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Gary Craig v. City of Cedar Rapids

December 12, 2012


Appeal from the Iowa District Court for Linn County, Nancy A. Baumgartner, Judge.

The opinion of the court was delivered by: Vogel, J.

A plaintiff appeals the grant of summary judgment on three tort claims. AFFIRMED.

Heard by Eisenhauer, C.J., and Vogel and Vaitheswaran, JJ.

Gary Craig appeals the grant of summary judgment on his three tort claims-malicious prosecution, false arrest, and defamation-against his former employer, the City of Cedar Rapids. Craig claims there is at least one disputed fact question for each claim, which should have precluded summary judgment. The City contends the district court was correct on all grounds. We affirm.

I. Background Facts and Proceedings

On appeal, Craig accepts the district court's findings of fact by copying them almost verbatim*fn1 into his brief and we find no evidence in the record to depart from these findings:

Gary Craig was hired on August 31, 1998, as the Building Supervisor for the Cedar Rapids Veterans Memorial Commission (the "Commission"). On January 13, 2003, by resolution of the Commission, signed by Peter Welch, then-Chairperson of the Commission, Craig's job title was changed from Building Supervisor to Memorial Director.

It is Craig's position that beginning in 2005 he experienced hostility and verbal intimidation from Welch and the Mayor. In August 2007, the Commission hired the Iowa State Auditor's Office to conduct an audit of city payroll records as they related to Craig's work for the Commission and his work for a private entity, Valor, Inc. This investigation was initiated as a result of a letter to the Commission from Welch after Welch learned Craig was providing paid services to Valor. The Iowa State Auditor's Office began an audit in November 2007.

During the audit, in mid-November 2007, Welch made direct e-mail correspondence with Jennifer Campbell, one of the Iowa State Auditors' Office auditors, in which he discussed the Mayor inquiring about the matter and the desire to "dismiss the employee."

One e-mail correspondence from Welch made the statement: "Thanks for your help in dealing with this 'blivet'!!!!! (tee hee!)."*fn2

Craig was placed on paid administrative leave from his employment as Memorial Director in October 2007, but this leave was changed by the Commission at times to unpaid administrative leave throughout the fall and winter months. During this same period, Craig requested and received medical leave due to health problems he was having related to stress and anxiety. It is Craig's position that he was "essentially forced to resign after his medical leave expired and he was without income due to the unpaid leave status."

For a period of time during the investigation, Welch was not the chair of the Commission; Jim Bruner was the acting Chair. There is no evidence in the record as to the exact period during which Bruner served as Chair.

On June 13, 2000, Resolution No. 06-19-2000 was passed by the Commission in which "The Cedar Rapids Veterans Memorial Commission has determined that the Memorial Director in the performance of his duties does work in excess of 40 hours per week. NOW, THEREFORE, BE IT RESOLVED by the Cedar Rapids Veterans Memorial Commission, that the Memorial Director at his discretion may take Administrative Leave as described in the above mentioned City of Cedar Rapids Policy to compensate for the excess hours accumulated in the performance of his assigned duties to be approved and adopted." The Resolution was signed by the five members of the Commission. Welch did not sign the Resolution and there is no indication that he was a Commissioner at the time the Resolution was passed. During his deposition, Welch stated that he was not aware of the Resolution passed by the Commission in 2000. Craig asserts that as Memorial Director he was an Overtime Exempt Employee, exempt from the Fair Labor Standards Act, and as such he was allowed to take a form of comp time entitled "administrative leave" for hours worked over 40 hours per week.

On January 22, 2009, the Office of David A. Vaudt, CPA, Iowa State Auditor, issued a "News Release" announcing the release of the report by his office on a special investigation of the Cedar Rapids Veterans Memorial Commission and Valor, Inc. for the period of January 1, 2006, through October 31, 2007. The State Auditor's report found that Craig received $5,021 in city income and payroll taxes due while receiving pay from a private entity, Valor, Inc., during hours that he was paid by the city as Memorial Director. The Auditor's report additionally found numerous accounting irregularities regarding the Valor, Inc. accounts that Craig maintained. The Auditor's News Release reported that the special investigation performed by the office "identified $15,280.18 of improper disbursements and improper payroll." The balance of the News Release identifies in specific detail the manner in which the report concluded that Craig was responsible for those improper disbursements. The State Auditor issued a "Report on Special Investigation of the Cedar Rapids Veterans Memorial Commission and Valor, Inc. for the Period January 1, 2006 through October 31, 2007," which detailed the improprieties and consisted of 36 pages of text, exhibits, and appendices. It is Craig's position that he used numerous hours that he had accrued in Administrative Leave or comp time for the time the auditors found improper disbursements. The State Auditor's Office was not informed of the June 13, 2000 resolution passed by the Commission. Craig avers that at an October 1, 2007 special meeting he and his attorney reminded the Commission of this fact, but that the Commission ignored the fact.

On or about March 25, 2009, as a result of the Auditor's findings, a complaint was filed in the Iowa District Court for Linn County captioned "State of Iowa v. Gary Lynn Craig, FECR82392-0309" in which Craig was charged with Felonious Misconduct in Office in violation of Iowa Code § 721.1(3).*fn3 On March 27, 2009, the Cedar Rapids Gazette published a news story on the charge and arrest. On April 21, 2009, Craig was charged by trial information with Felonious Misconduct in Office, a violation of Iowa Code § 721.1, for "unlawfully and willfully, while serving as Director of the Cedar Rapids Veteran Memorial Commission. . . [submitting] false payroll records to the City of Cedar Rapids." A Bill of Particulars was filed in the case on August 27, 2009, detailing the allegations of alleged misconduct. Craig alleges he was arrested, handcuffed, taken to Linn County Jail, stripped, and searched (including body cavities), and placed in an orange jumpsuit. He bonded out a short time later. In November 2009, the State of Iowa filed a Motion to Dismiss stating: "Because of information discovered during depositions of both State and defense witnesses, the State cannot now prove beyond a reasonable doubt each and every element of the crime charged. It is therefore in the interest of justice that this charge be dismissed." On November 23, 2009, the Court granted the State's Motion to Dismiss. Craig alleges that because of the negligent or reckless withholding of critical leave policy information from the State Auditor's Office during the course of their audit, and due to the erroneous felony charges lodged against Craig, he has suffered both medical and mental problems including weight loss, anxiety, and depression.

Craig filed a petition against the City of Cedar Rapids, on January 13, 2010, and amended on June 17, 2011. The amended petition sought damages as a result of the alleged "untrue and false" statement made by Peter Welch on March 27, 2009, to the Cedar Rapids Gazette as well as the email correspondence with a state auditor, and the improper arrest and incarceration that resulted from the allegedly untrue statements. The City filed a motion for summary judgment on April 6, 2011, and refiled on July 15, 2011, to address the issues in the amended petition.

The district court originally granted the City summary judgment on the malicious prosecution claim, the false arrest claim, and the defamation claim for the statement in the Gazette, but not for the "blivet" comment. However, after the City filed a timely motion to reconsider, the district court found the "blivet" comment could not support an actionable defamation claim as a matter of law and dismissed that claim as well. This appeal follows.

II. Standard of Review

Appellate review of a summary judgment ruling is for correction of errors of law. Shriver v. City of Okoboji, 567 N.W.2d 397, 400 (Iowa 1997). To uphold the district court's summary judgment rulings, we must confirm that no disputed issues of material fact existed to render summary judgment inappropriate and that the district court correctly applied the law to those undisputed facts. Royce v. Hoening, 423 N.W.2d 198, 200 (Iowa 1988). The burden is upon the defendant to show the nonexistence of material facts and to prove they are entitled to judgment as a matter of law. Knapp v. Simmons, 345 N.W.2d 118, 121 (Iowa 1984). Every legitimate inference that can be reasonably deduced from the evidence must be afforded the party resisting the summary judgment motion, and a question of fact is generated if reasonable minds could differ on how the issue should be resolved. Northrup v. Farmland Indus., Inc., 372 N.W.2d 193, 195 (Iowa 1985). But entry of summary judgment is proper if the conflict in the record concerns only the legal consequences flowing from undisputed facts. Royce, 423 N.W.2d at 200. In ruling on a motion for summary judgment, the court considers the record as it then exists. Prior v. Rathjen, 199 N.W.2d 327, 331 (Iowa 1972). A resisting party may not rely on the hope of subsequent appearance of evidence of a genuine issue of fact. Id. "Opposing affidavits are not required, but [a] party who does not file affidavits in response takes the risk of standing on the record established by the moving party." In re Estate of Eickman, 291 N.W.2d 308, 312 (1980). Finally, the court must keep in mind that the purpose of a summary judgment is to avoid a useless trial. AMCO Ins. Co. v. Stammer, 411 N.W.2d 709, 712 (Iowa Ct. App. 1987).

The role of summary judgment in defamation cases is unique and the court's role as gatekeeper is expanded. See Bitner v. Ottumwa Cmty. Sch. Dist., 549 N.W.2d 295, 300 (Iowa 1996). In deciding whether the City's summary judgment motion was properly granted, we must determine whether any facts have been presented over which a reasonable difference of opinion could exist that would affect the outcome of the case and whether the district court correctly applied the law to the undisputed facts. See Behr v. Meredith Corp., 414 N.W.2d 339, 341 (Iowa 1987).

III. Summary Judgment for Malicious Prosecution

Craig argues the district court erred in granting the City's motion for summary judgment on the claim of malicious prosecution. There are six elements of a malicious prosecution claim: (1) a previous prosecution; (2) instigation or procurement thereof by defendant; (3) termination of the prosecution by an acquittal or discharge of plaintiff; (4) want of probable cause; (5) malice in bringing the prosecution on the part of the defendant; and (6) damage to the plaintiff. Sarvold v. Dodson, 237 N.W.2d 447, 448 (Iowa 1976). Craig claims there are material issues of fact to support each element of the tort such that his claim does not fail as a matter of law. However, the district court found the second, fourth, and fifth elements were not satisfied, which prevented the claim from surviving summary judgment.

As Craig has adopted the district court's statement of facts the only question presented is whether the district court reached the correct legal consequences flowing from those undisputed facts. Neither party disputes the district court's finding that elements one, three, and six were satisfied. We will consider the remaining contested elements in turn.

A. Instigation of Prosecution by the City

On the question of instigating the prosecution, the district court held: "While Mr. Welch's e-mail correspondence to Ms. Campbell discusses charges, there is no evidence in the record that he ever discussed the need to bring charges with anyone in the State Attorney General's Office." Craig disputes this conclusion, arguing instead that Welch, by failing to provide the 2000 Resolution to the auditor's office, which in turn gave its findings to the ...

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