Minicuci v. Scientific Data Management, Inc

620 N.W.2d 657 (2000) 243 Mich. App. 28

Anthony MINICUCI, Plaintiff-Appellant,
v.
SCIENTIFIC DATA MANAGEMENT, INC., Defendant-Appellee.

Docket No. 212439.

Court of Appeals of Michigan.

Submitted April 4, 2000, at Detroit. Decided October 20, 2000, at 9:00 a.m. Released for Publication December 19, 2000.

Lipson, Neilson, Jacobs & Cole, P.C. (by Joseph P. Garin), Troy, for the plaintiff.

Strobl Cunningham Caretti & Sharp, P.C. (by Kieran F. Cunningham), Bloomfield Hills, for the defendant.

Before HOOD, P.J., and GAGE and WHITBECK, JJ.

GAGE, J.

Plaintiff Anthony Minicuci appeals as of right from a trial court order granting defendant summary disposition of plaintiff's breach of contract and statutory sales commissions claims pursuant to MCR 2.116(C)(4) and (C)(7) (res judicata). We affirm.

I

In January 1991, plaintiff commenced employment with defendant Scientific Data Management, Inc., working as a commissioned sales representative. On February 24, 1995, plaintiff voluntarily ended this employment. Defendant in March 1995 provided plaintiff a check covering the February 1995 commissions due plaintiff. According to plaintiff, however, defendant still owed him approximately $11,000, which represented unpaid commissions and bonuses, illegal deductions, and overrides.

In October 1995, plaintiff filed with the Michigan Department of Labor^[1] a claim for the allegedly unpaid commissions pursuant to the wages and fringe benefits act (wage act), M.C.L. § 408.471 et seq.; MSA 17.277(1) et seq. Defendant responded that under the terms of its employment agreements with plaintiff, the permissible net write offs, including plaintiff's customers' canceled orders and bad debt losses, exceeded "the modest sum of commissions" due plaintiff. In April 1996, the department issued a determination order concluding that plaintiff was entitled to no further wages for the December 31, 1994, through February 24, 1995, period, in essence agreeing with defendant. The order advised plaintiff of his right to appeal the determination within fourteen days.

Plaintiff timely appealed the determination, and the department scheduled an August 8, 1996, hearing date for plaintiff's appeal. On August 6, 1996, plaintiff moved that his appeal "be withdrawn/dismissed without prejudice." An August 16, 1996, department order granted plaintiff's motion to dismiss, but ordered dismissal with prejudice. Although plaintiff denied that he ever received the order, a department "memorandum of transmittal" reflects that a copy of the order was properly sent. According to plaintiff, on August 7, 1996, the department verbally advised his counsel that plaintiff's appeal would be "withdrawn and dismissed without prejudice." While the wage act provided plaintiff the right to appeal to the circuit court the hearing referee's order of dismissal, M.C.L. § 408.481(9); MSA 17.277(11)(9), plaintiff averred that "[b]ased on this oral statement ... Plaintiff did not further pursue his [wage act] claim."

Plaintiff thus did not appeal the administrative determination and order of dismissal regarding his wage act claim, but instead in November 1996 filed the instant circuit court action alleging (count I) defendant's breach of express and implied contracts, (count II) that defendant refused to pay plaintiff's commissions in violation of M.C.L. § 600.2961(4) and (5); MSA 27A.2961(4) and (5), and (count III) defendant's violation of the Employee Right to Know Act, M.C.L. § 423.501 et seq.; MSA 17.62(1) et seq.

Defendant sought summary disposition of counts I and II under MCR 2.116(C)(4) and (7). Defendant alleged that counts I and II represented the same claims for unpaid commissions that plaintiff raised before the department in his wage act claim, and that the department rejected in a final administrative determination. Defendant argued that the circuit court therefore lacked jurisdiction to consider counts I and II because plaintiff was prohibited from choosing to pursue his claims in a different, judicial forum after unsuccessfully seeking recompense from the department. Defendant also suggested that because a final administrative determination existed regarding plaintiff's claim for unpaid commissions, res judicata precluded relitigation of this issue in the circuit court.

Plaintiff countered that his November 1996 complaint asserted different commonlaw and statutory claims than his administrative claim, which raised only wage act violations, and that the circuit court possessed jurisdiction over all these separate claims. Plaintiff also suggested that res judicata would not preclude litigation of plaintiff's instant claims because the department's dismissal with prejudice did not constitute a final, binding determination regarding his claim and plaintiff never received the department's order of dismissal.

On June 19, 1997, the trial court granted defendant's motion for summary disposition. The court determined that counts I and II represented the same claims for unpaid commissions that plaintiff raised before the department. The court, citing dicta in Murphy v. Sears, Roebuck & Co., 190 Mich.App. 384, 388, 476 N.W.2d 639 (1991), explained that plaintiff had the option to elect either the wage act's administrative remedy or other relief available at common law, but that once plaintiff chose to seek the administrative remedy, plaintiff had to pursue that remedy exclusively.^[2]

II

Plaintiff contends that the trial court erred in granting defendant summary disposition because the court relied on the Murphy Court's nonbinding statement in dicta that "once an employee chooses to pursue the administrative remedy, that remedy must be utilized exclusively." Id.; see Faulkner v. Flowers, 206 Mich.App. 562, 566, 522 N.W.2d 700 (1994) (recognizing the quoted statement as dicta). We note that although defendant's brief on appeal urges that we decline consideration of claim preclusion issues, defendant invokes the cited Murphy dicta as the proper basis for our affirmation of the trial court's grant of summary disposition. While neither the trial court nor the Murphy opinion dicta expressly considered the doctrines of claim preclusion, we find that collateral estoppel represents the doctrine correctly applied in and controlling of the outcome of the instant case, and the basis for the Murphy Court's suggestion that "once an employee chooses to pursue the administrative remedy, that remedy must be utilized exclusively, including an appeal to the circuit court." Murphy, supra at 388, 476 N.W.2d 639.

The preclusion doctrines serve an important function in resolving disputes by imposing a state of finality to litigation where the same parties have previously had a full and fair opportunity to adjudicate their claims. By putting an end to litigation, the preclusion doctrines eliminate costly repetition, conserve judicial resources, and ease fears of prolonged litigation. Whether the determination is made by an agency or court is inapposite; the interest in avoiding costly and repetitive litigation, as well as preserving judicial resources, still remains.

At issue in this case is the doctrine of collateral estoppel. Generally, "[f]or collateral estoppel to apply, a question of fact essential to the judgment must have been actually litigated and determined by a valid and final judgment. In addition, the same parties must have had a full opportunity to litigate the issue, and there must be mutuality of estoppel."

However, because defendant is seeking to preclude relitigation on the basis of an administrative decision, three additional requirements must be satisfied. The administrative determination must have been adjudicatory in nature and provide a right to appeal, and the Legislature must have intended to make the decision final absent an appeal. Nummer v. Dep't of Treasury, 448 Mich. 534, 541-542, 533 N.W.2d 250 (1995) (citations omitted).]

Application of a preclusion doctrine represents a question of law that we review de novo. Pierson Sand & Gravel, Inc. v. Keeler Brass Co., 460 Mich. 372, 379, 596 N.W.2d 153 (1999).^[3]

While plaintiff denies that his wage act administrative claim is related to his instant breach of contract count and his claim under M.C.L. § 600.2961(4) and (5); MSA 27A.2961(4) and (5), plaintiff ignores that all three claims allege and seek reimbursement for defendant's wrongful retention of commissions owed plaintiff. Plaintiff's wage act claim asserted defendant's nonpayment of approximately $11,000 in commissions, bonuses, and illegal deductions. Plaintiff's instant complaint likewise alleges that when he left defendant's employ, defendant intentionally and unreasonably failed to provide plaintiff more than $10,000 in unpaid commissions and unauthorized deductions. The department's initial "Determination Order" expressly "determined that no wages are due" for the period plaintiff alleged defendant's nonpayment. Accordingly, the department clearly determined the fact essential to the instant action whether defendant unlawfully failed to provide plaintiff any outstanding commissions. See Dearborn Heights School Dist. No. 7 v. Wayne Co. MEA/NEA, 233 Mich.App. 120, 125, 592 N.W.2d 408 (1998) ("noting that a key determination concerning whether an earlier proceeding controls a later one is whether `the same facts or evidence are essential to the maintenance of two actions'"), quoting Jones v. State Farm Mut. Automobile Ins. Co., 202 Mich.App. 393, 401, 509 N.W.2d 829 (1993).

Every indication exists that plaintiff's alleged entitlement to unpaid commissions was "actually litigated and determined by a valid and final judgment." Nummer, supra at 542, 533 N.W.2d 250, quoting Storey v. Meijer, Inc., 431 Mich. 368, 373, n. 3, 429 N.W.2d 169 (1988). Though the record does not reveal exactly when plaintiff retained counsel to represent him with respect to the wage act claim, the available record does indicate that by some point during the administrative proceedings both parties had retained counsel. Nummer, supra. Before the Wage Hour Division of the department's Bureau of Safety and Regulation initially determined the matter, the parties had the opportunity to submit evidence substantiating their positions, which the bureau then investigated before issuing the determination. MCL 408.481(2), (3); MSA 17.277(11)(2), (3). Moreover, plaintiff invoked his right to an appellate evidentiary hearing before a hearing referee, but then voluntarily dismissed the appeal. The referee's August 16, 1996, order dismissing plaintiff's wage act claim with prejudice represents an adjudication on the merits for claim preclusion purposes. Limbach v. Oakland Co. Bd. of Co. Rd. Comm'rs, 226 Mich.App. 389, 395, 573 N.W.2d 336 (1997).

Plaintiff insists, however, that the department did not issue a final, binding determination. Plaintiff asserts that he requested that the hearing referee dismiss his wage act claim without prejudice, that neither he nor his attorney received or learned of the referee's dismissal with prejudice until defendant filed its motion for summary disposition, and that therefore "it would be inequitable to preclude Plaintiff from obtaining a final adjudication of his case."^[4] Even assuming plaintiff's allegations are true, no relevant issue of fact precludes a grant of summary disposition based on collateral estoppel.^[5] Neither plaintiff's wish for a dismissal without prejudice nor the extent of plaintiff's knowledge concerning the referee's conclusion to enter an order of dismissal with prejudice alters the facts that both the administrative claim and the instant claims sought plaintiff's entitlement to commissions and that the referee's order dismissing plaintiff's administrative claim constitutes a final adjudication on the merits. See MCR 2.504,^[6]Brownridge v. Michigan Mut. Ins. Co., 115 Mich.App. 745, 748, 321 N.W.2d 798 (1982). Furthermore, we observe that "an unappealed [administrative agency's] determination ... that plaintiff is not entitled to `back pay' ... operates as collateral estoppel to the subsequent maintenance of a suit in circuit court to recover the same reimbursement as `damages' for breach of contract" when "the questions of fact necessary for determination of `damages' by the circuit court ... would be identical to questions of fact already determined by the [administrative agency] in concluding `back pay' was improper." Senior Accountants, Analysts & Appraisers Ass'n v. Detroit, 399 Mich. 449, 453, 457-459, 249 N.W.2d 121 (1976) (emphasis added); see also Champion's Auto Ferry, Inc. v. Public Service Comm., 231 Mich.App. 699, 712, 588 N.W.2d 153 (1998) ("Collateral estoppel applies to unappealed administrative determinations that are adjudicatory in nature and where ... a method of appeal is provided.") (emphasis added). To the extent plaintiff suggests that this Court should craft some equitable remedy for him, plaintiff does not explain this suggestion and cites no authority in support of it; therefore, we decline to further address it. Mudge v. Macomb Co., 458 Mich. 87, 105, 580 N.W.2d 845 (1998).^[7]

Furthermore, both the administrative proceedings and the instant case involve the same parties, and mutuality of estoppel exists because it appears that defendant would have been bound by an administrative determination that it violated the wage act. Barrow v. Pritchard, 235 Mich.App. 478, 481, 597 N.W.2d 853 (1999) ("Collateral estoppel is mutual if the one taking advantage of the earlier adjudication would have been bound by it, had it gone against him.").

In light of the department's consideration and investigation of information supplied by the parties in making its initial determination regarding the merits of plaintiff's claim, the department's initial determination appears adjudicatory in nature. See M.C.L. § 408.481(3); MSA 17.277(11)(3) ("If the department is unable to informally resolve the dispute, the department shall notify the employer and employee.... The notification shall include a determination of the merits of the complaint ....") (emphasis added). No indication exists that the initial determination occurred summarily or constituted a "decision to dismiss for `insufficient evidence.' "Nummer, supra at 543, n. 7, 533 N.W.2d 250. Moreover, M.C.L. § 408.481(4)-(7); MSA 17.277(11)(4)-(7), affords the parties to the administrative proceeding the opportunity for appellate review of the department's initial determination before a hearing referee, which appellate proceedings "shall be conducted pursuant to the procedures applicable to the trial of contested cases under ... [MCL] 24.201 to 24.315[MSA 3.560(101) to 3.560(215) ]." Subsection 9 makes available, circuit court judicial review of the hearing referee's conclusions.

Because the administrative proceedings plaintiff initially invoked are adjudicatory in nature and provide a method of appeal, the last consideration in determining whether the agency's action precludes the instant reconsideration of defendant's alleged liability for unpaid commissions becomes whether the Legislature clearly intended to make the agency's determination final in the absence of an appeal. Storey, supra at 373, 429 N.W.2d 169. In Nummer, supra at 545, 533 N.W.2d 250, the Supreme Court examined whether the Civil Rights Act, M.C.L. § 37.2101 et seq.; MSA 3.548(101) et seq., reflected the Legislature's intent concerning the finality of administrative proceedings involving it. The Court considered that the Legislature explicitly provided only one remedy from an adverse agency determination, a direct appeal to the circuit court, and that the Civil Rights Act otherwise contained no language concerning the preclusive effect of the Civil Rights Commission's findings or conclusions. Nummer, supra at 547, 551, 533 N.W.2d 250. The Court therefore concluded that the Legislature intended to permit only an appeal and that "[i]f the Legislature intended anything else, it would have said so more directly." Id. at 551, 533 N.W.2d 250.

In Dearborn Heights, supra, the plaintiff school district in 1994 filed a complaint concerning the defendant teacher with the State Tenure Commission, pursuant to the teacher tenure act, M.C.L. § 38.71 et seq.; MSA 15.1971 et seq. The commission affirmed the hearing referee's preliminary decision that the defendant teacher had assaulted a colleague and ordered the defendant teacher to serve a three-semester suspension, which decision this Court subsequently affirmed. The defendant teacher's union then filed grievances alleging that the plaintiff's suspension of the defendant teacher violated the school district's collective bargaining agreement. The arbitrator revisited the defendant teacher's alleged misconduct, disregarding the commission's earlier decision and concluding that the defendant teacher did not commit a battery and should receive only a one-month suspension. The plaintiff then filed a circuit court complaint seeking to vacate the arbitrator's award. The defendant teacher's union filed a countercomplaint to enforce the arbitration award. Dearborn Heights, supra at 122-123, 592 N.W.2d 408. This Court concluded that the defendant teacher and the union were "estopped from relitigating the commission's factual conclusion that [the defendant teacher] had intentionally struck a fellow teacher." Id. at 123, 592 N.W.2d 408. The Court discussed as follows whether the Legislature intended that the State Tenure Commission's factual determinations be final "in the absence of, or affirmance upon, an appeal":

[E]ven if the teacher tenure act is silent concerning whether a determination by the [State Tenure Commission is to be given preclusive effect, in the absence of legislative intent to the contrary, the applicability of principles of preclusion is presumed.... [I]t is instructive that, pursuant to the Administrative Procedures Act, the only procedure available to a party aggrieved by a final decision of the commission is direct review by the courts. MCL 24.301; MSA 3.560(201). Because the appeal process, by its very nature, does not contemplate a new, original action, the commission's decision is clearly intended to be a final decision on the merits.... [The union's] position in this case would leave this Court in the precarious position of having two different panels issue two potentially opposing opinions concerning one factual issue. Such circumstances are but one type of the "repetitious and needless litigation" that the doctrine of collateral estoppel is designed to prevent. [Dearborn Heights, supra at 129-130, 592 N.W.2d 408, quoting Storey, supra at 372, 429 N.W.2d 169.]

In this case, the wage act expressly provides only for appellate judicial review of the hearing referee's determinations, M.C.L. § 408.481(9); MSA 17.277(11)(9), and does not reflect any legislative intent to limit the preclusive effect of administrative wage act determinations. We therefore conclude that, as in Nummer, supra, and Dearborn Heights, supra, the Legislature intended to make the department's administrative determination final absent an appeal.

As this Court in Murphy, supra, observed, plaintiff need not have pursued his commissions in the form of an administrative wage act claim. See also Cork v. Applebee's of Michigan, Inc., 239 Mich.App. 311, 318, 608 N.W.2d 62 (2000) (explaining the Murphy Court's holding that where a plaintiff seeks enforcement of a common-law right, such as a breach of contract claim, the statutory remedy is cumulative, not exclusive). Once the issue of defendant's liability for these commissions proceeded to an adverse administrative adjudication on the merits, however, collateral estoppel precluded plaintiff's subsequent resort to the circuit court except through the wage act's direct appeal provision. MCL 408.481(9); MSA 17.277(11)(9). Our failure under the instant circumstances to apply collateral estoppel would sanction multiplicity of litigation and the absolutely unnecessary waste of precious judicial resources. See Dearborn Heights, supra at 128, 130-131, 592 N.W.2d 408.^[8]

Because collateral estoppel precludes plaintiff's instant claims, summary disposition was proper pursuant to MCR 2.116(C)(7). Alcona Co. v. Wolverine Environmental Production, Inc., 233 Mich.App. 238, 246, 590 N.W.2d 586 (1998). Although the trial court did not delineate the proper basis for its ruling granting defendant summary disposition, we nonetheless will affirm the trial court's achievement of the correct result. Kosmyna v. Botsford Community Hosp., 238 Mich.App. 694, 701, 607 N.W.2d 134 (1999).

Affirmed.

NOTES

[1] The Department of Labor subsequently became the Department of Consumer and Industry Services.

[2] On June 2, 1998, the court ordered dismissal of count III, apparently pursuant to the parties' agreement.

[3] We also review de novo the trial court's summary disposition ruling. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998).

[4] We note that the "memorandum of transmittal" of the final order indicates that copies of the order were to be sent to both plaintiff and defendant, and that at no time has plaintiff attempted to appeal the referee's order of dismissal.

[5] "Summary disposition on the basis of collateral estoppel ... is pursuant to MCR 2.116(C)(7), and in considering a motion under that subrule, the court may consider all affidavits, pleadings, and other documentary evidence, construing them in the light most favorable to the nonmoving party." Alcona Co. v. Wolverine Environmental Production, Inc., 233 Mich.App. 238, 246, 590 N.W.2d 586 (1998) (citations omitted).

[6] Even considering the hearing referee's order of dismissal as an involuntary dismissal with prejudice, MCR 2.504(B)(3) explains that "[u]nless the court otherwise specifies in its order for dismissal, a dismissal under this subrule or a dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction or for failure to join a party under MCR 2.205, operates as an adjudication on the merits."

[7] The Supreme Court in Mudge, supra at 105, 580 N.W.2d 845, quoted Mitcham v. Detroit, 355 Mich. 182, 203, 94 N.W.2d 388 (1959), for the following proposition:

"It is not enough for an appellant in his brief simply to announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position. The appellant himself must first adequately prime the pump; only then does the appellate well begin to flow."

[8] This Court previously and astutely observed the following with respect to the policies behind application of collateral estoppel:

Where resolution of a controversy involves both an administrative hearing and a statutorily recognized arbitration procedure, the latter should supplement, not obviate, the former. If a teacher were allowed to relitigate a factual question previously decided by the commission, it would reduce the administrative process to a mere rehearsal; an employee satisfied with the commission's findings could accept them, while a dissatisfied employee could start over with a clean slate by bringing the matter before an arbitrator. Although surely most dissatisfied litigants would enjoy a second bite at the apple, our system disfavors resort to successive litigation to resolve identical issues.

* * *

A teacher alleging wrongful termination or other adverse action typically has her choice from among multiple forums and causes of action to vindicate her rights.... The question here is, if the teacher chooses a forum, loses on the central claim, then appeals unsuccessfully to this Court, may she then relitigate her claim in a new forum? May she get a second bite at the apple? Further, if a litigant had the right to a second forum to adjudicate her rights without risk that the first adjudication were binding, one must ask, why not a third or fourth try after losing two or three times? These questions, of course, underscore the importance of finality in litigation. In this case, allowing the arbitrator to decide de novo a factual question already resolved by the commission and affirmed by this Court would invite an incongruous outcome. [Dearborn Heights, supra at 128, 130-131, 592 N.W.2d 408 (citations omitted).]