United States District Court, E.D. Wisconsin
COMSYS INC. and KATHRYNE L. MCAULIFFE, Plaintiffs,
CITY OF KENOSHA, WISCONSIN, CITY OF KENOSHA WATER UTILITY, FRANK PACETTI, EDWARD ST. PETER, MERRIL A. KERKMAN, JR., and KEITH G. BOSMAN, Defendants.
STADTMUELLER U.S. DISTRICT JUDGE.
INTRODUCTION & PROCEDURAL HISTORY
litigation arises from the termination by the City of Kenosha
(the “City”) and the Kenosha Water Utility (the
“Water Utility”) of their contracts with an
outside information technology vendor, Comsys Inc.
(“Comsys”), a private, for-profit Wisconsin
corporation based in Racine. Comsys and its sole shareholder,
Kathryne McAuliffe (“McAuliffe”), brought a
litany of claims against the City and the Water Utility, as
well as many individual defendants, including, the City's
mayor Keith Bosman (“Mayor Bosman”), the
City's administrator Frank Pacetti
(“Pacetti”), the general manager for the Water
Utility Edward St. Peter (“St. Peter”), the
City's alderpersons, and a former Comsys employee, Merril
A. Kerkman, Jr. (“Kerkman”).
plaintiffs brought claims under 42 U.S.C. §§ 1983,
1985, and 1986 seeking damages to remedy various First,
Fourth, and Fifth Amendment violations, as well as claims for
alleged violations of several Wisconsin state statutes.
See generally (Docket #31). The allegations
underlying both the federal and state law claims concern
certain IT service contracts that the City and the Water
Utility entered into with Comsys from approximately 1987
until 2015 (the “Comsys Contracts”). Id.
¶¶ 32-42. The plaintiffs claim that the events
leading up to-and ultimately culminating in-the termination
of the Comsys Contracts involved a complex conspiracy among
various government officials and a rogue former employee who
now works for the City. Id. ¶¶ 32-121.
defendants brought a motion to dismiss under Rule 12(b)(6),
pursuant to which the Court dismissed one count of the
Amended Complaint (a Monell claim against the City
and Water Utility for Fourth Amendment violations) as well as
the plaintiffs' official capacity claims asserted against
the individually-named defendants. (Docket #41).
defendants then filed a motion for summary judgement under
Rule 56 seeking dismissal of all claims. The Court granted it
in part and denied it in part. See generally (Docket
#114). Specifically, the Court dismissed the plaintiffs'
federal claims for civil conspiracy, failure to protect, and
Fifth Amendment takings. Id. at 32-37. It also
dismissed the plaintiffs' state law claims for breach of
the implied contractual covenant of good faith, conversion,
civil extortion, victim intimidation, injury to business,
intentional infliction of emotional distress, and, as to one
defendant, tortious interference. Id. at 37-50. The
claims that remained following summary judgment included two
federal claims (for violations of the First and Fourth
Amendments) and two state law claims (a breach of contract
claim against the Water Utility for underpayment of amounts
due under its contract with Comsys and a claim for tortious
interference against Kerkman).
First Amendment claim is alleged against Pacetti, Mayor
Bosman, St. Peter, the City, and the Water Utility. Pacetti,
Mayor Bosman, and St. Peter argued in their Rule 56 motion
that they were entitled to qualified immunity, and the Court
declined to apply the defense at the summary judgment stage.
Id. at 23-26. Similarly, as to the Fourth Amendment
claim alleged against Pacetti and Kerkman, the Court declined
Pacetti's request for qualified immunity. Id. at
defendants then filed an interlocutory appeal of the
Court's denial of qualified immunity. (Docket #117). In
light of the appeal, the Court stayed proceedings in this
case. (Docket #116). On July 12, 2018, the Court of Appeals
issued its mandate, reversing this Court's denial of
qualified immunity as to Pacetti, Mayor Bosman, and St.
Peter. (Docket #132). With those defendants excused from
liability, the only defendants remaining in the case are the
City, the Water Utility, and Kerkman.
September 4, 2018, the remaining defendants filed a second
motion for summary judgment. (Docket #134). They ask the
Court to dismiss the First Amendment and Fourth Amendment
claims in light of the Seventh Circuit's pronouncements
in the interlocutory appeal about the law applicable to those
claims. Id. In response, the plaintiffs argue that
no legal or factual bases exist to dismiss their First
Amendment claim against the City and Water Utility, brought
under Monell. (Docket #137). However, the plaintiffs
concede that their Fourth Amendment claim must be dismissed.
Id. In light of the parties' agreement, the
Court will dismiss that claim (Counts One and Two of the
Amended Complaint). Neither the plaintiffs nor the defendants
address the remaining state law claims.
STANDARD OF REVIEW
same standard announced in the Court's order on the
defendants' first motion for summary judgment applies to
the instant motion as well.
party files a motion for summary judgment, it is her
“contention that the material facts are undisputed and
the movant is entitled to judgment as a matter of law.”
Hotel 71 Mezz Lender LLC v. Nat'l Ret. Fund, 778
F.3d 593, 601 (7th Cir. 2015) (citing Fed.R.Civ.P. 56(a)).
“Material facts” are those facts which
“might affect the outcome of the suit, ” and
“summary judgment will not lie if the dispute about a
material fact is ‘genuine,' that is, if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, to
demonstrate a genuine dispute about a material fact, a party
opposing summary judgment “must do more than simply
show that there is some metaphysical doubt as to the material
facts.” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986). Rather, the non-moving
party “must set forth specific facts showing that there
is a genuine issue for trial.” Fed.R.Civ.P. 56(e).
. .the movant is seeking summary judgment on a claim as to
which it bears the burden of proof, it must lay out the
elements of the claim, cite the facts it believes satisfies
these elements, and demonstrate why the record is so
one-sided as to rule out the prospect of a finding in favor
of the non-movant on the claims.” Hotel 71
Mezz, 778 F.3d at 601. A court considering a motion for
summary judgment must draw all reasonable inferences from the
materials before it in favor of the non-moving party. See
Johnson v. Pelker, 891 F.2d 136, 138 (7th Cir. 1989). A
court will deny a motion for summary judgment when “one
or more material facts are disputed or. . . the facts relied
on by the motion do not entitle the movant to judgment as a
matter of law.” Hotel 71 Mezz, 778 F.3d at
from a short set of supplemental facts proposed by the
plaintiffs, the parties did not include new facts in their
briefing. They agree that the relevant facts are
unchanged since their previous submissions. Therefore, the
Court will reproduce its summary of the relevant facts here.
in the late 1980s, Comsys began performing IT services for
the City and the Water Utility as an independent computer
facilities management provider. In that role, Comsys
performed various functions such as furnishing professional
and technical assistance in connection with IT management,
information system administration, and programming support
services. Comsys had contracts with the City and the Water
Utility, each of which were amended over time. (Docket #77 at
5). Kerkman was a longtime employee of Comsys, and from
January 1, 2013 until March 31, 2014, he served as the
company's Chief Information Officer. Id.
Amended Complaint alleges an elaborate conspiracy between
Pacetti, the city administrator, and Kerkman, his mole, to
misappropriate Comsys' goodwill, confidential
information, trade secrets, and employees so that the City
could create its own IT department. More specifically, the
plaintiffs allege that sometime around July 2013, Kerkman
buddied up to Pacetti, soliciting him to create a Director of
IT position for the City and hire Kerkman to fill that role.
To that end, the plaintiffs claim that Kerkman unlawfully
obtained access to Comsys' and McAuliffe's
confidential data by unlawfully surveilling Comsys' and
McAuliffe's email accounts and archives, and then passed
that information along to Pacetti for his use in building an
in-house IT department for the City.
and Pacetti's conspiracy was confronted with a hiccup in
February 2014, the plaintiffs claim, when Deputy Chief Daniel
Miskinis (“Miskinis”) of the Kenosha Police
Department began an administrative investigation to determine
whether Kerkman had complied with a 2009 directive not to
archive City Police Department emails on the City's
computer server. Id. at 17. On March 7, 2014,
Miskinis met with McAuliffe to question her (and another
Comsys employee) in connection with his investigation into
Kerkman. McAuliffe gave true and accurate responses to
Miskinis' questions and performed actions on the
City's server at his direction.
met with McAuliffe again a couple of days later, and during
that interview, McAuliffe told Miskinis about a 2013 meeting
between Kerkman and Pacetti where the two men discussed the
police department emails being archived on the City's
server. She also told Miskinis that she had reason to believe
Kerkman had accessed her email account without authorization
because in the fall of the previous year, McAuliffe
discovered a confidential email printed from her archives on
Kerkman's desk. Id. at 10- 11.
this time, Pacetti requested a meeting with the Police Chief
and Miskinis, wherein he expressed disagreement with
Miskinis' findings in the Kerkman investigation at that
point. Id. at 19. Pacetti also summoned McAuliffe to
his office, and during the meeting, according to McAuliffe,
Pacetti yelled at her and banged his fist on the desk,
accusing her of initiating the Kerkman investigation and
threatening wholesale changes to the IT department, leaving
McAuliffe in tears. Id. at 20. Shortly afterward,
McAuliffe spoke with Kenosha Joint Services Director Thomas
Genthner who informed her that Pacetti asked him for copies
of Comsys' contract that day and said the relationship
between Joint Services and Comsys needed to ...