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Perzynski v. Cerro Gordo County

United States District Court, N.D. Iowa

June 18, 2013

CERRO GORDO COUNTY, IOWA, a Municipal Corporation, and Kenneth Kline and Heather Mathre, individually and in their corporate capacities, Defendants

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[Copyrighted Material Omitted]

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For Debra Perzynski, Plaintiff: Mark D Sherinian, Sherinian & Hasso Law Firm, West Des Moines, IA.

For Cerro Gordo County, Iowa, Kenneth Kline, Heather Mathre, Defendants: Jason M Craig, Ahlers & Cooney, P.C., Des Moines, IA.


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A. Section 1983

1. Probable Cause

2. Kline's and Mathre's Liability

3. Cerro Gordo County's Liability

B. Malicious Prosecution

1. Probable Cause

2. Instigation

3. Malice

C. False Imprisonment

V. Conclusion

This case is before me on defendants' motion (Doc. No. 6) for summary judgment, filed December 27, 2012. Plaintiff filed her resistance (Doc. No. 13) on February 20, 2013, and defendants filed their reply (Doc. No. 19) on March 7, 2013. After resolving a dispute over the contents of plaintiff's summary judgment appendix, I heard oral arguments on May 24, 2013. Attorney Mark Sherinian appeared for the plaintiff and attorney Jason Craig appeared for all defendants. The motion is fully submitted.


Plaintiff Debra Perzynski filed this action on January 13, 2012. Her complaint (Doc. No. 1) includes a jury demand and names the following defendants: Cerro Gordo County, Iowa, Kenneth Kline, both individually and in his corporate capacity as the County Auditor for Cerro Gordo County, and Heather Mathre, both individually and in her corporate capacity as the Budget Director for Cerro Gordo County. Perzynski's causes of action include a claim under 42 U.S.C. § 1983 against all defendants, malicious prosecution against all defendants and false imprisonment against Cerro Gordo County. She invokes the court's federal question jurisdiction pursuant to 28 U.S.C. § 1331 and supplemental jurisdiction over the related state law claims pursuant to 28 U.S.C. § 1367.

Defendants filed their answer and affirmative defenses on February 15, 2012 (Doc. No. 3). The parties subsequently

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consented to trial, disposition and judgment by a United States Magistrate Judge pursuant to 28 U.S.C. § 636(c) and the case was assigned to me on April 23, 2013.


The following facts are presented in the light most favorable to Perzynski, the nonmoving party:

Perzynski's employment.

Perzynski worked in the Management Information Systems (MIS) Department for Cerro Gordo County (County). In 2004, her payroll status was changed from salaried to hourly due to changes by the United States Department of Labor tat classified her position as non-exempt. She originally kept track of her time on weekly timesheets, which her supervisor reviewed and signed. Beginning May 14, 2007, she was required to use a time clock, which meant she had to punch in and out when she arrived at work, went to lunch, returned from lunch and left work. While other hourly-wage County employees were also required to use the time clock, Perzynski was the only hourly-wage MIS department employee.

Perzynski often had to work outside the office, assisting with computer support in other County offices or picking up supplies for the department. She worked outside the office approximately twenty-five percent of the time and would often start or end her workday away from the time clock. The County had a procedure under which hourly employees could request corrections to the hours recorded by the time clock system. For example, if an employee forgot to punch in or punch out, the employee could request a correction from his or her supervisor. If the supervisor approved the proposed correction, the supervisor would submit it to the auditor's office. According to the defendants, two employees in the auditor's office, Sandy Shonka and Denice Knudson, were the only County employees authorized to make edits through the time clock software. Thus, if an employee's proposed correction was approved by his or her supervisor, one of those two individuals (usually Shonka) would make the necessary manual adjustment in the software system.

Perzynski's supervisor during the relevant period of time was Scott Tepner. Tepner gave Perzynski the user name and password to the time clock software so she could reboot the system as necessary and generally keep it up and running, consistent with her duties as an MIS employee. He showed her how the system worked and, according to Perzynski, showed her how to edit timecard entries so she could edit her own. [1] Because Perzynski, unlike other hourly employees, often worked away from the County courthouse, she needed to edit her time clock entries on a more-frequent basis. She felt that employees in the auditor's office were carefully scrutinizing her time and were suspicious of her need for regular edits. Likewise, Tepner was aware that people gossiped about Perzynski receiving too much overtime pay. As such, Perzynski contends that Tepner showed her how to edit timecard entries so she could make necessary corrections to her own entries without repeatedly going through the regular procedure.

Perzynski edited her own timecards from May 2007 to October 2009. Each week, and in accordance with County policies, she printed her timecard for Tepner to review and sign. The printed timecard

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did not show that any edits had been made but instead reflected the modifications Perzynski had made herself. Tepner reviewed the weekly timecards with Perzynski, asked if any changes needed to be made, and then signed them and submitted them to Shonka in the auditor's office.

Tepner has testified that he did not authorize Perzynski to edit her own time entries through the time clock software and was not aware she was doing so. However, he also testified that her weekly timecards never caused him to suspect that she was being paid for more time than she actually worked. He believed Perzynski regularly worked one to four hours of overtime every two weeks.

Events leading to discovery of edits.

Perzynski's edits to her timecards were discovered in October 2009. An edit had been made for 12:00 a.m. (midnight) that, apparently, should have been 12:00 p.m. (noon). This caused Perzynski's timecard to reflect 15 hours of overtime for a single day. Knudson, Shonka and Mathre (who also worked in the auditor's office) found the mistake. The County's external auditor, Janis Slater, was at the courthouse that day to conduct a regular annual, external audit. Knudson called Tepner to ask if this amount of overtime was correct and he said it was not. Knudson discovered that the entry had been created through the computer rather than with the time clock and that neither she nor Shonka had entered it into the system. Knudson confronted Tepner who said he had not made the edit, but confirmed (based on the IP address) it had been made using the computer in the MIS server room. Knudson asked Tepner not to say anything to Perzynski so they could monitor the situation and find out if further edits were made. However, Tepner told Perzynski that her time cards were being investigated and she stopped making edits.

Further investigation revealed that a total of 595 edits were made to Perzynski's time entries from the computer in the MIS server room over a period of two years. No such edits were found with regard to any other employee's time records. Slater gave notice of the situation to the Office of the Auditor for the State of Iowa and to the County Auditor, Kenneth Kline. Kline met with Tepner, Mathre, Slater, personnel manager Tom Drzycimski, County Supervisor Bob Amosson and the County Attorney to discuss the situation on November 10, 2009.

This same group, except for Slater and the County Attorney, met with Perzynski on November 12, 2009. When she was asked to explain the edits, she stated that she had no explanation. Perzynski now explains that Tepner had warned her prior to the meeting that she was going to be fired regardless of what she said. Based on that information, and following the advice of her attorney, she declined to provide an explanation during the meeting. Her employment was terminated the same day.

On December 11, 2009, a hearing was held on Perzynski's claim for unemployment benefits. At this hearing, Perzynski admitted to editing her time entries and stated that her purpose for doing so was to reflect the time she actually worked for the County.

Events leading to criminal charges.

Kline and Mathre first met with Chief Deputy David Hepperly on November 16, 2009. After explaining the situation, they asked Hepperly to investigate for possible criminal charges. They explained that they were still in the process of documenting information from the time clock software that would be needed for a criminal

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investigation. [2]

Kline and Mathre met with Hepperly in December 2009 to discuss a report they had prepared with calculations that were presented as unauthorized time clock edits/adds. This report included a base amount of $1,644.04 that they were " firm" and " solid" about as being unearned compensation based on the edits. Mathre explained this figure was based on instances in which Perzynski had edited her time back or forward from the time she actually clocked in or out. For example, if she clocked in at 8:30 a.m. and edited the time to 8:10 a.m., they calculated 20 minutes of unearned compensation. If she clocked out at 4:30 p.m. but edited it to 5:00 p.m., they calculated 30 minutes of unearned compensation. The minimum number was based on a strict reading of actual time clock punches.

The report also showed Perzynski could have received unearned compensation of up to $7,131.84, but this was considered less quantifiable because it involved time entries that had been added rather than simply changed. For example, if there were time clock entries at noon and 3:00 p.m. one day, and Perzynski then added an entry of 12:30 p.m., Kline and Mathre treated this as 2.5 hours of unearned compensation because the system showed she was not back at work until 3:00 p.m. but she created an entry showing that she returned at 12:30 p.m.

Hepperly conducted an investigation that included interviews with ten individuals who had knowledge of the case, in January and February 2010. None of those individuals were asked whether they had witnessed Perzynski not working when her timecards, as edited, reflected that she was, and none of them offered such information.

Hepperly discussed whether to file criminal charges with Assistant Attorney General Andrew Prosser. Kline was present at their final meeting before the criminal charges were filed. Hepperly filed the complaint on February 22, 2010. He called Perzynski that day and she voluntarily turned herself in. She was arrested and incarcerated in the Cerro Gordo County jail for a short time that day. Prosser then filed the trial information on March 23, 2010, charging Perzynski with theft in the second degree in violation of Iowa Criminal Code § § 714.1 and 714.2(2). A district court judge approved the trial information and minutes of evidence, thus allowing Prosser to proceed with prosecution.

Dismissal of criminal charges.

Perzynski filed a motion to dismiss the criminal case on September 22, 2010. She argued that she could not face trial for theft because the State could not prove that she did not actually work during the times reflected by her edits to the time clock computer system. In other words, even if those edits were not authorized, there was no evidence that she received compensation for time not actually worked. Judge Stephen P. Carroll ultimately granted the motion, finding that while the factual allegations established unauthorized use of a computer system to edit time records, there were no factual allegations " providing a nexus between her unauthorized use and her receiving any compensation in excess of that to which she was entitled by virtue of the hours she actually worked for the County." As such, the criminal case was dismissed on February 4, 2011.

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