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Neborsky v. Town of Victory

United States District Court, D. Vermont

February 22, 2018

v. RUTH ANNE NEBORSKY, Plaintiff, TOWN OF VICTORY, FERNE LOOMIS in her official & personal capacity, CAROL EASTER in her official & personal capacity, DAWN PETERS in her official & personal capacity, BONNIE BATCHELDER in her official & personal capacity, and BATCHELDER ASSOCIATES in its official & personal capacity, Defendants.


          Geoffrey W. Crawford, Chief Judge.

         Plaintiff Ruth Anne Neborsky ("Neborsky") alleges that the Defendants, comprising the Town of Victory, various town officers, and an accountant engaged by the Town, violated her rights under the United States and Vermont constitutions and the Voting Rights Act, and defamed her. Neborsky alleges that the Defendants spied on her, removed her name from the town's voter registration rolls, and disseminated wrongful claims that she had committed improprieties in her role as town clerk and town treasurer of Victory, resulting in damage to her reputation and career.

         This matter came before the court on November 29, 2017 for hearing on a Motion to Dismiss (Doc. 7) brought by Defendants Bonnie Batchelder and Batchelder Associates ("the Batchelder Defendants" or "Batchelder"). Attorney Deborah Bucknam appeared on behalf of Neborsky, Attorney Marikate Kelley appeared on behalf of the Town of Victory, Attorney Constance Pell appeared on behalf of Defendants Ferne Loomis and Carol Easter, Attorney Gary Franklin appeared on behalf of the Batchelder Defendants. For the reasons set forth herein, the court denies in all respects the motion to dismiss.


         The following facts are set forth in the Complaint, and the court accepts them as true and draws all reasonable inferences from them in favor of Neborsky for the purposes of this motion to dismiss.

         Neborsky is a resident of the Town of Victory. She was elected town clerk and treasurer in 2003. Beginning in 2011, Defendants Ferne Loomis, Carol Easter, and Dawn Peters attempted to undermine Neborsky by claiming variously that she had embezzled funds, that she was not a resident of the town, and that her son's school tuition should not have been paid by the town. In furtherance of these efforts, they surveilled Neborsky's home and property. On November 27, 2013, Neborsky resigned as town clerk and treasurer. Defendants Loomis, Easter, and Peters continued to make false statements concerning Neborksy's residency and malfeasance in 2014, 2015, and 2016.

         In March 2014, Defendant Ferne Loomis, who was chair of the town selectboard, engaged Batchelder to perform a forensic audit of the town. (Doc. 1, ¶ 40.) On August 15, 2014, Batchelder issued a letter to the town selectboard falsely claiming that there had been various irregularities in the town's finances during Neborsky's term as town clerk and treasurer. (Id. at ¶ 42). Defendant Loomis sent this letter to all town voters, even though the letter stated that it was "intended solely for the information and use of the Select Board and management and is not intended to be used by anyone other than these specified parties." After the release of the letter, Neborsky contacted Batchelder and offered to meet with Batchelder to answer any questions. Batchelder responded by stating that the letter was "preliminary and a draft" and that it was "premature to be discussing" the matter. Batchelder made no further contact with Neborsky.

         In March 2015, Defendant Bonnie Batchelder spoke at Victory's town meeting and falsely stated that funds were missing and unaccounted for and that Neborsky had not properly performed her official duties. Batchelder was thereafter engaged by the town to reconcile its accounts on a monthly basis.

         In January 2016, Batchelder issued a report falsely stating that there were $300, 000 in discrepancies in the financial records maintained by Neborsky while she was town clerk and treasurer. The report contained a multitude of false statements about financial irregularities during Neborsky's term.

         Neborsky filed suit in the Vermont Superior Court on January 25, 2016, alleging that the town and Batchelder had violated the Vermont Public Records Act, 1 V.S.A. §§ 316-18, by failing to make available for public review documents that Batchelder had relied upon in preparing its report. In the course of that litigation, Batchelder successfully moved for summary judgment on the issue of whether it was an entity subject to the Public Records Act.


         Of the eight counts in Neborsky's complaint, three allege wrongdoing by the Batchelder Defendants. Count 3 claims that the Batchelder Defendants violated Neborsky's liberty interest in her reputation by maliciously making false statements about her while acting under color of state law. Count 7 alleges defamation of Neborksy by the Batchelder Defendants. Count 8 alleges conspiracy to deprive Neborsky of her constitutional liberty rights.

         The Batchelder Defendants have moved to dismiss, arguing that Neborsky's claims against them are precluded under the doctrines of res judicata and collateral estoppel. They point to the decision granting summary judgment in their favor in the state court public records litigation, where the Superior Court held that Batchelder was not a "custodian" of Victory's records within the meaning of 1 V.S.A. § 318(a). The Superior Court determined that Batchelder was an independent auditor rather than a public agency, and that its temporary possession of town records for the purposes of performing an audit was not enough for it to be deemed a custodian. See Neborsky v. Town of Victory, No. 2-1-16 Excv (Vt. Super. Ct. Aug. 5, 2016). Batchelder contends that this determination should have preclusive effect on the question of whether it acted under color of state law, which is a necessary element of Neborsky's constitutional claims.

         "Under the Constitution's Full Faith and Credit Clause, see U.S. Const. Art. IV, § 1, federal courts must accord state court judgments the same preclusive effect as other courts within that state." Burgos v. Hopkins,14 F.3d 787, 790 (2d Cir. 1994) (citing Migra v. Warren City School District,465 U.S. 75, 81 (1984)). Accordingly, Vermont law governs the court's analysis of the preclusive ...

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