Hawkins v. State, Dept. of Economic Sec.

• Citation: 900 P.2d 1236,183 Ariz. 100
• Decision Date: 10 August 1995
• Docket Number: CA-CV-95-0070,No. 2,2
• Parties: , 68 Fair Empl.Prac.Cas. (BNA) 1178 Charles E. HAWKINS and Delma Hunter, husband and wife, Plaintiffs/Appellants, v. STATE of Arizona; DEPARTMENT OF ECONOMIC SECURITY, Defendants/Appellees.
• Court: Court of Appeals of Arizona

Page 1236

900 P.2d 1236

183 Ariz. 100, 68 Fair Empl.Prac.Cas. (BNA) 1178

Charles E. HAWKINS and Delma Hunter, husband and wife, Plaintiffs/Appellants, v. STATE of Arizona; DEPARTMENT OF ECONOMIC SECURITY, Defendants/Appellees.

No. 2 CA-CV-95-0070.

Court of Appeals of Arizona,

Division 2, Department A.

Aug. 10, 1995.

[183 Ariz. 101] Elaine C. Hardin, Tucson, for plaintiffs/appellants.

Ryley, Carlock & Applewhite by Charles L. Chester, Patrick J. Duffy, Phoenix, for defendants/appellees.

OPINION

PELANDER, Judge.

This appeal raises an issue of first impression in Arizona: whether a judicially-unreviewed administrative determination by the state personnel board upholding a state employee's demotion for cause has res judicata or collateral estoppel effect on, and therefore bars, a subsequent lawsuit claiming unlawful race and sex discrimination under the Arizona Civil Rights Act [ACRA], A.R.S. §§ 41- 1461 [183 Ariz. 102] through 1464, 41-1481 through 1484. ¹ We hold that the state personnel board's determination that there was "cause" to discipline an employee does not preclude a separate suit under the ACRA, and vacate the trial court's order granting summary judgment in favor of the State of Arizona and its Department of Economic Security.

BACKGROUND

Appellant, Charles Hawkins (hereinafter "appellant"), a permanent status state employee with the Arizona Department of Economic Security [DES], was demoted for alleged job performance deficiencies, resulting in a decrease in job classification and pay. He appealed to the Arizona State Personnel Board, claiming that the demotion was without "just cause" and seeking reinstatement with full back pay. ² Following a two-day contested hearing at which appellant testified and was represented by a union representative, the administrative hearing officer rendered findings and conclusions that cause existed for the demotion under A.R.S. § 41-770 and the applicable administrative personnel rules. The hearing officer recommended that the demotion be sustained. His findings and conclusions were adopted by the state personnel board, which upheld appellant's demotion and denied his administrative appeal.

In his appeal, appellant did not specifically allege that his demotion was discriminatorily based on his race or sex, or that he was a victim of disparate treatment. No evidence relating to alleged race or sex discrimination was presented, and no such issues were actually litigated, at the administrative hearing. Nor did the hearing officer's findings and conclusions address or resolve any claims relating to discrimination or disparate treatment. For example, the performance of other co-employees and any disciplinary measures taken with respect to them vis-a-vis the appellant were not considered or determined by the personnel board.

Appellant did not seek judicial review of the personnel board's decision as he had a right to do under A.R.S. § 41-785(D). Instead, after receiving the hearing officer's adverse findings, conclusions and recommendation, appellant filed a charge with the Arizona Civil Rights Division [ACRD], claiming discrimination by his DES superiors based on his sex (male) and race (African-American). In that charge appellant contended that a similarly situated Caucasian female co-employee had experienced similar job performance problems but was laterally transferred to a less stressful position with no decrease in pay. He further contended that other Caucasian females were not demoted and received lesser discipline despite similar work performance deficiencies. Appellant alleged that but for his sex and/or race, he would not have been demoted.

Almost one year after filing his charge with the ACRD, appellant filed this action, alleging, inter alia, that he was demoted because of his sex and race in violation of the ACRA. ³ In granting summary judgment for the state, the trial court explained the basis for its ruling as follows:

Plaintiffs cannot establish a prima facie case of race discrimination because a member of Mr. Hawkins' racial group replaced him as a Human Service Specialist III after his demotion. Plaintiffs also cannot establish a claim of race and sex discrimination because the doctrine of collateral estoppel precludes them from proving the essential elements of their discrimination claims. The doctrine of res judicata further bars plaintiffs from litigating this case because they had an adequate opportunity to litigate their claims before the State Personnel Board.

This appeal followed.

STANDARD OF REVIEW

On appeal from a summary judgment we must determine de novo whether there are any genuine issues of material fact and whether the trial court erred in its application of the law. United Bank v. Allyn, 167 Ariz. 191, 805 P.2d 1012 (App.1990). We will also review de novo issues of statutory interpretation because they are issues of law. Norquip Rental Corp. v. Sky Steel Erectors, Inc., 175 Ariz. 199, 854 P.2d 1185 (App.1993). We view the evidence in a light most favorable to the party against whom summary judgment was entered, and all favorable inferences fairly arising from the evidence must be given to that party. Angus Medical Co. v. Digital Equip. Corp., 173 Ariz. 159, 840 P.2d 1024 (App.1992); Ancell v. Union Station Associates, Inc., 166 Ariz. 457, 803 P.2d 450 (App.1990). We will affirm if the trial court's disposition is correct for any reason. Glaze v. Marcus, 151 Ariz. 538, 729 P.2d 342 (App.1986).

DISCUSSION

As Division One of this court recognized in Ferris v. Hawkins, 135 Ariz. 329, 331, 660 P.2d 1256, 1258 (App.1983) (quoting Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 415, 66 L.Ed.2d 308, 313 (1980)), the doctrines of res judicata and collateral estoppel " 'relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication.' " While the doctrines have similar purposes, they are nevertheless different.

Under the doctrine of res judicata, a judgment on the merits in a prior suit involving the same parties or their privies bars a second suit based on the same cause of action. This doctrine binds the same party standing in the same capacity in subsequent litigation on the same cause of action, not only upon facts actually litigated but also upon those points which might have been litigated....

The doctrine of "collateral estoppel" is a doctrine of issue preclusion. It bars a party from relitigating an issue identical to one he has previously litigated to a determination on the merits in another action. The elements necessary to invoke collateral estoppel are: the issue is actually litigated in the previous proceeding, there is a full and fair opportunity to litigate the issue, resolution of such issue is essential to the decision, there is a valid and final decision on the merits, and there is a common identity of the parties.

Gilbert v. Board of Medical Examiners, 155 Ariz. 169, 174, 745 P.2d 617, 622 (App.1987) (citations omitted). See also Western Cable v. Industrial Comm'n of Arizona, 144 Ariz. 514, 518, 698 P.2d 759, 763 (App.1985) (claim preclusion prohibits relitigation of the same claim, including matters that were actually decided or that could have been decided; issue preclusion prohibits religation of the same issue, but only applies to matters that were actually litigated and determined and only if such determination was essential); Barassi v. Matison, 134 Ariz. 338, 340, 656 P.2d 627, 629 (App.1982) (the doctrine of res judicata gives conclusive effect to every point decided and every point which could have been raised by the record and decided with respect to the parties thereto).

Both doctrines of res judicata and collateral estoppel may apply to decisions of administrative agencies acting in a quasi-judicial capacity. See, e.g., Yavapai County v. Wilkinson, 111 Ariz. 530, 532, 534 P.2d 735, 737 (1975); Casillas v. Arizona Dep't of Economic Security, 153 Ariz. 579, 581, 739 P.2d 800, 802 (App.1986). There are sound policy reasons for this rule. The res judicata doctrine " 'rests upon considerations of economy of judicial time and public policy favoring the establishment of certainty in legal relations.' " Campbell v. Superior Court, 18 Ariz.App. 287, 290, 501 P.2d 463, 466 (1972) (quoting Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591, 597, 68 S.Ct. 715, 719, 92 L.Ed. 898, 905 (1948)). Thus, " 'when an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.' " Id. (quoting United States v. Utah Const. & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 1560, 16 L.Ed.2d 642, 660-61 (1966)). Arizona case law also makes clear that "the failure to seek judicial review of an administrative order precludes attacking the order by means of a separate complaint." Gilbert, 155 Ariz. at 176, 745 P.2d at 624. Where a party does not appeal a final administrative decision that decision becomes final and res judicata. Guertin v. Pinal County, 178 Ariz. 610, 875 P.2d 843 (App.1994). See also Hurst v. Bisbee Unified Sch. Dist., 125 Ariz. 72, 75, 607 P.2d 391, 394 (App.1979).

Appellant contends that the personnel board proceeding and determination should be accorded neither res judicata nor collateral estoppel effect so as to preclude his discrimination claims under the ACRA in this case. We agree. Although the Arizona cases cited above contain broad language and suggest expansive application of preclusion principles, none involves the ACRA.

The United States Supreme Court has held that judicially-unreviewed state administrative proceedings, in which it was determined that an employee's termination was not racially motivated, did not have preclusive effect on the employee's discrimination claims under Title VII....