Summary
finding that an employee's tortious interference with contract claim could be brought in the state district court
Summary of this case from Lueth v. City of GlencoeOpinion
No. C8-00-2065.
Filed June 19, 2001.
Appeal from the District Court, Cottonwood County, File No. C300215.
James G. Ryan, (for respondent Brian Pierce)
Jill Clark, Jill Clark, P.A., (for appellant)
Richard A. Beens, Marnie E. Polhamus, Felhaber, Larson, Fenlon Vogt, P.A., (for respondent Cottonwood County)
Considered and decided by Willis, Presiding Judge, Foley, Judge, and Poritsky, Judge.
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant David P. Honan challenges the district court's decision to grant a joint motion to dismiss respondent Brian T. Pierce's claim against respondent Cottonwood County and Honan, pursuant to Minn.R.Civ.P. 41.01(b), after respondents reached a settlement that included an agreement by Pierce to dismiss with prejudice all claims against respondent Cottonwood County and Honan, and preserved any claims by Honan against Pierce. Honan also argues that the district court made inadequate findings when it approved the settlement pursuant to Minn. Stat. § 466.08 (2000).
FACTS
Appellant David P. Honan has been the county attorney of respondent Cottonwood County ("Cottonwood") since January 1999. Respondent Brian T. Pierce was an assistant county attorney in Cottonwood from March 15, 1999, through June 16, 2000. Pierce claims that in October or November of 1999, he received a request from the Cottonwood Human Rights Officer to cooperate with an ongoing investigation concerning Honan's conduct towards a secretary. Pierce claims that because of this upcoming interview, Honan told Pierce that his job evaluation and salary could be affected by what he told the investigator. Pierce further claims that Honan manipulated the scheduling and the location of the interview to intimidate Pierce.
Pierce was interviewed on December 6, 1999. Pierce claims that from January until June 2000, Honan undertook a course of action that constructively discharged Pierce. Pierce claims, among other things, that Honan denied him access to computers and office staff; that on January 4, 2000, Honan provided a false notice to the Cottonwood County Board claiming that Pierce had resigned; and that Honan made defamatory statements about Pierce to the public and to the board. Pierce tendered his resignation on June 16, 2000.
On June 19, 2000, Pierce served a summons and complaint on Honan and Cottonwood. The complaint contained three counts: (1) whistleblower statute violation; (2) defamation; and (3) tortious interference with contract. The Minnesota County Insurance Trust (MCIT) provided both Cottonwood and Honan with attorneys from separate law firms to defend against Pierce's lawsuit. Honan retained Gordon L. Moore, III, as his personal attorney. Honan filed an answer on July 10, 2000. The answer was signed by Moore and by Michael J. Ford, an MCIT attorney. Richard A. Beens, an MCIT attorney, filed Cottonwood's separate answer on July 12, 2000.
Sometime in August, Cottonwood and Pierce reached an agreement to settle the lawsuit. Honan objected to the settlement and did not sign a stipulation of dismissal, even though the settlement disposed of all of Pierce's legal claims with prejudice, called for no payment of money by Honan, imposed no other obligations on Honan, and did not require Honan to sign a release of any claims he might have against Pierce.
On August 29, 2000, Honan filed a motion to stay discovery and a rule 12 motion to dismiss Pierce's complaint, based on lack of subject-matter jurisdiction and other defenses. The district court scheduled a hearing on both motions for September 22, 2000.
On September 6, 2000, Pierce, joined by Cottonwood, filed a motion to dismiss pursuant to rule 41.01(b), contingent on the county board approving a settlement between Pierce and Cottonwood. Respondents requested that the hearing on Honan's rule 12 motion to dismiss be continued indefinitely because the dismissal and settlement made the motion irrelevant. Respondents' request was made pursuant to Minn.R.Gen.Pract. 115.07, which allows the district court to waive or modify time limits pertaining to motions. The motion indicated that Honan would not agree to join the settlement or to sign the agreement.
On September 8, 2000, attorney Jill Clark filed a notice of appearance on behalf of Honan, replacing Moore as Honan's private counsel. Also on this date, Clark filed a motion for Honan requesting leave to amend his answer and to add a counterclaim. Since September 8, Clark has acted as attorney for Honan and has continued to act as his attorney on this appeal.
Honan's brief suggests that Pierce's motion to dismiss was filed on the same day that Honan filed his motion to add a counterclaim. But a thorough review of the record shows that Honan's motion was faxed to the district court on September 8, 2000. Honan admits in his brief that he received fax notice of respondents' rule 41.01(b) motion on September 7, 2000. And respondents' rule 41.01(b) motion was filed with the district court on September 6, 2000.
A hearing on respondents' motion to continue Honan's rule 12 motion was held by telephone on September 8, 2000. In an order, the district court continued Honan's rule 12 motion indefinitely.
On September 12, 2000, the Cottonwood County Board approved the settlement between Cottonwood and Pierce.
On September 19, 2000, respondents filed a settlement agreement.
On September 22, 2000, a hearing was held on respondents' rule 41.01(b) motion. The district court issued an order (1) refusing to rule on Honan's rule 12 motion, since to do so "would be a waste of judicial resources"; (2) finding that the settlement between Pierce and Cottonwood was reasonable and should be approved pursuant to Minn. Stat. § 466.08 (2000); and (3) finding that Honan's proposed counterclaim was untimely and should not prevent dismissal of this proceeding. Honan appeals from the judgment entered pursuant to this order.
DECISION I.
Subject-matter jurisdiction is a question of law that this court reviews de novo. Bode v. Minnesota Dep't of Natural Resources, 612 N.W.2d 862, 866 (Minn. 2000). There is no time limit for challenging a judgment based on a lack of subject-matter jurisdiction. Id.
Honan, relying on Deitz v. Dodge County, 487 N.W.2d 237 (Minn. 1992), argues that because certiorari is the exclusive method for obtaining judicial review of a county's action discharging an employee, the district court did not have subject-matter jurisdiction of Pierce's claims. We disagree.
A discharged municipal employee may bring a whistleblower claim in district court.
We hold * * * that employees of the state and its subdivisions who claim to be injured by violation of the Whistleblower Act are entitled to a civil cause of action in the district court * * * .
Manteuffel v. City of North St. Paul, 538 N.W.2d 727 , 731 (Minn.App. 1995); see also Larson v. New Richland Care Ctr., 538 N.W.2d 915, 917 (Minn.App. 1995), ("A municipal employee may bring a civil action in district court under the whistleblower statute * * * without being required to petition for writ of certiorari to the court of appeals * * *."), review granted (Minn. Dec. 20, 1995), and order granting review vacated (Minn. Mar. 4, 1997). In the present case, Pierce alleged a whistleblower claim in his complaint and thus it was properly brought in district court. See Minn. Stat. § 181.935(a) (2000) (providing an employee a civil action for whistleblower claims).
Consistent with Manteuffel and Larson, the supreme court has held that a discharged county employee can bring a statutory claim against the county in district court. Willis v. County of Sherburne, 555 N.W.2d 277, 283 (Minn. 1996). In Willis, the court held that even though certiorari was the only procedure by which a discharged county employee could seek review of his discharge, he could nonetheless bring a statutory claim for disability discrimination in district court. Id. at 283. The court also held that the employee could bring a claim for common-law defamation in district court. Id. at 282-83 (allowing common-law claims if they are separate from the discharge decision). We conclude that Pierce's statutory whistleblower claim, as well as his common-law defamation and tortious-interference-with-contract claims, were properly brought in district court.
II.
Whether or not to grant a rule 41 motion to dismiss rests in the discretion of the district court, and we will not reverse unless the district court abuses its discretion. Altimus v. Hyundai Motor Co., 578 N.W.2d 409, 411 (Minn.App. 1998). Honan contends the district court abused its discretion by dismissing Pierce's lawsuit pursuant to rule 41.01(b). We disagree.
Respondents moved to dismiss after they reached a settlement because Honan was unwilling to stipulate to the with-prejudice dismissal of Pierce's complaint. Rule 41.01(b) provides:
[A]n action shall not be dismissed at the plaintiff's instance except upon order of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon the defendant of the plaintiff's motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim may remain pending for independent adjudication by the court.
Here, Honan had not pleaded a counterclaim prior to respondents serving their motion to dismiss.
Our court has used the following factors to review a district court's decision on a rule 41.01(b) motion:
(1) the defendant's effort and the expense of trial preparation;
(2) the plaintiff's excessive delay and lack of diligence;
(3) insufficient explanation of plaintiff's need for dismissal; and
(4) whether defendant moved for summary judgment.
Altimus, 578 N.W.2d at 411 (citations omitted). In this case, all of these factors favor affirmance of the district court's decision to dismiss. First, the lawsuit had not approached the trial stage, and Cottonwood's insurance carrier was paying for many of Honan's legal bills. Second, there is no evidence that Pierce or Cottonwood delayed proceedings. Instead, the dismissal was sought within a couple of months after the lawsuit was filed. Third, there was a sufficient explanation for the dismissal — a settlement of all claims. Fourth, Honan had not moved for summary judgment. Because there was no pending counterclaim, and the applicable factors favored granting respondents' rule 41.01(b) motion, the district court did not abuse its discretion in granting the dismissal with prejudice.
Honan further argues that the district court erred because it should have considered his rule 12 motion before it granted respondents' motion to dismiss. We disagree. Rule 41.01(b) limits the court's authority to dismiss if a counterclaim has been pleaded, and Altimus indicates that a court may consider whether the defendant has moved for summary judgment. See Altimus, 578 N.W.2d at 411. But there is nothing in rule 41.01(b) that states the district court's discretion is limited when a defendant brings a rule 12 motion, and we conclude that the fact Honan brought a rule 12 motion before respondents brought their rule 41.01(b) motion did not limit the district court's discretion.
Honan also claims that the district court erred when it denied his motion for leave to bring a counterclaim. The court gave as its reason that Honan had "ample time" to file the counterclaim. Initially, it should be noted that Honan's motion to bring a counterclaim was brought after respondents brought their motion to dismiss. A party failing to bring a counterclaim through "oversight, inadvertance, or excusable neglect, or when justice requires," may plead a counterclaim by amendment with "leave of court." Minn.R.Civ.P. 13.06. At oral argument, Honan's counsel attempted to lay the blame for the two-and-one-half-month delay in bringing Honan's counterclaim on the MCIT attorney, claiming that Honan could not convince the attorney to plead a counterclaim. But the record shows that Honan's private counsel, Moore, signed his answer, and Honan has not explained why the same private attorney could not have signed the counterclaim. Because Honan provides no justifiable excuse for failing to timely plead his counterclaim while his private counsel was representing him, his argument on this score is not persuasive.
Honan contends he is also prejudiced because the dismissal could bar a future lawsuit he may bring against Pierce. He refers to the doctrines of res judicata, collateral estoppel, and compulsory counterclaim. His argument in this respect is not persuasive. First, the settlement agreement preserved future claims by Honan against Pierce. Second, both res judicata and collateral estoppel require a final judgment before either doctrine is operative; there was no final judgment in this case. Finally, as to the compulsory counterclaim argument, Minn.R.Civ.P. 13.01 does not bar bringing a tort claim in a subsequent lawsuit even when the claim could have been brought as a counterclaim in an earlier lawsuit. House v. Hanson, 245 Minn. 466, 472-73, 72 N.W.2d 874, 878 (1955) (holding that Minn.R.Civ.P. 13.01 "does not embrace claims in tort and that therefore the failure of a defendant to assert as a counterclaim any claim he has against the plaintiff does not estop him from asserting such claim in an independent action against the plaintiff"). Of course, whether or not Honan is barred from bringing his defamation claim in a subsequent action would ultimately have to be decided by the court in which he might bring such an action. In the present action, however, Honan attacks the dismissal on the ground that he is prejudiced by it, and therefore he has the burden to make a showing of prejudice. We conclude that he has failed to make such a showing.
Honan also contends that the district court decision prejudiced his reputation. This argument is unpersuasive. First, Honan does not cite us to any authority for the proposition that a defendant's reputation is a sufficient ground to deny a dismissal under rule 41.01(b). He cites a condemnation case, Independent School Dist. v. Gross, 291 Minn. 158, 190 N.W.2d 651 (1971), in which the main issue was: at what point did the title vest so as to deny the condemnor's right to abandon the proceeding? Id. at 160-61, 190 N.W.2d at 653. In that case, the supreme court upheld the condemnor's partial dismissal of the proceeding. Id. at 169, 190 N.W.2d at 658. Piedmont Interstate Fair Ass'n v. Bean, 209 F.2d 942 (4th Cir. 1954), which Honan cites for the proposition that a plaintiff who has no case should not be allowed to dismiss it, the plaintiff sought a dismissal without prejudice. Finally, in Butkovich v. O'Leary, 303 Minn. 535, 225 N.W.2d 847 (1975), the plaintiff voluntarily dismissed his case with prejudice but subsequently sought to vacate the dismissal. The supreme court affirmed the trial court's refusal to vacate the order of dismissal. Id. at 537, 225 N.W.2d at 849. In none of the cases cited by Honan did the courts discuss the defendants' reputation.
Second, Honan has failed to make a showing that he cannot later attempt to restore his reputation by bringing a defamation action against Pierce, or anyone else for that matter, who, he feels, has harmed his reputation. Finally, the court's dismissal has given Honan the same legal relief he would have received had his rule 12 motion been heard and granted. In Shepard v. Egan, 767 F. Supp. 1158 (D.Mass. 1990), the plaintiff moved to dismiss with prejudice because she had entered into a settlement agreement with all the parties except a single defendant. Id. at 1164. That defendant opposed the motion and refused to sign the settlement agreement. Id. at 1165. The plaintiff brought a motion to dismiss under the equivalent to rule 41.01(b), which requires an order of the court. Id. The Shepard court upheld the dismissal and stated that
when a dismissal with prejudice is granted, it does not harm the defendant: The defendant receives all that he would have received had the case been completed.
Id. (quotation omitted). Similarly, in the present case, Honan received all he would have received had his rule 12 motion been granted: the case was dismissed, there was no finding of wrongdoing on Honan's part, and he did not have to pay Pierce anything. We conclude that Honan's claimed prejudice to his reputation is insufficient to bar dismissal of Pierce's lawsuit with prejudice.
III.
Honan claims that Minn. Stat. § 466.08 (2000) requires the district court to make adequate factual findings and that the district court failed to meet this requirement. We disagree. Section 466.08 requires only that a district court approve a settlement with a municipality when the amount exceeds $10,000. The plain language of the statute does not require factual findings, and it is not the courts' role to add requirements to a statute. See Martinco v. Hastings, 265 Minn. 490, 497, 122 N.W.2d 631, 638 (1963) (holding that "the courts cannot supply that which the legislature purposely omits or inadvertently overlooks") (citations omitted). We note that the trial court did make a finding that the settlement was reasonable, but such a finding is not required by the statute.