IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

MEDFORD DIVISION 

JAMES L. WENZEL, 

Plaintiff, 

v. 

KLAMATH COUNTY FIRE DISTRICT 

NO. 1; BOARD OF DIRECTORS OF 

KLAMATH COUNTY FIRE DISTRICT 

NO. 1 in their capacity as the decision making 

body of Klamath County Fire District No. 1; 

STEPHEN ROBERT HEDLUND, individually 

and in his capacity with Klamath County Fire 

District No. 1 and dba Hedlund & Hedlund; and 

JIM TODDY, individually and in his capacity 

with Klamath County Fire District No. 1 and 

dba Jim Toddy Investigations, 

Defendants. 

CLARKE, Magistrate Judge. 

Page 1 - REPORT AND RECOMMENDATION 

Case No. 1:15-cv-1371-CL 

REPORT AND RECOMMENDATION 
Plaintiff Jaines Wenzel brings this action against defendants for violation of his due 

process rights under the United States Constitution. Plaintiff also brings state law claims for 

breach of contract and interference with contract, wrongful and negligent investigation, negligent 

retention and supervision, wrongful discharge, breach of the covenant of good faith and fair 

dealing, legal malpractice, negligent misrepresentation, and intentional misrepresentation. This 

case comes before the Court on defendants' motions for summary judgment (#115, #118, & 

#120). For the reasons below, defendants' motions should be GRANTED in part and DENIED in 

part. The case should be set for trial as to the Plaintiffs claims against KCFD 1 for violation of 

due process rights, breach of contract, wrongful discharge, and breach of the covenant of good 

faith and fair dealing, and his claims against Hedlund and Toddy for tortious interference. 

FACTUAL BACKGROUND 

Plaintiff becaine the Fire Chief of Klainath County Fire District No. 1 ("KCFD 1 ") on 

January 1, 2008. Storey Deel. if 3. Plaintiffs position as Fire Chief was originally subject to an 

agreement signed in December of 2007 by Plaintiff and a representative from the KCFD 1 Board 

of Directors ("Board"). Storey Deel. Ex. 1. 

In 2010, Plaintiff entered into a second agreement with KCFD 1 instead of allowing the 

original to auto-renew. Storey Deel. if 5. This new agreement contained a clause stating that 

Plaintiffs employment would automatically extend for three years unless KCFD 1 issued a letter 

of intent to not renew the agreement at least 120 days before its expiration on December 31, 

2013. Storey Deel. Ex. 2, Section 2. The agreement also contained a clause about discipline, 

stating that KCFD 1 's general disciplinary policies applied to Plaintiff, and that he may be 

terminated "for cause." Storey Deel. Ex. 2, Section 8. However, this clause also states that 

"[n]othing in this Agreement shall be construed to include any requirement that [KCFDl] have 

Page 2 - REPORT AND RECOMMENDATION 
specific cause for non-renewal of the employment agreement in accordance with the terms set 

forth herein." Id On KCFDl 's general disciplinary policies, Plaintiff refers to KCFDl 's Policies 

and Procedure Manual, of which section 8.11 discusses disciplinary practices. Wenzel Deel. Ex. 

B. Plaintiff notes that the manual requires "progressive discipline" and specifically an adequate 

notice and a hearing before discharge. Id 

Plaintiff contends that, up until the events at issue in this litigation, he received no 

disciplinary action of any kind as Fire Chief for KCFD 1, nor in connection with any other job 

during his 40 year fire-fighting career. Wenzel Deel. iii! 2,5. On March 16, 2010, the Board 

voted unanimously to support Plaintiff as a member of the Oregon Fire Chiefs Association 

("OFCA"). Wenzel Deel. Ex. D. As a result, the acting president of the Board, Gloria Storey 

("Storey"), sent OFCA a letter on behalf of KCFD 1. Wenzel Deel. Ex. C. This letter stated that 

the Board would support Plaintiff in running for the four-year position of Director for the OFCA, 

including providing Plaintiffs "time and associated expenses." Id In a deposition, Storey 

testified that providing "associated expenses" meant the Board was paying Plaintiffs salary. 

Storey Dep. 127:1-3. 

Events Preceding the Investigation 

Beginning in 2010, Defendant Steven Hedlund ("Hedlund"), an attorney in private 

practice, was retained as the attorney for KCFDl and the Board. Storey Deel. if 8. Hedlund's 

position was subject to a contractual agreement, and Hedlund was never an employee ofKCFDl. 

Storey Deel. iii! 8-9; Ex. 3. Plaintiff contends that, over time, Hedlund's role evolved from legal 

advisor into that of an influential Board member, leading Plaintiff to complain to Storey that 

"[Hedlund] was acting more like a sixth Board member than an attorney .... " Wenzel Deel. if 16. 

Page 3 - REPORT AND RECOMMENDATION 
In early 2013, KCFDl remained involved in negotiations to develop a new agreement 

with the firefighter's union. Wenzel Deel. ii 17. The former agreement required KCFDl to 

maintain minimum staffing levels by calling in workers on overtime to fill vacancies left by 

vacation or sick leave. Id. During labor negotiations, on March 7, 2013, Hedlund emailed 

Plaintiff regarding his plan to eliminate overtime via lowering minimum staffing levels. Wenzel 

Deel. Ex. F. On March 13, 2013, Hedlund sent another email to Plaintiff questioning why he had 

not eliminated overtime per the Board's request. Id. Plaintiff, as lead negotiator for KCFD 1, 

believed that the former agreement was still operative, and that making unilateral changes to 

minimum staffing levels would be unlawful and an unfair labor practice. Wenzel Deel. iii! 17-18. 

Accordingly, Plaintiff refused Hedlund's request and did not eliminate overtime. Id. at ii 19. 

Plaintiff further states that he contacted Storey to resolve the disagreement between 

himself and Hedlund. Id. at ii 20. This resulted in a private meeting between Plaintiff, Storey, and 

Hedlund on March 19, 2013, right before a monthly KCFDl board meeting. Id. Plaintiff states 

that, during the private meeting, there was a confrontation between himself and Hedlund over 

unilaterally changing minimum staffing levels. Id. Plaintiff further states, "I pointed out that 

[Hedlund] was the only person in the room who faced no risk as a result of violating the law in 

this way," and that "Hedlund was angry and embarrassed as a result of the confrontation and 

being wrong on the legal issue." Id. 

Beginning on that same evening, March 19, 2013, a series of emails regarding Plaintiff 

were exchanged or catalogued by Hedlund. Plaintiff notes that, prior to these communications, 

nothing produced in discovery shows defendants had discussed taking disciplinary action against 

him. Ford Deel. ii 19. In the first email on March 19, Hedlund told Storey that he "had put some 

thought into what the chief said and decided to: 1) look internally and 2) be proactive." Ford 

Page 4 - REPORT AND RECOMMENDATION 
Deel. Ex. G. Storey responded the next day by encouraging Hedlund and assuring him of his 

value to the Board. Id On March 20, Hedlund cataloged an email to himself stating that he had 

received information and concerns regarding Plaintiffs actions as chief. Ford Deel. Ex. H. These 

concerns included that Plaintiff was frequently absent from the office, he had used a company 

credit card for personal use, and he had presented false information to the Board regarding 

meeting attendance. Id 

On March 22, Storey emailed Hedlund the following: "I received a call from John 

Spradley tonight. He wants to meet me tomorrow regarding the chief. He didn't want me to 

involve you yet. I will let you know what it is all about." Ford Deel. Ex. I. Indeed, Storey states 

that in "early 2013" she was approached by John Spradley ("Spradley"), who was a division 

chief for KCFDl, and two other members of the KCFDl management team who expressed 

concerns about Plaintiff. Storey Deel. iiii 10-12; Spradley Deel. ii 3. Specifically, Storey states 

some of the concerns indicated that Plaintiff may have violated KCFDl policies regarding travel 

reimbursements, reports to the Board, and the duties as fire chief. Id at ii 13. 

On March 25, Hedlund emailed Kirk Peterson, another attorney who worked for KCFDl, 

about Plaintiff. Ford Deel. Ex. J. Here, Hedlund asked Peterson whether he should take 

Plaintiffs keys and keep him off KCFD 1 property during the investigation. Id Hedlund noted 

that he had requested Plaintiff not speak with any Board members, and that an interim chief may 

be appointed by the evening of March 26. Id Also on March 25, Hedlund and Storey exchanged 

emails to plan for an emergency board meeting to take place on March 26. Ford Deel. Ex. K. At 

one point, Hedlund suggested that they "[ d]on't give [Plaintiff] an opportunity to speak or 

address the issues." Id Hedlund also suggested placing Plaintiff on paid leave pending an 

investigation, and discussed with Storey the possibility of appointing an interim chief. Id. 

Page 5 - REPORT AND RECOMMENDATION 
March 26 Board Meeting 

On March 25, Hedlund emailed Plaintiff to notify him of the emergency board meeting 

taking place on the following day. Wenzel Deel. iJ 21; Ex. G. In the email, Hedlund gave 

Plaintiff the choice of holding the meeting in either open or executive session, and Plaintiff 

responded that he preferred an executive session. Wenzel Deel. Ex. G. Hedlund also stated, "[I]t 

is my belief there will not be any hearing process tomorrow, more of a matter to inform you the 

nature of the claims being made against you." Id 

During the March 26 board meeting, in executive session, Storey read the following 

statement: 

Chief Wenzel, the purpose for tonight's meeting is to inform you that the Board of 

Directors has received negative information regarding your performance as Chief of the 

Fire District. This is not the time for either the Board or for you to inquire or investigate 

this information. Pursuant to your employment agreement, you are entitled to due process 

in the investigation and resolution of this matter. The information the Board has been 

presented pertains to violations that generally allege the following: Violation of vacation 

policies of the employment agreement; dishonesty in regard to monthly reports provided 

to the board; and failure to perform the duties of Fire Chief as described in the District's 

job description and employment agreement. This list is not all inclusive. If determined to 

be true, these allegations could result in disciplinary action up to and including 

termination. At this time, the Board is not discussing any action in this matter other than 

to inform you of the general allegations. No response is requested from you at this time, 

but these are allegations which need to be investigated to determine their validity. 

Wenzel Deel. Ex. I. 

While still in executive session, the Board decided to investigate the allegations against 

Plaintiff using an outside investigator. Id Hedlund suggested defendant Jim Toddy ("Toddy") 

for the position, stating that he was a "retired Oregon State Police detective and a former 

detective for the Klamath County District Attorney's Office." Id Hedlund further stated that, if 

available, he believed Toddy would perform a discrete investigation, and that Plaintiff could 

refute allegations once Toddy gathered the necessary information. Id The Board agreed that 

Page 6 - REPORT AND RECOMMENDATION 
Hedlund should obtain the private investigator for confidentiality considerations, id, and voted 

in open session to allow him to do so, Storey Deel. Ex. 5. 

Whether the Board took adequate steps to ensure that Toddy could adequately perform 

the investigation competently and in an unbiased manner remains disputed. Storey testified in 

depositions that no background check of Toddy was performed, KCFDl Dep. 193:15-17, nor 

was he interviewed, id. at 194:7-10, the Board sought no references for Toddy, id. at 193:22-25, 

and the Board was unaware that Toddy was not licensed as a private investigator, Storey Dep. 

40:12-15. From deposition testimony, it appears neither Toddy nor Hedlund had any training or 

experience in workplace investigations, specifically. On Toddy's experience, he testified the 

following: 

Q: Okay. Maybe we should be sure we define our terms. What would you 

describe as a "workplace investigation"? 

A: Citizen's complaint against one of our troopers, vehicular crashes, 

falsifying reports, theft. 

Toddy Dep. 20:16-22. Toddy further testified that he had performed one other outside 

investigation of an employee accused of theft while with the Klamath County District 

Attorney's office. Id. at 21:21-22:24. On Hedlund's experience, he testified the 

following: 

Q: Okay. Do you have any experience with workplace investigations? 

A:No. 

Q: Have you ever done any training or studied in the area of workplace 

investigations? 

A:No. 

Hedlund Dep. 20:23-21 :3. 

Per his employment agreement with KCFDl, Toddy was to report only to Hedlund 

during the investigation. Toddy Deel. Ex. 1 Section 3. Hedlund told the board he had known 

Toddy for 15 years, Wenzel Deel. Ex. I, and Toddy states that he met Hedlund while the two 

Page 7 - REPORT AND RECOMMENDATION 
worked at the Klamath County District Attorney's office. Toddy Deel.~ 6. Toddy also states that 

he and Hedlund do not have a social relationship, and that they did not spend time together 

outside of work while at the district attorney's office. Toddy Deel.~ 6. Hedlund said the 

following in deposition on why he recommended Toddy to the Board: 

Q: Did you ever do any research into the issue of what qualifications might 

be required for a workplace investigation? 

A:No. 

Hedlund Dep. 108:16-19; 

Q: Okay. What did you think Mr. Toddy's qualifications were to conduct 

this investigation? 

A: He handled- I don't know how many different criminal investigations 

during the course of his career. My personal opinion, right or wrong, is that 

criminal investigations are probably more difficult than workplace 

investigations to make determinations; so I felt he was qualified. 

Hedlund Dep. 109:6-109:13. 

Storey states that the Board hired Toddy based on his experience as a state police officer 

and as an investigator for the Klamath County District Attorney. Storey Deel.~ 15. She also 

states that when Toddy was hired, she was not aware of any reason why he would not be an 

effective and fair investigator, id., and testified that she could not recall KCFDl performing any 

background checks on outside contractors, KCFD 1 Dep. 193: 18-21. 

Investigation Period 

Toddy logged that his investigation of Plaintiff took place from April 3 to June 23, 2013. 

Toddy Dep. Ex. 116. During that time, Toddy reviewed documents, recorded interviewing 15 

witnesses, and wrote a report on his findings. Toddy Dep. Ex. 116; Toddy Deel.~ 9. 

The appropriateness of Toddy's motives and conduct during the investigation remain in 

dispute. Toddy stated he was not concerned with rumors that could result from the questions he 

asked witnesses, Toddy Dep. 67: 13-20, that he could not remember telling interviewees anything 

Page 8 - REPORT AND RECOMMENDATION 
about confidentiality, Toddy Dep. 106:7-9, and that the scope of what he discussed with each 

witness was about the same for all witnesses. Toddy Dep. 83:5-8. Toddy also took notes of his 

interviews but destroyed them, and there are no audio recordings of the interviews. Toddy Dep. 

52:18-24; 107:1-3. Toddy states that his only purpose in conducting the investigation was to 

serve the Board's goal of determining whether Plaintiff had violated KCFDl policies. Toddy 

Deel. if 7. Toddy further states that he kept all information about the investigation confidential, as 

required by his employment agreement. Id at if 8. Finally, Toddy states that he did his best to be 

fair and neutral during the investigation, attempted to find the truth in all matters addressed in his 

report, and did not include anything in the report that he believed was untrue. Id. at if 10. 

During the investigation, Toddy required each interviewee to sign what Plaintiff refers to 

as a "Garrity Warning" (Warning). Hedlund wrote the Warning and advised Toddy to give it to 

all interviewed witnesses. Toddy Dep. 58:1-10; Hedlund Dep. 129:2-3. Hedlund testified that he 

believed Toddy should use the Warning because he was concerned witnesses might not provide 

accurate information when asked questions that could create issues with their supervisor, 

Plaintiff. Hedlund Dep. 129: 13-130: 1. Plaintiff also signed a copy of the Warning, Wenzel Deel. 

Ex. J, which was the same as was signed by all other witnesses, Toddy Dep. 121:15-17. In part, 

the Warning stated the following: 

Neither your answers nor any information or evidence gained by reason of your answers 

can be used against you in any criminal proceeding. If you knowingly and willfully 

provide false statements or information in your answers, you may be disciplined up to 

and including discharge. The answers you furnish and any information or evidence 

resulting there from may be used in the course of disciplinary proceedings. 

Wenzel Deel. Ex. J. 

Storey states that, to her knowledge, Toddy performed the investigation without direct 

supervision from the Board or anyone else. Storey Deel. if 17. During the investigation, however, 

Page 9 - REPORT AND RECOMMENDATION 
Hedlund cataloged or emailed Storey accusations and evidence against Plaintiff. Ford Deel. Ex. 

H; P; Q. There are other emails where Hedlund and Storey discussed the gathering of documents 

and records. Ford Deel. Ex. L; M; N; SS. Hedlund also emailed Toddy about a meeting with 

Spradley. Ford Deel. Ex. 0. 

On June 5, 2013, Plaintiff emailed Hedlund stating that Toddy may be "unprofessional 

and dishonest." Wenzel Deel. Ex. L. Plaintiff also attempted to contact Storey multiple times to 

tell her the investigation was being performed with bias and unfairness, but Storey did not speak 

to Plaintiff during that time. Wenzel Deel.~ 29; Ford Deel. Ex. DD. 

Toddy did not interview Plaintiff at any time during the investigation. While Toddy 

briefly met with Plaintiff on May 29, 2013, this was to gather documents and have Plaintiff sign 

the Warning. Wenzel Deel.~ 26. Toddy initially scheduled an interview with Plaintiff for June 

14, 2013. Toddy Deel.~ 9. Plaintiff states that out of concern the investigation was being 

conducted unfairly, he retained counsel, Karen Ford ("Ford"). Wenzel Deel.~ 30. On June 13, 

Ford emailed Toddy and Hedlund to reschedule the interview. Toddy Dep. Ex. 125. 

A disputed issue is whether Hedlund and Toddy intentionally avoided interviewing 

Plaintiff before reporting their findings to the Board. Toddy states that because the interview 

with Plaintiff was never rescheduled, he was unable to speak with Plaintiff about the 

investigation. Toddy Deel.~ 9. However, Toddy also testified that he understood Ford's email to 

mean he should not speak with Plaintiff, and that Hedlund told him, "[Plaintiff] retained an 

attorney. Don't talk to him." Toddy Dep. 101:1-102:21. 

Plaintiff further states that he did not immediately attempt to reschedule an interview 

with Toddy because he was waiting for information on the specific charges against him. Wenzel 

Deel.~ 32. On June 13, Ford emailed Hedlund to request information on the specific charges 

Page 10- REPORT AND RECOMMENDATION 
against Plaintiff. Ford Deel. Ex. R. The next day, Hedlund responded, in part, by saying the 

following: 

Perhaps it would be easiest ifl have Mr. Toddy prepare the results of his investigation 

without any information from the Chief, and provide that to me in a written report. Then 

the report can be forwarded to you and Chief Wenzel so you have the details you are 

requesting, and Mr. Toddy can meet with the Chief after he has had an opportunity to 

review the documents. 

Id. Hedlund's response also stated that the allegations against Plaintiff were the same as the ones 

read by Storey at the March 26 board meeting. Id. On June 19, Ford then responded that the 

allegations read at the March 26 meeting were too generalized to provide any information, and 

that Plaintiff would wait for Toddy's report before responding to anything. Ford Deel. Ex. S. 

On July 16, 2013, Hedlund emailed Ford a copy of a summarized report from Toddy's 

investigation, which Hedlund had received on or about July 12. Ford Deel. Ex. T. In the email, 

Hedlund stated that if Plaintiff would like to answer the claims in an interview with Toddy, the 

interview needed to take place before July 26. Id. The next day, Ford responded that she would 

like access to the full report before Plaintiff be interviewed by Toddy. Ford Deel. Ex. U. On July 

22, Hedlund sent Ford a copy of Toddy's full report ("Toddy Report") from the investigation. 

Ford Deel. Ex. W. 

On July 25, Ford emailed Hedlund that she and Plaintiff had looked at the Toddy Report, 

and requested KCFDl 's agreement with Toddy and a copy of his resume or CV. Ford Deel. Ex. 

Z. On July 26, Hedlund responded by denying Ford's request for information on Toddy. Id. 

Hedlund also stated that if Plaintiff was disputing the claims, he had a right to a hearing before 

the Board, and that the Board would likely meet on August 6 to pick a date for the hearing. Id. 

On July 29, Ford responded by requesting a hearing before the Board and that the Toddy report 

be kept confidential. Ford Deel. Ex. AA. In additional emails, Hedlund assured Ford that a 

Page 11 - REPORT AND RECOMMENDATION 
hearing before the Board would be scheduled, possibly for sometime in September, 2013. Ford 

Deel. Ex. BB. 

Special Board Meeting on August 6, 2013 

The Board held a special meeting on August 6, 2013 regarding Toddy's investigation of 

Plaintiff. Ford Deel. Ex. MM. Before the meeting, some Board members had read the 

summarized report and others had read parts of the full Toddy Report. Wenzel Deel. Ex. N, lines 

9-12. The transcript shows that the Board contemplated terminating Plaintiff in the special 

meeting: 

DENNIS THOMPSON [Board member]: No matter what he says, or what he tries to do! 

It's just over with him! There is no way he can come back. 

Wenzel Deel. Ex. N, lines 55-56. 

MIKE JONES [Board member]: Uh, that summary letter pretty much outlined it for me! 

That, I mean, you can't, you can't, uhh, misuse government tax payers' dollars and just 

get away with it! His abuse of his leave, his lying to the board about his time, his 

meetings, I mean, my god, uh, if it was my business, ya, if was my business and my 

company I think I would, wouldn't stand for it and the person would be fired! And I 

understand it is a little different situation here but uhm, honestly, I think we should, uhm, 

terminate him based on all the (talked over by Gloria Storey) information here! 

GLORIA STOREY: Terminate him? Or just let his contract ride out for the rest of the 

year? 

MIKE JONES: Nope. Terminate him! 

Wenzel Deel. Ex. N, lines 35-42. 

GLORIA STOREY: If all this transpires and we appoint John as the Chief Monday night. 

Wenzel Deel. Ex. N, line 118. In other parts of the transcript, board members discuss the option 

of non-renewal instead of termination. Wenzel Deel. Ex. N, lines 56-64; 68-69; 73-76. 

The Toddy Report 

Toddy wrote an extensive report, over 1000 pages long, on the findings of his 

investigation, and delivered a paper copy to Hedlund. Toddy Deel.~ 12. Board members were 

Page 12 - REPORT AND RECOMMENDATION 
only given access to the Toddy Report in Hedlund's office. Storey Deel.~ 20. Additionally, 

Storey states that no electronic or paper copies of the Toddy Report were distributed, it was 

never discussed in open session of a board meeting, and the report's existence was never 

mentioned outside ofKCFDl. Id 

The accuracy of the Toddy Report remains in dispute. The Toddy Report states that 

Plaintiff abused sick leave, based on his personal calendar on his work computer. Wenzel Deel.~ 

44. It also states that Plaintiff lied about attending an OFCA meeting, based on Toddy's 

discovery that Plaintiff did not attend the meeting in person and there was no record of a cellphone call. Id at~ 45. In a later address to the Board, Plaintiff contended that these statements, 

and many others in the report, were untrue or misleading by only stating selective evidence. 

Wenzel Deel. Ex. P; Storey Deel. ~ 23. Plaintiff also made these contentions shortly after he was 

first provided with the Toddy Report. On July 17, Ford emailed Hedlund that Plaintiff noticed 

many factual mistakes in the summarized report. Ford Deel. Ex. U. On July 29, Ford emailed 

Hedlund that the full Toddy Report contained false and misleading statements that Plaintiff could 

easily refute. Ford Deel. Ex. AA. 

Storey states she read the summarized report, but that, by the time the report was 

released, it had little bearing on the question of whether to renew Plaintiffs contract. Storey 

Deel.~ 21. Storey further states that the deteriorating financial situation ofKCFDl, in particular, 

was among other information more important than the Toddy Report. Id Indeed, in May 2013, 

the Board was informed that KCFDl would have to borrow $2.1 million to fund operations 

through the 2012-13 fiscal year. Id at~ 18. Storey states that this was troubling to her because it 

was more than KCFD 1 had borrowed, and was part of a pattern of increased, earlier borrowing 

over the previous five years. Id She also states that she saw this pattern as evidence of the poor 

Page 13 - REPORT AND RECOMMENDATION 
performance by Plaintiff, as managing KCFD 1 's finances was one of his most important 

responsibilities as fire chief. Id. at ii 19. 

Board Meeting on August 19, 2013 

On August 16, 2013, Hedlund emailed Plaintiff that a special board meeting was 

scheduled for August 19, and the renewal of Plaintiffs contract would be discussed. Wenzel 

Deel. Ex. 0. Upon learning of this meeting, Ford emailed Hedlund to request a hearing for 

Plaintiff to address the investigation. Ford Deel. Ex. CC. In that email, Ford also offered that the 

parties form an agreement to delay the deadline for the renewal decision so Plaintiff could 

sufficiently address the accusations against him. Id. 

At the August 19 board meeting, there were two executive sessions regarding the renewal 

of Plaintiffs employment contract. Storey Deel. ii 23. With Plaintiff excluded, the first executive 

session began with Hedlund reading an email from Ford, who offered an agreement where 

Plaintiff would waive the 120 day notice requirement for non-renewal so he could address the 

allegations against him before the Board's decision. Wenzel Deel. Ex. Q 3:19-6:22. The Board 

then discussed Plaintiffs performance as fire chief, non-renewal of his contract, and placing him 

on administrative leave until the end of his contractual term. Wenzel Deel. Ex. Q. In the second 

executive session, Plaintiff addressed the Board to make a case for renewing his contract. Storey 

Deel. ii 23. In making his case, Plaintiff read a memo addressing some accusations in the Toddy 

Report and stating that the meeting did not allow an adequate opportunity to present a full 

response. Wenzel Deel. ii 39; Ex. P. Plaintiff states that the board members did not ask him any 

questions, nor did they discuss anything in his presence. Wenzel Deel. ii 39. 

Once in open session, the Board voted unanimously to not renew Plaintiffs contract. 

Storey Deel. Ex. 7. The Board then voted unanimously to appoint Spradley as interim fire chief 

Page 14-REPORT AND RECOMMENDATION 
and place Plaintiff on paid administrative leave. Id. Storey states that, during open session, there 

was no discussion of the reasons for the Board's decision not to renew Plaintiffs contract. Storey 

Deel.~ 24. 

The day after the board meeting, on August 20, Plaintiff received a letter from Storey to 

officially notify him of the non-renewal and paid leave. Wenzel Deel. Ex. R. The letter also 

designated Spradley as the interim chief and requested Plaintiff return all KCFDl property. Id. 

Regarding Toddy's investigation, the letter further stated, "If you would still like to have a 

hearing please have Ms. Forde (sic) notify Mr. Hedlund before August 30, 2013, at 5:00 PM, so 

we can accommodate scheduling with the Board." 

On August 20, Spradley issued a press release announcing that Plaintiffs contract would 

not be renewed. Spradley Deel.~ 5; Ex. 1. The press release did not mention the Toddy Report or 

the reasons for Plaintiffs non-renewal. Spradley Deel.~ 5; Ex. 1. On the same day, Spradley 

also issued an internal directive to KCFDl employees, notifying them of the non-renewal of 

Plaintiffs contract and that Spradley would take over as interim chief. Spradley Deel.~ 6; Ex. 2. 

Between August 29 and December 14, 2013, Ford continued emailing Hedlund to 

schedule a hearing so Plaintiff could address Toddy's investigation. Ford Deel. Ex. EE-II. On 

December 6, 2013, Hedlund emailed Ford the following: 

I have had an opportunity to speak to the [Board], and the decision was made by the 

Board that they will not be seeking to pursue any action against Mr. Wenzel as a result of 

the internal investigation. The Board did not, and will not, render any decision as to the 

merits of the investigation. 

Ford Deel. Ex. HH. Hedlund also stated that the Board was standing by its decision regarding the 

non-renewal of Plaintiffs employment agreement, but that he would forward any dispute to the 

Board at its December 18 meeting. Id In prior communications with Ford, Hedlund had not 

mentioned that Plaintiff may be unable to address the Board. Indeed, Hedlund repeatedly 

Page 15 - REPORT AND RECOMMENDATION 
suggested that he was having discussions with the Board to schedule a hearing, and failed to 

respond to Ford's communications and specific questions regarding a hearing. Ford Deel. Ex. 

EE-GG. Ultimately, Plaintiff remained on paid administrative leave until the end of his 

contractual term, when his employment with KCFD 1 ended on December 31, 2013. 

LEGAL STANDARD 

Summary judgment shall be granted when the record shows that there is no genuine 

dispute as to any material of fact and that the moving party is entitled to judgment as a matter of 

law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The 

moving party has the initial burden of showing that no genuine issue of material fact exists. 

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Devereaux v. Abbey, 263 F.3d 1070, 1076 

(9th Cir. 2001) (en bane). The court cannot weigh the evidence or determine the truth but may 

only determine whether there is a genuine issue of fact. Playboy Enters., Inc. v. Welles, 279 F.3d 

796, 800 (9th Cir. 2002). An issue of fact is genuine "if the evidence is such that a reasonable 

jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. 

When a properly supported motion for summary judgment is made, the burden shifts to 

the opposing party to set forth specific facts showing that there is a genuine issue for trial. Id at 

250. Conclusory allegations, unsupported by factual material, are insufficient to defeat a motion 

for summary judgment. Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the 

opposing party must, by affidavit or as otherwise provided by Rule 56, designate specific facts 

which show there is a genuine issue for trial. Devereaux, 263 F.3d at 1076. In assessing whether 

a party has met its burden, the court views the evidence in the light most favorable to the nonmoving party. Allen v. City of Los Angeles, 66 F.3d 1052, 1056 (9th Cir. 1995). 

DISCUSSION 

Page 16-REPORT AND RECOMMENDATION 
I. Defendant KCFDl 's motion for summary judgment on Plaintiff's claims for 

procedural due process should be granted in part and denied in part. 

Plaintiff alleges the Board's vote to terminate him violated his Fourteenth Amendment 

rights to procedural due process. Plaintiffs due process claims are brought under 42 U.S.C § 

1983, as KCFDl is a state actor as a Rural Fire Protection Special District funded through real 

property taxes in Oregon. Plaintiff does not have a property interest in his continued employment 

with KCFDI. However, he has raised a substantial question as to whether the defendants 

violated Plaintiffs liberty interest in his reputation by publishing stigmatizing information in 

connection with his non-renewal and failing to give him a name-clearing hearing. Therefore, the 

defendants are entitled to summary judgment on only one of the two claims. 

a) Plaintiff does not have a property interest in his employment with KCFDl. 

The Fourteenth Amendment of the Constitution protects against the deprivation of 

property without procedural due process. Carey v. Piphus, 435 U.S. 247, 259 (1978). A plaintiff 

has a constitutionally protected property interest in continued employment if the plaintiff has a 

reasonable expectation or a "legitimate claim of entitlement," not merely a "unilateral 

expectation," to continued employment. Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972). "A 

legitimate claim of entitlement arises if it is created by 'existing rules or understandings that 

stem from an independent source such as state law."' Brady v. Gebbie, 859 F.2d 1543, 1548 (9th 

Cir. 1988) (citing Roth, 408 U.S. at 577). 

In this case, Plaintiffs property rights are defined by his employment agreement subject 

to state law. Under Oregon state law, "[a]s a general rule, an employment contract creates an atwill arrangement that may be terminated by either the employee or the employer at any time." 

Ewalt v. Coos-Curry Elec. Co-op., Inc., 202 Or. App. 257, 262 (2005) (citation omitted). A 

protected property interest may be created, however, by a contract provision stating that the 

Page 17 - REPORT AND RECOMMENDATION 
contract may only be terminated for cause. Brunick v. Clatsop Cnty., 204 Or. App. 326, 332 

(2006) (citation omitted). Where such an employment agreement is for a fixed term, the 

employee has a protectable property interest only for the length of that term. Roth, 408 U.S. at 

578; Maddox v. Clackamas Cnty. Sch. Dist. No. 25, 293 Ore. 27, 36 (1982). 

In this case, Plaintiffs employment agreement expired after three years on December 31, 

2013, but would automatically renew unless KCFDl issued a letter of intent to not renew the 

agreement at least 120 days before that date. Storey Deel. Ex. 2, Section 2. The agreement also 

contained a clause about discipline, stating that KCFDl 's general disciplinary policies applied to 

Plaintiff, and that he may be terminated "for cause." Storey Deel. Ex. 2, Section 8. However, 

this clause specifically contemplates non-renewal without cause: 

Nothing in this Agreement shall be construed to include any requirement that [KCFDl] 

have specific cause for non-renewal of the employment agreement in accordance with the 

terms set forth herein. 

Id. Therefore, the language of the agreement specifically allowed the Board to end Plaintiffs 

contract, for any reason, after the three-year term. Plaintiff remained on paid administrative leave 

until December 31, 2013, when his employment agreement expired by its own terms. 

Accordingly, Plaintiffs claim that he was entitled to due process fails because he had no 

property interest in his continued employment such that his due process rights were triggered. 

Plaintiff was not de facto terminated on August 19, 2013 when he was notified of the 

Board's intent to not renew his contract and placed on administrative leave. Such de facto 

termination was found in Thurston v. Dekle, 531F.2d1264 (5th Cir. 1976), vacated on other 

grounds, 438 U.S. 901 (1978), where the Fifth Circuit held that "[s]ince suspension without pay 

is in reality termination, the city must provide whatever pretermination procedures the 

Constitution mandates prior to suspension without pay." To contrast, Plaintiff was suspended 

Page 18 - REPORT AND RECOMMENDATION 
with pay, so it cannot be said that "suspension without pay [was] in reality termination." Id. 

Indeed, the fact that Plaintiff was suspended with pay differentiates this case from all the cases 

Plaintiff relies on to assert a de facto termination on August 19. 

Plaintiff also had no protectable property right in his employment through 2016 by any 

implied contract. "To be binding, modification of a contract must be supported by consideration. 

Where the terms of a written contract are modified by oral agreement, modification must be 

shown by clear and convincing evidence." Anderson v. Divito, 138 Or. App. 272, 281-82 (1995) 

(citations omitted). Plaintiffs strongest evidence in support of an implied contract is KCFD 1 's 

decision to support Plaintiff as a candidate for an eight year term on the OFCA Board of 

Directors. However, Plaintiff fails to explain how this letter of support for a position in an 

outside organization is "clear and convincing evidence" of a contractual modification supported 

by consideration. Id. Plaintiffs reliance on the finding of an implied agreement found in Perry v. 

Sindermann, 408 U.S. 593 (1972) is similarly futile, as nothing in evidence shows KCFDl 

"created a system" by its treatment of similarly situated employees, such that a protected 

property interest was established. Id. 

b) Plaintiff has raised an issue of material fact as to whether the defendants 

violated his liberty interest in procedural due process for failing to give him a 

hearing after the publication of the Toddy investigation and the non-renewal 

of Plaintiff's contract. 

The liberty interest that is protected by the due process clause "encompasses an 

individual's freedom to work and earn a living." Bo/low v. Fed. Reserve Bank of San Francisco, 

650 F.2d 1093, 1100 (9th Cir. 1981), cert. denied, 455 U.S. 948 (1982). "[W]hen the government 

dismisses an individual for reasons that might seriously damage his standing in the community, 

id., or if the government discharges an employee amidst allegations of misconduct, the employee 

may have a procedural due process right to notice and an opportunity to clear his name. Bledsoe 

Page 19 - REPORT AND RECOMMENDATION 
v. City of Horn Lake, Miss., 449 F.3d 650, 653 (5th Cir. 2006). Neither damage to reputation 

alone, nor the stigma resulting from the discharge itself trigger the protections of due process. 

Paul v. Davis, 424 U.S. 693, 701 (1976); Wells v. Hico Indep. Sch. Dist., 736 F.2d 243, 256 (5th 

Cir.1984 ). Rather, a liberty interest is infringed, and the right to notice and an opportunity to 

clear one's name arises only when the employee is "discharged in a manner that creates a false 

and defamatory impression about him and thus stigmatizes him and forecloses him from other 

employment opportunities. White v. Thomas, 660 F.2d 680, 684 (5th Cir.1981). See also Board 

of Regents of State Colleges v. Roth, 408 U.S. 564, 573 (1972) (discussing the Supreme Court's 

recognition of a procedural due process right to notice and an opportunity to clear one's name 

when the government discharges an employee in a manner that puts the employee's "good name, 

reputation, honor, or integrity ... at stake"). 

1. The Toddy Report was publicized when it was placed into the public 

record and when the charges were disclosed to KCFDl staff and the 

OFCA, an outside organization. 

"The presence of stigmatizing information placed into the public record by a state entity, 

pursuant to a state statute or otherwise, constitutes sufficient publication to implicate the liberty 

interest under the due process clause of the fourteenth amendment to the United States 

Constitution." Buxton v. City of Plant City, Fla., 871F.2d1037, 1046 (1 lth Cir. 1989). The 

Court notes that there is a circuit split on this issue. See, e.g., Dasey v. Anderson, 304 F .3d 148, 

156 (1st Cir.2002) (without dissemination, no right to name-clearing hearing); Hughes, 204 F.3d 

at 228 (presence of stigmatizing information in personnel file insufficient to create triable issue 

on public disclosure element of liberty interest claim); McMath v. City of Gary, Ind, 976 F .2d 

1026 (7th Cir.1992) (information in plaintiffs personnel file may be "ticking time bomb" but 

unless it is disseminated, no publication); Copeland v. Phila. Police Dep't, 840 F.2d 1139, 1148 

Page 20- REPORT AND RECOMMENDATION 
(3d Cir.1988) (presence of information relating to termination in personnel file does not raise 

inference that defendant intends to communicate information to prospective employers). 

However, the Eleventh Circuit's Buxton holding was explicitly adopted by the Ninth Circuit in 

Cox v. Roskelley, 359 F.3d 1105, 1112 (9th Cir. 2004) (placement of the stigmatizing 

information in the public record, accessible upon request, constituted publication sufficient to 

trigger Cox's liberty interest under the Fourteenth Amendment). 1 

In this case, it is clear that KCFDl, and the defendants in general, have been cautious not 

to disclose the contents of the Toddy Report to the general public.2 However, in opposing 

Plaintiffs motion for a protective order early in this case, defense counsel specifically argued 

that the Toddy Report qualified as a public record because it was created by a KCFDl employee 

with public funds. Mersereau Letter to the Court, March 30, 2016. Counsel argued that the 

statutory exemptions to Oregon's "very robust public records law" do not apply because 

KCFD 1 's position is that it did not impose any discipline based on the investigation. While that 

characterization is certainly disputed by the Plaintiff, defense counsel also noted that the report 

contains an "examination of the plaintiffs compliance with District policies regarding 

expenditures and personal time. Thus it deals with the manner in which public funds were 

expended, a subject that could hardly be of greater public interest." Therefore, at the very least, 

KCFDl 'sown position is that the Toddy Report is part of the public record and subject to a 

public records request at any time. 

1 The Cox Court also addressed qualified immunity as to the publication issue, and found that the law was 

clearly established even without an identical case on point. Cox v. Roskelley, 359 F.3d 1105, 1112 (9th 

Cir. 2004). Defendants only briefly raise qualified immunity concerns, but to the extent they claim it 

here, the Court finds the constitutional right is clearly established and defendants are not entitled to 

qualified immunity. 

2 Additionally, a Protective Order entered by the Court (#35) has prevented disclosure since May 18, 2016 

up until now. However, this order and its protective effect will not survive the litigation. 

Page 21 - REPORT AND RECOMMENDATION 
Plaintiff presents further evidence of publication via defendant Toddy's investigation 

itself, during which, Toddy admits, he disclosed the charges against Plaintiff to many KCFDl 

employees, asking them detailed questions about Plaintiffs use of the County credit card, his 

time in and away from the office, and other questions designed to probe his conduct and integrity 

as fire chief. In addition, Toddy had each employee sign a Garrity Warning, which stated: 

Neither your answers nor any information or evidence gained by 

reason of your answers can be used against you in any criminal 

proceeding. If you knowingly and willfully provide false 

statements or information in your answers, you may be disciplined 

up to and including discharge. The answers you furnish and any 

information or evidence resulting there from may be used in the 

course of disciplinary proceedings. 

Plaintiff asserts that the warning created an impression that the investigation could have serious 

criminal implications - and by giving it to multiple employees, KDFDl essentially made such 

stigmatizing allegations public, at least to the KCFD 1 staff. 

In an analogous case, an employee of a department was terminated, and in connection 

with that termination, a security bulletin was sent to the security captain for the plaintiffs 

department, which prohibited the plaintiff from entering the building. Fontanilla v. City & Cty. 

of San Francisco, 205 F.3d 1351, *2 (9th Cir. 1999). The bulletin included plaintiffs picture, 

along with that of one other person, and stated that both people had "made serious threats against 

employees of the Department." Id. This bulletin was posted at the security desk and was seen by 

"at least one" employee of the Department. With respect to plaintiffs procedural due process 

claim under § 1983, the Ninth Circuit concluded that the security bulletin implicated the 

plaintiffs liberty interest because "it jeopardized Fontanilla's good name and reputation and 

could foreclose employment opportunities." Id. The Ninth Circuit went on to hold that the 

plaintiff had demonstrated a triable issue of fact as to whether he was entitled to procedural due 

Page 22 - REPORT AND RECOMMENDATION 
process by presenting uncontroverted evidence that the bulletin was posted publicly and was 

posted in connection with Plaintiffs termination. Id. 

Like the bulletin that was public because it was posted where it was visible to other 

employees, KCDFl publicized stigmatizing information by interviewing a number of employees, 

by disclosing to them the specific charges against Plaintiff, and by giving them the Garrity 

Warning. Publication of this stigmatizing information raises a material question of fact as to 

whether it jeopardized Plaintiffs good name, reputation, and potential future employment. 

Finally, Toddy's investigation included phone calls to the Oregon Fire Chiefs 

Association, where again Plaintiffs attendance, credit card purchases, and truthfulness was 

called into question. Even had Toddy been extremely discreet in his lines of questioning with the 

OFCA, an outside organization, taking the facts in the light most favorable to the Plaintiff, a jury 

could find that the defendants publicized the charges against him. 

ii. Non-renewal with the backdrop of the Toddy investigation meets the 

standard for reputational damage under the liberty clause. 

"In order to justify relief under the liberty clause of the 14th amendment via section 1983, 

plaintiffs alleged reputational damage must be entangled with some other 'tangible interests 

such as employment."' McGhee v. Draper, 639 F.2d 639, 643 (10th Cir. 1981) ("McGhee I") 

(citing Paul v. Davis, 424 U.S. 693, 701, (1976)). Typically, when one's liberty interest is 

allegedly infringed upon by a discharge from employment, the termination or non-renewal will 

either explicitly state the stigmatizing factors or implicitly ratify some other stigmatizing 

allegations. Thus, the discharge will either cause or contribute to the alleged defamation. In 

either case, the defamed's liberty "to engage in any of the common occupations of life" is 

diminished, Board of Regents v. Roth, 408 U.S. 564, 572 (1972) (quoting Meyer v. Nebraska, 

262 U.S. 390, 399 (1923)), and the defamation has occurred "in the course of the termination of 

Page 23 - REPORT AND RECOMMENDATION 
employment." Paul v. Davis, 424 U.S. at 710. If plaintiff can show to the trier of fact that the 

non-renewal caused or enhanced his alleged reputational damage, he will have shown that he 

was entitled to a hearing or other reasonable opportunity to clear his name. See Paul v. Davis, 

424 U.S. at 706-13; Board of Regents v. Roth, 408 U.S. 564, 573-74 (1972). 

In McGhee v. Draper, 564 F.2d 902 (10th Cir. 1977) ("McGhee IF') the court considered 

whether a school board infringed on the liberty interest of an at-will teacher when it chose to 

non-renew her contract for the coming school year. The court noted that the board's letters and 

resolutions of non-renewal stated no formal charges or findings against the teacher. Id. at 910. 

However, the board's minutes focused attention on the allegedly pornographic materials and 

improper changing of grades, and affidavits held by the board charged misconduct with male 

students and drunkenness, all of which plaintiff denied. Id. The court found that "the discharge 

against this immediate background raised a substantial question whether the board declining to 

re-employ had imposed a stigma or other disability which foreclosed plaintiffs freedom to take 

advantage of other employment opportunities." Id. 

Similarly, in this case, defendant KCFDl ostensibly chose not to renew Plaintiffs 

contract "without cause." It did so, however, after conducting a months-long investigation into 

Plaintiffs financial conduct and abuse of time and County resources. The decision not to renew 

came down within a few short weeks of an Executive Board Meeting where the Toddy Report, 

alleging 1000 pages of misconduct was discussed and determined to be a sufficient reason for 

termination by several members of the board. Against this "immediate backdrop" then, the 

Court finds that Plaintiff has raised a substantial question as to whether the board's decision to 

non-renew his contract imposed a stigma or other disability which, without a hearing, foreclosed 

Plaintiffs freedom to take advantage of other employment opportunities. 

Page 24-REPORT AND RECOMMENDATION 
iii. If a jury finds that Plaintiff's liberty interest was impacted such that 

it triggered his due process rights, the Court finds as a matter of law 

that Plaintiff was not given a hearing sufficient for due process. 

There is a strong presumption that a public employee is entitled to some form of notice 

and opportunity to be heard before being deprived of a property or liberty interest. Vanelli v. 

Reynolds Sch. Dist. No. 7, 667 F.2d 773, 778 (9th Cir. 1982) (citing Goss v. Lopez, 419 U.S. 565, 

574-75 (1975); Goldberg v. Kelly, 397 U.S. 254, 264 (1970)). Apart from this general 

presumption, a court should analyze whether the timing of a hearing comports with due process, 

given the exigencies and circumstances of any particular case, according to the three part 

balancing test outlined in Mathews v. Eldridge, 424 U.S. 319 (1976). Vanelli, 667 F.2d at 778. 

The factors to consider include the private interest that will be affected, the risk of an erroneous 

deprivation of that interest through the procedures used, and the fiscal and administrative 

burdens that any additional procedural requirements would entail. Id. at 779. 

Applying these factors compels the Court to determine that under these circumstances 

Plaintiff was not given a hearing sufficient for due process. First, the weight of the private 

interest at stake is apparent. Plaintiff Wenzel had a distinguished firefighting career for 40 years, 

and he had been fire chief for the last five. In that time he never received a negative review or 

any sort of disciplinary action. 

Second, the risk of an erroneous deprivation was quite high. As discussed above Wenzel 

consistently disputed the allegations, yet the Toddy Report was finalized without his input, and 

he was not given an opportunity to respond to the 1000 pages of specific charges that report 

made against him. The only process he was given was the opportunity to read a statement to the 

Board on August 19 that responded to some of the charges. Wenzel stated to the Board at the 

time that the hearing was inadequate for him to address all of the charges brought against him in 

Page 25 - REPORT AND RECOMMENDATION 
the Toddy Report. The Board asked Plaintiff no questions, and Plaintiff was not allowed to cross 

examine Toddy or any of the witnesses that Toddy interviewed. 

Third, the County has not raised any fiscal or administrative burden that granting a 

hearing would have imposed, and in fact the record shows that KCFDl represented to Wenzel 

and his lawyer multiple times that he would be given such a hearing. Plaintiff and his counsel 

even offered to waive the 120-day notice requirement for non-renewal of his contract so that he 

could be given an opportunity to respond to each charge against him before the non-renewal 

decision was made. The Court finds that the administrative burdens in allowing him to do so 

would have been minimal. Therefore, considering all of the circumstances, if Plaintiff was 

entitled to due process, he did not receive an adequate hearing for such process. 

II. Defendant KCFDl 's motion for summary judgment on Plaintiff's claim for 

breach of contract should be granted in part and denied in part. 

To state a claim for breach of contract, plaintiff must allege the existence of a contract, 

"its relevant terms, plaintiffs full performance and lack of breach and defendant's breach 

resulting in damage to plaintiff." Slover v. Oregon State Bd. of Clinical Soc. Workers, 144 Or. 

App. 565, 570, 927 P.2d 1098, 1101 (1996) (citing Fleming v. Kids and Kin Head Start, 71 

Or.App. 718, 721, 693 P.2d 1363 (1985)). 

KCFD 1 did not breach its contract with Plaintiff when it did not renew his contract with 

120 days' notice. Plaintiffs written agreement stated, "The term of this Agreement shall begin 

on January 1, 2011 and shall terminate on December 31, 2013. This Agreement will 

automatically extend for an additional three years, unless [KCFD 1] issues a letter of intent not to 

renew, at least one hundred twenty days prior to December 31, 2013." Storey Deel. Ex. 2. The 

agreement also states, "[Plaintiff] may only be terminated for cause during the term of this 

Agreement or any extension thereof," but that "[n]othing in this Agreement shall be construed to 

Page 26- REPORT AND RECOMMENDATION 
include any requirement that [KCFDl] have specific cause for non-renewal of the employment 

Agreement in accordance with the terms set forth herein." Id. These unambiguous terms allowed 

KCFD 1 to not renew Plaintiffs contract for any reason. KCFD 1 sent Plaintiff a letter of intent to 

not renew his contract 120 days before its expiration, and Plaintiff remained on paid leave until 

December 31, 2013. Therefore, KCFDl did not breach Plaintiff's written employment 

agreement, as it expired by its own terms. 

KCFD 1 did not create any enforceable agreements with Plaintiff outside the written 

employment contract. As discussed above, KCFD 1 's decision to support Plaintiff as a candidate 

for an eight year term on the OFCA Board of Directors did not modify Plaintiffs employment 

agreement to extend until 2016, as this does not constitute "clear and convincing evidence" of a 

contractual modification supported by consideration. Anderson, 138 Or. App. at 282. Similarly, 

any statements made by KCFD 1 regarding how the investigation would be conducted lack 

consideration from Plaintiff to KCFD 1 such that they could be enforced. Therefore, KCFD 1 did 

not breach any enforceable agreement with Plaintiff when it chose not to renew his contract. 

While the contract agreement between the parties specifically contemplated non-renewal 

with 120 days' notice without cause, the Plaintiffs Amended Complaint also raises issues with 

the disciplinary provisions of the employment agreement. Specifically, the contract provides for 

progressive discipline and the right to a hearing concerning any disciplinary action or 

termination. The contract also incorporates other County disciplinary policies and procedures, 

which require an appropriate investigation of any accusations against the employee and that there 

be a decision issued by the Board following an investigation and fair hearing. 

Based on these contractual disciplinary provisions, Plaintiff has raised an issue of 

material fact regarding whether the Toddy investigation was a "disciplinary action," and whether 

Page 27 - REPORT AND RECOMMENDATION 
or not the Board chose to non-renew his contract because of that investigation. Statements by 

Board members at the August 6 Executive Session Board Meeting indicate that the investigation 

was a substantial factor in that decision. Under the terms of the contract, if non-renewal was a 

result of the investigation, than the investigation and non-renewal was inherently a disciplinary 

action, which should have triggered the rights under the disciplinary provisions, including the 

right to notice, a hearing, and a final decision regarding the results of the investigation. Because 

a reasonable jury could find that the months-long investigation, including the publication of the 

Toddy Report, was disciplinary in nature and resulted in non-renewal, KCFDl is not entitled to 

summary judgment on this issue. 

III. All defendants should be granted summary judgment as to Plaintiff's negligence 

claims; the claims are precluded because he alleges only economic loss and he 

was not owed a heightened duty by the defendants. 

Under Oregon law, "one ordinarily is not liable for negligently causing a stranger's 

purely economic loss without injuring his person or property." Hale v. Groce, 304 Or. 281, 284 

( 1987). Thus, a negligence claim to recover purely economic losses "must be predicated on some 

duty of the negligent actor to the injured party beyond the common law duty to exercise 

reasonable care to prevent foreseeable harm." Onita Pac. Corp. v. Trustees of Bronson, 315 Or. 

149, 159 (1992). This additional duty has been identified in certain relationships, typically 

between professionals and their clients. Id. at 160. Outside the professional-client relationship, 

the controlling question becomes whether the relationship is one "in which the party who owes a 

duty of care is acting, 'at least in part, to further the economic interests of the 'client,' the person 

owed the duty of care."' Conway v. Pac. Univ., 342 Or. 231, 240 (1996) (quoting Onita Pac. 

Corp., 315 Or. at 161). 

Page 28 - REPORT AND RECOMMENDATION 
In this case, Plaintiff alleges that purely economic losses resulted from the negligent 

conduct of defendants KCFDl, Hedlund, and Toddy, since the result of any negligence was that 

Plaintiff lost his job as fire chief. In other words, it cannot be said that Plaintiffs "person or 

property" was injured as a result of the defendants' allegedly negligent conduct. Hale, 304 Or. at 

284. Any harm to Plaintiffs reputation is distinguishable from injury to his person for the 

purposes of the economic loss rule, as reputational harm would result in "financial losses such as 

indebtedness incurred and return of monies paid." Onita Pac. Corp., 315 Or. at 159 n. 6. 

Additionally, because Plaintiff had no property interest in his employment beyond the term of his 

employment agreement, he cannot assert that his property was injured by the non-renewal. 

The relationships between Plaintiff and the defendants did not give rise to the additional 

duty required under the economic loss rule. Because Plaintiff alleges purely economic damages, 

the defendants may only be liable for negligent actions if they were acting, "at least in part, to 

further the economic interests" of Plaintiff. Onita Pac. Corp., 315 Or. at 161. 

Plaintiff brings three negligence claims against the defendants. First, in his negligent 

investigation claim, Plaintiff alleges that the defendants acted negligently in performing the 

investigation. Second, in his negligent retention and supervision claim, Plaintiff alleges KCFD 1 

acted negligently by hiring Hedlund and Toddy, and by supervising them throughout the 

investigation since they had no experience with employment investigations and may have been 

biased against Plaintiff. Finally, in his negligent misrepresentation claim, Plaintiff alleges that 

Hedlund and Toddy acted negligently by submitting the Toddy Report to KCFDl, since the 

report was filled with misrepresentations and created false impressions about Plaintiff. In all 

three negligence claims, the alleged negligent actions pertain to the investigation. In performing 

the investigation, however, the defendants were not acting to further Plaintiffs economic 

Page 29 - REPORT AND RECOMMENDATION 
interest. Instead, the purpose of the investigation was to determine whether Plaintiff had violated 

KCFDl policies, so the defendants acted to further KCFDl 's economic interest in preventing 

policy violations. Even assuming Hedlund and Toddy's purpose was to influence KCFDl into 

terminating Plaintiff, they would be acting to further their own economic interests, not 

Plaintiff's. Therefore, because Plaintiff alleges purely economic damages, and the defendants' 

allegedly negligent actions were not in furtherance of Plaintiff's economic interests, the 

defendants should be granted summary judgment and Plaintiff's negligence claims should be 

dismissed. 

IV. Defendant KCFDl 's motion for summary judgment as to Plaintiff's wrongful 

discharge claim should be denied. A reasonable jury could find that Plaintiff 

was wrongfully discharged for fulfilling an important public duty. 

Under Oregon law, "[t]he tort of wrongful discharge stands as an exception to the usual 

rule that at-will employees can be discharged at any time for any reason." Eusterman v. 

Northwest Permanente, P. C., 204 Or. App. 224, 229 (2006) (citing Babick v. Oregon Arena 

Corp., 333 Or. 401, 407 (2002)). Courts "recognize two general types of wrongful discharge: (1) 

discharge for exercising a job-related right that reflects an important public policy ... , and (2) 

discharge for fulfilling an important public duty .... [The] court cannot create a public duty but 

must find one in constitutional or statutory provisions or case law. To establish a duty, statutes 

cannot merely express a general public policy; rather, they must encourage specific acts or 

'otherwise demonstrat[e] that such acts enjoy high social value."' Id. at 229-30 (citations 

omitted). 

In this case, a jury could find that Plaintiff was discharged, via non-renewal of his 

employment agreement, for refusing to unilaterally change KCFD 1 's minimum staffing levels 

during labor negotiations. This action by Plaintiff is most appropriately categorized as fulfilling 

Page 30 - REPORT AND RECOMMENDATION 
an important public duty; it "involve[s] obligations that [Plaintiff] was required to fulfill, rather 

than benefits that he was entitled to as an employee." Id. at 230 n. 2. 

While representing KCFD 1 in labor negotiations, Plaintiff was contacted by Hedlund on 

behalf of the Board. In two separate emails, Hedlund requested that Plaintiff eliminate overtime 

via lowering minimum staffing levels. Plaintiff refused this request, as he believed that action 

would be unlawful and an unfair labor practice. Plaintiff contacted Storey to resolve the 

disagreement, and the two met with Hedlund in a private meeting. Plaintiff states that during this 

meeting, Hedlund became "angry and embarrassed as a result of the confrontation and being 

wrong on the legal issue." Wenzel Deel. iJ 20. Beginning the next day, a series of emails 

regarding Plaintiffs performance as fire chief were catalogued by Hedlund or exchanged 

between Hedlund and Storey. 

First, Plaintiffs refusal to unilaterally lower minimum staffing levels during labor 

negotiations fulfilled an important public duty, as defined by statutory law. Under ORS 

243.672(1)(e), Plaintiff had a duty as a representative ofKCFDl to "bargain collectively in good 

faith" with the firefighter's union representatives. "That duty to bargain in good faith obligates 

public employers to negotiate with respect to mandatory subjects of collective bargaining. A 

public employer, such as [KCFDl], commits aper se unfair labor practice if it 'institutes a 

unilateral change to the status quo involving a mandatory subject of bargaining."' Amalgamated 

Transit Union, Div. 7 5 7 v. Tri-Cnty. Metro. Transp. Dist. of Oregon, 250 Or. App. 681, 684 

(2012) (citations omitted). In KCFDl 's negotiations with the firefighter's union, minimum 

staffing levels were a mandatory subject of the bargaining, so unilaterally changing them would 

have constituted a per se unfair labor practice. Therefore, by refusing to do so, Plaintiff fulfilled 

Page 31 - REPORT AND RECOMMENDATION 
an important public duty which, as demonstrated by statute and case law, enjoys high social 

value. 

Whether Plaintiff was terminated because he acted to fulfill a public duty then becomes a 

question of fact for a jury. Plaintiff states that, prior to the events at issue here, he had never 

received disciplinary action or been threatened with possible disciplinary action in any job. There 

is also no evidence of any discussion within KCFDI about Plaintiff's poor job performance until 

the day after Plaintiff's private meeting with Hedlund and Storey. Additionally, the investigation 

that followed was performed by Toddy, a long-time professional acquaintance of Hedlund, who 

had no prior experience with workplace investigations. Shortly after having access to the Toddy 

Report, Plaintiff began contesting that the Toddy Report contained false and misleading 

statements. However, Plaintiff was never afforded an opportunity to refute the allegations against 

him, as the Board was given access to the Toddy Report before he knew what it said. From this 

evidence, viewed in the light most favorable to Plaintiff, a reasonable jury could conclude that 

the investigation was initiated as retaliation for Plaintiff's refusal to follow Hedlund's request. 

After Board members accessed the Toddy Report, and during the August 6 special 

meeting, the Board contemplated terminating Plaintiff. Because a jury could then conclude that 

the investigation and resulting Toddy Report caused the Board to not renew Plaintiff's 

employment agreement, a genuine factual dispute remains regarding Plaintiff's wrongful 

termination claim against KCFD 1. 

The Court notes that this analysis does not change merely because Ms. Storey and the 

Board ultimately agreed with Plaintiff regarding the staffing issue. Nothing in the law says that 

an employer must force the employee into not fulfilling the public duty prior to acting in 

retaliation over the issue. Indeed, if that were the case, every employer could simply agree with 

Page 32 - REPORT AND RECOMMENDATION 
the lawful fulfillment of the public duty by the employee, and then summarily terminate that 

employee's employment for raising the issue, and the employee would have no recourse. The 

entire purpose of a wrongful discharge claim would be defeated, and the Court declines to 

contemplate such an outcome. 

Finally, the existence of a§ 1983 claim in this case does not preclude Plaintiff's wrongful 

discharge claim. Defendants cite to Baynton v. Wyatt, which indeed did hold that "a plaintiff 

suing under § 1983 for First Amendment retaliation has the same remedies as under her wrongful 

discharge claim, and the analysis does not require the court to determine the merits of the claim; 

rather the court evaluates whether the claim, if proven, provides an adequate remedy." 411 F. 

Supp. 2d 1223, 1225 (D. Or. 2006). The difference in this case, of course, is that Plaintiff is not 

suing KCFDl for First Amendment retaliation, but for violation of his procedural due process 

rights. Whether or not Plaintiff received all the procedural process he was due prior to his nonrenewal is not the same question as whether or not the reason for his non-renewal was lawful or 

wrongful. One is a process question and the other is a substantive question. Defendants cite to 

no cases holding that a Plaintiff is precluded from bringing both a due process claim under § 

1983 and a wrongful discharge claim. Summary judgment on this claim should be denied. 

V. A reasonable jury could find that KCFDl breached its duty of good faith and 

fair dealing; summary judgment on this issue should be denied. 

Under Oregon law, "[t]he law imposes a duty of good faith and fair dealing in the 

performance and enforcement of every contract." Sheetz v. Knight, 308 Or. 220, 233 (1989). The 

purpose of the duty "is to prohibit improper behavior in the performance and enforcement of 

contracts, and to ensure that the parties 'will refrain from any act that would have the effect of 

destroying or injuring the right of the other party to receive the fruits of the contract."' Klamath 

Off-Project Water Users, Inc. v. Pacificorp, 237 Or. App. 434, 445 (2010) (quoting Iron Horse 

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Engineering v. Northwest Rubber, 193 Or. App. 402, 421 (2004)). A party may violate the 

covenant of good faith and fair dealing without breaching the express terms of the contract. Id 

The covenant, however, '"cannot contradict an express contractual term, nor otherwise provide a 

remedy for an unpleasantly motivated act that is expressly permitted by the contract.'" Id 

(quoting Zygar v. Johnson, 169 Or. App. 638, 645 (2000), rev. den., 331 Or. 584 (2001)). 

In this case, KCFD 1 did not breach the covenant of good faith and fair dealing by 

terminating Plaintiffs employment, as an express contractual term of the employment agreement 

contemplated non-renewal without cause. On the other hand, KCFD 1 may have breached the 

covenant in how it handled the investigation of Plaintiff. 

Specifically, not allowing Plaintiff an opportunity to rebut the evidence against him, 

while continually stating that he would have such an opportunity, may constitute an "act that 

[had] the effect of destroying or injuring the right of [Plaintiff] to receive the fruits of the 

contract." Iron Horse Engineering, 193 Or. App. at 421. The transcript of the August 6 meeting 

shows that the Board was contemplating terminating Plaintiff based on the Toddy Report without 

knowing the truth of the allegations. Furthermore, at the August 19 meeting, Plaintiff offered to 

extend the 120 day notice requirement for non-renewal of his employment agreement so he could 

refute the allegations in the Toddy Report. The Board denied Plaintiff this opportunity and voted 

to not renew his employment agreement. 

KCFD 1 contends that the non-renewal of Plaintiffs agreement was due to its 

deteriorating financial situation under Plaintiffs leadership. However, KCFDl became aware of 

that situation in May, 2013, and only began discussing the termination of Plaintiff after the 

Toddy Report became available. Thus, because a reasonable jury could find that KCFDl would 

not have terminated Plaintiffs employment if not for the investigation and Toddy Report, it 

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could also find that KCFD 1 breached its duty of good faith and fair dealing by denying Plaintiff 

an opportunity to refute the allegations against him. Since allowing Plaintiff this opportunity was 

specifically contemplated in his employment agreement, Plaintiff was denied the right to receive 

the fruits of the contract. Summary judgment on this claim should be denied. 

VI. Defendant Hedlund and Toddy's motions for summary judgment as to 

Plaintiff's claims for tortious interference should be denied. 

Plaintiff brings claims for tortious interference with economic relations against 

defendants Hedlund and Toddy, alleging that they conducted the investigation in a biased 

manner, intending to cause KCFDl to terminate Plaintiffs employment due to Hedlund's own 

personal animus against him. Both defendants move for summary judgment. The motions 

should be denied because a reasonable jury could find that Hedlund and Toddy interfered with 

Plaintiffs economic relations and because Plaintiff has raised a question of fact as to whether 

Hedlund was acting within the scope of his lawyer-client relationship. 

a. A reasonable jury could find that Hedlund and Toddy interfered with 

Plaintiff's economic relations with KCFDl. 

Under Oregon law, to prevail on a claim of intentional interference with economic 

relations, a plaintiff must establish: ( 1) the existence of a valid prospective or existing contract or 

business relationship; (2) intentional interference with that relationship; (3) by a third party; (4) 

accomplished through improper means or for an improper purpose; (5) a causal effect between 

the interference and the harm to the relationship or contract; and ( 6) damages. McGanty v. 

Staudenraus, 321 Or. 532, 535 (1995) (citations omitted). 

A plaintiff cannot establish the third element if the alleged interferer is itself a party to the 

prospective relationship. Id. at 537. "So long as an officer or employe acts within the general 

range of his authority intending to benefit the corporation, the law identifies his actions with the 

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corporation. In such a situation the officer is not liable for interfering with a contract of the 

corporation any more than the corporation could be liable in tort for interfering with it." 

Wampler v. Palmerton, 250 Or. 65, 76-77 (1968). However, "ifthe action or advice is to serve 

other interests than those of the corporation there can be no immunity because it is not rendered 

for the purpose which gives birth to the immunity." Id. at 75. 

In this case, Defendants Hedlund and Toddy primarily dispute the third element of 

Plaintiffs claim, asserting that both were parties to Plaintiffs employment agreement with 

KCFDl. Indeed, both defendants were employed3 by KCFDl, and both claim to have acted 

within the scope of their employment in conducting the investigation. However, a factual dispute 

remains as to whether Hedlund and Toddy were acting to serve interests other than those of 

KCFD 1, in that the investigation may have been initiated and conducted for retaliatory purposes. 

This conclusion is supported by the timing of the accusations against Plaintiff that 

initiated the investigation, as they arose immediately after the confrontation between Hedlund 

and Plaintiff. Other supporting evidence includes the fact that Toddy was hired to perform the 

investigation at Hedlund's request, that Hedlund and Toddy previously held a professional 

relationship for many years, that the two never interviewed Plaintiff or allowed him to confront 

the allegations before allowing the Board access to the Toddy Report, and that the Toddy Report 

may have contained false and misleading information about Plaintiff. 

From this evidence, a reasonable jury could find that Hedlund and Toddy did not perform 

the investigation in furtherance of KCFDl 's interest in accurately determining whether their 

chief employee was violating county policies. Instead, a jury could find that Hedlund and Toddy 

3 The Court notes, however, that Hedlund was not an employee, but admittedly an independent contractor, 

and Toddy was only made an employee for insurance purposes during the limited time the investigation 

was on-going. Thus it is unlikely that defendant could properly be deemed a "party" to Plaintiff's 

employment agreement with KCFD 1. 

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were acting to further Hedlund's interest in retaliating against Plaintiff over their disagreement. 

Therefore, there remains a factual dispute of whether Hedlund and Toddy were third parties to 

Plaintiffs employment agreement with KCFD 1. 

The fourth element is also in dispute; whether the interference was accomplished through 

improper means or for an improper purpose. Here, for similar reasons as the third element, there 

remains an issue of fact. That is, from the same evidence, a reasonable jury could find that 

Hedlund and Toddy performed the investigation for an improper, retaliatory purpose. Because a 

jury could also find that Plaintiff was only terminated because of the investigation, Plaintiffs 

intentional interference with economic relations claim cannot be dismissed. 

b. A reasonable jury could find that Defendant Hedlund acted outside the scope 

of the attorney-client relationship. 

Oregon Supreme Court decisions hold that "a person may be jointly liable with another 

for substantially assisting in the other's breach of a fiduciary duty owed to a third party, if the 

person knows that the other's conduct constitutes a breach of that fiduciary duty." Reynolds v. 

Schrock, 341 Or. 338, 350, 142 P.3d 1062, 1069 (2006) (citing Granewich v. Harding, 329 Or. 

4 7, 57, 985 P .2d 788 (1999). However, the Court has also held that "a lawyer acting on behalf of 

a client and within the scope of the lawyer-client relationship is protected by such a privilege and 

is not liable for assisting the client in conduct that breaches the client's fiduciary duty to a third 

party. Accordingly, for a third party to hold a lawyer liable for substantially assisting in a client's 

breach of fiduciary duty, the third party must prove that the lawyer acted outside the scope of the 

lawyer-client relationship." Id. at 351. Defendant Hedlund contends that this principle precludes 

Plaintiffs claim for tortious interference. The Court disagrees. 

The Oregon Supreme Court has determined that several features of the rule are 

particularly important. "First, the rule places the burden on the Plaintiff to show that the lawyer 

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was acting outside the scope of the lawyer-client relationship." Id. "Second, the rule protects 

lawyers only for actions of the kind that permissibly may be taken by lawyers in the course of 

representing their clients. It does not protect lawyer conduct that is unrelated to the 

representation of a client, even if the conduct involves a person who is a client." Id. The Court 

explained that such unrelated conduct is by definition outside the scope of the lawyer-client 

relationship, and therefore no important public interest would be served by extending the 

"qualified privilege" to cover it. Third, for the same reason, "the rule does not protect lawyers 

who are representing clients but who act only in their own self-interest and contrary to their 

clients' interest." Id. 

In applying the rule, the Court evaluated an attorney's conduct in advising his client to 

act in her own interest to the detriment of the plaintiff, a third party. The attorney took three 

concrete actions to advise the client to breach a fiduciary duty and to assist her in doing so, 

causing damage to the plaintiff. Id. at 354. The attorney took a fourth action in that he 

"accepted substantial fees for performing legal work for [the client], including the foregoing 

three actions." Id. at 355. The Court found that nothing about these actions took place outside 

the scope of the lawyer-client relationship or the assistance that a lawyer properly provides for a 

client, including the fees accepted for such actions. Id. 

By contrast, in this case, a jury could find that Hedlund was not acting for the benefit of 

his client, KCFDI. As discussed above, KCFDI 's interest would have been in a fair, accurate, 

and unbiased investigation of its chief employee. Instead, a jury could find that Hedlund was 

acting to further his own interest in retaliating against Plaintiff over their disagreement. Plaintiff 

has therefore carried his burden to raise a question of material fact as to whether Hedlund was 

acting outside the scope of the lawyer-client relationship by initiating the investigation and 

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helping Toddy to conduct the investigation in a biased way in order to cause KCFD 1 to terminate 

Plaintiff. Defendants' motions for summary judgment as to Plaintiffs claim for tortious 

interference should be denied. 

VII. Plaintiff cannot sustain his common-law fraud claim because he himself did not 

rely on any misrepresentation; Hedlund and Toddy's motions for summary 

judgment should be granted. 

In Oregon, "[t]he essential elements of a common-law fraud claim are: the defendant 

made a material misrepresentation that was false; the defendant did so knowing that the 

representation was false; the defendant intended the plaintiff to rely on the misrepresentation; the 

plaintiff justifiably relied on the misrepresentation; and the plaintiff was damaged as a result of 

that reliance." Strawn v. Farmers Ins. Co., 350 Or. 336, 351-52 (2011). 

In this case, Plaintiff alleges that defendants Hedlund and Toddy made a material 

misrepresentation to KCFDl through the Toddy Report. This claim then fundamentally fails, 

since KCFDl, not Plaintiff, relied on the Toddy Report. Therefore, only KCFDl may state a 

claim that stems from intentional misrepresentations in the Toddy Report. Other 

misrepresentations alleged by Plaintiff regarding the nature of the investigation create factual 

disputes that have been addressed in other claims. In any event, Plaintiff was damaged by 

KCFDl 's reliance on any misrepresentations about the investigation, and was not damaged by 

his own reliance. 

VIII. Plaintiff's legal malpractice claim against Hedlund fails because he was not 

Hedlund's client. 

Under Oregon law, to prove legal malpractice, a plaintiff must show: (1) a duty that runs 

from the defendant to the plaintiff; (2) a breach of that duty; (3) resulting harm to the plaintiff 

measurable in damages; and (4) causation. Stevens v. Bispham, 316 Or. 221, 227 (1993). An 

attorney for a corporation represents the entity only and not its shareholders, officers, or 

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employees. In re Conduct of Campbell, 345 Or. 670, 681 (2009). "[T]he entity may act only 

through its authorized representatives, and, in representing the entity, the lawyer generally must 

follow their directives." Id. (citing RPC l.13(a)). 

In this case, Hedlund was retained as legal counsel for KCFD 1 per a legal services 

agreement, and KCFD 1 's authorized representatives consisted of its board of directors. Thus, 

Hedlund had an attorney-client relationship with KCFDl and the Board. As an employee of 

KCFDl, Plaintiff did not enjoy the same attorney-client relationship such that a duty ran from 

Hedlund to Plaintiff. The fact that Plaintiff received legal advice related to KCFDl business does 

not change the analysis, as Hedlund was still representing the Board in any matters. Because 

Plaintiff did not have an attorney-client relationship with Hedlund, Plaintiffs legal malpractice 

claim against him must be dismissed. 

IX. Defendants' motion to dismiss the KCFDl Board of Directors should be granted. 

It is undisputed that the KCFD 1 Board of Directors is not a separate legal entity from the 

county, KCFD 1, itself. Plaintiff appears to concede this issue, and the Court agrees the Board 

should be dismissed as a redundant party. 

RECOMMENDATION 

For the reasons stated above, the defendants' motions for summary judgment (#115, 

#118, & # 120) should be GRANTED in part and DENIED in part. Specifically: 

Defendant KCFDl 's motion for summary judgment on Plaintiffs claims for procedural 

due process should be granted in part and denied in part. The claim regarding his property 

interest should be dismissed, and the claim regarding his liberty interest should go forward. 

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Defendant KCFDI 's motion for summary judgment on Plaintiffs claim for breach of 

contract should be granted in part and denied in part. Breach for non-renewal should be 

dismissed, and breach for failure to follow the disciplinary procedures should go forward. 

Defendant KCFDI 's motion for summary judgment as to Plaintiffs wrongful discharge 

claim should be denied. 

Defendant KCFDI 's motion for summary judgment as to Plaintiffs claim for breach of 

the implied duty of good faith and fair dealing should be denied. 

All three defendants' motions for summary judgment should be granted as to Plaintiffs 

negligence claims. Plaintiffs claims for negligent investigation, negligent retention and 

supervision, and negligent misrepresentation should be dismissed. 

Defendant Hedlund and Toddy's motions for summary judgment as to fraud and legal 

malpractice should be granted and these claims should be dismissed. 

Defendant Hedlund and Toddy's motions for summary judgment as to Plaintiffs claims 

for tortious interference should be denied. These two claims should go to trial along with the 

surviving claims against Defendant KCFD 1. 

Defendant KCFDI 's motion to dismiss the KCFDI Board of Directors should be granted. 

The case should be set for trial as to the Plaintiffs claims against KCFD 1 for violation of 

procedural due process, breach of contract, wrongful discharge, and breach of the covenant of 

good faith and fair dealing, as well as his claims against Hedlund and Toddy for tortious 

interference. 

This Report and Recommendation will be referred to a district judge. Objections, if any, 

are due no later than fourteen (14) days after the date this recommendation is filed. If objections 

Page 41 - REPORT AND RECOMMENDATION 
are filed, any response is due within fourteen (14) days after the date the objections are filed. See 

Fed. R. Civ. P. 72, 6. 

Parties are advised that the failure to file objections within the specified time may waive 

the right to appeal the District Court's order. Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991 ). 

United States Magistrate Judge 

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