Shovelin v. Central New Mexico Elec. Co-op., Inc.

Citation1993 NMSC 15,850 P.2d 996,115 N.M. 293
Decision Date05 March 1993
Docket NumberNo. 20083,20083
Parties, 8 IER Cases 654, 38 A.L.R.5th 819 Richard J. SHOVELIN, Plaintiff-Appellee, and Cross-Appellant, v. CENTRAL NEW MEXICO ELECTRIC COOPERATIVE, INC., Defendant-Appellant, and Cross-Appellee.
CourtSupreme Court of New Mexico
OPINION

BACA, Justice.

Defendant-appellant, Central New Mexico Electric Cooperative (the "Cooperative"), appeals a jury verdict and judgment in favor of plaintiff-appellee, Richard J. Shovelin. The jury determined that the Cooperative and Shovelin had entered into an implied employment contract and that the Cooperative had breached the contract. The jury awarded Shovelin $107,885 in damages on his breach of contract claim. In accordance with the trial court's instructions, however, the jury did not award Shovelin any damages on his retaliatory discharge claim. The Cooperative appeals this judgment and raises one issue that it contends mandates reversal of the contract judgment. This issue, which is an issue of first impression in New Mexico, is whether the doctrine of collateral estoppel should have precluded Shovelin from relitigating an issue that was previously decided by an administrative agency, in this case the Employment Security Department (the "ESD"). The Cooperative also maintains that the trial court erred when it failed to grant the Cooperative's motion for a judgment on the pleadings or, in the alternative, its motion for summary judgment regarding Shovelin's retaliatory discharge claim. Shovelin cross-appeals, contending that (1) the trial court correctly determined that public policy supported his right to seek office, (2) the trial court erred when it declined to grant his motion for partial summary judgment on the retaliatory discharge claim, and (3) the trial court erred when it instructed the jury not to consider his retaliatory discharge claim if it found in his favor on his breach of contract claim. We note jurisdiction under SCRA 1986, 12-102(A)(1) (Repl.Pamp.1992), and affirm in part and reverse in part.

I

Shovelin was employed by the Cooperative as an energy conservation advisor. At the same time, Shovelin was also a volunteer medical technician and a volunteer firemen. These volunteer duties required Shovelin to take time off from his work at the Cooperative. In 1986, Shovelin considered running for mayor of Mountainair, New Mexico. When Shovelin told his supervisor at the Cooperative, Fain Lawson, that he intended to run for mayor, Lawson told Shovelin that the Cooperative felt that the mayoral duties would further, and to an unreasonable extent, interfere with Shovelin's employment. Lawson warned Shovelin that he would be terminated from employment with the Cooperative if he were elected mayor. In spite of this warning, Shovelin ran for mayor of Mountainair. On March 4, 1986, Shovelin was elected mayor of Mountainair, and the Cooperative terminated his employment.

Following his termination, Shovelin filed for unemployment compensation, which the Cooperative contested. After a hearing on the matter, the ESD determined that Shovelin had voluntarily left his employment with the Cooperative without good cause and denied Shovelin unemployment benefits pursuant to NMSA 1978, Section 51-1-7(A) (Repl.Pamp.1983). Shovelin, who was represented by counsel at all stages of the ESD proceedings, appealed this determination to the district court, which reversed. The Cooperative appealed to this Court, and, in an unpublished decision, we held that the ESD decision was supported by substantial evidence.

The evidence shows that [Shovelin's] decision not to comply with the [Cooperative's] reasonable condition of employment was the cause for his termination. Under these circumstances, ESD correctly determined that [Shovelin] left his employment voluntarily without good cause in connection with his employment and was therefore disqualified from receiving unemployment benefits under the provisions of Section 51-1-7(A).

Shovelin v. Employment Sec. Comm'n, No. 17,046, slip op. at 2 (N.M. Oct. 2, 1987). Accordingly, we reversed the district court and reinstated the ESD decision. Id.

While the appeal of the ESD decision was pending, Shovelin filed the instant action against the Cooperative in state court. His complaint alleged that the Cooperative breached an implied employment contract and that the Cooperative had violated his federal constitutional rights. After answering Shovelin's complaint, the Cooperative removed the action to federal court pursuant to 28 U.S.C. § 1441(a) (1988). Upon the Cooperative's motion, the federal district court ruled that "[Shovelin] fail[ed] to state a federal claim for violation of his constitutional rights because there [was] no governmental action involved in his dismissal from employment." Shovelin v. Central New Mexico Elec. Coop., No. 87-0598 JC, slip op. at 4 (D.N.M. Aug. 17, 1988). The federal court dismissed the federal constitutional claim and remanded the breach of contract claim to the state court.

After the case was transferred back to state court, the Cooperative moved for summary judgment, contending that evidence adduced during discovery failed to create an issue of genuine fact as to whether Shovelin was anything other than an at-will employee and that the doctrine of collateral estoppel precluded Shovelin from relitigating the reasons for his termination. Shovelin subsequently moved to amend his complaint to add a cause of action for retaliatory discharge. The trial court denied the Cooperative's summary judgment motion and granted Shovelin's motion to amend his complaint.

On July 17, 1990, Shovelin filed his first amended complaint, alleging breach of an employment contract and retaliatory discharge. On January 18, 1991, Shovelin moved for summary judgment on his retaliatory discharge claim, and, subsequently, the trial court denied this motion. The Cooperative, on March 11, 1991, moved for judgment on the pleadings or, in the alternative, summary judgment on the retaliatory discharge claim. The Cooperative contended that the pleadings failed to allege a public policy violation sufficient to support a claim for retaliatory discharge under New Mexico law. The trial court denied both of the Cooperative's motions.

In June of 1991, the trial court conducted a jury trial. At the close of the evidence, the trial court instructed the jury on Shovelin's breach of an implied employment contract and retaliatory discharge claims. The trial court instructed the jury to first consider the breach of contract claim. The jury was also instructed not to consider Shovelin's retaliatory discharge claim unless it entered a verdict in favor of the Cooperative on the breach of contract claim. The jury returned a verdict in favor of Shovelin on his breach of contract claim and awarded him $107,885 in damages. In accordance with the trial court's instructions, the jury did not award Shovelin damages on his retaliatory discharge claim. From this verdict, the Cooperative appeals, contending that (1) the trial court erred when it denied the Cooperative's motion for summary judgment based on the doctrine of collateral estoppel, and (2) the trial court erred when it denied the Cooperative's motion for summary judgment or judgment on the pleadings in regard to Shovelin's retaliatory discharge claim. Shovelin cross-appeals, contending that (1) the trial court correctly determined that public policy supported his retaliatory discharge claim, (2) the trial court erred when it denied his motion for summary judgment on the retaliatory discharge claim, and (3) the trial court erred when it instructed the jury not to consider the claim of retaliatory discharge if it found for Shovelin on his breach of contract claim. As to the collateral estoppel issue, we hold that the trial court did not abuse its discretion in declining to apply the doctrine of collateral estoppel to the facts of this case, and, accordingly, we affirm the judgment in favor of Shovelin. As to the retaliatory discharge issue, we hold that the trial court erred when it refused to grant the Cooperative's motion for a judgment on the pleadings because Shovelin failed to allege a public policy violation sufficient to support a claim for retaliatory discharge under New Mexico law. Accordingly, we remand with instructions to dismiss with prejudice Shovelin's retaliatory discharge claim.

II

The first issue that we address is whether the trial court erred when it declined to apply the doctrine of collateral estoppel. The Cooperative asserts that the trial court should have applied the doctrine of collateral estoppel and that Shovelin should have been precluded from relitigating the basis and reasons for his termination. According to the Cooperative, application of collateral estoppel is appropriate because (1) Shovelin was a party to the ESD hearing; (2) the cause of action in the instant case is different from the cause of action in the ESD proceeding; (3) the issue--whether Shovelin's separation from employment was voluntary or involuntary--is the same in both of the actions; and (4) the issue was necessarily determined in the prior litigation. The Cooperative cites numerous cases from other jurisdictions supporting its contention that the adjudicative determinations of an administrative tribunal should be given preclusive effect in subsequent litigation. See, e.g., University of Tennessee v. Elliott, 478 U.S. 788, 799, 106 S.Ct. 3220, 3227, 92 L.Ed.2d 635 (1986). The Cooperative concludes that, because the trial court erred when it failed to apply collateral estoppel to preclude Shovelin from relitigating the basis and reasons for his termination, the judgment should be reversed and remanded with instructions to enter...

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