Opinion
No. C0-01-336
Filed December 4, 2001.
Appeal from the Gilbert City Council.
Larry C. Minton, Jason M. Hill, Law Offices of Larry C. Minton, Ltd. (for relator)
Patricia Y. Beety, League of Minnesota Cities (for respondent)
Considered and decided by Toussaint, Chief Judge, Kalitowski, Judge, and Klaphake, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Relator Gary D. Mackley challenges the Gilbert City Council's action terminating the provisions of his employment agreement with the city, arguing that the decision was arbitrary and capricious and not supported by evidence. Relator also moves this court (1) to strike parts of the record submitted by the city, asserting that the evidence was not part of the record below, and (2) to award attorney fees under Minn. Stat. § 549.211 (2000) and Minn.R.Civ.P. 11. We affirm but grant relator's motions.
DECISION I.
Relator challenges the city's decision to terminate his employment agreement. Review on writ of certiorari is limited to an inspection of the record to determine the propriety of the city council's jurisdiction and procedures and, with respect to the merits, to determine whether its decision was arbitrary, oppressive, unreasonable, fraudulent, or unsupported by evidence or applicable law. Dietz v. Dodge County, 487 N.W.2d 237, 239 (Minn. 1992). A reviewing court will not retry the facts or make credibility determinations, and the city council's decision will be upheld if it "furnished any legal and substantial basis for the action taken." Senior v. City of Edina, 547 N.W.2d 411, 416 (Minn.App. 1996) (quotation omitted).
A writ of certiorari provides only limited review of quasi-judicial decisions due to judicial recognition of separation of power concerns and [the] deference accorded [a non-statewide agency] by virtue of the fact that such a body is a derivative of the executive branch[.]
Dietz, 487 N.W.2d at 239. A city council, in the exercise of its power to set the terms that govern its relationship with its employees, "does not thereby lose its identity as an administrative body and become a court." Dokmo v. Indep. Sch. Dist. No. 11, 459 N.W.2d 671, 674 (Minn. 1990). A city council's decision to hire an employee and to negotiate and determine the terms of that employment necessarily involves the city's "exercise of discretion" in setting the city's policies and goals. See Dietz, 487 N.W.2d at 240 (discussing that wrongful termination action involves examining the propriety of county's exercise of discretion). We afford the city council substantial deference when it exercises its discretion in such matters.
Relator asserts that the record the city relied upon lacked any evidence to support its decision to terminate all provisions of relator's employment agreement, and therefore, the city council's decision was necessarily unreasonable and arbitrary. We disagree.
A municipal corporation only possesses the powers "expressly conferred upon it by statute or its charter, or necessarily implied." Borgelt v. City of Minneapolis, 271 Minn. 249, 252, 135 N.W.2d 438, 440 (1965) (citation omitted). Actions taken by the city council contrary to its city charter are invalid. Sermon v. City of Duluth, 256 Minn. 92, 96, 97 N.W.2d 464, 467 (1959). Moreover, whether an employee entered into an "at-will" or "just cause" employment agreement is a question of law. Willis v. County of Sherburne, 555 N.W.2d 277, 281 (Minn. 1996).
Relator argues that he had a continuing agreement with the city. But the city's charter mandates that the city reappoint the city clerk yearly and section 6.02 of the city's charter expressly provides that the "city clerk may be removed at any time by an affirmative vote of a majority of the council." 1978 Charter of City of Gilbert § 6.02. Hence, consistent with the charter, relator is an at-will employee.
An at-will employee can be terminated for any reason or no reason. Randall v. N. Milk Prods., Inc. 519 N.W.2d 456, 459 (Minn.App. 1994); Vonch v. Carlson Cos., Inc., 439 N.W.2d 406, 408 (Minn.App. 1989), review denied (Minn. July 12, 1989). Thus, by definition, an at-will employee's termination could not be arbitrary and capricious. Reierson v. City of Hibbing, 628 N.W.2d 201, 204 (Minn.App. 2001). Here, relator challenges the city's action of terminating his employment agreement. Because relator was an at-will employee, the city could terminate the employee, and thus the employment agreement, at any time for any reason. Therefore, relator's assertion that the decision to terminate the agreement was arbitrary and capricious fails.
Moreover, even the limited record properly before us establishes that the parties did not have a continuing contract. The parties do not dispute that, historically, after the city reappointed relator, the parties entered into contract negotiations and that various terms in the agreement changed as a result. Additionally, the city referenced the anticipated negotiations on the agenda for the January 9, 2001, city council meeting. The parties' course of dealing shows that relator was aware that his conditions of employment were subject to the annual reappointment procedure and the corresponding contract negotiations and thus, that the terms were subject to change. Because relator was an at-will employee and the terms of employment were subject to change each year, we conclude that no continuing contract existed between the parties and, therefore, the city's action was not arbitrary and capricious.
II.
Relator moves this court to strike certain items transmitted by the city as part of the record. Although the city council is not required to prepare formal findings, the city council is "at a minimum, required to have the reasons for its decision recorded or reduced to writing and in more than just a conclusory fashion." White Bear Rod Gun Club v. City of Hugo, 388 N.W.2d 739, 742 (Minn. 1986) (quotations omitted). It is the government body's responsibility "to develop and preserve a record that allows for meaningful review by appellate courts." In re Livingood, 594 N.W.2d 889, 895 (Minn. 1999). Thus, the city had the responsibility to record the reasons for its decision and develop a record that would aid this court in reviewing the actions taken at the January 9, 2001, council meeting.
The record on review consists of the "proceedings" and actions of the city council. Dokmo, 459 N.W.2d at 676 (citation omitted). The record contains "the papers, exhibits, and transcripts of any testimony considered by the body whose decision is to be reviewed." Stephens v. Bd. of Regents, 614 N.W.2d 764, 769 (Minn.App. 2000) (citations omitted), review denied (Minn. Sept. 26, 2000). This court "may not base its decision on matters outside the record on appeal[.]" Plowman v. Copeland, Buhl, Co., 261 N.W.2d 581, 583 (Minn. 1977). Accordingly, this court will strike materials that are not properly part of the appellate record. Fabio v. Bellomo, 489 N.W.2d 241, 246 (Minn.App. 1992), aff'd, 504 N.W.2d 758 (Minn. 1993).
Here, the proceeding on review is the January 9, 2001, city council meeting. Therefore, the record properly consists of the transcript, minutes, agenda, and matters considered by the city council as part of that proceeding. The record shows that the city council considered the January 25, 2000, contract with relator, thus this contract is properly part of the record. Similarly, the city council reappointed relator under the appointment procedure in the city charter, thus the city charter is properly part of the record.
Relator argues that this court should strike the 1991, 1996, and 1998 city council minutes and the 1995, 1998, and 1999 employment agreements between relator and the city. In response, the city argues that council members considered discussions made at previous city council meetings before making their decision on January 9, 2001. The city also asserts that the previous minutes and agreements demonstrate the history between the parties and that the history was "obviously in the minds of the Council on January 9, 2001." But the city bears the burden of creating a record of its proceedings. Livingood, 594 N.W.2d at 895. Contrary to the city's argument, relator does not have the burden of proving that the city council did not rely on the evidence. And there is no support in the law for a city adding documents to a record because a decision-maker might have known of them and considered them. Because the record before us does not establish that the council members considered the disputed documents at the January 9, 2001, proceeding, we grant relator's motion to strike these documents from the record.
Relator moves for bad-faith attorney fees and costs incurred on appeal. Under Minn. Stat. § 549.211 (2000), this court has discretion to award reasonable attorney fees when a party acts in bad faith by asserting frivolous or unfounded claims solely to harass or to cause unnecessary delay or litigation costs. Minn. Stat. § 549.211, subds. 2, 3 (2000); Toughill v. Toughill, 609 N.W.2d 634, 642 (Minn.App. 2000); Allstate Ins. Co. v. Allen, 590 N.W.2d 820, 823 (Minn.App. 1999). When the city transmitted "the record" to this court, it included several documents that were never mentioned in the January 9, 2001, transcript or minutes. Relator served the city with a motion to strike. Included with the motion was a request for fees pursuant to Minn. Stat. § 549.211, subd. 4(a), which gives the city 21 days after receiving service of relator's motion to withdraw the disputed items and correct the record. The city did not withdraw the documents, and relator filed this motion to strike.
We conclude that this unfounded action constitutes bad faith and directly increased relator's litigation costs. Therefore, we award $750 in attorney fees to relator for costs incurred in relator's motion to strike.