This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).

STATE OF MINNESOTA

IN COURT OF APPEALS

C5-96-2101

Delores Johnson,

Relator,

vs.

City of Isle,

Respondent.

Filed April 8, 1997

Reversed and remanded

Huspeni, Judge

City of Isle

File No. 072496B

Marc G. Pera, Frank J. Kundrat, Hall & Byers, P.A., 1010 West St. Germain, Suite 600, St. Cloud, MN 56301 (for Relator)

Carla J. Heyl, 145 University Avenue West, St. Paul, MN 55103-2044 (for Respondent)

Considered and decided by Parker, Presiding Judge, Huspeni, Judge, and Willis, Judge.

U N P U B L I S H E D O P I N I O N

HUSPENI, Judge

Relator Delores Johnson challenges respondent City of Isle's decision to demote her from municipal liquor store manager to bartender. Because respondent violated relator's due process rights, we reverse and remand.

FACTS

Respondent employed relator as manager of respondent's municipal liquor store from 1987 to July 24, 1996. A performance evaluation completed in February 1996 indicated that relator was performing the job adequately for the most part, but needed to improve in a few areas.

The city council held a special meeting on June 27, 1996, to evaluate relator's performance. She was given notice of the meeting, but did not attend. A resolution demoting relator from liquor store manager to bartender was defeated at that meeting. The council held another special meeting on July 24, 1996. Relator was not given notice of this second meeting. A resolution was again introduced to demote relator from liquor store manager to bartender. The resolution gave the same reasons for demotion as stated in the failed June 27 resolution. At this meeting, the council had before it a letter, dated July 1, 1996, from two former liquor store employees who claimed they resigned due to relator's management style. The demotion resolution passed.

Relator filed a petition for a writ of certiorari claiming that respondent violated her due process rights.

D E C I S I O N

In a review by certiorari, we are confined to questions about jurisdiction, the regularity of the proceedings at issue, and, with respect to the merits of the controversy, whether the challenged decision was arbitrary, unreasonable, oppressive, fraudulent, erroneous as a matter of law, or without any supporting evidence. Dietz v. Dodge County, 487 N.W.2d 237, 239 (Minn. 1992).

1. Respondent argues that its decision to demote relator may not be reviewed by the court of appeals through the certiorari process and, therefore, this proceeding should be dismissed. We disagree.

While respondent agrees that a writ of certiorari is appropriate for review of an employment termination, it claims that certiorari is inappropriate to consider a demotion. See Willis v. County of Sherburne, 555 N.W.2d 277, 282 (Minn. 1996) (holding that when alleged breach of government worker's employment contract results in termination, worker may contest employer's action by certiorari alone, absent statutory authority for different process). Courts' certiorari review is not limited to terminations. In Bahr v. City of Litchfield, 420 N.W.2d 604 (Minn. 1988), the supreme court recognized that a writ of certiorari was the proper vehicle to obtain judicial review of a local police civil service commission's decision regarding the promotion of police officers. Id. at 606. We see no reason to treat promotions and demotions differently and conclude that a certiorari proceeding is proper in this case.

2. Relator contends that she had a property interest in continued employment as liquor store manager and due process requirements therefore obligated respondent to provide her with notice and a hearing before demoting her. We agree.

A public employee with a constitutionally protected property interest in that employment must be afforded due process prior to termination. Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542, 105 S. Ct. 1487, 1493 (1985). Respondent argues that relator was an at-will employee and did not have a property interest in her job. See Skeets v. Johnson, 816 F.2d 1213, 1215 (8th Cir. 1987) (concluding that at-will employees have no property interest in continued employment); Rutherford v. County of Kandiyohi, 449 N.W.2d 457, 460 n.1 (Minn. App. 1989) (same), review denied (Minn. Feb. 28, 1990). A document signed by relator explicitly states:

REGULATIONS PERTAINING TO JOB:

1. Manager will be on a six month probationary period and can be terminated by the Council at any time.

2. After six months violations of any of the above rules will be cause for dismissal.

Relator may indeed have been an at-will employee for her first six months as manager. A fair reading of paragraph one would support such a result. Paragraph two, however, also applies to relator, who had been employed for more than six months. In addressing "cause for dismissal," paragraph two refers to "violations of any of the above rules." This language compels a conclusion, we believe, that cause must be found (violation of some rule) before termination from the position of liquor store manager could be effected. We therefore conclude that relator had a property interest in her job. See Loudermill, 470 U.S. at 538-39, 105 S. Ct. at 1491 (holding that employee had property interest in continued employment because under statute he could only be dismissed for cause); Perry v. Sindermann, 408 U.S. 593, 601, 92 S. Ct. 2694, 2699 (1972) (noting that written contract grants employee property interest in job where contract guarantees continued employment absent cause for termination); Martin v. Itasca County, 448 N.W.2d 368 370 (Minn. 1989) (finding property interest where county employee could not be discharged absent "just cause"); cf. McIntire v. State, 458 N.W.2d 714, 718 (noting that probationary state employee has no property interest in continued employment), review denied (Minn. Sept. 28, 1990), cert. denied, 498 U.S. 1090 (1991).

Respondent notes that relator was merely demoted from liquor store manager to bartender, arguing that something less than full termination of employment is not a constitutional deprivation of property. Again, we disagree and find respondent's reliance on Pedersen v. Ramsey County, 697 F. Supp. 1071 (D. Minn. 1988), to be misplaced. In Pedersen, the court held that a property interest in continued employment was not implicated where the employee was reinstated a short time after being discharged. Id. at 1076-77. Here, relator's demotion is permanent. We recognize that "there are damages which do not rise to the level of a constitutional deprivation of property," id. at 1077, but we note that even when an employment decision has not resulted in full termination, this court has analyzed the case in terms of a constitutional deprivation of property. See, e.g., American Fed'n of State, County & Mun. Employees Council 65 v. Blue Earth County, 389 N.W.2d 244, 248 (Minn. App. 1986) (equating suspension with discharge for purposes of determining whether employee was entitled to due process based on property interest in continued employment), review denied (Minn. Aug. 20, 1986).

Respondent cites Johnson v. Independent Sch. Dist. No. 281, 494 N.W.2d 270 (Minn. 1992), in support of its contention that a demotion alone does not require a hearing. Johnson, however, is distinguishable from the present case. In Johnson, the applicable statute governing the employment of teachers (Minn. Stat. § 125.12 (1990)), did not require a hearing for the demotion of a teacher for cause, but the statute applying to teachers in other school districts (Minn. Stat. § 125.17 (1990)) explicitly stated that a teacher could be demoted for cause only after a hearing. Id. at 274. The Johnson court concluded that the absence of a provision addressing demotion in Minn. Stat. § 125.12 indicated that the legislature intended that teachers in some school districts could be demoted without a hearing. Id.; cf. Sweeney v. Special Sch. Dist. No. 1, 368 N.W.2d 288, 291-92 (Minn. App. 1985) (analyzing, under section 125.17, demotion of principals and assistant principals without hearings as deprivation of property interests). Relator is not subject to the statutes governing the employment of teachers, and the rationale of Johnson does not apply here.

Respondent further contends that relator was afforded adequate due process because she was given notice of the city council's first special meeting, but she chose not to attend it. Respondent's argument on this issue appears to be that relator waived her right to any further notice. We find no merit in respondent's argument. First, the vote taken at the June 27 meeting did not result in relator's demotion. When she was made aware of the nonaction of the council, relator reasonably could have believed the matter was at an end. Second, it was only at the meeting on July 24 (for which relator had received no notice that her employment situation would again be discussed)[1] that the council had before it the letter written by former liquor store employees. Relator was not given an opportunity to respond to this letter and was therefore not afforded due process. See Eisen v. State, Dep't of Pub. Welfare, 352 N.W.2d 731, 736 (Minn. 1984) (noting that fundamental requirement of procedural due process is opportunity to be heard).

Finally, we find persuasive the rationale of In re Channel Lane, 444 N.W.2d 602 (Minn. App. 1989), review denied (Minn. Oct. 19, 1989). While Channel Lane involved the issue of proper notice due landowners in a property assessment project, the analysis is applicable in an employment context also:

After receiving notice, the landowners here were able to marshal sufficient resources to convince the city council to reject the initial project at the July 16, 1986 hearing. This rejection terminated consideration of the initial assessment project. The city council's consideration and apparent approval of the scaled-down project on August 6, 1986 also demonstrates that the initial project was no longer under consideration. Reconsidering and approving the initial project on August 20, 1986 without giving new notice deprived the landowners of an adequate opportunity to protect themselves by once again making their preferences known to their elected representatives. We hold as a matter of law that where, as here, an assessable improvement project has been previously rejected, the municipality must thereafter provide new notice before reconsidering the project.

Id. at 604.

We reverse the City of Isle city council's decision to demote relator and remand the matter to the city council so that it may provide relator with the process due her.

Reversed and remanded.

[ ]1 Respondent also argues that relator was given notice of the June 27 meeting not because she was entitled to due process, but because the June meeting was a closed meeting in accordance with the Minnesota open meeting law, Minn. Stat. § 471.705, subd. 1d(c), (d) (1994), and that relator was not given notice of the July 24 meeting because that meeting was an open meeting under the statute and the council posted appropriate notice of that meeting. Because we find that relator's property interest in continued employment required that she be afforded due process, we do not address any issues of required notice under the open meeting law.