awarded to Rice and DeSpain
The jury awarded Rice and DeSpain each one dollar for
noneconomic damages. The city argues that these nominal awards
were for their § 1983 claims, and that it was therefore error to
award Rice and DeSpain substantial attorney's fees under 42 U.S.C.
§ 1988.
This issue is so sparely briefed that it is effectively
waived.32 The city's brief does not even squarely assert that the
court granted any fees to Rice and DeSpain under § 1988, or what
amounts it granted.33 The city does not object to the manner in
which Rice and DeSpain's fee awards were calculated, but asserts
that the nominal damages awards precluded fee awards under § 1988.34
Even if the city had not waived the issue, its argument would
fail. Rice and DeSpain's § 1988 awards were justified by the
jury's substantial damage verdicts. These awards, totaling
$353,001 for Rice and $142,901 for DeSpain, reflected damages
arising from the defendants' retaliatory interference with the
plaintiffs' rights of free speech. Therefore, it was not error to
grant them attorney's fees under § 1988.
7. Defamation claim
DeSpain sued Pulice for defamation, alleging that Pulice
made defamatory statements intimating that DeSpain had had an
extramarital affair with a friend's wife. The statements giving
rise to this claim occurred during the Pulice-Wood telephone
conversation which was also the basis for Rice and DeSpain's
assertions that they had been constructively discharged. Pulice
told Wood that he had received a report from a private individual
that DeSpain had an extramarital affair. According to Wood, Pulice
also implicitly threatened to repeat the rumor to third parties.
The city argues that the superior court should have
dismissed DeSpain's defamation claim on summary judgment because
Pulice's call to attorney Wood, DeSpain's agent, was not a
"publication." Courts elsewhere are split on whether a defamatory
communication to an agent is a "publication."35 But there is no
evidence here that DeSpain had authorized Wood to act as DeSpain's
agent for the purpose of receiving communications on the subject of
Pulice's statements. Absent any such evidence, we think the better
rule is that a communication to an attorney can be a publication.
Because the city on appeal points to no evidence that Wood had
authority to act as an agent to receive such communications, the
city cannot prevail on this issue.
The city next argues that DeSpain's defamation claim
should have been dismissed absent evidence of special harm. We
conclude that the superior court did not err in holding that
Pulice's statement to Wood was defamatory per se, obviating the
need for proof of damages. We have previously recognized that
imputation of sexual misconduct is defamatory per se.36 The
superior court concluded that allegations of marital infidelity
were allegations of serious sexual misconduct. We agree. It was
not error to deny the city's summary judgment motion on DeSpain's
defamation claim.
The city finally contends that because DeSpain failed to
establish any harm to his reputation, the superior court should
have remitted the damages the jury awarded DeSpain for defamation.
Remittitur is proper when a jury, without acting under
the type of passion or prejudice that would warrant a new trial,
nonetheless awards an amount that is unreasonable given the
evidence.37 The appropriate measurement is the "maximum possible
recovery" a reasonable jury could have awarded.38
A defamed party may recover damages for harm to
reputation, wounded feelings and humiliation, resulting physical
ailments, and estimated future damages of the same kind.39 A wide
range of damages is generally allowable, "running from six cents to
$1,000,000 in compensatory damages with an additional $1,250,000 in
punitive damages."40 In Alaska, defamation damages of $10,000 have
been affirmed on appeal.41 We are not persuaded that the defamation
award of $8,050 exceeds the maximum amount permissible for the
intangible harms resulting from this defamation.
8. Attorney's fees awarded to Cole
The superior court awarded Cole attorney's fees of
$5,139, divided between Rice and DeSpain. Cole argues that the
court abused its discretion by rejecting Cole's "methodology" and
in undervaluing time spent by the city's staff attorneys.
As a prevailing party, Cole, through the city, moved for
attorney's fees against Rice and DeSpain.42 His initial request was
based on incurred fees which he claimed had a total value of
$384,168.25. This total valued the time of the city's staff
attorneys at $75 per hour and the time of retained attorneys at
their billed rates. When the superior court ruled Cole could not
recover fees on the § 1983 claims and required him to segregate the
fees "that apply solely to the state claims," Cole recalculated the
base total as $290,396.43. 43 This figure valued the staff
attorneys' time at $150 per hour, reduced the time of outside
counsel by forty-five percent to compensate for the mix of state
and federal claims, and deleted time spent solely representing
other defendants.
The superior court then ordered Cole "to properly
segregate the fees spent solely in defense of state claims against
him." In response, Cole submitted affidavits establishing that
attorney's fees totaling $17,130 had been incurred on his behalf on
the state-law-only claims. The superior court awarded Cole thirty
percent, $5,139, of that amount.
Cole argued below and implicitly argues here that the
common nature of the various claims made it "largely" impossible to
segregate the time and that his approach of discounting fees by
forty-five percent was reasonable and conservative. We conclude
that the superior court permissibly required segregation between
federal and state-law claims.44 It properly declined to award fees
based on services performed in defending the § 1983 claims. And we
conclude that in limiting the award to services performed defending
the state-law claims against Cole, the superior court did not abuse
its discretion by rejecting Cole's apportionment scheme in
preference for exact time records specifying the actual time spent
defending Cole on state-law claims.
Cole next argues that it was error to value staff city
attorney time at $75 per hour. Cole's superior court filings
established that for internal purposes the city attorney's office
valued staff time at $75 per hour and his original calculation
valued the staff attorneys' work at that rate. Cole's revised
calculation requested a "reasonable market value" of $150 per hour
for the staff attorneys' time. The court's award was based on a
$75 hourly rate for staff attorneys, but valued the time of outside
counsel at the rates they charged. On appeal Cole tersely argues
for "reasonable" fees but does not specify the rate he believes
correct or address any of the policy questions this issue
potentially raises.45 We conclude that it was not an abuse of
discretion to rely on the city's internal $75 hourly rate in this
case.
The case the city cites in support, AMFAC Hotels v.
State, Department of Transportation,46 does not require finding an
abuse of discretion here. We there held that it "was well within
the trial court's discretion" to calculate the state's fees by
substantially reducing the time spent by counsel for the state and
applying an average private billing rate of $75 per hour.47 That
opinion did not require trial courts to value staff counsel's time
at private billing rates.
Accordingly, we discern no clear abuse of discretion.
2. Rice's and DeSpain's Appeals: S-8470/8479/8489
1. JNOV for Cole on qualified immunity
The jury determined that Cole was not entitled to
qualified immunity; it found that Cole could not reasonably have
believed that his conduct did not violate Rice's right to free
speech. The superior court, however, granted JNOV for Cole on this
issue stating that "reasonable people would not disagree that Cole
could have reasonably believed his conduct was lawful within the
context of the information he knew and the actions he took." The
court explained that "Cole took no action which deprived Rice or
DeSpain of any free speech right. . . . At worst, Cole failed to
do as much as he could have to investigate the allegations."
"The standard of review for motions for directed verdict
and judgment n.o.v. is 'to determine whether the evidence, when
viewed in the light most favorable to the nonmoving party, is such
that reasonable men could not differ in their judgment.'"48
We agree with the superior court's analysis because it is
consistent with principles underlying the application of qualified
immunity. Federal qualified immunity shields government officials
from liability for civil damages "insofar as their conduct does not
violate clearly established statutory or constitutional rights of
which a reasonable person would have known."49 It is applied
liberally to protect government officials who exercise discretion
when making policy decisions or balancing competing
considerations.50 If there is a "legitimate question" as to whether
an official's conduct constitutes a constitutional violation, the
official is entitled to immunity.51 "Officials are not liable for
bad guesses in gray areas; they are liable for transgressing bright
lines."52 Given Cole's limited role in the events giving rise to
the constitutional violations, we agree with the superior court's
reasoning and conclude that Cole was entitled to a JNOV.
2. Dismissal of Whistleblower Act claims
The superior court dismissed the Whistleblower Act claims
against Pulice and Cole; it allowed the jury to consider those
claims only as against the city.53 After the trial ended, we ruled
in another case that Whistleblower Act claims can be brought
against individual defendants.54 Given that ruling, it was error
to dismiss the Whistleblower Act claims against the individual
defendants. Rice claims that this error requires reversal as to
both Cole and Pulice; DeSpain argues that the error requires
reversal as to Cole, but does not raise the issue as to Pulice.
The city concedes that dismissal was error, but argues that the
error was harmless.
We conclude that the error was harmless as to both Cole
and Pulice. In deciding whether an official is entitled to
discretionary function immunity under AS 09.65.070(d)(2), we apply
the federal standard for qualified immunity in § 1983 claims.55
Because we affirm the court's determination that Cole was entitled
to qualified immunity under § 1983, Cole also would have been
entitled to discretionary function immunity under state law. Thus,
the error of dismissing the Whistleblower Act claims against Cole
as an individual was harmless.
As to Pulice, the city argues that the § 1983 and
Whistleblower Act claims against him are identical, and that
remanding the Whistleblower Act claims for trial could lead to a
double recovery. The jury found Pulice liable under § 1983 for his
retaliatory conduct and awarded Rice (and DeSpain) damages for lost
past and future wages and benefits. The Whistleblower Act claims
were based on the same conduct and losses that resulted in the
damages verdict for Rice under § 1983. Rice's recovery of that
verdict establishes that the error of dismissing Rice's
Whistleblower Act claim against Pulice individually did not
prejudice Rice.
3. Time limits at trial
Although he prevailed at trial, DeSpain challenges time
limits the superior court imposed on the presentation of his case.
The court allowed each side ten days to present its case. DeSpain
agreed that Rice, who was to address their common issues, should
have six of their ten days. At trial, DeSpain claimed his time was
insufficient and requested four additional hours; the superior
court gave him an extra half-hour. DeSpain now argues that he was
forced to curtail his cross-examination of two unspecified defense
witnesses and his closing argument.
Although he agrees with the city that any error is
harmless, DeSpain asks us to consider it because it presents an
important and recurrent issue capable of evading review.56 We
decline to consider it here. The issue necessarily depends on the
facts of each case. We are not willing to condemn time limits in
the abstract, and the issue can be raised by a party actually
claiming prejudice. Moreover, DeSpain's conclusory arguments that
his case was curtailed do not establish error or prejudice. They
give us no basis for saying that these time limits were
inappropriate, or for offering guidance to the trial courts.
4. DeSpain's discovery master fees
The superior court appointed a discovery master and
ordered DeSpain to pay his portion of the master's fees. After he
prevailed at trial, DeSpain moved to recover the fees he had paid.
The superior court denied his motion on the ground that the
parties' "unreasonable conduct" had required the appointment. "Had
counsel cooperated, no expense would have been incurred. Each
party must pay the master's expense; the court finds that it should
not be a shifted expense under [42 U.S.C.] § 1988."
Section 1988 awards are reviewed for abuse of discretion
if grounded in factual findings57 and are reviewed de novo if they
are grounded in statutory interpretation.58
DeSpain does not claim that it was error to appoint the
discovery master, only that it was an abuse of discretion not to
shift to the city DeSpain's share of the master's expense. But §
1988 does not mandate such an award, and DeSpain has not
demonstrated that it was an abuse of discretion to deny his motion.
We affirm the denial.
5. Mitigation of Rice's damages
The jury found that Rice failed to mitigate his economic
damages, and reduced his damage award.59 Rice does not deny that
he had a duty to mitigate his damages, but he contends that he was
only required to seek comparable employment, that the jury was
erroneously instructed about what constitutes comparable
employment, and that no evidence supported the jury's verdict on
the mitigation issue.
"The goal of contract damages is to place the
nonbreaching party in as good a position as if
the contract had been fully performed."
Alyeska Pipeline Serv. Co. v. H.C. Price Co.,
694 P.2d 782, 787 (Alaska 1985). In the case
of wrongful discharge, this generally means
that the employee "is entitled to the total
amount of the agreed upon salary for the
unexpired term of his employment, less what he
could earn by making diligent efforts to
obtain similar employment." Skagway City
School Bd. v. Davis, 543 P.2d 218, 225 (Alaska
1975), overruled on other grounds, Diedrich v.
City of Ketchikan, 805 P.2d 362, 366 (Alaska
1991).[60]
The jury was instructed that "an employee who is
constructively discharged in violation of law has a duty to take
steps to minimize the loss by making a reasonable effort to find
other comparable employment." The instruction also allowed the
city to reduce any damages by proving that "it is more likely true
than not true that the plaintiff could have avoided some losses in
whole or in part with reasonable efforts and without undue risk,
expense, hardship or embarrassment . . . ." The parties seem to
agree that "comparable employment" is the same as or analogous to
"similar employment."
The propriety of a jury instruction is a question of law
subject to our independent review.61 Rice objects to the court's
instruction, contending that "[m]itigation based on a rule that
plaintiff must accept employment that would not cause undue risk,
expense, hardship or embarrassment is inconsistent with the duty
imposed by 'comparable employment.'"
We think the court adequately instructed the jury about
the factors relevant to assessing Rice's ability to obtain
comparable employment. The instruction required the jury to
consider whether the city had proved that the replacement
employment would not involve "undue risk, expense, hardship or
embarrassment." The jury heard opposing testimony about Rice's
employment prospects. This testimony and the instruction offered
sufficient information and guidance to the jury in evaluating
whether the employment available to Rice was "similar" or
"comparable."
Rice also argues that the evidence was insufficient to
justify submitting the issue to the jury. Submission of a question
to the jury is appropriate when the evidence is such that
reasonable people could differ in their conclusions.62 The
testimony of Carl Gann, the city's vocational consultant, permitted
an inference that a person with Rice's training who used reasonable
efforts in seeking a substitute job could find work in the fire
fighting or paramedic field in the vicinity of Fairbanks. Counsel
for Rice vigorously cross-examined Gann, and obtained admissions
that many of the positions were not open to Rice. But that cross-
examination did not foreclose any permissible inference that Rice
could have obtained substitute employment that was sufficiently
similar to require mitigation efforts.
We conclude that it was not error to submit the
mitigation issue to the jury, and that the mitigation instruction
adequately informed the jury of the factors relevant to this case.
6. Exclusion of evidence of Pulice's conduct
Rice challenges the superior court's exclusion of
evidence of alleged misconduct after Pulice telephoned Wood on
February 14, 1995. Rice claims that the evidence was relevant to
prove the working conditions that caused his constructive
discharge. But February 14, 1995 was the watershed date on which
Pulice made threats, and Rice has not explained on appeal what
evidence was excluded, how any excluded evidence substantively
differed from admitted evidence, and how the excluded evidence
might have affected a jury that nonetheless awarded Rice
substantial damages. Rice has not demonstrated that the superior
court abused its discretion or that the exclusion harmed him.
7. Other evidentiary rulings
Rice raises five additional evidentiary rulings in his
cross-appeal.63 Although he argues with respect to each that the
superior court erred, he does not establish how exclusion of this
evidence prejudiced him, whether the jury heard equivalent
evidence, or what relief would be justified as to any of the
alleged errors. We perceive no prejudicial error that would
require appellate relief for Rice on any of these rulings.
4. CONCLUSION
For the reasons explained above, we AFFIRM the judgment
and rulings below.
Footnotes:
1 AS 39.90.100 -.150.
2 See U.S. Const. amend. I; 42 U.S.C. § 1983.
3 The jury did not segregate the damages it awarded on the
§ 1983 and Whistleblower Act claims.
4 The city cites the following cases to support its claim
that isolated and trivial acts of misconduct and an employee's
subjective perceptions do not create a claim for constructive
discharge: King v. AC & R Advertising, 65 F.3d 764, 767-69 (9th
Cir. 1995); Calhoun v. Acme Cleveland Corp., 798 F.2d 559, 561 (1st
Cir. 1986); Bristow v. Daily Press, Inc., 770 F.2d 1251, 1255 (4th
Cir. 1985); Turner v. Anheuser-Busch, Inc., 876 P.2d 1022, 1026-27
(Cal. 1994). The city, arguing that an employee has an obligation
to be reasonable and "not to assume the worst," cites Garner v.
Wal-Mart Stores, Inc., 807 F.2d 1536, 1539 (11th Cir. 1987).
5 See Western Pioneer, Inc. v. Harbor Enters., Inc., 818
P.2d 654, 656 n.3 (Alaska 1991).
6 See Brinkerhoff v. Swearingen Aviation Corp., 663 P.2d
937, 940 (Alaska 1983).
7 Constructive discharge is not an independent cause of
action, but merely satisfies the discharge element in a wrongful
discharge claim. We recognized the doctrine of constructive
discharge in Beard v. Baum, 796 P.2d 1344, 1349-50 (Alaska 1990).
8 See Cameron v. Beard, 864 P.2d 538, 547 (Alaska 1993).
9 In support, the city cites King, 65 F.3d at 767-69, and
Turner, 876 P.2d at 1023-26.
10 See VECO, Inc. v. Rosebrock, 970 P.2d 906, 915-16 (Alaska
1999) (declining to weigh evidence or assess witness credibility in
reviewing JNOV on element of sexual harassment claim involving
reasonableness of plaintiff's beliefs); see also Castle v. Sangamo
Weston, Inc., 837 F.2d 1550, 1559-60 (11th Cir. 1988) (reversing
JNOV for employer because reasonable jury could have concluded,
applying objective reasonable person standard, that plaintiff felt
compelled to resign).
11 AS 39.90.100-.150.
12 AS 09.65.070(d) provides:
An action for damages may not be brought
against a municipality or any of its agents,
officers, or employees if the claim . . . (2)
is based upon the exercise or performance or
the failure to exercise or perform a
discretionary function or duty by a
municipality or its agents, officers, or
employees, whether or not the discretion
involved is abused . . . .
13 See Integrated Resources Equity Corp. v. Fairbanks N.
Star Borough, 799 P.2d 295, 301 (Alaska 1990).
14 See AS 23.40.070-.260.
15 See State v. Beard (Beard IV), 960 P.2d 1, 5 (Alaska
1998); Broeckel v. State, Dep't of Corrections, 941 P.2d 893, 896
n.2 (Alaska 1997).
16 See Romulus v. Anchorage Sch. Dist., 910 P.2d 610, 615
(Alaska 1996).
17 See Cozzen v. Municipality of Anchorage, 907 P.2d 473,
477 (Alaska 1995).
18 See AS 39.90.120 (providing for punitive damages and
civil penalties for whistleblower claims).
19 See Public Safety Employees Ass'n v. State, 658 P.2d 769,
774-75 & n.17 (Alaska 1983). Accord Barrentine v. Arkansas-Best
Freight Sys., Inc., 450 U.S. 728, 745-46 (1981); Bridgeton Educ.
Ass'n v. Board of Educ., 334 A.2d 376, 378 (N.J. Super. 1975).
20 See AS 39.90.120.
21 658 P.2d 769 (Alaska 1983).
22 See PSEA, 658 P.2d at 774-75.
23 See id. at 772-73.
24 See id. at 774-75.
25 See Beard IV, 960 P.2d at 7-8.
26 See PSEA, 658 P.2d at 775.
27 The city raises this issue only as to Rice, not DeSpain.
DeSpain argues on appeal that the city did not raise the
exhaustion defense as to any of DeSpain's claims. Although the
city argues in its appellate reply brief that DeSpain failed to
exhaust his administrative remedies, the record citations in
support establish that the city's superior court exhaustion motion
related only to Rice, and not DeSpain.
It also appears that the city did not raise a failure-to-
exhaust defense in the superior court with respect to Rice's
assertion that he was constructively discharged. Rice argues on
appeal that the city waived this issue by failing to raise it in
the superior court. The city does not address Rice's waiver
argument in its reply brief. The superior court addressed only the
Whistleblower Act exhaustion issue and other issues not raised on
appeal.
28 See Beard IV, 960 P.2d at 8.
29 See id.
30 Id. at 5.
31 See State v. Municipality of Anchorage, 805 P.2d 971, 973
(Alaska 1991).
32 See Adamson v. University of Alaska, 819 P.2d 886, 896
n.3 (Alaska 1991).
33 The superior court awarded DeSpain attorney's fees
against Pulice in the amount of $168,114 and awarded Rice
attorney's fees against Pulice in the amount of $346,739. Because
§ 1983 was the only possible basis for the jury's verdict against
Pulice, the court must have awarded those fees under authority of
§ 1988.
34 In support, it cites Farrar v. Hobby, 506 U.S. 103, 115
(1992) (affirming denial of fees to party who originally sought $17
million and injunctive relief but received only nominal damages).
But see Brandau v. State of Kansas, 168 F.3d 1179, 1182-83 (10th
Cir. 1999) (affirming attorney's fee award to plaintiff who
originally sought $50,000 and lost wages but received only nominal
damages).
35 See W. Page Keeton et al., Prosser & Keeton on the Law of
Torts § 113, at 798-99 (5th ed. 1984).
36 See French v. Jadon, Inc., 911 P.2d 20, 32 (Alaska 1996).
37 See Exxon Corp. v. Alvey, 690 P.2d 733, 741 (Alaska
1984).
38 Id. at 742.
39 See Prosser & Keeton § 112, at 794.
40 Id. at 795.
41 See Alaska Statebank v. Fairco, 674 P.2d 288, 294-96
(Alaska 1983).
42 The city had agreed to defend and indemnify Cole.
43 A fee award for a prevailing party who recovers no money
judgment is presumptively thirty percent of the total fees actually
incurred. See Alaska R. Civ. P. 82 (b)(2). Cole sought an
enhanced award under Rule 82(b)(3).
44 See Balough v. Fairbanks N. Star Borough, __ P.2d __, Op.
No. 5234 at 57-59 (Alaska, January 28, 2000) (superior court may
award fees for state-law claims segregated from § 1983 claims);
Lyman v. State, 824 P.2d 703, 707 (Alaska 1992) (superior court may
require party seeking costs to identify and segregate state-law
claims from federal-law claims).
45 Cole also asserts that it was error not to award him
costs and prejudgment interest. Because he totally fails to
explain the nature of either alleged error, we deem these issues
waived for purposes of appellate review. See Adamson v. University
of Alaska, 819 P.2d 886, 889 n.3 (Alaska 1991).
46 659 P.2d 1189, 1194 (Alaska 1983), overruled on other
grounds by Atlantic Richfield Co. v. State of Alaska, 723 P.2d
1249, 1252 n.4 (Alaska 1986). The state's attorneys there spent
about 611 hours. The superior court applied private rates of $75
per hour, but reduced the hours to 250, and then awarded twenty
percent of the total, for a fee award of $3,750. See 659 P.2d at
1194.
47 Id.
48 Bendix Corp. v. Adams, 610 P.2d 24, 27 (Alaska 1980)
(quoting Holiday Inns of America, Inc. v. Peck, 520 P.2d 87, 92
(Alaska 1974)).
49 Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982).
50 See Benson v. Allphin, 786 F.2d 268, 276 (7th Cir. 1986).
51 Wiley v. Doory, 14 F.3d 993, 995 (4th Cir. 1994).
52 Maciarello v. Sumner, 973 F.2d 295, 298 (4th Cir. 1992).
53 See AS 39.90.120(a).
54 See Alaska Hous. Fin. Corp. v. Salvucci, 950 P.2d 1116,
1124-25 (Alaska 1997).
55 See Integrated Resources Equity v. Fairbanks N. Star
Borough, 799 P.2d 295, 301 (Alaska 1990) (applying "clearly
established" law test to discretionary function immunity claim
under AS 09.65.070(d)(2)); Breck v. Ulmer, 745 P.2d 66, 72 (Alaska
1987) (adopting two-prong test articulated by Supreme Court in
Harlow, 457 U.S. at 818-19).
56 See Hayes v. Charney, 693 P.2d 831, 834 (Alaska 1985)
(noting public interest exception to mootness doctrine).
57 See United Steelworkers of Am. v. Phelps Dodge Corp., 896
F.2d 403, 405-06 (9th Cir. 1990).
58 See id. at 407.
59 The jury calculated Rice's damages verdict of $353,000 by
first finding Rice's total losses to be $1,716,700, and then
subtracting $75,200 for "[a]ctual earnings or pension payments
which would not have been earned," and also subtracting $1,288,500
for the "[a]mount which should have been earned through reasonable
and diligent efforts."
60 Luedtke v. Nabors Alaska Drilling, Inc., 834 P.2d 1220,
1226 (Alaska 1992).
61 See Anchorage Nissan, Inc. v. State, 941 P.2d 1229, 1240
n.22 (Alaska 1997).
62 See Cummins v. King & Sons, 453 P.2d 465, 466-67 (Alaska
1969).
63 Rice appeals: the exclusion of evidence regarding
Pulice's interview for the position of Director of Public Safety;
the refusal of the discovery master to review a Fairbanks City
Council Executive Session tape; the discovery master's refusal to
compel the mayor of Fairbanks to answer deposition questions; the
exclusion of expert opinions on Pulice's qualifications for his
job; and the exclusion of testimony of prior acts of Pulice.
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