Individual board members were entitled to official immunity in a suit brought by a former employee accused of forging checks, the Missouri Court of Appeals, Western District ruled on December 9, reversing summary judgment in favor of the employee on an indemnification provision.
Tracy Rank worked as the Human Resources Manager of the Pettis County Ambulance District (PCAD) beginning in 2013. Rank was in a romantic relationship with Michael Gardner, the PCAD District Administrator.
Rank reported to Gardner and never directly reported to the PCAD Board of Directors, nor was she evaluated by the Board members.
In 2017, checks were presented that purported to have the board president’s signature on them but did not. The police were contacted and provided with several checks issued on the account of PCAD made payable to Rank and Gardner.
Gardner was arrested and admitted that he forged the checks in question. PCAD fired Gardner.
Rank was arrested and charged with felony stealing. After her arrest, PCAD terminated Rank’s employment.
The criminal charges against Rank were later dismissed and Gardner entered a plea of guilty to stealing $25,000 or more from PCAD and forgery, with a 10-year prison sentence.
Rank filed suit against PCAD and the four individual board members alleging negligent supervision of Gardner, negligence, malicious prosecution and indemnification under PCAD’s bylaws for the attorney’s fees and expenses she incurred.
On cross motions for summary judgment, the trial court awarded Rank $33,667.72 for attorney’s fees and costs incurred in defending the criminal charges against her and sided with the defendants on her other claims.
Both parties appealed.
In an opinion authored by Judge Thomas N. Chapman — and joined by Judges Mark D. Pfeiffer and Alok Ahuja — the court affirmed in part and reversed in part.
The individual board members were entitled to summary judgment based on official immunity and did not waive that immunity by failing to comply with PCAD bylaws, the court said.
According to Rank, the board members waived their immunity when they failed to obtain certain bonds as required by section 190.075 and PCAD’s own bylaws, but the court disagreed.
“Rank’s argument is entirely misplaced,” the court wrote, as the cases she relied upon featured statutes that contained an express abrogation of official immunity without the applicable bond. “In this instance there is no express waiver/abrogation of official immunity in section 190.075, nor the PCAD bylaws. Likewise, nothing in the indemnification provision of the PCAD bylaws waives official immunity.”
Nor was the court persuaded that the failure of the board members to perform several ministerial duties required by the bylaws waived their official immunity.
“Here, the duties that Individual Defendants allegedly failed to perform were not clerical, ministerial, or ‘rubber stamp’ acts,” the court said. “Individual Defendants had discretion on how the acts were to be completed and by whom. It is not enough that the bylaws required certain actions; rather, the issue is whether Individual Defendants had any discretion in carrying out the acts.”
Because the tasks completed by the board members involved discretion, the ministerial exception of official immunity did not apply.
The court also rejected Rank’s position that official immunity was inapplicable because the board members acted with bad faith or with malice.
Rank’s complaint “was devoid of any factual allegations that Individual Defendants intended to cause injury to Rank,” the court wrote. “At most, Rank’s pleading alleged, and the summary judgment record showed, only that Individual Defendants may have willfully and wrongfully failed to follow the PCAD bylaws.”
The court affirmed summary judgment in favor of the board members.
On PCAD’s appeal of Rank’s indemnification award, the court reversed as neither party established that it was entitled to judgment as a matter of law.
“Rank’s criminal prosecution and subsequent dismissal alone … did not answer the question of whether Rank reasonably incurred the expenses from her criminal case by reason of her service in her capacity as a PCAD employee,” the court said.
If Rank participated in the theft of PCAD funds or knowingly received the stolen funds for her benefit, her actions were not done in service of her employment with PCAD. On the other hand, pursuant to the indemnification provision, an employee who incurs expenses related to a stealing charge might be eligible for reimbursement if they can prove that they did not knowingly participate in or knowingly benefit from the conduct in an in any manner and were only implicated in the events because of their status as an employee.
Further, the parties ignored the reasonable inference that might have been drawn from the undisputed evidence of Rank’s romantic relationship with and cohabitation with Gardner throughout the entire time he was stealing from PCAD.
The court reversed summary judgment in favor of Rank for indemnification and remanded.
Laurie S. Ward of Spangler Ward in Sedalia, who represented Rank, declined to comment on the case, citing the continuing litigation.
Jefferson City attorney Christopher P. Rackers of Schreimann, Rackers & Francka, who represented the defendants, did not respond to a request for comment.
The case is Rank v. Pettis County Ambulance District, No. WD87706.
