Phil Sylvester v. State of Illinois

ORDER

BIRNBAUM, CJ.

THIS MATTER is before the Court on Cross Motions for Summary Judgment. An oral argument was held on the Motions on March 4, 2014.

NATURE OF THE CLAIM

Claimant is a former Illinois State Police Captain seeking payment of attorney’s fees incurred defending a sexual harassment lawsuit (Belinda Storey v. Illinois State Police, et al., 05- 4011) filed in U.S. District Court for the Southern District of Illinois by Sgt. Storey, a former subordinate in the Illinois State Police. Specifically, the federal lawsuit included allegations that when Sgt. Storey refused to enter into a personal, intimate relationship with Claimant, he then denied her a promotion, directed others to discipline her, directed that her performance ratings be lowered, questioned her expense reports and placed derogatory information in her personnel file.

On February 4, 2005, Claimant requested representation by the Illinois Attorney General to defend the suit pursuant to the State Employees Indemnification Act, 5 ILCS 350 et. seq. (“Indemnification Act”). Under the Indemnification Act, a State officer or employee is entitled to representation by the Attorney General and indemnification for damages awarded, court costs, and attorney’s fees when sued in a civil proceeding in which the plaintiff alleges deprivation of a civil or constitutional right arising out of an act or omission occurring within the scope of his employment. Id. On June 1, 2005, the Attorney General’s Office refused to represent and indemnify Claimant stating that there was a potential conflict of interest and that the alleged acts or omissions which gave rise to the claims constituted intentional, willful, or wanton misconduct.

Subsequent to the June 1, 2005 denial, Claimant obtained his own counsel. On February 2, 2006, the District Court partially denied Claimant’s Motion to Dismiss, finding that “Storey has alleged sufficient personal involvement to state a claim for relief against Sylvester.” On August 17, 2006, the claims against Claimant were dismissed because the Court found that Claimant’s conduct occurred prior to the applicable two-year limitations period. On July 27, 2007, Claimant filed a complaint in this Court seeking reimbursement for his court costs and attorney’s fees incurred in defending the federal lawsuit.

[*113] ANALYSIS

In its Motion for Summary Judgment, Respondent alleges that Claimant’s indemnification request was reviewed by Karen McNaught, bureau chief of the General Law Bureau in Springfield, which handled the defense for Claimant’s co-defendants. According to Respondent, Ms. McNaught reviewed information from the Illinois State Police’s legal department including the Illinois State Police’s Internal EEO Investigation and its Division of Internal Investigations material, both of which contained admissions by Claimant that he made requests to date Sgt. Storey between February 2001 and December 2002. The reports also indicated Claimant allegedly told police command staff that Sgt. Storey was performing well in March 2002 but that in June 2002, Sgt. Storey began dating someone other than Claimant and at that time Claimant placed someone other than Sgt. Storey in an Acting Master Sergeant position.

Using the information provided in the Illinois State Police investigative reports and after discussing the matter with her supervisors and the Illinois State Police lawyers, Ms. McNaught determined that the conduct in which Claimant had allegedly engaged giving rise to the federal lawsuit was intentional, willful and wanton misconduct that was not intended to serve the benefits of the State. Further, Ms. McNaught and her supervisors concluded that there was an actual or potential conflict in representing Claimant while also representing the other defendants, also members of the Illinois State Police, in the federal case. At oral argument when questioned about this alleged potential conflict, Respondent denied it as a reason for Ms. McNaught to deny representation but Ms. McNaught’s letter, attached to Respondent’s Memorandum in Support of Respondent’s Motion for Summary Judgment, clearly states: “We have determined that the alleged acts or omissions which gave rise to the claims of the plaintiff constitute an actual or potential conflict of interest with the other defendants in this case and that the alleged acts or omissions which gave rise to the claims of the plaintiff constitute intentional, willful or wanton misconduct.” (McNaught Letter, Exhibit C of Respondent’s Memorandum in Support). This Court finds the reasoning of a potential conflict without merit for denying a claimant’s request for representation pursuant to the Indemnification Act as the Attorney General could assign separate special prosecutors for each defendant.

Respondent argues because no court or jury found the Claimant’s acts were within the scope of his employment and were not intentional, willful or wanton misconduct, the State was within its discretion in refusing to indemnify Claimant pursuant to the Indemnification Act for court costs and attorney’s fees associated with the case. Respondent specifically cites section 350/2(b) of the Indemnification Act which states:

In the event that the Attorney General declines to appear or withdraws on the grounds that the act or omission was not within the scope of employment, or was intentional, willful or wanton misconduct, and a court or jury finds that the act or omission of the State employee was within the scope of employment and was not intentional, willful or wanton misconduct, the State shall indemnify the State employee for any damages awarded and court costs and attorneys’ fees assessed as part of any final and unreversed judgment. In such event the State shall also pay the employee’s court costs, litigation expenses and attorneys’ fees to the extent approved by the Attorney General as reasonable. 5 ILCS 350/2(b) [*114] Respondent argues that the court or jury finding is a prerequisite to the Court of Claims exercising jurisdiction under the Indemnification Act. Specifically, Respondent’s Summary Judgment Motion argues that the Indemnification Act does not give the Court of Claims authority or jurisdiction to determine whether the Attorney General’s decision regarding indemnification was correct: “Without a previous finding that Claimant’s actions were within the scope of his employment and were not intentional, willful and wanton misconduct, the Court cannot exercise jurisdiction to second-guess the Attorney General’s decision not to indemnify Claimant.” Respondent also cites this Court’s precedents of lacking authority to review or interfere in matters of administrative policy and decisions of state agencies and their employees.

White v. State, 49 Ill.Ct.Cl. 187, 189 (1996); Brady v. State, 32 Ill.Ct.Cl. 240, 241 (1977). Lastly, Respondent cites the U.S. District Court Judge’s Order granting Claimant’s motion for summary judgment arguing it suggests, had Sgt. Storey filed her federal complaint within the two year statute of limitations, the federal judge would have held that Claimant’s actions were unwanted and intentional.

The crux of the issue is whether this Court can exercise jurisdiction under the Indemnification Act in finding that the act or omission of the State employee was within the scope of employment and was not intentional, willful or wanton misconduct. As highlighted at the oral argument, the Indemnification Act specifically states that “a court or jury” must make the finding that the act or omission of the State employee was within the scope intended by the Indemnification Act and the actions were not intentional, willful or involving wanton misconduct. Respondent failed to provide this Court with any case law indicating that this Court cannot make this determination as “a court” contemplated by the Indemnification Act.

The rationale surrounding the Indemnification Act, as recognized by Illinois Courts, is creating a “duty” to reimburse state employees for their “court costs and litigation expenses and other costs of providing a defense.” 5 ILCS 350/2(e)(i); Loman v. Freeman, 229 Ill. 2d 104 (2008). Public policy considerations dictate that this Court stands as a check against the decisions of the Office of the Attorney General, who otherwise would be the sole authority on all matters on indemnification. In this case, the question of whether Claimant’s conduct is within the scope of the Indemnification Act is a question of fact, undecided in the underlying dismissed federal action. To prevent Claimant from seeking such a finding in this Court would be to deprive Claimant an opportunity to be heard and would render the Attorney General’s decision to deny Claimant representation, as the sole and final determination on the matter. This Court does not believe the General Assembly envisioned this harsh result when enacting the provisions of the Indemnification Act.

Based upon the facts here, this Court concludes that the question and finding of whether Claimant was acting within the scope of his employment and whether his actions constituted intentional, willful or wanton misconduct falls within the jurisdiction of this Court. In rendering this decision, this Court notes that our finding is distinguishable from those claims involving jurisdiction over mandamus actions pursuant to the Indemnification Act. In those cases where the Attorney General declines representation and there is a judgment specifically finding that a potential claimant was within his/her scope of employment and his/her actions were not intentional, willful or involving wanton misconduct, a claimant seeking to compel the State to [*115] comply with the non-discretionary statutory duty under the Indemnification Act is seeking mandamus relief and this Court believes jurisdiction is proper in the Circuit Court. A mandamus suit properly brought in the Circuit Court is distinguishable from a present claim against the State in which the Court of Claims is the only proper jurisdiction. Such reasoning was presented in a June 1, 2012 Illinois Appellate Court ruling in the appeal of Sanquia Jacobs v. Erwin McEwen, 09-CH-49695, concluding that a mandamus suit seeking to compel state officials to act in accordance with their mandatory statutory obligations, while not attempting to subject the State to liability or seeking a determination of the plaintiff’s rights, is not regarded as an action against the State funds. (2012 IL.App. (1st) 110773-U is attached and was previously submitted to this Court by Respondent in Court of Claims case no. 12-CC-0832) IT IS HEREBY ORDERED that Respondent’s Motion for Summary Judgment and Claimant’s Motion for Summary Judgment are DENIED and the matter is remanded to the Commissioner for a hearing on whether Claimant’s actions were within the scope of his employment and whether said actions were not intentional, willful or wanton misconduct entitling Claimant to reimbursement pursuant to the Indemnification Act.

OPINION

Claimant, Phil Sylvester, brings this action against the State of Illinois for reimbursement of legal expenses and litigation costs pursuant to the Illinois State Employee Indemnification Act (SEIA) at 5 ILCS 350/2. A hearing was held before Commissioner Murphy. The issue in this case is whether Claimant’s alleged actions in a sexual harassment lawsuit in Federal Court were within the scope of his employment, qualifying Claimant for reimbursement of attorney’s fees pursuant to SEIA.

FACTS

As outlined in the Court’s ruling on Cross Motions for Summary Judgment, the undisputed facts are as follows. Claimant is a former Illinois State Police (ISP) Captain seeking reimbursement of attorney’s fees incurred defending a sexual harassment lawsuit (Belinda Storey v. Illinois State Police, et al., 05-4011) filed in United States District Court for the Southern District of Illinois. The Plaintiff in that case, Sgt. Storey, is a former subordinate in the Illinois State Police (ISP). Specifically, the Federal lawsuit included allegations that when Sgt. Storey refused to enter into a personal, intimate relationship with Claimant, he denied her a promotion, directed others to discipline her, directed that her performance ratings be lowered, questioned her expense reports, and placed derogatory information in her personnel file.

On February 4, 2005, Claimant requested representation by the Illinois Attorney General (AG) to defend him in the lawsuit pursuant to SEIA. Under SEIA, a State officer or employee is entitled to representation by the Attorney General and indemnification for damages awarded, court costs, and attorney’s fees when sued in a civil proceeding in which the plaintiff alleges deprivation of a civil or constitutional right arising out of an act or omission occurring within the scope of employment. On June 1, 2005, the Attorney General’s Office refused to represent (or indemnify) Claimant stating that there was a potential conflict of interest and that the alleged acts [*116] or omissions which gave rise to the claims in the underlying Federal action constituted intentional, willful, or wanton misconduct.

After the June 1, 2005 denial by the Attorney General’s Office, Claimant obtained his own counsel to represent him in the Federal law suit brought by Sgt. Storey. On February 2, 2006, the Federal Court partially denied a Motion to Dismiss, finding that “Storey has alleged sufficient personal involvement to state a claim for relief against Sylvester.” On August 17, 2006, the claims against Claimant were dismissed because the Federal Court found that Claimant’s conduct occurred prior to the applicable two-year limitations period. On July 27, 2007, Claimant filed a complaint in this Court seeking reimbursement for his court costs and attorney’s fees incurred in defending the Federal lawsuit. The parties submitted Cross Motions for Summary Judgment in this case. This Court held oral arguments on the pending motions.

Both parties submitted written summations of their arguments. Both motions were later denied.

TESTIMONY

At the hearing before Commissioner Murphy, Claimant testified to his education, training and experience leading up to his promotion to ISP Captain in 1999. Claimant eventually had supervisory responsibility of the entirety of Zone 7 (approximately the southern third of the state) including 125 to 150 employees/officers. Claimant retired in 2003. Claimant first had professional contact with Sgt. Storey in 2001, but he said he had known her for several years prior to that. Claimant dated Sgt. Storey on two occasions. Claimant participated in a rating given to her by others. It is noted that Sgt. Storey did not grieve the ratings given to her with the union. According to Claimant, he took steps to try to improve Sgt. Storey’s performance at one point, but he said he had very little contact with her after 2001.

On cross-examination, Claimant testified he dated Sgt. Storey while he was zone commander and the relationship included sex. Claimant was in Sgt. Storey’s direct line of supervision but had very limited interaction with personnel “squads” on a daily basis. He had known Sgt. Storey since the early 1980s, including an intimate relationship. After the subject Federal lawsuit was filed, Claimant asked for the Attorney General to defend him. Following that request, he testified that he received a letter from Ms. Karen McNaught of the Attorney General’s Office denying representation. He said he talked to Ms. McNaught on the telephone who affirmed the denial. Following the denial, Claimant hired private counsel. Claimant testified he does not know why he was denied representation by the AG’s Office.

Respondent called to testify Attorney Karen McNaught, Bureau Chief of General Law for the AG’s Office. Chief McNaught’s responsibilities include review of requests for representation. She reviewed documents and an investigatory file forwarded to her pertaining to Claimant’s request for representation. She discussed these materials with her supervisors, the Chief of Staff and Chief Deputy Attorney General. They all agreed the ISP should be afforded representation on the retaliation and gender discrimination claims in the underlying Federal lawsuit. However, she testified they concluded that Claimant had engaged in willful and wanton misconduct which would not afford him eligibility under SEIA. Looking specifically at the claims of retaliation, Chief McNaught noted that the two evaluations of females went down in ratings while the males went up on the promotional portion. Claimant was in the direct chain of [*117] command and signed off on those ratings which gave Chief McNaught “a lot of pause.” Chief McNaught testified the primary reason Claimant was not represented by the AG’s Office in the underlying claim is that Chief McNaught, along with her supervisors, believed the Claimant had engaged in willful and wanton misconduct not within the scope of his employment on the retaliation claim.

On cross-examination, Chief McNaught cited specific statements made by Claimant as evidence that Claimant had directed subordinates to lower Sgt. Storey’s evaluation. The complaint filed by Sgt. Storey alleges that as a result of Sgt. Storey’s refusal to enter into a personal intimate relationship with Claimant, Claimant denied her a promotion, directed others to administer written discipline and directed that her performance ratings be lowered. Given the allegations, Chief McNaught had concerns about Claimant’s motivations when he denied Sgt.

Storey the opportunity for advancement when he was Captain in the line of supervisors of Sgt.

Storey. Chief McNaught looked at the totality of the circumstances and believed there was evidence that a reasonable jury could draw the conclusion that when Claimant was having a sexual relationship with Sgt. Storey, “things were going just fine” and then when she ended it, Sgt. Storey’s ratings fell, and she was placed in a lesser position. Chief McNaught said that Claimant was the person who engaged in the misconduct that made ISP liable in the underlying lawsuit. In sum, at the time of review of information given to her, Chief McNaught’s basis for denial of representation of Claimant was that Claimant was acting outside the scope of employment by having sex with a subordinate and then engaging in the evaluation process of that subordinate. Chief McNaught concluded a jury or judge could find retaliatory conduct when there is a sexual advance by Sylvester and rebuff by Storey followed by a decline in her performance ratings and a transfer to a much less desirable job.

ARGUMENTS

Respondent argues this Court lacks jurisdiction to review the Attorney General’s administrative decision to deny Claimant indemnification. Respondent also argues that Claimant failed to exhaust his previously available remedies by not seeking a factual finding in the underlying Federal case that his actions were within the scope of his employment and not intentional, willful or wanton. Speaking more directly to the issues currently before the Court, Respondent argues Claimant has not met his burden of proving that his actions were within the scope of his employment and did not constitute intentional, willful or wanton misconduct.

Respondent’s position is that Claimant’s pursuit of a romantic relationship with Sgt. Storey was purely a personal endeavor with no ascertainable benefit intended for ISP, and thus not within the scope of his employment. Respondent also contends that Claimant’s actions in pursuing a sexual relationship with Sgt. Storey while remaining in a supervisory position until he was removed from Sgt. Storey’s chain of command as the result of an internal investigation constitutes intentional misconduct.

Claimant argues that because no court or jury ever found Claimant to have committed intentional, willful or wanton misconduct, he is entitled to indemnification.

[*118] ANALYSIS

The issues to be decided before this Court are whether Claimant’s acts or omissions that gave rise to the Federal lawsuit were (1) not intentional, willful or wanton and (2) whether they were within the scope of his employment. If either issue is answered in the affirmative, then Claimant is entitled to indemnification by the state. The relevant portion of SEIA states:

(b) In the event that the Attorney General determines that so appearing and defending an employee either (1) involves an actual or potential conflict of interest, or (2) that the act or omission which gave rise to the claim was not within the scope of the employee’s State employment or was intentional, willful or wanton misconduct, the Attorney General shall decline in writing to appear or defend or shall promptly take appropriate action to withdraw as attorney for such employee. Upon receipt of such declination or upon such withdrawal by the Attorney General on the basis of an actual or potential conflict of interest, the State employee may employ his own attorney to appear and defend, in which event the State shall pay the employee’s court costs, litigation expenses and attorneys’ fees to the extent approved by the Attorney General as reasonable, as they are incurred.

In the event that the Attorney General declines to appear or withdraws on the grounds that the act or omission was not within the scope of employment, or was intentional, willful or wanton misconduct, and a court or jury finds that the act or omission of the State employee was within the scope of employment and was not intentional, willful or wanton misconduct, the State shall indemnify the State employee for any damages awarded and court costs and attorneys’ fees assessed as part of any final and unreversed judgment. In such event, the State shall also pay the employee’s court costs, litigation expenses and attorney’s fees to the extent approved by the Attorney General as reasonable.

5 ILCS 350/2(b) (emphasis added). This Act “provide[s] a means by which the Attorney General may decide whether to represent a party.” Healy v. Vaupel, 133 Ill. 2d 295, 317 (1990).

This Court previously ruled in the Order Denying Summary Judgment to both parties and again on a Motion to Reconsider that claims for indemnification may be within the jurisdiction of this Court because it is the only recourse for parties who were denied indemnification and did not receive the requisite factual findings in the underlying Federal case. Respondent’s jurisdictional argument, therefore, will not be discussed here because it has been addressed in the Court’s previous rulings. Likewise, there is no language in the statute that requires the State employee to seek such findings in the underlying Federal case. To the contrary, the statute says “a court of jury…” as opposed to articulating a specific court that must make the findings. Again, we previously rejected Respondent’s assertion that we are not “a Court” for purposes of SEIA.

For this reason, Respondent’s argument of failure to exhaust remedies must also fail because Claimant was not required to seek such findings by the Court in the underlying Federal case.

Claimant’s argument is that absent a finding by the Court in the Federal action that he acted willfully, wantonly or intentionally, he is entitled to indemnification. However, it is not dispositive that the Federal Court ruled or did not rule Claimant to have acted intentionally. That is the sole focus of the current proceeding. Consistent with our previous rulings on the Cross [*119] Motions for Summary Judgment, such findings can be made after the underlying case is over.

Further, the fact that Sgt. Storey did not explicitly allege intentional conduct outside the scope of employment in the underlying case is equally irrelevant. The statute merely requires that specific factual findings be made, not that they be alleged by a specific party. Either party can seek these findings, evidenced by the current procedural posture. It was permissible, but by no means mandatory, that Sgt. Storey allege one or more of the intentional torts relevant to Claimant’s indemnification. Likewise, it is permissible that Claimant now alleges that his acts or omissions do not satisfy the relevant standard of intent to exclude representation and indemnification.

Having dismissed the straying arguments, the dispositive issues are whether Claimant’s acts or omissions that “gave rise to the claim” were not intentional, willful or wanton misconduct and whether such acts or omissions were within the scope of his employment. Claimant’s alleged acts or omissions which gave rise to the claim are outlined in the complaint of the underlying Federal case. The allegations against Claimant include: repeatedly asking Sgt. Storey for dates; expressing interest in a personal, intimate relationship; showing up uninvited to Sgt. Storey’s home; becoming angry when he was informed Sgt. Storey was seeing other men; asking coworkers to ask Sgt. Storey on dates on his behalf; asking Sgt. Storey about her personal relationships; calling Sgt. Storey for personal reasons; denying Sgt. Storey a promotion; directing others to discipline Sgt. Storey; directing others to lower Sgt. Storey’s performance rating; questioning Sgt. Storey’s expense reports; placing derogatory information in Sgt. Storey’s personnel file; and placing Sgt. Storey on inferior work assignments. All of these claims were dismissed against Claimant individually due to the running of the statute of limitations. However, the case for retaliation proceeded against ISP. A portion of the jury instructions from the bench read as follows:

Evidence regarding [Claimant’s] alleged sexually harassing conduct…is not an issue in this trial[.]…[Storey] claims that [ISP] retaliated against her for her complaints regarding alleged sexual harassment. [Storey] claims that because she opposed the sexual harassing conduct of [Claimant], filed an internal sexual harassment complaint and filed charges with Equal Employment Opportunity Commission, [ISP] engaged in a course of retaliatory conduct which includes transferring her to a unit where she had little or no work, subjecting her to unwarranted discipline, lowering her performance appraisal in 2003, denying her request for transfer to the Joint Terrorism Task Force and subjecting her to intolerable conditions causing her to transfer from investigation to patrol.

The case was submitted to the jury who returned a verdict against ISP for $146,000. At least some of the conduct for which ISP was held liable was the result of the directives given by Claimant. Respondent presented evidence in the form of an ISP Division of Internal Investigation (DII) Report documenting the sexual harassment claims against Claimant. Page 307 of that report contains an email from Claimant recommending that Sgt. Storey be moved to the Public Integrity Unit, which is the “inferior work assignment” Sgt. Storey complained of as well as the “unit where she had little or no work” as identified in the jury instructions. The jury concluded that ISP was guilty of retaliation due, at least in part, to this transfer and the aforementioned email makes it clear that Claimant was at least partially responsible for this transfer. The jury found that ISP took these actions in part “because [Sgt. Storey] complained of sexual harassment [.]” Respondent’s Exhibit T, p. 788. It can be reasoned that Claimant’s actions [*120] were done with the intent to retaliate and certainly done with the intent that the transfer be accomplished. Other allegations point to misconduct by Claimant such as performance evaluations and ratings reviews of a subordinate in his chain of command with whom he had an intimate relationship. Those charges were sustained by ISP as Claimant’s employer during an internal investigation. This internal investigation file as well as other documents was relied upon by Chief McNaught and her superiors to deny Claimant’s request for representation. We conclude that the Office of the Illinois Attorney General was correct when it found that Claimant engaged in willful misconduct when he used his official position with ISP to retaliate against Sgt.

Storey, and therefore that he is disqualified for indemnification pursuant to the State Employee Indemnification Act.

CONCLUSION

For the above reasons, this claim is DENIED.