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Davis v. State

United States District Court, D. Utah

July 8, 2019

JASMIN DAVIS and BARRY WILSON, Plaintiffs,
v.
THE STATE OF UTAH, THE UNIVERSITY OF UTAH, and Individuals, STEPHEN HESS, STEPHEN CORBATO, LISA KUHN, MICHAEL EKSTROM, CAPRICE POST, JIM LIVINGSTON, JOHN NIXON and JEFF HERRING, sued individually and in their official capacities, Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS AND DENYING PLAINTIFFS' MOTION FOR LEAVE TO FILE THIRD AMENDED COMPLAINT

          TED STEWART UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Defendants' Motion to Dismiss and Plaintiffs' Motion for Leave to File Third Amended Complaint. For the reasons discussed below, the Court will grant the Motion to Dismiss, but will allow amendment of Plaintiffs' free speech claim, and will deny the Motion for Leave to Amend.

         I. BACKGROUND

         Plaintiffs Jasmin Davis and Barry Wilson are former employees of the University of Utah. Plaintiffs claim they were improperly terminated as a result of whistleblowing activities. They bring a number of claims, including claims under the Utah Protection of Public Employees Act (“UPPEA”), breach of contract and related claims, and violations of the First and Fourteenth Amendments. Defendants seek dismissal of all claims.

         II. MOTION TO DISMISS STANDARD

         In considering a motion to dismiss for failure to state a claim upon which relief can be granted under Rule 12(b)(6), all well-pleaded factual allegations, as distinguished from conclusory allegations, are accepted as true and viewed in the light most favorable to Plaintiffs as the nonmoving party.[1] Plaintiffs must provide “enough facts to state a claim to relief that is plausible on its face, ”[2] which requires “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.”[3] “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.' Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'”[4]

         “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.”[5] As the Court in Iqbal stated,

[o]nly a complaint that states a plausible claim for relief survives a motion to dismiss. Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not shown-that the pleader is entitled to relief.[6]

         In considering a motion to dismiss, a district court not only considers the complaint, “but also the attached exhibits, ”[7] the “documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.”[8] The Court “may consider documents referred to in the complaint if the documents are central to the plaintiff's claim and the parties do not dispute the documents' authenticity.”[9]

         III. DISCUSSION

         A. STATE OF UTAH

         Plaintiffs assert claims against the State of Utah. However, there are no allegations that the State played any role in the alleged wrongful conduct. Rather, all of Plaintiffs' allegations are directed at the University of Utah and the individual Defendants. As a result, the State seeks dismissal. Plaintiffs have failed to respond to this argument. With no allegations against it and no argument in support of its inclusion in this action, dismissal of the State is appropriate.

         B. UPPEA

         Plaintiff Davis asserts a claim under the UPPEA. Defendants contend that her claim is untimely.

         Davis was terminated on September 22, 2015. The version of the UPPEA in effect at the time of her termination provided that, in most instances, “an employee who alleges a violation of this chapter may bring a civil action for appropriate injunctive relief, damages, or both, within 180 days after the occurrence of the alleged violation of this chapter.”[10] It is undisputed that Plaintiff did not bring this action within 180 days of her termination.

         Plaintiff nonetheless argues that this action is timely. Plaintiff relies on Utah Code Ann. § 67-21-4(b)(ii), which provides an exception to the 180-day filing requirement in certain circumstances. That provision states:

An employee of a state institution of higher education that has adopted a policy described in Section 67-21-3.7:
(A) may bring a civil action described in Subsection (1)(a) within 180 days after the day on which the employee has exhausted administrative remedies; and
(B) may not bring a civil action described in Subsection (1)(a) until the employee has exhausted administrative remedies.[11]

         Here, there are no allegations that the University had “adopted a policy described in Section 67-21-3.7” and Defendants affirmatively state the University had not adopted such a policy. Thus, Plaintiff cannot rely on this provision and she was required to commence this action within 180 days from the date of her termination. Plaintiff's argument that the statute of limitations was tolled while she pursued various administrative processes is unavailing.

         Plaintiff further argues that, under the Governmental Immunity Act (“GIA”), she was required to file a notice of claim and that she filed this action within 180 days of her claim being denied. The Utah Court of Appeals addressed the interplay of the UPPEA and the GIA in Thorpe v. Washington City.[12] Reading the statutes together, the court held that a plaintiff asserting a claim under the UPPEA must file a notice of claim under the GIA “and a ‘civil action'-i.e., a district court complaint-within 180 days” of the alleged retaliatory action.[13]This requires a “claimant to file a GIA notice early enough in the 180-day period to allow the governmental entity 60 days to evaluate the claim so that, at the elapse of that time, the claimant can file a civil action before the 180 days have passed.”[14] Thus, the court rejected the plaintiff's argument that the filing of a notice under the GIA tolled the statute of limitations under the UPPEA.[15] Plaintiff's claim suffers from the same deficiency as the one in Thorpe.

         Plaintiff also argues that the statute of limitations should be tolled by equitable estoppel or the discovery rule. Essentially, Plaintiff argues that because she failed to understand and appreciate the statute of limitations, Defendants should be estopped from enforcing it. This argument finds no support in law or logic.

         Estoppel has the following elements: “(1) an admission, statement, or act inconsistent with the claim afterwards asserted, (2) action by the other party on the faith of such admission, statement, or act, and (3) injury to such other party resulting from allowing the first party to contradict or repudiate such admission, statement, or act.”[16] The Utah Supreme Court has stated that “courts must be cautious in applying equitable estoppel against the State.”[17] “Accordingly, estoppel is applied against the state only ‘if necessary to prevent manifest injustice, and the exercise of governmental powers will not be impaired as a result.'”[18] Further, “[t]he few cases in which Utah courts have permitted estoppel against the government have involved very specific written representations.”[19]

         Here, there is no admission, statement, or act that is inconsistent with Defendants asserting a statute of limitations defense. As required by case law, there is no “specific, written representation directly related to that issue.”[20] Plaintiff attempts to overcome this by citing to the requirement in the UPPEA to exhaust administrative remedies. However, as set forth above, that provision has no application here. Plaintiff also points to the language of the UPPEA to support her belief that the statute of limitations would be tolled while she pursed administrative remedies. However, Plaintiff's failure to understand the statute of limitations does not equate to a representation from Defendants that is inconsistent with their assertion of a statute of limitations defense. Therefore, Plaintiff's equitable estoppel argument fails.

         Plaintiff next argues that the discovery rule tolls the statute of limitations. The fraudulent concealment branch of the equitable discovery rule may operate to toll a statute of limitations “where a plaintiff does not become aware of the cause of action because of the defendant's concealment or misleading conduct.”[21] Here, Davis' termination was not concealed from her. Thus, she knew the facts underlying her claim on the date of her termination and she fails to allege anything to support her claim that Defendants somehow concealed those facts. Rather, her discovery rule argument is again premised on her misunderstanding of the statute of limitations.

         “The limitations period is postponed only by belated discovery of key facts and not by delayed discovery of legal theories.”[22] Thus, the fact that Plaintiff misunderstood the statute of limitations does not result in tolling.

         While “concealment includes non-disclosure where there is a duty to disclose, ”[23] Plaintiff has pointed to no such duty. Plaintiff relies on a provision of the UPPEA that requires employers to “post notices and use other appropriate means to keep employees informed of their protections and obligations under this chapter.”[24] However, nothing in this provision imposes a duty on Defendants to inform Plaintiff of the relevant statute of limitations or to correct her misunderstanding. Therefore, this argument fails and Plaintiff Davis' UPPEA claim must be dismissed with prejudice.

         C. CONTRACT AND RELATED CLAIMS

         1. Second Cause of Action

         The second cause of action is brought by Wilson against the State of Utah and the University of Utah and is for breach of contract and detrimental reliance. As discussed, the State of Utah must be dismissed, leaving this claim as against the University.

         Plaintiff Wilson's first employment contract contained the following statement:

I accept this offer of employment and understand that my initial six months of employment is probationary. Throughout probation, my employment is “at will” and can be terminated for business reasons substantiated by the hiring department, subject to review and approval by the Division of Human Resources.[25]

         Wilson alleges that the University breached this provision by terminating him. He also alleges that he relied upon this provision to his detriment by leaving his previous employment to take this position with the University.

         Plaintiff contends that his employment contract provided that he could only be fired for “business reasons” and he asserts that he was not terminated for “business reasons, ” but rather in retaliation for whistleblowing activity. However, Plaintiffs' employment contract does not state that he could only be fired for business reasons. Rather, his employment contract makes clear that he remained an at will employee during his probation period. “An at-will employment arrangement allows either the employer or the employee to terminate the employment for any reason, or no reason at all, at any time.”[26] As Wilson was terminated during his probation period, this claim fails.

         Turning next to Plaintiff's promissory estoppel/detrimental reliance claim, in Utah, the elements of promissory estoppel are: (1) the promisee acted with prudence and in reasonable reliance on a promise made by the promisor; (2) the promisor knew that the promisee had relied on the promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person; (3) the promisor was aware of all material facts; and (4) the promisee relied on the promise and the reliance resulted in a loss to the promise.[27]

         Here, Plaintiff's claim fails because any reliance on an alleged promise would have been unreasonable in light of the terms of the employment contract, which clearly indicated that Plaintiff was an at-will employee.[28] Therefore, this claim fails.

         2. Third Cause of Action

         Plaintiffs' third cause of action is for breach of contract and detrimental reliance/promissory estoppel. These claims arise out statements from John Nixon, the Chief Administrative Officer and Chief Financial Officer for the University of Utah. Plaintiffs allege they met with Nixon and provided him details of their concerns. Plaintiffs allege that Nixon assured them that their employment was secure and that they would not be retaliated against by being fired. Plaintiffs continued to be concerned and Davis reached out to Nixon to report that Steven Corbato, Deputy Chief Information Officer for UIT, was altering Wilson's reporting line and probation period, which she feared would lead to Wilson's termination. In response, Nixon stated that he had talked to Corbato and “asked him to hold off in doing anything with you [Davis] or Barry [Wilson] until we get the new CIO on board.”[29] Once that occurred, “we will evaluate where your shop should reside. Until then, I need to ask you to continue working with the IT team within the org structure they have established.”[30] Wilson was terminated about one month later, on December 15, 2014, before the installation of a new CIO.

         Plaintiffs' allegations reveal two distinct promises: (1) that Plaintiffs would not be terminated because of their whistleblowing activities; and (2) that Corbato would “hold off in doing anything” with Plaintiffs until a new CIO was chosen.

         As to the first promise, Defendants argue that there was insufficient consideration because it was merely a promise to comply with the requirements of the UPPEA. “It is well recognized that the performance of a duty imposed by law is insufficient consideration to support a contract.”[31] Thus, Nixon's alleged promise to comply with the statutory obligations contained in the UPPEA by not retaliating against Plaintiffs is insufficient consideration.

         As to the second alleged promise, it is simply too vague to convey a clear and unequivocal intention to relinquish the right to terminate at will.[32] Without more, the statement that Nixon has asked Corbato “to hold off in doing anything” is insufficient. Further, while Plaintiffs contend that Nixon's statement was a promise that Plaintiffs would not be terminated until a new CIO was in place, they read too much into Nixon's statement. Rather, he stated only that he asked Corbato to hold off doing anything with Plaintiffs until a new CIO was in place. This statement was in response to Plaintiffs' concerns about Corbato altering the Wilson's reporting line and probationary period and, when put into proper context, does not constitute a promise not to terminate Plaintiffs until a new CIO was in place.[33]

         Turning next to Plaintiffs' promissory estoppel/detrimental reliance claim, in Utah, the elements of promissory estoppel are: (1) the promisee acted with prudence and in reasonable reliance on a promise made by the promisor; (2) the promisor knew that the promisee had relied on the promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person; (3) the promisor was aware ...


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