Tischer v. Housing & Redevelopment Authority of Cambridge , 2005 Minn. LEXIS 124 ( 2005 )

DISSENT

ANDERSON, PAUL H., Justice

(dissenting).

I must respectfully dissent from the majority’s conclusion that appellant Sandy Tischer’s civil breach of contract action is controlled by Dokmo and Dietz. See Dokmo v. Indep. Sch. Dist. No. 11, 459 N.W.2d 671 (Minn.1990); and Dietz v. Dodge County, 487 N.W.2d 237 (Minn.1992). Further, to the extent that the majority holding is mandated by Willis, I conclude that Willis should be overruled. Willis v. County of Sherburne, 555 N.W.2d 277 (Minn.1996).

Upon reflection, I have concluded that the dissents of Justice Gardebring in Dietz and Chief Justice Keith in Willis articulate the better legal analysis of this issue. As Justice Gardebring said in her dissent in Dietz: “administrative decisions made by the executive branch of government are entitled to deference”; but the result — in Dietz — is not only harsh, it “exalts form over substance” and effectively denies persons in Tischer’s position any meaningful appellate review. Dietz, 487 N.W.2d at 241 (Gardebring, J., dissenting). Moreover, as Chief Justice Keith said in Willis, our holding in Dietz was not “intended to give governmental bodies the right to breach their employment contracts free from judicial intervention.” Willis, 555 N.W.2d at 283 (Keith, C.J., dissenting). In essence, the majority has by its decision made “second class citizens” out of public employees such as Tischer. Id.

At this point, a brief review of the facts is in order. The Cambridge HRA hired Tischer as its Executive Director in 2000. In 2001, the Cambridge City Council began discussing the restructuring of the Cambridge HRA and transferring its powers. On April 15, 2002, the City Council transferred all of the Cambridge HRA’s functions to the city’s Economic Development Authority (EDA) effective at 12:01 a.m. on April 16. Three employees of the Cambridge HRA were retained as EDA employees, but Tischer was not retained.

At an “emergency meeting” at 10:47 p.m. on April 15, the Cambridge HRA and Tischer entered into an employment agreement that was signed by Cambridge HRA Chairperson Robert Theis and Tischer. The agreement contained the following provisions:

Whereas, Sandy Tischer, Executive Director of the Cambridge HRA, shall be employed under contract for a period of 2 years, beginning 11:00 pm April 15, 2002 and ending 11:00 pm April 15, 2004. This contract is legally binding and shall require a buyout in the total amount of her present monthly rate of $3,000.00, not counting future raises should the present structure of The Cambridge HRA change prior to the expiration of the contract.

Whereas, the following shall also be due and payable:

1) Any payable accumulated sick leave

2) Any payable accumulated vacation pay

3) Pension balance

4) Any vacation, pension, or sick leave that would have accumulated under present conditions

On May 7, 2002, after gaining two additional members, the Cambridge HRA by a 4-3 vote amended its bylaws to eliminate Tischer’s Executive Director position and terminated Tischer effective May 21, 2002.

Six months later, in November 2002, Tischer commenced a civil action in Isanti County District Court. In Count I of this action, Tischer sought unpaid wages under Minn.Stat. § 181.13 (2004) and in Count II she sought damages for breach of her April 15, 2002 employment contract with the Cambridge HRA. Tischer did not seek reinstatement to her position as Executive Director. The Cambridge HRA moved to dismiss Tischer’s action for lack of subject matter jurisdiction on the ground that Tischer did not, within 60 days of her employment termination, appeal her termination by writ of certiorari to the Minnesota Court of Appeals. The district court denied the Cambridge HRA’s motion, but on appeal the court of appeals reversed. In its opinion, the court of appeals relied on Dokmo, Dietz, and Willis. Tischer v. Housing and Redevelopment Auth. of Cambridge, 675 N.W.2d 361 (MinnApp. 2004).

In Dokmo, we held that a challenge to the action of a school district in refusing to reinstate a teacher could only be by certio-rari, and not by declaratory judgment action in the district court. Dokmo, 459 N.W.2d at 677. We concluded that the district court lacked subject matter jurisdiction to review the school district’s action and that a petition for writ of certiorari was the exclusive means of review. Id. Our decision in Dokmo, an action for the reinstatement of an employee, was based in part upon the constitutional principles of separation of powers which prohibit the judiciary from exercising de novo review of administrative decisions. Id. at 674.

In Dietz, we held that a petition for writ of certiorari was the exclusive means by which a nursing home administrator terminated by Dodge County could secure judicial review of her wrongful termination claim against the county. Dietz, 487 N.W.2d at 240-41. We said that we have

long held that in the absence of an adequate method of review or legal remedy, judicial review of the quasi-judicial decisions of administrative bodies, if available, must be invoked by writ of certio-rari.

Id. at 239. As in Dokmo, we stated that separation of powers principles limit judicial review of quasi-judicial decisions of the executive branch of government. Dietz, 487 N.W.2d at 239.

I conclude that Dietz and Dokmo do not mandate the result reached by the majority. Tischer’s action is only for breach of contract. She is not seeking reinstatement to her position as Executive Director of the Cambridge HRA. Thus, she is not asserting that her employment was wrongfully terminated by the Cambridge HRA. Rather, she seeks ordinary breach of contract money damages in a civil action. She asserts that her rights and the county’s liability can and should be determined based upon the validity and terms of her contract rather than the propriety of the Cambridge HRA’s exercise of its discretion in terminating her.

By framing her action as one for breach of contract, Tischer finds support in the language we used in Dietz when we said Dietz’s request for reinstatement and damages for mental anguish

highlights the fact that her claim is not an ordinary action for failure to perform on a contract for goods or services. The cause of action alleged in Dietz’s complaint would require the rights and liabilities of the parties to be fixed not by the terms of the contract, but by the propriety of the county’s exercise of discretion in terminating her.

Id. at 240. As I interpret Dietz, an employee is entitled to pursue monetary damages from a government entity for breach of contract because this issue is separate from the employee’s termination. As Chief Justice Keith said in his dissent in Willis: “the factual reasons underlying [the employee’s] termination will not be in issue.” Willis, 555 N.W.2d at 284 (Keith, C.J., dissenting). Tischer’s action does not require the court to delve into the Cambridge HRA’s justifications for terminating Tischer’s employment and therefore falls outside the scope of our decision in Dietz. Our decision in Willis is more problematic and, to the extent that Willis prevents Tischer from pursuing her breach of contract action, I conclude that it should be overruled.

To engage in a proper review of Tischer’s breach of contract action, we would need to determine whether Tischer had a valid contract and whether it was breached by the Cambridge HRA. But we are not in a position to perform this task because all we have before us are some resolutions and meeting minutes.⁵ Justice Gardebring said in her dissent in Dietz, there are “serious problems” with the application of the principles for review by certiorari when applied to an employment contract case, and that.it “takes deference to an unreasonable extreme.” Dietz, 487 N.W.2d at 241. Again, as Justice Gar-debring said in Dietz:

There is no reason why our duty of deference to a co-equal branch of government precludes us from deciding [whether appellant had a contract and whether it was breached]. It is not our role to second-guess the county’s decision, so long as there is evidence in the record to support it. But at the same time, it is entirely inappropriate for us to approve of contracts being breached, whether by a government agency or anyone else.

Id. We must keep in mind that it is within the power, oftentimes within the discretion, of the government entity to make an adequate record. By our decision in Willis and here today, we have essentially established a system by which a government entity can shield itself from any meaningful review of its actions under an employment contract.

There are genuine issues of material fact regarding Tischer’s breach of contract action. She is entitled to a forum in which she can make a record which, upon appeal, would provide us with a meaningful basis to make a decision. Anything less would result in us blindly deferring to a government entity’s decision. Tischer is entitled to have her breach of contract action heard on its merits; therefore,. I would reverse the court of appeals and uphold the district court’s decision denying the city’s motion to dismiss for lack of jurisdiction.

5 . Historically, review by writ of certiorari is limited to looking at the legal import of the facts in the record and determining whether there was a reasonable basis for the lower tribunal's decision. Stefan A. Riesenfeld, John A. Bauman, and Richard C. Maxwell, Judicial Control of Administrative Action by Means of the Extraordinary Remedies in Minnesota, 33 Minn. L.Rev. 685, 707-10 (1949). See Dietz, 487 N.W.2d at 241 (Gar-debring, J., dissenting).