BRENDA HORVATH V CITY OF RIVER ROUGE
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
August 13, 1999
BRENDA HORVATH,
Plaintiff-Appellee,
v
No. 204378
Wayne Circuit Court
LC No. 95-519690 CL
CITY OF RIVER ROUGE,
Defendant-Appellant.
Before: White, P.J., and Kelly and Hoekstra, JJ.
PER CURIAM.
Defendant appeals the judgment, the order denying its motion for judgment notwithstanding the
verdict or new trial, and the award of mediation sanctions to plaintiff in this failure to promote and
harassment case brought under the whistleblowers’ protection act (WPA), MCL 15.361 et seq.; MSA
17.428(1) et seq. We affirm in part and reverse in part.
I
The facts viewed in a light most favorable to plaintiff are that plaintiff began employment in
defendant’s treasurer’s office in 1977 as a clerk/secretary. She had extensive contact with the public
and trained the department’s employees. In 1991, Edward Reeder, the elected city treasurer,
appointed Billy Evans, a longtime friend, as deputy treasurer. The city treasurer position is part-time,
while the deputy treasurer position, which is full-time, is responsible for handling the day to day affairs of
the office. Evans took a stress leave of absence in August 1993.
Before Evans left, a number of citizens complained that they had received delinquent tax notices
despite having paid their taxes and having receipts so indicating. Plaintiff advised Reeder of these
discrepancies, and there was testimony that Reeder did not adequately investigate at least some of them.
Several weeks after Evans left, plaintiff and co-worker JoAnn Sprader unexpectedly discovered a
cardboard box in the city’s vault that contained cash, uncashed checks and other valuables. Plaintiff
took the box to the then mayor, Margaret Watson, who in turn called the police.
-1
In January 1994, before plaintiff reported Evans’ wrongdoing, plaintiff discussed her interest in
the deputy treasurer position with Reeder, who told her he did not intend to nominate her.
After Evans left in August 1993, several citizens complained of similar discrepancies and plaintiff
advised Reeder of them. One of these citizens, a Mr. Dege, came to the treasurer’s office on July 13,
1994, after receiving a delinquent tax notice despite having paid the tax and having a receipt so
indicating. Plaintiff waited on Dege and noticed that his receipt was not the kind used for taxes. Dege
indicated that a man had waited on him. Plaintiff looked through the office files and could not find a
record of having received Dege’s tax payment. Dege was angry and asked to speak to someone in
authority, and plaintiff took Dege to the mayor’s office. Dege spoke to the mayor and also filed a police
complaint. In July 1994, plaintiff gave a statement to the River Rouge police department regarding
Evans’ conduct.
Watson testified that plaintiff told her about Evans’ practices and that Watson in turn spoke to
Reeder about it a number of times, telling him that plaintiff believed Evans was doing something
improper. Watson testified that Reeder responded negatively, was evasive and said that plaintiff and
Sprader were “over-reacting.” Evans was eventually charged with and pleaded guilty of embezzlement.
Plaintiff testified at trial that as a result of having blown the whistle on Evans, Reeder became
hostile toward plaintiff and isolated her, giving her practically no work. Sprader testified similarly
regarding Reeder’s treatment of plaintiff. Several witnesses testified that Reeder and plaintiff had gotten
along well before these incidents.
A city council member testified that, in a council meeting, Reeder blamed plaintiff and Sprader
for the problems in the office after Evans left, and also implied that plaintiff and Sprader were acting
dishonestly.
In August 1994, plaintiff asked to be put on the agenda of the city council meeting. At the
meeting, she said she wanted to be appointed deputy treasurer, and complained of Reeder’s treatment
of her. Plaintiff requested that she be paid the deputy treasurer’s salary since she had been doing the
job for a year, and that she be given back pay. Reeder stated at this council meeting that no monies
should be budgeted for a deputy treasurer, contrary to his position in April and June 1994 when he
indicated that although he was not going to fill the deputy treasurer position, it should continue to be
budgeted. Plaintiff filed a grievance regarding her salary, which was denied.
Reeder was reelected in 1995, and in April 1995 appointed a deputy treasurer at a salary of
$28,000 per year. The city commission unanimously approved the appointment. Plaintiff earned about
$22,000.
Plaintiff testified that her duties were almost entirely given to the deputy treasurer, that she had
almost nothing to do, and that Reeder and his deputy locked away records to which she had previously
had access. In September 1995, plaintiff filed a grievance against Reeder claiming harassment. Plaintiff
testified that as a result of the hostile environment, in October 1995 she bid on and obtained a position
-2
in the city’s fire department. Plaintiff’s salary and benefits remained the same as her salary in the
treasurer’s office.
Defendant moved for a directed verdict at the close of plaintiff’s proofs. Defendant did not
state the grounds of the motion at that time and the court took the motion under advisement, indicating
that it knew what defendant was going to argue. At the close of all the proofs, defendant renewed its
motion, arguing that defendant was not liable for Reeder’s acts because only Reeder could nominate
plaintiff for the deputy treasurer position, it had not discriminated against plaintiff and plaintiff had not
named Reeder as a defendant; plaintiff should be barred from recovering damages for the period of July
1994 until April 1995, when the deputy treasurer was appointed, because plaintiff brought suit in July
1995 and the WPA is governed by a ninety-day statute of limitations; that plaintiff’s damages terminated
on October 6, 1995, when she transferred from the treasurer’s office to the fire department; and that
plaintiff had not established a prima facie case of discrimination.
The trial court denied defendant’s motion on the basis that the issues could have been raised
pre-trial based on the proofs before trial. The jury returned a verdict in plaintiff’s favor and awarded
damages of $10,000. The trial transcript indicates that both counsel had agreed to the general verdict
form, which provided:
1. On plaintiff’s claim under the Michigan Whistleblower Protection Act, we the jury
find in favor of:
___ Plaintiff ___ Defendant (check one)
If you found in favor of defendant, your deliberations are over. If you found in favor of
plaintiff, proceed to Question #2.
2. We find plaintiff’s damages to be in the amount of:
$ ___________
II
In reviewing the trial court’s denial of defendant’s motion for directed verdict, this Court
reviews the evidence presented up to the time of the motion to determine whether a question of fact
existed. Auto Club Ins Ass’n v General Motors Corp, 217 Mich App 594, 603; 552 NW2d 523
(1996). Any conflicts in the evidence are resolved in favor of the nonmoving party. Locke v
Pachtman, 446 Mich 216, 223; 521 NW2d 786 (1994). The same standard of review applies to
determinations of motions for judgment notwithstanding the verdict. Yacobian v Vartanian, 221 Mich
25, 27; 190 NW2d 641 (1922). In deciding a motion for new trial, the trial court determines whether
the overwhelming weight of the evidence favors the losing party. Severn v Sperry Corp, 212 Mich
App 406, 412; 538 NW2d 50 (1995). This Court reviews the trial court’s determination for abuse of
discretion, giving substantial deference to the trial court’s conclusion that the verdict was not against the
great weight of the evidence. Id.
-3
Defendant first argues that because the city council does not have the authority to appoint a
person to the position of deputy treasurer, but may only approve the appointment of a deputy treasurer
named by the city treasurer, and because the city council may not compel the city treasurer to appoint a
person to that position, the city treasurer cannot be construed as the agent of the city within the meaning
of the WPA, and the city cannot be held liable for the failure of the city’s treasurer to nominate the
plaintiff for appointment as deputy treasurer in retaliation for her protected activity.
The WPA provides:
An employer shall not discharge, threaten, or otherwise discriminate against an
employee regarding the employee’s compensation, terms, conditions, location, or
privileges of employment because the employee . . . reports or is about to report,
verbally or in writing, a violation or a suspected violation of a law or regulation or rule . .
. to a public body, unless the employee knows that the report is false, or because an
employee is requested by a public body to participate in an investigation, hearing, or
inquiry held by that public body, or a court action. [MCL 15.362; MSA 17.428(2).]
The act defines “employer” as:
. . . a person who has 1 or more employees. Employer includes an agent of an
employer and the state or a political subdivision of the state. [MCL 15.361(b); MSA
17.428(1)]
Defendant asserts that, contrary to the trial court’s ruling on its directed verdict motion, it raised
this defense before trial, in the joint final pretrial order, which stated in pertinent part:
II. CONCISE STATEMENT OF DEFENDANT’S DEFENSES AND CLAIMS
INCLUDING LEGAL THEORIES:
1. The position of deputy treasurer is authorized by the City Charter. The office of the
deputy treasurer is an appointed position, subject to the approval of the city council.
The treasurer also has the power to revoke the appointment at pleasure. Mr. Reeder
left the position of deputy treasurer vacant from the time of Mr. Evans’ departure until
after his reelection in April, 1995. It is the city’s position that it has no liability in this
matter, because a political appointment to the position of deputy treasurer is not
covered within the meaning of the Whistleblower’s [sic] Act.
***
V. ISSUES OF LAW TO BE LITIGATED:
1. Whether the Whistleblower’s [sic] Protection Act is applicable to a situation where
the plaintiff is denied a promotion to an appointed position.
-4
Plaintiff argues that nowhere in the joint final pretrial order did defendant indicate that Reeder
was not an agent of defendant, and that defendant described itself in that order as the entity which may
or may not have refused to appoint plaintiff to the deputy treasurer position. The pretrial order stated in
pertinent part:
IV. ISSUES OF FACT REMAINING TO BE LITIGATED:
1.
Whether plaintiff was subjected to a hostile and intimidating work
environment because of her whistleblowing activities.
2. Whether defendant refused to pay plaintiff the salary of a deputy treasurer because
of her whistleblowing activities.
3. Whether defendant refused to appoint plaintiff into the open position of deputy
treasurer because of her whistleblowing activities.
4. Whether defendant took any other adverse action against plaintiff, including
harassment, because of her whistleblowing activities. [Emphasis added.]
We conclude that plaintiff is correct in asserting that defendant did not raise the specific issue
whether Reeder was an agent of defendant under the WPA before trial. The question whether Reeder,
by virtue of being an elected official, was not under defendant’s control, and thus not defendant’s agent
is a separate question from the question whether the WPA applies to denials of appointed positions,
which issue was, indeed, raised. The first time defendant raised the agency issue was in closing
argument;1 plaintiff objected to it, arguing that it was being raised for the first time, and defendant did not
argue otherwise.2 Moreover, defendant did not request a jury instruction on agency and approved the
jury instructions the trial court read. We conclude that the issue of agency regarding liability for
Reeder’s alleged retaliatory harassment of plaintiff was not preserved.
Under these circumstances, as regards the harassment claim, the trial court did not abuse its
discretion in denying defendant’s motion for directed verdict on the agency issue on the basis that the
issue was not raised pre-trial.3 However, the question of defendant’s liability for the failure to appoint
plaintiff to the deputy treasurer position was arguably preserved, and the court should have entertained
defendant’s motion on the merits. Nonetheless, because we agree with defendant that plaintiff’s failure
to appoint claim was time-barred, we do not address the merits of defendant’s other arguments
regarding this claim.
III
Defendant argues that plaintiff’s failure to appoint claim is time-barred by the WPA’s ninety-day
statute of limitations. Defendant preserved this defense by pleading it as an affirmative defense.4
The doctrine of continuing violations was extended to WPA claims in Phinney v Perlmutter,
222 Mich App 513, 546; 564 NW2d 532 (1997). Plaintiff argues that she presented evidence that
retaliation occurred within the limitations period and that defendant had engaged in a “continuous course
-5
of conduct.” See id. at 546. Plaintiff filed her complaint in July 1995, and presented evidence of
retaliatory actions affecting the terms and conditions of her employment between April and July 1995,
including having duties taken away. Plaintiff thus presented sufficient evidence to raise a genuine issue of
fact that the alleged retaliatory harassment constituted a “continuing course of conduct.” Id. Defendant
concedes in its supplemental brief that plaintiff’s harassment claim could properly go to the jury
provided plaintiff presented a prima facie case. Plaintiff’s failure to appoint claim, on the other hand,
concerns an isolated employment decision having a degree of permanence that would trigger an
employee’s awareness of and duty to assert her rights. Sumner v Goodyear Tire & Rubber Co, 427
Mich 505, 538; 398 NW2d 368 (1986). Thus, the trial court should have granted defendant’s motion
for directed verdict in part, dismissing the failure to appoint claim as time-barred.
IV
Defendant argues that Reeder’s actions in violation of the WPA, if any, were ultra vires, and
defendant thus cannot be held liable because there is no intentional tort exception to governmental
immunity. However, defendant waived this argument by not pleading immunity as an affirmative
defense. MCR 2.111(F)(3).
V
Defendant argues that plaintiff did not establish a prima facie case under the WPA. Having
concluded that the failure to appoint claim was time-barred, we address this claim of error as it relates
to the harassment claim only.
This Court reviews a trial court’s determination whether the evidence established a prima facie
case under the WPA de novo. Terzano v Wayne Co, 216 Mich App 522, 526; 549 NW2d 606
(1996). In order to establish a prima facie case under the WPA, the plaintiff must show 1) that she
engaged in protected activity as defined by the act; 2) she was subsequently discharged, threatened or
otherwise discriminated against; and 3) that a causal connection existed between the protected activity
and the adverse employment action. MCL 15.362; MSA 17.428(2); Terzano, supra at 526.
Defendant does not dispute that plaintiff established the first two elements of a prima facie case.
Plaintiff established that she made several reports of “a violation or suspected violation of a law or
regulation or rule,” by testimony that she reported her concerns that Evans was doing something
improper to the police and to Mayor Watson. Plaintiff also presented evidence that adverse actions
were taken against her affecting the conditions of her employment, including having duties taken away
after she reported Evans, being isolated by Reeder, and Reeder’s altering her paycheck, among other
things.
Notwithstanding that Reeder had earlier said that plaintiff would not be appointed deputy
treasurer, plaintiff presented evidence of a causal connection between her protected activities and the
harassment. Various witnesses testified that plaintiff’s relationship with Reeder was good and cordial
before she reported Evans, and that after she reported Evans, Reeder would not communicate with her
and took duties away from her. There was also testimony that after Evans’ departure, Reeder told the
-6
city council that plaintiff and Sprader were to blame for the problems in the treasurer’s office and
implied to the council that plaintiff and Sprader were acting dishonestly. Plaintiff presented evidence that
after she reported Evans, Reeder altered one of her paychecks. We thus conclude that plaintiff
presented a prima facie case under the WPA.
VI
Defendant next argues that plaintiff suffered no compensable damages after October 6, 1995,
and the trial court thus erred in denying its motion for judgment notwithstanding the verdict. Under the
circumstances that the jury heard plaintiff’s testimony that she was no longer in a hostile environment
once she transferred to the fire department in October 1995, that the jury awarded only $10,000
pursuant to the agreed-upon general verdict form, thereby almost certainly rejecting plaintiff’s claim for
lost wages, the jury most likely awarded the $10,000 in damages for the harassment plaintiff was
subjected to from July 1994 until she transferred to the fire department in October 1995. Emotional
distress damages may be awarded in a WPA claim. Phinney, supra at 559-560.
We further reject defendant’s claim that plaintiff presented no evidence of mental distress
damages. Plaintiff’s testimony regarding the harassment and the resultant stress was adequate to
support a claim for emotional distress damages, especially in light of the amount awarded – ten thousand
dollars.
VII
The question remains regarding the appropriate remedy for the trial court’s error in permitting
the failure to appoint claim to go to the jury. Because there was a general verdict form, this court
cannot determine with absolute certainty that the error did not affect the outcome of the trial. Under that
circumstance, we normally would order the case retried on the retaliatory harassment claim alone.
However, given the amount of the verdict and the way the case was presented and argued, it seems
apparent that the jury itself limited damages to the period preceding the October 1995 transfer, and that
the jury rejected the claim for economic damages resulting from the failure to appoint, choosing instead
to award a relatively modest sum for the retaliatory harassment. Under these circumstances, remand for
a new trial is not necessary.5
VIII
Lastly, defendant argues in a supplemental brief that the trial court erred in awarding plaintiff
reasonable attorney fees pursuant to statute and then awarding mediation sanctions. We agree.
In McAuley v General Motors Corp, 457 Mich 513; 578 NW2d 282 (1998), the Supreme
Court held that the prevailing party was not entitled to a second award of attorney fees under the
mediation rule, MCR 2.403(O), where he had already been fully reimbursed for his reasonable attorney
fees under a statutory provision, the attorney fee provision of the Handicapper’s Civil Rights Act. The
Court stated that it agreed with this Court that “multiple awards in excess of a reasonable attorney fee
are permissible where independent purposes are served by the provisions authorizing such awards,” but
-7
held that its enactment of MCR 2.403 did not intend double recovery under the circumstances
presented in this case. Id. at 522-523.
. . . if the prevailing party has already been fully reimbursed for reasonable attorney fees
through the operation of the attorney fee provision of the HCRA, there are no ‘actual
costs’ remaining to be reimbursed under [MCR 2.403].
***
In conclusion, the mandatory language of MCR 2.403(O), which requires the rejecting
party to compensate the prevailing party for ‘actual costs’ of the portion of the litigation
made necessary by the rejection of the mediation evaluation, refers to the obligation of
the rejecting party to reimburse the prevailing party for reasonable attorney fees in an
amount determined by the trial court in its discretion; once this occurs and the prevailing
party has been made whole, the requirement of the court rule is satisfied and no further
compensation is warranted or required. [McCauley, supra at 523, 525.]
Plaintiff argues that her claim under the WPA should be treated differently than the HCRA claim
in McCauley, supra, because the Supreme Court has characterized the purposes behind the WPA as
special and unique, citing Dudewicz v Norris-Schmid, Inc, 443 Mich 68; 503 NW2d 645 (1993). In
Dudewicz, the Court stated that the WPA was designed to alleviate the inability to combat corruption
or criminally-irresponsible behavior in the conduct of government or large businesses. Id. at 75. Given
the holding in McCauley, plaintiff’s claim is unpersuasive. Both the HCRA and WPA have statutory
attorney fee provisions, and thus appear to fall directly under McCauley’s proscription of double
recovery. Thus, the award of $7,280 in attorney fees under MCR 2.403(O) must be vacated.
Affirmed in part, reversed in part, and remanded for amendment of the judgment consistent with
this opinion. We do not retain jurisdiction.
/s/ Helene N. White
/s/ Michael J. Kelly
/s/ Joel P. Hoekstra
1
Defendant stated in pertinent part in closing argument:
Now, did the employer threaten or otherwise discriminate a
gainst Brenda Horvath
regarding her compensation, terms, conditions, location, or privileges of employment
after Brenda Horvath engaged in protective [sic] activities? There, we have a dispute.
We have a dispute here because we have Mr. Redder [sic], the Treasurer whose an
elected official, having to run his shop versus the City of River Rouge, which all the
employee [sic] are paid by. We write the check –the City writes the check. The City
-8
does not run the Treasurer’s Office, Mr. Redder [sic] the Treasurer, runs the
Treasurer’s Office. He’s elected by the citizens of River Rouge.
***
The City of River Rouge continue to pay her salary. They never took disciplinary
actions against her. . . .
. . . . The City and the City fathers and City Mayor took no action against Brenda
Horvath.
2
Plaintiff’s counsel argued:
MR. PITT: Yes. The Defendant made an improper argument to the jury saying that the
Defendant in this case is not responsible because Ed Redder [sic] is the City Treasurer.
I have before me a pretrial order which says otherwise, and I mean it has never been
contested that the Defendant, that the Defendant, that the City of River Rouge is
responsible for what has happened. And Defendant at the last minute, I think has made
a deliberate attempt to mislead the jury that the City of River Rouge, which they
admitted in all the pleadings, were responsible for what happened, is no longer
responsible.
I tried to correct it in my rebuttal and I hope that I did, but I think I’m entitled – I should
have an instruction to that effect.
THE COURT: Your objection is noted. I’m not going to do anything in the way of the
jury. If I do start instructing, I’m telling them what the facts are in the case, whose
responsible, whose all that, I’m not willing to do that, to risk that.
So, I think you may be – you did the best you can at cleaning it up in rebuttal.
So, your objection is noted, I’m going to leave it at that.
Mr. Donaldson, any comments?
MR. DONALDSON [defendant’s counsel]: I’m satisfied with the ruling.
MR. PITT: Again, for the record, I think a curative instruction – without a curative
instruction –
THE COURT: What do you want me to say, that the City is responsible for everything
that Mr. Redder [sic] did?
-9
MR. PITT: That Mr. Redder [sic] is an agent of the City and that the City is
responsible for the acts of its agent?
THE COURT: I’m going to deny that request. It’s as clear as you can make it. I will
have to deny that request.
After the trial court instructed the jury, plaintiff’s counsel reiterated its objection to the court’s failure to
read a curative instruction on agency. Defense counsel again stated that he was satisfied with the
instructions.
3
Even assuming that defendant did raise this issue pretrial, there was substantial evidence to support
that Reeder had authority over plaintiff, controlled plaintiff’s duties, took duties away, disciplined
plaintiff, set work hours, altered her paycheck, and created a hostile environment, which led to plaintiff’s
transferring out of the treasurer’s office. Plaintiff argues and defendant concedes that when an employer
gives its supervisors certain authority over other employees, it must also accept responsibility to remedy
the harm caused by the supervisors’ unlawful exercise of that authority. Champion v Nationwide
Security, 450 Mich 702, 712; 545 NW2d 596 (1996).
4
We observe, however, that defendant’s motion for directed verdict at the close of proofs and its
motion for judgment notwithstanding the verdict argued that none of the alleged adverse actions taken
by defendant occurred within the limitations period. Defendant did not argue the failure to appoint claim
specifically, except in a different argument -- that plaintiff failed to establish a prima facie case.
5
We note that at argument plaintiff agreed that a new trial would be warranted if this Court concluded
that the failure to appoint claim was improperly submitted to the jury, but the harassment claim was
properly submitted to the jury. However, plaintiff cannot complain if the verdict is affirmed.
Defendant’s briefs do not address the appropriate remedy should this Court conclude that submission of
the harassment claim was proper, and do not seek a new trial as an alternative to the relief sought -
reversal and entry of judgment for defendant.
-10
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
