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Berkey v. City of Mingo

Court of Appeal of Iowa

October 23, 2013

AMY M. BERKEY, Plaintiff-Appellant,
v.
THE CITY OF MINGO, JASPER COUNTY, DEPUTY SHERIFF BRADY LEWIS and RICHARD E.H. PHELPS II, Defendants-Appellees.

Appeal from the Iowa District Court for Jasper County, Randy V. Hefner, Judge.

A plaintiff appeals from summary judgment on three tort claims.

Bruce H. Stoltze of Stoltze & Updegraff, P.C., Des Moines, for appellant.

Jason C. Palmer and Thomas M. Boes of Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, for appellee City of Mingo.

Harry Perkins III and Jason W. Miller of Patterson Law Firm, L.L.P., Des Moines, for appellees Jasper County and Sheriff Lewis.

Kevin J. Driscoll and Jeffrey A. Craig of Finley, Alt, Smith, Scharnberg, Craig, Hilmes & Gaffney, P.C., Des Moines, for appellee Phelps.

Heard by Potterfield, P.J., and Mullins and Bower, JJ.

MULLINS, J.

Amy Berkey appeals the grant of summary judgment on her three tort claims—malicious prosecution, false arrest, and defamation—against four defendants: Jasper County, Jasper County Deputy Sheriff Brady Lewis, the City of Mingo, and Mingo city attorney Richard Phelps. Berkey claims there are genuine issues of material fact that should have precluded summary judgment, and the district court erred as a matter of law. We affirm.

I. Background Facts and Proceedings

Amy Berkey served as city clerk for the City of Mingo from October 2002 until her resignation in April 2006. As city clerk, Berkey was responsible for maintaining the city's financial records and exercised control over the city's bank accounts. Sometime in 2005, Harley Steenhoek of the Mingo fire department noted some discrepancies between his accounting of the fire department's account and Berkey's records kept as city clerk. Berkey and the city council requested an audit from the Office of the Auditor of State. While conducting their investigation, the auditors learned that even after she had resigned from her position as city clerk, records and documents needed to complete the audit were located at Berkey's home, as well as on Berkey's personal computer. On July 20, 2006, the auditors sent a letter to Berkey requesting the documents but she did not return them. On August 10, 2006, the Jasper County Sheriff's Office applied for and executed a search warrant for Berkey's residence to retrieve any City of Mingo property needed for the audit. During the execution of the search warrant, Jasper County Sheriff's Detective Dennis Stevenson recovered a cardboard box full of City of Mingo records. However, Berkey informed Stevenson her personal computer containing more City of Mingo records had crashed two weeks earlier and the hard drive was destroyed, including all the City of Mingo records. Because so many records were destroyed, the auditors were unable to conduct a full audit. Instead they completed an audit they termed a special investigation (hereinafter "audit").

The auditors released the audit report on March 21, 2008. The audit report detailed a number of concerns with Berkey's record-keeping, including errors in reports submitted to the State of Iowa and unaccounted-for cash deposits, disbursements, and utility payments. The audit report concluded, among other discrepancies, the following:

(1) The cumulative amount of utilities collections deposited in the City of Mingo bank account was $13, 752.06 less than the amount expected for fiscal years 2004, 2005, and 2006.
(2) Utility collection reports included $746.03 of cash collections that were not deposited in the bank.
(3) Bank documentation for deposits into the City's bank account showed Berkey made only two deposits from cash utilities collections totaling $136.48 between September 1, 2002, and June 30, 2006, the entire time of her employment with the City.
(4) A number of warrants the State of Iowa issued to the City were not deposited in a timely manner; however, Berkey recorded the collections as though they had been deposited. As a result, financial reports provided to the city council during their meetings did not accurately reflect the balances in the city bank accounts. Also, annual financial reports prepared by Berkey and filed with the Office of Auditor of State did not accurately reflect the city's account balances at the end of fiscal years 2003, 2004, and 2005.
(5) There were $3, 362.45 of improper disbursements.
(6) Payments totaling $32, 849.52 were not supported by appropriate documentation. In addition, $583.01 of reimbursements to Berkey and $646.55 of credit card purchases were not supported by appropriate documentation.

Berkey subsequently admitted that she made mistakes and took actions that were incorrect or inconsistent with her duties as city clerk. She does not dispute the findings of the audit report. On June 27, 2008, Berkey's successor as city clerk filed a proof of loss under bond document with the City of Mingo's insurer, claiming the losses detailed in the auditor's report. This document was notarized by Mingo city attorney, Richard Phelps.

As a result of the audit report, Jasper County officials began investigating the situation. Sheriff Deputy Brady Lewis led the investigation, which included conducting an interview with Berkey in July 2008. The Jasper County Attorney at the time, Steve Johnson, and Assistant Jasper County Attorney Michael Jacobsen also were involved in the investigation. Jacobsen reviewed the audit report and met with Lewis and auditors Annette Campbell and Tamera Kusian to discuss the investigation. Jacobsen also met and discussed the case with Phelps, Johnson, Stevenson, and Lewis. In depositions, Jacobsen testified that he and Johnson believed there was probable cause to file criminal charges, but that Johnson made the final decision.[1] The decision was based on the information produced in the investigation, the conclusions of the ...


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