In Polygraph Case, Lieutenant Retains Most Of Multi-Million Dollar Judgment Against City

Dan Dixon was a lieutenant with the City of Coeur d’Alene, Idaho Police Department. In December 2008, allegations were made that Dixon had falsified timekeeping records and intentionally violated a subordinate officer’s rights under a labor agreement. In January 2009, the City began an internal investigation into these allegations. As part of the investigation, and pursuant to City policy and Dixon’s employment agreement, Dixon submitted to two independent polygraph exams. Both polygraph examiners determined that Dixon was deceptive in his answers.

At the completion of the investigation, police investigators made the determination that Dixon was in fact lying, that he had falsified his timekeeping records, and that he manipulated a subordinate officer’s schedule. This determination prompted the Chief’s recommendation that Dixon’s employment be terminated. Following a pre-termination hearing, the City’s Personnel Officer Jon Ingalls determined that in lieu of termination Dixon should be demoted two ranks from lieutenant to patrol officer with a similar reduction in pay.

Believing the demotion amounted to constructive discharge, Dixon did not return to work, and the City Personnel Officer conducted a second pre-termination hearing. Following that hearing, the City terminated Dixon’s employment.

Dixon and his wife sued the City, alleging constructive discharge; violation of substantive due process rights in his employment; breach of his employment contract; negligence in investigation and termination of his employment; inadequate supervision and training of City employees; and negligent infliction of emotional distress. A jury ruled in favor of the Dixons, awarding $2,763,541 in economic damages and $500,000 in non-economic damages each to Dan and Heidi Dixon, for a total verdict of $3,763,541.

The City filed a motion to overturn the verdict, making essentially two arguments: (1) The Court should have allowed the results of the polygraph examinations into evidence; and (2) The damages award should either be completely overturned or greatly reduced.

A federal court rejected the City’s arguments with respect to the polygraph examinations. The Court found that the polygraph evidence was “relevant for obvious reasons,” but concluded under the Federal Rules of Evidence that the “potential prejudice substantially outweighs the probative value” of the examinations. The City contended that the Court’s rulings prevented the City from being able to defend the claim that its investigation was arbitrary, that it negligently supervised or trained its employees, or that it failed to follow its policies. The City also contended that the Dixons’ expert “opened the door” by testifying that he saw no evidence in the entire file he reviewed (which included the polygraph examination results) that Dixon had been dishonest.

The Court was unconvinced, noting that it had “carefully considered the testimony of Plaintiffs’ expert concerning the investigation, as well as the City’s argument that its ability to defend was hampered by the exclusion of the tests. Put simply, the Court continues to find, and thus conclude, that the prejudicial effect of the polygraph evidence substantially outweighs their probative value. At no point, before, during, or after trial, has sufficient evidence or testimony arisen to alter the Court’s prior analysis and ruling on the issue. Thus, the City’s motion is denied with regard to revisiting the issue of admissibility of the polygraph examinations.”

The City also asked the Court to reduce the amount of damages awarded to the Dixons, arguing that the damages were clearly excessive, not supported by the evidence and based on speculation and guesswork. The Court partially agreed, finding that “the jury’s award of damages for future lost earnings appears to have been founded upon the basis that Dixon would have been promoted to the rank of Captain by 2013, and would have retired at 60 years of age in that position. After thoroughly reviewing the record, the Court concludes that there was sufficient evidence that Dixon would retire at 60 years of age, but there was insufficient evidence to support a factual finding that he would have retired in the rank of Captain. In the Court’s view, this finding by the jury is speculative given that the evidence at trial was that Dixon would have to apply for and pass the test to be promoted to a Captain position. There is simply not sufficient evidence to support that Dixon would be the only, or the top candidate for the position if it did become available, or that he was otherwise more likely than not to have received the promotion at any specific time.”

In the end, the Court gave the Dixon’s a choice: “(1) accept the future damages award in the amount of $2,238,899, which is a reduced amount from Dixon’s supposed promotion to Captain, for a total award, including general damages, of $3,238,899; or 2) proceed to a new trial limited solely on the issue of Dixon’s future economic damages.”

Dixon v. City of Coeur d’Alene, 2012 WL 2923149 (D. Idaho 2012).