author: FRANCIS J. BOYLE, Chief Judge.

text:
    Frederick JOSLYN, Jr. v. Henry S. KINCH, et al.
    No. 83-0824-B.
    United States District Court, D. Rhode Island.
    July 25, 1985.

      William Y. Chaika, Pasco F. Loffredo, Chaika and Loffredo, Cranston, R.I., for plaintiff.
    Steven E. Snow, Tillinghast, Collins & Graham, Providence, R.I., for defendant.
   FRANCIS J. BOYLE, Chief Judge.

OPINION

In this action Frederick Joslyn, Jr. sues Henry S. Kinch, both individually and in his capacity as Mayor of the City of Pawtucket; Albert R. Papineau, in his capacity as Treasurer and Finance Director of the City of Pawtucket; and the City of Pawtucket under the Civil Rights Act, 42 U.S.C. § 1983, alleging that the Defendants violated his constitutional rights to freedom of speech and association, as well as procedural and substantive due process, in attempting to terminate his employment as Director of Accounts for the City of Pawtucket. Plaintiff seeks money damages and injunctive relief.

Mr. Joslyn received a Bachelor of Arts degree in Economics from Rutgers University in 1973. He was employed by the City of Pawtucket on December 6, 1973. In January of 1977 he became Director of Accounts in the Finance Department of the City. In July of the same year he satisfactorily completed his probationary period in the position, and was accorded full status.

The job of Director of Accounts is a full-time position in the classified service of the City. In the Plaintiff’s capacity as Director of Accounts he supervises nine employees, who have responsibility for the financial information of the City. The work of the Director of Accounts includes the administration and direction of the accounting program, including budgetary and general accounting; the direction of major accounting activities; the development and maintenance of manuals of accounts; and the preparation and submission of financial reports. The Director of Finance is charged with the maintenance of all city accounting records, and thus supervises the Director of Accounts.

In 1977 Mr. Joslyn received a Juris Doctor degree from the New England School of Law and was admitted to practice as a member of the Bar of the Supreme Court of the State of Rhode Island in 1979. Although he continued in his position as Director of Accounts, after.1979 the City took advantage of Mr. Joslyn’s newly acquired talents. Following its election to become self-insured under the Rhode Island Workers’ Compensation Law, the City was represented by Plaintiff before the Workers’ Compensation Commission. The Plaintiff also conducted labor negotiations for the City, represented the City in grievance hearings and appeared before the Rhode Island Department of Employment Security with respect to employee claims.

On December 15, 1983 Mr. Joslyn was notified in writing by the Finance Director, Defendant Albert R. Papineau, that the position of Director of Accounts would be eliminated as of January 1, 1984. The body of the letter read as follows:

Due to reorganization in the Finance Department and the necessity to implement cost saving measures, the position of Director of Accounts will be dropped as of January 1, 1984.
This personnel change is one of several being implemented and [sic] the administration’s continuing effort to streamline city government and cut costs.
We would like to thank you for your services to the City of Pawtucket.

Plaintiff then filed an application for a temporary restraining order on December 22, 1983 asking this Court to enjoin Defendants from terminating Plaintiff as Director of Accounts. On the following day, Defendants agreed to the entry of a consent order reinstating Plaintiff as Director of Accounts until the Court held a full hearing, and temporarily rescinding the notice of December 15, 1983. Thus Plaintiff has been continuously employed as the Director of Accounts for the City.

On February 3, 1984 the City followed up its letter of December 15, 1983 with correspondence from Defendant Papineau which reiterated the fact that the position of Director of Accounts was being abolished because of a reorganization of the Finance Department and the necessity of implementing cost-saving measures. The letter acknowledged the fact that the effective date of the abolition had been delayed pending action by the Court, but expressed the City’s intention to effect the position change as soon as it was permitted. The final paragraph read as follows:

Due to the abolition of the position of Director of Accounts, you shall be laid off as a classified City employee to take effect on the same date that the position of Director of Accounts is abolished. Your name shall be placed on the eligibility list for re-employment if and when a position meeting your skills, training and experience becomes available. Moreover, I hereby certify that this lay off is not for reasons reflecting discredit upon your services as an employee.

It is Plaintiff’s contention that his termination was in retaliation for the exercise of the rights guaranteed to him by the First Amendment to the United States Constitution. He claims he was discharged because of his practice of furnishing information and supporting opinions to a member of the City Council, Mr. Sarault, who was described as a thorn in the side of the Administration. The essence of Plaintiff’s argument is that the information which he furnished to Councilman Sarault was used by the Councilman to embarrass the Administration, to the Administration’s chagrin. The matters involved included the proposed sale of a school building, the leasing of office space by the City, the adjustment of a tax levy ceiling, the issuance of tax abatements by the City, the elimination of vacant positions from the City pay plan, and the accounting method used by the City in determining tax revenues received after the end of the fiscal year but applied as revenue within the fiscal year to reduce or eliminate deficit spending.

In support of his contentions, the Plaintiff points to several facts. First, he highlights the fact that it was almost two months after his intended termination before the City personnel ordinance was complied with which required the certification that Plaintiff’s termination was not for reasons reflecting the quality of his work. Plaintiff also testified that in the fall of 1983 the Mayor of the City of Pawtucket, in a conversation with Councilman Sarault, referred to “your friend Joslyn” and Mr. Church, who was the Personnel Director of the City, advised the Plaintiff that “Brian Sarault had gone too far”. Moreover, the Plaintiff believes that his contentions are supported by the fact that a directive was issued by the Mayor on December 2, 1983 to all City employees that communications between members of the City Council and the Administration were to take place only between the heads of departments and the Council members involved, with a notice of the communication to be forwarded to the Mayor. Other evidence cited by the Plaintiff includes the following: that after Plaintiff’s termination, an employee of the Accounting Department who was the wife of the Mayor’s Administrative Assistant became Chief Accounting Clerk; that on the day of his termination the City moved with remarkable speed to demolish partitions separating his office from other employees of the Department; and that after his termination, the Finance Director advised him that he was a “victim of politics.”

The Plaintiff further claims that the abolition of his position as Director of Accounts was made in bad faith, to get rid of him as a person rather than his position. He argues that his position was created by a 1955 city ordinance which established a pay plan for the City of Pawtucket. As a result, Plaintiff avers that his position can be lawfully abolished only by the authority which created it — that is, by the Pawtucket City Council. Plaintiff also contends that his due process rights were violated because the procedures specified in the City of Pawtucket’s Personnel Rules and Regulations for terminating an employee were not followed.

The Defendants deny Plaintiff’s allegations and propose quite a different scenario. They describe the Plaintiff as a “lawyer in sheep’s clothing,” suggesting that he abandoned any accounting duties in the Department of Finance other than those of a supervisory nature and took on legal duties for the City, as well as conducted his own private practice of law. Although this practice had been tolerated by a previous Finance Director, Mr. Papineau was not prepared to accept this behavior.

These contentions were documented by Defendant Papineau’s testimony. According to Mr. Papineau, the Plaintiff delegated many of his duties as Director of Accounts to his subordinates; left the majority of the City’s budget preparation to Defendant Papineau, rather than actively assisting him; and, when the Plaintiff did produce reports for him, set them out in a format which could not be utilized, so that Papineau had to redo them. Moreover, Mr. Papineau testified that the limited duty which the Plaintiff performed regularly, supervision of his department, was not performed during Plaintiff’s frequent out-of-office trips. Both Defendant Papineau and Plaintiff agreed that the Plaintiff spent a large portion of his regular working hours out of his office on legal matters, with some of this time being devoted to Plaintiff’s private law practice.

Mr. Papineau contends that the Mayor ultimately adopted his suggestion that the position of Director of Accounts be eliminated because it was unnecessary. Mr. Papineau testified he was instructed by the Mayor to notify Mr. Joslyn in accordance with the December 15, 1983 letter, a letter which actually was drafted in the Mayor’s office. Defendant Papineau argues that the Plaintiff overstates the degree of embarrassment which the Plaintiff caused the Mayor. Mr. Papineau contends that, for the most part, no one was aware of the extent of the communications between Mr. Joslyn and Councilman Sarault, and that in any event the information was public information which was neither controversial nor scandalous.

According to Raymond Church, Personnel Director for the City, the elimination of Plaintiff’s position was part of an ongoing reorganization of City government. Mr. Church testified that thirty positions were abolished between 1982 and 1985. He stated that this was accomplished by eliminating the Department of Community Affairs, reducing the staff on each garbage truck from three to two persons, closing the City incinerator, reducing the staff in the police and fire departments, abolishing parking meter attendants, reducing the number of supervisors and part-time employees in the Parks and Recreation Department, initiating an early retirement program, and failing to fill nonessential jobs which were vacated by general attrition. Mr. Church further testified that the Plaintiff was not the only person affected by the mid-December 1983 reorganization. At about this same time the positions of Director of Housing Standards, and Director and Assistant Director of the Redevelopment Authority were eliminated; the position of Chief Housing Inspector was created; the Redevelopment and Planning Departments were merged under the Planning Director; and an accountant was transferred from the Accounting Department to the Water Department.

Without becoming immersed in all of the details, it was abundantly clear that throughout 1983, prior to December 2, Councilman Sarault utilized information furnished by Plaintiff to raise a number of issues concerning the Administration’s activities which were reported in the press. Plaintiff's unrefuted testimony was that he did not furnish any further information after the memorandum of the Mayor dated December 2, 1983 directing that communications with city departments by members of the City Council be through the department head.

It was equally apparent that Plaintiff did not devote his entire 35-40 hour work week to the duties of Director of Accounts; rather, he spent'a good portion of it upon legal matters. Furthermore, from the testimony it was obvious that Mr. Joslyn’s job was not the only job in the City government to be eliminated during Mayor Kinch’s Administration.

The issues the Court now must address are (1) was Plaintiff’s employment terminated in retaliation for the exercise of his First Amendment rights; and (2) was Plaintiff accorded due process.

FIRST AMENDMENT ISSUES

Freedom of Speech

In order to prove that a plaintiff’s employment was terminated in retaliation for exercising his right to free speech, the plaintiff must show that his conduct was constitutionally protected. Mount Healthy City Board of Education v. Doyle, 429 U.S. 274, 287, 97 S.Ct. 568, 576, 50 L.Ed.2d 471 (1977). Then the plaintiff must show that this conduct was a “substantial factor” or “motivating factor” in the defendant’s decision to terminate his employment. Id. Even if the plaintiff succeeds in proving these two elements of his case, he may not recover if the defendant demonstrates by a preponderance of the evidence that it would have reached the same decision even in the absence of the protected conduct. Id. Thus a plaintiff may recover for a First Amendment violation only if the court determines that the defendant would not have terminated plaintiff’s employment “but for” the plaintiff’s exercise of his First Amendment rights. Givhan v. Western Line Consolidated School District, 439 U.S. 410, 417, 99 S.Ct. 693, 697, 58 L.Ed.2d 619 (1979).

The Court first will address the question of whether Plaintiff’s speech is protected. The First Amendment protects the right of every citizen to express his views without government regulation. See, e.g., Givhan, supra at 415, 99 S.Ct. at 696; Smith v. Harris, 560 F.Supp. 677, 692 (D.R.I.1983). However, when the citizen is a public employee, the interests of the employee as a citizen in commenting upon matters of public concern must be balanced against the interest of the government as an employer in promoting the efficiency of the public services it performs through its employees. See Pickering v. Board of Education, 391 U.S. 563, 568, 88 S.Ct. 1731, 1734, 20 L.Ed.2d 811 (1968).

Although the Supreme Court has cautioned against developing a general standard for determining whether speech is protected, it has set forth some factors which should be considered in making this determination. Id. at 569, 88 S.Ct. at 1735. The Court has stated that, usually, critical comments on matters of public concern which are substantially correct are protected by the First Amendment and may not furnish grounds for an employee’s dismissal. Id. at 570, 88 S.Ct. at 1735. An evaluation of the following factors may, however, dictate a different result:

(1) whether it [the speech] was directed against those with whom plaintiff is regularly in contact such that it might impede harmony among coworkers or the ability of supervisors to maintain discipline; (2) whether plaintiff’s activity has a detrimental impact on those with whom he must maintain personal loyalty and confidence for the fulfillment of his job responsibilities; and (3) with regard to erroneous statements concerning matters of public concern, whether such statement impedes plaintiff’s performance of his daily duties or the regular operation of the [business] generally.

McDonough v. Trustees of the University System of New Hampshire, 704 F.2d 780, 784 (1st Cir.1983) (citing Pickering v. Board of Education, supra, 391 U.S. at 569-73, 88 S.Ct. at 1735-37). If private, rather than public, expression is involved, a fourth relevant consideration is the manner, time and place of the speech. Connick v. Myers, 461 U.S. 138, 152-53, 103 S.Ct. 1684, 1692-93, 75 L.Ed.2d 708 (1983); Givhan, supra, 439 U.S. at 415 n. 4, 99 S.Ct. at 696 n. 4.

Whether an employee’s speech deals with a matter of public concern is determined by the content, form and context of the statement. Connick v. Myers, supra, 461 U.S. at 147-48, 103 S.Ct. at 1690-91. Here the speech involved, that is, the information provided by Plaintiff to Councilman Sarault, concerned subjects of public interest. As already noted, these matters ranged from the proposed sale of a school building to the accounting method used by the City in determining tax revenues. Neither party to this suit contends that the information supplied by the Plaintiff was incorrect. The Court finds that the information was accurate in all material respects so as to be protected.

The information was not made public by the Plaintiff himself, even though the essence of Plaintiff’s expression was made public by Councilman Sarault. Thus the speech involved can be argued to be public, because it was communicated to the public by a third person; private, because the information originally was conveyed in private; or both. Neither party to the suit addresses this issue. Regardless of the resolution of the public-private issue, the outcome is the same. After examining the four considerations influencing whether speech is protected, it is clear the expression here is protected.

Examining the first consideration, the speech here was not directed against those with whom Plaintiff was regularly in contact, that is Plaintiff’s co-workers or his immediate superior, Defendant Papineau. Moreover, any criticism of Mayor Kinch’s Administration which might have been implicit in the information supplied by Plaintiff to Councilman Sarault was indirect at best, since Plaintiff merely gave the Councilman documentation which the Councilman used to support the Councilman’s own criticisms of the Administration.

As for the second consideration, the First Circuit has held that in order to show Plaintiff’s expression had a negative impact on those with whom he must maintain personal loyalty and confidence to perform his job, Defendants initially must demonstrate that Plaintiff needed to preserve a relationship of personal trust and loyalty with his employer or supervisor to properly perform his job responsibilities. Brasslett v. Cota, 761 F.2d 827, 845 (1st Cir.1985). Here no such showing was, or could have been, made. Plaintiff was insulated from regular contact or the development of a confidential relationship with the Mayor, who arguably was impacted by his indirect criticism, because the chain of command contained one link, Finance Director Papineau, between Plaintiff and the Mayor.

Since the speech involved here has been determined to be accurate, the third consideration, whether the Plaintiff’s statements impeded the performance of his daily duties or the regular conduct of the City’s business, need not detain the Court. It apparently did not.

If it is assumed that the expression in this case was private, the fourth consideration as to the propriety of the manner, time and place of the speech’s conveyance must be examined. Plaintiff, a public employee, distributed information on matters of public interest to an elected official. This information was not supplied in violation of any established procedure. See Connick v. Myers, supra, 461 U.S. at 153, 103 S.Ct. at 1693. Instead, the dissemination halted after the December 2 mayoral memorandum. The information often was conveyed during Plaintiff’s working hours, but its conveyance arguably was within Plaintiff’s job responsibilities. Cf id. Finally, the information was not given out in the context of a personal dispute between Plaintiff and the City Administration, see id., nor did Plaintiff personally confront his superior. See Givhan, supra, 439 U.S. at 415 n. 4, 99 S.Ct. at 696 n. 4. Thus the speech was conveyed in such a fashion as to be protected.

To summarize, the information conveyed by Plaintiff concerned areas with which the Plaintiff was more familiar than most by virtue of his training as an accountant and his employ by the financial branch of the City government. To paraphrase the Supreme Court, it is essential that the public employees who are most likely to have informed and definite opinions on matters of public concern are able to speak freely on these issues without fear of retaliatory dismissal. Pickering v. Board of Education, supra, 391 U.S. at 572, 88 S.Ct. at 1736; accord Pilkington v. Bevilacqua, 439 F.Supp. 465, 474 (D.R.I. 1977), aff'd, 590 F.2d 386 (1st Cir.1979). The use to which Councilman Sarault put Plaintiffs information may well have caused the City Administration some discomfort. But,

an employee’s First Amendment rights to comment on and criticize his employer’s actions shall not yield to an employer’s interests in averting embarrassment. Were it otherwise, of course, an employee would have no right at all to engage in public criticism. That is a notion that the Supreme Court long ago flatly rejected.

Brasslett v. Cota, supra at 846.

Because Plaintiff has shown that his communications were protected, the Court must determine whether Plaintiff successfully has demonstrated that his conduct was a substantial or motivating factor in Defendants’ decision to terminate Plaintiff's employment. He has not. From the evidence presented at trial the Court finds that, although Defendants may not have been overjoyed by the fact that Plaintiff furnished Councilman Sarault with information which documented the Councilman’s criticisms of the Administration, the primary reason for dismissing the Plaintiff was because of the elimination of his position as part of an ongoing reorganization within the Pawtucket City government.

The position of Director of Accounts, as filled by the Plaintiff, was ripe for reorganization. Plaintiff neither spent a full work week engaged in the City’s business, nor did those accounting duties which the Plaintiff performed occupy the whole of his City work schedule. Instead, the Plaintiff spent City time on his own private law practice, and rather than performing all the functions set out in the job description of Director of Accounts, Plaintiff acted as an attorney and labor negotiator for the City. Because of Plaintiff’s only part-time devotion to his accounting duties, his subordinates and supervisor, Defendant Papineau, took over a large portion of his responsibilities. It then became obvious that the position of Director of Accounts was unnecessary, and that its abolition would streamline the City government, as well as benefit it financially.

A public employer is not prohibited from reorganizing its operations so as to eliminate unnecessary positions. See Landry v. Farmer, 564 F.Supp. 598, 606 (D.R.I.1983). The City of Pawtucket exercised its option in abolishing Plaintiff’s position not because of his First Amendment activities, but because his position was unnecessary.

Assuming, arguendo, that Plaintiff’s protected communications were a motivating factor in abolishing his position, Defendants have shown that they would have eliminated the position even if Plaintiff had not engaged in the protected conduct. The Administration had been actively reorganizing the City’s government, eliminating positions which it deemed extraneous. Cf. Pilkington v. Bevilacqua, supra at 477 (discharge decision did not occur at a time when a number of personnel decisions were made). A Director of Accounts with the duties delineated in its job description was no longer necessary because many of the tasks already were being performed elsewhere. Thus the position went the way of the parking meter attendants and incinerator personnel.

Freedom of Association

The same factual determination is required to show that a plaintiff’s employment was terminated in retaliation for the exercise of his freedom of association as for the exercise of his freedom of speech. Rosaly v. Ignacio, 593 F.2d 145, 149 (1st Cir.1979); Landry v. Farmer, 564 F.Supp. 598, 604-05 (D.R.I.1983). Thus the plaintiff must show that his associational conduct was constitutionally protected and that this was a “substantial” or “motivating” factor in the defendant’s decision to discharge him. Rosaly v. Ignacio, supra at 149; see also Landry v. Farmer, supra at 604. If the plaintiff successfully meets his burden, in order for a defendant to prevail it must show by a preponderance of the evidence that it would have reached the same decision regardless of the protected conduct. Rosaly v. Ignacio, supra at 149; Landry v. Farmer, supra at 604-05.

The First Amendment guarantees all citizens a right to associate freely with others, Griswold v. Connecticut, 381 U.S. 479, 483, 85 S.Ct. 1678, 1681, 14 L.Ed.2d 510 (1965), as well as to speak freely. Usually the issue of whether a public employee was terminated in retaliation for his associations arises in a political context, with the plaintiff-employee being discharged because of his lack of affiliation with the political party then in power. See Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980); Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976). The Supreme Court has held that a dismissal because of political affiliation is proper only if the defendant can demonstrate that party affiliation is an appropriate requirement for the effective performance of the job, as is often the case in confidential or policymaking positions. Branti v. Finkel, supra, 445 U.S. at 518, 100 S.Ct. at 1294; see also Elrod v. Burns, supra, 427 U.S. at 367, 96 S.Ct. at 2686.

Organizations established for the social, legal and economic benefit of their members also are encompassed within the concept of freedom of association. Griswold v. Connecticut, supra, 381 U.S. at 483, 85 S.Ct. at 1681, and cases cited therein. Here the Plaintiff claims he was discharged for associating with Councilman Sarault, a political adversary of the City Administration. Although this political and social alliance does not bear the imprimatur of a recognized organization, because of the broad interpretation given the associations within the First Amendment’s purview, it is apparently protected.

Assuming that the association was a political alliance and thus constituted organized opposition to the City’s Administration, an allegation implied in the complaint but not clearly shown at trial, Defendants did not demonstrate that the nature of Plaintiff’s job was such as to exempt him from the First Amendment’s protections. Defendants did not show that the job of Director of Accounts requires Plaintiff to be politically aligned with the Administration. Plaintiff, as Director of Accounts, is not in a confidential relationship with the Mayor, nor is he responsible for making policy or communicating the Administration’s position and views to the public. Accord Pilkington v. Bevilacqua, 439 F.Supp. 465, 467 (D.R.I.1977), aff'd, 590 F.2d 386, 388 (1st Cir.1979). Rather, if any policy-making decisions or communications on behalf of the City are to made by Plaintiff, they are subject to the approval of his superior, the Finance Director. The primary responsibility of the Director of Accounts, as set forth in its job description, is to maintain the City’s accounting records under the direction of the Finance Director. According to the job description’s specifications, any significant change in accounting procedures or practices has to be approved by the Finance Director, and procedure and policy problems are to be addressed through other high level departmental officials.

Since the Court has found that Plaintiffs association with Councilman Sarault is protected by the First Amendment, the next step in the First Amendment analysis is to determine whether Plaintiff has shown that this association was a substantial factor in Defendants’ decision to discharge him. Plaintiff clearly has not met his burden. As was noted in the context of Plaintiff’s free speech claim, the position of Director of Accounts was eliminated because of reorganization within the City government, not in retaliation for the exercise of any of Plaintiff’s First Amendment rights. Moreover, Defendants have demonstrated that they would have abolished Plaintiff’s position even if he had not engaged in any protected conduct.

DUE PROCESS ISSUES

The due process clause of the Constitution provides that a person cannot be deprived of life, liberty, or property without constitutionally adequate procedures. Cleveland Board of Education v. Loudermill, — U.S. ---, 105 S.Ct. 1487, 1493, 84 L.Ed.2d 494 (1985). In order for the Court to consider whether an employee was discharged without due process of law, it must first find the employee has a property right in continued employment. Id., 105 S.Ct. at 1491. Such a property interest is not created by the Constitution, but is established by existing rules or understandings stemming from an independent source such as state law. Id.; Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). Courts generally have recognized a property right if, “by statute, rule or contract, express or implied, the employee can only be fired for ‘cause’.” Ventetuolo v. Burke, 470 F.Supp. 887, 891 (D.R.I.1978), aff'd, 596 F.2d 476, 480-81 (1st Cir.1979). See also Bishop v. Wood, 426 U.S. 341, 344, 96 S.Ct. 2074, 2077, 48 L.Ed.2d 684 (1976); Lynch v. Gontarz, 120 R.I. 149, 157, 386 A.2d 184, 189 (1978). A unilateral expectation by the employee of continued employment, Board of Regents v. Roth, supra, 408 U.S. at 577, 92 S.Ct. at 2709, or a situation where an employee serves at the public employer’s pleasure is not sufficient to give rise to a property interest. Bishop v. Wood, supra, 426 U.S. at 345-47, 96 S.Ct. at 2077-79; Ventetuolo v. Burke, 596 F.2d 476, 481 (1st Cir.1979).

Here Plaintiff Joslyn has the requisite property interest in his job as Director of Accounts to give rise to a right to due process. He is a classified employee who has completed his probationary period. The City Charter provides that any dismissal of an employee who has completed his probationary period of service from such a position in the personnel system “shall be for cause.” Pawtucket, R.I. Charter art. VII, § 7-101. Since the general principle is that when public employees only can be dismissed for cause they have been given a property interest in their employment, it is clear Mr. Joslyn has a property interest in his position of Director of Accounts. Accord Durkin v. Personnel Board, 83 R.I. 353, 356, 116 A.2d 456, 457 (1955).

Once a property interest in continued employment has been found, an employee cannot be deprived of this employment without appropriate process. Cleveland Board of Education v. Loudermill, supra, 105 S.Ct. at 1493. This due process right takes two forms. It consists of a right to both procedural and substantive due process. The Court will first address the procedural due process issue.

Procedural Due Process

The Supreme Court has repeatedly admonished that “due process is flexible and calls for such procedural protections as the particular situation demands,” Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 2600, 33 L.Ed.2d 484 (1972). "[Sjome form of hearing is required before an individual is finally deprived of a property interest,” and the hearing has to occur “ ‘at a meaningful time and in a meaningful manner.’ ” Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 901, 47 L.Ed.2d 18 (1976) (quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965)).

Here Plaintiff does not argue that the procedures provided him by the City of Pawtucket’s Charter and its Personnel Rules and Regulations are inadequate, so as to violate the procedural guarantees of the Fourteenth Amendment to the Constitution. Accord Casey v. DePetrillo, 697 F.2d 22, 23 (1st Cir.1983); cf. Cleveland Board of Education v. Loudermill, supra, 105 S.Ct. at 1490 (plaintiffs alleged procedure provided by Ohio statute was unconstitutional on its face). If he did, his claims clearly would fall within both the purview of a § 1983 action, and the jurisdiction of this Court. Instead, Plaintiff contends that the Director of Accounts position was abolished by a branch of the City government which was not so empowered, and that the City terminated his employment without complying with the procedures set out in the City’s Personnel Rules.

The issue of which branch of the City government is authorized to abolish the position of Director of Accounts, or any other position in the Pawtucket government, has not been addressed by any Rhode Island court in a published decision. The two cases of which the Court is aware involving the layoff of a Pawtucket city employee concern issues arising after the position was eliminated. See LeFebvre v. Kando, 119 R.I. 780, 383 A.2d 589 (1978) (use of efficiency rating in determining which employee is to be laid off); Durkin v. Personnel Board, supra, 83 R.I. at 359-60, 116 A.2d at 459 (petitioner’s position abolished making it impossible, for City to reinstate him pursuant to court order). This undecided issue is one more properly addressed by a Rhode Island state court.

Since the procedure provided by the City of Pawtucket’s Personnel Rules and Regulations varies depending upon an employee’s status as “dismissed” or “laid off”, see Pawtucket, R.I., Personnel Rules & Regulations, Rule XIV, §§ 2, 5-6 (1977), only then will it be apparent if the City complied with the Rules’ procedures. It is within the context and procedures of the City’s Personnel Rules and Regulations that this issue ought to be determined. This Court is not a super personnel board.

Substantive Due Process

Substantive due process protects a person from another’s arbitrary and capricious actions in depriving him of his property. Ventetuolo v. Burke, 470 F.Supp. 887, 891 (D.R.I.1978). Plaintiff alleges in his complaint that he was deprived of substantive due process with respect to his job, without ever explaining this averment more fully.

Under these circumstances it is sufficient to say that Plaintiff’s allegation is unfounded. The Court finds that neither the Defendants’ actions in, nor their reasons for abolishing the position of Director of Accounts and laying off Plaintiff were arbitrary and capricious. See Drown v. Portsmouth School District, 451 F.2d 1106, 1108 (1st Cir.1971) (test for determining whether reasons are arbitrary and capricious).

Judgment shall be entered for the Defendants with costs. Defendants shall prepare a form of Order.

SO ORDERED.

      . Only while the Plaintiff was Acting Finance Director, a position which he held from May through December of 1982, was there a possibility his political associations were exempted from First Amendment coverage, and that time has long since passed.

      . Defendants curiously argue that the fact Plaintiff was performing legal work for the City makes his position that of a political appointee, not subject to the First Amendment’s associational protection. Defendants cannot rely on the fact that Plaintiff supplied legal services to the City to support its claim that Plaintiff's position as Director of Accounts is without First Amendment associational protections after maintaining that the reason Plaintiff’s job was abolished was because he had time to, and did, provide legal expertise to the City.


source: Caselaw Access Project

author: CALDWELL, District Judge.

license: Public Domain

text:
    William I. KAUFMAN, Plaintiff, v. McCRORY STORES DIVISION OF McCRORY CORP., (N.Y.) sub of Rapid American Corp. (Del.); Helena L. Bowes, Individual; Geiger & Loria Reporting Service, Inc. (Penna); Defendants.
    Civ. A. No. 85-0504.
    United States District Court, M.D. Pennsylvania.
    July 25, 1985.

      William I. Kaufman, Harrisburg, Pa., pro se.
    James R. Ronca, Schmidt & Ronca, Harrisburg, Pa., for Bowes and Geiger & Loria.
    Patricia A. Butler, York, Pa., for McCrory Corp and Rapid-American.
   MEMORANDUM

CALDWELL, District Judge.

I. Introduction.

Plaintiff, William Kaufman, has filed a pro se complaint, alleging that defendants violated his civil rights under 42 U.S.C. § 1983. Defendants, Geiger & Loria Reporting Service (Geiger & Loria) and Helena Bowes, have moved to dismiss the complaint for failure to state a claim. Defendants, McCrory Stores Division of McCrory Corp. (McCrory Corp.) and Rapid American Corp., after filing an answer, have moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c).

The main issue presented is whether a privately employed stenographer who is also a notary public acts under color of state law when she records and transcribes the depositions of witnesses as part of the discovery process in a civil action.

II. Background.

Plaintiffs claim arises from two depositions taken in preparation for a separate lawsuit brought by him against Penn Needle Art Co. in the Court of Common Pleas of Allegheny County, Pennsylvania for unpaid sales commissions. Defendant, Helena Bowes, a stenographer employed by defendant, Geiger & Loria, administered oaths to the deponents, recorded their testimony, and was responsible for transcribing the depositions. Defendant McCrory Corp., a subsidiary of defendant, Rapid-American Corp., employed the two deponents. Plaintiff was not satisfied with the outcome of the state court action and blames the defendants. He asserts that the two McCrory Corp. employees falsely testified at their depositions and Bowes omitted, and changed, portions of the testimony in the transcription. Plaintiff claims all the defendants conspired together to accomplish these goals which violated his rights under the Fourteenth Amendment.

III. Discussion.

42 U.S.C. § 1983 provides relief from conduct committed by persons acting under color of state law and violative of federally protected rights. Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981). While plaintiff alleges a violation, inter alia, of his right to due process, we believe that he has failed to show that defendants acted under color of state law. Plaintiff tries to satisfy the latter requirement by relying upon Bowes’s status as a notary public and as a stenographer who plays a part in judicial proceedings. He also points out that Virginia Loria, the owner of Geiger & Loria, is also a notary public and was formerly employed as a court reporter in this court. Hence, in his view, they are state officials for the purposes of section 1983. With regard to the other defendants, he claims that their partaking in the conspiracy with these state actors makes them liable as well. See Unger v. Hacker, 578 F.Supp. 143 (E.D.Pa.1983).

Plaintiff cannot look to Virginia Loria to supply the necessary state action here. First, she had no personal involvement in the conduct forming the basis of plaintiffs claim. Thus, it is irrelevant that she is a notary public or court reporter herself. See Prochaska v. Fediaczko, 473 F.Supp. 704 (W.D.Pa.1979). Second, her former employment by the federal government cannot constitute state action in the present. Finally, despite plaintiff's contention to the contrary, only respondeat superior could involve Loria in this action and that doctrine is inapplicable to civil rights claims. See United States ex rel. Flores v. Cuyler, 511 F.Supp. 386 (E.D.Pa.1981).

Plaintiff’s argument concerning Bowes is more plausible. She is a notary public and, of course, unlike Loria, had personal involvement in the conduct giving rise to plaintiff’s complaint. In Pennsylvania, qualified individuals are eligible for the “office of notary public,” The Notary Public Law, Act of August 21, 1953, P.L. 1323, § 3, as amended, 57 P.S. § 149 (Purdon Supp.1985). Notaries public are commissioned by the Secretary of the Commonwealth, 57 P.S. § 151 (Purdon Supp.1985), for a term of four years. 57 P.S. § 148. Their duties include the power to administer oaths and affirmations, id. at § 162, and to take depositions. Id. at § 164. Superficially, it would appear that Bowes was thus acting under color of state law when she was recording the depositions, and, consequently, subject to suit under the Civil Rights Act of 1871. Based upon case law, however, we must conclude otherwise.

In Polk County v. Dodson, 454 U.S. 312, 102 S.Ct. 445, 70 L.Ed.2d 509 (1981), the United States Supreme Court reiterated the well established standard for determining when a person has acted under color of state law for the purposes of section 1983:

In United States v. Classic, 313 U.S. 299, 326, 61 S.Ct. 1031, 85 L.Ed. 1368 (1941), this Court held that a person acts under color of state law only when exercising power “possessed by virtue of state law and made possible only because the wrongdoer is clothed with the authority of state law.”

Id. at 317-18, 102 S.Ct. at 449, 70 L.Ed.2d at 516; see also Henig v. Odorioso, 385 F.2d 491 (3d Cir.1967), cert. denied, 390 U.S. 1016, 88 S.Ct. 1269, 20 L.Ed.2d 166 (1968); Augenti v. Cappellini, 84 F.R.D. 73 (M.D.Pa.1979).

Using the foregoing test, the Court held that a public defender, a full time employee of the petitioner county, was not acting under color of state law, and thus not amenable to suit under section 1983, when she withdrew as counsel on respondent Dodson’s appeal of a state criminal conviction. The Court concluded that:

In this case the Offender Advocate for Polk County assigned Martha Shepard to represent Russell Dodson in the appeal of his criminal conviction. This assignment entailed functions and obligations in no was dependent upon state authority. From the moment of her appointment, Shepard became Dodson’s lawyer, and Dodson became Shepard’s client. Except for the source of payment, their relationship became identical to that existing between any other lawyer and client.

Id. 454 U.S. at 318, 102 S.Ct. at 449, 70 L.Ed.2d at 516 (emphasis added).

Polk County is dispositive of plaintiff’s claim here. The complaint clearly reveals that Bowes was hired in her capacity as a privately employed stenographer to record the testimony of the two deponents. Stenographers are not licensed by Pennsylvania and anyone may engage in this occupation who feels he or she has the necessary competence. Thus, just as in Polk County, there was no action under color of state law here because Bowes’s “assignment entailed functions and obligations in no way dependent upon state authority.” Id.

The issue of state action arises in this ease merely because, in accordance with custom, Bowes had obtained her commission as a notary public, so that as a matter of convenience to the litigants she could administer the oath or affirmation to the deponents. Significantly, plaintiff’s claim does not arise from these actions of Bowes which could only have been performed in her capacity as a notary public. If the claim did, then possibly state action would be present here since then Bowes would have been exercising power made possible only because she was clothed with the authority of state law. Because plaintiff is alleging, however, only that Bowes altered, and omitted portions of, the depositions, a power Bowes possessed regardless of state law, plaintiff’s section 1983 claim must fail.

We will issue an appropriate order.

      . Additionally, we note in passing that her former status as a federal employee could not, in any event, support a claim under section 1983 which redresses wrongs committed by state actors. The distinction may not be of much substance, however, since plaintiff has an equivalent cause of action directly under the federal constitution. See Shabazz v. Odum, 591 F.Supp. 1513, 1515 n. 2 (M.D.Pa.1984).

      . In Polk County, the Court suggested that there may be cases in which a public defender could be found to have acted under color of state law if the defender was acting in a capacity other than the traditional courtroom role. Id. at 324-25, 102 S.Ct. at 453, 70 L.Ed.2d at 520-21.

      . Because of our disposition of the state action issue, we need not consider defendants’ remaining arguments for not permitting plaintiff to proceed any further with this case.


author: BRIMMER, Chief Judge.

text:
    PARK COUNTY RESOURCE COUNCIL, INC., a non-profit corporation; Stan Siggins, an individual; Lloyd Zeman, an individual, Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE, United States Forest Service; Stephen P. Mealey, in his official capacity as supervisor of the Shoshone National Forest; Bureau of Land Management; Department of the Interior of the United States; Hilery Oden, in his official capacity as State Director of the Bureau of Land Management, Defendants, and Marathon Oil Company, Amerada Hess Corporation, and Rosewood Resources, Inc., Defendants-Intervenors.
    No. C85-0208-B.
    United States District Court, D. Wyoming.
    July 25, 1985.

      Patrick J. Marley, (pro hac vice), Cole & Marley,' Los Angeles, Cal, Don W. Riske, Cheyenne, Wyo., for plaintiffs.
    Richard A. Stacy, U.S. Atty., and Carole A. Statkus, Asst. U.S. Atty., Cheyenne, Wyo., Marla Mansfield, Regional Sol., U.S. Dept, of Interior, Denver, Colo., for Federal defendants.
    Stanley K. Hathaway, Hathaway, Speight & Kunz, Cheyenne, Wyo.; and Charles L. Kaiser (pro hac vice), Davis, Graham & Stubbs, Denver, Colo., for defendants-intervenors.
   MEMORANDUM OPINION

BRIMMER, Chief Judge.

This case arises from plaintiffs’ contention that the Bureau of Land Management issued an oil and gas lease, and later granted an Application for Permit to Drill (APD), in violation of the National Environmental Policy Act (NEPA), 42 U.S.C. § 4321, et seq. By the July 1, 1985 Order of this Court, plaintiffs’ motion for a Temporary Restraining Order on the granting of the APD was denied. To allow plaintiffs an opportunity to address the issues more fully, the Court then held a hearing on plaintiffs’ motion for preliminary injunction, which with the agreement of counsel, the Court consolidated into a full hearing on the merits. Fed.R.Civ.P. 65(a)(2). At the conclusion of the evidence and final arguments, the Court concluded that plaintiffs failed to carry their burden of proof both for the preliminary 'injunction and upon the merits of the case, and orally denied plaintiffs’ motion and dismissed their claims with prejudice. This memorandum opinion confirms the oral Order and more fully sets out the reasoning of the Court.

On July 9, 1982 the Bureau of Land Management (BLM) decided to issue Federal Oil and Gas Lease W-73230 to defendant-intervenors, which lease encompasses multiple-use lands in the Shoshone National Forest. The lease contains a number of stipulations and surface use restrictions which, together with applicable Department of the Interior regulations, required the conduct of additional environmental studies and approval by the United States before any exploration or development activities could be conducted on the lease. Neither plaintiffs nor any other party challenged the BLM’s proposed issuance of this lease, nor appealed the BLM decision to the Interior Board of Land Appeals (IBLA).

On June 21, 1983 intervenor Marathon Oil Company, the designated operator for the lease, submitted an Application for Permit to Drill (APD). Federal defendants prepared a draft Environmental Impact Statement (EIS) on the APD in February, 1984, and completed a second draft in October 1984 and a Final EIS in March 1985. They held public meetings to discuss these documents on September 27, 1983, October 19, 1983, March 21, 1984, April 21, 1984, May 1, 1984, May 2, 1984, and November 8, 1984. At the conclusion of this process the BLM granted intervenors a limited right to drill an exploratory oil and gas well at North Fork on an untimbered ridge located 28 miles west of Cody, Wyoming, and 26 miles east of Yellowstone National Park, access to which was to be obtained only by helicopter transport from a staging area situated on an abandoned quarry site near U.S. Highways 14, 16 and 20 about a mile or two from the drill site.

Plaintiffs appealed this decision to the IBLA, which decision is still pending. However, when the IBLA denied plaintiffs’ motion to stay the drilling pending outcome of the appeal, plaintiffs filed suit in this Court. Plaintiffs contend that the actions of the BLM and the Forest Service violated NEPA and the Endangered Species Act, 16 U.S.C. § 1531, et seq. Specifically, plaintiffs contend:

(1) That an EIS, rather than an Environmental Assessment, should have been prepared for the entire lease area,

(2) that the EIS on the APD itself is inadequate, and,

(3) that the Endangered Species Act was violated.

The Court has studied each of these issues, and concludes that plaintiffs have failed to prove their claims. Plaintiffs failed to establish irreparable harm either to themselves or the environment. Plaintiffs’ witnesses testified to some unspecified fears about inability to take hunters or sportsmen into the North Fork area, and possible problems with air and water quality. Nothing testified to by these witnesses convinced the Court that the Environmental Assessment and EIS were erroneous in concluding that there will be no irreparable harm to the environment or plaintiffs. Without such a showing, a preliminary injunction would be improper. Lundgrin v. Claytor, 619 F.2d 61 (10th Cir.1980).

Moreover, the proof clearly showed that if intervenors cannot drill quickly, they will suffer substantial losses. • Intervenors have demonstrated that they have made a substantial investment of over $1,000,000 preliminary to drilling the test well. They have also shown that unless they commit to contracting for the only known drilling rig in North America that can be disassembled to permit helicopter access, they will be precluded from conducting approved activities during the 1985 Field Season. Delays in completing these approved activities could result in losses exceeding $500,000. Also, the evidence showed that the public interest favors development of energy resources on federal lands after thorough studies have been completed and when carefully supervised restrictions are placed upon those activities. In light of this evidence the Court concluded that plaintiffs failed in their proof on both the balance of harm and public interest, which is a prerequisite for a preliminary injunction. Lundgrin, 619 F.2d at 63.

Finally, as the Court’s decision on the merits will show, the Court concluded that plaintiffs had no substantial likelihood of prevailing on the merits, and therefore the motion for preliminary injunction was denied.

Plaintiffs’ first claim is that an EIS, rather than an Environmental Assessment, should have been prepared on the entire lease. Defendants contend that this claim is barred by the 90-day statute of limitations contained in the Mineral Lands Leasing Act. The Court agrees. The statute, which is contained in 30 U.S.C. § 226-2, reads as follows:

No action contesting a decision of the Secretary involving any oil and gas lease shall be maintained unless such action is commenced or taken within 90 days after the final decision of the Secretary relating to such matter.

There is no question that the July 9, 1982 BLM decision on Federal Oil and Gas Lease W-73230 was a decision of the Secretary, and since no party appealed within 30 days pursuant to 43 CFR §§ 4.410 and 4.411, the decision was final, at the latest, on August 8, 1982. There is also no question the plaintiffs knew of the lease decision for a long time prior to their filing date in this case of June 3, 1985. Plaintiffs became aware not later than fall of 1983 that the lease had been issued without preparation of an environmental impact statement. Notwithstanding that knowledge, neither plaintiffs nor any other party challenged issuance of the lease in administrative or judicial proceedings until May 31, 1985, when the IBLA received plaintiffs’ Formal Notice of Appeal on the APD.

Even giving plaintiffs the benefit of the doubt that they were unaware of the lease in 1982 or 1983, plaintiffs’ own evidence shows that the Park County Resource Council, the plaintiff Stan Siggins and their counsel, Patrick Marley, had complained to the BLM about the legality of the lease in the initial comment period, and as of December 1, 1984 were still objecting that the EIS only covered the North Fork Well, and not the entire lease. See Plaintiffs’ Proposed Exhibit # 8.

Either May 31 or June 3, 1985 are well over 90 days from December 1, 1984. The question of whether or not an EIS was needed for the original leasing decision is therefore time-barred by 30 U.S.C. § 226-2. The purpose of this 90-day period is to establish a statute of limitations and to provide stability and remove clouds from titles to federal oil and gas leases. S.Rep. No. 1549, 86th Cong., 2d Sess. 4, reprinted in 1960 U.S.Code Cong. & Ad.News 3313, 3317; Conf.Rep. No. 2135, 86th Cong.2d Sess. 3, reprinted in 1960 U.S.Code Cong. & Ad.News 3337. Plaintiffs would have this Court rule that § 226-2 does not apply in NEPA cases, but they provide no case law to support their position. There is no exception in § 226-2 itself. The statute is clear and unambiguous that no action contesting an oil and gas lease decision shall be maintained unless taken within 90 days. It is the duty of this Court to apply the law as set down by Congress. In the absence of any ambiguity, the Court concludes that on its face § 226-2 applies to plaintiffs’ claim.

This Court has stated in a prior decision, “[predictability and certainty of title are mandatory to the entire oil and gas leasing system____ Title to thousands of oil and gas leases could be clouded by protest proceedings. Such confusion would be contrary to the expressed statutory intent of the Minerals Leasing Act.” Geosearch, Inc. v. Andrus, 508 F.Supp. 839, 845 (D.Wyo.1981). Although referring to an oil and gas lease lottery challenge, NEPA challenges could be just as devastating to the necessity for clear title. Without a statute of limitations to provide some certainty in this area, the express Congressional intent to allow oil and gas leasing in multiple-use areas would be impaired.

Even ih the absence of an express statute of limitations, the Court concludes that the equitable doctrine of laches would apply in this case. The evidence presented at the two hearings in this matter has convinced the Court that the plaintiffs not only knew of their claim, but also were so convinced that the APD would never be granted that they decided to sit on the lease EIS issue until after the decision on the APD. Although the Court sympathizes with plaintiffs’ belief that the APD decision was incorrect, it cannot condone a decision to delay in the filing of a known claim, especially when to allow that claim would so prejudice the intervenors. Jicarilla Apache Tribe v. Andrus, 687 F.2d 1324 (10th Cir.1982). Moreover, by deciding to wait for the APD decision, plaintiffs allowed their time for appeal to the IBLA to run out. 43 C.F.R. § 4.411. Under the doctrine of failure to exhaust administrative remedies, plaintiffs would again be barred from raising the issue of the need for an EIS on the original lease. Winkler v. Texoma Production Co., 758 F.2d 1360 (10th Cir.1985).

Finally, even if plaintiffs could properly raise the lease EIS issue, the Court concludes that they must fail on the merits. Under NEPA an EIS must be prepared only for major federal actions significantly affecting the quality of the human environment. 42 U.S.C. § 4332(2)(C). The threshold decision of whether or not a proposed action requires an EIS is left to the discretion of the agency, and should only be overturned by the courts if demonstrated to be arbitrary, capricious or unreasonable. Cabinet Mountains Wilderness v. Peterson, 685 F.2d 678 (D.C.Cir.1982); Hanly v. Kleindienst, 471 F.2d 823 (2d Cir.1972); cert. denied, 412 U.S. 908, 93 S.Ct. 2290, 36 L.Ed.2d 974 (1973).

Before issuing the lease the BLM studied the issue carefully. It relied on a complete Environmental Assessment in concluding that the lease issuance itself— not possible future drilling thereon — would have no significant impact on the human environment. The Environmental Assessment fully discusses all reasonable alternatives, including the alternative to refrain from lease issuance. It evaluates the potential effects of all alternatives on the environmental constituents. It identifies stipulations that may be imposed in issuance of a lease to protect the environment. The Court cannot say that this decision was arbitrary or capricious. The Court agrees with the following conclusion of the Regional Forester:

Few issued leases result in active exploratory operations. Still fewer result in discovery or production of oil or gas. The act of issuing a lease involves no physical or biological impacts. The cumulative environmental effect of lease issuance on a Region-wide basis is very small. Nov. 7, 1979 Decision Notice and Finding of No Significant Impact.

When considered in light of the Limited Surface Use Stipulation imposed on lessees, and the fact that the BLM reviewed public comment and discussed several alternatives, the Court can only conclude that the agency did its job. Courts have a limited role in reviewing agency decisions, and a decision not to prepare an EIS will only be overturned if it was not “fully informed and well considered.” Cabinet Mountains Wilderness v. Peterson, 685 F.2d at 684. Plaintiffs have not carried their burden of convincing the Court that the federal defendants failed in their duties. From its own review of the evidence, the Court concludes that the decision not to prepare' an EIS for the original lease, was sound.

Plaintiffs also contend that the EIS issued for the North Fork Well is inadequate. Again, the Court is not convinced that plaintiffs have carried their burden of proof. The lands in question are not Wilderness Areas. They are not pristine, or primitive, or even very unusual. There are many roads, including a major highway and an old gravel pit, just a short distance away. Congress has had three chances in recent years to incorporate these lands into a Wilderness Area, but each time has refused to do so, including in 1984 when the lands in question were once again classified as multiple-use areas in the Wyoming Wilderness Act. Although plaintiffs would prefer that the lease area only be used for recreational purposes, multiple-use does include oil and gas drilling.

The Final EIS identifies a full range of alternatives, including the “no action” alternative preferred by plaintiffs. It evaluates the potential environmental consequences of each of those alternatives on a whole range of environmental parameters, including air and water quality, soils and vegetation, and social and economic conditions. The EIS also specifies a series of mitigation requirements calculated to minimize any potential environmental consequences, and addresses the “worst case” scenario of a blowout.

Federal defendants also prepared a biological assessment and initiated formal consultation with the United States Fish and Wildlife Service, as contemplated by the Endangered Species Act. The U.S. Fish and Wildlife Service rendered a formal biological opinion which concluded that the proposed action would not jeopardize the continued existence of endangered or threatened species. In light of all this information, the EIS concludes that the preferred alternative is approval of the Marathon APD.

As mandated by § 706(2)(D) of the Administrative Procedure Act, courts have a very limited role when addressing the question of the adequacy of an EIS. “Judicial review of an EIS covers only the issue of whether NEPA’s procedural requirements have been met, and whether the EIS performs its primary function of presenting the decision-maker with an environmentally-informed choice.” Save Lake Washington v. Frank, 641 F.2d 1330, 1334 (9th Cir.1981). Although they point out that there is room for disagreement on the ultimate decision, plaintiffs’ contentions of specific procedural violations do not stand up under scrutiny. Despite plaintiffs’ reservations, the federal defendants clearly took the required “hard look” at the potential environmental consequences of the proposed action.

Plaintiffs contend that the North Fork EIS is inadequate because it does not consider the effects of full field development, but only discusses the one exploratory well. The first problem with this contention is that the BLM was perfectly justified in dealing with the question presented to it, and not with the speculation that oil might be discovered, and that sometime in the future an entire field could be developed. See e.g., Cabinet Mountains Wilderness v. Peterson, 510 F.Supp. 1186, 1190 (D.D.C.1981), aff'd 685 F.2d 678 (D.C. Cir.1982). If oil is discovered and future development and drilling becomes a real possibility, further study will be needed. However, at this time only one exploratory well will be drilled, and the EIS prepared regarding that well is adequate.

Moreover, even though a limited EIS would have been sufficient, the EIS study area consisted not of just the small drill site area, but of approximately 39,000 acres in the Shoshone National Forest. Final EIS, at p. 5. Appendix E of the EIS includes a complete discussion of full field development. Without the further data which will be provided by the drilling of exploratory wells, it is difficult to see how a full field EIS could accomplish anything more than what is already set out in the North Fork EIS. Since full field development will not be allowed without further study, the Court concludes that the North Fork EIS is adequate.

Plaintiffs also contend that the EIS failed to adequately consider the possible alternatives. The Court finds that Chapter III does adequately address not only alternative drilling sites, but a no action alternative as well. Plaintiffs’ contention that the EIS fails to address a worse case analysis also lacks merit. Pages 53-55 of the EIS discuss the very situation, namely, a blowout of the well, which plaintiffs contend is the worst case scenario.

Finally, plaintiffs allege that the Section 7 consultation and biological opinion provided by the Fish and Wildlife Service on the APD violates the Endangered Species Act (ESA), 16 U.S.C. § 1531 et seq. Plaintiffs contend that the EIS fails to provide adequate protection for the grizzly bears present in the area. The Court must disagree. The BLM consulted with both the State and Federal Wildlife Services, and imposed such restrictions as no roads and limited drilling times from June 21, 1985 to December 1, 1985. See EIS at 42-44, and Cabinet Mountains Wilderness v. Peterson, 685 F.2d at 687. The superintendent of the Shoshone Forest is himself an expert on grizzly bears and testified, at request of plaintiff, that no harm to the bears would occur. That evidence is unrebutted. Overall the Court cannot say that the agency’s actions, pursuant to the ESA, were arbitrary or capricious. The Court finds that adequate measures were taken for the protection of endangered species.

In dismissing plaintiffs’ claims, the Court is guided by the language of the United States Supreme Court in Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 558, 98 S.Ct. 1197, 1219, 55 L.Ed.2d 460 (1978):

NEPA does set forth significant substantive goals for the Nation, but its mandate is essentially procedural. It is to insure a fully informed and well-considered decision, not necessarily a decision the judges of the Court of Appeals or of this Court would have reached had they been members of the decisionmaking unit of the agency. Administrative decisions should be set aside in 'this context, as in every other, only for substantial procedural or substantive reasons as mandated by statute, and not simply because the court is unhappy with the result reached.” (Citations omitted.)

The Court is sympathetic with plaintiffs’ concerns. However, all they have proven is that a “no action” alternative would better suit their wishes, vocations, or lifestyles. None of the eight witnesses called by plaintiffs and none of the affiants, whose affidavits plaintiffs presented, identified any real factual objection to the documents prepared by the federal defendants prior to rendering their decisions on the lease and APD. They suggested no other mitigation features that could reasonably have been imposed, identified no significant omissions in the administrative record, nor suggested how yet another EIS would differ from the one recently prepared. To the contrary, as admitted by a number of plaintiffs’ witnesses, plaintiffs’ quarrel is with the decision to permit exploration activities on the lease, not the administrative record on which the decisions objected to are based. The Court can only set aside an EIS upon a showing of clear NEPA violations, and the Court must conclude that plaintiffs have failed to uphold this burden. Therefore, it is

ORDERED that plaintiffs’ motion for preliminary injunction be, and the same hereby is, denied. It is further

ORDERED and ADJUDGED that plaintiffs’ claims be, and the same hereby are, dismissed with prejudice.


author: ARCENEAUX, District Judge.

text:
    Hartford DURANT, Jr. v. CHEVRON U.S.A., INC.
    Civ. A. No. 82-2778.
    United States District Court, E.D. Louisiana.
    July 25, 1985.

      W. Henry Sanders, Jena, La., Wilson M. Montero, Jr., Esq. Joseph E. Roberts, Esq., T. A. Metairie, La., for plaintiff.
    Michael J. Vondenstein, Hailey, McNamara, Hall Larmann & Papale, Metairie, La., for intervenor Maryland Cas. Co.
    Milling, Benson, Woodward, Hillyer, Pierson & Miller, John T. Nesser, III, Charles F. Seabolt, New Orleans, La., for Chevron U. S.A., Inc.
    James Ryan, III, Sessions, Fishman, Rosenson, Boisfontaine & Nathan, New Orleans, La., for Tilden J. Elliott Contract, Inc.
   OPINION

ARCENEAUX, District Judge.

Once again this matter is before the Court to determine the right of Chevron, U.S.A., Inc. (Chevron) to seek contractual indemnity from Tilden J. Elliott Contractors, Inc. (Elliott) and its insurer Northeastern Fire Insurance Company of Pennsylvania, (hereinafter sometimes together referred to as Elliott), considering the effect of the Louisiana Oilfield Indemnity Act, LSA-R.S. 9:2780 (the Act).

Plaintiff, Elliott’s employee, was injured on March 31, 1982 on Chevron’s drilling platform. Plaintiff sued Chevron alleging Chevron’s negligence and strict liability. Chevron filed a third party complaint against Elliott and its insurer seeking contractual indemnity under a 1982 Service Order and Agreement.

Elliott moved for summary judgment that Chevron’s third party complaint for indemnity is barred by the Act. The Judge of the section of this Court to which this matter had been previously allotted granted the motion, denied Chevron’s motion for reconsideration and issued his opinion on September 26, 1984, Durant v. Chevron, U.S.A., Inc., 594 F.Supp. 527 (E.D.La.1984). Chevron moved for clarification of the opinion and the Court issued a minute entry dated October 5, 1984. On January 2, 1985 the suit was transferred to this section and Chevron again moved for reconsideration of the September 26, 1984 and October 5, 1984 opinions. The Court deferred ruling and Elliott moved for reconsideration of the Court’s decision to defer ruling on Chevron’s motion for reconsideration. At oral argument on March 13, 1985, the Court agreed to reconsider the ruling that the Act bars Chevron’s claim for indemnity from Elliott, and now issues its order and reasons.

I — Chevron’s Negligence

The Court must first interpret the indemnity provision contained in the Service Order and Agreement:

Contractor agrees to defend and hold Company indemnified and harmless from and against any loss, expense claim or demand for:
a) Injury to or death of Contractor’s employees or for damage to or loss of Contractor’s property in any way arising out of or connected with the performance by Contractor of services hereunder; and
(b) Injury to, or death of, third persons or the employees of Company, or for damage to or loss of property of Company or of third persons, in any way arising out of or connected with the performance by Contractor of services hereunder, unless caused solely by the negligence of Company; provided that if such injury, death, damage or loss is caused by the joint or concurrent negligence of Contractor and Company, each shall be liable for one-half of the loss, expense, claim or demand resulting therefrom.

Presented with identical language in Wiley v. Offshore Painting Contractors, Inc., 711 F.2d 602 (5th Cir.1983) the Fifth Circuit held that whereas paragraph (b) clearly indicated the parties intention to indemnify Chevron for its own negligence, paragraph (a) was ambiguous and did not indicate an intention to indemnify Chevron for its own negligence. Because the jury found Chevron’s negligence to be the sole cause of the damage, Chevron could not recover indemnity.

As in Wiley, paragraph (a) is the indemnity provision applicable to Chevron’s claim against Elliott because Elliott’s (Contractor’s) employee was injured. As a matter of law, paragraph (a) does not permit Chevron to seek indemnity for its own negligence.

The subject paragraph does not purport to apply to Chevron’s negligence and clearly lacks the “talismanic language” required by Louisiana law to do so. See Wiley, supra, at 610.

II — Chevron’s Strict Liability

As to indemnity for Chevron’s strict liability, the same principles of contractual construction apply, that is, whether the parties clearly indicated their intention to allow indemnity for strict liability. Hyde v. Chevron, U.S.A., Inc., 697 F.2d 614 (5th Cir.1983). In Hyde the Fifth Circuit analyzed an indemnity provision substantially similar to the instant clause and held Chevron was entitled to indemnity for its strict liability. The Court found the detailed insurance coverage provisions (not present in this agreement) manifested the parties’ intention and cited Cole v. Chevron Chemical Co., 477 F.2d 361 (5th Cir.1973) and Stephens v. Chevron Oil Co., 517 F.2d 1123 (5th Cir.1975) as allowing indemnity for strict liability pursuant to language “virtually identical” to the Hyde language. Based on the reasoning of Hyde and the cases cited therein, I conclude that Chevron’s agreement with Elliott entitles Chevron to indemnity for its strict liability.

Ill — The Louisiana Act

A.

Considering now the applicability of the Act, since paragraph (a) allows indemnity only for Elliott’s negligence, it follows that the Act has no effect on that indemnity provision. LSA-R.S. 9:2780 makes void any provision in an agreement pertaining to an oil or gas well “to the extent that it purports to or does provide for defense or indemnity ... to the indemnitee ... which is caused by or results from the sole or concurrent negligence or fault (strict liability) of the indemnitee____” Because paragraph (a) requires indemnity only for Elliott’s negligence and not for negligence or fault of Chevron, the Act does not apply. Nesom v. Chevron, U.S.A., Inc., C.A. No. 83-5298 (E.D.La.1984). Of course, should Elliott’s fault be the sole cause of the claimant’s alleged injuries, no liability could be imposed upon Chevron. Even if the subject language granted “concurrent fault” indemnity to Chevron, it would clearly be barred by the Act’s prohibition against indemnity for claims caused by the “concurrent negligence” of the indemnitee.

B.

However, with regard to indemnity for strict liability, what Hyde giveth the Act taketh away. The Act makes unenforceable a provision purporting to provide indemnity to the indemnitee resulting from the “fault (strict liability) of the indemnitee.” (Emphasis added). The literal wording of the statute mandates the conclusion that if Chevron is found strictly liable it is not entitled to indemnity, regardless of Elliott’s fault. Rigby v. Tenneco Oil Co., 607 F.Supp. 1247 (E.D.La.1985); Home Insurance v. Garber Industries, Inc., 588 F.Supp. 1218 (W.D.La.1984). Although the Court is aware of inequities which may arise by prohibiting indemnity for Chevron’s liability where that liability arises only from custodial relationships, such as those upon which Louisiana’s strict liability code articles are founded, (see Hyde, supra) this Court is not free to alter the policy decision of the Louisiana legislature.

IV — Chevron’s Costs of Defense

Elliott argues it is not liable even for costs of defense under Sullen v. Missouri Pacific Railroad Company, 750 F.2d 428 (5th Cir.1985). Elliott relies on Sullen for the proposition that unless the indemnity agreement specifically provides for costs of defense Chevron is not entitled to them, citing Sullen’s language that

unless the contract of indemnity specifically provides for costs of defense as a separate item of indemnification, the indemnitor has no obligation to defend if the petition alleges facts which, if proven, would establish liability of the indemnitee but preclude coverage under the indemnity agreement.

Sullen, supra, at 433-434.

The complaint in this case claims damages from Chevron based on its alleged negligence and strict liability. For reasons earlier stated, indemnity will not be allowed as to either of these claims. Sullen teaches that under Louisiana law, which this Court is Erie-bound to apply:

Whether a party is obliged to tender a defense to another party depends entirely upon the allegations in the precipitating pleadings.
... [T]he Louisiana courts look exclusively to the pleadings in light of the contract provisions; the ultimate outcome of the case has no effect upon the duty to defend.

Sullen, supra, at 433 (citations omitted).

Since, here, as in Sullen, the pleadings only allege claims against Chevron which Elliott had no duty to defend, Elliott is not obliged to reimburse Chevron the costs it may incur in its defense.

Accordingly, upon reconsideration, and for reasons stated herein, the previous granting of third party defendant Elliott’s motion for summary judgment is AFFIRMED.

IT IS SO ORDERED.

      . The Court notes the recent decision of Soverign Insurance Co. v. Texas Pipeline Co., 470 So.2d 969 (La.App. 1st Cir.1985) (en banc) in which the Court held that the intention to indemnify the indemnitee for its strict liability must be expressed in unequivocal terms, overruling Strickland v. Tesoro Drilling Co., 434 So.2d 424 (La.App. 1st Cir.1983), writs denied. Strickland adopted the rationale of Hyde. This Court is bound to follow Hyde but the application of Soverign would not change the result reached here. (See part III-B, infra.)


author: ORINDA D. EVANS, District Judge.

text:
    CONSULTING ENGINEERS GROUP, INC. v. PACE CONSTRUCTION, et al.
    Civ. A. No. C84-2370A.
    United States District Court, N.D. Georgia, Atlanta Division.
    July 25, 1985.

      R. Jeffrey Morrison, Atlanta, Ga., for plaintiffs.
    J.D. Humphries, III, John P. Gallagher, Varner, Stephens, Wingfield, McIntyre & Humphries, Atlanta, Ga., for Pace Const. Inc. and Atlanta/Windy Hill, Ltd.
    Ira Genbert, Ruth A. Zaleon, Stokes, Shapiro, Fussell & Genberg, Atlanta, Ga., for Southeast Schokbeton.
    J. Alexander Porter, Sidney R. Barrett, Jr., Asbill, Porter, Churchill & Nellis, Atlanta, Ga., for U.S. Fidelity & Guar. Co.
   ORDER

ORINDA D. EVANS, District Judge.

This case is before the court on motion of Third Party Defendant United States Fidelity & Guaranty Co. (“U.S. Fidelity”) for partial summary judgment.

This case originated when Plaintiff Consulting Engineers Group, Inc. brought suit against Defendants Pace Construction, Inc. (“Pace”), Atlanta/Windy Hill, Ltd., and Southeast Schokbeton, seeking foreclosure of a mechanic’s lien on a hotel. Pace then filed a third party complaint against U.S. Fidelity, seeking damages for U.S. Fidelity’s alleged wrongful refusal to perform on a surety bond issued to Schokbeton.

In addition to actual damages, Pace seeks an award of attorney’s fees and punitive damages in the amount of $500,000.00 “to deter surety and other sureties from refusing to pay valid claims in the future.” Third Party Complaint, ¶ 9. U.S. Fidelity now moves for summary judgment as to Pace’s prayer for attorney’s fees and punitive damages, on the grounds that Georgia law forbids such a recovery in a suit on a surety bond under these circumstances.

The surety argues that Pace can only seek penalties against it under the limited statutory penalty provisions of O.C.G.A. § 10-7-30. U.S. Fidelity then contends that Pace is barred from claiming any penalty under that section because Pace filed its action against the surety before the sixty day statutory period had elapsed, citing Columbus Fire & Safety Equipment Co., Inc. v. American Druggist Insurance Co., Inc., 166 Ga.App. 509, 304 S.E.2d 471 (1983).

In Columbus Fire & Safety, the court found that the plaintiff obligee had filed suit against the surety less than sixty days after making demand for payment. The court noted that the Supreme Court of Georgia had confronted the same situation in Guarantee Reserve Life Insurance Co. v. Norris, 219 Ga. 573, 134 S.E.2d 774 (1964), under a “virtually identical” bad faith penalty provision for insurance companies, O.C.G.A. § 33-4-6. The Guarantee Reserve Court had held that the insured’s failure to wait at least sixty days after demand before filing suit barred her statutory claim for bad faith penalties. Id. 219 Ga. at 575, 134 S.E.2d 774. The court in Columbus therefore concluded that an obligee who files suit prematurely is similarly barred from recovering a bad faith penalty against its surety under § 10-7-30. 166 Ga.App. at 510-11, 304 S.E.2d 471.

Pace argues that U.S. Fidelity did receive a demand to perform more than sixty days before Pace filed its complaint. Pace also contends that U.S. Fidelity investigated the claim and specifically disclaimed liability in writing, thereby waiving the sixty day performance period. Pace distinguishes Columbus Fire & Safety on the grounds that no waiver by the surety was involved in that case.

In response, U.S. Fidelity argues that Section 10-7-30 requires that the obligee itself make demand on the surety before the sixty day period begins to run. U.S. Fidelity therefore objects to Pace’s argument that the period began when the surety learned of Pace’s claim on the bond from Schokbeton, the principal. U.S. Fidelity maintains that its performance period did not begin until it received a demand or default notice from the obligee, Pace. U.S. Fidelity also argues that its subsequent denial of obligation on the bond did not operate as a waiver of the remainder of the sixty day period.

The Court finds that Pace’s argument as to the initiation of the performance period is unsupported by the case law or the language of the statute. The statute provides for a specific event from which the 60 day period is to run, and that event is the surety’s “receipt from the obligee of a notice of default or demand for repayment....” O.C.G.A. § 10-7-30(b). The statute does not suggest that the surety’s mere awareness of a claim is sufficient. Its language instead requires the actual receipt by the surety of a more formal “notice” or “demand” from the obligee. This strict interpretation of the statute is supported by the opinions in Columbus Fire & Safety, and Guarantee Reserve, supra.

In Columbus Fire & Safety, the claimant had notified the surety of the subcontractor’s default, but then had sent a subsequent letter giving the subcontractor additional time to perform. The court held that the sixty day period did not begin to run until a second official notice of demand was made against the surety. 166 Ga.App. at 510, 304 S.E.2d 471.

In Guarantee Reserve, the insured had filed a proof of loss with her insurance company in December, but did not demand payment until January. The court held that the insured’s filing of a proof of loss with her insurance company did not initiate the running of the period, because the statute “requires the insured to make an actual demand on the insurer for payment of her loss 60 days before filing a suit therefor.” 219 Ga. at 575, 134 S.E.2d 774 (emphasis added).

Thus, both courts required a formal demand by the claimant, rather than a mere awareness on the part of the payor of the pending claim. This strict interpretation of the statute avoids the uncertainty that would otherwise be created. A holding to the contrary would leave the obligee uncertain as to when it could safely file suit for punitive damages, and the surety uncertain as to how long it had to investigate the claim.

In this case, the evidence fails to show a demand by the obligee on the surety until Pace’s letter to U.S. Fidelity on October 18. The affidavit submitted by Pace does not show that Pace made an earlier oral demand on the surety, but only that it made demands on the subcontractor and that U.S. Fidelity “was aware of the situation.” Kinsey Affidavit, 11117, 9. This is insufficient to meet the requirements of the statute. The sixty day performance period therefore began to run on October 20, 1984, the date that U.S. Fidelity received Pace’s demand letter.

Pace filed its third party complaint against U.S. Fidelity on December 12,1984, only fifty-three days after making demand for payment. Under Columbus' Fire & Safety, Pace would therefore be barred from seeking statutory bad faith penalties. 166 Ga.App. at 511, 304 S.E.2d 471. However, Pace contends that U.S. Fidelity waived the remainder of the sixty day period by its letter of October 22, 1984, denying any obligation on the bond. The court does not agree.

While the opinion in Columbus does not reflect whether the defendant had already denied the claim before the claimant filed suit, the opinion in Guarantee does. The Guarantee court barred the plaintiff from recovering bad faith penalties where she filed suit less than sixty days after demand, even though the facts show that the insurer had already issued a written denial of her claim. 219 Ga. at 574-75, 134 S.E.2d 774.

Furthermore, neither of these statutes contain waiver provisions. The court concludes that the liability of a surety or insurer for statutory bad faith penalties simply does not accrue until sixty days have passed. See National Casualty Co. v. Borochoff 45 Ga.App. 745, 749, 165 S.E. 905 (1932). Pace is therefore barred from recovering punitive damages or attorney’s fees from U.S. Fidelity under § 10-7-30.

Third Party Defendant’s motion for partial summary judgment is hereby GRANTED.

      . Originally filed as a motion to dismiss, this motion is now being treated as a motion for summary judgment pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. See Order of June 12, 1985, pp. 3-4.

      . This statute states, in pertinent part:
      In the event of the refusal of a corporate surety to commence the remedy of a default covered by, to make payment to an obligee under, or otherwise to commence performance in accordance with the terms of a contract of suretyship within 60 days after receipt from the obligee of a notice of default or demand for payment, and upon a finding that such refusal was in bad faith, the surety shall be liable to pay such obligee, in addition to the loss, not more than 25 percent of the liability of the surety for the loss and all reasonable attorney’s fees for the prosecution of the case against the surety.
      O.C.G.A. § 10-7-30(b).

      . Columbus, 166 Ga.App. at 510, 304 S.E.2d 471.

      . Section 10-7-30 is in derogation of the common law and therefore must be strictly construed. Travelers Indemnity Co. v. Sasser & Co., 138 Ga.App. 361, 364, 226 S.E.2d 121 (1976).


author: GERALD J. WEBER, District Judge.

text:
    Gary M. LARWOOD, Carol Larwood, Arnold M. Johnson, and Florence Johnson, Plaintiffs, v. Joseph E. PROFOZICH and Rose Marie Profozich, Defendants.
    Civ. A. No. 84-2559.
    United States District Court, W.D. Pennsylvania.
    July 25, 1985.
    David B. Buerger, Pittsburgh, Pa., for plaintiffs.

      Robert S. Adams, Pittsburgh, Pa., for defendants.
   OPINION AND ORDER

GERALD J. WEBER, District Judge.

Defendants have moved for summary judgment, or in limine, upon the following set of undisputed facts. We made the following conclusions of law thereon.

Plaintiffs as sellers and defendants as buyers entered into Articles of Agreement for the purchase of real estate. The agreement provided for payment in installments, with the balance to be paid within one year after notice. Notice was given and the buyers failed to pay the balance. Buyers are also delinquent in installments and payment of taxes.

Sellers offered to take back a purchase money mortgage at the current market rate of interest. Buyers refused to pay this rate of interest. Buyers have tendered a return of the property which sellers refuse.

The balance due on the articles of agreement is in excess of 75% of the purchase price.

There is no genuine issue of material fact.

Sellers have sued for the balance of the purchase price which is the same as an action for specific performance. Sellers rely on Trachtenburg v. Sibarco Stations, Inc., 477 Pa. 517, 384 A.2d 1209 (1978) which allows this remedy for breach of a contract to buy real estate. We find this remedy unavailable here because Trachtenburg was a suit for breach of a sales agreement and did not involve an installment sale.

We find the sellers’ remedies here entirely controlled by the Pennsylvania “Installment Land Contract Law” of 1965, 68 P.S. 901 et seq. which limits a sellers remedies. The declaration of policy for that statute, Section 902, states that it defines what constitutes default and provides remedies for the same and provides proper provisions for final settlement and delivery of good title to the purchaser.

The remedy which sellers seek is set forth in Section 907(a)(2) (second paragraph) of the Act, as follows:

Seller shall not require purchaser to make settlement until the principal balance has been reduced by payments on account thereof to a sum not more than seventy-five percent of the original principal set forth in the installment land contract, except if seller agrees to take purchaser’s purchase money mortgage for the full balance of the principal then due or secures a mortgage for the full balance of the principal then due from a third party, said mortgage to be payable within a term of not less than ten years.

The sellers offered to take a mortgage at the then current market rate. No other details were specified, but buyers rejected this offer because of the interest rate. We find no support for a rejection on this basis. Sellers now withdraw this offer, but this is a condition of the Act, and if sellers now demand settlement they are entitled to specific performance upon the tender of a deed and the offer to take buyers’ purchase money mortgage at the current market rate for a term of not less than ten years.

Sellers have other remedies here under Section 907(b) for default in the payment of any installment, or the payment of assessments, or for repairs made by sellers. These are limited to termination of the contract, recovery of possession and the recovery of unpaid installments, assessments and repairs. The sellers do not seek these remedies.

Finally, the damages for breach of an installment land contract are limited by the provisions of Section of 905(e):

(e) In any action by the seller to recover damages for a breach of any installment land contract, the seller shall be entitled to recover damages for all losses resulting from the breach, including but not limited to the excess of the contract price over the market price at the time of breach, the unpaid installment payment due prior to the surrender of the dwelling by the purchaser, the value of repairs made by the seller prior to the surrender whenever the purchaser is responsible for the repairs, and the cost of any actual repairs made by the seller subsequent to the surrender of the premises which repairs become necessary by reason of damage done by the buyer or the vandalism of the premises prior to the actual delivery of possession to the seller, and any assessments for public improvements. The unpaid balance of the purchase price shall not be considered an item of recoverable damages.

Therefore, in the present case, we find that the sellers’ remedies are limited to:

(1) Specific performance under Section 907(a)(2) or
(2) An action for damages limited by Section 905(e).

The trial of the action will be governed by the conclusions of law made herein.