Court Opinion

ID: 156599
Source: CourtListenerOpinion
Date Created: 2010-08-14 04:42:07+00
Date Added: 2024-06-11T16:58:05.969571
License: Public Domain

F I L E D
                                                                      United States Court of Appeals
                                                                              Tenth Circuit
                                        PUBLISH
                                                                                 JUL 15 1998
                      UNITED STATES COURT OF APPEALS
                                                                          PATRICK FISHER
                                                                                    Clerk
                                  TENTH CIRCUIT

 CECIL M. SMITH,

        Plaintiff-Appellant,
 vs.                                                        No. 97-6223

 CITY OF ENID, by and through the Enid
 City Commission

        Defendant-Appellee,

 ENID FIRE DEPARTMENT CIVIL
 SERVICE COMMISSION,

       Defendant,

 OKLAHOMA FIREFIGHTERS
 PENSION AND RETIREMENT
 SYSTEM,

       Defendant-Intervenor-Appellee.

             APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE WESTERN DISTRICT OF OKLAHOMA
                          (D.C. No. CIV-96-809-T)

Phyllis L. Walta (Frank E. Walta with her on the briefs), Walta & Walta, Enid,
Oklahoma, for Plaintiff-Appellant Cecil M. Smith.

David W. Lee, (Carol Lahman, Enid, Oklahoma, with him on the brief), Comingdeer and
Lee, Oklahoma City, Oklahoma, for Defendant-Appellee City of Enid.
Marc Edwards, Phillips McFall McCaffrey McVay & Murrah, P.C., Oklahoma City,
Oklahoma, for Defendant-Intervenor-Appellee Oklahoma Firefighters Pension and
Retirement System.

Before BALDOCK, McKAY, and KELLY, Circuit Judges.

KELLY, Circuit Judge.

       Plaintiff-Appellant Cecil M. Smith (Smith) appeals from the district court’s grant

of summary judgment in favor of Defendant-Appellee City of Enid (the City) and

Defendant-Intervenor-Appellee Oklahoma Firefighters Pension and Retirement System

(the System) on his 42 U.S.C. § 1983 claims.1 Mr. Smith also appeals from the district

court’s refusal to exercise jurisdiction over his supplemental state law claims. See 28

U.S.C. § 1367(c)(3). Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm.

                                        Background

       Mr. Smith was employed with the City as a firefighter. By 1989, Mr. Smith had

attained the rank of assistant fire chief and had accrued over twenty years of service with

the City. As required by Oklahoma statute, the City was a participating municipality in

the System, and as an eligible full time firefighter, Mr. Smith was a participating member

in the System. Under the System’s statutory scheme, member firefighters with twenty or

more years of service are eligible to retire and receive a monthly service pension benefit.

       The Enid Fire Department Civil Service Commission is not a party to this appeal.
       1

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At any time, retired member firefighters receiving a pension benefit may serve as

firefighters for compensation within the state of Oklahoma; they may not, however,

continue to receive pension benefits during such service.

       In October 1988, Bob Hollander, Executive Director of the System, and Pete

Stavrose, the Legislative Director of the Oklahoma State Firefighters Association, held a

meeting at the Enid fire station to discuss proposed legislation for a deferred

compensation plan for Oklahoma firefighters. Mr. Smith attended this meeting, where it

was related that under the proposed legislation firefighters opting to participate in the plan

would be required to retire after a set number of years.

       On April 24, 1989, a deferred compensation plan for Oklahoma firefighters was

enacted into law. It provided, in pertinent part:

        A.    In lieu of terminating employment and accepting a service retirement
       pension . . . any member of [the System] who has not less than twenty (20) years
       of creditable service and who is eligible to receive a service retirement pension
       may elect to participate in the Oklahoma Firefighters Deferred Option Plan and
       defer the receipts of benefits in accordance with the provisions of this section.
       ....

       C.     The duration of participation in the Oklahoma Firefighters Deferred Option
       Plan for active firefighters shall not exceed five (5) years.

       D.     When a member begins participation in the Oklahoma Firefighters Deferred
       Option Plan, the contribution of the employee shall cease. The employer
       contributions shall continue to be paid . . . . Municipal contributions for
       employees who elect the Oklahoma Firefighters Deferred Option Plan shall be
       credited equally to [the System] and to the Oklahoma Firefighters Deferred Option
       Plan. The monthly retirement benefits that would have been payable had the
       member elected to cease employment and receive a service retirement shall be paid
       into the Oklahoma Firefighters Deferred Option Plan account.

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1989 Okla. Sess. Laws 240-41 (codified at Okla. Stat. Ann. tit. 11, § 49-106.1 (West

Supp.1998)). Mr. Smith received a copy of the newly enacted legislation in bill form,

read it, and determined that it did not require him to retire after five years if he

participated in the plan. Mr. Smith accordingly decided to opt into the plan, and on

October 17, 1989, he drove to the System’s offices in Oklahoma City and informed Bob

Hollander he wished to sign up for the Deferred Option Plan. Mr. Hollander provided

Mr. Smith with the form, and Mr. Smith signed it. The election form provided that

participation in the plan was limited to five years and that Mr. Smith’s deferred option

deposits would cease September 1, 1994. The election form did not explicitly provide

that Mr. Smith would be required to retire in five years. Later that year, Mr. Smith

discussed the Deferred Option Plan with Everett Brewer, former City of Enid fire chief

and a member of the System’s Board of Directors, thanking him for his effort in getting

the Deferred Option Plan enacted. Mr. Brewer told Mr. Smith that “it’s a really good law

that they passed and fortunately you don’t have to leave employment after you’ve

completed it.” See II Aplt. App. at 142.

       On May 31, 1990, Okla. Stat. Ann. tit. 11 § 49-106.1(C) was amended to add the

following language:

       At the conclusion of a member’s participation in the Oklahoma Firefighters
       Deferred Option Plan, the member shall terminate employment with all
       participating municipalities as a firefighter, and shall start receiving the member’s
       accrued monthly retirement benefit from the System.

1990 Okla. Sess. Laws 1753, 1754 (codified at Okla. Stat. Ann. tit. 11, § 49-106.1(C)

                                               4
(West Supp.1998)). On June 15, 1990, the System sent a memo to all members informing

them of the legislative changes. The memo noted the addition of the five-year retirement

requirement, and noted that “[t]he legislature made the change[] in keeping with their

policy of having the same benefits for all [retirement] systems.” II Aplt. App. at 167.

       On May 11, 1994, in response to an inquiry made by the Enid City Attorney

regarding the application of the 1990 amendment, the Lawton City Attorney indicated he

felt “the firefighter that wants to stay on after [the expiration of the Deferred Option Plan]

has the winning position if he chooses to contest the issue . . . .” II Aplt. App. at 168.

However, on May 24, 1994, Bob Hollander informed Mr. Smith by letter that “[a]ll

[Deferred Option Plan] participants must terminate [employment] at the end of the five

year period of participation in [the] Plan . . . .” Aplt. App. at 75. Though Mr. Smith

refused to petition the System Board for retirement, on August 19, 1994 the System Board

voted to approve Mr. Smith’s service retirement effective September 1, 1994, the date

Mr. Smith was scheduled to end his participation in the Deferred Option Plan. The City’s

fire chief requested Mr. Smith’s termination on August 22, 1994, effective August 31,

1994. Mr. Smith was terminated on that date without a hearing.

       Mr. Smith filed this suit on May 23, 1996, alleging that the City and the System

deprived him of due process by terminating him without a hearing and impaired his right

to receive the benefits of his contract in violation of the United States Constitution. Mr.

Smith also asserted breach of employment and impairment of contract claims under

                                               5
Oklahoma law. The City and System moved for summary judgment, and the district court

granted their motions, holding that the statute of limitations on Mr. Smith’s § 1983 claims

had expired. Having dismissed the federal claims, the district court declined to exercise

jurisdiction over Mr. Smith’s pendent state law claims.

                                            Discussion

       We review the district court’s grant of summary judgment de novo, using the same

standard as the district court. See Lytle v. City of Haysville, 138 F.2d 857, 862 (10th Cir.

1998). Summary judgment is proper if the evidence submitted by the parties, viewed in

the light most favorable to the non-movant, indicates that there is no genuine issue as to

any material fact and the moving party is entitled to judgment as a matter of law. See

Fed. R. Civ. P. 56(c); Lytle, 138 F.2d at 862. Where, as here, the facts and dates are not

disputed, we may as a matter of law determine when a cause of action accrued. See

Edwards v. International Union, United Plant Guard Workers, 46 F.3d 1047, 1050 (10th

Cir.), cert. denied, 516 U.S. 811 (1995).

       Though the two year limitations period governing both of Mr. Smith’s § 1983

claims is a creature of state law, see Abbitt v. Franklin, 731 F.2d 661, 663 (10th Cir.

1984) (en banc), federal law governs the question of accrual of federal causes of action,

and thus, dictates when the statute of limitations begins to run for purposes of § 1983.

See Fratus v. Deland, 49 F.3d 673, 675 (10th Cir. 1995); Baker v. Board of Regents, 991

F.2d 628, 632 (10th Cir. 1993). “A civil rights action accrues when the plaintiff knows or

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has reason to know of the injury which is the basis of the action.” Baker, 991 F.2d at 632;

see Hunt v. Bennett, 17 F.3d 1263, 1266 (10th Cir.) (quoting Johnson v. Johnson County

Comm’n Bd., 925 F.2d 1299, 1301 (10th Cir.1991)), cert. denied, 513 U.S. 832 (1994).

Since the injury in a § 1983 case is the violation of a constitutional right, see Garcia v.

Wilson, 731 F.2d 640, 650 (10th Cir. 1984), aff’d, 471 U.S. 261 (1985), such claims

accrue “when the plaintiff knows or should know that his or her constitutional rights have

been violated.” Lawshe v. Simpson, 16 F.3d 1475, 1478 (7th Cir. 1994). This requires

the court “to identify the constitutional violation and locate it in time.” Id.

       Mr. Smith alleges two distinct federal constitutional violations. First, Mr. Smith’s

impairment of contract claim is predicated on the Contract Clause. See U.S. Const. art. I,

§ 10. In his complaint, he alleges that he “signed a ‘Deferred Retirement Option Plan’

[sic] with the . . . System” and that neither the contract he signed nor the law in existence

at the time he signed it required participants in the Plan to retire. Aplee. City of Enid

Supp. App. at 2. Accordingly, Mr. Smith asserts that he “possessed a vested or accrued

right in his [Deferred Option Plan] contract” to continued employment, and that the

subsequent 1990 amendment to the Deferred Option Plan requiring retirement cannot

defeat that contractual right. Id. at 4.

       Though Mr. Smith argues his impairment claim accrued in August 1994, when the

City and System terminated his employment, the undisputed facts establish that the

alleged constitutional claim—the impairment of Mr. Smith’s Deferred Option Plan

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contract—should have been apparent to Mr. Smith in 1990, when he received notice of

the amendment to § 49-106.1(C). Although Mr. Smith suggests his impairment claim is

analogous to actions for wrongful termination, see Aplt. Brief at 17-20, it is not. Though

it is generally true that a claim for wrongful termination accrues when an employee is

notified of an adverse employment decision, Mr. Smith has brought an impairment of

contract claim, the very essence of which is a substantial impairment of plaintiff’s

contractual relationship with the state by a change in law. See General Motors Corp. v.

Romein, 503 U.S. 181, 186-87 (1992). Thus, the constitutional injury, the injury which

triggers the statute of limitations for purposes of § 1983, occurred when the 1990

amendment became law, not when the consequence of that constitutional injury—here,

Mr. Smith’s termination by the City and System—manifested itself.

       Mr. Smith may not rely on Mr. Brewer’s assessment of the law to defeat summary

judgment. Mr. Brewer’s statements are hearsay and may not be relied on in reviewing the

district court’s grant of summary judgment. See Thomas v. IBM, 48 F.3d 478, 485 (10th

Cir. 1995). Even if their content were admissible, Mr. Smith has not sufficiently

established that his reliance on those statements would be justified, as Mr. Brewer was

not a member of the System Board at the time the statements were made and did not

speak on behalf of the Board in a representative capacity. See Lehman v. City of

Louisville, 967 F.2d 1474, 1477 (10th Cir. 1992). Moreover, though Mr. Smith suggests

that prior to 1994 his claim would have been premature, the authority he cites for support

                                             8
is distinguishable. In San Miguel Consol. Fire Protection District v. Davis, 30 Cal. Rptr.

2d 343, 352 (Cal. Ct. App. 1994), a statute passed by the legislature reallocated property

tax revenues from fire districts to county educational augmentation funds to benefit

school districts. There was no determination as to how much revenue would be lost. The

court held an impairment of contract claim premature since the contract at issue would be

impaired or terminated only if property taxes were substantially reduced by the operation

of the statute. In contrast, if the 1990 amendment applied to him, Mr. Smith’s

employment with the City would unquestionably end in 1994. Mr. Smith admits he had

actual notice of the generally applicable amendment to § 49-106.1(C) in 1990.

Consequently, we hold his impairment of contract claim accrued at that time and triggered

the two year statute of limitations.

       Mr. Smith also asserts a procedural due process claim against the City, arguing that

he “possesses a property interest in his employment with the . . . CITY . . . pursuant to

city ordinances, policies, procedures, customs and practice.” Aplee. City of Enid Supp.

App. at 3. Mr. Smith alleges the City denied him the right “to be terminated only for

cause, to receive notice of the charges against him, and to receive a hearing before an

impartial hearing panel,” causing him irreparable harm. Id. at 4; see Aplt. App. at 127-

130. Mr. Smith’s due process claim, however, is unquestionably linked to the City’s

application of the 1990 amendment to him. See Aplee. City of Enid Supp. App. at 2-3

(Complaint). Mr. Smith admits he had knowledge of the 1990 amendment, which clearly

                                              9
requires participants in the Deferred Option Plan to terminate employment after five years

of plan participation, but asserts he did not believe the amendment applied to him2 and, in

any event, did not know that if the amendment applied to him he would be terminated

without a hearing.

       We are urged, therefore, to adopt an accrual rule which would trigger the statute of

limitations in procedural due process claims when the employer notifies the employee of

the adverse employment decision. Several circuits have so held, with varying

understandings of when employer notice is adequate. See, e.g., Lawshe, 16 F.3d at 1480

(claim for deprivation of public employment without due process accrues on date of

actual termination of employment); Hoesterey v. City of Cathedral City, 945 F.2d 317,

320 (9th Cir. 1991) (clear notice of a final decision to terminate without further process

may occur prior to actual termination); Rubin v. O’Koren, 621 F.2d 114, 116 (5th Cir.

1980) (cause of action accrued when employment period terminated), reh’g granted on

other grounds, 644 F.2d 1023 (5th Cir. 1981), cert. denied, 504 U.S. 910 (1992). We are

not, however, presented with a standard procedural due process claim, wherein the

       2
         This belief is apparently grounded in Mr. Smith’s argument that he had a vested
right to continued employment with the City under the Deferred Option Plan as it was
enacted in 1989. Because we do not address the merits of Mr. Smith’s claims, we need
not address his contention that he had a vested right in continued employment,
notwithstanding Taylor v. State & Educ. Employees Group Ins. Program, 897 P.2d 275,
279 (Okla. 1995); Woods v. City of Lawton, 845 P.2d 880, 883 (Okla. 1992); and Baker
v. Oklahoma Firefighters Pension and Retirement Sys., 718 P.2d 348, 352-53 (Okla.
1986).

                                             10
plaintiff complains of termination without cause and a hearing based on her exercise of a

constitutional right. Instead, Mr. Smith’s due process argument inherently challenges the

City’s compliance with the 1990 amendment. In the unusual situation with which we are

faced, state law provides that termination of employment with the City will—in fact,

must—occur. See, e.g., Dillon v. City of Tulsa, 273 P.2d 145, 150 (Okla. Crim. App.

1954) (holding that an ordinance must give way to the general laws of the state if they

conflict). Here, the notice of termination is the statute itself, the statute is by its terms

mandatory, and no amount of pre-termination process short of a lawsuit for declaratory

judgment could provide relief.

       Mr. Smith had actual notice of the 1990 amendment, and his complaint belies any

assertion that he was unaware the City might rely on the 1990 amendment in terminating

his employment in 1994. See Aple. Supp. App. at 3, ¶ 12 (“Throughout the five year term

of the [Deferred Option Plan] Contract, SMITH continually informed personnel and

supervisors at the Enid Fire Department . . . of his intention to continue his employment

after the end of the term of the Deferred Option Contract.”). Moreover, Mr. Smith has

not alleged any reliance on statements made by City officials regarding his continued

employment in light of the 1990 amendment, nor has Mr. Smith alleged he had

knowledge of or relied on the Lawton City Attorney’s April 13, 1994 opinion. Finally,

Mr. Smith’s subjective belief that the amendment did not apply to him is irrelevant, since

our inquiry is whether Mr. Smith knew or should have known in 1990 that the City would

                                                11
comply with the 1990 amendment and retire him at the end of the five-year period, as he

had been advised.

       Under these circumstances, Mr. Smith knew or should have known that the 1990

amendment generally provided for termination of all Deferred Option Plan members after

five years solely because their five years of participation in the Plan had ended, that the

City would be required to comply with it, and that the City would accordingly terminate

him in 1994 without cause and a hearing. We thus affirm the district court’s dismissal of

Mr. Smith’s federal claims as barred by the statute of limitations and do not reach the

parties’ arguments relating to the merits of those claims.

         Finally, Mr. Smith argues that the district court abused its discretion by refusing

to exercise jurisdiction over his supplemental state law claims. When all federal claims

have been dismissed, the court may, and usually should, decline to exercise jurisdiction

over any remaining state claims. See 28 U.S.C. § 1367(c)(3); Ball v. Renner, 54 F.3d

664, 669 (10th Cir. 1995). After a thorough review of the record and the authority cited

by Mr. Smith, we cannot say the district court abused its discretion in dismissing his

remaining state claims.

       AFFIRMED.

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