DeBerg v. RSM McGladrey, Inc., No. A07-1731 (Minn. App. 10/7/2008)

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Craig J. DeBerg, Appellant, v. RSM McGladrey, Inc., a Delaware corporation, et al., Respondents.

No. A07-1731.

Court of Appeals of Minnesota.

Filed October 7, 2008.

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).

Appeal from the District Court, Hennepin County, File No. 27 CV-0703473.

James H. Kaster, David Einer Schlesinger, Nichols Kaster, PLLP, Minneapolis, MN (for appellant)

James B. Sherman, Kevin M. Mosher, Wessels Pautsch & Sherman, P.C., Minneapolis, MN (for respondents).

Considered and decided by Halbrooks, Presiding Judge; Klaphake, Judge; and Schellhas, Judge.

UNPUBLISHED OPINION

KLAPHAKE, Judge.

Appellant Craig J. DeBerg filed an administrative charge with the Minnesota Department of Human Rights (the department) alleging age discrimination against his former employer, respondents RSM McGladrey, Inc., and McGladrey & Pullen, LLP (collectively "McGladrey"). Without notifying the department, appellant subsequently began a civil action asserting these same claims against McGladrey and a claim of tortious interference with contract against respondent Donald Natenstedt. Upon receipt of notice of the suit from respondents, the department withdrew the administrative charges.

On respondents' motion, the district court granted summary judgment in favor of respondents, concluding that appellant's civil action was time-barred and that his tortious interference with contract claim was preempted by the Minnesota Human Rights Act (the act), Minn. Stat. §§ 363A.001-.38 (2006).

Because (1) the provisions of the act toll the statute of limitations during the time an administrative charge is pending before the department, (2) appellant's failure to notify the department was cured by respondents' notice to the department before its motion to dismiss, and (3) genuine issues of material fact preclude summary judgment on the tort claim, we reverse and remand to the district court.

FACTS

McGladrey employed appellant from 1993 to December 9, 2005, as a certified public accountant. Respondent Natenstedt became the managing director of McGladrey's Minneapolis offices in 2004.

In 2005, McGladrey hired Gail Robertson, who was in her thirties, to assist appellant, who was then 50 years old. Shortly after this, McGladrey proposed new, less attractive compensation arrangements to appellant. At the same time, various managers made remarks to appellant, which he perceived to be age related. One partner said he did not think appellant could continue to produce at historic levels; several managers asked him how long he expected to continue working; and someone told appellant that he needed professional coaching to help him deal with younger people.

In October 2005, the manager of SCEU, another unit of McGladrey, approached appellant about working for that unit under his current compensation terms. In order to do so, appellant had to secure the approval of Natenstedt. This approval was apparently not forthcoming. On December 9, 2005, appellant made a counterproposal for a new compensation agreement to McGladrey. Instead, McGladrey terminated appellant's employment and placed Robertson in his position.

On December 8, 2006, appellant filed an administrative charge with the Minnesota Department of Human Rights (the department), alleging age discrimination in employment. On February 20, 2007, while this charge was pending, appellant served a summons and complaint asserting one count of age discrimination against McGladrey and one count of tortious interference with contract against Natenstedt. Appellant did not notify the department, as required by Minn. Stat. § 363A.33, subd. 1(3).

On March 7, 2007, an employee of respondents' attorney, Linda Elias, contacted the department to learn the status of the administrative charge. The charge was still pending and Elias informed the department that appellant had begun a civil action. On March 8, 2007, the department notified the parties that it had withdrawn the administrative action. On March 13, 2007, respondents initiated a motion to dismiss for failure to state a claim upon which relief can be granted. On May 7, 2007, appellant filed a response with additional material outside of the pleadings, including the charge filed with the department, affidavits of service, and the department's termination letter. Respondents filed a reply memorandum and attached Elias' affidavit.

The district court heard the motion on May 14, 2007. The district court's July 3, 2007 order granted summary judgment to respondents and dismissed the complaint with prejudice, stating that appellant's civil action was time-barred because appellant initiated the suit more than one year after the occurrence and failed to give the commissioner notice. The court further held that appellant's tort claim was preempted by the act.

On July 30, 2007, the district court denied appellant's motion to reconsider. Appellant moved on August 17, 2007, for relief from the judgment under Minn. R. Civ. P. 60.02; respondents filed a reply on August 28, 2007. Without waiting for a decision, appellant filed a notice of appeal of the district court's grant of summary judgment with this court on September 7, 2007. On September 18, the district court denied appellant's motion, permitting this appeal to proceed.

D E C I S I O N

Standard of Review

When a party asserts the defense that a pleading fails to state a claim upon which relief can be granted, and matters outside the pleadings are presented to and not excluded by the court, the court may treat the motion as one for summary judgment. Minn. R. Civ. P. 12.02. The court must give the parties a reasonable opportunity to present all pertinent information. Id. If, upon consideration of all record evidence, there are no genuine issues of material fact and either party is entitled to judgment as a matter of law, the court must issue a summary judgment. Minn. R. Civ. P. 56.03. We review the district court's grant of summary judgment to determine if there are any genuine issues of material fact and if the district court erred in its application of the law. Antone v. Mirviss, 720 N.W.2d 331, 334 (Minn. 2006).

Statute of Limitations

Minn. Stat. § 363A.28 provides that an aggrieved party may file an administrative charge with the department or bring a civil action alleging violations of the act. Id., subd. 1. In either case, the administrative charge or the civil action must be brought within one year of the occurrence providing a basis for the action. Id., subd. 3. The one-year limitation is tolled during the time the parties engage in a dispute resolution process. Id.

Minn. Stat. § 363A.33 sets forth the requirements for bringing a private civil action to redress an unfair discriminatory practice. Either the commissioner or the aggrieved party can file an action in district court. Id., subd. 1. In addition, a party can file a civil action (1) within 45 days of department notification that it will not be pursuing a charge; (2) within 45 days of receiving notification that the commissioner has reaffirmed a determination of no probable cause; or (3) if more than 45 days have elapsed since filing and no hearing has been held or agreement reached, upon notice to the commissioner of the party's intent to file a civil action. In the latter case, the suit must be commenced within 90 days after giving notice. Id.

The district court concluded that the civil action must be filed within one year of the discriminatory occurrence. We disagree. An initial claim, either administrative or civil, must be made within a year of occurrence. Minn. Stat. § 363A.28, subd. 3. But Minn. Stat. § 363A.33, subd. 1(1-3), which permits the filing of a civil suit upon certain conditions, cannot be reconciled with the rest of the statute unless it acts to extend the time for filing a civil suit, in effect tolling the statute of limitations. See Minn. Stat. § 645.17 (2006) (setting forth presumption that legislature intended all parts of a statute to be effective).

For example, the commissioner is required to make a determination of probable cause within one year of filing of a charge, with limited exceptions. Minn. Stat. § 363A.29, subd. 2. Under the district court's reasoning, a party would be unable to bring a civil action within 45 days of receiving notice from the department of its decision not to pursue a charge, even if the department had taken up to a year to make that determination, despite Minn. Stat. § 363A.33, subd. 1(1). This would make the provisions of Minn. Stat. § 363A.33 largely meaningless, surely not a result intended by the legislature. See Minn. Stat. § 645.08 (prohibiting construction of statutes "inconsistent with the manifest intent of the legislature").

The timely filing of an administrative charge effectively tolls the limitations period as to a subsequent civil action if the aggrieved party follows the statutory procedure. Thus, the district court's blanket conclusion that appellant was barred from bringing a civil action more than one year after the occurrence is erroneous.

Respondents suggest that appellant's civil action is barred because he neglected to give notice to the commissioner before filing his suit. Minn. Stat. § 363A.33, subd. 1(3), permits an aggrieved party to file a civil action if more than 45 days have passed since the filing of the administrative charge, as long as no hearing has been held, the commissioner has not entered into a conciliation agreement, the commissioner is given notice of the charging party's intent to bring a civil action, and a civil action is commenced within 90 days of the notice. The clear intent of these requirements is to avoid duplicative actions while encouraging speedy resolution of a claim, either administratively or by civil action. Here, although appellant failed to give notice of his intent to bring a civil action, no hearing was pending before the...