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FOLAK v. SHERIFF'S OFFICE OF COOK COUNTY

January 26, 1984

CHESTER FOLAK, PLAINTIFF,
v.
SHERIFF'S OFFICE OF COOK COUNTY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Shadur, District Judge.

MEMORANDUM OPINION AND ORDER

Chester Folak ("Folak") filed a Complaint and then a First Amedended Complaint (for convenience the latter will be termed the "Complaint") asserting one of the classic causes of action under 42 U.S.C. § 1983 ("Section 1983"): Folak alleged his employers (Sheriff's Office of Cook County*fn1 and Sheriff Richard J. Elrod (collectively "Elrod")), in firing him as a Deputy Sheriff, deprived him of a property interest in public employment without a hearing. Elrod has filed a non-classic response: a 50-page factual stipulation by Folak, publicly filed in the criminal case United States v. Folak, No. 82 CR 467 (N.D.Ill. Nov. 1, 1983), in which Folak admitted to facts underlying numerous counts of alledged mail fraud (18 U.S.C. § 1341) and extortion (18 U.S.C. § 1951) perpetrated in the course of his employment.

In light of Folak's stipulation Elrod offers two motions:

    1. one under Fed.R.Civ.P. ("Rule") 12(b)(6) for the
  Complaint's dismissal for failure to state a claim
  upon which relief can be granted;*fn2 and
    2. the other under (a) Rule 11 or (b) the bad faith
  exception to the American Rule Or (c) 28 U.S.C. § 1927
  ("Section 1927") or a combination of them for
  imposition of attorneys' fees and other sanctions on
  Folak and his attorney Jeffrey B. Steinback
  ("Steinback") for bringing this action vexatiously,
  unreasonably and in bad faith.

Despite Elrod's indignation at being haled into court by a former employee who has admitted offical malfeasance, he has not established the bad faith of either Folak or Steinback. Through Elrod ultimately prevails on his motion to dismiss, his sanctions motion is denied.

Facts*fn3

Folak was a Cook County Deputy Sheriff from 1971 to March 1983, when he was fired without written notice or a statement of reasons for his termination. Elrod's failure to afford Folak procedural safeguards before termination was allegedly in contravention of Elrod's commitment, voluntarily undertaken in General Order 7000 of the Court Services Department (the "Order"),*fn4 to provide Folak notice and a hearing on the reasons for termination. Elrod's position, that the Order's language establishes as a matter of law its inapplicability to Folak's termination, is considered below in the discussion of controlling legal principles.

Folak was indicted July 6, 1982 on numerous counts of mail fraud and extortion. On February 28, 1983 he stipulated to the facts underlying the indictment. Elrod dismissed him from his job the following month. Judge McMillen later tried Folak and his co-defendants via a "stipulated bench trial" (based solely on the facts agreed upon in the stipulation, without presentation of other evidence). Folak's defense was that the facts as stipulated did not constitute federal offenses. Judge McMillen's November 1, 1983 decision credited Folak's defense on 11 counts but convicted him on the remaining 28.

Because Folak was not convicted until after he had been fired, Elrod's argument for the propriety of the firing is based not on the conviction but on the stipulation. That stipulation undeniably constitutes good cause for dismissal. For example, describing the stipulated facts regarding two of the counts on which Folak was found guilty,*fn5 Judge McMillen wrote (slip op. at 30-31):

  Counts Thirty Nine and Forty involve a seizure warrant
  of the Department of Revenue against the William Tell
  II, Inc. for $106,772.72, assigned to defendant
  Folak. Defendant [Hyman] Schmidt went to the premises
  on July 30, 1980, and the owner Louis Patras told
  Schmidt that he intended to make a partial payment of
  $25,000 to the Department of Revenue that day. Schmidt
  suggested that they make their own deal, and defendant
  Folak then came to the premises. Folak and Schmidt
  advised Patras to change the name of the corporation
  and give them a $10,000 check payable to Gebel
  Liquidators and $5,000 in cash.
  No arm's length sale or auction was held, the warrant
  was not in fact executed, and the restaurant continued
  in operation under its original name during the entire
  period. No remittance was made of the $5,000 cash
  which was paid by Patras to the two defendants and to
  Gebel.

Property Interest in Continued Employment


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