Buchholtz v. Dugan

977 S.W.2d 24, 1998 Ky. App. LEXIS 79, 1998 WL 637208
CourtCourt of Appeals of Kentucky
DecidedSeptember 11, 1998
Docket1997-CA-000404-MR
StatusPublished
Cited by8 cases

This text of 977 S.W.2d 24 (Buchholtz v. Dugan) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buchholtz v. Dugan, 977 S.W.2d 24, 1998 Ky. App. LEXIS 79, 1998 WL 637208 (Ky. Ct. App. 1998).

Opinion

DYCHE, Judge.

Wolfgang Buchholtz appeals from the Fay-ette Circuit Court’s dismissal of his defamation claim by summary judgment, and dismissal of his wrongful discharge claim by directed verdict. We affirm.

Buchholtz initiated this action in Fayette Circuit Court on October 2, 1989, asserting state and federal claims relating to his termination from employment as the manager of the University of Kentucky (UK) College of Engineering Machine Shop. Appellees removed the matter to U.S. District Court for the Eastern District of Kentucky on October 23, 1989, and filed a counterclaim against Buchholtz to recover money for the value of services alleged to have been misappropriated. The U.S. District Court dismissed all of the federal claims in the complaint and remanded the pendent state claims as well as appellees’ counterclaim to Fayette Circuit Court. On appeal to the Sixth Circuit Court of Appeals, the judgment of the District Court was affirmed.

On November 23,1994, the Fayette Circuit Court granted appellees’ motion for summary judgment on all claims except the two which are the subject of this appeal: wrongful discharge and defamation. After further discovery, the court granted summaiy judgment to appellees on the defamation claim, but allowed the wrongful discharge claim to proceed to trial. At the close of appellant’s evidence, the court directed a verdict in favor of appellees, and appellees dismissed the counterclaim with leave to reinstate should appellant prevail here. This appeal followed.

Buchholtz was hired by UK in 1968 to be manager of the UK College of Engineering Machine Shop. Buchholtz had previously worked at Princeton University and was hired at UK by Robert Drake, Dean of the College of Engineering from 1966 to 1972, and formerly Buchholtz’s supervisor at Princeton. Drake told Buchholtz that he could do private consulting work the equivalent of one day per week, like other faculty, as long as that work did not interfere with his UK duties or compete with local machine shops. The U.S. District Court, referring to a deposition of Drake, stated in its opinion that “it was understood that [Buchholtz’s] private consulting work ... did not envision the use of other UK employees (i.e., shop machinists) during the regular work day or the appropriation of UK machine shop equipment and supplies.” Buchholtz asserts in this appeal that he believed the authorization allowed the use of machine shop facilities, materials, and machinists.

*26 Some of Buchholtz’s private consulting work involved precision machining at the specific request of a client. When such work could be done by a local machine shop, Buch-holtz declined to do it privately and scheduled it as an Office of Engineering Services (OES) job. When Buchholtz undertook a job privately he used the machine shop, shop scrap material, clients’ materials, or materials he purchased from the shop inventory. Machinists under his supervision who worked on one of his private projects recorded their work by the clients’ names on their time sheets, and Buchholtz reported this as “non-billable” time. He billed for the work privately, collected consulting fees through a post office box, paid machinists personally for their work, and deposited his earnings in his credit union account. From 1983-1988, Buchholtz acted as a private consultant and provided machining services for Databeam and Projeetron, two Lexington companies owned by UK professor Lee Todd and then former-Dean Drake. Buchholtz never reimbursed UK for the use of the shop machines, scrap materials, or the machinists’'work.

Robert Dugan became Buchholtz’s supervisor in 1980, and Ray Bowen became Dean of the College of Engineering in 1983. Buch-holtz continued his private consulting work, but never discussed the work or negotiated an agreement allowing him to continue the work with Dean Bowen. By 1987, some enmity had developed between Buchholtz and Dugan, and Dugan began observing Buch-holtz’s activities more closely.

On September 29, 1988, a “rush job” from Projeetron came in and Buchholtz, who was leaving for a dental appointment, asked a machinist to suspend his work on a UK job in order to accommodate Projeetron, explaining that he would correct the time sheets later. The machinist informed Dugan, and Dugan obtained copies of time sheets reflecting Da-tabeam and Projeetron work done by the machinists over the past five years. The following Monday Buchholtz was called into a meeting with Dugan, Bowen, and Tom Moore, Budget Director of the UK College of Engineering.

At this October 3, 1988, meeting, Buch-holtz was informed that there were discrepancies in time sheets and a possible misappropriation of funds, specifically related to Databeam and Projeetron, and that an audit might be necessary to investigate these problems unless Buchholtz could explain them. Buchholtz stated that he had performed some weekend work for Projeetron, and encouraged UK to proceed with an audit. Buchholtz was suspended without pay pending the outcome of the audit.

John Carrico, an auditor in the Office of Management and Organization, conducted the internal audit. He reported that from 1983-88, UK machinists had worked approximately 1,394 hours on private projects that were never billed through the University, amounting to $23,745 in losses to UK. He concluded that “it appears the Machine Shop Manager is in violation of University Personnel Policy and Procedure 18.0 regarding outside employment and [Kentucky Revised Statutes] KRS 514.030, KRS 514.070 and KRS 517.110 regarding theft and misapplication of property.” After the issuance of this report, in the words of the Sixth Circuit opinion, Buchholtz was “terminated for violating UK Staff Personnel and Policy Procedures in violation of University or department rales; falsification of University records; and dishonesty on the job.”

The UK Police Department filed a criminal complaint against Buchholtz charging him with two counts of failure to make required disposition of property. He was indicted by the Fayette County Grand Jury, pled not guilty, and was tried. At the close of the prosecution’s case, a directed verdict of acquittal was entered on appellant’s behalf. The court concluded that the Commonwealth had failed to prove that there was a “known legal obligation” to pay the money to UK. The parties then proceeded down the winding road of civil litigation which has led to this appeal.

Appellant’s first assignment of error is that the trial court erred in directing a verdict in favor of UK on the wrongful discharge claim. Under Kentucky law, a directed verdict is appropriate when, drawing all inferences in favor of the nonmoving party, a reasonable jury could only conclude that the moving party was entitled to a verdict. Gar *27 rison v. Jervis B. Webb Co., 583 F.2d 258 (6th Cir.1978).

Appellant was permitted to present evidence at trial that the oral agreement reached with Drake removed him from the status of an at-will employee pursuant to Hammond v.

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Bluebook (online)
977 S.W.2d 24, 1998 Ky. App. LEXIS 79, 1998 WL 637208, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buchholtz-v-dugan-kyctapp-1998.