Storey v. Meijer, Inc.
| Decision Date | 19 September 1988 |
| Docket Number | Docket No. 81136,No. 6,6 |
| Citation | 431 Mich. 368,429 N.W.2d 169 |
| Parties | , 57 USLW 2223, 3 IER Cases 1257 William F. STOREY, Plaintiff-Appellant, v. MEIJER, INC., Defendant-Appellee. Calendar |
| Court | Michigan Supreme Court |
This case presents the issue whether an administrative adjudication of disqualification for unemployment compensation benefits may be used to preclude the litigation of issues in a subsequent civil suit for wrongful discharge or breach of employment contract. We conclude that the application of collateral estoppel to the administrative determinations of the MESC would be contrary to legislative intent and considerations of public policy. An MESC proceeding designed to determine eligibility for unemployment benefits is not an adequate substitute for full access to the circuit court with the full range of remedies available. Consequently, issue preclusion is not available for determinations of the MESC.
William Storey was employed by defendant as the manager of a gas station located at defendant's store in Battle Creek. One of the duties connected with his employment was to check the price of gas and other products at competing gas stations in the area. Storey used his personal vehicle for this purpose, and he was reimbursed for the mileage driven in order to complete this task. In June, 1982, defendant discharged Storey from his employment for allegedly having submitted expense account vouchers claiming reimbursement for more mileage than was actually driven.
Storey applied for unemployment compensation benefits the day after he was discharged. The MESC determined that he was ineligible for benefits under M.C.L Sec. 421.29(1)(j); M.S.A. Sec. 17.531(1)(j) because he had been discharged for theft connected with his work. After a redetermination by the MESC affirming that decision, Storey appealed the denial of benefits to a hearing referee.
A hearing was held on December 2, 1982, and plaintiff appeared with counsel. In direct contrast to both the initial determination and the redetermination by the MESC, the referee concluded that plaintiff's failure to complete his expense vouchers according to the proper procedures established by defendant was a good-faith error in judgment. The referee found insufficient evidence on the record to establish that plaintiff sought reimbursement for expenses that were not legitimate. He concluded that neither employee theft nor misconduct had been established.
The defendant employer appealed this decision to the Board of Review. The board reversed the referee's determination as to benefit rights and found that plaintiff was ineligible for benefits because of employee theft. After the board denied plaintiff's application for rehearing, plaintiff filed an appeal in the circuit court. The circuit court affirmed the decision of the board, and the Court of Appeals denied plaintiff's application for leave to appeal.
On February 2, 1984, while the case was pending before the Board of Review, plaintiff filed the present wrongful discharge action in the circuit court. After the board's finding of disqualification for employee theft was affirmed, the employer filed a motion for summary disposition on the ground that collateral estoppel barred plaintiff from relitigating the issue whether his discharge was for employee theft. MCR 2.116(C)(7). Meijer alleged there was no genuine issue of fact regarding whether it had just cause to terminate plaintiff's employment, since the finding of employee theft had been fully adjudicated in the administrative proceeding and had been reviewed by the circuit court. The circuit court granted defendant's motion, and plaintiff's claim was dismissed.
The Court of Appeals affirmed the dismissal of plaintiff's claim and held that a factual determination of the MESC collaterally estops a party from relitigating that factual issue in a subsequent circuit court action. Storey v. Meijer, Inc., 160 Mich.App. 589, 591, 408 N.W.2d 510 (1987). We granted leave 1 to consider this issue of first impression.
The doctrine of collateral estoppel must be applied so as to strike a balance between the need to eliminate repetitious and needless litigation and the interest in affording litigants a full and fair adjudication of the issues involved in their claims. Howell v. Vito's Trucking & Excavating Co., 386 Mich. 37, 48, 191 N.W.2d 313 (1971). The extent to which the doctrine is applied is also dependent upon the nature of the forum in which the initial determination was rendered. 2 We have previously determined that when the rendering forum is an administrative agency, the general principles of collateral estoppel 3 are to be applied only when the procedures are adjudicatory in nature, when a method of appeal is provided, and when it is clear that the Legislature intended to make the determination final in the absence of 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). 4
Our analysis begins with an examination of the governing statute in order to determine whether the Legislature intended the determinations of the MESC to be conclusive in subsequent civil litigation. It is this inquiry which has led to a conflict in the Court of Appeals.
The parties have focused on Sec. 11(b)(1) of the Employment Security Act which provides in part:
(Emphasis added.) M.C.L. Sec. 421.11(b)(1); M.S.A. Sec. 17.511(b)(1).
The Court of Appeals in the present case dismissed Sec. 11(b)(1) as inapplicable, reasoning that the present defendant did not seek to use the MESC determination of ineligibility for unemployment benefits but, instead, sought to use the MESC's finding of fact that plaintiff's discharge was due to employee theft.
In Moody v. Westin Renaissance Co., 162 Mich.App. 743, 748, 413 N.W.2d 96 (1987), however, another panel of the Court of Appeals expressly rejected that analysis and concluded that Sec. 11(b)(1) is a clear and unambiguous expression of the Legislature's intent "to isolate MESC determinations within the narrow confines of eligibility for benefits, leaving resolution of labor disputes, civil rights violations and contract disputes to forums more uniquely adapted to resolution of those disputes."
The Court of Appeals for the Sixth Circuit has also considered this issue. In Polk v. Yellow Freight System, Inc., 801 F.2d 190 (C.A. 6, 1986), 5 the court held that an MESC determination that the employee was ineligible for unemployment benefits because she was discharged for misconduct precluded her subsequent action in circuit court for breach of contract. The court rejected the employee's statutory argument in a footnote, and concluded that Sec. 11(b)(1) refers only to internal determinations. The court found support for this conclusion in M.C.L. Secs. 421.33(3), 421.36(3); M.S.A. Secs. 17.535(3), 17.538(3) which mandate compliance with Michigan's Freedom of Information Act, 6 and reasoned that "no presumption of confidentiality, such as that found in section 421.11(b)(1), attaches to decisions by MESC referees or the review board." 801 F.2d at 194, n. 6. 7
We disagree with the Sixth Circuit's conclusion that Sec. 11(b)(1) refers only to "internal determinations." As the Moody Court stated, "[w]e do not see the word internal in the statute...." 162 Mich.App. at 749, 413 N.W.2d 96. We also note that the Sixth Circuit failed to cite its earlier decision in Herman Bros. Pet Supply, Inc. v. NLRB, 360 F.2d 176 (C.A. 6, 1966), in which it upheld the quashing of...
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