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Okpik v. City of Barrow

Supreme Court of Alaska

April 30, 2010

Lucy OKPIK, Appellant,
CITY OF BARROW, Alaska, Appellee.

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[Copyrighted Material Omitted]

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Michael J. Walleri, Law Offices of Michael J. Walleri, Fairbanks, for Appellant.

Greg Dorrington, Matthew Singer, and Howard Trickey, Jermain Dunnagan & Owens, P.C., Anchorage, for Appellee.

Before: CARPENETI, Chief Justice, WINFREE, and CHRISTEN, Justices.


CHRISTEN, Justice.


An employee of the City of Barrow (Barrow) who served as finance director for nearly eight years resigned after learning the mayor was demoting her to the position of senior accountant. She filed suit alleging violation of her right to due process under 42 U.S.C. § 1983, alleging violation of the Alaska Whistleblower Act, and alleging wrongful termination and intentional and negligent infliction of emotional distress. The superior court granted summary judgment for Barrow

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on all claims. We affirm the grant of summary judgment on the employee's § 1983 claim because she was an at-will employee and had no property interest in continued employment. Because the employee did not make a report to a public body or participate in an investigation while employed, we also affirm the superior court's grant of summary judgment on the whistleblower claim. But the employee presented sufficient admissible evidence to create genuine issues of material fact as to whether her demotion was wrongful. We therefore reverse the grant of summary judgment on the wrongful termination claim.[1]


A. Facts

Lucy Okpik began working for the City of Barrow in 1994 as chief accountant. In 1997 the then-mayor appointed her to the position of finance director, a position that includes budget duties and payroll oversight.

Nathaniel Olemaun was elected mayor in October 2004. Shortly after his election, Olemaun sent a memorandum to " All Staff" stating he was placing city employees " holding mayoral appointee positions" -the finance director, grants administrator, and administrative assistant-in " acting" status.

Before Olemaun's election, the approved mayoral pay was $47.49 per hour. It is undisputed that from October 2004 to March 2005 Olemaun was paid about $70 per hour, resulting in an overpayment of nearly $20,000. It is also undisputed that both Olemaun and Okpik knew he was being overpaid during this time, but the parties dispute how and why the overpayment occurred.

It was Okpik's job to prepare the payroll for Barrow employees. Okpik asserts that Olemaun brought a blank personnel action form to her shortly after he was elected. She recalls that she showed him the budget, including his rate of pay, that the mayor left, but later returned, and that when Okpik again showed him his rate of pay, he expressed that the pay was too low. According to Okpik, the mayor's assistant Susan Atos later told her that the mayor wanted his pay calculated at a higher rate. Okpik testified that neither she nor Atos wrote the higher rate of pay on the personnel action form, but together they calculated higher rates of pay on a calculator tape and that Atos left Okpik's office with the tape. Okpik claims she does not know who wrote the higher hourly rate on the mayor's personnel form, but admits she knew Olemaun was receiving the higher hourly pay and that she did not report the overpayment while she was an employee of Barrow.

Olemaun claims that he asked to be paid what the previous mayor had been paid, that he discovered he was being overpaid in the fall of 2004 and that he asked Okpik to correct the problem but she did not do so. He denies that he wrote the incorrect hourly rate on his personnel action form, but admits he otherwise filled out the form and signed it.

In February 2005 Olemaun hired a special assistant, Deborah Lyn, and assigned her to work with Okpik on the budget. According to Lyn, Olemaun informed her several weeks after she was hired that he believed his pay was being calculated incorrectly and that Okpik had told him she would fix it. When Lyn conducted a " personnel file audit" several months later, she discovered Olemaun was still being overpaid. For reasons unclear in the record, Olemaun's salary was still incorrect in early April 2005. On April 6, 2005, Lyn personally created a new personnel form for Olemaun with the correct salary, effective April 1.

On April 14, Olemaun told Okpik she was still in acting status, that he intended to advertise the finance director position, that he wanted her to remain in the position until a new director was hired, and that she would then be " Accountant, Senior." Olemaun cited the budget problems that had developed during Okpik's nearly eight-year tenure as finance director as reason for his decision. He also stated he believed the city " would benefit from a finance director with more training, better qualifications[,] and more experience."

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The next day, Okpik submitted a resignation letter that was effective April 22. She disputed Olemaun's claim that she was not qualified, indicated she would not train the new finance director as he had requested, and said " I cannot work under these circumstances."

Lyn was appointed " acting finance director" on April 28, 2005. She discovered Olemaun's salary had still not been corrected because the form she created on April 6 had apparently been lost. Lyn created a second, correct personnel form, effective April 1. Olemaun signed it on April 29.

In May 2005, after Olemaun's pay had been corrected and after Okpik had resigned, Okpik met with a city council member and revealed that Olemaun had been overpaid since October 2004. On May 25, 2005, Lyn circulated a memorandum to city council members discussing the personnel audit results. She explained that Olemaun had been overpaid from October 2004 until the end of March 2005. The memorandum blamed Okpik for not correcting Olemaun's rate of pay and suggested that if an independent legal advisor could find that Okpik was entirely responsible for the incorrect hourly pay Olemaun had received, repayment would be unnecessary. The ...

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