Tischer v. Housing & Redevelopment Authority of Cambridge

693 N.W.2d 426, 22 I.E.R. Cas. (BNA) 1052, 2005 Minn. LEXIS 124, 2005 WL 674627

• Court: Supreme Court of Minnesota
• Decided: March 24, 2005
• Docket: A03-845
• Status: Published

Opinions

OPINION

HANSON, Justice.

Appellant Sandy Tischer sued respondent Cambridge Housing and Redevelopment Authority (HRA) for breach of an employment contract when it eliminated her executive director position and terminated her employment. The district court assumed jurisdiction over her claim, ruling that Minn.Stat. § 469.014 (2004), which specifies that HRAs “shall be liable in contract or in tort in the same manner as a private corporation,” provides an exception to the general rule that public employees may only challenge the termination of their employment by writ of certiorari. The court of appeals reversed, holding that section 469.014 establishes the scope of an HRA’s liability but does not provide an alternative procedure for bringing a wrongful termination claim. Tischer v. Hous. & Redev. Auth. of Cambridge, 675 N.W.2d 361, 365 (Minn.App.2004). We affirm the court of appeals and hold that the district court erred in denying the HRA’s motion to dismiss for lack of subject matter jurisdiction.

The HRA hired Tischer as its executive director in 2000. Approximately a year and a half later, the Cambridge City Council shifted control of all HRA functions to the city’s Economic Development Authority (EDA). The city council’s April 15, 2002, resolution specified that three HRA employees, Tischer not among them, were to be considered EDA employees as of 12:01 a.m. on April 16.

On the same evening, in response to the city council’s action, the HRA’s board convened an “emergency meeting” at 10:47 p.m. The board minutes indicate that “[t]he purpose of the meeting was to offer the Executive Director an immediate contract in lieu of transfer of powers attempt by the Cambridge City Council to the EDA, for which no notice had been issued.” The two-year contract specified that Tiseher was to be paid her current wage of $3,000 per month, plus benefits.

Tiseher alleges that on May 6 the city council “purported to add two additional seats” to the HRA, and on May 7 the HRA held a “special meeting” to amend its bylaws, eliminate the Executive Director position, and lay off Tiseher effective May 21, 2002. The record contains six HRA resolutions to that effect, one of which explains that by consolidating economic development efforts, the city council aimed to save administrative expenses, coordinate planning, and increase accountability.

Tiseher did not challenge her termination by certiorari. Instead, she sued the HRA for breach of contract in district court.¹ In a motion to dismiss, the HRA contended that the district court lacked subject matter jurisdiction because Tischer’s termination was a “quasi-judicial” decision subject to review only by certiorari. In response, Tiseher contended that her termination was not a quasi-judicial action or, even if it was, section 469.014 specifically conferred jurisdiction on the district court to hear a breach of contract claim. The district court ruled that the termination was quasi-judicial, but agreed with Tiseher that section 469.014 had both substantive and procedural implications and that it conferred jurisdiction on the district court to hear breach of contract claims against a HRA. Consequently, the district court denied the HRA’s motion to dismiss for lack of subject matter jurisdiction.

Tiseher did not challenge the quasi-judicial nature of her termination before the court of appeals. The court of appeals held that a plain reading of section 469.014 “merely establishes the extent of a HRA’s liability, not a procedure for obtaining review of a wrongful discharge claim[,]” and held that the district court erred by denying the HRA’s motion to dismiss. Tiseher, 675 N.W.2d at 365. The court of appeals further held that “Tischer’s sole remedy was to appeal to this court by certiorari.” Id. Tiseher sought further review of the sole issue of whether the court of appeals correctly interpreted section 469.014 as not providing subject matter jurisdiction to the district court.

I.

Tiseher argues that section 469.014 creates an exception to the general rule that certiorari is the exclusive remedy for wrongful termination claims brought by employees of an executive body that has less than statewide jurisdiction.² We review this issue de novo because statutory interpretation and subject matter jurisdiction are questions of law. Educ. Minnesota-Chisholm, v. Indep. Sch. Dist. No. 695, 662 N.W.2d 139, 143 (Minn.2003); Handicraft Block Ltd. P’ship v. City of Minneapolis, 611 N.W.2d 16, 19-20 (Minn.2000).

The general rule is founded on separation-of-powers considerations. Willis v. County of Sherburne, 555 N.W.2d 277, 280 n. 2 (Minn.1996). We have recognized that the decision of an executive body to terminate an employee is a discretionary exercise of its administrative powers. Dietz v. Dodge County, 487 N.W.2d 237, 239 (Minn.1992). Separation of powers requires that such discretionary decisions be granted deference by the judiciary to avoid usurpation of the executive body’s administrative prerogatives. Id. Because a direct action in the district court would contemplate de novo review, we have concluded that review by certiorari is required to provide appropriate deference and to minimize the judicial intrusion into administrative decision-making. Id.3 Further, review by certiorari protects public resources because it provides an efficient and economical form of judicial review. Id. at 240.

In Willis, we recognized that the legislature may create exceptions to this general rule, stating “the claimant may contest the employer’s action by certiorari alone, absent statutory authority for a different process.” Willis, 555 N.W.2d at 282 (emphasis added). The legislature has enacted exceptions to this general rule, by specifically authorizing a fired public employee to bring a “civil action” in district court to challenge her dismissal on certain specified grounds. See, e.g., Minn.Stat. §§ 181.931, subd. 3; 181.935(a) (2004) (Whistleblower Act); Minn.Stat. §§ 363A.28, 363A.33 (2004) (Human Rights Act). Tischer argues that by enacting Minn.Stat. § 469.014, the legislature intended to create another exception to the certiorari rule by authorizing HRA employees to challenge their dismissal on breach of contract grounds. Section 469.014 reads:

Subject to the provisions of chapter 466, an authority shall be liable in contract or in tort in the same manner as a private corporation. The commissioners of an authority shall not be personally hable as such on its contracts, or for torts not committed or directly authorized by them. The property or funds of an authority shall not be subject to attachment, or to levy and sale on execution, but, if an authority refuses to pay a judgment entered against it in any court of competent jurisdiction, the district court for the county in which the authority is situated may, by writ of mandamus, direct the treasurer of the authority to pay the judgment.

(Emphasis added.) Because that section does not expressly state that a HRA employee may bring a civil action in district court, Tischer must argue that the exception to the general rule should be implied from the words “in the same manner.” Tischer notes that an employee of a private corporation could bring a wrongful termination action in district court.

We have interpreted this statutory language once before, then in the context of whether a notice-of-claim statute applied to a housing authority. Schultz v. Ruiz, 161 N.W.2d 537, 281 Minn. 281 (1968). In Schultz, we concluded:

Broadly interpreted, the phrase “in the same manner” refers not only to the creation of rights and the extent of liability but also to the procedure for the assertion of those rights.

⅜ ⅝ ⅝ ⅝

We believe that a proper interpretation of the phrase “in the same manner” was intended to encompass both the procedural and the substantive law applicable to tort actions.

Id. at 540, 281 Minn, at 284, 161 N.W.2d 537.

We do not believe that the reference in Schultz to procedural law was intended to include all procedures affecting HRA liability. In particular, we do not believe the reference included subject matter jurisdiction, which is fundamentally different than procedural rules. Subject matter jurisdiction cannot be conferred by consent of the parties, it cannot be waived, and it can be raised at any time in the proceeding. Minn. R. Civ. P. 12.08(c); State ex. rel. Farrington v. Rigg, 107 N.W.2d 841, 842, 259 Minn. 483, 485-86 (1961) (noting that subject matter jurisdiction cannot be “conferred by consent[,]” and that challenge may be brought “directly or collaterally at any time”). Further, Schultz was premised in large part on the view that HRAs were “quasi-private” bodies. 161 N.W.2d at 541, 281 Minn, at 285. The applicable notice-of-claim statute, Minn.Stat. § 465.09 (1961), applied to a “city,” and we characterized the HRA as “a corporate entity distinct from the city.” Id., 281 Minn, at 286, 161 N.W.2d 537. Section 465.09 was then repealed by the notice-of-claim requirements in the Minnesota Tort Liability Act, which governed claims against “public authorities” and “public corporations” including HRAs. McCaleb v. Jackson, 239 N.W.2d 187, 188-89, 307 Minn. 15, 17-18 (1976); see also Act of May 22, 1963, ch. 798, §§ 1, 15, 16, 1963 Minn. Laws 1396,1396-98,1402 (codified at §§ 466.01, 466.05 (1965)) (applying notice-of-claim provision to a “public authority” or “public corporation”); Act of May 28, 1987, ch. 291, § 3, subd. 1, 1987 Minn. Laws 1500, 1505 (codified at Minn. Stat. § 469.003, subd. 1 (1987 supp.) stating an HRA is “a public body, corporate and politic”). For these reasons, we do not believe that Schultz controls the analysis of subject matter jurisdiction in this case.

Tischer argues that district court jurisdiction can be inferred from section 469.014 because the third sentence mentions the “district court.” She bolsters her argument by noting that HRAs generally may “sue and be sued.” Minn.Stat. § 469.012, subd. la(l) (2004). But sections of a statute must be read together in order to discern the legislature’s intent. Minn. Stat. § 645.16 (2004); Vlahos v. R & I Const. of Bloomington, Inc., 676 N.W.2d 672, 679 (Minn.2004). Our reading of section 469.014 as a whole suggests that the purpose of the section is to deal with HRA liability, not district court jurisdiction.

Our interpretation parallels that of the Massachusetts Supreme Judicial Court, which concluded that identical language did not create an exception to a general rule exempting public employers from suits over intentional torts. Lafayette Place Associates v. Boston Redev. Auth., 427 Mass. 509, 694 N.E.2d 820, 835-36 (1998) (characterizing plaintiffs interpretation of the statute as “not in accord with [the] over-all purpose of enacting a comprehensive and uniform regime of tort liability for public employers”).⁴

Tischer points to other situations, such as the Minnesota Whistleblower and Human Rights Acts, where the legislature has provided that aggrieved public employees may bring a civil action in district court to recover damages or redress discrimination. But, the fact that these other statutes specifically authorize civil actions compels the conclusion that, had the legislature intended to permit HRA employees to bring employment claims in district court, the legislature would have specifically said so, as it did in the Whistleblower and Human Rights Acts.

Finally, Tischer argues that the legislative intent to confer jurisdiction on the district court can be inferred from the fact that the typical record of an employment action by an HRA is not suitable for appellate review. She points out that the record of her employment termination is too sparse for certiorari review, containing only a letter to her from the HRA’s attorney and a series of city resolutions that justify why the city consolidated its development efforts but do little to explain why Tischer’s position was eliminated while three other HRA employees were guaranteed future employment. She contends that remand to the district court is required so that a suitable record can be made.

We observe that the record in administrative cases is often sparse, but we have not considered that fact as defeating certiorari jurisdiction. To the contrary, we have held that the proper procedure for challenging the adequacy of the record to support an administrative decision is to seek a writ of certiorari. See Dokmo v. Indep. Sch. Dist. No. 11, Anoka-Hennepin, 459 N.W.2d 671 (Minn.1990). On cer-tiorari, the court is empowered to order the public body to expand the record or augment its findings or, if those remedies are not appropriate, to reverse the public body’s decision because it is not supported by substantial evidence in the record. See Earthburners, Inc. v. County of Carlton, 513 N.W.2d 460, 463 (Minn.1994) (ordering remand to county board to “reopen” zoning proceedings, to hear from all interested parties, “and ultimately to allow the board to articulate the reasons for whatever action it takes”); White Bear Rod & dun Club v. City of Hugo, 388 N.W.2d 739, 742-43 (Minn.1986) (remanding to city council “to prepare appropriate findings” on decision regarding special-use permit application); Foesch v. Indep. Sch. Dist. No. 616, 223 N.W.2d 371, 376, 300 Minn. 478, 486 (1974) (ordering remand to school board “to take testimony and make findings” on teacher’s hiring and whether replacement was qualified); Carter v. Olmsted County Hous. & Redev. Auth., 574 N.W.2d 725, 733 (Minn.App.1998) (reversing decision because evidence offered by the HRA, viewed in light of the record as a whole, does not rise to the level of the substantial evidence necessary to support a termination of [the tenants] section 8 certificate).

We hold that the court of appeals correctly concluded that Minn.Stat. § 469.014 does not confer subject matter jurisdiction on the district court to hear a wrongful termination claim of a HRA employee.

II.

Tischer suggests that her claim for wages and benefits is not a wrongful termination claim, but a breach of contract claim over which district courts routinely assume jurisdiction. We addressed Tischer’s argument in Willis, where a terminated county employee sued for wrongful discharge, breach of contract, disability discrimination, and defamation. We held that the claim should be viewed as one for wrongful employment termination, stating:

Regardless that the claim is cloaked in the mantle of breach of contract, when the alleged breach of the employment contract of a governmental employee results in termination of the claimant’s employment by an executive body which does not have statewide jurisdiction — for example, a county — -the claimant may contest the employer’s action by certio-rari alone, absent statutory authority for a different process.

Willis, 555 N.W.2d at 282.

In practical application, breach of contract is not a separate claim but is simply one theory of relief that may be included under the umbrella of a wrongful employment termination claim. Others may include the violation of the Human Rights Act and the Whistleblower Act. Although the legislature has specifically conferred jurisdiction on the district court for claims based on the Human Rights Act or the Whistleblower Act, it has not done so for claims of wrongful termination of employment that are based on the theory of breach of contract. Therefore, we reiterate the rule that when a public employee’s claim of breach of an employment contract is inevitably centered on the executive body’s decision to discharge her, it will be viewed as a wrongful employment termination claim for jurisdictional purposes and certiorari is the exclusive remedy for judicial review of that claim.

Affirmed.

Dissenting, ANDERSON, PAUL H., and PAGE, J.J.

1 . Tischer's action was commenced on November 8, 2002, approximately 4 months after the 60-day period had expired for seeking review by certiorari. Minn.Stat. § 606.01 (2004).

2 . This general rule is stated as being applied to executive bodies that do not have statewide jurisdiction because executive bodies with statewide jurisdiction are subject to the Administrative Procedure Act, which specifies the procedure for obtaining judicial review of their decisions. Minn.Stat. §§ 14.02, subd. 2; 14.44-45; 14.63-.69 (2004).

3 . To timely pursue certiorari review, the discharged employee must obtain a writ of cer-tiorari within 60 days of receiving notice of the adverse decision. Minn.Stat. § 606.01 (2004); Dietz, 487 N.W.2d at 239. Certiorari review is limited to questions of jurisdiction, regularity of proceedings, and whether the decision was arbitrary, oppressive, unreasonable, fraudulent, under an erroneous theory of law, or without any supporting evidence. Dietz v. Dodge County, 487 N.W.2d at 239; Ging v. Bd. of Educ. of City of Duluth, 7 N.W.2d 544, 556, 213 Minn. 550, 570-71 (1942), overruled in part on other grounds, Foesch v. Indep. Sch. Dist. No. 646, 223 N.W.2d 371, 300 Minn. 478 (1974).

4 . Even if the plain meaning of section 469.014 could not be readily ascertained, the legislative history supports the conclusion that the legislature did not intend to confer jurisdiction on the district court. Our analysis reveals that when the legislature adopted section 469.014 in 1947, it repealed a predecessor statute that specifically provided for district court review. Act of Apr. 23, 1947, ch. 487, § 61, 1947 Minn. Laws 766, 813.