* This order and judgment is not binding precedent, e xcept under the

doctrines of law of the case, res judicata, and col lateral estoppel. The court generally disfavors the citation of orders and judg ments; nevertheless, an order and judgment may be cited under the terms and condi tions of 10th Cir. R. 36.3. 

## F I L E D United States Court of Appeals Tenth Circuit 

### OCT 3 1997 

### PATRICK FISHER Clerk UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

ROGER D. BOYDSTON and SANDIE J. BOYDSTON, doing business as JTB Title and Registration Services, formerly known as JTB Auto Sales,

Plaintiffs-Appellants, v. NEW MEXICO TAXATION AND REVENUE DEPARTMENT; MOTOR VEHICLE DIVISION; JOHN J. CHAVEZ, in his individual capacity and official capacity as Secretary of New Mexico Taxation and Revenue Department; GARY A. MONTOYA, in his individual capacity and official capacity as Director of the Motor Vehicle Division of the New Mexico Taxation and Revenue Department; CHARLES DANIELS, in his individual capacity and official capacity as Senior Investigator of the Motor Vehicle Division of the New Mexico Taxation and Revenue Department, Defendants-Appellees. No. 96-2234 (D.C. No. CIV 96-1118-M) (D. N.M.)

ORDER AND JUDGMENT *-2-

Before ANDERSON, BARRETT, and MURPHY, Circuit Judge s.

After examining the briefs and appellate record, th is panel has determined unanimously to grant the parties’ request for a dec ision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1.9. The c ase is therefore ordered submitted without oral argument. Plaintiffs appeal the district court’s entry of sum mary judgment in defendants’ favor on their claims that defendants v iolated their federal and state rights when terminating their employment by the State of New Mexico. We affirm. Plaintiffs entered into two written contracts, the “agent contract” and the “inspector contract,” with the Director of the New Mexico Motor Vehicle Division of the Taxation and Revenue Department, wh ereby they were authorized to perform specified services relative to motor veh icle registration, licensing, and inspection. A third contract, the “data access agreement,” granted plaintiffs access to computerized motor vehicle records to carry out their duties under the other two contracts. Following an investigation of plaintiffs’ allegedly improper automobile licensing practices, defendants notifiedplaintiffs on July 24, 1995, that the agent contract and inspector contract were terminated. Defendants also-3-

informed the computer database operator not to perm it plaintiffs to use the database. A few days later, following plaintiffs’ application for a temporary restraining order, the parties stipulated to contin ue all three contracts. Consequently, plaintiffs continued to operate theirbusiness under the same terms as those provided in the contracts until the distri ct court entered summary judgment for defendants on August 25, 1996. On appeal, plaintiffs assert that the district court erred in (1) denying their constitutional due process claims on the grounds th at they did not have a property interest or a liberty interest in continuing the co ntractual relationship with defendants; (2) holding that defendants did not bre ach the contracts; and (3) finding that sovereign immunity was not waived under the New Mexico Tort Claims Act. Plaintiffs also claim that they are en titled to declaratory relief. Defendants request an award of attorneys’ fees on appeal. We review de novo the district court’s decision to grant summary judgment pursuant to Fed. R. Civ. P. 56(c). See Watson v. University of Utah Med. Ctr. , 75 F.3d 569, 574 (10th Cir. 1996). We consider the record in the light most favorable to the party opposing summary judgment. See id. Summary judgment is appropriate where there are no genuinely dispute d issues of material fact and one party is entitled to judgment as a matter of law. See id.

Constitutional Property and Liberty Interests-4-

We first address plaintiffs’ claim that they had a protected property interest in their continued contractual employment relations hip with defendants, entitling them to substantive and procedural due process prot ections. The Fourteenth Amendment safeguards interests that a person has ac quired in specific benefits as defined by state law. See Board of Regents v. Roth , 408 U.S. 564, 576-77 (1972). To have a property interest in continued employment , a person must have “a legitimate claim of entitlement to it.” Id. at 577; accordRussillo v. Scarborough , 935 F.2d 1167, 1170 (10th Cir. 1991) (“Under New Mexico law, a public employee has a protected property interestonly if he has an express or implied right to continued employment.”). Plaintiffs argue that they were entitled to continu e to work pursuant to the contracts unless the contracts were terminated for good cause. They allege defendants terminated the contracts without cause, thereby implicating plaintiffs’ due process rights. Plaintiffs rely on language in the contracts and N. M. Stat. Ann. § 66-2-14, which states that “[t]he [Motor Vehicle Division of Taxation and Revenue Department] may terminate the designation of any ag ent for failure of the agent to perform to the secretary’s satisfaction the agent’s duties by notifying the agent of the termination.” The agent contract provides that“[e]ither party hereto may terminate this agreement at any time, with or witho ut cause, by giving thirty (30)-5-

days written notice to the other party.” Appellant s’ App. at 146. It is undisputed that defendants gave thirty days’ written notice of cancellation of the agent

contract. The inspector contract states, “Inspector Agent [pl aintiffs] may terminate this agreement at any time, with or without cause, by giving 30 day[s’] notice to the Division. The Division may terminate without n otice.” Id. at 261. Plaintiffs argue that the inspector contract permits only them , not defendants, to terminate “with or without cause,” thereby requiring cause fo r defendants to terminate it. We reject such a tortured interpretation, and concl ude that the defendants were not required to show cause for terminating the insp ector contract. The data access agreement provides for cancellation in the event of a breach for good cause shown. See id. at 165-68. Construing the contracts together, as plaintiffs request, we recognize that the purpose of the data access agreement was to implement the other two contracts. Therefore, when the agent contract and the inspector contract were canceled, it was appropriate to deny plaintiffs access to the computer data. We construe the contracts according to their terms, and conclude that the Division was not required to show cause to terminat e the contracts. Consequently, plaintiffs do not have a constitution al property interest in their continued contractual employment relationship with defendants.-6-

We next consider plaintiffs’ claim that the defenda nts deprived them of their liberty interest without due process of law. They allege that defendants damaged their reputation when they falsely stated t hat they forged documents and submitted false information to the Motor Vehicl e Division. “When a public employer takes action to terminate a n employee based upon a public statement of unfounded charges of dishones ty or immorality that might seriously damage the employee’s standing or associations in the community and foreclose the employee’s freedom to take advantage of future employment opportunities, a claim for relief is created.” Mel ton v. City of Okla. City , 928 F.2d 920, 927 (10th Cir. 1991) (en banc). To s upport the cause of action, the statements “must impugn the good name, reputati on, honor, or integrity of the employee,” and they must be false. Workman v. Jordan , 32 F.3d 475, 481 (10th Cir. 1994). The statements must also be made during the procedure to terminate the employee or must foreclose other oppo rtunities for employment.
See id. In addition, the statements must be published. S ee id. Plaintiffs assert that defendants published false and defamatory statements when they informed members of the public that plaintiffs had forged official documents. To support their position, plaintiffs r ely on their own statements of what others told them. That evidence is insufficie nt because “hearsay testimony that would be inadmissible at trial may not be incl uded in an affidavit to defeat-7-

summary judgment.” Thomas v. International Bus. Ma ch. , 48 F.3d 478, 485 (10th Cir. 1995). To the extent plaintiffs rely on defendants’ directive to the computer database operator to deny them access to t he computer database, plaintiffs do not identify any false statement made to him. Plaintiffs also suggest that the Motor Vehicle Division file containing fal se charges against them may be available to the public. Those claims are too spec ulative to resist summary judgment. See Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249-50 (1986) (evidence that is “merely colorable” or “not signif icantly probative” will not prevent summary judgment). Accordingly, we hold th at plaintiffs’ failure to establish the necessary element of publication fore closes their liberty interest claim. Because we conclude plaintiffs failed to establish a property or liberty interest, we need not address whether defendants we re entitled to qualified immunity. See Harlow v. Fitzgerald , 457 U.S. 800, 818 (1982) (in qualified immunity inquiry, plaintiff must demonstrate that g overnment official violated a clearly established constitutional right of which areasonable person would have known).

State Law Claims - Breach of Contract and Tort Plaintiffs assert that defendants breached the contracts when they terminated them without cause. For the reasons stated above in the discussion of1 Plaintiffs’ declaratory judgment claim is moot in l ight of the construction

of the contracts determining that they did not have a constitutional property interest and that the contracts could be terminated without cause. -8- plaintiffs’ property interest claim, we conclude th at defendants were not required to have cause to terminate the contracts. Therefor e, the district court correctly granted summary judgment on the breach of contract claim. 1 Plaintiffs also argue that defendant Daniels, the M otor Vehicle Division official who investigated plaintiffs’ participation in forging an automobile title, is liable in tort. Generally, a public employee ac ting within the scope of his duties is granted immunity from tort liability. Se e N.M. Stat. Ann. § 41-4-4(A). N.M. Stat. Ann. § 41-4-12 permits suit against a “l aw enforcement officer,” as defined by N.M. Stat. Ann. § 41-4-3(D) (principa l duties include “to hold in custody any person accused of a criminal offense, t o maintain public order or to make arrests for crimes”). N.M. Stat. Ann. § 66-2- 12(A)(1)-(2) provides that officers designated by the Director of the Motor Ve hicle Division have the power to act as “peace officers for the purpose of enforc ing the provisions of the [code and] to make arrests upon view and without warrant for any violation [of the code].” Therefore, plaintiffs argue, defendant Dan iels falls within the definition of a “law enforcement officer” whose immunity from suit is waived under the Tort Claims Act.-9-

In his deposition, defendant Daniels stated that hi s duty was to investigate. Plaintiffs did not rebut that deposition. Accordin gly, we conclude that defendant Daniels was not acting as a full-time law enforceme nt officer, as contemplated by section 41-4-3(D), and his immunity from suit wa s not waived. See Dunn v. New Mexico ex rel. Taxation & Revenue Dep’t , 859 P.2d 469, 472 (N.M. Ct. App. 1993).
Defendants’ Request for Attorneys’ Fees on Appeal Defendants have requested an award of costs and att orneys’ fees on appeal, pursuant to 42 U.S.C. § 1988, which permits such anaward to the prevailing party. Defendants have proffered no reason for thi s court to exercise its discretion to award attorneys’ fees on appeal to de fendants. See Hoyt v. Robson Companies, Inc. , 11 F.3d 983, 985 (10th Cir. 1993) (“‘prevailing p arty’ is not automatically entitled to an award of appeal-relate d attorneys’ fees;” appellate court exercises discretion in awarding attorneys’ f ees on appeal). The request for attorneys’ fees is DENIED. With respect to costs o n appeal, defendants may file with the clerk of this court a bill of costs in acc ordance with the rules. An award will be considered based on that bill and any objec tions by the plaintiffs thereto.-10-

The judgment of the United States District Court fo r the District of New Mexico is AFFIRMED.

Entered for the Court

Michael R. Murphy Circuit Judge