Haugen v. Superior Dev., Inc.

• Decision Date: 06 August 2012
• Docket Number: No. A11–1888.,A11–1888.
• Citation: 819 N.W.2d 715
• Parties: Daniel HAUGEN, Respondent, v. SUPERIOR DEVELOPMENT, INC., Relator, Department of Employment and Economic Development, Respondent.
• Court: Minnesota Court of Appeals

819 N.W.2d 715

Daniel HAUGEN, Respondent,

v. SUPERIOR DEVELOPMENT, INC., Relator,Department of Employment and Economic Development, Respondent.

No. A11–1888.

Court of Appeals of Minnesota.

Aug. 6, 2012.

Recognized as Unconstitutional

M.S.A. § 481.02

Syllabus by the Court

1. Limits on the legislature's authority to affect the judicial department, arising from the constitution's separation-of-powers provision, apply to legislation that bears on the Minnesota Court of Appeals notwithstanding its having been established by legislation.

2. Corporations must be represented by legal counsel when appearing before the Minnesota Court of Appeals.

3. The requirement that employers but not unemployed individuals pay fees associated with appeals of unemployment-benefits decisions, under Minnesota Statutes section 268.105, subdivision 7 (2010), does not violate the equal protection clause of the Minnesota Constitution.

Daniel Haugen, Prior Lake, MN, pro se.

Rebecca J. Levine, Thiel, Campbell, Gunderson, Anderson and Levine PLLP, Edina, MN, for relator.

Lee B. Nelson, Department of Employment and Economic Development, St. Paul, MN, for respondent.

Considered and decided by ROSS, Presiding Judge; WRIGHT, Judge; and MUEHLBERG, Judge.^*

OPINION

ROSS, Judge.

Daniel Haugen quit his apartment-management job at Superior Development, Inc., after Superior reduced his weekly hours from 40 to 24. The department of employment and economic development deemed Haugen ineligible for unemployment benefits, but an unemployment law judge (ULJ) disagreed and held that Haugen is eligible because he quit his employment for good reason caused by Superior. Superior appeals by certiorari, challenging that holding and arguing that it was unlawfully prohibited from appearing before this court without legal counsel and that the Minnesota statute that requires employers but not unemployed individuals to pay fees associated with an appeal from a ULJ's decision is unconstitutional. We hold that corporations cannot appear before the court of appeals without counsel, that Minnesota Statutes section 268.105 is not unconstitutional, and that Haugen had good reason to quit caused by Superior's decision to reduce his work hours. We therefore affirm.

FACTS

Daniel Haugen began working at Superior Development, Inc., in August 2008 managing 16 rental houses. Haugen was to work about 28 hours weekly for $15 an hour, plus commission on rent. Almost immediately Superior changed Haugen's management duties by adding an 18–unit apartment building. Haugen spent half of his time managing the apartment building, and his weekly hours increased to 40.

Haugen worked 40–hour weeks from September 2008 until late 2010. His hours then reduced to 32 because Superior believed he could complete his duties in less time. But Haugen's weekly hours soon crept back up to 40. Superior reduced his weekly hours again in late April 2011, this time from 40 to 24.

Haugen met with Superior's vice president, William Mellgren. He told Mellgren that he “didn't think he could make it on 24 hours.” Haugen sought unemployment benefits that same month based on the reduction. SeeMinn.Stat. § 268.035, subd. 26 (2010). On April 25, 2011, he was approved for benefits on that basis for $365 per week.

Two months later, on June 29, 2011, Haugen quit his employment altogether. He again applied for unemployment benefits. The department of employment and economic development determined that he was ineligible to receive unemployment benefits because he quit his employment for personal reasons. He appealed to the ULJ, who found instead that Haugen quit because of a good reason caused by Superior. The ULJ reasoned that cutting Haugen's weekly hours from 40 hours per week to 24 caused a substantial drop in compensation that would compel an average, reasonable employee to quit rather than remain employed. The ULJ recognized that other reasons may have contributed to Haugen's quitting, including disagreements over work duties and money owed to him, but he found that Haugen's primary reason was the reduction in hours.

The ULJ affirmed his decision after reconsideration, and Superior appeals the decision to this court by writ of certiorari, raising three issues.

ISSUES

I. May a corporation appear before the court of appeals without being represented by legal counsel?

II. Does Minnesota Statutes section 268.105, subdivision 7, violate the equal protection clause of the Minnesota constitution?

III. Did the ULJ err by concluding that Haugen had good reason to quit caused by Superior?

ANALYSIS

I

Superior first raises a procedural challenge concerning its appeal. It contends that, as a corporation, it has the statutory right to appear in the court of appeals represented by a corporate agent who is not an attorney. When Superior filed its appeal with this court, the clerk's office notified it that its appeal papers were infirm because they had not been signed by an attorney. Superior refiled its papers through counsel as required, but it objects to the requirement. It argues that Minnesota Statutes section 481.02, subdivision 2 (2010), permits corporations to appear in actions in all Minnesota state courts in which they are named parties. The argument faces two equally dispositive, insurmountable obstacles. We therefore reject it.

The first obstacle to Superior's argument is a matter of statutory interpretation. We review the interpretation of statutes de novo. Yath v. Fairview Clinics, N.P., 767 N.W.2d 34, 49 (Minn.App.2009). Section 481.02, subdivision 2, states that “No corporation ... by or through its officers or employees or any one else, shall maintain, conduct, or defend, except in its own behalf when a party litigant, any action or proceeding in any court in this state.” Superior's argument has initial appeal only; the supreme court has interpreted section 481.02 narrowly to mean that corporations may appear in court by or through its officers, employees or other agents only when those agents are also attorneys. Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753, 755 (Minn.1992). Based on the supreme court's interpretation, section 481.02 does not even purport to require courts to allow corporations to represent themselves through non-attorney agents of the corporation.

The second obstacle is even more formidable than the first. Section 481.02 not only does not mean that corporations may be represented in court through their nonattorney agents, it cannot mean that corporations may be represented in court through their non-attorney agents. The Turnham court recognized that, as a matter of constitutional delineation of governmental power, the court, and not the legislature, has the authority to decide who may and who may not practice law before the courts. Id. “Therefore, legislative enactments which purport to authorize certain classes to practice law in the courts of this state are not controlling upon the judiciary.” Id. at 756. For that reason, section 481.02 was deemed unconstitutional to the extent it attempts to require courts to allow nonattorneys to appear in court on behalf of corporations. Id. at 755–56.

Superior is aware of this holding, but it counters it with its own constitutional separation-of-powers theory. It contends that Turnham 's constitutional holding does not apply here because the court of appeals is not really part of “the judiciary,” at least not in the same way that the district court and supreme court are. On that same theory, Superior also suggests that this court is not bound by the supreme court's interpretation of section 481.02 as announced in Turnham. To support its theory, Superior highlights the provision of the constitution that authorizes the legislature to establish the court of appeals: “The judicial power of the state is vested in a supreme court, a court of appeals, if established by the legislature, a district court ..., and [courts of jurisdiction inferior to the district court].” Minn. Const. art. VI, § 1. Superior maintains that because the court of appeals was “established by the legislature” (unlike the district court and supreme court, which were established without special legislation), the court of appeals is a “creature of the legislature” and is not a constitutional court. It follows, argues Superior, that the court of appeals is bound by all legislative pronouncements, even those pronouncements that exceed the legislature's constitutional authority when applied to the district or supreme courts.

Superior's argument has no merit. It reads far more into the term “ establish ” than the term allows. Apparent from its context, the term means only to initiate. Nothing in the clause authorizing the legislature to “establish” the court of appeals suggests anything more, and it certainly does not mean that the court of appeals exists in the government's legislative department rather than its judicial department. The constitution first holds that “[t]he powers of government shall be divided into three distinct departments: legislative, executive and judicial.” Minn. Const. art. III, § 1. The three articles that immediately follow that declaration (IV, V, and VI) define those three distinct departments. The first of these defines the legislative department, and it includes no hint of judicial power. The third of the three departments—the judiciary—alone holds “[t]he judicial power of the state.” Minn. Const. art. VI, § 1. Specifically, that judicial power, as distinguished from the legislative power or the executive power, “is vested” only in the courts: “a supreme court,” “a court of appeals, if established by the legislature,” and “a district court” (as well as other courts or officers having jurisdiction inferior to the district courts). Id. So on its plain text, the constitution did not, by authorizing the legislature to “establish” a court of appeals, confer in the legislature any of the judicial power that it vested automatically in the court of appeals...