IN COURT OF APPEALS
City of St. Paul,
File No. 06-342
John J. Choi,
Considered and decided by Minge, Presiding Judge; Stoneburner, Judge; and Wright, Judge.
If prejudicial, an arbitrary time limit on a licensee’s opportunity to present his case at a license-cancellation hearing violates the licensee’s right to procedural due process.
a certiorari appeal, relator Ron Staeheli challenges the St. Paul City
Council’s decision to cancel his license to evaluate homes under the
Relator started working as a licensed TISH evaluator in the early 1990s. Between 2002 and 2005, the St. Paul TISH program received eight complaints charging relator with inconsistencies between his disclosure reports and the city’s evaluator guidelines. Between November 2002 and January 2005, the TISH board took adverse action against relator on two occasions. Both actions were prompted by multiple complaints. On both occasions, relator’s license was suspended for 30 days and relator was placed on probation for a year. While on probation in April 2004, relator performed an evaluation that resulted in the license revocation that is the subject of this appeal.
November 2003, relator evaluated a home on
July 2005, a TISH administrator received a phone call from the woman who had purchased
Several days later, TISH administrators received another oral complaint from the homeowner, which the homeowner reduced to writing. The homeowner reported that relator had called her and offered to resolve the charges privately, but she refused. Ten minutes later, the homeowner received a phone call from a female who identified herself as “Susan Brown from the City Attorneys office.” The caller claimed to be investigating the TISH complaint and asked numerous questions about it. The caller refused to answer the homeowner’s questions and abruptly ended the conversation.
In August 2005, a city employee met relator, relator’s son, the homeowner, and her plumber at the home so that relator could personally observe the home’s plumbing and electrical deficiencies. Although the homeowner told relator that he could not videotape her property, while she was in the basement with the others, relator attempted to videotape documents on the kitchen table. The homeowner also reported that relator was “very angry, abrupt, [and] making accusations about others who might have been involved in assessing the plumbing issues.”
On November 4, 2005, TISH sent relator notice that the TISH board intended to consider adverse action. The notice scheduled a disciplinary hearing for November 29. Relator requested a continuance, and the hearing was reset to January 10, 2006. A hearing examiner conducted relator’s disciplinary hearing. The TISH board then deliberated. On February 8, by a 4-1 vote, the board adopted findings and revoked relator’s TISH license. Relator appealed to the St. Paul City Council. The City Council held a public hearing in April 2006, and, based on the record of the TISH board, confirmed the board’s decision. The mayor approved the decision. This certiorari appeal follows.
I. Did the city’s decision deprive relator of procedural due process?
II. Is the city’s decision based on an error of law?
III. Is the city’s decision supported by substantial evidence?
IV. Was the city’s decision arbitrary and capricious?
council action is quasi-judicial and subject to certiorari review “if it is the
product or result of discretionary investigation, consideration, and evaluation
of evidentiary facts.” Pierce v. Otter Tail County, 524 N.W.2d
308, 309 (Minn. App. 1994), review denied
(Minn. Feb. 3, 1995). Certiorari review is
limited to “questions affecting the jurisdiction of the board, the regularity
of its proceedings, and, as to merits of the controversy, whether the order or
determination in a particular case was arbitrary, oppressive, unreasonable,
fraudulent, under an erroneous theory of law, or without any evidence to
support it.” Dietz v. Dodge County, 487 N.W.2d 237, 239 (
first issue is whether the city of
due process requires adequate notice and a meaningful opportunity to be
heard. Mathews v. Eldridge, 424
[f]irst, the private interest that will be affected by the official action; second the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.
Relator’s license is important to his livelihood and constitutes a substantial private interest, the deprivation of which is accorded the protection of procedural due process. Relator argues that the decision to cancel his evaluator’s license deprived him of procedural due process in three ways.
A. Length of the TISH Hearing
Relator contends that he was not given enough time at the TISH hearing to present evidence, cross-examine witnesses, and make his case. Relator and the city were each given 45 minutes to present their positions, which included making oral statements, presenting testimony, and cross-examining witnesses. In addition, they were allowed to place written materials and exhibits into the record. Following the initial hearing, the parties were given one week to submit additional documents and written argument for the board’s consideration. A follow-up hearing was held, and each party was given 30 minutes to present rebuttal evidence. The time that the TISH board members used to ask and obtain answers to their questions was not counted toward either party’s time limit.
Relator contends that the 45-minute primary presentation, 30-minute rebuttal, and the opportunity to present written material did not permit him to adequately present his position. We are sympathetic to respondent’s concern. While efficiency may be an important and unavoidable consideration in conducting adjudicatory proceedings, there is a real danger that administrative bodies will arbitrarily exclude probative evidence based on an efficiency rationale. Cf. 22 Charles Alan Wright & Kenneth W. Graham Jr., Federal Practice and Procedure: Evidence § 5219, at 299 (1978). At the same time, we recognize that municipalities are qualified to measure the costs and benefits of their procedures, and to balance these considerations against the property interests at stake. See 2 Richard J. Pierce, Jr., Administrative Law Treatise § 9.5, at 636 (4th ed. 2002). We are cautious in imposing additional procedures when the administrative body has carefully designed its procedural scheme. See id.
Here, the time limit imposed at the TISH hearing appears to have been arbitrary. There is no indication in the record that the time allotted to relator was determined on the basis of this particular dispute or that the city balanced the property interest at stake with the cost of providing additional time to relator. Given the complexity of the charges outlined in the formal complaint, the time allotted relator may have been inadequate.
there is also no indication in the record that relator was prejudiced by the
city’s time limit. Relator does not claim
that he or any witnesses were unable to testify due to the time restraint, and
relator has not shown that he was unable to present material evidence or that
the board was unable to thoroughly consider an important issue due to the time limit. The administrative burden of permitting more
time for a hearing may be minimal, and the time allotted may have been
inadequate. But absent even a facial
showing of prejudice, we cannot conclude that additional time would have
increased the fairness of the hearing for relator, and we will not reverse and
require the city to afford a new hearing with greater time available. See
Based on the record in this proceeding, we emphasize that a fair hearing is a cornerstone of due process, that the application of arbitrary, inflexible time limits has the inherent potential to prejudice a licensee’s ability to present his or her case, and that a credible claim of prejudice would constitute reversible error. A licensee’s interest in the loss of his or her livelihood is substantial compared to the modest cost of the time necessary for an adequate hearing.
B. Timely Notice
also argues that the city deprived him of procedural due process by failing to
provide timely notice of the January 2006 hearing or the substantive content of
the hearing. “Due process requires that
a defendant must be given adequate time to investigate the charges and prepare
its defense.” In re License of W. Side Pawn, 587 N.W.2d 521, 523 (
Relator asserts that he was prejudiced and his due process right to notice was violated because the hearing was canceled shortly before January 10 and then rescheduled on short notice. The record indicates that relator requested that the January 10 hearing be delayed, that a city official emailed relator on December 28, 2005, informing him that he would “ask that the action on the 10th be delayed,” that the January 10 hearing was never canceled, and that on January 9, 2006, relator received confirmation that the hearing would not be rescheduled. Because the January 10 hearing date was never canceled, and because the record indicates that relator received notice of the date, time, location, and substance of the hearing, we conclude that the notice met the time requirement of due process.
C. Surprise Complaints
Relator also argues that he was not given adequate notice of the substantive complaints filed against him. The record indicates that relator received a detailed report from TISH, dated September 9, 2005, which recounted the history of complaints against relator, summarized the current complaints, and identified potential code violations. The document was prepared as a report to the TISH board, and relator does not dispute receipt of this report. The report sufficiently described the complaints evaluated at the hearing, and it put relator on notice of the standards under which his conduct would be evaluated, including the evaluators’ code of ethics. And, within days of the initial complaint, relator was allowed to personally inspect the home.
further argues that the city presented “surprise additional complaints” at the
TISH disciplinary hearing. According to
relator, this additional material “added allegations that [relator] violated
On this record, we conclude that the reference to the criminal law on impersonation was not error and did not unfairly prejudice relator. We further conclude that although the report was not designed as a formal notice of charges and was not a model of clarity, it was sufficient to inform relator of the proposed action. The notice requirements of procedural due process were met.
next issue is whether the city’s decision was based on an erroneous interpretation
A. Basis for Cancellation of Relator’s License
relator argues that under the standards established by the city of
Several sources of legal authority are relevant to revoking a TISH evaluator license: chapter 310 of the St. Paul Legislative Code (SPLC), chapter 189 of the SPLC, and the TISH board’s Guidelines for Disciplinary Action.
310 of the SPLC establishes uniform license procedures for the city of
SPLC sets forth a presumptive-penalty scheme for license violations. Under chapter 310, presumptive penalties are
calculated according to the “[t]ype of [v]iolation” and the number of times a
licensee has “appear[ed] before the [city] council.” SPLC § 310.05(m), (v) (2005). Unless the violation is a felony or results
in “[d]eath or great bodily harm,” revocation of a license is appropriate only
after three prior appearances. SPLC §
310.05(m). Deviation from the
presumptive penalties is permissible for “substantial and compelling reasons,”
so long as the council provides “written reasons” to explain the departure.
In addition to establishing the TISH board and delegating certain responsibilities to the board, chapter 189 of the SPLC governs the conduct of TISH licensees. Section 189.14 provides: “(1) Each truth-in-sale of housing evaluator, when preparing a disclosure report, shall set forth any structural defects, any immediate hazards to health and safety, and/or other deviation(s) from the standards set forth in the evaluator guidelines.” SPLC § 189.14(a)(1) (2004). Section 189.15 describes the duties of TISH evaluators as follows:
(a) Each evaluator is required to:
(1) Comply with the code of ethics;
(2) Complete the disclosure report in accordance with the standards in the evaluator guidelines;
. . . .
(b) Failure to comply with any one or more of these duties shall be sufficient cause for the board to take adverse action against the license or licensee. . . .
SPLC § 189.15 (2004).
The final source of authority is the city’s TISH Guidelines for Disciplinary Action. The city code delegates to the TISH board the responsibility to: develop, adopt, and issue evaluator guidelines; develop and enforce a code of ethics for evaluators; and take necessary adverse action against licensed evaluators. SPLC § 189.10(a) (2004). Pursuant to this authority, the TISH board developed and published guidelines that the city council adopted in April 2002. These guidelines govern the board’s imposition of adverse action on TISH licensees. In relevant part, the guidelines provide:
An evaluator or evaluator’s license issued under Chapter 189 may be denied, revoked, suspended, canceled, not renewed or subject to other adverse action if the evaluator:
. . . .
2. Has intentionally or by established pattern violated any of the provisions of Chapter 189 or any duties specifically required by Sec. 189.15.
. . . .
8. Has been the subject of substantiated complaints for his/her evaluation services.
9. Has demonstrated a pattern of incompetency in conducting evaluations.
Here, the legal basis for the board’s cancellation of relator’s license is not clearly stated in the board’s written decision. Finding seven comes closest to stating the explicit legal authority on which the board’s decision is based, stating:
The TISH Board’s disciplinary procedure was adopted based on Saint Paul Legislative Code Chapter 310, Uniform License Procedures. It provides that for a fourth violation resulting in adverse action the Board may impose any of the following penalties: revocation or suspension of the TISH license for a fixed period of time, refusal to renew the TISH license, or cancellation of the TISH license permanently. These guidelines are consistent with Saint Paul Legislative Code Chapter 310.05 (m) (2) . . ., which provides that the presumptive penalty for a fourth violation is revocation.
seven is unclear. It invokes the
“Board’s disciplinary procedure[s],” but it incorrectly describes the content
of those procedures by stating that chapter 310’s presumptive-penalty scheme
“provides that for a fourth violation resulting in adverse action the board may
. . . cancel [a] TISH license permanently.” Although the board’s disciplinary procedures
and guidelines for disciplinary action do not contain a parallel provision, the
board’s guidelines for disciplinary action do state that when an evaluator “[h]as
been the subject of substantiated complaint(s)” or “[h]as demonstrated a
pattern of incompetency,” the presumptive penalty for a Class 4 violation is
cancellation of the evaluator’s license.
TISH Guidelines at 1. A Class 4
violation includes “an excessive number of founded complaints.”
It is unclear what legal authority the board relied on for its decision, but we conclude that it is logical to read the decision as invoking the guidelines’ standards and presumptive scheme, as opposed to the scheme in chapter 310. Finding one supports this conclusion by emphasizing the recurring complaints filed against relator. The board’s closing statement that it canceled relator’s license due to “the long-term repetitive nature of the violations of [relator]” also supports our interpretation of the board’s decision. The board’s findings include eight substantiated complaints of report inconsistency and another substantiated complaint involving misconduct. Thus, the board’s determination, though unclearly expressed, is not outside the disciplinary guidelines.
Relator argues that because he only appeared before the city council and adverse action was taken on two previous occasions, the board’s decision was legally erroneous. Relator’s argument assumes that the board was limited by SPLC chapter 310 in penalizing relator. But the SPLC delegates to the board the authority to develop and enforce evaluator guidelines, and, accordingly, the board was permitted to take adverse action pursuant to TISH Guidelines. Relator does not appear to challenge the adoption of the guidelines themselves and does not argue that the guidelines are subject to the scheme in chapter 310. We also note that the board’s “[d]etermination” emphasized the “serious nature” of relator’s violations, the “long-term repetitive nature” of the violations, relator’s “ongoing misunderstanding of the TISH program and its mission,” and that relator was on probation at the time of the inspection at issue. Even if the board’s decision were based on chapter 310 of the SPLC, these considerations provide “substantial and compelling reasons” to depart from the presumptive penalty.
Because we interpret the board’s decision to be based on the TISH Guidelines, and the guidelines contain sufficient legal authority for the board’s action, we conclude that the board did not exceed its authority in terminating relator’s license.
B. Writing Requirement
relator argues that cancellation of his license must be reversed because the board’s
decision was based on a telephone complaint.
TISH Bylaws state that “[a] complaint must be in writing.”
Bylaws provide that “[t]he complain[ant] must [either] . . . directly
represent the . . . buyer or the seller of the dwelling . . . or . . . [be]
employed by, or directly represent, the City of
C. Staleness of Disclosure Report
Relator also argues that his report, which was the subject of the complaint and constitutes the basis of the board’s decision, was stale and could not be the basis for sanctions against him. SPLC § 189.02(a) (2004) states: “A disclosure report is valid for three hundred sixty-five (365) consecutive days from the date of its issuance.” SPLC § 189.02(a). Relator argues that because the April 2004 report was over a year old at the time it was investigated, the report was “invalid” and could not form the basis of a violation. But relator’s interpretation of the provision ignores the entirety of section 189.02 and surrounding sections of chapter 189. For instance, section 189.02(d) (2004) provides: “The report is valid for only one sale during its three hundred sixty-five (365) consecutive day lifetime.” (Emphasis added.) Section 189.03 (2004) uses the term “valid” five times and suggests that the drafters’ intention was to require individuals selling homes to obtain a new disclosure report every year. The language of section 189.02 does not support a reading that would insulate any deficient disclosure report from becoming the basis of a complaint against an evaluator as soon as a year had expired. It is not a statute of limitations for relator’s responsibilities. We conclude that the board did not err in basing its action on relator’s 2003 and 2004 disclosure reports.
next issue is whether the city’s decision to cancel relator’s license is supported
by substantial evidence. Substantial
evidence is: “(1) such relevant evidence
as a reasonable mind might accept as adequate to support a conclusion; (2) more than a scintilla of evidence; (3) more than some evidence; (4) more than any evidence; and (5) evidence considered in its entirety.” CUP
Foods, Inc., v. City of
Although relator contests each of the board’s seven findings, he only challenges the sufficiency of the evidence to support findings three through six.
A. Findings 3 and 4
Relator challenges findings three and four, arguing that no substantial evidence supports the findings that his April 2004 evaluation improperly reported the condition of the electrical service drop and the plumbing system.
With respect to the electrical service drop, the board’s findings were based on the testimony of a code-enforcement inspector and the homeowner, in addition to documentary evidence, which included the repairman’s notes and the inspector’s photographs. The homeowner testified that the electrical service drop was in the same condition at the time of the inspection as when she bought the home, and the inspectors testified that it did not comply with city code. Relator suggests that because of the significant time between his evaluation and the code-enforcement inspection, the electrical service mast must have been damaged in the interim time period, following his evaluation. But the board did not find relator’s theory credible, and relator offered no direct evidence to support his position.
With respect to the basement plumbing issues, the city offered the testimony of the homeowner and an inspector, photographs, and the plumbing-repair estimate. This evidence established that the basement waste piping was not sealed properly, that improper material was used for the main waste line, that there was visible waste on the outside of that line, and that relator’s evaluation was not consistent with the city code. Relator asserts that the problems with the basement plumbing were not visible in April 2004. But relator’s earlier report clearly noted some of the plumbing problems, which suggests that the problems were visible at the time of relator’s second inspection. Moreover, relator offered no direct evidence to show that the problems cited in the complaint were not visible or arose in the interim period. On this record, we conclude that findings three and four are supported by substantial evidence.
B. Findings 5 and 6
Relator argues that there is no substantial evidence to support findings five and six, which state that relator violated the evaluators’ code of ethics by treating the homeowner disrespectfully and videotaping against her wishes. Relator also asserts that there is no substantial evidence to support the finding that he violated the evaluators’ code of ethics by facilitating the call in which a woman claimed to be from the city attorney’s office.
code of ethics proscribes professional and behavioral misconduct, stating: “The
evaluator, while acting as such, will not engage in conduct that in any way is
in violation of any law or ordinance, or is in contravention of good order and
There is also circumstantial evidence supporting the finding that relator facilitated the false and harassing phone call allegedly from the city attorney’s office. The written complaint indicates that the day before relator was scheduled to view the home with the inspectors, the homeowner received a phone call from “Susan Brown,” allegedly from the city attorney’s office. The homeowner received this call about ten minutes after relator called to attempt to settle the dispute privately. The female caller asked explicitly about the dispute with relator and elicited information about an inspection performed by another firm. The following day, relator asked the homeowner about the other inspection. The homeowner testified that relator would have had no way of knowing of the other inspection had he not been privy to the offending phone call. Finally, the city introduced evidence that the city attorney’s office did not employ an individual named Susan Brown. We do not reweigh conflicting evidence or re-judge the credibility of testimonial evidence. Based on the foregoing evidence, we conclude that findings five and six are supported by substantial evidence.
Finally, relator argues that cancellation of his TISH license was arbitrary and capricious. A decision is arbitrary and capricious only if the decision-making body: “(1) . . . relied on factors not intended by the ordinance; (2) entirely failed to consider an important aspect of the issue; (3) offered an explanation that conflicts with the evidence; or” (4) arrived at a decision that “is so implausible that it could not be explained as a difference in view or the result of the city’s expertise.” Rostamkhani, 645 at 484.
Relator’s arbitrary-and-capricious argument is not well developed and is based on little more than assertion. He has not shown that the TISH board or the city council relied on factors not intended by the city code or that either decision-making body failed to consider the merits of the dispute. Also, relator has not shown that the board or city council decisions are without substantial evidentiary support based on the entire record.
Because the city’s decision did not violate relator’s right to procedural due process, was not based on error of law, is supported by substantial evidence, and was not arbitrary and capricious, we affirm.
 Relator asserts that the Minnesota APA provides the
applicable scope of review on appeal. See
 The parties do not dispute the applicable version of the SPLC. We note that section 310.05 was amended in April of 2005, after the conduct forming the basis of the license termination, but before the TISH board’s decision. The 2005 amendment appears to have enacted a presumptive penalty scheme that was not in effect at the time of relator’s conduct. Here, because the parties do not dispute the applicability of that scheme to resolution of the current dispute, we apply and cite the 2005 version of section 310.05. Likewise, we cite the version of section 310.06 enacted in 1999 and substantially unchanged until November 2006.
 The parties do not dispute the applicable version of SPLC chapter 189. Accordingly, we cite the version supplied by the parties and last altered in 2004, prior to the city’s termination of relator’s TISH license.
 Relator correctly argues that the board only took adverse action, and relator only appeared before the city council, on two prior occasions. Finding one states that there are three prior hearings before the board. But because we interpret the board’s decision as based on its disciplinary guidelines, and not chapter 310, we conclude that the board’s factual error as to the number of prior hearings is not prejudicial.