Opinion
No. CV 03 0283760
June 26, 2007
MEMORANDUM OF DECISION
I. BACKGROUND
Peter Vollemans seeks damages for his dismissal as an employee of the town of Wallingford, where he was employed as the Superintendent of the Pierce Power Plant, an electrical generation facility formerly operated and owned by Wallingford in a proprietary capacity. The plaintiff brought this action in three counts and claimed it to the jury list. On the day of the trial, the parties agreed to try the matter to the court instead of to a jury. The trial occurred on April 10 and 11, 2007.
Wallingford claims that no evidence was offered by Vollemans to show that the Pierce Power Plant was operated by the town in a proprietary capacity. The evidence presented showed that the plant was operated by Wallingford. In deposition testimony by Raymond Smith, made a full exhibit in this case (Plaintiff's Exhibit 32), he testified that the electric division was designed for the purpose of making a monetary contribution to the town and that it was generally successful in meeting this purpose. The issue of whether this meets the legal standard of a municipal proprietary capacity is discussed, infra.
At trial, Vollemans abandoned the second and third counts of his complaint and now seeks relief upon the first count alone, sounding in the contractual doctrine of promissory estoppel. Wallingford filed four special defenses to count one: 1) failure to state a claim upon which relief may be granted, 2) lack of subject matter jurisdiction for failure to exhaust administrative remedies under a collective bargaining agreement, 3) that any alleged contract between the parties is rendered void, ab initio, by the provisions of the Municipal Employee Relations Act (MERA), and 4) Vollemans' failure to join his union as an indispensable party.
Vollemans claims that he relied to his detriment upon promises of continued employment made by the Wallingford Director of Public Utilities, Raymond Smith, in the event that the Pierce Power Plant was closed. Wallingford denies that Smith made this promise and that he had authority to make such a promise on its behalf.
The court finds for the defendant, there to be no liability found in this case under the doctrine of promissory estoppel.
II. FACTS
The court finds the following facts to be relevant and proven at trial by a preponderance of the evidence. Vollemans received a bachelors degree in Marine Engineering in 1972. Subsequent to his graduation from college, he began a successful career as an engineer, primarily working on mechanical and power systems in the marine trades. Between the years of 1972 and 1975, he was employed to oversee the engine rooms of seagoing vessels for several European shipping concerns. Soon after moving to the United States in 1975, he was employed by Stolaval Corporation as an engineer, servicing shipboard machinery. Subsequently, from 1978 through 1989, he was continuously employed by Seaworthy Systems in Essex, Connecticut, where he designed electrical and mechanical systems used in the marine trades.
His employment with Seaworthy Systems involved significant international travel and, at his wife's suggestion, he sought employment with the town of Wallingford. In 1989, Vollemans was hired as the Superintendent of the Pierce Power Plant, an aging, municipally-owned power plant in Wallingford. At all times during his employment with Wallingford, Vollemans was a member of a union and, although his union representation changed, his union was always recognized as his exclusive collective bargaining representative.
See Defendant's Exhibit A, Article 1, p. 4. Also see Supplemental Exhibit AA in Defendant's Post-Trial Brief dated June 1, 2007, Article 1, p. 3, as well as Supplemental Exhibit BB, Article 1, p. 3.
When Vollemans was originally interviewed for his position at the plant, he was concerned about the continuity of employment he should expect as a Wallingford municipal employee and he expressed this concern to the General Manager of the Electric Division, Bill Barry. One critical element of Vollemans' employment discussions with Barry was the town's plan to build a new combustion turbine power plant. In Vollemans' view, this plan to build a new plant represented a long-term employment opportunity. Unfortunately, the town council rejected this proposal to build a new plant in the early 1990s and, instead, Wallingford bid the project to a private power company in the year 2000.
For the first nine months of his employment, Vollemans supervised extensive renovations, necessary for the old power plant to become operational. Once it became operational, Vollemans supervised the generation of electrical power at the Pierce Power Plant until June 30, 2000, after which the generation of electricity at the power plant was discontinued. During its years of operation, the plant was generally successful in one of its primary purposes, which was to generate revenue for the town of Wallingford. (Plaintiff's Exhibit 32, p. 15.)
The court notes that the generation and distribution of electrical power in Connecticut was radically transformed in the late 1990s by the enactment of legislation deregulating the generation of electric power. Under this legislation, inter alia, the generation and distribution of electric power were required to be performed by separate business entities. See Public Acts 1998, No. 98-28, An Act Concerning Electric Restructuring.
On two occasions during his employment, Vollemans became concerned about the future viability of his position as the Superintendent of the Pierce Power Plant. The first occasion occurred in 1993 after a proposal to build a new power plant was rejected by the town council. Seeking reassurance that he would keep his job, Vollemans met with his two supervisors at that time, Smith, and William Cominos, the new General Manager of the Wallingford Electric Division. Vollemans specifically recalled the first of these two meetings at a coffee shop in Wallingford on July 1, 1993, during which Smith assured him that he was a valued employee and promised that, if the plant were to close, Vollemans would always be employed by the town of Wallingford. If that were not possible, Vollemans further recalled that Smith promised that he would be a part of any arrangement for the operation of any successor power plant. This recollection was contemporaneously memorialized by Vollemans in a handwritten note on a memorandum arranging the first meeting, which he had received from Cominos.
The second meeting occurred in 1995 in a conference room at the power plant. Although Vollemans could not recall the specific date and reason giving rise to the second meeting with Smith and Cominos, he clearly recalled receiving the same assurances from Smith as he received in 1993.
When called upon to testify, Smith had no recollection of the July 1, 1993 meeting or the 1995 meeting. He denied, however, making any promise of future job security to Vollemans. Moreover, he claimed that he had no authority to make such a promise on behalf of Wallingford. Smith, nonetheless, recalled Vollemans as a valuable employee. He also recalled assuring Vollemans that he would "try" to help him maintain his employment with the town or, alternatively, with Northeast Utilities, in the event that the Pierce power plant closed. Smith added that he had a good relationship with someone at Northeast Utilities who he could rely upon to provide an employment opportunity for Vollemans.
Cominos was Vollemans' direct supervisor at the time that these conversations took place in 1993 and 1995 and was present at both meetings. He was also the person responsible for arranging the meeting with Smith on July 1, 1993, and was, therefore, aware of the purpose of the meeting. His recollection of the conversation between Smith and Vollemans was generally the same as Vollemans', except that he recalled that Smith specifically promised to get Vollemans a job at Northeast Utilities in the event that no employment opportunity was available with the town of Wallingford.
Although a successor power plant was ultimately built by a private bidder, Pennsylvania Power Light, Vollemans was not offered employment with this private operator of the new power plant in Wallingford. After the Pierce power plant closed, Wallingford continued to employ Vollemans as the town liaison to the new power plant operator. Smith also presented evidence showing that he requested Vollemans to be considered for positions at Pennsylvania Power Light, Northeast Utilities and other positions with the town. Pennsylvania Power chose not to employ Vollemans at the new power plant. Northeast Utilities chose not to generate power in Connecticut after the enactment of Public Acts 1998, No. 98-28, An Act Concerning Electric Restructuring, and Smith was unable to secure employment for Vollemans at Northeast Utilities, despite his attempt to do so. Smith also testified, however, that he did not include Vollemans in his budget requests for the electric division after 2002.
Vollemans claims that Smith was specifically authorized to exercise control over his employment by the Charter of the town of Wallingford (the Charter). The Charter identifies several specific positions which are relevant to these proceedings. The first specific position identified in the Charter is the Director of Public Utilities, which was Smith all times relevant to these proceedings. As the director of public utilities, Smith was empowered by the Charter to "appoint and remove a superintendent for [the electric division, the water division and the sewer division] subject to [the classified service provisions] of this charter, except that he may fill . . . such positions himself, unless the board [of public utilities] shall otherwise direct." Charter of the Town of Wallingford, Ch. XIV § 10, Revision of November 7, 1989. In other words, the Charter delegated to Smith the authority to hire or fire the Superintendent of the Electric Division, unless otherwise directed by the Board of Public Utility Commissioners. Vollemans interprets the language of this Charter provision to be his former position as the Superintendent of the Power Plant.
Smith testified that he viewed the General Manager of the Wallingford Electric Division to be the "Superintendent of the Electric Division," as contemplated by the Charter, notwithstanding Vollemans' particular title as the "Superintendent of the Power Plant." The position of General Manager of the Electric Division was previously held by Barry, who originally hired Vollemans. Barry's successor, Cominos, directly supervised Vollemans until his dismissal. Vollemans disputes Smith's view and claims that, as Superintendent of the Power Plant, his position was the position specifically contemplated by the Charter and, therefore, Smith was authorized by the Charter to promise him continued, future employment.
III. DISCUSSION
A. Superintendent of the Electric Division
The court finds that Cominos was the administrative head of the Wallingford Electric Division. This finding is based upon Smith's testimony and the hierarchical chart of the Wallingford Electric Division, as it existed in 1993, which was admitted as a full exhibit at trial. (Defendant's Exhibit L.) According to the chart, Cominos, the General Manager of the Electric Division, reported directly to Smith, the Director of Public Utilities. The chart also identifies three managers, as well as the Superintendent of the Power Plant, Vollemans, who were all under Cominos on the chart and who reported to him directly. The specific language of the Charter provides for the appointment of three superintendents of three divisions: the electric, water and sewer divisions. The court interprets the language of the Charter to mean that Cominos, as the General Manager of the Electric Division, not Vollemans, held the position of Superintendent of the Electric Division as provided by the Charter.
Vollemans objected to Smith's testimony concerning his opinion of the meaning of the Charter language in question. The court allowed the testimony, subject to the court's determination of the issue as a matter of law.
B. Promissory Estoppel
Vollemans' case rests upon the doctrine of promissory estoppel. "Under the law of contract, a promise is generally not enforceable unless it is supported by consideration . . . [The Supreme Court] has recognized, however, the development of liability in contract for action induced by reliance upon a promise, despite the absence of common-law consideration normally required to bind a promisor . . . [U]nder the doctrine of promissory estoppel [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise . . . A fundamental element of promissory estoppel, therefore, is the existence of a clear and definite promise which a promisor could reasonably have expected to induce reliance." (Citation omitted; internal quotation marks omitted.) Stewart v. Cendant Mobility Services Corp., 267 Conn. 96, 104, 837 A.2d 736 (2003).
"[A]ny claim of estoppel is predicated on proof of two essential elements: the party against whom estoppel is claimed must do or say something calculated or intended to induce another party to believe that certain facts exist and to act on that belief; and the other party must change its position in reliance on those facts, thereby incurring some injury." (Internal quotation marks omitted.) Chotkowski v. State, 240 Conn. 246, 268, 690 A.2d 368 (1997).
[T]he prerequisite for . . . application [of the doctrine of promissory estoppel] is a promise and not a bargain and not an offer. Stewart, supra, [267 Conn.] 105, citing to 3 A. Corbin, Contracts (Rev. Ed. 1996) § 8.9, p. 29 (emphasis in original). Additionally, the promise must reflect a present intent to commit as distinguished from a mere statement of intent to contract in the future. See D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 214-15, 520 A.2d 217 [(1987)]. The requirements of clarity and definiteness are the determinative factors in deciding whether the statements are indeed expressions of commitment as opposed to expressions of intention, hope, desire, or opinion. Id. Whether a given representation rises to that level is a question of fact to be determined in light of the circumstances under which the representation was made. Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., 234 Conn. 1, 17 n. 6, 662 A.2d 89 (1995).
(Internal quotation marks omitted.) Litchfield Feed Grain, LLC v. Glyndon Valley Health Products, Superior Court, judicial district of Litchfield, Docket No. CV 02 0087023 (September 21, 2006, Sheedy, J.).
C. Government Employment Estoppel
An action for promissory estoppel may be brought against a public agency, such as town of Wallingford; however, "estoppel against a public agency is limited and may be invoked: (1) only with great caution; (2) only when the action in question has been induced by an agent having authority in such matters; and (3) only when special circumstances make it highly inequitable or oppressive not to estop the agency . . . As noted, this exception applies where the party claiming estoppel would be subjected to substantial loss if the public agency were permitted to negate the acts of its agents." (Internal quotation marks omitted.) Fadner v. Commissioner of Revenue Services, 281 Conn. 719, 726, 917 A.2d 540 (2007). Furthermore, "[a] party seeking to justify the application of the estoppel doctrine by establishing that a public agency has induced his actions carries a significant burden of proof." Id., 727.
The parties dispute the proper standard applicable to the claim of promissory estoppel in this case. Vollemans relies upon the recent Supreme Court case, Stewart v. Cendant Mobility Services Corp., supra, 267 Conn. 96, as setting forth the singular standard for the court to evaluate his claim of promissory estoppel. Wallingford, however, claims that the proper standard for the court to apply is the heightened, governmental standard for promissory estoppel, as required in Fadner v. Commissioner of Revenue Services, supra, 281 Conn. 719. Vollemans argues that the court should rely upon the Stewart standard alone and not upon the heightened governmental standard of Fadner because Wallingford was acting in a proprietary capacity in its operation of the Pierce power plant. Alternatively, Vollemans contends that the facts proven in this case nonetheless support his claim for promissory estoppel under the heightened Fadner test.
D. Proprietary Capacity
Historically, a municipality in Connecticut "was generally immune from liability for its tortious acts at common law . . ." (Internal quotation marks omitted.) Spears v. Garcia, 263 Conn. 22, 28, 818 A.2d 37 (2003). And again, historically, an exception to this rule of common law existed where a municipality has acted in a proprietary capacity. Considine v. Waterbury, 279 Conn. 830, 841-42, 905 A.2d 70 (2006). The court finds that Wallingford was acting in a proprietary capacity in the operation of the Pierce power plant, since the court has found that it was generally successful in its mission to raise revenue for the town of Wallingford.
"[A] municipality generally has been determined to be acting for its own special corporate benefit or pecuniary profit where it engages in an activity for the particular benefit of its inhabitants . . . or if it derives revenue in excess of its costs from the activity. Martel v. Metropolitan District Commission, 275 Conn. 38, 53, 881 A.2d 194 (2005) (operation of water utility for profit is proprietary function). . . Accordingly, it has been stated that a municipality is engaged in a proprietary function when it acts very much like private enterprise . . ." (Citations omitted; internal quotation marks omitted.) Considine v. Waterbury, supra, 279 Conn. 847-48.
Vollemans contends that since Wallingford acted in its proprietary capacity, it must be held to the standard of a private business in interpreting his claim of promissory estoppel. The court disagrees. Where a municipality acts in a proprietary capacity, there is an exception to governmental immunity for tortious conduct. Vollemans, however, has not offered any authority to suggest that this exception to governmental immunity extends to the issue of government contracts in general, and particularly to contracts for government employment. The proprietary capacity exception to municipal immunity from tort liability serves to protect the pubic at large from injury and to provide a more level playing field when a governmental entity engages in a business traditionally operated by private economic concerns. Although this latter public policy may be furthered by extending the proprietary capacity exception to matters concerning contracts, the analogy to contracts of government employment is incomplete and inconsistent with the existing law of municipalities.
Under Connecticut law, a claim for promissory estoppel requires a heightened standard of proof and a more limited application to governmental entities. Further, the rule for municipal employment is that municipal authority must be exercised under the Charter or other legislative authority. "It has been well established that a city's Charter is the fountainhead of municipal powers . . . The Charter serves as an enabling act, both creating power and prescribing the form in which it must be exercised . . . In construing a city Charter, the rules of statutory construction generally apply." (Internal quotation marks omitted.) Fennell v. Hartford, 238 Conn. 809, 813, 681 A.2d 934 (1996). "The officer, body or board duly authorized must act [on] behalf of the municipality, otherwise a valid contract cannot be created. Generally the power to make contracts on behalf of the municipality rests in the council or governing body . . . Generally, no officer or board, other than the common council, has power to bind the municipal corporation by contract, unless duly empowered by statute, the Charter, or authority conferred by the common council, where the latter may so delegate its powers . . . It follows that agents of a city, including its commissions, have no source of authority beyond the Charter. [T]heir powers are measured and limited by the express language in which authority is given or by the implication necessary to enable them to perform some duty cast upon them by express language." (Citations omitted; internal quotation marks omitted.) Id., 813-14.
In this case, Smith had no authority under the Charter to guarantee future employment to Vollemans. Even if Smith had this authority under the Charter to promise Vollemans future employment as the Superintendent of the Power Plant, Wallingford decided to close the plant. The possibility of this future policy decision was contemplated by Vollemans when Smith made his promise to find him other employment. Aside from Smith's authority under the Charter, his promise to Vollemans was equivocal in nature. The nature of the promise was that "if the plant closed," Smith would do one of three things; namely, find him other employment with the town, the power plant successor or Northeast Utilities. However, Smith had no authority under any reasonable reading of the Charter to offer Vollemans other employment with the town. Furthermore, any promise Smith made to secure employment with Northeast Utilities or with a successor power generator was beyond the scope of his municipal authority, actual or apparent, as the Director of Public Utilities for the town of Wallingford. Therefore, Wallingford cannot be held liable for Smith's unauthorized assurances of future employment.
E. Municipal Employee Relations Act
Although the court has found there to be no liability under Vollemans' claim for promissory estoppel in this case, the court will address Wallingford's special defense that the Municipal Employee Relations Act (MERA), §§ 7-467 et seq., provides the exclusive means for negotiating the terms and conditions of Vollemans' employment and for addressing any grievances between the parties. In support of its claim, the prohibited practices section of MERA is cited by Wallingford as authority for the proposition that the duty to negotiate in good faith prevents direct negotiations with employees. In further support of its special defense, Wallingford cites the case of West Hartford Education Assn. v. DeCourcy, 162 Conn. 566, 295 A.2d 526 (1972).
General Statutes § 7-47 provides in relevant part: "(a) Municipal employers or their representatives or agents are prohibited from . . . (4) refusing to bargain collectively in good faith with an employee organization which has been designated in accordance with the provisions of said sections as the exclusive representative of employees in an appropriate unit . . ."
In DeCourcy, the court stated that "[a]ttempts to bypass the representative may be considered evidence of bad faith in the duty to bargain. The conduct proscribed [is] direct negotiation with the employees and bypassing the union. The act does not prohibit an employer from communicating in noncoercive terms with his employees while collective negotiations are in progress . . . The element of negotiation is critical. Another crucial factor in these cases is whether or not the communication is designed to undermine and denigrate the union." (Citation omitted.) Id., 593. "The question in the present case is whether the [municipality] was engaging in direct negotiations with [employees] offering something in return for a consideration, dealing with them in a manner calculated to subvert the union, or merely communicating with them without interfering, restraining or coercing them." Id.
Although there was, no doubt, a duty to negotiate in good faith with Vollemans' union, there is no allegation here that Wallingford refused to negotiate with the union in this case or was in any way attempting to undermine the collective bargaining process. Instead, Vollemans approached Smith and it is alleged that Smith made certain promises to Vollemans that the court has found not to be actionable under the applicable law and facts of this case. If an actionable promise had been made by Smith pursuant to authority delegated to him by the Charter, it would not be the basis of a prohibited practice under MERA, unless it was otherwise found to be evidence of bargaining in bad faith.
Although municipalities are the creation of state statutes and are subject to state law, there is no provision of MERA cited by Wallingford that would specifically preclude a Charter provision delegating of the right to hire and fire a person in a particular position, such as the Superintendent of the Electric Division. In other words, if the Wallingford Charter allowed Smith to hire and fire Vollemans, there is no authority offered to show that the collective bargaining agreement or process would supersede a specific Charter provision.
IV. CONCLUSION
Accordingly, the court finds for the defendant, the town of Wallingford.