Driver v. Wood

670 F.Supp.3d 723

Nelson DRIVER; Theresa Driver; andArkansas Risk and Insurance Services, Inc., Plaintiffs v. Joseph WOOD, individually and in his capacity as Washington County,Arkansas, County Judge; Brian Lester, individually and in his capacity asWashington County, Arkansas, County Attorney and Chief of Staff;and Washington County, Arkansas, Defendants

CASE NO: 5:22-CV-05049

United States District Court, W.D. Arkansas, Fayetteville Division

Signed April 21, 2023

Kevin Carl Bonner, Bonner Law Firm, Bentonville, AR, Steven S. Zega, Crouch, Harwell, Fryar & Ferner, PLLC, Springdale, AR, for Plaintiffs.

Jason E. Owens, Michael A. Mosley, Jason Owens Law Firm, P.A., Conway, AR, for Defendants.

MEMORANDUM OPINION AND ORDER

TIMOTHY L. BROOKS, UNITED STATES DISTRICT JUDGE

This case was brought by a former contractor for Washington County, Arkansas, who claims that the County terminated the parties' contract in violation of its terms and in retaliation for the contractor's political speech. Before the Court are the Motion for Summary Judgment and accompanying briefing (Docs. 18, 19, 20) filed by Defendants Joseph Wood, Brian Lester, and Washington County, Arkansas, and a Response in Opposition and accompanying briefing (Docs. 24 & 25) filed by Plaintiffs Nelson Driver, Theresa Driver, and Arkansas Risk and Insurance Services, Inc. For the reasons stated below, Defendants' Motion for Summary Judgment (Doc. 18) is GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND

The following undisputed facts are taken from the 2017 Consulting Contract ("the Contract") (Doc. 2, pp. 13-16) between Arkansas Risk and Insurance Services, Inc. ("ARIS") and Washington County; the depositions of Theresa Driver, Nelson Driver, Brian Lester, Joseph Wood, and Jennifer Hinkle (Docs. 20-1, 20-2, 20-3, 20-4, 25-3); the affidavit by Nelson Driver (Doc. 25-1); the declaration of Eva Madison (Doc. 25-2); and other uncontroverted evidence in the record.

Plaintiff Nelson Driver is the sole shareholder of ARIS, an S corporation. ARIS provides consulting services related to risk management, insurance, and workers' compensation. In 2000, Washington County Judge Jerry Hunton¹ contracted with ARIS to advise the County and address solvency issues with the County's health insurance program. The contract between the County and ARIS—signed by Judge Hunton and Nelson Driver—was for one year, and the agreement was re-signed each successive year. In 2009, County Judge Marilyn Edwards replaced Judge Hunton, and she continued engaging ARIS's services. In 2014, Judge Edwards and ARIS signed a new agreement that included an automatic renewal provision, which stated that the contract would renew each year unless the parties agreed otherwise.

In 2016, Joseph Wood, a Republican, was elected to a two-year term as County Judge. That same year, Arkansas voters amended the state constitution to provide for four-year county judge terms going forward. Wood appointed Brian Lester as the County Attorney, and Lester later become Wood's Chief of Staff as well.

On January 3, 2017, just as Wood began his first term in office, he and Nelson Driver, on behalf of ARIS, executed the Contract at issue in this lawsuit. The Contract obligated ARIS to continue to advise the County on its risk management and insurance programs. The County agreed to "make available to Consultant all necessary information concerning County's current insurance and risk programs." (Doc. 2, p. 13). The County agreed to pay ARIS $2,300 on the 15th day of each month. Section 1(f) provides that either party's "default from any obligation herein . . . shall be grounds for termination of this contract" if the default is not cured within ten business days. Id. at p. 14. Section 1(g) defines the term of the agreement and includes an automatic renewal provision:

The term of this contract shall be from January 1, 2017 through December 31, 2017. However, is shall renew annually and automatically and include any pay increases approved by the Quorum Court, unless agreed to otherwise by the parties.

Id. (all errors in original). Nelson drafted the Contract, basing it on the prior agreements between ARIS and the County. Those prior agreements were originally created by the Washington County Attorney.

The 2017 Contract was nearly identical to the 2014 agreement, but one sentence was removed in the newer version: "Either party may terminate this contract for any reason upon thirty (30) days notice." (Doc. 20-5, p. 2). The effect of this deletion was that if each side performed as promised, the 2017 Contract could only be terminated upon their mutual agreement. In addition, the word "it" in Section 1(g) of the 2014 Contract was changed in the 2017 version to the nonsensical "is." See Doc. 2, p. 14 ("However, is shall renew annually and automatically . . . .") (emphasis added).

In 2018, Wood ran for and won reelection to a four-year term against Democrat Jim House. In October 2018, just before the election, House's campaign Facebook page posted about a campaign mailout. Nelson's wife, Theresa Driver, commented on the post expressing her and Nelson's support for House, and County Attorney Lester responded that it was "[g]ood to know . . ." that the Drivers supported House. Below is a screenshot of Theresa and Lester's exchange.

Image materials not available for display.

(Doc. 2, p. 16). According to the declaration of Eva Madison, a former Justice of the Peace of Washington County, Madison responded to Lester that she was "Following and paying attention . . . ," to which Lester, in a now-deleted reply, stated, "to what? You told me in January 2017 that the Judge needed to get rid of Nelson . . . ." (Doc. 25-2, ¶ 5).

Lester testified at his deposition that Theresa and Nelson's support for House was "good to know" because "when it comes to especially what all that has transpired over the years in county government . . . [y]our guard's always up on, you know, people that you think have your back versus people that may not have your back type thing." (Doc. 20-3, pp. 46-47).

Nelson interpreted Lester's comments as a threat against his contract with the County due to his support for Wood's opponent. Theresa decided not to respond further to Lester or anyone else in the Facebook comment thread because she "felt like any other comments [that] might be taken from that . . . could be detrimental . . . or used." (Doc. 20-1, p. 21).

In January 2019, as Wood began his second term, the County failed to pay ARIS on the 15th of the month, as required by the Contract. Nelson's attorney sent a letter to the County demanding payment, and the County complied. This same sequence happened again in January 2020.² Nelson also alleges that County employees, under the direction of Lester, denied him access to information he needed to complete his duties.

In late 2021 or early 2022, Lester proposed a new contract to ARIS. The new contract was similar to the existing contract but added a provision allowing either party to unilaterally terminate the agreement. Nelson declined to sign the new contract because he was happy with the existing agreement.

Starting in January 2022, the County stopped paying ARIS under the existing 2017 Contract but did not explicitly inform ARIS or Nelson that the Contract was being terminated. The County also engaged another firm to provide insurance and risk management consulting to the County. After not being paid for three months, Plaintiffs filed this lawsuit in March 2022. On November 8, 2022, Patrick Deakins was elected to replace Wood as Washington County Judge and began his term in January 2023.

Count I of the Complaint (Doc. 2) brings claims on behalf of Nelson and Theresa under 42 U.S.C. §§ 1981³ and 1983 for First Amendment retaliation against the County, Wood, and Lester.⁴ Specifically, the Complaint alleges that "Nelson and Theresa's Constitutionally protected support for Jim House was a motivating factor in the Defendants' decision to cease payment under the contract." Id. at ¶ 27. Count II of the Complaint brings companion claims under the Arkansas Civil Rights Act ("ACRA") for violations of Nelson and Theresa's free speech and association rights under the Arkansas State Constitution. In Count III, ARIS brings a claim for breach of contract against the County. Plaintiffs seek economic damages under §§ 1981 and 1983 and the ACRA, injunctive relief to prevent future retaliation by the County, damages for breach of contract, and attorney's fees and costs.

Defendants' Motion for Summary Judgment argues that (1) Nelson and Theresa lack standing because they were not parties to the Contract; (2) Wood and Lester are entitled to qualified immunity for all individual-capacity claims against them; (3) Plaintiffs fail to show that the County maintained an unconstitutional policy or custom with respect to the free speech rights of its employees and contractors; and (4) ARIS's breach of contract claim fails because the relevant provision contains a typo and the Contract is void for illegality and is contrary to public policy.

II. LEGAL STANDARD

Under Federal Rule of Civil Procedure 56(a), "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The Court must review the facts in the light most favorable to the opposing party and give that party the benefit of any inferences that can be drawn from those facts. Canada v. Union Elec. Co., 135 F.3d 1211, 1212-13 (8th Cir. 1997). The moving party bears the burden of proving the absence of a genuine dispute of material fact and that it is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Nat'l. Bank of Commerce v. Dow Chem. Co., 165 F.3d 602, 606 (8th Cir. 1999).

Once the moving party has met its burden, the non-moving party must ...