University & Cmty. Coll. Sys. v. Sutton

• Decision Date: 28 December 2004
• Docket Number: No. 39568.,39568.
• Parties: The STATE of Nevada, UNIVERSITY AND COMMUNITY COLLEGE SYSTEM, Appellant, v. Richard L. SUTTON, Respondent.
• Court: Nevada Supreme Court

103 P.3d 8

120 Nev. 972

The STATE of Nevada, UNIVERSITY AND COMMUNITY COLLEGE SYSTEM, Appellant, v. Richard L. SUTTON, Respondent.

No. 39568.

Supreme Court of Nevada.

December 28, 2004.

Bart J. Patterson, Associate General Counsel, University and Community College System of Nevada, Las Vegas, for Appellant.

Law Office of Daniel Marks and Adam Levine and Daniel Marks, Las Vegas, for Respondent.

Before the Court En Banc.¹

OPINION

LEAVITT, D.J.:

The University of Nevada, Las Vegas (UNLV) terminated the employment of Richard L. Sutton, a tenured professor. Sutton sued UNLV, asserting claims of breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of substantive and procedural due process. In the alternative, Sutton sought judicial review of UNLV's administrative decision to terminate his employment. UNLV moved for summary judgment, claiming statutory immunity from civil liability under its discretionary employment power. Alternatively, UNLV moved to limit the district court to judicial review. The district court denied summary judgment and rejected the claim that this case should be treated as a judicial review of an administrative decision.

Following a jury trial, the district court, based upon the jury verdict, entered judgment for Sutton on the claims of breach of contract and breach of the implied covenant of good faith and fair dealing. UNLV now appeals the final judgment, contending that the district court erred in denying its motion for summary judgment and made multiple errors at trial.

FACTUAL AND PROCEDURAL HISTORY

In 1974, UNLV hired Sutton as an associate professor. Sutton became a tenured professor in 1978.

Under the University and Community College System of Nevada (UCCSN) Code, all professors are required to undergo an annual evaluation based on their research, teaching and service. The code provides that a tenured professor may be terminated if he or she receives overall unsatisfactory ratings for two consecutive years. If a university seeks to terminate a professor, the code requires, as part of its administrative procedure, a complaint and a hearing. The process includes a university-appointed administrative code officer and a university-appointed faculty hearing committee. The committee takes evidence and thereafter makes a recommendation to the university president. The code requires that the hearing be held and a recommendation made to the university president no later than six months after the complaint was filed with the administrative code officer.

In both 1990 and 1991, Sutton received consecutive unsatisfactory annual evaluations, which is cause for termination under the previously described terms of the UCCSN code. On December 18, 1992, UNLV filed a complaint against Sutton with its administrative code officer. UNLV scheduled a hearing for May 7, 1993, within the required six-month time period. The hearing did not take place, however, because the parties believed they had reached a settlement. The settlement required that Sutton immediately tender a resignation letter effective at the end of the following academic year. In exchange, UNLV agreed to cancel the hearing and offer Sutton a nontenured teaching contract. The administrative code officer sent an unsigned, university-prepared draft settlement agreement to Sutton. Prior to signing it, Sutton penned interlineations to the agreement, which he believed reflected the actual terms the parties had agreed to. Of significance were Sutton's interlineated terms indicating his employment was guaranteed through the 1993/94 academic year and that he would be eligible for cost-of-living increases. Sutton signed and delivered the interlineated agreement to UNLV, along with his resignation letter. Subsequently, UNLV unilaterally altered the document by removing all but the page containing Sutton's signature and replaced Sutton's interlineated document with their first non-interlineated draft and appending the page with Sutton's signature to the original draft. UNLV then signed the settlement agreement. Later, UNLV offered Sutton a 1993/94 employment contract that did not contain the guarantee language that Sutton had written into the agreement. After Sutton refused to sign the 1993/94 employment contract without the guarantee language, UNLV terminated his employment.

Sutton, in February 1995, filed a complaint in district court alleging breach of contract (Sutton I). The case proceeded to trial in April 1999, but prior to the jury verdict, Sutton and UNLV stipulated to a form of judgment. The stipulation indicated that if the jury believed Sutton's interlineated settlement document represented the true settlement between the parties, then UNLV would concede that it had breached the contract and Sutton would be entitled to six years of back pay and reinstatement as a tenured professor. The jury returned a verdict in favor of Sutton. The stipulation was incorporated into the judgment and required UNLV "to continue [Sutton] in his employment unless and until such time as his tenure is revoked by hearing held pursuant to the university code."

In June 1999, UNLV tendered the court-ordered 1999/2000 employment contract to Sutton. The contract contained an integration clause but made no reference to the parties' stipulation for a hearing as referenced in the judgment. Prior to tendering the court-ordered employment contract to Sutton, UNLV Provost Douglas Ferraro and university counsel recommended to UNLV President Carol Harter that Sutton's 1990 and 1991 unsatisfactory evaluations proceed anew to a code hearing. President Harter testified regarding the need for the hearing and said, "We [Provost Douglas Ferraro and President Harter] did not believe in the justice of the judgment and believed that it needed to go forward as it would have in 1991, in that area, exactly the way it would have gone forward had we been back at that point." Thereafter, in June 1999, UNLV filed another complaint pursuant to its administrative process against Sutton for the 1990 and 1991 unsatisfactory evaluations. UNLV determined the administratively mandated six-month deadline within which to hold a hearing did not apply to the time that had passed between the parties' 1993 settlement and UNLV's 1999 administrative complaint against Sutton because, as Harter testified:

What happened when — when professor Sutton agreed to sign a letter of resignation back in 1992 or -3, we accepted that in lieu of having this hearing. We believed the letter of resignation effectively vacated the need to have the hearing. When the Court then decided, in 1999, that the entire activity was essentially vacated, it put us back in time to the period in 1992 where we were required, within six months, to have the hearing. In other words, the intervening years had effectively suspended the six month period, in our judgment and in the judgment of the counsel of the university system.

The faculty hearing committee conducted a hearing within six months of UNLV'S June 1999 complaint and recommended termination of Sutton's employment. The president adopted the recommendation, and Sutton's employment was terminated effective December 21, 1999. Sutton timely appealed to the Board of Regents. Following a hearing, the Board of Regents upheld the president's decision.

Sutton then filed a second lawsuit in district court, which is the subject of this appeal (Sutton II). Sutton claimed breach of contract and breach of the implied covenant of good faith and fair dealing and sought declaratory relief for violations of his substantive and procedural due process rights. Sutton sought relief based on the 1999 court-ordered contract referenced in the judgment. According to Sutton, the contract as well as the Sutton I judgment prohibited UNLV from using the 1990 or 1991 evaluations as a basis for terminating his employment. Alternatively, Sutton's complaint petitioned for judicial review and/or a writ of certiorari in the event the district court determined the case was entitled only to judicial review of an administrative decision.

Eight months after filing its answer, UNLV filed a motion for summary judgment on all claims. UNLV argued that the decision to terminate a tenured faculty member's employment is within its discretionary power, and therefore, UNLV is statutorily immune from civil liability. Alternatively, UNLV sought to dismiss the contract claims, vacate the trial, and proceed as a judicial review. The district court denied UNLV's motion, concluding as a matter of law that termination of a tenured professor is not a discretionary act and that tenure would be illusory if UNLV could terminate a tenured professor at its discretion. Consequently, the district court held that the decision to terminate Sutton was not a discretionary act, but rather it was a ministerial act which requires due process and for which immunity is not available. The district court further found judicial review unwarranted and determined that Sutton was entitled to proceed with a civil action for breach of contract.

The case proceeded to trial with the jury returning a verdict in Sutton's favor on his claims of breach of contract and breach of the implied covenant of good faith and fair dealing. Pursuant to a pre-verdict stipulation between the parties, the district court reinstated Sutton as a tenured professor at UNLV. Thereafter, UNLV filed this timely appeal.

DISCUSSION

UNLV asserts first that the district court erred when it denied UNLV's motion for summary judgment because: (1) university employment decisions are discretionary and therefore UNLV is entitled to statutory immunity from civil liability, and (2) the judgment in the previous lawsuit required Sutton to undergo a code hearing and Sutton's sole remedy is therefore judicial review. Second, UNLV claims that the district court made multiple errors at trial.

I. District court denial of summary judgment

UNLV...