Arizona Dept. of Economic Sec. v. Redlon

• Court: Arizona Court of Appeals
• Writing for the Court: Espinosa
• Citation: Arizona Dept. of Economic Sec. v. Redlon, 156 P.3d 430, 215 Ariz. 13 (Ariz. App. 2007)
• Decision Date: 24 April 2007
• Docket Number: No. 2 CA-CV 2006-0051.,2 CA-CV 2006-0051.
• Parties: ARIZONA DEPARTMENT OF ECONOMIC SECURITY, Plaintiff/Appellee, v. Pamela J. REDLON, Defendant/Appellant.

156 P.3d 430

215 Ariz. 13

ARIZONA DEPARTMENT OF ECONOMIC SECURITY, Plaintiff/Appellee, v. Pamela J. REDLON, Defendant/Appellant.

No. 2 CA-CV 2006-0051.

Court of Appeals of Arizona, Division 2, Department B.

April 24, 2007.

Terry Goddard, Arizona Attorney General, By Samantha E. Blevins, Phoenix, for Plaintiff/Appellee.

Pamela J. Redlon, Bisbee, In Propria Persona.

OPINION

ESPINOSA, Judge.

¶ 1 Appellant Pamela Redlon appeals from an order of the Cochise County Superior Court finding the Arizona State Personnel Board lacked jurisdiction to hear her employment claim. For the reasons expressed below, we reverse the superior court's judgment and remand with directions to refer this matter back to the Board for a hearing on the merits of Redlon's claim.

Factual and Procedural Background

¶ 2 Because Redlon has failed to include citations to the record in her statement of facts, as required by Ariz. R. Civ.App. P. 13(a)(4), 17B A.R.S., we disregard her factual narrative and draw the facts from the state's answering brief and the record on appeal. It appears, however, that the essential facts of the case are undisputed. Redlon was a long-time employee of the Arizona Department of Economic Security (ADES). In March 2004, she received from ADES a Notice of Charges of Misconduct that alleged four incidents in which she had been "discourteous" to members of the public and "insubordinate" to her supervisors. ADES reviewed her written response to the charges and prepared a letter of dismissal. On the morning of April 2, Redlon was informed she would be dismissed from her employment if she did not resign by noon. ADES had prepared another letter for her signature that stated "I, Pam Redlon . . . am submitting this letter stating that I am involuntarily resigning from state service." Redlon protested that the charges against her were "not enough" for dismissal and that she did not want "[]either action to occur." She requested until 5:00 p.m. to "think about it." ADES supervisors reiterated there were "no other choices"; she must either resign by 12:00 or she would be issued a letter of dismissal. They also told her that if she resigned ADES would not contest her application for unemployment benefits, she would leave state employment in "good standing" and be eligible for reinstatement, and she could use ADES as a reference for future employment—advantages that would not be available were she dismissed. Redlon was not told, however, that if she were dismissed she could contest the underlying charges through an appeal to the Arizona State Personnel Board ("the Board"); nor was she shown the dismissal letter, which contained a notice of her appeal rights.¹

¶ 3 Redlon signed and submitted to ADES the resignation letter it had prepared. Within a few days, she wrote to ADES and requested the reasons she had been "requir[ed]" to resign. ADES responded that she had been given the "option to resign" for the reasons listed in the Notice of Charges of Misconduct she had received in March. On April 6, Redlon applied for unemployment benefits and, after initially being denied, received the benefits in full. In February 2005, she appealed her separation from employment to the Board.

¶ 4 In March 2005, a Board-appointed officer held a hearing to determine whether Redlon's claim was within the Board's jurisdiction. The officer concluded the Board should accept jurisdiction because Redlon's resignation had been "involuntary" and "the result of duress, coercion, and misrepresentation." At a meeting in May, the Board made "no ruling on the adoption of the hearing officer's [report]" but ordered a hearing on the merits of Redlon's claim "as if it were a dismissal from state service." In July, ADES filed a complaint in the Cochise County Superior Court, seeking a stay of the hearing and review of the Board's decision to accept jurisdiction. The superior court stayed the hearing and, in January 2006, concluded the Board lacked jurisdiction over the matter and dismissed Redlon's claim.² Her appeal to this court followed.

Appellate Jurisdiction³

¶ 5 Under the Arizona Administrative Review Act, A.R.S. §§ 12-901 through 12-914, administrative decisions are not judicially reviewable until the agency has issued a final decision "that affects the legal rights, duties or privileges of persons and that terminates the proceeding before the administrative agency." §§ 12-901(2) and 12-902(B). That requirement is an express codification of the exhaustion of administrative remedies doctrine, which compels parties to avail themselves of all available administrative processes before seeking the aid of a court. See Sw. Paint & Varnish Co. v Ariz. Dep't of Envtl. Quality, 194 Ariz. 22, ¶ 10, 976 P.2d 872, 874 (1999) ("We read § 12-902(B) as encompassing the traditional doctrine of exhaustion of administrative remedies."); Coconino County v. Antco, Inc., 214 Ariz. 82, ¶ 8, 148 P.3d 1155, 1159 (App.2006); see also Estate of Bohn v. Waddell, 174 Ariz. 239, 246, 848 P.2d 324, 331 (App.1992) ("Courts have characterized the exhaustion rule as a rule of judicial administration that is usually applied by virtue of express statutory mandate.").

¶ 6 The doctrine applies, however, only when the statutory mandate grants an administrative agency original jurisdiction over a matter. Campbell v. Mountain States Tel. & Tel. Co., 120 Ariz. 426, 429, 586 P.2d 987, 990 (App.1978); see Coconino County, 214 Ariz. 82, ¶ 8, 148 P.3d at 1159 (exhaustion of remedies doctrine applies where claim cognizable in first instance by administrative agency, but not "when the jurisdiction of the agency is being contested"); Estate of Bohn, 174 Ariz. at 248, 848 P.2d at 333 ("[A] court should not summarily apply the doctrine when a party challenges the agency's jurisdiction."). Thus, the superior court "has authority to review administrative agency proceedings . . . [by direct appeal if] the agency's jurisdiction is being challenged." Murphy v. Bd. of Med. Exam'r of State of Ariz., 190 Ariz. 441, 448, 949 P.2d 530, 537 (App.1997) (superior court properly determined jurisdictional bounds of administrative agency even though agency had not issued "final decision" within definition of § 12-901(2)); see also Moulton v. Napolitano, 205 Ariz. 506, ¶ 18, 73 P.3d 637, 643-44 (App.2003) (doctrine of exhaustion of administrative remedies not applicable where subject matter jurisdiction of agency contested); State Board of Tech. Reg. v. Bauer, 84 Ariz. 237, 242, 326 P.2d 358, 361 (1958) (under ARA, notwithstanding lack of final decision on issuance of architectural license, board's authority to require applicant to sit for examination subject to appeal). Accordingly, the superior court had jurisdiction over ADES's appeal challenging the Personnel Board's subject matter jurisdiction, as do we. See A.R.S. § 12-2101.

Discussion

A. Personnel Board's General Jurisdiction

¶ 7 The Personnel Board's jurisdiction is established by A.R.S. § 41-782(A), which provides that the Board "shall hear and review appeals . . . relating to dismissal from state service . . . resulting from disciplinary action as defined in the personnel rules." The Board does not have authority to hear appeals relating to voluntary resignations from state employment. See A.R.S. § 41-782(A); Ross v. Ariz. State Pers. Bd., 185 Ariz. 430, 432, 916 P.2d 1146, 1148 (App. 1995) ("If [the appellant] resigned, there was no dismissal and the Board lacks jurisdiction."); see generally Pima County v. Pima County Law Enforcement Merit Sys. Council, 211 Ariz. 224, ¶ 13, 119 P.3d 1027, 1030 (2005) (administrative agencies derive their powers from enabling legislation and their authority cannot exceed that granted by legislature). But the Board has discretion to determine whether an employee's separation from employment was the result of a resignation or a dismissal, and thus has the power to determine its own jurisdiction. See Ross, 185 Ariz. at 432, 916 P.2d at 1148. Whether § 41-782 empowers the Board to address Redlon's claim is a question of law that we review de novo. See id.

B. Procedural Due Process

¶ 8 Permanent state employees, such as Redlon, have a constitutionally protected property interest in their continued employment and cannot be deprived of this interest without due process of law. See Gilbert v. Homar, 520 U.S. 924, 928-29, 117 S.Ct. 1807, 1811, 138 L.Ed.2d 120 (1997); Deuel v. Arizona State School for Deaf and Blind, 165 Ariz. 524, 526, 799 P.2d 865, 867 (App.1990). Due process requires that state employees dismissed from their employment be provided a written notice of the specific grounds for the dismissal; disclosure of the evidence supporting the dismissal; the opportunity to confront and cross-examine available adverse witnesses; the opportunity to be heard in person and present evidence; the opportunity to be represented by counsel; a fair-minded and impartial decision maker; and a written statement by fact-finders as to the evidence relied upon and the reasons for the determination made.⁴ See Deuel, 165 Ariz. at 527, 799 P.2d at 868; see also Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542-48, 105 S.Ct. 1487, 1493-96, 84 L.Ed.2d 494 (1985). State employees who have been separated from their employment may receive due process through an appeal to the Board.⁵ See A.R.S. §§ 41-782(A) and 41-785; Ariz. Admin. Code R2-5.1-103.

¶ 9 Courts have held that employees may "waive" their right to due process by resigning from their employment. See Morrell v. Stone, 638 F.Supp. 163, 168 (W.D.Va.1986); Illinois ex rel. Schoepf v. Bd. of Educ., 606 F.Supp. 385, 390 (N.D.Ill.1985); but see Stone v. Univ. of Md. Med. Sys. Corp., 855 F.2d 167, 173 n. 7 (4th Cir.1988) (noting "technical [in]accuracy" of labeling resignation a "waiver" of right to procedural due process). A resignation must be voluntary to constitute a waiver of the right to due process. See, e.g., Angarita v. St. Louis County, 981 F.2d 1537, 1544 (8th Cir.199...