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Nelson v. Town of St. Johnsbury

Supreme Court of Vermont

January 16, 2015

Ralph Nelson
Town of St. Johnsbury, Rodney LaMotte, Kevin W. Oddy, Alan Ruggles, James L. Rust, Bernard Timson and Town of St. Johnsbury

On Appeal from Superior Court, Caledonia Unit, Civil Division Mary Miles Teachout, J.

Richard T. Cassidy of Hoff Curtis, Burlington, for Plaintiff-Appellant.

John T. Leddy and Kevin J. Coyle of McNeil, Leddy & Sheahan, Burlington, for Defendants-Appellees.

PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Crawford, JJ. [1]


¶ 1. Plaintiff Ralph Nelson, the former town manager of St. Johnsbury, appeals from a trial court decision granting partial summary judgment to defendants, the Town of St. Johnsbury and its individual selectboard members (collectively “the Town”), on his claims of wrongful termination; violation of procedural due process under the Civil Rights Act, 42 U.S.C. § 1983; violation of Chapter I, Article 4 of the Vermont Constitution; and promissory estoppel. We reverse and remand on the trial court’s dismissal of the wrongful termination, Civil Rights Act, and state constitutional claims. We affirm the court’s dismissal of the promissory estoppel claim and its grant of summary judgment on the qualified immunity defense.

¶ 2. In September 2010, the selectboard formally hired plaintiff as town manager after he served briefly on an interim basis. There is no evidence that the parties negotiated or agreed upon any specific contract terms for plaintiff’s employment. According to plaintiff, the Town’s attorney advised him on three separate occasions that he could be removed only for serious misconduct, which the attorney assured was “an extremely high bar.”

¶ 3. As town manager, plaintiff undertook a major project to renovate and lease the Town’s Pomerleau Building. He apparently gained voter approval on a renovation budget and negotiated a lease with a potential tenant. The selectboard contends that plaintiff made certain misrepresentations about the proposed lease, which plaintiff denies. On March 16, 2012, selectboard chair, James Rust, informed plaintiff that the board had concerns about his performance and gave him a letter stating that the board would be conducting an inquiry and that “[r]efusing to answer, answering incompletely, or answering untruthfully, questions relating to work is considered misconduct for which an employee may be disciplined up to and including dismissal.” The letter never stated the nature of the inquiry, only that plaintiff was obligated to cooperate.

¶ 4. Selectboard member Kevin Oddy conducted the inquiry into plaintiff’s performance and drafted a list of concerns, including allegations that plaintiff sexually harassed employees, created a hostile work environment, attempted to influence a school board member, and lied. No details were provided in the list, and there is no evidence the list was disclosed to plaintiff. On April 2, 2012, Rust informed plaintiff that the inquiry had turned up “something” and that the selectboard would be holding a meeting to discuss plaintiff’s job. Rust would not tell plaintiff what had turned up. He requested that plaintiff hand in his keys and laptop computer [2] and go home, and plaintiff complied.

¶ 5. On April 3, 2012, Rust called plaintiff and notified him that the selectboard would be meeting that evening but that plaintiff was not obligated to attend. Plaintiff nonetheless attended. When the meeting convened that evening, the selectboard immediately recessed to executive session. After forty-five minutes, the board asked plaintiff to join them, at which time they discussed the proposed lease. According to the selectboard members, they also questioned plaintiff about the other allegations concerning his job performance, but plaintiff denies this. The selectboard asked plaintiff if he wanted to resign, and he declined. Consequently, the board returned to public session and passed a vote of “no confidence.” According to plaintiff, he did not understand until that time that the selectboard was terminating his employment.

¶ 6. On April 4, 2012, the Town issued a press release announcing plaintiff’s termination, stating that “[t]he Manager holds office at the will of the Board” and “the Town terminated... [plaintiff] for certain actions... that went directly against the will of the Board and were misrepresented by... [plaintiff] to the Board.” Rust calculated that the proposed lease would have resulted in a substantial loss for the Town, and the Town eventually negotiated a more favorable lease.

¶ 7. Plaintiff filed suit against the selectboard and its individual members, claiming: (1) wrongful termination; (2) deprivation of due process of law in violation of the Civil Rights Act, 42 U.S.C. § 1983; (3) violation of Chapter I, Article 4 of the Vermont Constitution; and (4) promissory estoppel. Plaintiff sought a preliminary injunction reinstating him as town manager; compensatory and punitive damages; and attorney’s fees and costs. After a hearing, the trial court refused to grant a preliminary injunction on the ground that plaintiff had an adequate remedy at law and was not entitled to equitable relief. The Town filed a motion for partial summary judgment on the counts of plaintiff’s complaint for which he sought reinstatement or damages for his termination, and the trial court granted this motion. The court held that plaintiff has no legal interest in his employment because his employment was at will; the selectboard members are entitled to qualified immunity for their alleged violation of the Civil Rights Act, 42 U.S.C. § 1983; plaintiff has no private right of action for a violation of Chapter I, Article 4 of the Vermont Constitution; and plaintiff failed to satisfy all the required elements of promissory estoppel. [3] This appeal followed.

¶ 8. “We review summary judgment decisions de novo, using the same standard as the trial court.” Demag v. Better Power Equip., Inc., 2014 VT 78, ¶ 9, ___ Vt. ___, 102 A.3d 1101. Summary judgment will be granted when, viewing the evidence in the light most favorable to the nonmoving party, “there exist no genuine issues of material fact and the moving party is entitled to judgment as a matter of law.” Id. (quotation omitted); see V.R.C.P. 56(a).

¶ 9. Before we turn to the specific claims, we stress that the lynchpin of this appeal is whether plaintiff could be terminated for any reason or only for cause. This question is controlled by 24 V.S.A. § 1233, the statute providing for termination of a town manager in the absence of a contract between the manager and the town. On this central question, plaintiff claims that the statute allows removal only for cause and that the Town lacked cause for his termination. He further argues that because he could be removed only for cause, he was entitled as a matter of due process to notice of the alleged cause for removal and a hearing at which he could contest the presence of cause, and that he did not receive these procedural protections. The Town, in turn, argues that plaintiff’s employment as town manager was terminable at will under § 1233 and that, because it was terminable at will, plaintiff had no property interest in his job and no right to due process. These positions frame the central issue in this appeal.

¶ 10. The Town raised additional grounds on which it asserts it should prevail even if it loses on the lynchpin issue. With the exception of qualified immunity, these grounds were not considered by the trial court. For the reasons discussed below, we conclude that the summary judgment record is too limited to consider these additional grounds. We do consider whether the selectboard members are entitled to qualified immunity, but leave the consequence of such a holding to the trial court.

I. Wrongful Termination

¶ 11. With this background in mind, we turn first to plaintiff’s wrongful termination claim. Plaintiff claims that he could be removed only for cause but that he was terminated for no cause and is entitled to relief. The resolution of this issue depends upon the interpretation of 24 V.S.A. § 1233, which provides, in relevant part, that the town manager “shall be subject to the direction and supervision and shall hold office at the will of such selectmen, who, by majority vote, may remove him at any time for cause.” We are confronted with a statutory provision that appears internally inconsistent, both stating that the town manager serves at the will of the selectboard and requiring cause for removal. The trial court attempted to reconcile the conflicting terms, concluding that a town manager may be hired either at will pursuant to the statute or under a contract that modifies the statutory provision by providing for a specific employment duration. It then reasoned that if the town manager is hired at will, the selectboard may terminate that person at any time for any reason—with or without cause—but if the town manager has negotiated a contract for a fixed term, the selectboard can remove that person only for just cause. Because the court found no contract here, it concluded that plaintiff’s employment was at will.

¶ 12. We start with the plain language of the statute and will enforce it according to its terms if the language is clear and unambiguous. In re Porter, 2012 VT 97, ¶ 10, 192 Vt. 601, 70 A.3d 915. Although both parties assert that the language of § 1233 is clear, we cannot agree that a statute with contradictory terms is unambiguous. We therefore must look beyond the plain language to determine the legislative intent, either probing into the legislative history or resorting to canons of statutory construction. Id. In this process, we are dealing with a statute that was enacted in 1917, see 1917 No. 104, §§ 2, 6; was codified in 1918, see 1918 G.L. § 4055; and has not been amended since. We have no direct evidence of the intent of the 1917 Legislature. Accordingly, we must determine the intent from the context of the statute in its entirety, Brownington Ctr. Church v. Town of Irasburg, 2013 VT 99, ¶ 9, 195 Vt. 196, 87 A.3d 502, as it existed when drafted and as it exists today.

¶ 13. Part of the statute’s context is the meaning of the words and phrases used at the time of its enactment in relation to the meaning of those words and phrases today. Many of our modern terms-of-art likely would be foreign to the nineteenth- and early-twentieth-century drafters. The terms “at the will of” or “at will” as used today clearly connote employment that is terminable at any time for any reason. See, e.g., Handverger v. City of Winooski, 2011 VT 130, ¶ 2, 191 Vt. 556, 38 A.3d 1153 (mem.) (defining at-will employee as one who may be dismissed at any time without cause). The term, as it relates to employment, [4] is not used in Vermont’s statutes at least through the 1940s [5] and received only brief mention in our early case law. See Mullaney v. C.H. Goss Co., 97 Vt. 82, 87, 122 A. 430, 432 (1923) (discussing at-will presumption for employment contract with indefinite duration); Rutter v. Burke, 89 Vt. 14, 26, 93 A. 842, 848 (1915) (stating that “an authority to remove for cause excludes the power to remove at will”).

¶ 14. Although the “at will” terminology may not have been employed widely by the Court or the Legislature, the concept of at-will employment was recognized in a number of early statutes. The Legislature, however, used the terms “at the pleasure of” or “during the pleasure of” to signify at-will employment. See, e.g., 1933 P.L. § 396 (“The governor... shall appoint an executive clerk and an executive messenger for the term of two years to serve him when the general assembly is in session and may remove them at pleasure.”); 1906 P.S. § 347 (“Said [state fair] commission may appoint and remove at pleasure a superintendent... and may prescribe their duties and fix their compensation.”); 1894 V.S. § 4001 (“[The] board of directors [of the bank] shall have the general management of the affairs of the association... and may appoint a cashier and such other officers and agents as their business requires, and remove them at pleasure.”); 1840 R.S. ch. 68, § 1 (“There shall be an inspector general of beef and pork, to be appointed by the governor, and to be by him removed at pleasure.”); see also First Nat’l Bank v. Briggs’ Assignees, 69 Vt. 12, 19-20, 37 A. 231, 233 (1894) (discussing authority of appointing power to remove appointee who is terminable at pleasure). But, prior to at least 1947, the town manager statute was the only Vermont statute to use the phrase “at the will of.” On the other hand, “pleasure” was used liberally both before and after 1917. In fact, § 1233 remains the only statutory provision to use the term “at the will of” with respect to employment. The failure of the Legislature to use the traditional language to describe the power to terminate employment without cause, and the lack of any precedent for the terminology used, suggests that the Legislature may have viewed the language as having a different meaning from what it means today.

¶ 15. While the “at will” terminology is virtually absent in Vermont’s early laws, the term “for cause” appears quite frequently, including alongside the town manager statute in the codification of laws regulating town officers. See 1917 G.L. § 3992 (“[T]he overseer of the poor shall be under the control and direction of the selectmen, and may, for cause, be removed by them.”). And the term was recognized by the courts as placing a limit on the discretion of employers to terminate employment at will. See Rutter, 89 Vt. at 26, 93 A. at 848 (stating that under city charter that requires cause for removal “there must be something which in law amounts to incapacity, negligence or bad conduct, to sustain the removal”). The Legislature continues to use the term “for cause” as a limit on an employer’s removal power, even absent use of the word “only.” See, e.g., Turnley v. Town of Vernon, 2013 VT 42, ¶¶ 13-19, 194 Vt. 42, 71 A.3d 1246 (recognizing that 24 V.S.A. § 1931(a), which states that officers “shall hold office during good behavior, unless sooner removed for cause, ” authorizes town to remove police chief only for cause). Clearly the Legislature was cognizant of the term “for cause” and its import and must have been aware of the force it would have when incorporated into the removal provision of the town manager statute. We believe this word choice fairly signals the Legislature’s intent to limit the selectboard’s removal power. C.f. Longe v. Boise Cascade Corp., 171 Vt. 214, 223, 762 A.2d 1248, 1256 (2000) (concluding that legislative intent was clear because Legislature knows how to impose duties on employers and create equitable tolling provisions but chose not to with respect to workers’ compensation statute).

¶ 16. The dissent rebuts our reasoning that the “at the will of” terminology may have held a different meaning to the Vermont Legislature a century ago by detailing the history of the at-will employment doctrine and citing to a number of out-of-state cases that recognize this doctrine. Post, ¶¶ 70-83. We do not dispute the dissent’s conclusion that the doctrine was well-established nationally, nor do we contest that other states used the at-will terminology more freely. Rather, we merely observe that, in light of our own research into early Vermont laws, the term as used in the town manager statute had a different meaning to the Legislature than it likely would if the statute was enacted today.

¶ 17. The organizational structure of the town manager act, entitled “An Act to Authorize the Employment of General Town or Municipal Mangers, ” also supports this analysis. 1917, No. 104. The 1917 Act was comprehensive and contained thirteen sections. Id. The statutory language before us today was separated into two parts and located in different sections of the Act. Section 2 provided, in pertinent part:

Said manager shall, in all matters be subject to the direction and supervision and shall hold office at the will of the selectmen, and shall be selected with special reference to his education, training and experience to perform the duties of such office, and shall be appointed without reference to his political belief; and said appointee may or may not be a resident of the town, for which he is appointed.

Id. § 2 (emphasis added). Section 6 provided: “The selectmen may, by majority vote, remove the general manager at any time for cause.” Id. § 6 (emphasis added). The placement of the terms “at the will of” and “for cause” in separate sections suggests that the Legislature believed they addressed distinct subjects and that § 2 did not deal with termination of the town manager. Indeed, the Town’s argument requires us to accept that the Legislature included a separate section that was superfluous and unnecessary.

¶ 18. The Legislature authorized a new codification of Vermont laws in 1917. [6] That codification merged the language from § 2 together with the language from § 6 in one sentence, creating the apparent conflict and ambiguity before us. We presume that a codification does not intend to change the substance of the law “unless the contrary clearly appears.” Town of Cambridge v. Town of Underhill, 124 Vt. 237, 240, 204 A.2d 155, 157 (1964); see also Weale v. Lund, 2006 VT 66, ¶ 8, 180 Vt. 551, 904 A.2d 1191 (mem.) (same); State v. Brennan, 172 Vt. 277, 282, 775 A.2d 919, 923 (2001) (same). The contrary does not appear in this case.

¶ 19. On this point, we note one final piece of support. Numerous statutes enacted across the country in the nineteenth and early twentieth centuries contained, in various contexts, a general statement that a particular official holds office and employment “at the will of” or “at the pleasure of” the appointing officer and also contained some limitation on the ability of the appointing officer to terminate without cause. See, e.g., Colo. Rev. Stat. Ann. § 31-4-210 (“The city manager shall be appointed for an indefinite term, but he may be removed at the pleasure of the city council for cause.”); N.H. Rev. Stat. Ann. § 37:3 (virtually same language as 24 V.S.A. § 1233); Mich. Comp. Laws Ann. § 791.203 (“[The director of corrections] shall hold office at the pleasure of the commission except that he may be removed for cause and only after a public hearing before the commission.”); R.I. Gen. Laws Ann. § 45-4-1(c) (“[T]he town council [is entitled] to appoint a tax collector who shall serve at the pleasure of the town council and who may be removed for cause shown....”). We think it unlikely that so many legislatures would have overlooked these internal inconsistencies unless, in their view, the terms held a different meaning.

¶ 20. We also consider whether an interpretation requiring cause for removal is reasonable in light of other canons of statutory construction. Particularly, we are concerned with whether requiring cause for removal renders the term “at the will of” mere surplusage. See In re Beliveau NOV, 2013 VT 41, ¶ 13, 194 Vt. 1, 72 A.3d 918 (“Generally, we do not construe a statute in a way that renders a significant part of it pure surplusage.” (quotation omitted)). We think not. As discussed above, evidence suggests “at the will of” was not meant in the modern conventional sense. We think this term reasonably can be read to indicate that it is the selectboard— and no other authority —that may remove the town manager and that the selectboard has the discretion to initiate termination. We note that, in support of this construction, the statute established no process for termination, but the requirement for cause is still a limitation on the discretion of the selectboard. This reading is consistent with that statute’s limitation on the selectboard’s discretion in selecting a town manager. See 1917, No. 104, § 2 (requiring selectboard to consider education, training, and experience when selecting town manager and prohibiting selectboard from considering town manager’s political belief).

¶ 21. Adopting the Town’s reading of the statute, however, would render the term “for cause” superfluous. The at-will employment doctrine inherently allows the employer to terminate employment either with or without cause. There would be no reason to further specify that an employee with an at-will contract may be terminated for cause.

¶ 22. We also consider whether our interpretation adds implied conditions to § 1233. See Brennan v. Town of Colchester, 169 Vt. 175, 177, 730 A.2d 601, 603 (1999) (“We will not read an implied condition into a statute unless it is necessary in order to make the statute effective.” (quotation omitted)). Again, we think not. The Town argues that plaintiff’s reading requires that the word “only” be read into the phrase requiring cause. Nowhere in our statutory or common law do we find precedent ...

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