Handmaker v. Henney

• Decision Date: 17 November 1999
• Docket Number: No. 24475.,24475.
• Citation: 128 N.M. 328,1999 NMSC 43,992 P.2d 879
• Parties: Stanley D. HANDMAKER, M.D., Ph.D., Plaintiff-Appellee, v. Jane HENNEY, M.D., in her individual and official capacities, Shirley Murphy, M.D., in her individual and official capacities, Paul Roth, M.D., in his individual and official capacities, Shannan Carter, in her individual capacity, Clark Hansbarger, M.D., in his individual capacity, Leonard M. Napolitano, Ph.D., in his individual capacity, and The University of New Mexico, Defendants-Appellants.
• Court: New Mexico Supreme Court

992 P.2d 879

128 N.M. 328

1999 NMSC 43

Stanley D. HANDMAKER, M.D., Ph.D., Plaintiff-Appellee, v. Jane HENNEY, M.D., in her individual and official capacities, Shirley Murphy, M.D., in her individual and official capacities, Paul Roth, M.D., in his individual and official capacities, Shannan Carter, in her individual capacity, Clark Hansbarger, M.D., in his individual capacity, Leonard M. Napolitano, Ph.D., in his individual capacity, and The University of New Mexico, Defendants-Appellants.

No. 24475.

Supreme Court of New Mexico.

November 17, 1999.

Paula I. Forney, Paul R. Ritzma, Santa Fe, Sutin, Thayer & Browne, P.C., Norman S. Thayer, Cerianne L. Mullins, Albuquerque, for Appellants.

Miller, Stratvert & Torgerson, P.A., Ranne B. Miller, Virginia Anderman, Albuquerque, for Appellee.

OPINION

SERNA, Justice.

{1} Dr. Stanley D. Handmaker, following his removal from an administrative position, filed suit against the University of New Mexico for breach of his employment contract and against numerous university officials for related claims. UNM moved for summary judgment on the ground of sovereign immunity, and the district court denied the motion. UNM then petitioned the Court of Appeals for writ of error to the district court. Upon certification from the Court of Appeals, we conclude that determinations regarding sovereign immunity from actions based on contract are generally reviewable by writ of error; however, the trial court did not err in determining that governmental immunity is inapplicable in this case due to the existence of a written contract. We also conclude that the trial court's determination that genuine issues of material fact exist regarding the breach of contract claim is not a final order and is not subject to review by writ of error. Accordingly, we affirm in part and dismiss the appeal in part.

I. Facts

{2} Dr. Handmaker has been a faculty member at the UNM School of Medicine since 1977 and is currently a tenured professor in pediatric medicine. Like other faculty members at UNM, Dr. Handmaker's employment contract with UNM is renewed annually. In 1981, Dr. Handmaker began serving as director of the division of developmental disabilities. Dr. Handmaker's 1986-1987 employment contract designated him as administrator of the developmental disability program, which, because there was no change in Dr. Handmaker's duties, included the position of director of the division of developmental disabilities. At that time, Dr. Handmaker's contract provided $5000 for his administrative duties.

{3} In 1990, UNM, with Dr. Handmaker's assistance, received an administrative core grant to establish the New Mexico University Affiliated Program (UAP), a nationally recognized academic center for training and research in developmental disabilities. Dr. Handmaker served as director of the UAP from its inception. Although the position of UAP director entailed additional administrative duties, Dr. Handmaker's employment contract continued to designate him as administrator of the developmental disability program and made no mention of the UAP. Dr. Handmaker's administrative salary increased to $10,000 in his 1991-1992 employment contract. His 1993-1994 employment contract again designated him as administrator of the developmental disability program and continued to provide an administrative salary of $10,000.

{4} During the 1993-1994 academic year, the School of Medicine established an internal review committee to evaluate Dr. Handmaker's performance as director of the UAP. After receiving the committee's report, the dean of the School of Medicine informed Dr. Handmaker by writing on January 21, 1994, that he had "chosen to have [Dr. Handmaker] remain as Director of the University Affiliated Program. However, [Dr. Handmaker's] directorship is under ... probationary conditions for the remainder of the calendar year 1994...." According to Dr. Handmaker, he made good faith efforts during the spring of 1994 to comply with the dean's probationary conditions. On May 25, 1994, the chair of the department of pediatrics informed Dr. Handmaker in writing that his 1994-1995 contract would include a four percent increase in salary, including the administrative salary component.

{5} Dr. Handmaker received no progress report on his performance as director of UAP and received no indication that he was not in full compliance with the probationary conditions. However, on June 28, 1994, the chair of the department of pediatrics sent a letter to Dr. Handmaker informing him of the decision to remove him as director of the UAP. The letter informed Dr. Handmaker that his removal as director of UAP would not affect his position as associate professor of pediatrics or his position as director of the division of developmental disabilities in the department of pediatrics. The letter also stated that the removal as director of UAP would be effective July 1, 1994, even though federal regulations required thirty days notice before he could be officially removed as director of the UAP and principal investigator of the UAP core grant. Consistent with this letter, Dr. Handmaker's 1994-1995 employment contract changed his administrative title from administrator of the developmental disability program to the director of the division of developmental disabilities. Once again, the written contract made no mention of the UAP. However, Dr. Handmaker's administrative salary remained at $10,000 until his 1995-1996 employment contract, which reinstated his original $5000 administrative salary.

{6} Dr. Handmaker filed a breach of contract claim against UNM as a result of his removal as director of the UAP. Specifically, he claims that UNM's course of action violated the faculty handbook and internal policies and procedures and that removing him from his administrative position without just cause constituted a breach of his express employment contract. Dr. Handmaker also claims that UNM breached an implied covenant of good faith and fair dealing. In response to Dr. Handmaker's claims, UNM filed a motion for summary judgment in the district court. In addition to denying the merits of Dr. Handmaker's breach of contract claims, UNM asserted sovereign immunity pursuant to NMSA 1978, § 37-1-23 (1976). The district court, concluding that Dr. Handmaker raised genuine issues of material fact with respect to the breach of contract claim, denied UNM's motion. UNM then petitioned the Court of Appeals to issue a writ of error to the district court pursuant to Rule 12-503 NMRA 1999. The Court of Appeals decided that a determination of the proper criteria for issuance of writs of error constituted a matter of substantial public importance and, therefore, certified the case to this Court. See NMSA 1978, § 34-5-14(C)(2) (1972).

II. Writs of Error and the Collateral Order Doctrine

{7} As a general matter, this Court's appellate jurisdiction is limited to review of "any final judgment or decision, any interlocutory order or decision which practically disposes of the merits of the action, or any final order after entry of judgment which affects substantial rights." NMSA 1978, § 39-3-2 (1966). The principle of finality serves a multitude of purposes, including the prevention of piecemeal appeals and the promotion of judicial economy. See Executive Sports Club, Inc. v. First Plaza Trust, 1998-NMSC-008, ¶ 11, 125 N.M. 78, 957 P.2d 63

. Nonetheless, the principle of finality "is neither absolute nor inflexible," id. ¶ 5, and is given "a practical, rather than a technical, construction" in order to promote meaningful appellate review without sacrificing judicial economy. Kelly Inn No. 102, Inc. v. Kapnison, 113 N.M. 231, 236, 240, 824 P.2d 1033, 1038, 1042 (1992).

{8} There is no question that the district court's denial of UNM's motion for summary judgment is an interlocutory order which fails to dispose of the merits of the action and is, therefore, not a final decision for purposes of Section 39-3-2. See B.L. Goldberg & Assocs. v. Uptown, Inc., 103 N.M. 277, 278, 705 P.2d 683, 684 (1985)

("For purposes of appeal, an order or judgment is not considered final unless all issues of law and fact have been determined and the case disposed of by the trial court to the fullest extent possible."). UNM, however, contends that an interlocutory determination of sovereign immunity for actions based on contract falls within the limited exception to the principle of finality known as the collateral order doctrine.

{9} We recently examined the collateral order doctrine and its application in New Mexico. See Carrillo v. Rostro, 114 N.M. 607, 612-19, 845 P.2d 130, 135-42 (1992)

. In Carrillo, we explained that the collateral order doctrine, which was initially crafted by the United States Supreme Court in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 545-47, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), is a narrow exception to the principle of finality that permits appellate review of orders "implicat[ing] rights that will be irretrievably lost, absent immediate appeal and regardless of the outcome of an appeal from the final judgment." Carrillo, 114 N.M. at 614,

845 P.2d at 137. We noted that the collateral order doctrine has three requirements: (1) the order must finally determine the disputed question; (2) it must concern an issue that is entirely separate from the merits of the claim; and (3) there must be no effective remedy by appeal. Id. at 613, 845 P.2d at 136; accord Rule 12-503(E)(2). We concluded that the collateral order doctrine is consistent with the principle of finality expressed in Section 39-3-2 and adopted the doctrine, as well as the guidelines and criteria developed by the United States Supreme Court, to be applied procedurally in New Mexico through the writ of error. Carrillo, 114 N.M. at 616-17 & n. 9, 845 P.2d at 139-40 & n. 9. This case requires us to examine the applicability of the collateral order doctrine and writs of error as described in Carrillo...