Richard J. SHOVELIN, Plaintiff-Appellee, and Cross-Appellant,
v.
CENTRAL NEW MEXICO ELECTRIC COOPERATIVE, INC., Defendant-Appellant, and Cross-Appellee.
Supreme Court of New Mexico.
*998 Hinkle, Cox, Eaton, Coffield & Hensley, Robert P. Tinnin, Jr., Kara L. Kellogg, Margaret R. McNett, Albuquerque, for defendant-appellant.
Kenneth R. Wagner & Associates, Phillip P. Baca, Albuquerque, for plaintiff-appellee.
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). *999 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 *1000 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,
Shovelin, on the other hand, contends that the trial court correctly refused to apply the doctrine of collateral estoppel. Shovelin asserts that giving an administrative agency ruling such preclusive effect would violate various constitutional guarantees: (1) Separation of powers pursuant to Article III, Section 1 of the New Mexico Constitution; (2) his right to a jury trial pursuant to Article II, Section 12 of the New Mexico Constitution; and (3) his right to due process. In addition, Shovelin contends that an application of collateral estoppel would be contrary to the legislative intent and purpose underlying the unemployment insurance structure. Finally, Shovelin contends that the application of collateral estoppel is inappropriate because the issue decided during the ESD proceedings is different from the issue decided by the jury in the instant action. Shovelin concludes that the trial court did not err in refusing to apply collateral estoppel and that the judgment should be affirmed.
The doctrine of collateral estoppel fosters judicial economy by preventing the relitigation of "`ultimate facts or issues actually and necessarily decided in a prior suit.'" International Paper Co. v. Farrar,
In Silva, we approved of the use of both offensive and defensive collateral estoppel. See id. at 474-76,
The threshold question presented by this appeal, which, as noted above, is one of first impression in New Mexico,[1] is whether under the doctrine of collateral estoppel issues resolved in an administrative agency adjudicative decision should be given preclusive effect in later civil trials. We need not answer this question in a vacuum as it has been addressed by numerous courts and authorities. See, e.g., United States v. Utah Constr. & Mining Co.,
In the instant case, the Cooperative argues that the ESD determination that Shovelin voluntarily left his employment should be given preclusive effect. The Cooperative argues that the ESD acted in a judicial capacity to resolve disputed issues of fact that were properly before it and that the parties had an adequate opportunity to litigate the issue. In addition, the Cooperative points out that the Unemployment Compensation Law in effect when Shovelin left his employment with the Cooperative, NMSA 1978, Sections 51-1-1 to -54 (Repl.Pamp. 1983 & Cum.Supp. 1986),[2] was silent as to whether an ESD decision could be given preclusive effect under the doctrine of collateral estoppel. As the Cooperative maintains, the legislature subsequently amended the Unemployment Compensation Law to provide that findings of fact or law from any unemployment compensation proceeding may not be given preclusive effect under the doctrines of res judicata or collateral estoppel in a separate proceeding between an individual and his present or former employer. NMSA 1978, § 51-1-55 (Repl.Pamp. 1990). Citing Martinez v. Research Park, Inc.,
While we agree with the Cooperative that in enacting Section 51-1-55 the legislature intended to change the Unemployment Compensation Law, we cannot agree that the trial court must therefore apply the doctrine of collateral estoppel to every ESD determination that arose before amendment of the statute. The doctrine of collateral estoppel is a judicially created doctrine, see Perschbacher, supra, at 426-39, and, absent a statute to the contrary, whether to apply such a judicially created doctrine is a judicial determination. See Roberts v. Southwest Community Health Servs.,
If we assume without deciding that, as the Cooperative argues, the Cooperative met its burden and proved that the application of collateral estoppel was appropriate, the trial court could then determine whether Shovelin was given a full and fair opportunity to litigate the issues at the ESD hearing. While the trial court did not state its reason for declining to apply the doctrine of collateral estoppel, we believe that Shovelin did not have a full and fair opportunity at the ESD hearing to litigate the issue of whether he was voluntarily or involuntarily discharged. In making this determination, we weigh countervailing factors including, but not limited to, the incentive for vigorous prosecution or defense of the prior litigation; procedural differences between the prior and current litigation, including the presence or absence of a jury; and the possibility of inconsistent verdicts. See Silva,
The first factor, whether Shovelin had the incentive to vigorously litigate the prior action, weighs in favor of upholding the trial court's refusal to apply collateral estoppel. At stake in the initial hearing was Shovelin's right to receive unemployment compensation. The amount in controversy in that litigation is small indeed when compared to the amount that Shovelin could possibly have been, and eventually was, awarded by the jury in his breach of contract action. Our determination on this matter comports with court decisions in other jurisdictions and the prevailing attitude in the scholarly literature. See, e.g., McClanahan v. Remington Freight Lines, Inc.,
The second factor is whether procedural differences between the ESD proceedings and the breach of contract action would make it unfair to give preclusive effect to the ESD decision. The Unemployment Compensation Law is designed to "lighten [the] burden which now so often falls with crushing force upon the unemployed worker and his family," Section 51-1-3, by quickly placing the benefits into the hands of the unemployed worker. See, e.g., § 51-1-8(I) (requiring prompt payment of benefits even though appeal is pending); § 51-1-8(M) (giving appeals of district court decisions to the Supreme Court priority over most other civil cases). In passing the Unemployment Compensation Law, the legislature intended that the procedural steps should be reduced to a minimum to allow the unemployed worker to obtain a prompt decision regarding his or her benefits. Kennecott Copper Corp. v. Employment Sec. Comm'n,
The proceedings in a district court are similar to those in an ESD hearing in several significant ways. First, issues of fact and law decided in the ESD proceedings, like issues decided in a district court, are reviewable, Section 51-1-8(G) (appeal of hearing officer determination to board of review), Section 51-1-8(M) (appeal of board of review decision to district court), including a final appeal from district court to this Court, Section 51-1-8(M).[5] As in the district *1004 court, the ESD must give the parties appealing the initial decision of a claims examiner notice and an opportunity to be heard prior to issuing a decision, and the parties must be given written notice of the decision and the reasons for the decision. Section 51-1-8(C). In addition, like a proceeding in the district court, the parties may subpoena witnesses, see Section 51-1-8(K), and may present evidence and argument. See § 51-1-8(C) & (G). Finally, both the unemployed person and the former employer may be represented by counsel. Cf. § 51-1-8(L) (department may be represented by attorney).
While an ESD hearing is similar in many ways to a trial in a district court, important differences between the two proceedings exist. Unlike a trial in district court, an ESD hearing does not have to "conform to common law or statutory rules of evidence or other technical rules of procedure." Section 51-1-8(J). Unlike a trial in district court, the petitioner in an ESD proceeding has no method of gaining or compelling any meaningful discovery. In addition, the claims examiners, hearing officers, and board of review members, unlike a judge in a district court, need not be lawyers. See § 51-1-8(B), (C), & (E) (providing for appointment of agency officials without regard to legal educational qualifications); N.M. Const. art. VI, § 14 (defining qualifications for district judge). In addition, the petitioner in an ESD proceeding is not entitled to a jury trial. See § 51-1-8.
In the instant case, the ESD proceeding was conducted by a hearing examiner during a two and one-half hour telephone conference. The hearing was conducted shortly after Shovelin's discharge, which provided minimal time for discovery. However, Shovelin was represented by counsel and availed himself of the opportunity to appeal the decision to the district court and ultimately to this Court. Even so, our assessment of the procedural differences between the agency and court actions discussed above leads us to conclude that the ESD decision was reached by an informal process, which militates against giving collateral estoppel effect to that decision in subsequent litigation in district court. Accord Caras v. Family First Credit Union,
A policy consideration, as articulated in the Restatement, lends further support to our conclusion. Applying the doctrine of collateral estoppel to preclude Shovelin from relitigating the reason for his termination would be incompatible with the legislative policy underpinning the Unemployment Compensation Law. See Restatement § 83(4) & cmt. h ("[I]ssue preclusion may be withheld so that the parties will not be induced to dispute the administrative proceeding in anticipation of its effect in another proceeding."). As demonstrated above, the Unemployment Compensation Law is intended to expeditiously place unemployment compensation benefits in the hands of those persons who without fault become unemployed. If a collateral estoppel effect is given to determinations of the ESD in cases such as the instant case, unemployed workers may forgo asserting their rights under the Unemployment Compensation Law to preserve their right to seek further civil redress. Alternatively, if the unemployed decides to assert his or her rights under the Unemployment Compensation Law, employers and the unemployed, armed with the knowledge that the ESD determination may preclude subsequent litigation, may try to turn ESD proceedings into full blown trials. This would thwart the legislative intent that unemployment benefits quickly flow to those in need the unemployed. Accord Storey v. Meijer, Inc.,
III
The next issue that we address is whether the trial court erred when it denied the Cooperative's motion for a judgment on the pleadings or, in the alternative, the Cooperative's motion for summary judgment in regard to Shovelin's retaliatory discharge claim.[6] The Cooperative maintains that, as a matter of law, Shovelin's amended complaint failed to state a claim for retaliatory discharge because (1) the public policy asserted by Shovelin was inconsistent with New Mexico's rule of employment at will, and (2) the public policy asserted by Shovelin was insufficient to support a claim for retaliatory discharge under New Mexico law. Accordingly, the Cooperative maintains that the trial court erred when it failed to grant the Cooperative's motion for a judgment on the pleadings regarding the retaliatory discharge claim. We agree.
A motion to dismiss on the pleadings, SCRA 1986, 1-012(C) (Repl.Pamp. 1992), is similar to a motion to dismiss for failure to state a claim upon which relief can be granted, SCRA 1986, 1-012(B)(6) (Repl.Pamp. 1992), and, in situations such as the instant case, is treated identically. See 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1369, at 532 n. 6 (1990) (discussing similar Fed. R.Civ.P. 12). Under Rule 12(B)(6), a motion to dismiss for failure to state a claim upon which relief can be granted tests the legal sufficiency of the complaint. Gonzales v. United States Fidelity & Guar. Co.,
In determining whether a complaint states a claim upon which relief can be granted, we assume as true all facts well pleaded. In addition, a motion to dismiss a complaint is properly granted only when it appears that the plaintiff cannot recover or be entitled to relief under any state of facts provable under the claim. Only when there is a total failure to allege some matter which is essential to the relief sought should such a motion be granted. Moreover, a motion to dismiss for failure to state a claim is granted infrequently.
Las Luminarias of the N.M. Council of the Blind v. Isengard,
*1006 The tort of retaliatory discharge was first adopted in New Mexico by the Court of Appeals as a narrow exception to the rule that an at-will employee may be discharged with or without cause. Vigil v. Arzola,
"For an employee to recover under this new cause of action, he must demonstrate that he was discharged because he performed an act that public policy has authorized or would encourage, or because he refused to do something required of him by his employer that public policy would condemn."
The linchpin of a cause of action for retaliatory discharge is whether by discharging the complaining employee the employer violated a "clear mandate of public policy." See Vigil,
Every statute enacted by the legislature is in a sense an expression of public policy but not every expression of public policy will suffice to state a claim for retaliatory discharge. "`[U]nless an employee at will *1007 identifies a specific expression of public policy, he may be discharged with or without cause.'" Id. (quoting Pierce v. Ortho Pharmaceutical Corp.,
Shovelin articulates the following public policies that he contends are sufficient to avoid a dismissal for failure to state a claim: "(1) A citizen's right to pursue and hold public office if duly elected; and (2) *1008 [t]he public's right to vote for and elect political candidates of their choice." Shovelin purports to find these expressions of policy in several sections of the New Mexico Constitution,[10] a federal statute,[11] and several state statutes.[12] We cannot agree.
One category of statutes that create public policy potentially sufficient to support a cause of action for retaliatory discharge includes those statutes providing protection of an employee without specifying a remedy. Vigil,
Only one of the provisions cited by Shovelin, Section 3-8-78, falls within the category of statutes cited by Vigil. Section 3-8-78 creates criminal sanctions against an employer if the employer discharges, penalizes, or threatens to discharge or penalize an employee because of the employee's intention to vote or refrain from voting in a municipal election. Shovelin contends that Section 3-8-78, which mirrors Section 1-20-13 as cited in Vigil, expresses a public policy protecting electoral freedom. We do not give that section such a broad reading. While Section 3-8-78 clearly expresses a public policy that supports an employee's right to vote and would, in a case in which the employer interfered with the employee's right to vote or abstain from voting, support a cause of action for retaliatory discharge, it is not implicated in the instant case. Shovelin does not allege that the Cooperative interfered with his right to vote in the election but rather with his right to run for office. Thus, Shovelin's first contention must fail.
The next category of statutes that create a public policy potentially sufficient to support a cause of action for retaliatory discharge includes those statutes defining public policy without specifying either a right or a remedy, in which case the employee would seek judicial recognition of both. Vigil,
In the instant case, Shovelin cites several statutes that, under proper circumstances, may be sufficient to support an action for retaliatory discharge. Initially, Shovelin cites 18 U.S.C. § 245(b), which prevents and punishes the violent interference with voting rights. See Johnson v. Mississippi,
Shovelin cites numerous other statutory provisions from the Municipal Election Code that he contends support a public policy encouraging a citizen to pursue and hold office, including Section 3-8-28 (defining candidate qualifications), Section 3-8-32(A) (guaranteeing right of properly elected candidate to hold office), and Sections 3-8-40 & -41 (guaranteeing the right to vote in municipal elections). None of these sections, however, are specific enough expressions of public policy to state a claim for relief under the facts of this case. See Vigil,
The final category of public policy as discussed in Vigil is limited to those instances in which the legislature did not express public policy but such policy was nonetheless recognized by a court. Id. In such instances, the employee must seek judicial recognition of both the right and the remedy. Id. The Vigil court cited two examples of when the judiciary may properly recognize an implicit right and remedy for the employee when his discharge violates public policy: Palmateer v. International Harvester Co.,
Shovelin asserts that Vigil and Chavez,
Neither Vigil nor Chavez supports the broad proposition that Shovelin asserts. In Vigil, the Court of Appeals held that the plaintiff stated a cause of action for retaliatory *1010 discharge when he alleged that he was fired for reporting his employer's misuse of public funds.
In Chavez, we cited Novosel v. Nationwide Insurance Co.,
Shovelin cites four cases from other jurisdictions that he contends have followed Novosel and have allowed a private employee to support a claim of retaliatory discharge for the violation of a public policy as evidenced by a constitutional provision: Bloom v. General Electric Supply Co.,
Taking all well-pleaded facts in Shovelin's complaint as true, the complaint fails to state a claim upon which relief can be granted because, as a matter of law, it fails to assert a sufficient public policy to support a claim of retaliatory discharge. Accordingly, the trial court erred when it failed to grant the Cooperative's motion for a judgment on the pleadings on Shovelin's retaliatory discharge claim. Our disposition of this issue makes it unnecessary for us to address the other issues raised by the parties.
The judgment of the trial court is affirmed in part and reversed in part. This case is remanded to the trial court for proceedings consistent with the foregoing discussion.
IT IS SO ORDERED.
RANSOM, C.J., and FROST, J., concur.
NOTES
Notes
[1] The Cooperative, citing Property Tax Department v. Molycorp, Inc.,
[2] Unless otherwise noted, all citations to provisions of the Unemployment Compensation Act refer to the version of the statute found in the 1983 Replacement Pamphlet and the 1986 Cummulative Supplement.
[3] Citing N.M. Constitution Article IV, Section 34; Stockard v. Hamilton,
[4] This problem is more acute when, as often is the case, the worker seeking unemployment benefits is not represented by counsel. See Comment, supra, at 791.
[5] Citing Stall v. Bourne,
[6] Citing Galvan v. Miller,
[7] Count II of the amended complaint reads as follows:
COUNT TWO: RETALIATORY DISCHARGE
15. Plaintiff exercised his civic right when he campaigned for public office.
16. However, [the Cooperative] automatically and prematurely discharged [Shovelin] once he was elected Mayor of Mountainair.
17. [Shovelin's] election as Mayor was the sole reason he was discharged.
18. [Shovelin's] election as Mayor did not adversely affect his job performance for [the Cooperative].
19. [The Cooperative's] misconduct contravened state public policy which supports an employee's right to hold public office and supports the public's right to vote for candidates of their choice, as long as it does not adversely affect the employer's business operation.
.....
20. [The Cooperative's] misconduct proximately caused [Shovelin] to suffer economic and emotional injury in an amount to be proven at trial.
[8] In Chavez, we noted that, in similar situations, some jurisdictions utilize a shifting burden of production under which the plaintiff must prove a causal connection between the employer's improper motive and the employee's discharge from employment.
[9] Other cases mentioning retaliatory discharge without discussing whether the plaintiff cited sufficient public policy include Aviles v. Lutz,
[10] Shovelin cites the following sections of the New Mexico Constitution: Article II, Section 17 (free speech); Article II, Section 8 (free and open elections); Article VII, Section 1 (voter qualifications); Article VII, Section 2 (qualifications to hold elective office); Article VII, Section 5 (candidate receiving highest vote total is elected).
[11] Shovelin cites 18 U.S.C. § 245(b) (1988) (making intimidation or interference with elections a federal crime).
[12] Shovelin cites numerous sections from the Municipal Election Code, NMSA 1978, Sections 3-8-1 to -80 & 3-9-1 to -16 (Repl.Pamp. 1985 & Supp. 1992).
