McDowell v. Napolitano

Decision Date25 April 1995
Docket NumberNo. 20910,20910
Citation119 N.M. 696,895 P.2d 218,1995 NMSC 29
Parties, 131 Lab.Cas. P 58,087, 100 Ed. Law Rep. 750 Thomas McDOWELL, Plaintiff-Appellee and Cross-Appellant, v. Leonard NAPOLITANO and Ellen Goldberg, Defendants-Appellants and Cross-Appellees.
CourtNew Mexico Supreme Court

BACA, Chief Justice.

Appellants Leonard Napolitano and Ellen Goldberg appeal from a judgment in favor of Appellee Thomas McDowell. Based on a jury verdict, the district court awarded Appellee $400,000 for breach of contract against Appellants and adjudged that Appellants take nothing against Appellee on its breach of contract counterclaim. We address the following issues on appeal: (1) Whether the trial court had jurisdiction to hear the claim; (2) whether the trial court erred in refusing to grant a mistrial based on alleged misconduct by Appellee's counsel and the introduction of certain exhibits; (3) whether the trial court improperly refused Appellants' jury instructions on the mitigation of damages; and (4) whether Appellee's Section 1983 claim was properly dismissed. We review this case pursuant to SCRA 1986, 12-102(A)(1) (Repl.Pamp.1992), and affirm.


The following facts are pertinent to this appeal. McDowell was hired by the University of New Mexico School of Medicine in 1982 as an assistant professor in the Department of Microbiology. He was considered for tenure during the 1987-88 academic year. Chairman Goldberg submitted a negative recommendation for tenure, citing McDowell's strained relationships with some of his graduate students and his lack of productivity in research and scholarly publications as the basis for her recommendation. An ad hoc review committee of senior faculty members unanimously concurred in her negative recommendation. In April 1988 Dean Napolitano denied tenure to McDowell. The University issued a final termination contract for the 1988-89 academic year as provided for in the Faculty Handbook.

McDowell appealed the denial of tenure to the University's Academic Freedom and Tenure Committee (the "AFTC"), following the appeals procedure in the Faculty Handbook. After a hearing the AFTC determined that McDowell had not been adequately advised of his shortcomings in the areas of research and publications in his third year of appointment as required by the Handbook. Therefore, the AFTC ruled that McDowell should be given a probationary contract for the 1989-90 academic year during which a thorough review of his fitness for tenure should be conducted.

Dean Napolitano disagreed with the validity and correctness of the AFTC's decision and notified McDowell that his employment with the School of Medicine would end with the 1988-89 academic year. In June 1989, McDowell filed a lawsuit seeking to enjoin the termination of his contract. A settlement agreement resulted in maintenance of the status quo during further administrative proceedings. McDowell remained employed on a month-to-month basis pending review by the Regents of Appellants' appeal from the AFTC decision.

In May 1990, the Regents upheld the AFTC decision and directed that a full tenure review be completed by June 30, 1990. The Regents stated that "[i]f the decision is positive, tenure shall be effective July 1, 1990. If the decision is negative, Dr. McDowell shall be given a one-year terminal contract for 1990-91."

McDowell's second tenure review resulted in a negative recommendation by the majority of faculty members in the Department of Microbiology. An ad hoc committee of senior faculty concurred and Dean Napolitano denied tenure. McDowell challenged the review process and appealed the second denial of tenure to the University President, who upheld the Dean's decision. McDowell did not again appeal to the Regents. McDowell was issued a terminal contract effective June 30, 1991.

McDowell filed suit for breach of contract and civil rights violations allegedly arising from his denial of tenure. Appellants counterclaimed for breach of contract. Prior to trial, Appellants unsuccessfully moved for summary judgment on the ground that McDowell had failed to exhaust his administrative remedies as outlined in the Faculty Handbook. The trial court also denied Appellants' motion for a directed verdict based on failure to exhaust administrative remedies but did grant a directed verdict for Appellants on McDowell's civil rights retaliation claim. Only McDowell's contract claims were submitted to the jury.

At the end of the trial, Appellants requested that the court instruct the jury in accordance with SCRA 1986, 13-851 (Repl.Pamp.1991) regarding mitigation of damages for breach of contract of personal employment or, in the alternative, on mitigation of damages based on New Mexico case law. The trial court rejected Appellants' requested instructions and gave the jury instructions on the general mitigation of damages. See SCRA 13-1811. The jury returned a verdict in favor of McDowell in the amount of $400,000, which forms the basis for this appeal.


The first issue that we address is whether the trial court had jurisdiction over the case. Appellants claim that jurisdiction is lacking because Appellee failed to exhaust his administrative remedies. New Mexico law has long recognized that a party must exhaust all administrative remedies before applying to a court for relief unless the legal or statutory remedies available are inadequate. See First Nat'l Bank of Raton v. McBride, 20 N.M. 381, 401, 149 P. 353, 359 (1915). Appellants argue that Appellee was required to submit a second appeal to the Board of Regents. Appellee counters that he complied with the University's appeals process. We agree with Appellee that he substantially complied with the appeals process.

The doctrine of exhaustion of remedies is absolute "where a claim is cognizable in the first instance by an administrative agency alone[. In such a case] judicial interference is withheld until the administrative process has run its course." State ex rel. Norvell v. Arizona Pub. Serv. Co., 85 N.M. 165, 170, 510 P.2d 98, 103 (1973) (quoting United States v. Western Pac. R.R., 352 U.S. 59, 63, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956)); see also Pan Am. Petroleum Corp. v. El Paso Natural Gas Co., 77 N.M. 481, 487, 424 P.2d 397, 403 (1966) (stating that "the exhaustion doctrine ... applies where an administrative agency alone has authority to pass on every question raised" but not to a question of law).

The court has original jurisdiction under the doctrine of primary jurisdiction, however, where there is an applicable common-law or legal remedy apart from or in addition to an administrative remedy, or where there is no applicable statutory administrative remedy. Under the principle of comity, the court may choose to defer to the administrative agency where the interests of justice are best served by permitting the agency to resolve factual issues within its peculiar expertise. Exhaustion of administrative remedies is not absolutely required under the doctrine of primary jurisdiction. Arizona Pub. Serv. Co., 85 N.M. at 171, 510 P.2d at 104. Cf. Gandy v. Wal-Mart Stores, Inc., 117 N.M. 441, 443-44, 872 P.2d 859, 862-63 (1994) (bringing claim under tort for retaliatory discharge does not require exhaustion of remedies under the Human Rights Act and stating that "under the doctrine of primary jurisdiction district courts have discretion to abstain from hearing a case that has been brought simultaneously before an administrative tribunal").

The court in its discretion may defer to an administrative agency in the interests of judicial economy, where the agency is in a better position to fully develop a record of the grievance. Seefeldt v. Board of Trustees, 487 F.Supp. 230, 233 (D.D.C.1979). Likewise, the court may defer to the agency where those most familiar with tenure requirements and regulations are best able to interpret the rules and make decisions to resolve the grievance. See Krynicky v. University of Pittsburgh, 560 F.Supp. 803, 807 (W.D.Pa.1983) (holding that court is not proper original forum for contract disputes between faculty and university); Snitow v. Rutgers Univ., 103 N.J. 116, 510 A.2d 1118, 1123 (1986) (finding that professor's peers and university's officers are best suited to review tenure grievance because these issues are uniquely within their expertise).

Because there is no statutory remedy available to University faculty, the exhaustion of remedies doctrine is not absolute. The question, therefore, is not whether Appellee failed to exhaust all procedural remedies, but whether he substantially discharged his own contractual obligations so as to be able to complain of a breach by his employer. There appears to be no dispute that during his first appeal Appellee properly followed the appeals process outlined in the Faculty Handbook. Appellants contend that Appellee failed to properly follow the procedures in his second appeal before turning to the court.

Because Appellee pursued the appeals process to the highest authority within the University, the trial court had a sufficient record to review his grievance. Before Appellee turned to the court, the University was able to develop a full and complete record of his grievance. The University exercised its discretion through two review procedures. The Board of Regents fashioned a remedy and made a final determination based on the results of its remedy. The reviews were conducted according to the appeals procedures set out in the Faculty Handbook and utilized the unique expertise of the University faculty and officers. Although Appellee did not take the last step following the second review of appealing again to the Board of Regents, he substantially complied...

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