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HIXON v. DURBIN

March 31, 1983

Barry C. HIXON
v.
John DURBIN, et al.



The opinion of the court was delivered by: NEWCOMER

 NEWCOMER, District Judge.

 Before the court are several summary judgment motions in this civil rights and diversity action, which arose out of a dispute over a state employment contract. Defendants Harvey Bartle, III and Jay Waldman move for summary judgment on plaintiff's sole remaining claim against them, which is a claim of deprivation of a property interest without due process of law in violation of 42 U.S.C. § 1983. Plaintiff has filed a cross-motion for partial summary judgment on the issue of liability against defendants Bartle and Waldman. Also, defendant Fred Heddinger moves for summary judgment on the two remaining claims against him, state-law claims of interference with prospective contractual relations and defamation. All other claims set forth in the complaint, including all claims against defendant John Durbin, have been dismissed either by my order of July 27, 1982, 545 F. Supp. 231, or by stipulation of the parties. *fn1"

 I. BARTLE AND WALDMAN'S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFF'S CROSS-MOTION.

 A. Undisputed Facts.

 The following statement of undisputed facts is derived from defendants' reply to plaintiff's motion for partial summary judgment, plaintiff's reply memorandum in support of his motion for partial summary judgment, and other submissions of the parties.

 1. The complaint in this case was filed on February 17, 1982.

 2. The plaintiff is an adult individual named Barry C. Hixon.

 3. Mr. Hixon was born on February 28, 1943.

 4. Defendant Harvey Bartle, III, on or about June 24, 1980, was the acting Attorney General of the Commonwealth of Pennsylvania. He held the office of Attorney General until January 21, 1981.

 5. Defendant Jay C. Waldman is General Counsel of the Commonwealth of Pennsylvania. He has held this office since January 21, 1981.

 6. The Pennsylvania Public School Employees' Retirement Board ("the Board") administers the Pennsylvania Public School Employees' Retirement Fund, a multi-billion dollar fund which provides retirement benefits to public school employees in the Commonwealth of Pennsylvania.

 7. The members of the Board are subject to 24 Pa.C.S. § 8521(e), which provides:

 
"The members of the board, employees of the board, and agents thereof shall stand in a fiduciary relationship to the members of the system regarding the investments and disbursements of any of the monies of the fund and shall not profit either directly or indirectly with respect thereto."

 8. On September 14, 1964, when he was 21 years old, Mr. Hixon pleaded guilty to criminal charges of burglary, larceny and receiving stolen goods and was sentenced to three years probation.

 9. Paragraph 22 of the Complaint alleges in part that plaintiff "became an expert in financial matters, and ultimately became an Assistant Vice-President of The First National Bank of Pennsylvania."

 10. The highest title ever held by Barry Hixon at The First National Bank of Pennsylvania was that of "Municipal and Corporate Services Officer." Mr. Hixon explained at his deposition on November 16, 1982, that just prior to his departure from the Bank to work for the Treasury Department he was nominated to become an Assistant Vice-President, but that the promotion was not made final and formally adopted because he was about to leave the Bank.

 11. In December of 1976, on the occasion of the Pennsylvania Society Dinner in New York, Mr. Hixon was offered a job with the Treasury Department of the Commonwealth of Pennsylvania by newly elected State Treasurer Robert E. Casey.

 12. Mr. Hixon was subsequently asked to complete a job application form for the Treasury Department. Mr. Hixon's completed job application form falsely stated that he had not previously been convicted of a crime.

 13. After working for the Treasury Department, plaintiff went to work for the Board. From June 15, 1978, through June 14, 1980, Mr. Hixon was under contract to the Board "to furnish professional services, of which consultant has unique and special expertise in the area of economics, financial planning and advice. . . ."

 14. The contract called for Mr. Hixon to work as an independent contractor and to receive a consultant fee of $46,000 annually, to be paid at a rate of $207.11 per normal work day completed.

 15. On September 7, 1979, and again on May 25, 1980, a majority of the Board voted to enter into a proposed new two-year contract with Mr. Hixon as its Investment Coordinator, at an annual compensation of $58,500.00.

 16. The proposed new contract was drafted and a copy, unexecuted by the Board Chairmen, John Killian and Barry Hixon, was submitted by the Board to the Office of the Attorney General for approval as to form and legality as required by the Pennsylvania law.

 17. The proposed new contract was very similar to Mr. Hixon's first contract with the Board except that his fee was to be $11,900.00 higher and his duties were to be expanded. One of Mr. Hixon's new tasks would have been to manage any monies requested and approved by the Board.

 18. Under the proposed new contract, Mr. Hixon would have been responsible for managing billions of dollars of public pension funds.

 19. On June 24, 1980, in a letter to John D. Killian, the Chairman of the Board, Attorney General Bartle, disapproved the proposed contract of June 15, 1980, and advised the Board that no contractual relationship existed between the Board and Mr. Hixon.

 20. The Attorney General's decision was based on the reasons set forth in the following letter:

 
"The Department of Justice has reviewed the proposed contract between the Public School Employes Retirement System and Barry C. Hixon. You are hereby advised that I, as Attorney General, disapprove the contract. This disapproval means that no contract relationship between the Commonwealth and Mr. Hixon now exists, the previous two year contract having ended on June 14, 1980.
 
This Board manages over $4.5 billion in assets for the pensions of current and retired public school employees. Under the Act of October 2, 1975, P.L. 298, No. 96, known as the Public School Employes' Retirement Code, the members of the Board have substantial fiduciary responsibilities as trustees of the Fund (24 P.S. § 8521). Specifically, the members of the Board have a fiduciary relationship to the thousands of current and retired school employes for the Board's actions, including the hiring of professional personnel under contract to the Board. There must be the highest degree of ...

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