United States District Court, N.D. Iowa, Central Division
ORDER ON MOTION FOR SUMMARY JUDGMENT and ORDER ON MOTION FOR SANCTIONS
DONALD E. O'BRIEN, Senior District Judge.
Currently before this Court is Defendant Mid Iowa Regional Housing Authority's [hereinafter MIRHA] Motion for Summary Judgment. Docket No. 18. The parties appeared telephonically for a hearing on February 12, 2014. After hearing the parties' arguments, the Court took the issues under advisement. Also before the Court is a Motion for Sanctions filed by the Plaintiff on February 20, 2014. Docket No. 36.
II. FACTUAL HISTORY
The following is an overview of the agreed facts and the areas of disagreement.
The Defendant, MIRHA, is a Public Housing Agency located in Fort Dodge, Webster County, Iowa. It operates a Housing Choice Voucher program in several north-central Iowa counties. MIRHA assists low income families, the elderly, disabled individuals and other individuals in obtaining affordable housing. Mr. Dutcher was hired by MIRHA around April 26, 2010, to be its Housing Inspector. At the time Mr. Dutcher was hired, MIRHA had a total of four employees: Mr. Dutcher; Anita Michael, Housing Coordinator II; Beverly Verschoor, Executive Director; and, Romana Hundertmark, FSS Coordinator. During the relevant time period, Jackie Bellinghausen was the President of MIRHA's Board.
Mr. Dutcher's job duties included completing annual inspections of properties on the Housing Choice Voucher program, initial inspections of new properties following acceptance of the request for tenancy approval, and occasional special inspections. He was responsible for the time, scheduling, and completion of inspections to keep MIRHA in compliance with Housing and Urban Development [hereinafter HUD] regulations. Other duties included client interviews, rent calculation, and assisting applicants and landlords and others with questions, applications, information, and any other duties assigned by the Executive Director. Plaintiff further states that, generally, his job consisted of conducting home reviews, performing home inspections, helping clients complete Section 8 assistance paperwork, and miscellaneous duties around the office.
It is undisputed that Mr. Dutcher had concerns regarding MIRHA's operation. At the beginning of 2011, Mr. Dutcher began questioning MIRHA's Executive Director Verschoor and Ms. Michael, its Housing Coordinator II, on various matters dealing with MIRHA's management and day-to-day operations. As set out by the Defendant, those matters included: (1) rent calculations for clients in "group homes"; 2) allowing certain clients to rent from family members; 3) adjusting payment standards for disabled clients; 4) time card fraud involving Ms. Verschoor and Ms. Michael; 5) improperly collecting an overpayment from one client and not seeking to collect overpayments from other clients; 6) falsification of Section Eight Management Assessment Program (SEMAP) scoring for fiscal year 2011; 7) one instance of a client receiving a medical deduction who was not entitled to it; and 8) MIRHA spending $165, 000.00 more than it took in for the fiscal year 2011. (The Plaintiff disagrees with the eight-part division of Mr. Dutcher's complaints. See Docket No. 23, Att. 8, p. 7.)
Mr. Dutcher pursued his complaints about MIRHA in a number of ways. For instance, Mr. Dutcher testified during his deposition that he raised issues he perceived regarding improper rent calculations for people in "group homes" with both Beverly Verschoor and Anita Michael near the beginning of 2011. Mr. Dutcher also testified that he discussed collecting overpayments of rental assistance from a client, Don Herrick, with Ms. Verschoor. He further testified that based on his complaints, Ms. Verschoor stopped collecting the overpayments.
Mr. Dutcher also had concerns about how certain medical deductions were given to people who received spend downs' from the Iowa Department of Human Services. Specifically, Mr. Dutcher informed Ms. Verschoor that medical deductions should only be given for actual out of pocket expanses. MIRHA subsequently contacted HUD and began correctly applying medical deductions.
Additionally, when Mr. Dutcher discovered information that suggested MIRHA was engaged in conduct in violation of HUD regulations, rules, and other requirements, he brought those situations to Ms. Verschoor's or Ms. Bellinghausen's attention. On March 15, 2012, Mr. Dutcher sent an e-mail to Ms. Bellinghausen entitled "Fraud and Mis-appropriation of HUD Funds." On March 28, 2012, Dutcher gave Ms. Verschoor a letter to give to the MIRHA Board in a sealed envelope and instructed her to give it to the Board at a Special Board meeting on March 28, 2012. Mr. Dutcher sent Ms. Bellinghausen another email regarding "Fraud and mis-appropriation of HUD Funds" on March 17, 2012. In that email, Mr. Dutcher stated, "I was trying to do the right thing by exposing the fraud and waste of HUD funds." Mr. Dutcher sent another email to Ms. Bellinghausen on March 19, 2012. Mr. Dutcher also availed himself of a website, HUDCLIPS, to assist in his investigation.' HUDCLIPS provides information related to HUD programs.
One of Mr. Dutcher's larger complaints to the Board at the March 14, 2012, meeting was the fact that MIRHA spent $165, 000.00 more than it took in for 2011. As set out in the parties' documents, MIRHA attempted to explain the deficiency, but MIRHA failed to allay Mr. Dutcher's concerns. Another issue about the year 2011 which concerned Mr. Dutcher was that as a result of the 2011 audit, HUD reduced MIRHA's Section Eight Management Assessment Program score. The Section Eight Management Assessment Program (SEMAP) measures the performance of the public housing agencies (PHAs) that administer the Housing Choice Voucher program in 14 key areas. SEMAP helps HUD target monitoring and assistance to PHA programs that need the most improvement.
Mr. Dutcher also felt that Ms. Verschoor and Ms. Michael were not keeping accurate time cards, and attempted to keep track of possible work-time discrepancies.
Mr. Dutcher was also concerned about MIRHA providing assistance to people who are renting living quarters from family members. Allowing people who reside with a family member to receive housing assistance is a violation of the applicable regulations, unless that person is disabled. MIRHA argues that it only provided assistance to those living with family if they were disabled. Mr. Dutcher disagrees.
Mr. Dutcher's attention to the above listed issues caused tension at MIRHA. On April 2, 2012, Ms. Verschoor terminated Mr. Dutcher. The Defendant does not dispute the fact that Mr. Dutcher was terminated or that his termination was a result of his complaints. See Docket No. 18, Att. 1, p. 10-11, stating:
Verschoor did not have any issues with Dutcher's performance of his job as a Housing Inspector during the time he was employed at MIRHA. Dutcher started to question everything Verschoor and Michael were doing and they got the feeling he was telling them how to do their jobs after the March 14, 2012 MIRHA Board Meeting... Verschoor decided with MIRHA Board approval to let Dutcher go. It was clear that Dutcher would not accept Verschoor's or the Board's explanation for financial matters about which he had no personal knowledge, and that Dutcher would not stop letting his concerns interfere with the operations of MIRHA.
After being terminated, Mr. Dutcher filed the present case.
III. SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate only if the record shows "there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P., Rule 56(c). A fact is material if it is necessary "to establish the existence of an element essential to [a] party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986). There is a genuine issue as to a material fact if, based on the record before the court, a "rational trier of fact" could find for the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 587 (1986).
When considering a motion for summary judgment, a "court must view the evidence in the light most favorable to the nonmoving party...." Hutson v. McDonnell Douglas Corp. , 63 F.3d 771 (8th Cir. 1995). This requires a court to draw any reasonable inference from the underlying facts in favor of the nonmoving party and to refrain from weighing the evidence, making credibility determinations, or attempting to discern the truth of any factual issue in a manner which favors the moving party unless there is no reasonable alternative. See Matsushita , 475 U.S. at 587; and Morris v. City of Chillicothe , 512 F.3d 1013, 1018 (8th Cir. 2008) (citing Thomas v. Corwin , 483 F.3d 516, 526-27 (8th Cir. 2007)).
Procedurally, the movant bears the initial burden "of informing the district court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue." Hartnagel v. Norman , 953 F.2d 394, 395 (8th Cir. 1992) (citing Celotex , 477 U.S. at 323). Once the movant has carried his burden, the non-moving party is required "to go beyond the pleadings" and through "affidavits, or by the depositions, answers to interrogatories, and admissions on file, ' designate specific facts showing that there is a genuine issue for trial.'" Celotex , 477 U.S. at 323 (citing Fed.R.Civ.P. 56(e)).
Defendant's Motion for Summary Judgment raises three main issues. First, the Defendant argues that Mr. Dutcher did not engage in a protected activity. Next, the Defendant argues that Mr. Dutcher's conduct was not in furtherance of a False Claims Act ["FCA"] action. Finally, the Defendant argues that Mr. Dutcher's termination does not violate public policy. The Court will consider each of these issues in turn. The Court will also consider the Plaintiff's Motion for Sanctions.
A. Motion for Sanctions
The first issue the Court will address is the Plaintiff's Motion for Sanctions, Docket No. 36. As was noted above, hearing was held on the pending Motion for Summary Judgment on February 12, 2014. On February 17, 2014, the Defendant filed Docket No. 35, a Supplement to their Motion for Summary Judgment. The Supplement consists of a declaration by Beverly Verschoor, a MIRHA employee. In the declaration, Ms. Verschoor disputes Mr. Dutcher's claim that Ms. Verschoor did not perform certain inspections. The Supplement also contains Inspection Checklists, ' purporting to confirm that Ms. Verschoor performed the disputed inspections.
On February 20, 2014, the Plaintiff filed a Motion for Sanctions. Docket No. 35. In that document, the Plaintiff argues that:
[o]n February 12, 2014, a telephonic hearing on MIRHA's summary judgment motion was held before Senior Judge Donald E. O'Brien. At the conclusion of that hearing, nearly two hours in length, Judge O'Brien declared MIRHA's motion fully submitted. On February 17, 2014, MIRHA filed a Supplemental Declaration of Beverly Verschoor... It is improper to attempt to insert additional documents or testimony into the summary judgment record at this point given that the issues have been fully briefed by the parties and the Court has already heard oral arguments and that MIRHA has had a year to produce the documents to the Plaintiff. Wherefore, for the reasons stated herein, and the reasons set forth in the Plaintiff's supporting Brief, Plaintiff respectfully asks the Court to sanction MIRHA by striking the Supplemental Declaration of Beverly Verschoor and the Quality Control Inspections and for such other relief as the Court deems proper.
Docket No. 36, p. 1-2.
On February 28, the Defendant filed a Response to the Motion for Sanction. Docket No. 38. In its Response, the Defendant argues that during the Motion for Summary Judgment hearing, the Plaintiff brought up new claims related to Ms. Verschoor and the quality control inspections. Docket No. 38, p. 2. The Defendant goes on to argue that:
[t]he Court Order following the Summary Judgment Hearing stated "[t]he offering party must, within 3 days after hearing, file in electronic form any exhibit that was not filed with a motion, resistance, or other filing related to this hearing." Verschoor's Supplemental Declaration was filed within the three (3) day time limit set by the Court for additional filings related to the hearing.
Docket No. 38, p. 2-3. The Defendant argues that based on the quoted language from the Court's Hearing Minute document and the history of the parties' discovery exchanges, the Plaintiff has suffered no prejudice from the post-hearing filing and it should be considered by the Court. Id., p. 3.
The language quoted by the Defendant, "[t]he offering party must, within 3 days after hearing, file in electronic form any exhibit that was not filed with a motion, resistance, or other filing related to this hearing;" is not relevant to the present controversy. That is standard language in the Court's Hearing Minute document, and it means that any exhibit offered during a hearing must be filed within three days. See Pub. Admin. Order 09-AO-03-P (05/29/09), ¶ 7. The Defendant's Supplement was not offered during the hearing; in fact, the Defendant admits that the Supplement only exists because of an argument/allegation that the Plaintiff made during the hearing. Accordingly, the Defendant's Supplement falls far outside the definition of an exhibit' that must be filed after a hearing per the Pub. Admin. Order. The Court notes that it is beyond clear that the language quoted from the Hearing Minutes, Docket No. 34, is not independent authority under which a party may choose to supplement the record after a hearing.
That said, the Court is persuaded that the Plaintiff is not prejudiced by the Supplement. As both parties note, the Court has broad authority to allow supplements to the record. In this case, the Defendant has decided to rebut a factual allegation made by the Plaintiff during oral argument. As was stated above, summary judgment is only appropriate if there is no genuine issue of material fact. The fact that the Defendant feels the need to rebut a (factual) allegation made by the Plaintiff during the oral argument is, itself, evidence that there is a genuine issue of material fact in this case. In considering whether summary judgment is appropriate, the Court will not wade into those factual disputes. Factual disputes are for the jury to decide. The Court rules only on the law. Accordingly, the only information the Court gleans from the Defendant's Supplement is that there is another factual dispute. Since the Plaintiff argues that summary judgment is not appropriate in this case because there is a genuine issue of material fact, the Defendant's admission of another factual dispute is not prejudicial to the Plaintiff. Accordingly, the Plaintiff's Motion for Sanctions, Docket No. 36, is denied. The Court will consider the Defendant's Supplement, Docket No. 35, along with all the other documentation in this case.
B. Federal False Claims Act
This case arises, mainly, under the Federal False Claims Act ...