Nummer v. Treasury Dept., 97343

• Decision Date: 02 May 1995
• Docket Number: No. 16,No. 97343,97343,16
• Citation: 448 Mich. 534,533 N.W.2d 250
• Parties: David NUMMER, Plaintiff-Appellee, v. TREASURY DEPARTMENT, Defendant-Appellant. Calendar
• Court: Michigan Supreme Court

Page 250

533 N.W.2d 250

448 Mich. 534

David NUMMER, Plaintiff-Appellee, v. TREASURY DEPARTMENT, Defendant-Appellant.

No. 97343.

Calendar No. 16.

Supreme Court of Michigan.

Argued Nov. 2, 1994.

Decided May 2, 1995.

Green & Green by Christine A. Green, Ann Arbor, for plaintiff.

Frank J. Kelley, Atty. Gen., Thomas L. Casey, Sol. Gen., and Gary P. Gordon and John F. Szczubelek, Asst. Attys. Gen., for defendant.

RILEY, Justice.

In this case, we decide whether a formal and final decision by the Civil Service Commission rejecting a discrimination claim precludes relitigation of that issue in a subsequently filed action in circuit court. We hold that collateral estoppel bars relitigation of this claim. Accordingly, we reverse the decision of the Court of Appeals.

I

Plaintiff David Nummer is a white male who was hired as an auditor by the Treasury Department in 1970 and transferred to the intelligence unit of the Tax Fraud Division in 1978. Plaintiff remained in the Tax Fraud Division until 1987, when all Tax Fraud Division auditors were transferred to the newly formed Discovery Division within the Department of Treasury. Plaintiff objected to the transfer and filed a grievance with the Department of Civil Service. His grievance alleged two theories of recovery: first, that the Department of Treasury breached a contractual promise that he would remain within the Tax Fraud Division and, second, that the transfer constituted discrimination on the basis of race and gender in violation of the civil service provisions set forth in art. 11, § 5, of the Michigan Constitution. ¹

On June 17, 1988, the civil service hearing officer denied recovery on both theories. Plaintiff appealed the decision to the Employment Relations Board, which denied leave. ² The Civil Service Commission subsequently reviewed and approved the Employment Relations Board's decision. Plaintiff then appealed the final determination of the commission to the circuit court, which affirmed the commission's determination.

While plaintiff's appeal was pending in circuit court, and before that court issued its opinion affirming the decision of the commission, plaintiff filed a new action in circuit court. The second case, also based on plaintiff's transfer to the Discovery Division, alleged breach of contract and race and sex discrimination in violation of the Civil Rights Act. M.C.L. § 37.2101 et seq.; M.S.A. § 3.548(101) et seq.

Defendant responded to the second action by alleging that the commission's determination that the transfer did not breach any contractual obligation and that the transfer was not for discriminatory reasons collaterally estopped redetermination of these issues in the circuit court. The circuit court agreed that plaintiff was collaterally estopped from bringing either the contract issue or the discrimination issue and dismissed the complaint.

Plaintiff appealed the dismissal in the Court of Appeals. The Court held that the contract issue was collaterally estopped, ³ but that collateral estoppel did not apply to the civil rights claim. The Court of Appeals refused to apply collateral estoppel to the discrimination issue because it believed that the Legislature, in the civil rights arena, "chose to set aside the principles of collateral estoppel in civil rights cases and to countenance a multiplicity of litigation." 200 Mich.App. 695, 700, 504 N.W.2d 724 (1993). Defendant appealed, and we granted leave. ⁴

II

The preclusion doctrines serve an important function in resolving disputes by imposing a state of finality to litigation where the same parties have previously had a full and fair opportunity to adjudicate their claims. Storey v. Meijer, Inc., 431 Mich. 368, 372, 429 N.W.2d 169 (1988). By putting an end to litigation, the preclusion doctrines eliminate costly repetition, conserve judicial resources, and ease fears of prolonged litigation. Whether the determination is made by an agency or court is inapposite; the interest in avoiding costly and repetitive litigation, as well as preserving judicial resources, still remains. Univ. of Tennessee v. Elliott, 478 U.S. 788, 798, 106 S.Ct. 3220, 3225-3226, 92 L.Ed.2d 635 (1986).

At issue in this case is the doctrine of collateral estoppel. Generally, "[f]or collateral estoppel to apply, a question of fact essential to the judgment must have been actually litigated and determined by a valid and final judgment. In addition, the same parties must have had a full opportunity to litigate the issue, and there must be mutuality of estoppel." Storey, supra at 373, n. 3, 429 N.W.2d 169.

However, because defendant is seeking to preclude relitigation on the basis of an administrative decision, three additional requirements must be satisfied. The administrative determination must have been adjudicatory in nature and provide a right to appeal, and the Legislature must have intended to make the decision final absent an appeal. Senior Accountants, Analysts & Appraisers Ass'n v. Detroit, 399 Mich. 449, 457-458, 249 N.W.2d 121 (1976); Roman Cleanser Co. v. Murphy, 386 Mich. 698, 703-704, 194 N.W.2d 704 (1972). See also Storey, supra at 373, 429 N.W.2d 169.

It is not seriously contested that the general requirements of collateral estoppel are met and that at least the first two requirements for administrative estoppel are satisfied. In the Civil Service Commission, plaintiff alleged that the Department of Treasury violated Civil Service Commission Rule 1-2.1. ⁵ This claim between the same parties involved a similar factual issue as that which was actually litigated and decided in the Civil Service Commission. Moreover, plaintiff was represented by counsel before the agency; had the opportunity to, and did in fact, call witnesses; and had a full hearing on the merits of his claim. ⁶ In addition, he appealed this decision to the Employment Relations Board and then to the Civil Service Commission.

This proceeding, therefore, clearly was not summary in nature. See Storey, supra. Furthermore, it is disingenuous to argue that plaintiff did not have a full opportunity to present his claim or that the adjudicatory nature of the proceeding is not sufficiently akin to a judicial proceeding. ⁷ Indeed, neither party suggests that the proofs required in the agency determination differ from a Civil Rights Act claim in circuit court.

In terms of the right to appeal, plaintiff certainly was afforded numerous opportunities. In addition to the two intra-agency appeals, he obtained review in the circuit court. Thus, plaintiff had the opportunity to appeal, did in fact appeal, and, hence, satisfies the second part of administrative estoppel.

The point of contention in this case centers on the third element of administrative estoppel, i.e., that the Legislature intended the decision to be final absent an appeal. Plaintiff and Justice Mallett rely on M.C.L. § 37.2606(1); M.S.A. § 3.548(606)(1), which provides the standard of review on appeal from the Civil Rights Commission: "An appeal before the circuit court shall be reviewed de novo." Even assuming that a Civil Service Commission determination should be akin to a Civil Rights Commission determination, a plaintiff whose claim is fully adjudicated by a formal hearing is only afforded the opportunity to appeal the decision and receive a de novo review, but is not afforded the right to file a complaint anew raising the same claim. In this case, plaintiff appealed to the circuit court and received a review under a competent, material, and substantial evidence standard. ⁸ Viculin v. Civil Service Dep't., 386 Mich. 375, 392, 192 N.W.2d 449 (1971). While this appeal was pending, plaintiff decided to file a new, original action in the same court. This new action was assigned to a different judge who had to decide issues on the basis of the same factual setting. There is absolutely no legislative intent for this multiplicity of litigation.

III

Preclusion doctrines are judicial creations, developed and extended from the common law. Accordingly, the Legislature is free to modify its strict application in any given statutory scheme. 2 Davis & Pierce, Administrative Law (3d ed), § 13.3, p. 256. However, the Civil Rights Act is devoid of any statement that traditional preclusion rules do not apply to this statutory scheme. Hence, the difficulty lies in determining whether an intent can be inferred from the statutory scheme. Davis & Pierce, supra. In doing so, it must be remembered that the Legislature is deemed to legislate with an understanding of common-law adjudicatory principles. Garwols v. Bankers Trust Co, 251 Mich. 420, 424-425, 232 N.W. 239 (1930); Astoria Federal S. & L. Ass'n v. Solimino, 501 U.S. 104, 107-108, 111 S.Ct. 2166, 2169-2170, 115 L.Ed.2d 96 (1991).

A

To date, the closest this Court has come to making such a determination was in Storey, supra. We considered whether a determination by the Michigan Employment Security Commission precluded relitigation of the same issue regarding dismissal in a subsequent civil suit for wrongful discharge and breach of employment contract. In terms of legislative intent to modify traditional preclusion principles, we found M.C.L. § 421.11(b)(1); M.S.A. § 17.511(b)(1) controlling. It provides:

Except as provided in this act, such information and determinations shall not be used in any action or proceeding before any court or administrative tribunal unless the commission is a party to or a complainant in the action or proceeding, or unless used for the prosecution of fraud, civil proceeding, or other legal proceeding pursuant to subdivision (2).

Accordingly, this Court held "that § 11(b)(1) clearly and unambiguously prohibits the use of MESC information and determinations in subsequent civil proceedings unless the MESC is a party or complainant in the action." Storey, supra at 376, 429 N.W.2d 169. ⁹ Federal cases have reached similar conclusions, but under slightly less explicit direction from Congress. For...