Marlar v. State, 1

CourtCourt of Appeals of Arizona
Citation136 Ariz. 404,666 P.2d 504
Docket NumberCA-CIV,No. 1,1
PartiesJames Floyd MARLAR, Plaintiff-Appellee, v. STATE of Arizona, a governmental entity, Department of Economic Security, an agency of the State of Arizona, and Robert L. Harris, Defendants-Appellants. 6503.
Decision Date17 February 1983

Page 504

666 P.2d 504
136 Ariz. 404
James Floyd MARLAR, Plaintiff-Appellee,
STATE of Arizona, a governmental entity, Department of Economic Security, an agency of the State of Arizona, and Robert L. Harris, Defendants-Appellants.
No. 1 CA-CIV 6503.
Court of Appeals of Arizona,
Division 1, Department D.
Feb. 17, 1983.
Rehearing Denied Mar. 22, 1983.
Review Denied May 17, 1983.

[136 Ariz. 406]

Page 506

Robert K. Corbin, Atty. Gen. by David Rich, Asst. Atty. Gen., Phoenix, for defendants-appellants.

Ryley, Carlock & Ralston by James M. Marlar and Charles L. Chester, Phoenix, for plaintiff-appellee.



In this appeal, we are called upon to determine the propriety of certain actions taken by an agency within the Arizona Department of Economic Security (DES) which administers the Business Enterprises Program, Services for the Blind (BEP). The facts necessary for the disposition of this appeal are as follows.


Plaintiff-appellee James Floyd Marlar (Marlar) is an independent businessman, licensed to operate a food service facility in a government building, pursuant to a federally-funded vocational rehabilitation program for the blind authorized under the Randolph-Sheppard Act. 20 U.S.C.A. §§ 107-107f (1974 & Supp.1982). Although the Randolph-Sheppard Act applies to the operation of vending facilities on federal property, Arizona has made the program applicable to state, county, and municipal property. A.R.S. § 23-504.A. (Supp.1982). The Randolph-Sheppard Act authorizes each state to establish a "licensing agency" for the purpose of administering the act. In Arizona, the licensing agency is the Rehabilitation Services Administration, Services for the Blind, an agency within DES. The BEP is operated by the licensing agency; it has direct contact with blind vendors, such as Marlar, and is responsible for licensing an individual as a vending facility manager (manager). A.C.R.R. R6-4-704.E.

Between 1973 and 1980, Marlar was licensed to operate a cafeteria in the basement of the State Education Building, 1535 West Washington, in Phoenix. Once a particular location is identified and a manager [136 Ariz. 407]

Page 507

placed in a location, a contract is entered into between the licensing agency and the vendor. Such a contract was executed between Marlar and BEP with respect to the location at 1535 West Jefferson. In 1979, BEP announced that a new cafeteria facility would be available at 1300 West Washington, Phoenix; Marlar applied for that location and was chosen as the successful applicant. He moved into the new facility in March, 1980. Although no contract was entered into between Marlar and BEP with regard to the location at 1300 West Washington, DES concedes this was an oversight and for the purpose of this action, DES acknowledges that Marlar does have a valid contract.

The incident out of which this appeal arises occurred on January 2, 1981. Sometime in the morning, Marlar gave a document to two DES employees as they passed through the cafeteria line. The document, which Marlar described as a "joke," was written in the form of guidelines adopted by the "State Game Commission" which described rules applicable to the hunting and killing of "wetbacks." The document was replete with racial and ethnic slurs and could easily be interpreted as offensive, racist, and was completely inappropriate in any setting, much less in DES or any other agency of government. One of the employees read only several lines of the document and returned it immediately to Marlar. The other employee read it entirely and was so offended that he contacted the administrator of the licensing agency, Tom Tyrrell, and the DES equal employment officer, Theresa Ruiz. Later that morning, Ruiz went to the cafeteria and spoke with Marlar and confronted him about the document (although at this point she had not yet read it). She told Marlar that she was under the impression that it was disparaging to Hispanics and that he was jeopardizing his contract. Marlar responded that the document was "funny."

Ruiz wrote a memo to Tyrrell describing the incident and attached a copy of the document which Marlar distributed. She sent a copy of her memo and the document to a number of other DES officials. Apparently, with the exception of the two individuals to whom the document was initially shown, all other DES employees who actually saw the document did so in conjunction with investigative and disciplinary efforts made by DES. The incident became an immediate topic of conversation within DES and a number of complaints were received by Ms. Ruiz from individuals complaining about the distribution of what they understood to be a racist and offensive joke. Many individuals refused to eat in the cafeteria after learning of Marlar's actions.

The BEP program supervisor, Robert L. Harris, learned of the incident on January 5 while out of town. By January 6, Harris, after consultation with his supervisor, determined that Marlar should be transferred because of bad business practices or mismanagement. That same day, Harris met with Marlar to inform him of the decision with regard to his transfer. Marlar was asked if he would agree to the transfer and he said no. On January 8, Marlar was informed of the transfer; between the 6th and the 8th the matter had reached the attention of William Jamieson, Jr., the director of DES who instructed Tyrrell, through an intermediary, that Marlar should be removed from the building.

On January 8, Marlar was informed in writing that because of "an alleged discrimination charge that has developed from actions that took place at your place of business.... DES has requested that you be removed from the facility for the alleged misconduct ...." The letter was reviewed and approved by Tyrrell and Jamieson. This action was taken pursuant to A.C.R.R. R6-4-704.J.5. which provides that the "[a]gency may transfer an individual when management-related problems indicate a more suitable location would be in the best interests of the individual and/or the overall program." Because no site was available, Marlar was placed on manager-at-large status which would make him eligible to apply for subsequent available locations.

Marlar sought administrative review of the transfer action and on January 23, 1981, [136 Ariz. 408]

Page 508

the acting manager of the licensing agency issued a decision affirming the transfer but providing that it "be effected when an actual position is available so as not to deny [Marlar] from earning a livelihood ...." Marlar appealed that determination and a five-day evidentiary hearing was held. On March 3, 1981, the hearing officer found that BEP reasonably concluded that a management-related problem was caused by Marlar's conduct and affirmed Marlar's transfer. Marlar then sought review of the hearing officer's decision from Jamieson. On March 31, 1981, Jamieson sustained the decision to transfer Marlar.

Thereupon, Marlar brought suit pursuant to the Administrative Review Act, A.R.S. §§ 12-901-914. On April 13, 1982, judgment was entered in Marlar's favor. The superior court judge concluded that (1) Marlar's conduct did not constitute a management-related problem and (2) Marlar could not be transferred unilaterally by DES without his consent. DES was further ordered to reinstate Marlar at the cafeteria location in 1300 West Washington. That relief was automatically stayed pending this appeal.

Four issues are presented for our review. DES contends that (1) the trial court lacked jurisdiction because Marlar failed to join DES Director William Jamieson as an indispensable party, (2) there was substantial evidence to support its conclusion that Marlar's conduct constituted a management-related problem, (3) it had authority to transfer Marlar without his consent and (4) the trial judge erred in granting attorneys' fees to Marlar.


DES contends that the superior court lacked jurisdiction to consider Marlar's complaint because he failed to join director Jamieson as a party. DES argues that because the legislature has not provided that it has the capacity to sue or be sued, the director is therefore an indispensable party in actions under the Administrative Review Act. We disagree; in an action filed under the Administrative Review Act the plaintiff need name as defendants only the "agency and all persons, other than the plaintiff, who are parties of record in the [administrative] proceedings ...." A.R.S. § 12-908.

DES's reliance upon Grande v. Casson, 50 Ariz. 397, 72 P.2d 676 (1937) is misplaced. Grande was a suit against the state for damages arising out of the alleged negligent construction of a concrete curb causing flood waters to run on to the plaintiff's property. Grande named as a defendant the Arizona State Highway Commission but did not name the members of the commission. The court found that the highway commission was not a proper party because the legislature had enacted "no provision authorizing suits to be brought by or against the Highway Commission in its official capacity." 50 Ariz. at 409, 72 P.2d at 681. See Kimball v. Shofstall, 17 Ariz.App. 11, 13, 494 P.2d 1357, 1359 (1972).

Although enabling legislation for DES does not specifically provide for the capacity to sue and be sued, A.R.S. §§ 41-1951-94, it does provide, however, that appeals from decisions by the director shall be taken pursuant to the Administrative Review Act. A.R.S. § 41-1993 (Supp.1982). The Administrative Review Act expressly provides that a plaintiff filing an action pursuant to its provisions shall name the "agency" as a defendant. A.R.S. § 12-908. Thus, unlike in tort actions as in Grande, we find that the legislature has authorized suits to be brought directly against administrative agencies in cases filed under the Administrative Review Act.

Our conclusion is consistent with Rule 19, Ariz.R.Civ.P., concerning joinder of persons needed for just adjudication. A person...

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