George v. D.W. Zinser Co.

• Decision Date: 13 March 2009
• Docket Number: No. 07-1495.,07-1495.
• Parties: Jeffrey GEORGE, Appellant, v. D.W. ZINSER COMPANY, Appellee.
• Court: Iowa Supreme Court

762 N.W.2d 865

Jeffrey GEORGE, Appellant, v. D.W. ZINSER COMPANY, Appellee.

No. 07-1495.

Supreme Court of Iowa.

March 13, 2009.

Matt J. Reilly of Eells & Tronvold Law Offices, P.L.C., Cedar Rapids, for appellant.

Charles A. Blades of Scheldrup, Blades, Schrock, Sand, Aranza, P.C., Cedar Rapids, for appellee.

STREIT, Justice.

After noticing his employer's failure to take certain required safety precautions during lead abatement jobs in violation of Iowa's Occupational Safety and Health Act (IOSHA), Iowa Code chapter 88 (2007), Jeffrey George filed a complaint with the Iowa Division of Labor Services Occupational Safety and Health Bureau (the Division). Soon thereafter, his employment with the company was terminated. George filed another complaint with the Division alleging retaliatory discharge in violation of IOSHA as well as a claim for wrongful discharge in the district court. The Division dismissed George's complaint. The district court also dismissed George's complaint on the grounds of res judicata, concluding the Division's dismissal precluded further litigation on the issue. George appealed. Because the Division's investigation and dismissal was not an adjudication, res judicata does not preclude George's action in the district court. Further, the remedy provided in IOSHA is not exclusive, and George may bring a common law action for wrongful discharge in the district court.

I. Background Facts and Prior Proceedings.

On January 18, 2007, Jeffrey George filed a complaint with the Division, alleging his employer, D.W. Zinser, violated provisions of IOSHA. The complaint arose out of violations George witnessed while performing lead abatement jobs for D.W. Zinser in September and October 2006. As a result of a subsequent investigation, D.W. Zinser was cited for eight serious IOSHA violations and assessed penalties on February 8, 2007.

On or around January 23, D.W. Zinser learned IOSHA complaints had been filed against the company. Michael Zinser left two messages on George's voicemail that day indicating they needed to speak as soon as possible. On January 24, David Zinser told George he should return the company truck that had been assigned to him, and there was no work available for him. On January 29, George met with David Zinser. Following the advice of the Division, George carried a concealed recording device. On February 1, George had another similar meeting. Although much of the recordings was inaudible, it seems that David Zinser was not going to give George work because of the IOSHA situation. George's employment with D.W. Zinser was subsequently terminated.

In March, George filed a complaint with the Division alleging he was discharged in retaliation for reporting unsafe working conditions. On April 4, the Division dismissed George's complaint. George appealed, and the interim labor commissioner affirmed the dismissal. The commissioner found that George, along with other employees, was laid off on January 12, before George filed his complaint regarding the IOSHA violations. George did not seek judicial review of the commissioner's decision under Iowa Code section 17A.19 (2007).

On March 12, while the complaint was still under investigation, George filed a lawsuit in the district court containing the same retaliation claim as well as a claim for unpaid wages under Iowa Code chapter 91A (2007). After learning the Division dismissed George's complaint, D.W. Zinser filed a pre-answer motion to dismiss, arguing Iowa Code section 88.9(3) provides the exclusive remedy for pursuing retaliation claims under IOSHA, and the doctrine of res judicata bars George from relitigating that issue in district court. George resisted the motion to dismiss and asserted the motion should be treated as a motion for summary judgment because it relied on matters outside the pleadings. The district court agreed and considered the motion to dismiss as if it were a motion for summary judgment. The district court dismissed George's petition with prejudice on the grounds that "the final adjudicatory decision of an administrative agency is entitled to res judicata effect as if it were the judgment of a court." The district court declined to rule on whether the statutory remedies provided in Iowa Code section 88.9(3) are exclusive because it identified the preemption issue as "troublesome" and decided it would be clearer to dispose of the case on grounds of res judicata. George appealed. The court of appeals affirmed, concluding George had "a full and fair opportunity to litigate the retaliatory discharge claim in the administrative proceedings in this case." However, the court of appeals reinstated George's wage claim which had been dismissed by the district court.

II. Scope of Review.

As the motion to dismiss in this case relied on matters outside the pleadings and both parties and the court treated it as a motion for summary judgment, we will do so as well. See Troester v. Sisters of Mercy Health Corp., 328 N.W.2d 308, 311 (Iowa 1982) (recognizing, in certain situations, where a motion to dismiss relies on matters outside the pleadings, "the proper procedure is to treat the motion as one for summary judgment"); see also Stotts v. Eveleth, 688 N.W.2d 803, 812 (Iowa 2004) (treating a motion to dismiss as a motion for summary judgment to conserve judicial resources).

A ruling on a motion for summary judgment is reviewed for correction of errors at law. City of Johnston v. Christenson, 718 N.W.2d 290, 296 (Iowa 2006). Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Iowa R. Civ. P. 1.981(3).

III. Merits.

A. Res Judicata. Today we determine whether an administrative decision made after a brief investigation is a final adjudicatory action entitled to preclusive effect. The doctrine of res judicata prevents a party from relitigating a claim or issue that has already been determined by a final judgment. Ashe v. Swenson, 397 U.S. 436, 443, 90 S.Ct. 1189, 1194, 25 L.Ed.2d 469, 475 (1970); see also Christenson, 718 N.W.2d at 297. Res judicata, or claim preclusion, applies only when a party has had a "full and fair opportunity" to litigate in the first trial. Spiker v. Spiker, 708 N.W.2d 347, 353 (Iowa 2006). A party asserting res judicata must establish the following:

(1) "the parties in the first and second action were the same"; (2) "the claim in the second suit could have been fully and fairly adjudicated in the prior case"; and (3) "there was a final judgment on the merits in the first action."

Id. (quoting Arnevik v. Univ. of Minn. Bd. of Regents, 642 N.W.2d 315, 319 (Iowa 2002)). A party asserting issue preclusion, or collateral estoppel, must establish the following:

(1) the issue concluded must be identical; (2) the issue must have been raised and litigated in the prior action; (3) the issue must have been material and relevant to the disposition of the prior action; and (4) the determination made of the issue in the prior action must have been necessary and essential to the resulting judgment.

Iowa Elec. Light & Power Co. v. Lagle, 430 N.W.2d 393, 397 (Iowa 1988) (citation omitted).

An agency determination will be entitled to preclusive effect in a judicial proceeding "[w]hen an administrative agency is acting in a judicial capacity and resolved disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate...." United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642, 661 (1966); see also Lagle, 430 N.W.2d at 397-98. "[A] valid and final adjudicative determination by an administrative tribunal has the same effects under the rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a court." Restatement (Second) of Judgments § 83(1) (1982). In determining whether the agency is acting in a judicial capacity, we look to the factors set forth in the Restatement.

(2) An adjudicative determination by an administrative tribunal is conclusive under the rules of res judicata only insofar as the proceeding resulting in the determination entailed the essential elements of adjudication, including:

(a) Adequate notice to persons who are to be bound by the adjudication ...;

(b) The right on behalf of a party to present evidence and legal argument in support of the party's contentions and fair opportunity to rebut evidence and argument by opposing parties;

(c) 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, or a specific series thereof;

(d) A rule of finality, specifying a point in the proceeding when presentations are terminated and a final decision is rendered; and

(e) Such other procedural elements as may be necessary to constitute the proceeding a sufficient means of conclusively determining the matter in question, having regard for the magnitude and complexity of the matter in question, the urgency with which the matter must be resolved, and the opportunity of the parties to obtain evidence and formulate legal contentions.

Restatement § 83; see Bennett v. MC # 619, Inc., 586 N.W.2d 512, 517 (Iowa 1998). Our cases are in accord with the rationale set forth in the comments to section 83 of the Restatement.

"Where an administrative agency is engaged in deciding specific legal claims or issues through a procedure substantially similar to those employed by courts, the agency is in substance engaged in adjudication. Decisional processes using procedures whose formality approximates those of courts may properly be accorded the conclusiveness that attaches to judicial judgments."

Bennett, 586 N.W.2d at 517 (emphasis removed) (quoting Restatement § 83 cmt. b).

Another crucial factor the Restatement identifies in determining whether res judicata applies to an agency action is...