Daniel Devine v. Bloomfield Township ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
DANIEL DEVINE, UNPUBLISHED
May 30, 2017
Plaintiff-Appellant,
v No. 330947
Oakland Circuit Court
BLOOMFIELD TOWNSHIP and LEO SAVOIE, LC No. 2015-149016-CK
Defendants-Appellees.
Before: M. J. KELLY, P.J., and BECKERING and SHAPIRO, JJ.
PER CURIAM.
Plaintiff, Daniel Devine, appeals as of right from the trial court’s order dismissing his
claim against defendants, Bloomfield Township and Leo Savoie, under the Whistleblowers’
Protection Act (WPA), MCL 15.361 et seq., pursuant to MCR 2.116(C)(8) (failure to state a
claim upon which relief may be granted). For the reasons set forth below, we affirm.
I. RELEVANT FACTS
This matter arises from alleged animosities among members of Bloomfield Township’s
government. At the time of the events at issue, plaintiff had served as Bloomfield Township
Treasurer since 1999, having been appointed to fill a vacancy and then elected or re-elected by
public vote several times thereafter. On May 24, 2011, plaintiff and four members of the
Bloomfield Township board1 signed a document titled “Administrator Employment Contract,”
which contains the following provisions relevant to the instant appeal:2
1
The latter presumably signed on the entire board’s behalf.
2
The contract is part of plaintiff’s pleadings pursuant MCR 2.113(F)(2). MCR 2.113(F)(2)
provides that an exhibit attached or referred to under subrule (F)(1)(a) or (b) is a part of the
pleading for all purposes. Subrule (F)(1)(b) states: “If a claim or defense is based on a written
instrument, a copy of the instrument or its pertinent parts must be attached to the pleading as an
exhibit unless the instrument is in the possession of the adverse party and the pleading so
states[.]” Plaintiff stated in his amended complaint, and defendants do not dispute, that the
contract is in defendants’ possession.
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PRINCIPLES UNDERLYING THE AGREEMENT
The Township desires to maintain high standards of quality and service to the
community.
The Township is desirous of employing you on the terms and conditions set forth
below and you agree to be employed by the Township upon those terms and
conditions.
CONTRACT
Therefore, in consideration of the matters set forth herein and the mutual benefits
and obligations set forth in this Contract, the receipt and sufficiency of which is
acknowledged by the Township and the undersigned employee, the parties to this
Agreement agree as follows:
1. Employment. The Township hereby employs you in your current position
with such duties and responsibilities in accordance with the statutory obligations,
rules, policies, and oversight responsibilities requisite to your position.
2. Terms of Employment. Employee agrees to be bound by the rules of conduct
and procedures promulgated by the Township, including those set forth in the
Bloomfield Township Employee Handbook, as these rules and procedures may be
changed from time-to-time.
3. Compensation. Employee will be paid his or her respective rate of
compensation in existence as of March 31, 2011 in conjunction with the
Employee Handbook. You will be paid pursuant to the Township’s normal
payroll practices by direct deposit. Any increase or decrease in salary shall be in
accordance with the prevailing law relative to township elected officials. You
will be employed as a full-time employee and you will generally be expected to
work at least 40 hours per week. As a salaried employee you are not compensated
for overtime.
* * *
10. Employment. You shall serve in your current position subject to the will of
the electorate expressed by a majority of voters in regularly scheduled elections,
or unless recalled pursuant to lawful procedure governed by prevailing law or
until you leave the employment of the Township by resignation, retirement or
death.
* * *
12. Term. The term of this Agreement shall be from April 1, 2011 to March 31,
2017. At the end of the term of this Agreement set forth above, the Township
may, at its sole discretion, modify, extend or terminate this Agreement in
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conjunction with prevailing law relating to township elected officials’
compensation and statutory obligations. . . .
* * *
15. Entire Agreement. This Agreement reflects the entire agreement between the
parties and all prior discussions, negotiations and understandings have been
incorporated herein. This Agreement supersedes and cancels all prior agreements
and understandings, whether written or verbal, between the parties. [Ex. 1 to
Defendant Bloomfield Township’s motion for summary disposition, LCF; Ex. 3
to plaintiff’s brief on appeal.]
In addition to the foregoing, the contract entitled plaintiff to participate in the health
insurance benefits and pension plan available as of March 31, 2011, retiree healthcare available
to new hires after May 1, 2011, and vacation, sick leave, and other benefits as set forth in the
Bloomfield Township Handbook.
In 2011, the board’s supervisor announced his retirement with 15 months remaining of
his term of office. Both defendant Savoie, who was a trustee at the time, and plaintiff sought the
board’s appointment to become the Township’s next supervisor. On July 25, 2011, the board
selected Savoie.
In August 2014, plaintiff filed a campaign finance complaint against Savoie with the
Michigan Department of State, alleging that Savoie’s campaign finance committee “accepted a
$2,500 contribution from Hubbel, Roth & Clark, Inc.,” in violation of statutory prohibitions of
corporate campaign contributions to campaign finance committees. Plaintiff further insinuated
that the contribution might have been a bribe. Plaintiff also informed the Secretary of State and
the board of trustees that the funding for a sewer extension project violated one of the
Township’s ordinances. The Department of State investigated plaintiff’s allegations and found
that Savoie had not violated any campaign finance laws.
Plaintiff alleges that Savoie, as Bloomfield Township supervisor, proceeded to engage in
an ongoing campaign against him for having reported violations of law or regulations by
defendants to public bodies, and that Savoie “intensively solicited and conspired with other
members” of the board to support him in “pursuing retaliatory actions intended to destroy
[plaintiff’s] reputation and ability to effectively function as Treasurer and ultimately, to oust him
from the Treasurer position.” According to plaintiff, at an April 13, 2015 meeting of the board
of trustees, Savoie impugned the quality of his work and proposed that the position of treasurer
be reduced from full-time to part-time. On May 1, 2015, two days after Savoie had allegedly
verbally berated plaintiff in plaintiff’s private office, plaintiff’s 24-year old daughter went
missing. Plaintiff reported to the Bloomfield Township police that his daughter may have been
kidnapped, and further suggested that her disappearance might be related to Savoie’s campaign
to “run [him] out” and to his recent angry outburst in plaintiff’s office.3 Plaintiff alleges that
3
Plaintiff’s daughter was found later the same day, safe and unharmed.
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Savoie found out about what he reported to the police. In June 2015, a person Savoie had hired
to analyze the township’s organization reported at a board meeting that “all of the department
heads . . . distrusted and disliked working with [plaintiff].” Plaintiff alleges that Savoie criticized
plaintiff at that time, claiming he would never be on the “team,” and complained about plaintiff
having filed the campaign finance complaint against him.
On July 31, 2015, at a regular meeting of the township’s board, five of the seven4
members of the board signed a document titled “Resolution of Censure of Dan Devine,
Township Treasurer” (censure resolution).5 The censure resolution read in relevant part:
WHEREAS, [plaintiff] is the duly-elected Treasurer of the Charter Township of
Bloomfield, and
WHEREAS, as Treasurer [plaintiff] is charged with a fiduciary duty to exercise
sound judgment, and
WHEREAS, during his term of office it has been brought to the attention of the
Township Board that there have been purportedly serious irregularities
attributable to the Township Treasurer and as a result the Township Board has
found it necessary to take action. Furthermore, the expectation of the Board of
Trustees is that the Treasurer will be competent to serve the residents of the
community and exercise care, diligence, integrity, fidelity and sound judgment in
keeping with established Township practices, and
WHEREAS, the conduct of [plaintiff] has brought both ridicule and
embarrassment to the Township Board and to the citizens of Bloomfield
Township, and
WHEREAS, as set forth below, it is the belief and opinion of the Township Board
that the Treasurer’s conduct rises to the level of official misconduct and willful
neglect of duty, and
WHEREAS, while the Township Board recognizes the office of the Treasurer is
an elected position and respects the election process, the Board has statutory and
fiduciary duties to insure that that Treasurer’s conduct is appropriate and lawful.
4
One of the two board members who did not sign the document was plaintiff himself. The other
refraining board member asked for additional time to review the matter and allow plaintiff an
opportunity to properly respond.
5
Although he does not attach it to his amended complaint, plaintiff stated that the censure
resolution was in defendants’ possession; therefore, the resolution is part of the pleadings
pursuant to MCR 2.113(F)(2).
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NOW, THEREFORE, BE IT RESOLVED that the Township Board of the
Charter Township of Bloomfield hereby censures its Treasurer, [plaintiff], for his
official misconduct in office consisting of the following facts, to wit:
1. Falsely stating that the Township Supervisor had approved a
$30,000.00 bonus for a retired employee[6];
2. Baseless allegations that the Supervisor had kidnapped his daughter;
3. Baseless allegations to the Secretary of State that the Supervisor had
violated campaign finance laws and had accepted a bribe from a long-time
vendor;
4. Questionable investment decisions relating to the fees payable to
Schwartz and Company[7];
5. Conduct causing department heads and employees to feel uneasy and
threatened in a potentially unsafe work environment as a result of the
Treasurer’s conduct.
On September 10, 2015, plaintiff filed suit against defendants, claiming a right to
recovery under the WPA. He alleged that he was an employee within the meaning of the WPA,
that Bloomfield Township was his employer, that Savoie was the township’s supervisor and
acted as an agent of the township within the meaning of the WPA, that plaintiff had engaged in
6
Plaintiff denies this charge. According to plaintiff’s amended complaint, Savoie agreed to pay
the township’s retiring finance director for six months after his retirement in exchange for the
director’s completion of specific special projects and assistance in the transition to a new finance
director. Although the outgoing director did not complete one of the projects assigned to him,
Savoie approved payments to him totaling $31,747.50. According to plaintiff, it was a different
trustee, not plaintiff, who raised questions about payments to the outgoing director at an April
13, 2015 meeting.
7
According to plaintiff’s amended complaint, the township had retained Gregory J. Schwartz &
Company (Schwartz) as an investment advisor since 2006. In November 2013, Bloomfield
Township issued over $80 million in bonds and directed Schwartz to invest the proceeds on
behalf of the Township’s pension fund. Schwartz did so, and received $491,153 in concession
fees from mutual fund managers. The township ultimately approved all of Schwartz’s
investment recommendations. Plaintiff “worked closely with Schwartz relative to the
investments and ongoing oversight of the funds.” In December 2013 (which we note was nine
months before plaintiff filed a campaign finance complaint against Savoie), Savoie questioned
whether Schwartz had been overcompensated and, without plaintiff’s knowledge, retained a law
firm to investigate the matter. After an investigation, the law firm issued a report stating that
Schwartz’s fees were reasonable and in keeping with what other investment brokers would have
received. The Township paid $17,574.75 for the report.
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protected activities by reporting violations or suspected violations of law by defendants to public
authorities, and that the censure resolution constituted a retaliation of the type prohibited by the
WPA. Specifically, plaintiff argued that the board’s intentional use of the phrase “official
misconduct and willful neglect of duty” constituted a threat of discharge because it alleged
behavior for which the governor could remove him from office pursuant to MCL 168.39.8
In lieu of filing an answer, defendants filed separate motions for summary disposition
pursuant to MCR 2.116(C)(8), asserting that plaintiff was an elected official, not an employee
under a contract of hire entitled to protection under the WPA, and that plaintiff had failed to
allege a discriminatory or retaliatory employment action prohibited by the WPA. Agreeing with
defendants’ reasoning, the trial court granted their motions for summary disposition.
II. ANALYSIS
A. STANDARD OF REVIEW
We review a trial court’s decision on a motion for summary disposition de novo. Maiden
v Rozwood, 461 Mich. 109, 118; 597 NW2d 817 (1999). The trial court granted defendants’
motions for summary disposition pursuant to MCR 2.116(C)(8). A motion under MCR
2.116(C)(8) tests the legal sufficiency of a claim by the pleadings alone. Bailey v Schaaf, 494
Mich. 595, 603; 835 NW2d 413 (2013). We “accept as true all factual allegations supporting the
claim, and any reasonable inferences or conclusions that might be drawn from those facts.”
Gorman v American Honda Motor Co, 302 Mich. App. 113, 131; 839 NW2d 223 (2013). We
construe well-pled factual allegations in a light most favorable to the nonmoving party. Johnson
v Pastoriza, 491 Mich. 417, 435; 818 NW2d 279 (2012). “A motion under MCR 2.116(C)(8)
may be granted only when the claims alleged are so clearly unenforceable as a matter of law that
no factual development could possibly justify recovery.” Id. at 435 (quotation marks and citation
omitted). We also review de novo the interpretation of a statute, Whitman v Burton, 493 Mich.
303, 311; 831 NW2d 223 (2013), or contract, Employers Mut Casual Co v Helicon Assoc, Inc,
313 Mich. App. 401, 404; 880 NW2d 839 (2015).
8
MCL 168.39 states in relevant part:
The governor shall remove a township officer chosen by the electors of any township,
when the governor is satisfied from the evidence submitted that the officer has been guilty of
official misconduct, wilful neglect of duty, extortion, habitual drunkenness, or has been
convicted of being drunk, or when it appears by a certified copy of the judgment of a court of
record of this state that the officer, after the officer's election or appointment, was convicted of a
felony. The governor shall not take action upon the charges made against the officer until the
charges are exhibited in writing, verified by the affidavit of the party making the charges that the
party believes the charges to be true. The officer shall not be removed for misconduct or neglect
until charges of the misconduct or neglect are exhibited to the governor as provided in this
section, a copy of the charges served on the officer, and an opportunity given to the officer of
being heard in his defense.
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B. CONTRACT OF HIRE
On appeal, plaintiff contends that the trial court erred in concluding that the administrator
employment contract was not a contract of hire, and thus, ruling that plaintiff was not an
employee for purposes of the WPA as a matter of law. We disagree.
To be entitled to the protection of the WPA, plaintiff first must be an employee for
purposes of the WPA. The WPA defines “employee” as “a person who performs a service for
wages or other remuneration under a contract of hire, written or oral, express or implied.
Employee includes a person employed by the state or a political subdivision of the state except
state classified civil service.” MCL 15.361(a) (emphasis added). The WPA does not define
“contract of hire,” but appellate courts have addressed the phrase in the context of workers’
compensation claims. In Higgins v Monroe Evening News, 404 Mich. 1, 20; 272 NW2d 537
(1978),” Michigan’s Supreme Court concluded that a contract of hire requires a bargained-for-
exchange. There must be a “legal detriment that has been bargained for and exchanged for the
promise. The two parties must have agreed to and intended that the benefits each derived be the
consideration for a contract.” Id. at 20-21.
To support his contention that he was a Bloomfield Township employee as defined by
and protected under the WPA, plaintiff stresses language in the contract stating that the township
“is desirous of employing” plaintiff, and plaintiff “agree[s] to be employed” on the terms and
conditions set forth in the contract, as well as the 29 times variations of the word “employ” may
be found in the contract. Further, he notes that the contract provides that he will be subject to
Bloomfield’s Employee Handbook, paid in conjunction with Bloomfield’s normal payroll
policies and eligible to participate in Bloomfield’s employee health care and pension programs,
and will receive vacation, sick leave, and other benefits in accordance with the Employee
Handbook.
It is a principle of contract interpretation that, “[i]n construing written agreements the
actual undertaking of the parties is to be deduced from the entire instrument, taking into
consideration, reconciling, and giving meaning to all its parts so far as possible . . . .” Thomson
Elec Welding Co v Peerless Wire Fence Co, 190 Mich. 496, 505; 157 N.W. 67 (1916). Plaintiff
executed the contract at issue while serving as the elected treasurer of Bloomfield Township.
Accordingly, when the township stated its desire to “employ” plaintiff in his current position at
his current salary to fulfill his current responsibilities, even if such agreement added the status of
“employee” to that of “elected official,” the agreement was not a contract of hire because, as the
trial court pointed out, about these things the board had no choice. With regard to plaintiff’s
position and salary, the contract merely memorialized the status quo.9
9
Further, as Michigan’s Supreme Court observed long ago,
Public officers are created for the purposes of government. They are delegations
of portions of the sovereign power for the welfare of the public. They are not the
subjects of contract, but they are agencies for the state, revocable at pleasure by
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Plaintiff contends, however, that the contract is a contract of hire because in it he agreed
to duties beyond his statutory obligations as treasurer in exchange for compensation beyond his
statutorily governed treasurer’s salary. Plaintiff asserts that this bargained-for exchange is
memorialized in the contract provision stating that Bloomfield Township employs him to
perform “such duties and responsibilities in accordance with the statutory obligations, rules,
policies, and oversight responsibilities requisite to [his] position” (emphasis added). Reading the
italicized text as referencing duties separate from his statutory obligations, plaintiff asserts that
he agreed to perform these duties in exchange for healthcare, pension, and other benefits. We
deem plaintiff’s interpretation of the provision strained and unpersuasive.
A contract must be read as a whole. Thomson Elec Welding Co, 190 Mich. at 505.
Reading the contract at issue as a whole reveals that Bloomfield Township “employs” plaintiff in
his current position—township treasurer—to do work that accords with his position. The
contract acknowledges that plaintiff generally serves at the will of the electorate and any changes
in salary “shall be in accordance with the prevailing law relative to township elected officials.”
Nothing in the contract indicates that the township is “employing” plaintiff in any capacity other
than that of the township’s treasurer, a position to which he was duly elected. Therefore,
reconciliation of the phrase “rules, policies, and oversight responsibilities requisite to [his]
position” with the contract as a whole requires interpreting the phrase as referring to the “rules,
policies, and oversight responsibilities” necessary to fulfill plaintiff’s statutory obligations as
treasurer.10
Further, even if some of the duties plaintiff contends he has undertaken exceed those
necessary to fulfill his statutory obligations, nothing in this contract reveals them as elements in a
bargained-for exchange. Moreover, nothing in the language of the contract or in plaintiff’s
amended complaint indicates that the contract was specific to plaintiff, rather than one that any—
or every—elected township official signed upon election to office. The contract’s non-specific
language makes it suitable for an elected official to agree to be “employed” at his or her “current
position” tied to his or her “respective rate of compensation,” to perform duties “requisite to [his
or her] position,” to “serve at the will of the electorate,” and to have one’s pay adjusted “in
accordance with the prevailing law relative to township elected officials.”
Even if plaintiff may be considered an “employee” by virtue of the contract, nothing in
the administrator employment contract supports a reasonable inference that it made plaintiff an
employee of the township for purposes of the WPA. “ ‘The underlying purpose of the WPA is
protection of the public.’ ” Anzaldua v Neogen Corp, 292 Mich. App. 626, 631; 808 NW2d 804,
808 (2011), quoting Dolan v. Continental Airlines/Continental Express, 454 Mich. 373, 378, 563
NW2d 23 (1997). The WPA “meets this objective by protecting the whistleblowing employee
the authority creating them, unless such authority be limited by the power which
conferred it. [Attorney Gen v Jochim, 99 Mich. 358, 367-368; 58 NW 611(1894).]
10
We also note that the censure resolution criticizes plaintiff for his “Treasurer’s conduct”
amounting to (in the belief and opinion of those who signed it) “official misconduct in office,”
that occurred “during his term of office.” The resolution does not identify or appear to relate to
any failings in any pursuits outside of plaintiff’s role as the “duly-elected Treasurer.”
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and by removing barriers that may interdict employee efforts to report violations or suspected
violations of the law.” Anzaldua, 292 Mich. App. at 631 (quotation marks and citation omitted).
Whistleblowers typically require protection because they are vulnerable to the adverse
employment decisions of those whose violations of the law they report or threaten to report. See,
e.g., Terzano v Wayne County, 216 Mich. App. 522; 549 NW2d 606 (1996) (affirming judgment
under the WPA for an electrician at a county operated airport terminated before end of his
probationary period because he reported electrical violations committed by the airport to the city
electrical inspector). For example, MCL 41.75a authorizes a township’s board to hire employees
that “shall serve at the pleasure of the township board and shall perform duties lawfully directed
by the township board, except those duties delegated by law to another township official, unless
there has been consent.” Employees hired under the authority of MCL 41.75a might find
themselves in the position of being whistleblowers subject to retaliatory measures, and therefore
in need of the protection of the WPA.
In the instant case, however, none of the barriers envisioned by the WPA existed to
prevent plaintiff from reporting “violations or suspected violations of the law” to a public body.
The board could not discharge, or even credibly threaten to discharge, plaintiff from his position
as treasurer, see MCL 168.369 (setting forth the requirements and conditions under which the
governor alone could remove plaintiff), or decrease his compensation during his term of office,
MCL 41.95(7). Further, as previously stated, the choice of treasurer belonged not to the board,
but to the electorate, from whom one might expect to garner political support by reporting a
violation or suspected violation of the law. Therefore, even if one could consider plaintiff an
employee as well as an elected official of Bloomfield Township, nothing in the contract at issue
establishes an employment relationship casting plaintiff in the role of an employee who, but for
the protections afforded employees under the WPA, would be deterred from reporting violations
or suspected violations of the law.11
Plaintiff contends that the WPA’s definition of “employee” is broad enough to
encompass public officials. We disagree. This Court has not been receptive in the past to
enlarging the category of employee for purposes of the WPA beyond that clearly intended by the
Legislature, and we decline to do so now. See e.g., Chilingirian v City of Frazer (On Remand),
200 Mich. App. 198, 200; 504 NW2d 1 (1993) (concluding that the attorney who represented the
city was not an employee for purposes of the WPA because he did not operate under a contract
of hire and the city paid for his service through his law firm).
III. CONCLUSION
For the reasons stated above, we conclude that trial court did not err in granting
defendants’ summary disposition pursuant to MCR 2.116(C)(8) on the ground that the contract
upon which plaintiff relies is not a contract of hire such as to establish him as an employee for
11
This is not to say that an elected official who agrees to perform additional duties in exchange
for extra compensation can never be considered an employee for purposes of the WPA, just that
plaintiff’s pleadings have not established that such is the case here.
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purposes of the WPA. In light of our resolution of this issue, we need not address whether the
censure resolution was the type of adverse employment act prohibited by the WPA.
Affirmed.
/s/ Michael J. Kelly
/s/ Jane M. Beckering
/s/ Douglas B. Shapiro
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