Wendy Dishman v. State of Iowa

IN THE COURT OF APPEALS OF IOWA

No. 22-1491
Filed November 21, 2023

WENDY DISHMAN,
Plaintiff-Appellee,

vs.

STATE OF IOWA,
Defendant-Appellant.
________________________________________________________________

Appeal from the Iowa District Court for Polk County, David Porter, Judge.

The State of Iowa seeks interlocutory review following the district court’s

denial of its motion for summary judgment. REVERSED AND REMANDED.

Brenna Bird, Attorney General, and Samuel P. Langholz (until withdrawal)

and Job Mukkada, Assistant Attorneys General, for appellant State.

Matthew S. Brick and Michael W. Heilman of Brick Gentry, P.C., West Des

Moines, for appellee.

Heard by Greer, P.J., and Ahlers and Buller, JJ. Langholz, J., takes no part.
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AHLERS, Judge.

The facts related to the issues in this appeal are largely undisputed. Wendy

Dishman worked for the Iowa Department of Inspections and Appeals. Her job

duties included directing work related to investigating alleged fraud in Iowa’s public

assistance program and Medicaid fraud by health-care providers. Dishman’s

employment was terminated in 2015. She sought new employment in the Medicaid

industry. Dishman received and accepted a job offer from Truven Health Analytics

(Truven) in May 2016. Around the time Dishman applied for the job, Truven was

in the process of taking over the Iowa Medicaid Enterprises Program Integrity

contract. Truven’s contract with the State gave the State authority to determine

whether to approve Truven’s hiring of key personnel. Initially the State approved

Dishman’s hiring at Truven. But after Dishman had completed some of the

on-boarding, the State informed Truven it no longer approved Dishman’s hiring.

As a result, Dishman was not hired by Truven.

Dishman brought this action against the State of Iowa; individual state

employees, Rod Roberts, Charles Palmer, Mikki Stier, and Donald Gookin; and a

state contractor, Thomas Mologiannes. Her second amended petition asserted

four claims. Count I asserted a claim for intentional interference with contractual

relations. Count II asserted a claim for intentional interference with a prospective

contractual or business relationship. Count III asserted a claim for blacklisting in

violation of Iowa Code chapter 730 (2018). Count IV asserted a claim for violation

of her procedural and substantive due process rights guaranteed by article I,

section 9 of the Iowa Constitution.
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The defendants filed a pre-answer motion to dismiss. They argued

Dishman’s claims in counts I through III were barred by sovereign immunity under

Iowa Code section 669.14(4), a section of the Iowa Tort Claims Act, and argued

count IV should be dismissed because it failed to state a claim upon which relief

could be granted.

The district court granted the defendants’ motion in part and denied it in

part. It granted the motion regarding counts I and III against the State, but it denied

the motion regarding those counts against the individually named defendants,

finding there was a question whether the individual defendants acted within the

scope of their employment. As to count II, the district court dismissed the claim in

its entirety because it concluded the claim was barred by sovereign immunity under

section 669.14(4) with respect to all defendants due to Dishman’s allegation that

the named defendants’ allegedly tortious conduct was done within the scope of

their employment. As to count IV, the court denied the motion to dismiss,

concluding it was a claim on which relief could be granted. For those scoring at

home, the result of the ruling on the motion to dismiss was that counts I and III

remained against the individual defendants and count IV remained against all

defendants. All other claims were dismissed.

Following the court’s ruling on the motion to dismiss, State employees Rod

Roberts, Charles Palmer, Mikki Stier, and Donald Gookin filed a motion pursuant

to Iowa Code section 669.5(2) seeking to substitute the State as the named

defendant and remove themselves as named parties. At the same time, the Iowa

Attorney General’s Office filed a notification of certification of scope of employment,
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in accordance with section 669.5(2)(a),1 certifying that Rod Roberts, Charles

Palmer, Mikki Stier, and Donald Gookin were acting within the scope of their

employment at all relevant times and conceding the State must be substituted for

those named defendants. Dishman did not challenge the certification or the

substitution of parties. The district court granted the motion to substitute,

effectively dismissing the individual defendants from the suit and replacing them

with the State.2

The State moved for summary judgment on the remaining claims. Dishman

resisted. The district court denied the motion for summary judgment, reasoning

fact questions remained as to the individuals’ personal motivations for their

conduct. The State applied for interlocutory appeal. The supreme court granted

the application and transferred the case to this court.

I. Standard of Review

We review summary judgment rulings for legal error. Garrison v. New

Fashion Pork LLP, 977 N.W.2d 67, 76 (Iowa 2022). In doing so, we “(1) view the

facts in the light most favorable to the nonmoving party, and (2) consider on behalf

of the nonmoving party every legitimate inference reasonably deduced from the

1 Section 669.5(2)(a) provides,

Upon certification by the attorney general that a defendant in
a suit was an employee of the state acting within the scope of the
employee’s office or employment at the time of the incident upon
which the claim is based, the suit commenced upon the claim shall
be deemed to be an action against the state under the provisions of
this chapter, and if the state is not already a defendant, the state shall
be substituted as the defendant in place of the employee.
2 The individual defendants to whom we refer are the State-employed individual

defendants. Contractor Thomas Mologiannes was also named a defendant. He
was not subject to the substitution order because he is not a State employee. He
is not involved in this appeal.
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record.” Id. (citation omitted). Summary judgment is only proper when there is no

issue of material fact “and the moving party is entitled to judgment as a matter of

law.” Id. (citation omitted).

II. Analysis

We start by addressing the district court’s ruling on count I (intentional

inference with contractual relations) and count III (blacklisting). During oral

argument, Dishman conceded that summary judgment should have been granted

on those counts. We agree. See Iowa Code § 669.14(4) (recognizing the State

retains sovereign immunity against claims relating to interference of contract

rights). We reverse the district court’s denial of the State’s motion for summary

judgment on those counts.

The only remaining claim is count IV, seeking damages for alleged violations

of Dishman’s procedural and substantive due process rights guaranteed by

article I, section 9 of the Iowa Constitution—known as a constitutional tort claim or

Godfrey claim. Godfrey v. State created a standalone cause of action for money

damages for violations of the Iowa Constitution. 898 N.W.2d 844, 874–80 (Iowa

2017). Our supreme court recently overruled Godfrey and expressly stated “we

no longer recognize a standalone cause of action for money damages under the

Iowa Constitution unless authorized by the common law, an Iowa statute, or the

express terms of a provision of the Iowa Constitution.” Burnett v. Smith, 990

N.W.2d 289, 307 (Iowa 2023). Shortly thereafter, our supreme court explicitly

stated, “[D]irect claims for damages under . . . article I, section 9 of the Iowa

Constitution . . . are not available.” Venckus v. City of Iowa City, 990 N.W.2d 800,

812 (Iowa 2023).
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The holdings in Burnett and Venckus seem to foreclose Dishman’s claim.

But Dishman argues otherwise. Although she acknowledges that Burnett

forecloses pursuing her Godfrey claims after Burnett was filed, she contends her

action was on file before Burnett was decided and there remains a question

whether Burnett applies retroactively. So, she argues, she is entitled to litigate the

retroactivity question, and as a result, the district court properly denied summary

judgment on her Godfrey claims.

We disagree with Dishman that the question of retroactive application of

Burnett remains unanswered. One week after Burnett was decided, the supreme

court issued its ruling in Venckus. Like this case, Venckus involved a Godfrey

claim filed before Burnett was decided. See 990 N.W.2d at 806–07 (describing the

procedural history of the case). Even though Venckus’s claim had been on file

before Burnett was decided, the supreme court summarily affirmed the dismissal

of Venckus’s Godfrey claims, noting such claims “are not available” after Burnett.

Id. at 812. One week after Venckus, the supreme court filed Carter v. State.

No. 21-0909, 2023 WL 3397451, at *1 (Iowa May 12, 2023) (per curiam). As in

Venckus and this case, Carter’s Godfrey claims were on file before Burnett was

decided. Id. Nevertheless, the supreme court affirmed the dismissal of Carter’s

claims. Id. In doing so, it noted that Burnett overruled Godfrey because it was

“demonstrably erroneous and unworkable in practice” and noted “Carter’s

constitutional torts claims therefore cannot proceed.” Id.

We conclude that Venckus and Carter answer the retroactivity question

raised by Dishman. Both cases affirmed the dismissal of Godfrey claims despite

the fact they were on file before Burnett was decided because “such claims are not
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available.” Venckus, 990 N.W.2d at 812. Applying the holdings in Burnett,

Venckus, and Carter, we conclude Iowa no longer recognizes Godfrey

constitutional tort claims, whether on file before Burnett or not, so the district court

erred in denying the State’s motion for summary judgment on such claims. In

reaching this conclusion, we mean no criticism of the district court, as the district

court did not have the benefit of Burnett, Venckus, and Carter when it ruled on the

motion for summary judgment.

III. Conclusion

The district court erred in denying the State’s motion for summary judgment.

We reverse and remand for entry of an order granting summary judgment in favor

of the State on all remaining counts.

REVERSED AND REMANDED.