GIEBEL v MT SYSTEM OF HIGHER EDUCA
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No. 96-393 IN THE SUPREME COURT OF THE STATE OF MONTANA 1996 DOUGLAS GIEBEL, Plaintiff and Appellant, v. MONTANA SYSTEM OF HIGHER EDUCATIONi MSU-NORTHERNi JEFFREY BAKER, MONTANA COMMISSIONER OF HIGHER , EDUCATIONi WILLIAM DAEHLING, CHANCELLOR, MSU-NORTHERNi ,,_,>tl' '" - ....... i, .', , STEPHEN SYLVESTER CHAIRMAN, DEPARTMENT OF HUMANITI&$;;,:,;.,;',·-;:,;; '\)('1'<, AND SOCIAL STUDIES, MSU-NORTHERNi and JANE ¥..ATHLEEN ~. "-;'J';'~A CURRY, ASSISTANT PROFESSOR, MSU-NORTHERN, " (~ '<, ¢ Defendants and Respondents. APPEAL FROM: District Court of the Twelfth Judicial District, In and for the County of Hill, The Honorable John Warner, Judge presiding. COUNSEL OF RECORD: For Appellant: Douglas Giebel, pro se, Big Sandy, Montana For Respondents: LeRoy H. Schramm, Legal Counsel, Montana University System, Helena, Montana Submitted on Briefs: Decided: Filed: CIerI;. October 24, 1996 December 10, 1996 Justice Terry N. Trieweiler delivered the opinion of the Court. Pursuant to Section I, Paragraph 3(c), Montana Supreme Court 1995 Internal Operating Rules, the following decision shall not be cited as precedent and shall be published by its filing as a public document with the Clerk of the Supreme Court and by a report of its result to State Reporter Publishing Company and West Publishing Company. On June 13, 1995, Douglas Giebel filed a complaint in the District Court for the Twelfth Judicial District in Hill County, in which he alleged that was denied employment, he was an denied appropriate fair consideration grievance hearing for in violation of his rights to due process and equal protection, and was injured by reliance on a promise of employment, retaliation, blacklisting, malice, defamation, fraud, and a denial of freedom of speech. motions Both Giebel and the University System defendants filed for defendants' summary motion. judgment. The District Court granted the Giebel appeals the District Court's order which denied his motion for summary judgment and which granted the defendants' motion for summary judgment. We affirm the order of the District Court. We address seven issues on appeal: 1. Did the District Court err when it concluded that Giebel was not deprived of due process by MSU-Northern's employment search and hiring process? 2 2. Did the District Court err when it concluded that Giebel was not denied equal protection by MSU-Northern's employment search and hiring process? 3. Did the District Court err when it concluded that Giebel could not maintain a cause of action against MSU-Northern for a breach of the covenant of good faith and fair dealing? 4. Did the District Court err when it concluded that Giebel had failed to present a primafacie case of fraud? 5. Did the District Court err when it concluded that Giebel had not properly raised a claim of malice? 6. Did the District Court err when it concluded that it had no general right of review of university administrative decisions or their administrative processes relating to these decisions? 7. Did the District Court err when it concluded that Giebel had failed to exhaust his administrative remedies? FACTUAL BACKGROUND On June 15, 1993, Montana State Uni versi ty-Northern (MSU-Northern) sent a letter to Douglas Giebel to confirm that he had been hired as an assistant professor in the Theater jSpeech Communication Division of the Department of Humanities and Social Services pursuant to a "one-year temporary professional contract for the 1993 appointment school "extends year." for its implication of reappointment." The letter fixed made duration clear and that carries the no The contract which accompanied the letter of appointment indicated the term of Giebel's employment was from August I, 1993 to May 31, 1994. 3 On April 5, 1994, near the end of Giebel's one-year term of employment, Giebel another letter confirming the Giebel's contract to expire. appointment. academic MSU-Northern sent school's The letter stated: intent to allow "[YJ our temporary will be terminated as of the end of the 1993-94 year in accordance with the initial terms of your appointment." In the spring of 1994, the MSU-Northern campus conducted a job search to secure a permanent faculty member for the position held temporarily Department. by Giebel in the Theater/Speech Communication Giebel applied for the permanent position, and was one of 100 applicants considered for the job. The search committee for the permanent position was chaired by Dr. Stephen Sylvester, the head of the Department of Humanities and Social Services. Syl vester had become during the 1993-1994 academic year. acquainted with Giebel During that time, Sylvester was generally satisfied with the Giebel's work performance and anticipated that Giebel would have an excellent chance of being hired for the permanent position. Sylvester informed Giebel that his prospects for being hired were good. Between the time the permanent position was advertised in March 1994, and recommendation in the time mid-May, the search however , committee Sylvester finalized had position and opposed Giebel's candidacy for the job. made his opposition to Giebel changed its his Sylvester known to other search committee members and recommended that Giebel not be granted an interview for the position. In an affidavit filed with the District Court after 4 the selection process was complete, Sylvester cited several factors which led to his opposition of Giebel for the permanent position, including Giebel's trip to New York City with the student member of the search committee and his presentation of a fictitious award to that student during the University's Awards Day convocation; Giebel's deteriorating relationship with a tenure-track member of the Theater/Speech Communication Department; and the fact that Giebel's application for the permanent position was less impressive than those submitted by other candidates. In mid-May 1994, after learning that he had not been selected for the permanent position, Giebel wrote to the Commissioner of Higher Education and voiced his selection process. objection to In his response, the University's the Commissioner informed Giebel that" [b]efore grievances may be submitted directly to the Commissioner college of Higher chancellor." Education The they must be filed with Commissioner referred Giebel to the the Regent's appeals policy. On June 10, campus grievance 1994, Giebel filed a grievance pursuant to the procedure. Following a hearing before an eight-person grievance committee on July 14, 1994, MSU-Northern's Chancellor issued a written decision in which he denied Giebel's grievance. Nearly four months later, Giebel appealed the Chancellor's decision to the Commissioner on Higher Education. The Commissioner denied Giebel's appeal on the grounds that it had not been timely filed pursuant to Montana University System Policy 203.5.2, which requires that an appeal be filed "within 30 days of 5 the . [campus] decision." Giebel appealed the Commissioner's decision to the Board of Regents; however, on May 19, 1995, the Regents declined to entertain the appeal. On June 13, 1995, Giebel filed two complaints in the Twelfth Judicial District Court in which he alleged that he was improperly denied fair consideration for employment, was denied an appropriate grievance hearing in violation of his rights to due process and equal protection, and was injured by reliance on a promise of employment, retaliation, blacklisting, malice, defamation, fraud, and a denial of freedom of speech. Both Giebel and the University System defendants filed motions for summary judgment. The District Court concluded that there were no genuine issues of material fact and that the University System defendants were entitled to judgment The court therefore granted the University as a matter of law. System defendant's motion for summary judgment and denied Giebel's cross-motion for summary judgment. STANDARD OF REVIEW In this case, the District Court granted summary judgment to MSU-Northern and dismissed each of Giebel's claims. This Court reviews a district court's grant of summary judgment pursuant to Rule 56, M.R.Civ.P., district court. 95, 906 based on the same criteria applied by the StateFarmFire&Cas.Co.v.Powell (1995),274 Mont. P.2d 198, 200. Rule 56 (c), M.R.Civ.P., provides 92, that summary judgment is proper only when "there is no genuine issue as to any material fact and . the moving party is entitled to a judgment as a matter of law." 6 ISSUE 1 Did the District Court err when it concluded that Giebel was not deprived of due process by MSU-Northern's employment search and hiring process? Giebel maintains that MSU-Northern denied him the right to due process as guaranteed Constitutions. both the Montana and United States Both the Fourteenth Amendment to the United States Constitution, Constitution, by and Article prohibit person of life, a II, Section governmental 17, entity of the from Montana depriving a liberty, or property without due process of law. In this case, Giebel contends that the University deprived him of his "liberty right to contract for employment through the search process and his right to protection from invidious discriminatory actions." Giebel cites BoardofRegentsv. Roth (1972), 408 U.S. 564, to support his broad definition of the term "liberty interest." In Roth, the United States Supreme Court addressed the issue of whether the nonrenewal of a nontenured state teacher's contract without a hearing constituted the deprivation of a liberty or property interest. In evaluating the teacher's "property interest, " the Court stated: To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it. employment [T] he respondent's at Wisconsin State 7 "property" interest in University-Oshkosh was created and defined by the terms of his appointment. Those terms secured his interest in employment up to June 30, 1969. But the important fact in this case is that they specifically provided that the respondent's employment was to terminate on June 30. They did not provide for contract renewal absent "sufficient cause." Indeed, they made no provision for renewal whatsoever. Thus, the terms of the respondent's appointment secured absolutely no interest in re-employment for the next year. They supported absolutely no possible claim of entitlement to re -employment. Nor, significantly, was there any state statute or University rule or policy that secured his interest in re-employment or that created any legi timate claim to it. In these circumstances, the respondent surely had an abstract concern in being rehired, but he did not have a property interest sufficient to reauire the University authorities to give him a hearing when they declined to renew his contract of employment. Roth, 408 U.S. at 577-78 (footnote omitted) (emphasis added). The Court also declined to find a liberty interest in the nonrenewal of the teacher's one-year contract. Specifically, the Court stated: "It stretches the concept too far to suggest that a person is deprived of 'liberty' when he simply is not rehired in one job but remains as free as before to seek another." Roth, 408 U.S. at 575 (citing Cafeteria Workersv. McElroy (1961), 367 U.S. 886, 895-96). Based on the principles of Roffi, the District Court concluded that Giebel was not deprived of either a liberty interest or a property interest by the expiration of his one-year contract and by the Uni versi ty' s decision tenure-track position. 643 P.2d 578. not to hire him for the permanent See also Lelandv. Heywood (1982), 197 Mont. 491, The court noted that, like the teacher in Roth, Giebel was hired pursuant to a one-year contract for employment; 8 that his employment expired pursuant to the terms of his contract; and that that expiration did not provide Giebel with a legitimate claim of entitlement which would rise to the level of a protected interest. The court further noted that Sylvester's alleged assurances of future employment could not form the basis for a claim of entitlement because "college administrators in this state have no authority to contract with faculty members different than those approved by the Board of Regents." Mont. at 497, 643 P. 2d at 581. on terms Leland, 197 The court therefore held that Giebel was not unconstitutionally deprived of life, liberty, or property without due process of the law. We hold that the District Court correctly concluded that Giebel had neither a liberty nor a property interest in continued employment with MSU-Northern. We therefore uphold that portion of the court's summary judgment order which concluded that Giebel was not deprived of due process by MSU-Northern's employment search and hiring process. ISSUE 2 Did the District Court err when it concluded that Giebel was not denied equal protection by MSU-Northern's employment search and hiring process? Giebel asserts that he was denied equal protection of the law by MSU-Northern's employment search and hiring process. Specifically, Giebel maintains that Sylvester's opposition to his candidacy placed him at a serious disadvantage during the search committee's deliberations. The District Court, however, summarily 9 denied Giebel's equal protection claim on the grounds that Giebel had neither identified a "class" of individuals who had been disadvantaged by the University's search and hiring practices nor asserted the deprivation of a fundamental right from those practices. This Court has previously evaluated an equal protection claim from a University System faculty member who claimed a denial of equal protection based on the University's failure to grant him tenure. Akhtarv. VandeWeter;ng (1982),197 Mont. 205,642 P.2d 149. In Akhtar, we stated: Appellant claims he was discriminated against in that he was treated differently from other tenure candidates because a different standard of excellence was applied to his tenure evaluation than to others. We agree with the Fourth Circuit which found that "not every difference in promotion treatment rises to the level of constitutional deprivation either under equal protection or due process." Clarkv. WhWng (4th Cir. 1979), 607 F.2d 634, 638. In Clark, an associate professor claimed he was denied equal protection because different standards were used in evaluating his promotion qualifications than were used in passing on promotions of other faculty members. President Van de Wetering testified that the tenure evaluations demanded a weighing and balancing of all the areas of consideration for all the candidates. Although there was sharp disagreement among appellant's colleagues, the final determination was that appellant's professional performance did not meet the overall professional academic standards needed to grant tenure. The District Court concluded the denial of tenure was not arbitrary but was an exercise of academic judgment. It also found no evidence had been presented which indicated the denial resulted from discrimination 10 or that the procedures followed were intended to penalize a certain class. We agree. Akhtar, 197 Mont. at 218-20, 642 P. 2d at 157. In this case, indicated that the as in Akhtar, no evidence was presented which decision not to hire Giebel "resulted from discrimination or that the procedures followed were intended to penalize a certain class." First, as the District Court correctly noted, Giebel has not asserted that he was a member of a particular "class" of individuals which was disadvantaged by the school's hiring process. Second, there is no evidence of any discrimination in the committee's decision to hire another candidate. There was ample evidence presented to the District Court to establish that that chosen candidate was better qualified and had a more impressive resume than Giebel. Therefore, because we hold that Giebel did not demonstrate that the search committee's procedures were discriminatory or that those procedures were intended to penalize a certain class, we affirm that portion of the District Court's summary judgment order which concluded that "Giebel's complaint is insufficient for a claim of a violation of his equal protection rights." ISSUE 3 Did the District Court err when it concluded that Giebel could not maintain a cause of action against MSU-Northern for a breach of the covenant of good faith and fair dealing? In his amended complaint, Giebel asserted that MSU-Northern's search and hiring process failed to "conform to the covenant of 11 good faith and fair dealing." Specifically, Giebel maintained that the University did not follow its established hiring policies and did not act in good faith during the hiring process. The District Court, however, dismissed Giebel's claim on the ground that a claim of a breach of the covenant of good faith and fair dealing "may arise only from a termination of employment." Because the court determined that Giebel was merely a job applicant for a permanent position with the University, the court concluded that Giebel's claim could not form the basis for recovery. In this case, Giebel was employed by MSU-Northern pursuant to a one-year employment contract and was specifically informed that the term of his employment "extends for its fixed duration and carries no implication of reappointment." In addition, prior to the contract, expiration notified of appointment of the "as of his fixed employment University's the end intention of the accordance with the initial terms of to 1993 - 94 [his] Giebel terminate academic appointment." year was his in Giebel does not, however, challenge the University's decision to allow his one-year contract to expirej instead, Giebel challenges the University's allegedly unfair treatment of him as a job applicant for a permanent position. Neither this Court nor the Legislature has extended the covenant of good faith and fair dealing to the hiring process. We will not do so on the basis of the facts in this case. 12 Therefore, we affirm the District Court's decision to grant summary judgment and dismiss Giebel's claim for breach of the covenant of good faith and fair dealing. ISSUE 4 Did the District Court err when it concluded that Giebel had failed to present a primafacie case of fraud? In his original complaint before the District Court, Giebel generally alleged guarantees of that he employment. had been defrauded by More than five months Sylvester's later, after discovery had closed and the University had filed a motion for summary judgment, Giebel filed a Accept Amended Complaint II." document entitled, In that document, "Motion to Giebel alleged with particularity that the search committee had been defrauded by a secret ballot which had been employed during the vote on Giebel's candidacy. Before the District Court could rule on Giebel's motion to amend his complaint, however, Giebel filed a cross-motion for summary judgment. Giebel never renewed or briefed his motion and the District Court neither ruled on the motion nor accepted that document as a part of the record. In an exceptional effort to accommodate Giebel, the District Court analyzed Giebel's claim of fraud as set forth attempted amendment. in both his original complaint and in his The court concluded, however, that (1) Giebel could not allege fraud based on any statements by Sylvester of a promise of future intent and (2) that Giebel did not have standing to allege fraud on behalf of the search committee. 13 The court therefore granted summary judgment to MSU-Northern and dismissed Giebel's claim of fraud. Rule 9(b), M.R.Civ.P., provides that" [i]n all averments of fraud . the circumstances constituting fraud. stated with particularity." . shall be In his original complaint, Giebel alleges in only the most general of terms that he was defrauded by Sylvester's promises of future employment. insufficient to satisfy either Rule Court's requirement 9 (b), That allegation was M.R.Civ.P., or this that a plaintiff must allege the requisite elements of fraud. See, e.g., Barrett v. Holland & Hart (1992), 256 Mont. 101, 106, 717 i Grenz v. Medical Management Northwest (1991), 845 P.2d 714, Mont. 58, 63, 817 P.2d 1151, 1154. 250 Furthermore, as the District Court correctly noted, even if Giebel's claim had been pled with the requisite particularity, "[t]he rule is that fraud cannot be based on and allegation of a promise of future intent." Valley School (N.C. Ct. App. 1985), 334 S.E.2d 404, 407. Braun v. Glade See also Davis v. LDS Church (1993), 258 Mont. 286, 2 93, 852 P. 2 d 640, 644 i Marlin v. Drury (1951), 124 Mont. 576, 584, 228 P.2d 803, 807. We hold that the District Court properly dismissed Giebel's original claim of fraud based on the fact that the allegation of fraud was not pled with the requisite particularity, and based on the general rule that promises of future intent cannot form the basis for a claim of fraud. We further hold that the District Court properly dismissed Giebel's amended claim of fraud based on its conclusion that Giebel did not have standing to allege fraud on 14 behalf of the search committee. Such a holding is consistent with the settled law that "if a false statement is made to one person to induce him to act, the balance of the world has no legal right to rely on it." 37 Am. (citations omitted). District Court's Jur. We order 2d Fraud and Deceit 244 p. § 324 (1968) therefore affirm that portion of which granted the University the summary judgment and dismissed Giebel's claim of fraud. ISSUE 5 Did the District Court err when it concluded that Giebel had not properly raised a claim of malice? In this case, Giebel has alleged "malice" as a separate cause of action. However, judgment order, as the District Court noted in its summary "malice, by itself does not form the basis for a separate cause of action." "Malice is basically 52 Am. Jur. 2d Malice § I, no p. more 161 than (1970) a state of mind." (citation omitted). such, it cannot alone form the basis for a cause of action. As The existence of malice may either serve to prove a necessary element of a particular offense or cause of action, factor to enhance damages. or may serve as a See, e.g., First Bank v. Clark (1989), 236 Mont. 195, 204, 771 P.2d 84, 90 (requiring existence of malice as element of malicious prosecution) i Section 27-1-221, MCA (providing that punitive damages may be available when actual malice is proven) . It is, in fact, well established that" [a] legally permissible act does not give rise to an actionable injury simply because it is 15 performed with evil intent or an improper motive." Actions § 54, p. 758 In Montana, injure another established ( 19 94) . "malice" is defined as a "wish to vex, annoy, or person or an either by proof 1-1-204(3), MCA. 1 Am. Jur. 2d intent to do or presumption of a wrongful law." act, Section However, whether Sylvester "intended to injure Giebel," as Giebel alleges, is irrelevant unless that state of mind led to conduct which gives rise to a judicially cognizable claim. As the District Court correctly concluded: "Mr . Sylvester's actions in not supporting Mr. Giebel as a candidate for the open tenure faculty position, and his alleged actions of discouraging other members of the search committee from pursuing him as a candidate, do not constitute an illegal, impermissible act against Mr. Giebel." We therefore hold that the District Court's conclusion that Giebel's allegation of malice did not state a claim for which he was entitled to recover, is correct. We affirm that portion of the District Court's summary judgment which dismissed this claim. ISSUE 6 Did the District Court err when it concluded that it had no general right of review of university administrative decisions or their administrative processes relating to these decisions? When Giebel MSU-Northern, he was not filed an hired for internal the permanent grievance University System grievance procedure. position pursuant the Giebel's grievance was denied by the MSU-Northern Chancellor on July 25, 1994. 16 to at Giebel's appeal of his grievance was denied by the Commissioner of Higher Education on March 3, 1995, on the ground that it was untimely. After the Board of Regents declined to entertain Giebel's appeal of the Commissioner's jurisdiction of the decision, District Giebel Court attempted to review to the policies and its grievance and appeals process. invoke the University's In its order granting the Uni versi ty' s motion for summary judgment, however, the court concluded that there exists no general statutory right of review of a University System's administrative actions. Ordinarily, administrative decisions are subject to judicial review pursuant to the Montana Administrative Procedure Act (MAPA). See §§ 2-4-101 through -711, MCA. Pursuant to § 2-4-102 (2) (a) (iii) , MCA, however, both the Board of Regents and the Montana University System are exempt from MAPA's provisions. Therefore, no independent right of judicial review of University administrative decisions exists pursuant to MAPA, nor has that right been created by some other means. "In Montana, only the legislature may validly provide for judicial review of agency decisions." Nye v. Department of Livestock (1982), 196 Mont. 222, 226, 639 P.2d 598, 498, 500. As evidenced by MAPA, however, the Legislature has chosen not to provide for a general review of University System decisions. As made clear by the District Court, although no specific right of judicial review is provided by MAPA, a plaintiff may still challenge a University System administrative decision by alleging a judicially-cognizable cause of action. 17 In this case, the court merely refused University to review System; specific allegations Giebel's claims the the court against of general denial did, the of decision however, University due process, reached address when it denial by the Giebel's reviewed of equal protection, denial of freedom of speech, breach of the covenant of good faith and fair dealing, fraud, defamation, intentional infliction of emotional distress, and blacklisting. We hold that the District Court correctly concluded that it had no general decisions decisions. or right their of review of administrative University processes administrative relating to those We therefore affirm that part of the District Court's summary judgment order in which the court declined to review the general administrative decision process of the Montana University System. ISSUE 7 Did the District Court err when it concluded that Giebel had failed to exhaust his administrative remedies? In this case, the District Court held that Giebel had "failed to follow both common law and state statutory mandates which require that he exhaust all administrative remedies before bringing a claim in district court." Specifically, the court concluded that Giebel had failed to abide by both the Board of Regent's appeals policy and the common law doctrine of exhaustion of remedies. The court therefore concluded that several of Giebel's claims which were informally alleged in Giebel's numerous and lengthy filings were barred by the doctrine of exhaustion. 18 It is the general policy of this state, as set forth in both statute and case law, to require a complainant to exhaust his administrative remedies before he may access the judicial system. The Administrative Procedure Act, in fact, allows judicial review only to "[a] person who has exhausted all administrative remedies available within the agency." Section 2-4-702, MCA. Because the University System is exempted from the Administrative Procedure Act, Giebel's claim is subject to only the common law doctrine of exhaustion, which this Court has recognized as "the general principle that ordinarily administrative remedies must be exhausted before applying for judicial review." State ex rei. Sletten Constr. Co. v. Great Falls (1973), 163 Mont. 307, 311, 516 P.2d 1149, 1151. In this case, Giebel administrative appropriate failed to remedy in avail a himself timely of the fashion. Specifically, Giebel failed to comply with Section 203.5.2 of the Montana University System Policy, which requires that an appeal of a campus grievance decision must be filed within thirty days of that decision. Instead, although the Chancellor's decision was rendered on July 25, 1994, Giebel did not file his appeal of that decision until November 22, 1994. Although Giebel corresponded with the Commissioner of Higher Education several times during the intervening months, statements of the Commissioner responded with only general policy and continuously advised Giebel that his appeal would have to conform with Section 203.5.2 of the University 19 System Policy. The Commissioner denied Giebel's appeal on March 3, 1995, on the ground that the appeal was not timely filed. It is well established that failure to make a timely appeal of an administrative decision may result administrative remedies. in a failure to exhaust As one treatise has noted: If the petitioner once had an opportunity to pursue a then-available administrative remedy within a specified time period, but the petitioner did not pursue the remedy within the time it was available, the agency action may be final by the time the court decides whether to review the action. Yet, in that situation, the court still may decline to review the final agency action because of the petitioner's failure to have exhausted the administrative remedies that were previously available. Kenneth Culp Davis & Richard J. Pierce, Treatise, vol. 306 (emphasis added). II, § The 15.1 at Montana reflects this proposition. Jr., Administrative Law (1994) University It states: (citation System omitted) Policy also "When a party fails to exercise the appeal rights guaranteed by this policy the party accepts the lower level decision as final and waives the right to contest the matter further." Montana University System Policy, Section 203.5.2. In this case, the District Court correctly concluded that Giebel did not exhaust his administrative remedies because he did not file a timely appeal of the Chancellor's decision. On that basis, the court correctly concluded that Giebel had waived his right to contest several claims University Chancellor and the which were campus grievance resolved by committee. the We therefore affirm that portion of the District Court's decision 20 which concluded that several of Giebel's claims were barred by the doctrine of exhaustion and could not be addressed by the court. Based on our conclusions that there are no genuine issues of material fact presented in this case, and that the Uni versi ty System defendants are entitled to judgment as a matter of law, we affirm the District Court's order which granted the defendants' motion for summary judgment and denied Giebel's cross-motion for summary judgment. We concur: Justices 21
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