Paul A. Scholz v. Washington State Patrol , 416 P.3d 1261 ( 2018 )

FILED
MAY 17, 2018
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
PAUL A. SCHOLZ, )
) No. 34919-5-III
Appellant, )
)
v. )
)
WASHINGTON STATE PATROL, AN ) OPINION PUBLISHED
AGENCY OF THE STATE OF ) IN PART
WASHINGTON )
)
Respondent. )
SIDDOWAY, J. — Paul Scholz appeals the summary judgment dismissal of a
disability discrimination claim through which he sought damages for the termination of
his employment by the Washington State Patrol.1 The trial court concluded that his claim
was barred by collateral estoppel on account of a labor arbitration determination that his
1
Mr. Scholz also appealed dismissal of a breach of implied contract claim and
assigned error to that dismissal in his opening brief. He devoted no argument to the issue
in his brief nor did he address it at oral argument, however, and we consider it
abandoned.
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employment was terminated for just cause. Mr. Scholz challenges whether the labor
arbitration presented an issue identical to any issue presented by his disability
discrimination claim, argues that applying preclusive effect will work an injustice, and
argues that the arbitrator’s decision reveals an erroneous finding on a material fact.
As a matter of first impression, we hold that with one modification, three special
considerations applied in determining whether facts determined in an administrative
hearing have preclusive effect should also apply to facts determined in an arbitration
hearing. Finding that all of the elements required to apply collateral estoppel are present,
we affirm.
FACTS AND PROCEDURAL BACKGROUND
Paul Scholz sued the Washington State Patrol (Patrol) for terminating his
employment based on the results of an investigation of his involvement in a semitruck
pileup on a winter morning in January 2012. Then-Officer Scholz had stopped his patrol
vehicle in the right lane of westbound Interstate 90 (I-90) on Snoqualmie Pass in bad
weather and had been speaking with the driver of a semitruck parked in the lane to his
left. When he found himself at the front end of what quickly became a six-semitruck
pileup, Officer Scholz was in fear for his life.
In his complaint for damages, Mr. Scholz alleges that within hours of the accident
and despite his obvious emotional distress—later described by his expert as an acute
anxiety disorder—he was taken to the Patrol’s scale house and was questioned about the
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accident. His answers led to an accusation that he lied and to a formal investigation by
the Patrol’s Office of Professional Standards. Following completion of the Patrol’s
investigation, his employment was terminated.
Mr. Scholz’s complaint asserted a claim for disability discrimination in violation
of chapter 49.60 RCW. A little less than a year after it was filed, the Patrol moved for
summary judgment, contending that his discrimination claim was precluded by a 2014
labor arbitration determination that the Patrol terminated Mr. Scholz’s employment for
just cause. Mr. Scholz responded that the 2014 arbitration decision should not be given
preclusive effect because the issue decided in the arbitration was not identical to issues
presented by the lawsuit, and applying preclusive effect would work an injustice.
With the context framed, we delve into more detail about the arbitration.
The labor arbitration
At the conclusion of the Patrol’s investigation of the pileup, it terminated Mr.
Scholz’s employment based on untruthfulness and violations of other Patrol rules. The
Professional and Technical Employees Local 17 (Union) and Patrol’s collective
bargaining agreement (Agreement) provides in article 29 that permanent employees shall
only be disciplined for “just cause.” Clerk’s Papers (CP) at 77. “Discipline” as used in
the Agreement includes discharges. Mr. Scholz’s Union grieved the termination, which
was denied. The Union and the Patrol then requested arbitration under the Agreement
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and mutually selected an arbitrator. Arbitration was conducted over four days. The
following facts are taken from the arbitrator’s decision.
In Mr. Scholz’s position as a commercial vehicle officer for the Patrol, his main
responsibility was to inspect and weigh vehicles at the Cle Elum scale house. In winter
months, when snowy conditions required the use of tire chains, he was authorized to
enforce chain requirements in the Snoqualmie Pass and Blewett Pass areas. As a limited
authority officer, he was not empowered to enforce the rules of the road, such as citing
drivers for speeding.
Bad weather and bad road conditions existed on the morning of the pileup.
Officer Scholz was sent out to conduct chain enforcement on I-90 in an area east of
Snoqualmie Pass. He was specifically directed to watch for drivers of trucks parked and
chaining up improperly on the right shoulder of the westbound lanes and to instruct them
to move a few miles ahead to a safer, designated chain-up area. He encountered two
large semitrucks parked on the shoulder at a location that was a particularly dangerous
place to chain up because it was approached on a curve, making it difficult for an
approaching driver to see the semis until the driver was almost upon them. He turned on
his emergency lights and came to a stop in the right lane next to the two stopped semis.
What happened as Officer Scholz approached the two semis and stopped was
disputed. A semitruck with double trailers being driven by Rigoberto Flores-Garcia was
traveling westbound at the same time as Officer Scholz, and there is some evidence that
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upon stopping and getting out of his vehicle, Officer Scholz flagged Flores-Garcia to
stop. For whatever reason, Flores-Garcia did stop in the lane to the left of, and next to,
Officer Scholz’s vehicle, thereby blocking the second lane for westbound traffic.
Leaving his motor running and his emergency lights flashing, Officer Scholz walked
around the cab of the Flores-Garcia vehicle to tell him the road was extremely icy and he
needed to slow down.
As Officer Scholz started to walk back toward his patrol vehicle, a fourth semi-
truck came along at high speed and crashed first into the patrol vehicle, and then into the
two semitrucks on the shoulder before coming to a stop mostly in the right lane. Within
moments or even seconds, two more westbound commercial vehicles came upon the
scene and crashed into the four stopped vehicles, creating a massive pileup that totally
blocked westbound traffic. Hearing the crashing sounds but with his visibility blocked by
the cab of the Flores-Garcia truck, Officer Scholz—afraid of being hit and killed—ran to
the safety of a snowbank in the median.
Trooper Darren Wright arrived on the scene within minutes of the collision and
was told by Officer Scholz that he had parked in the right lane, next to the semitrucks
parked on the shoulder, and that he had flagged the Flores-Garcia vehicle down for
speeding. Asked how he was doing, Officer Scholz told Trooper Wright and other
arriving officers that he was “okay,” “not hurt,” and was not injured, but the officers
described Scholz as shaken up and “kind of” or “a little bit” in shock. CP at 35. When
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his immediate supervisor arrived, Officer Scholz was upset and crying and hugged her—
an unusual gesture for him.
Sgt. Kevin Overbay was dispatched from Wenatchee to investigate and arrived at
the Cle Elum scale house a couple of hours after the accident, where he interviewed
Officer Scholz. When Sgt. Overbay asked what had happened, Officer Scholz told the
sergeant he had parked on the shoulder, behind the two semitrucks whose drivers were
chaining up. He also told the sergeant that he had not flagged down Flores-Garcia but
had merely signaled for Flores-Garcia to slow down by pumping his arms up and down,
palms down. When Sgt. Overbay pressed Officer Scholz on whether he had stopped in
the right lane of traffic, Officer Scholz said he had been “completely on the shoulder.”
CP at 53. Officer Scholz’s statements to the sergeant were overheard by others. Later
that day, investigators at the scene reported to Sgt. Overbay that based on the tire marks,
Officer Scholz’s vehicle had been parked in the right lane, not on the shoulder.
Within a few days after the pileup, Officer Scholz went to a medical clinic and
saw a physician’s assistant and a counselor. He had three counseling sessions with the
counselor and within a few weeks of the pileup saw a psychologist, Dr. James W. Cole,
who treated him for acute stress disorder.
Officer Scholz was placed on special assignment at home and an extensive
investigation ensued. Officer Scholz was reinterviewed in May and September 2012. In
the May interview, which took place after the investigation called into question his
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statements to Sgt. Overbay, Officer Scholz denied ever having told the sergeant that he
parked on the shoulder. He admitted parking in the right lane. But he insisted that his
position relative to Flores-Garcia had left ample room for travel between their vehicles,
drawing a sketch to support his explanation. The arbitrator characterized Officer
Scholz’s description and depiction of I-90 and the vehicles’ positions as “clearly
untruthful.” CP at 58. Officer Scholz also insisted in the May interview that he was still
inside his patrol vehicle when he merely motioned with a finger for Flores-Garcia to slow
down, telling interviewers that Flores-Garcia decided to stop in a traffic lane on his own.
He claimed not to recall having told Sgt. Overbay that he motioned Flores-Garcia to slow
down by pumping his arms up and down.
In his final, September interview, Scholz stuck by his statements in May.
Investigators found violations by Officer Scholz of four regulations, the most
serious being the prohibition of untruthfulness. Following a Loudermill2
predetermination hearing, the Patrol issued a final determination letter citing the same
violations and terminating his employment.
Other matters were factually and legally at issue in the labor arbitration, but
relevant for our purpose is only whether in deciding there was “just cause” for Officer
2
Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 105 S. Ct. 1487, 84 L. Ed.
2d 494 (1985).
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Scholz’s termination, the arbitrator necessarily determined that he had been intentionally
untruthful in making false statements and that his evidence of a mental disorder did not
explain or excuse the untruthfulness.
Since the parties’ Agreement did not define “just cause” and the Patrol’s process
for determining just cause had not been negotiated with the Union, the arbitrator relied on
labor arbitration common law, citing a currently favored four element test for just cause:
1. That the grievant had notice of the rules to be followed and the
consequences of noncompliance;
2. That the grievant engaged in the misconduct of which he/she is
charged;
3. That there was procedural regularity in the investigation of the
misconduct; and
4. That the employer applied the discipline in a reasonable and even-
handed manner, considering the seriousness of the proven offense(s),
the employee’s disciplinary record and any aggravating or mitigating
circumstances, using progressive discipline when appropriate.
CP at 48 (emphasis omitted). The arbitrator explained that where untruthfulness was
alleged, she would apply the standard of clear and convincing proof, “because of the
serious consequences of being accused of untruthfulness.” Id.As summarized by the arbitrator, the Union’s defense to the charge that Scholz
was untruthful was that “[his] state of mind after the traumatic event caused him to be
unclear or mistaken in his explanations about what had happened.” CP at 43. The
arbitrator’s decision recounts Dr. Cole as diagnosing acute anxiety disorder because of
the trauma:
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He said such trauma can impact the individual’s perception of the traumatic
incident itself as well as his ability to communicate about the trauma. A
traumatized individual may say things they wish they had been able to do
or they may be somewhat confused about what had happened.
CP at 44. With a citation to the transcript of the arbitration hearing, she said that
according to Dr. Cole, “for Scholz, the intense anxiety symptoms lasted about a month.
His condition finally abated just short of the point at which the diagnosis would have
changed to post-traumatic stress disorder (PTSD).” CP at 45.3
Mr. Scholz testified during the hearing that he had always dealt with a learning
disability, dyslexia, and that it impaired his communication when under stress, which
might explain inconsistencies between what he told officers at the scene of the pileup and
what he later told Sgt. Overbay.
Based on this evidence, the arbitrator concluded “it was possible Scholz was still
suffering from emotional trauma and confusion during the meeting at the scale house. It
is possible that his memory was unintentionally inaccurate or he misspoke because of a
3
Elsewhere, and without citation to the hearing transcript, the arbitrator’s decision
states that Scholz’s counselor and Dr. Cole both expressed the opinion that “Scholz was
suffering from post-traumatic stress.” CP at 44. Since the arbitrator did not use the word
“disorder” in recounting that testimony, the witnesses apparently described only stress
following trauma, not PTSD.
Our record does not include the transcript of the labor arbitration hearing, nor was
it needed. We are concerned only with the arbitrator’s final, binding factual
determinations. Our reason for noting citations to the transcript is that Mr. Scholz argues
on appeal that the arbitrator’s decision is ambiguous as to whether Dr. Cole diagnosed
him with PTSD. Her decision is not ambiguous. Her use of only the single citation to the
transcript contributes to the clarity of her finding that Dr. Cole never diagnosed PTSD.
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life-long communication difficulty that became aggravated at that time because of stress.”
CP at 57. But the arbitrator found that self-serving inaccuracies in Officer Scholz’s later
interviews were not caused by anxiety, stress, or PTSD:
Clearly, however, the Grievant was no longer suffering from the
stress of the incident on May 31, 2012, when he was interviewed. . . . Dr.
Cole had released him as a patient at least two months earlier without
diagnosing long-term PTSD, because the Grievant’s symptoms had ended
within 30 days of the January 19 incident. In spite of the passage of time
and the improvement in his emotional condition, however, Scholz seemed
to dig in his heels and defend the inaccurate statements he had made to Sgt.
Overbay on January 19, though he had had ample opportunity to reflect
about the events and explain the entire incident truthfully to the
interviewers.
CP at 57-58 (citation omitted). She characterized his claim in May and September that he
merely signaled with a finger from his patrol car that Flores-Garcia should slow down as
“carefully calculated to show that driver Garcia was responsible for the eventual
roadblock and that Scholz did nothing that contributed to such blockage.” CP at 59.
Among the arbitrator’s articulated reasons for finding the Patrol had just cause for
terminating Officer Scholz’s employment were her factual determinations that Mr.
Scholz had been intentionally untruthful in making statements and that his evidence of a
mental disorder did not explain or excuse his untruthfulness.
The summary judgment decision
Having reviewed the parties’ submissions on the matters addressed in the labor
arbitration and heard the argument of counsel, the trial court granted the Patrol’s motion
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to dismiss the disability discrimination claim. Mr. Scholz moved for reconsideration,
arguing that the trial court mistakenly believed he was not suffering from PTSD at the
time he gave his May and September statements. He pointed to the following statements
made in a declaration he filed in opposition to summary judgment:
Immediately following the incident I was disabled and suffering from
PTSD, and continued to suffer during the investigation. I treated with Dr.
James Cole, Ed.D. for one year due to the trauma I suffered and diagnosed
me with Acute Stress Disorder and Anxiety Disorder. I was diagnosed with
PTSD in October of that year by Dr. Freedman, and he recommended
additional counseling for more months.
[At the arbitration hearing, t]here was never any questioning or
statements regarding the state of my disability during the times I was
providing the statements, and whether the employer considered my
disability at the time it adjudged me untruthful.
CP at 103-04. This is the only mention in the record on appeal of a “Dr. Freedman.” No
evidence of Dr. Freedman or his opinions was presented in the labor arbitration hearing.
The court considered but denied the motion for reconsideration. Mr. Scholz
appeals.
ANALYSIS
Collateral estoppel, modernly referred to as issue preclusion, bars relitigation of an
issue in a subsequent proceeding involving the same parties. Ullery v. Fulleton, 162 Wn.
App. 596, 602, 256 P.3d 406 (2011). It is distinguished from claim preclusion, or res
judicata, in that, instead of preventing a second assertion of the same claim or cause of
action, it prevents a second litigation of issues between the parties, even though a
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different claim or cause of action is asserted. Id. “Collateral estoppel is concerned only
with limiting the relitigation of factual issues.” 14A KARL B. TEGLAND, WASHINGTON
PRACTICE: CIVIL PROCEDURE § 35:33, at 552-53 (2d ed. 2009).
Issue preclusion applies only if (1) the issue decided in the earlier proceeding was
identical to the issue presented in the later proceeding; (2) the earlier proceeding ended in
a judgment on the merits; (3) the party against whom issue preclusion is asserted was a
party to, or in privity with a party to, the earlier proceeding; and (4) application of issue
preclusion does not work an injustice on the party against whom it is applied.
Christensen v. Grant County Hosp. Dist. No. 1, 152 Wn.2d 299, 307, 96 P.3d 957 (2004).
An important clarification of the first requirement that an issue was “decided” in the
earlier proceeding is that the issue must have been “actually litigated and necessarily
determined” in that proceeding. Shoemaker v. City of Bremerton, 109 Wn.2d 504, 508,
745 P.2d 858 (1987). Mr. Scholz concedes that only the first and fourth required
elements are at issue.
Additional factors are considered when issue preclusion is based on the decision of
an administrative agency, and Mr. Scholz argues they should also be considered when
issue preclusion is based on the decision of an arbitrator. They are (1) whether the
agency acted within its competence, (2) the differences between procedures in the
administrative proceeding and court procedures, and (3) public policy considerations.
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Christensen, 152 Wn.2d at 308. The Patrol disputes the factors’ application to
arbitration.
The three additional factors do not increase the showing required before applying
issue preclusion, so much as they point to considerations relevant to the fourth required
element (the “injustice” element) when the earlier proceeding was a nonjudicial
administrative determination. Given relevant similarities between administrative
hearings and arbitration, we largely agree that the factors should be considered here. In
Robinson v. Hamed, which held for the first time that a party to an arbitration proceeding
may be precluded from relitigating the same issue in a subsequent lawsuit, this court
described the preclusive effect of issues decided by an administrative agency as a
“closely analogous situation.” 62 Wn. App. 92, 98, 813 P.2d 171 (1991) (citing
Shoemaker, 109 Wn.2d 504). And the Restatement (Second) of Judgments treats
arbitration awards and administrative agency decisions similarly, providing that both
types of decisions generally have the same preclusive effect as a judgment, although the
procedure in either must exhibit the essential elements of adjudication. RESTATEMENT
(SECOND) OF JUDGMENTS §§ 83(2); 84(3)(b) (AM. LAW INST. 1982). We accept the
proposition that the three additional factors must be considered where issue preclusion is
based on an arbitration, but recast the first “competence” factor as asking whether the
issue was within the scope of the reference to arbitration. Cf. RESTATEMENT § 84, cmt. d.
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We review an order granting summary judgment de novo. Lybbert v. Grant
County, 141 Wn.2d 29, 34, 1 P.3d 1124 (2000). Summary judgment is proper if no
genuine issue of material fact remains and the moving party is entitled to a judgment as a
matter of law. CR 56(c). We view conflicting evidence in the light most favorable to the
nonmoving party. Lybbert, 141 Wn.2d at 34. When summary judgment is based solely
on collateral estoppel, there is no conflicting evidence—the labor arbitration decision
says what it says, and whether it is preclusive is an issue of law that we review de novo.
Ullery, 162 Wn. App. at 603 (citing Christensen, 152 Wn.2d at 305).
We first address Mr. Scholz’s argument that there is no identity of issues between
the labor arbitration and his disability discrimination claim, turn next to his argument that
the application of issue preclusion works an injustice, and finish with his contention that
the trial court’s decision was based on a material factual error.
I. IDENTITY OF ISSUES
Mr. Scholz contends that the labor arbitrator did not determine whether the mental
disability he suffered as a result of the trauma from the pileup was or was not a
“substantial factor” in the Patrol’s decision to terminate his employment. Br. of
Appellant at 17. It is true that the arbitrator made no determination couched in those
terms. But when collateral estoppel is asserted, the second claim is always different from
the first. The former claim and the new claim can be expected to raise at least some
different ultimate issues. Island County v. Mackie, 36 Wn. App. 385, 392, 675 P.2d 60714
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(1984). What matters is whether facts established in the first proceeding foreclose the
second claim. Id.Mr. Scholz also contends that the arbitrator “merely found [he] was untruthful.”
Br. of Appellant at 17 (emphasis added). This is not true. Elements of “just cause”
applied by the arbitrator called on her to assess whether the untruthfulness was culpable
or excusable. The second and third elements of “just cause” required a finding of
“misconduct,” and the fourth required a “reasonable” application of discipline, taking
into account the seriousness of the offense and any mitigating circumstances.
Mr. Scholz attempts to persuade us that we cannot know whether the arbitrator
affirmed his discharge based on innocent untruthfulness, arguing that she could have—
whereas discharging him for an innocent, disability-caused, falsehood would be
actionable discrimination. He points to the arbitrator’s familiarity with the Brady4 rule.
The Brady rule requires prosecutors to disclose exculpatory evidence to criminal
defendants, and exculpatory evidence includes whether an involved officer has a record
of dishonesty. The arbitrator was familiar with the Brady rule and why it makes
truthfulness especially important to the Patrol. Her decision even refers to an aphorism
reportedly common in the Patrol workforce, “‘If you lie, you die.’” CP at 42. But
despite the importance of the regulation forbidding untruthfulness, the arbitrator did not
4
Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963).
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treat untruthfulness as an automatic basis for discharge, nor has it been treated as an
automatic basis for discharging law enforcement officers in other cases.
In Kitsap County Deputy Sheriff’s Guild v. Kitsap County, a case involving the
discharge of a Kitsap County law enforcement officer, Division Two of this court vacated
a labor arbitrator’s determination, holding that ordering reinstatement of a mentally
disabled officer who lied was contrary to public policy. 140 Wn. App. 516, 526, 165
P.3d 1266 (2007). It discussed the importance to law enforcement of an officer’s ability
to testify free of Brady concerns. Id. at 522 & n.2. But the Washington Supreme Court
reversed the decision. Kitsap County Deputy Sheriff’s Guild v. Kitsap County, 167
Wn.2d 428, 440, 219 P.3d 675 (2009). The Supreme Court reinstated the arbitrator’s
“return to duty” order, holding that “[t]he Brady rule provides neither an explicit nor a
well-defined public policy against reinstating an officer found to be untruthful.” Id. at
438.
Here, neither the parties nor the arbitrator treated untruthfulness as an automatic
basis for being discharged from the Patrol. The Union advanced the defense that Officer
Scholz was blameless for any untruthfulness resulting from trauma-induced anxiety. The
arbitrator carefully weighed the evidence of mental disability and found that it could
excuse the officer’s untruthfulness when first questioned by Sgt. Overbay. Whether
Officer Scholz’s untruthfulness was intentional or whether it was the result of a mental
disorder was not only material, it was the most material disputed issue in the arbitration.
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Turning to the proof required for Mr. Scholz’s disability discrimination claim, he
would have to show that he was (1) disabled, (2) subject to an adverse employment
action, (3) doing satisfactory work, and (4) discharged under circumstances that raise a
reasonable inference of unlawful discrimination. Brownfield v. City of Yakima, 178 Wn.
App. 850, 873, 316 P.3d 520 (2013).
The arbitrator’s determination that Mr. Scholz “knowingly and intentionally lied
to his superiors during the [Patrol’s] investigation in an attempt to minimize his role in
causing an unsafe condition to exist on I-90”—a binding determination for purposes of
the discrimination lawsuit—is fatal to Mr. Scholz’s ability to prove the third element: that
he was doing satisfactory work at the time of his discharge. CP at 64.
And Mr. Scholz failed to present prima facie evidence of the fourth element: that
he was discharged under circumstances raising a reasonable inference of unlawful
discrimination. His discharge for untruthfulness cannot raise such an inference given the
binding determination that he was discharged for just cause. He offered no other
evidence that his mental health disorder gave rise to a reasonable inference of unlawful
discrimination.
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Because facts determined in the arbitration make it impossible for Mr. Scholz to
establish essential elements of a disability discrimination claim, the required identity of
issues is present.5
Affirmed.
The remainder of this opinion has no precedential value. Therefore, it will be filed
for public record in accordance with RCW 2.06.040, the rules governing unpublished
opinions.
II. PRECLUSION WORKS AN INJUSTICE
Washington case law on the injustice element “is most firmly rooted in procedural
unfairness. ‘Washington courts look to whether the parties to the earlier proceeding
received a full and fair hearing on the issue in question.’” Thompson v. Dep’t of
Licensing, 138 Wn.2d 783, 795-96, 982 P.2d 601 (1999) (quoting In re Marriage of
Murphy, 90 Wn. App. 488, 498, 952 P.2d 624 (1998)). “There is nothing inherently
unfair about [issue preclusion] provided the party has the full and fair opportunity to
litigate, there is no significant disparity of relief, and all the other requirements of
collateral estoppel are satisfied.” Christensen, 152 Wn.2d at 313.
5
In his brief on appeal, Mr. Scholz distinguishes the Union’s claim in arbitration
from his disability discrimination lawsuit by relying on several cases that involve claim
preclusion, rather than issue preclusion. See Br. of Appellant at 20-23. They are
inapposite and need not be further discussed.
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The arbitrator found that the parties in the labor arbitration were “thoroughly and
competently represented by their respective advocates throughout the hearing.” CP at 27.
The Patrol called 10 witnesses and offered 21 exhibits, one of which contained all of the
Patrol’s records from the investigation of the January 2012 accident. The Union called 3
witnesses, one being Dr. Cole, and offered 9 exhibits. Both the Union and the Patrol
submitted post-hearing briefs.
Mr. Scholz identifies three procedural differences between arbitration and
litigation that he contends work an injustice in his case. He argues first, that the arbitrator
did not possess the power to inquire into disability discrimination but was limited to
determining the parties’ contract rights under the Agreement. Br. of Appellant at 17.
Second, he argues that one of the Restatement’s essential elements of adjudication was
not present, viz., “a formulation of issues of law and fact in terms of the application of
rules with respect to specified parties concerning a specific transaction, situation, or
status.” Br. of Appellant at 18 n.49 (quoting RESTATEMENT § 83(2)(c)). Third, he argues
that there was a disparity of relief between the reinstatement that Mr. Scholz could obtain
through the grievance and the damages recoverable in an action under chapter 46.60
RCW. Br. of Appellant at 18-19. We address his procedural challenges in the order
stated.
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Whether the issue decided by the arbitrator was within the scope of the
reference to arbitration
Under Section 32.2A of the parties’ Agreement, a grievance is “an allegation by
an employee or a group of employees that there has been a misapplication,
misinterpretation, or violation of [the parties’] Agreement, which occurred during the
term of this Agreement.” CP at 80. Article 32 provides several steps for resolving
grievances, with the fifth step being the right of the Union to demand arbitration. Under
Section 32.3D of the parties’ Agreement, an arbitrator’s authority is limited to the
grievance issue set forth in the original written grievance unless the parties agree to
modify it. The section provides that the arbitrator has no authority to add to, subtract
from, or modify any of the provisions of the Agreement. Here, the arbitrator’s decision
states that the parties stipulated to a statement of the arbitration issue: “Was there just
cause for disciplining the Grievant? If not, what would the remedy be?” CP at 28.
As already discussed, “just cause” is not defined by the Agreement, and the
common law definition applied by the arbitrator included elements that called on her to
assess whether Officer Scholz’s untruthfulness was culpable untruthfulness. Since the
Union defended Officer Scholz’s untruthfulness on the basis that it was a result of the
mental disorder he was suffering, the factual issue of whether his evidence of a mental
disorder explained or excused his untruthfulness was within the scope of the reference to
arbitration.
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Whether the arbitration procedure included a formulation of issues of
law and fact in terms of the application of rules with respect to specified
parties concerning a specific transaction, situation, or status
This “essential element of adjudication” identified by Restatement § 83(2)(c) is
explained further by the section’s comment b:
[A]djudication of a claim is impossible unless the matter for decision
includes a legal claim, that is, an assertion by one party against another cast
in terms of entitlement under substantive law to particular relief, including
determination of legal status. For this purpose legal claims include claims
of entitlement asserted . . . against the government, as . . . when a claim
based on legal right is prosecuted against the government. A petition for a
benefit from the government is not a legal claim unless the agency is
obliged to grant the petition upon a showing of the existence of conditions
specified by law. If a legal claim is involved, however, and if the
procedures to determine it are substantially similar to those used in judicial
adjudication, the proceeding is adjudication. As such, the outcome of the
proceeding should have the conclusive effects prescribed by the rules of res
judicata, including conclusiveness as to issues actually litigated.
As applied to administrative proceedings more generally, the comment observes that an
issue of law is formulated as it would be in a court “when there is assertion and
controversion of the meaning of an existing rule as applied to specific circumstances.”
Id. (emphasis added). “An issue of fact is so formulated when there is assertion and
controversion of the occurrence of a legally significant event.” Id. (emphasis added). “If
an issue has thus been formulated, and if the procedure for resolving it is substantially
similar to that used in judicial adjudication, the agency’s determination of the issue
should be given preclusive effect in accordance with the rules of res judicata.” Id.
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No. 34919-5-III
Scholz v. Wash. State Patrol
The parties’ Agreement formulates issues of law and fact for resolution in an
adjudicatory manner. As earlier noted, “grievance” is defined to mean “an allegation by
an employee or a group of employees that there has been a misapplication,
misinterpretation, or violation of this Agreement, which occurred during the term of this
Agreement.” CP at 80 (Section 32.2A). Grievances are required to be in writing, and in
order to be processed must include the following information:
1. The nature of the grievance;
2. The facts upon which the grievance is based;
3. The specific Article and Section of the Agreement violated;
4. The specific remedy requested;
5. The name of the grievant; and
6. The name and signature of the union steward or staff representative.
CP at 81 (Section 32.2E). Section 32.3B of the Agreement provides that at two steps of
the grievance process (meetings with a responsible supervisor or manager, and later with
an agency head or designee), Patrol employees provide the Union with a written response
to the grievance. If the grievance is not resolved by earlier steps and proceeds to
arbitration, the arbitration is limited to resolving the grievance issue, as originally framed
or reframed by agreement, solely with reference to the Agreement. The parties’
stipulation to the arbitration issue clearly identified the event to which a clearly-
articulated claim (the grievance) and clearly-identified rules (terms of the Agreement)
were to the applied.
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No. 34919-5-III
Scholz v. Wash. State Patrol
The arbitration procedure included a formulation of issues of law and fact that met
the essential element of adjudication described by Restatement § 83(2)(c).
Whether there was too great a disparity of relief between arbitration and
an action under 46.60 RCW
Mr. Scholz argues conclusorily that the disparity between the relief offered by
arbitration and the superior court will inevitably lead litigants to forego their arbitral
remedies fearing preclusion of their more substantial statutory claim. See Br. of
Appellant at 18-19. He does not identify what he believes to be the disparity.
The Agreement provides that the arbitrator may not make any award “that
provides an employee with compensation greater than would have resulted had there been
no violation of the Agreement.” CP at 85 (Section 32.3D(1)(d)). This would prevent an
arbitral award of general damages but would permit an award of back pay. Mr. Scholz
does not dispute that the arbitrator was authorized to reinstate him, a remedy that the
Union sought on his behalf.
In Reninger v. Dep’t of Corr., 134 Wn.2d 437, 453, 951 P.2d 782 (1998), the
Supreme Court, citing Shoemaker, reaffirmed that where the presiding officer in an
administrative hearing had the authority to restore to an employee his or her job and lost
compensation and benefits, the fact that some additional and uncertain damages might be
available in court “is not the gravamen of the decision whether to apply collateral
estoppel.” Any disparity of relief available in the current forum and an earlier one is
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No. 34919-5-III
Scholz v. Wash. State Patrol
reviewed “to determine whether sufficient incentive existed for the concerned party to
litigate vigorously” in the earlier forum. Id. It is where the amount that a party can
recover in the earlier forum is “insignificant” that courts reason “the party is not likely to
have litigated the crucial issues vigorously and it would be unfair to employ collateral
estoppel against the party in future proceedings.” Id.As in Reninger and Shoemaker, the arbitral forum in this case could provide
substantial remedies. The Union had reason to litigate the crucial issues vigorously, and
did.
III. ALLEGED MISTAKE OF MATERIAL FACT
Finally, Mr. Scholz argues that the superior court’s summary judgment decision
was primarily based on “the alleged fact that Officer Scholz was no longer being treated
for mental health issues after approximately one month following the . . . multi-vehicle
accident.” Br. of Appellant at 24. Pointing to statements in his declaration submitted in
opposition to summary judgment that he was treated for a much longer period of time, he
argues that the fact assumed by the court was a material error.
It is axiomatic that where collateral estoppel applies, the issue that is precluded is
not subject to re-argument either on the basis that it was wrongly decided in the first
place or on the basis of new evidence. Cf. Thompson, 138 Wn.2d at 795 (it would
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No. 34919-5-111
Scholz v. Wash. State Patrol
"eviscerate the collateral estoppel doctrine" to view preclusion as unavailable if the prior
decision is shown to be substantively incorrect).
Affirmed.
Siddoway, J.
WE CONCUR:
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