*1 GRAHAM, Appellant, M. Teresa

SPECIAL SCHOOL DISTRICT NO. al., Respondents.

No. C8-90-1009. of Appeals

Court of Minnesota.

Oct. 1990.

Review Granted Jan.

include defenses of collateral and judicata, trial court determined the litigation remaining issues in had al- this ready fully fairly been and decided in a prior proceeding before a resulting in termination. Gra- appeals grant summary judg- ham prejudice ment and dismissal with of her complaint.

FACTS Graham worked for the School District began since 1978 as a social worker. She working Ramsey Special at Pre-School (Ramsey) in Program Education 1987. The program Ramsey designed pre- at for special needs. school children with In the wrote fall of several internal memoranda various staff and officials, including and Kromer Janet Proehl, Ramsey. These the director at regard- discussed her concerns memoranda procedures ing perceived violations of state assessment children. time, began At Proehl about the same complaints receive from other staff mem- regarding Graham’s behavior. Those bers complaints involved Graham’s interactions members, slamming with other staff doors Leonard, Roth, and V. Street Dei- James during assessment of children and shut nard, appellant. Minneapolis, classes, interrupting During classes. and Haik, Lewis, Popham, M. Donald Schnob- time, inappro- this also exhibited Kaufman, Ltd., Minneapolis, for re- rich & priate toward Proehl which includ- conduct spondents. orders; violating physi- ed Proehl’s direct cally pushing Proehl one occasion HUSPENI, decided Considered and classroom; calling gain to a Proehl access SHORT, P.J., and JJ. and FORSBERG liar; Proehl; threatening yelling at a and give attempting Proehl orders. OPINION 9, 1988, meeting was On March held to FORSBERG, Judge. discuss behavior. Several Ram- keep sey staff had asked to members been brought M. Appellant Teresa with notes on their interactions Graham. Special respondents against action thereafter, meeting shortly it At that (School District) District No. School suspend- was determined Graham would Kromer, Special the Director of Edu- Keith immediately. ed The for the District. first cation defamation, alleges re- complaint amended memorandum dated prepared Kromer taliatory discharge in violation of Minn. 11, 1988, stating Graham's behavior March 181.932, 1(a), violation of subd. Stat. § “extremely it for her to made difficult” 42 U.S.C. § “potentially students and was serve her dangerous.” Kromer further stated Gra- District’s and granting the School After class, interrupted screamed answer to ham had motion to amend their Kromer’s students, presence verbally record, whole, abused The as taken estab- competent other staff members. Kromer recom- lishes substantial and evi- safety mended that “for dence that: of students suspended and staff” “pending Graham be repeatedly 1. Ms. Graham has demon- *3 a full investigation of her work behavior strated conduct unbecoming a social worker; the expressed by and concerns [Ramsey] employees.” 2. repeatedly Ms. Graham has en- gaged insubordination; in acts of Meanwhile, complaint Graham filed a 3. disruptive Ms. Graham’s behavior with the Department Minnesota Edu- of participate and failure as an effective claiming cation violations of assessment team member Ramsey while at Pre- by reporting procedures Ramsey. and The gross School have to cause tended ineffi- did School not aware of District become the ciency delivery in the of work social and 1988, complaint April until more than one management school; the suspended. month after Graham was In 4. Ms. has Graham failed to correct April Department the of Education her despite conduct oral reasonable and issued findings indicating its final requests so; written that she do and compliance was in District on cer- show, 5. The record fails to sub- issues, tain not but on others. evidence, competent stantial and that this Shortly suspension, after her Graham action is motivated the School Dis- brought against this action the School Dis- trict’s desire to against retaliate Ms. Gra- defamation, trict and alleging Kromer re- ham protected by act statute. taliatory discharge, and violation of section hearing The examiner therefore recom- 1983. The count first of her first amended mended discharged. Graham be The complaint alleged Kromer’s March 11 mem- adopted recommendation, school board defamatory orandum contained statements. and voted to terminate Graham Febru- alleged The second count Graham’s com- ary 1989. appropriate munications with officials con- appealed the board’s determina- cerning possible violations state laws tion to this court. In Special Graham v. “upset individuals within” the School Dis- 1, C6-89-533, School Dist. No. 1989 WL alleged trict. It further the School District (Minn.App. Aug. pet. for “disciplined, terminated, threatened and (“Graham 1989) Oct. against otherwise penal- discriminated I”), this court concluded substantial evi- good ized because of her faith actions [her] supported grounds dence for termi- reporting in suspected violations or viola- rejected nation. This court also tions state laws.” The third count al- claims that her termination violated her leged the School District and Kromer “dis- right speech, to free and that she was ciplined punished for her ex- [Graham] discharged filing retaliation the com- speech” of free ercise violation of section plaint Department with of Education. Meanwhile, discovery proceeded in this September In late Graham received case. November the School Dis- from attorney letter the School District’s trict and Kromer filed a motion amend informing her of the School District’s deci- its answer to include defenses sion to commence to termi- estoppel. They and collateral also employment. nate her on Gra- separate filed a summary motion for judg- ham’s termination was held before an inde- appeal ment. This is from the trial court’s pendent hearing Testimony examiner. motions, grant of both and dismissal of nine-day period. submitted over complaint prejudice. with The examiner issued thereafter ISSUES “Summary Proceedings, her Conclu- sions, and Recommendation to the Board 1. Did the trial court abuse its discre- Education.” Her conclusions state as fol- allowing tion the School District and lows: Kromer to amend their answer? 2. Did the trial granting court err in ii. summary judgment? Waiver argues the School District

ANALYSIS right and Kromer waived the to assert the defenses of res and collateral es- I. toppel by repeatedly taking position in that the the trial court could not should not consider abused its in allowing discretion the School relating facts or issues to this civil lawsuit. District Kromer to amend their answer In support claim, of her waiver *4 to judicata assert the defenses of res and portions submitted selected of the tran estoppel just prior moving collateral for script of the hearing. termination summary judgment. judicata Res and col reading portions, of those estoppel lateral are selected affirmative defenses however, fails to establish either may which an ex- properly be raised for the first press implied or part waiver on the time in a summary judgment motion for School District and They merely Kromer. instances where those defenses were un indicate there was some discussion of original available at the time of the answer. whether pending the issues before the De- Prods., Inc., Kendall v. F.Supp. Avon 711 partment of Education were collateral to 1178, (S.D.N.Y.1989). 1179 n. 2 proceeding. Those argues Graham next it is “both issues related to the School District’s com- inexplicable” inexcusable pliance regulations. and that the mo with state While the tion to expressed amend was not made until 9V2 some reserva- months after tion she was terminated and over about the relevance of the merits of complaint 3 months after upheld Department this court that termi with the Education, permitted nation. A trial she nevertheless court has wide discretion in inquiry some on those granting Contrary amendments to issues. pleadings. Minn. (“leave Graham’s assertion that she was limited in freely given R.Civ.P. 15.01 shall be presentation evidence, her justice requires”). when so Amendments examiner accorded Graham wide latitude in pleadings liberally permitted, should be attempt prove her her termination was party opposing unless the the amendment sought permissible for other than reasons. prejudice. can Indep. establish Envall v. 593, School Dist. No. 399 N.W.2d 597 estoppel Res and collateral (Minn.App.1987), pet. Under judica the related doctrines of res (Minn. 25, 1987). “ Mar. has made estoppel, ‘right, ques ta collateral showing prejudice. no She was familiar distinctly put tion or fact in issue and di proceedings, with the termination the hear rectly by determined competent court of * * * ing findings, examiner’s and the subse jurisdiction disputed cannot be in a Moreover, appeal. quent Graham had ade subsequent par suit between the same ” quate oppose time to the motion for sum ties.’ Kaiser v. Northern States Power mary judgment. Co., (Minn.1984)(quot 353 N.W.2d 902 ing States, Montana v. United U.S. finally argues ig- the trial court 147, 153, 970, 973, 99 S.Ct. 59 L.Ed.2d 210 Special nored rule 1.05 of the Rules of (1979)). preclusion” Res or “claim Practice, Fourth Judicial District. The mo- claim, bars a second suit for the same while tion to amend was not served and filed preclusion” or collateral “issue period until after the of nonreadiness had subsequent bars a suit based on a different Nevertheless, expired. amendment was involving cause of action but same is properly “by allowed under rule 1.05 order Kaiser, sue. 353 N.W.2d at 902. assigned judge,” who did so after noting that the amendment served the in- estoppel may appropriate Collateral justice. terests of when

(1) identical to one in substantially the issue was facts are similar to those (2) adjudication; presented there here. was a final merits; (3) judgment estopped on the Brundin was terminated the school party party privity was a awith receiving board after six notices of defi (4) party prior adjudication; to the ciency in teaching performance. her This party estopped a full and upheld court examiner’s find opportunity adju- fair to be heard on the ings conclusions, supreme and the dicated issue. petition court denied Brundin’s for further Indep. review. See Brundin v. Safety, Willems Commissioner Pub. Dist. No. C0-87-1964 1988 WL 15896 (Minn.1983) (quoting 333 N.W.2d (Minn.App. pet. Mar. rev. de Weaver, Victory Highway Village, Inc. v. 28, 1988) (“Brundin Apr. I”). nied (D.Minn.1979)). F.Supp. Brundin then sued the school district 1. Graham the trial court alleging it violated PELRA and her first giving preclusive erred in effect to an ad rights fourteenth amendment termi subsequent employ ministrative decision in nating filing griev her retaliation for litigation. terminating ment a teacher’s *5 affirming grant ances. In the trial court’s employment, quasi- a school as a board acts summary judgment to the school district judicial body. Morey See v. School Bd. of judicata grounds, on res this court conclud 492, 445, Indep. School Dist. No. 271 Minn. given op ed Brundin “was a full and fair 448-49, 105, (1965). 136 N.W.2d 107-08 portunity litigate pre-ter her case in her finding inappropriate par While its use in mination subsequent appeal ticular cases due to lack of one of the four this court. See Kremer v. Chemical Con considerations, public policy factors or 461, Corp., struction 456 U.S. 483-4 [102 recognized have Minnesota courts that the 1883, 1898, (1982).” 72 S.Ct. L.Ed.2d 262] policy purposes judicata apply of res to This court further concluded: agency administrative decisions where First, its review of Brundin’s termi- [in judicial quasi-judicial capacity. acts in a * * * nation,] this court found that Brun- See, Application e.g., In re the Disci arbitrary din’s termination was not Morris, 859, pline 408 862 N.W.2d capricious. This court addressed the rea- (Minn. 1987); 96 v. Ar AFSCME Council sons for Brundin’s termination and found Bd., Regional rowhead Corrections 356 they proper were under Minn.Stat. 295, (Minn.1984); N.W.2d 298 McKee v. 125.12, subd. 6. Brundin cannot now § 192, Minn. County Ramsey, 310 194 n. allege she was terminated for the im- 1, 460, (1976). 462 n. 1 Preclu 245 N.W.2d proper filing grievances reason of prior sive effect has been to a arbi against the All district. of the evidence tration decision. v. Data Dis Aufderhar concerning termination, Brundin’s includ- Inc., 648, (Minn. patch, 452 N.W.2d 652 ing grievances, was before this court 1990) (when damages amount of has been prop- when it found her termination to be previously pro in determined arbitration er. ceeding, may collaterally insured es- Secondly, when this court held that the relitigating topped from issue in subse arbitrarily school district did not act action). quent personal injury capriciously, it decided the essential ele- ments of Brundin’s section 1983 claims unpublished opinion, a recent of first and fourteenth amendment viola- application court affirmed of the doctrine Trammel, tions. See Gahr v. 796 F.2d judicata of res to a teacher termi (8th Cir.1986). 1063 proceeding. Indep. v. nation Brundin 112, C6-89-1469, Third, No. No. 1990 this court School Dist. its review of Brun- [in (Minn.App. pet. specifically WL 1728 Jan. din’s held that termination] 16, 1990) (“Brun process rev. Mar. Brundin was denied denied not due ”). prece pre-termination hearing. din II While Brundin II is not She is not dential, argue it warrants discussion because its allowed to this issue a second time. II growing Brundin illustrates a trend to- Unlike her claims of retaliatory dis giving ward quasi-ju- charge effect to and violation of section Gra dicial appropriate decisions an case. We ham’s defamation directly claim was not this is raised or pro believe such a case. addressed the termination ceeding. In determining whether two requisite same, claims are the a court examines identity of issues lacking because the whether the same support evidence will issues raised in this civil lawsuit are not judgments. both Melady-Briggs Cattle statutory within the jurisdiction of the Corp. Bank, v. Drovers State 213 Minn. hearing examiner. She insists that a hear 304, 309, (1942). 6 N.W.2d ing appointed examiner by the School Dis Essential to a claim of defamation is that trict does jurisdiction not have to hear def challenged statements are false. amation, retaliatory discharge, or free Parke, Stuempges Co., Davis & speech claims. County See McKee v. (Minn.1980). N.W.2d In recom- Ramsey, 194-5, 310 Minn. 245 N.W.2d mending discharged, Graham be the hear- (1976)(decision of commissioner of ing necessarily confirmed the public denying welfare reimbursement truth of Kromer’s statements. The evi- maternity expenses not res on sub dence support Graham offers to her def- sequent litigation raising constitutional and amation claim is the same evidence she negligence claims not raised before the upon during hearing. relied her termination agency and over which the agency had no if identity Even there is no of issues jurisdiction). McKee, however, Unlike Gra respect claim, with to Graham’s defamation retaliatory discharge ham’s claims of summary judgment appropriately first amendment violations were raised and *6 granted because she fails to offer evidence in proceeding. addressed the termination malice, support to actual an essential ele claim retaliatory discharge Graham’s ment of her claim. Stuempges, See 297 by herself, directly raised Graham ad- (absent N.W.2d at showing 256-57 a dressed, rejected by hearing both the malice, employer’s actual comments em hearing examiner and this court. The ex- ployee’s performance and misconduct are aminer concluded there was insufficient ev- privileged). supporting allegation idence her the School Kromer’s statement that Graham’s be- sought District her termination in retalia- potentially “dangerous” havior is is not filing complaint

tion for a Depart- with the exaggerated language support sufficient to ment of reject- Education. This court also finding a actual malice in this case. The discharge, ed her claim of retaliatory not- conduct the District and Kromer ing the record permissi- contains numerous following suspension sug- do not discharge. ble reasons for her gest actual is any malice. Nor there evi- suggesting anyone dence Proehl or else Graham’s first amendment claim was personal a against had motive to retaliate characterized as a violation of section 1983. Finally, deposition Graham. claim by While this was never considered regarding statements her beliefs as to examiner, hearing specifically speculative. They Kromer’s motives are as an in appeal raised it issue on are insufficient to refute evidence that rejecting argument In I. her that her ter- good Kromer’s statements were made in right speech, mination violated her of free gathered faith reliance on information at expres- concluded it this court was not the meeting days held two earlier with dismissal, sion of her views that led to her Graham’s co-workers. “time, place, but rather the and manner” in which those views were delivered. This 3. Graham she did not have a court further concluded her opportunity litigate statements full and fair to these place private took and were delivered in prior proceeding. issues in the termination threatening accusatory party “A opportunity manner at receives a fair to inappropriate present allegedly precluded times. the claims if

84 party brought could have the claims in nation decision because the information proceeding satisfy that would the mini- gathered in proceeding private that un- procedural requirements mal of the due 125.17, (1988). der Minn.Stat. subd. 7 § process Trammel, clause.” Gahr v. statute, however, This does not make (8th Cir.1986) F.2d (citing Krem- gathered private. information The statute er, 1897). 456 U.S. at 102 S.Ct. at speaks only confidentiality to the of the “All hearings itself: before the Clapper Co., In Budget Oil school private may board shall be be N.W.2d (Minn.App.1989), pet. for public against at the decision teacher June this court whom charges such have been filed.” give refused to collateral effect to 125.17, (1988) Minn.Stat. prior (empha- subd. 7 by Department determination § added). sis Training. request, Jobs and At Graham’s doing, In so the ter- this court employee determined the mination had not been af- this case was conduct- Nonetheless, forded a full and opportunity litigate private. fair ed we do not be- in the proceeding. administrative lieve statute mandates that information gathered in a termination unemployment The brief compensation should be limited to the administrative Clapper, however, involved in sphere, particularly where the teacher insti- analogous is not lengthy to the adversarial against tuted a civil suit the school district hearing, subject court, to review which already raised the same issues ad- provided Graham. Graham was afforded a prior dressed in the proceed- termination rights number of under the Teacher Tenure ing. Act. rights Those right included the have a written hearing, record of the subpoenaed have witnesses and examined Fraud and misconduct oath, counsel, under represented by argues preclusive effect witnesses, to examine and cross-examine cannot be to the present and to arguments. Minn.Stat. proceeding because it is marred fraud 125.17, (1988). subds. and 6 § and misconduct. See Halloran v. Blue & addition, examiner in this Co., 436, 442, Liberty White 253 Minn. Cab specifically

case *7 found: (1958). 92 N.W.2d Her claims of 6. The conduct of the fraud or misconduct have no basis in the fair parties, to both and each had the parties’ dispute record. The over the dis opportunity present to evidence as de- psychiatric closure of a report cannot be sired. Throughout hearing, the Ms. Gra- court, upon characterized as a fraud ham actively assisted her counsel. She good dispute but as a faith which has since brought voluminous documentation in been resolved the trial court. addi day, files with her each and often re- tion, questions regarding credibility of specific trieved documents from them for certain suggest witnesses fail to fraud or her counsel. She and her counsel con- misconduct sufficient to warrant relief during ferred at least once the examina- judgment. from a Regents See of witness, tion of each after which her Medical, Inc., Univ. Minn. v. of pursued counsel topics often new (lost N.W.2d (Minn.App.1987) 480-81 Thus, questioning. Ms. Graham was opportunities impeachment involving for participate able to and did in fact and collateral issues not material to the court’s assist in her defense to the fullest extent decision, ultimate do not warrant relief she certainly desired and to the extent operation judgment), from the pet. for necessary satisfy process. to due (Minn. 15, 1987). July rev. Finally, denied circumstances, Under these Graham had a number, timing, description of the full opportunity and fair to raise and liti- communications between the exam gate her claims. attorney sug iner and the School District's argues preclusive gest

4. Graham ef discussion of administrative matters fect should not be to her termi- improper attempt and fail to infer an to

«5 influence the outcome of the termination proceedings were made on the hearing. grounds that such evidence was to be con- pending

sidered other proceedings.1 To DECISION permit respondents now to utilize the scant evidence admitted objection over their grant The of summary judgment to the support summary their judgment motion is School District and Kromer is affirmed. permit them to use as a sword that Affirmed. only which should be used as a shield. With reference to the majority’s analysis HUSPENI, J., dissents. Brundin v. Indep. School Dist. No. HUSPENI, Judge (dissenting). 16, 1990), No. C6-89-1469 (Minn.App. Jan. respectfully I dissent and would reverse pet. (Minn. rev. denied Mar. I summary judgment. award of I con- agree precedential. that case is not Even clude that the doctrines were, however, if it it is distinguish also collateral were inappropriately in- able. appellant The in Brundin did not improperly voked and upon relied in this hesitate to during raise all issues the termi case. nation proceedings. Only after she failed prevail issue in proceedings those Many of the expressed by concerns upon appeal did she commence a civil in Clapper court v. Budget Company, Oil action very and raise there the same issues 437 N.W.2d (Minn.App.1989),pet. upon Here, which she had been defeated. 9, 1989) June are appellant commenced a civil proceeding pri- present court, Clapper here. The in re- or to hearing; parties the termination all versing the trial application court’s of the only were not aware of proceed that civil doctrine of collateral estoppel, among noted ing points but referred to it at various that, other concerns in administrative hear- during the termination when ings, common statutory law or rules of arg objections to evidence were raised and followed, evidence need not hearsay that by respondents The waiver ued.2 admissible, is jury and that a trial is not right to invoke res and collateral available. Id. estoppel which I discern notably here was The recog- officer this case absent in Brundin. Clapper nized the first two concerns. An equitable final observation: remedies persuasive raised, even argument more I rigidly applied. should not be Johnson v. believe, regarding the availability lack of Inc., Freightways, Consolidated jury hearings. Ap- trial administrative (Minn.1988). N.W.2d While trial pellant has raised issues in this only right courts have not duty but the put which she is jury. entitled to before a protracted repetitious avoid litiga- *8 tion, they must also conscientiously ensure concern, important further and a most litigants that receive a full oppor- and fair one, submit, repeated I is the objection of tunity to be heard on properly the issues respondents to admission in the termination preserved litigation. raised and I do not proceedings relating ap- evidence appellant believe oppor- was afforded that pellant’s retaliatory defamation or dis- tunity in this case. charge pos- claims. I conclude from that respondents ture rights that waived their upon

to invoke the doctrines which summa-

ry judgment granted. Respondents’

objections to admission of evidence in the Appellant troubling allegations raises about 2. Reference this court in Graham I to issues discovery during the minimal available to her properly other than those considered in the ter- proceedings. Respondents’ the termination sitancy he- mination constitutes dicta and does engage discovery in full in that termi- those, persuade properly not me that issues were nation would be consistent with before our court. position their that certain issues were to be addressed elsewhere.