may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Daniel J. Stafne,
City of Center City,
Filed November 10, 1998
Chisago County District Court
File No. C4-97-1052
Jesse Gant III, The Gant Law Office, 500 Flour Exchange Building, 310 Fourth Avenue South, Minneapolis, MN 55415 (for appellant)
Carla J. Heyl, 145 University Avenue West, St. Paul, MN 55103-2044 (for respondent)
Considered and decided by Lansing, Presiding Judge, Harten, Judge, and Anderson, Judge.
Appellant Daniel Stafne challenges the district court's vacation of a veterans preference board determination in his favor and remand for a second veterans preference board hearing. Stafne also contends that the district court erred when it later adjudged that he had waived his right to the second veterans preference board hearing and that his termination was lawful. Finally, he challenges the district court's denial of his motion to vacate the judgment. We affirm.
As a result of this finding, the city discharged Stafne and advised him of his right to a hearing under the Veterans Preference Act (VPA). Stafne requested a hearing. The city appointed Peter J. Grundhofer to the VPA board, and Stafne appointed his wife, Tiesh Stafne, to the board. Because the two could not agree on a third board member, the district court appointed the third person, Michas Ohnstad.
The VPA board conducted a hearing on July 8, 1997. On July 24, 1997, board members Michas Ohnstad and Tiesh Stafne signed a decision concluding that Stafne should be restored to his position. The majority did not serve the decision on the city council until the council's regularly scheduled monthly meeting on August 5, 1997. In an undated dissent, board member Grundhofer stated that he had not been given the opportunity to review the majority decision. He found that the city had acted reasonably in removing Stafne for misconduct or incompetency; further, he found that Tiesh Stafne did not act impartially and that she relied on information outside the record.
After receiving the VPA majority decision at the August 5 city council meeting, the city council authorized its two-member personnel committee to review the decision. The personnel committee recommended an appeal to district court. On August 20, an appeal of the VPA board's decision, signed by the mayor, was filed in district court. At its next scheduled meeting on September 2, 1997, the city council unanimously ratified the committee's decision to appeal.
On appeal, the district court held a hearing and then issued an order on November 20, 1997, determining that there were irregularities in the VPA review procedure that called into question the integrity of the VPA board's decision. The district court remanded for a new determination by a second VPA board. The court urged the parties to appoint different VPA board members in the interest of impartiality. On December 16, 1997, the city appointed Kevin Hofstad as its board representative; Stafne again appointed his wife as his representative.
On January 13, 1998, the city moved to terminate Stafne's right to any further VPA hearings or, alternatively, to permit the city to escrow salary payments otherwise due Stafne pending decision in the VPA proceeding. Through his attorney, Stafne then notified the city that he had appointed Tony Eastman to replace his wife as his board representative. Hofstad made several efforts to contact Eastman to select the third board member, but as of the date of the motion hearing (February 9, 1998) Eastman still had not responded to Hofstad's efforts to contact him. On February 6, 1998, Stafne's attorney mailed and faxed a letter to the court and the city's attorney requesting that the hearing of the city's motion be cancelled because the motion was in "bad faith."
Nevertheless, the motion hearing was held on February 9, 1998, but neither Stafne nor his attorney appeared. The court determined that Stafne waived any rights he may have had to a second VPA hearing and that he had been "properly and effectively terminated" as an employee of the city based on the city's February 1997 notice of termination. The district court ordered judgment on February 11, 1998.
On May 4, 1998, the district court denied Stafne's motion to vacate the judgment. This appeal followed.
An appellate court reviewing the decision by a VPA board must determine "whether the findings are supported by substantial evidence on the whole record." In re Schrader, 394 N.W.2d 796, 801 (Minn. 1986). The decision will not be reversed unless the board abused its discretion. Myers v. City of Oakdale, 461 N.W.2d 242, 244 (Minn. App. 1990). The appellate court need not defer to the decision of the district court because both use the same standard to review the board's decision. Id.
2. VPA Board.
A public employer may dismiss a U.S. military veteran only for incompetency or misconduct. Minn. Stat. § 197.46 (1996). The veteran must be given notice and the opportunity to have a hearing on the stated charges. Id. Where, as here, no civil service board exists, a VPA board is composed of three persons: one appointed by the governmental subdivision, one by the veteran, and a third chosen by the first two. Id. If the two members are unable to agree on a third member within 10 days after appointment of the second, the district court will select the third person. Id. The VPA board was charged with determining whether the employer met its burden to prove that it acted reasonably. Schrader, 394 N.W.2d at 801.
3. Appellant's Preliminary Objections.
a. Open Meeting Law. Stafne contends that the city did not comply with the open meeting law because it failed to give proper public notice that its personnel committee was going to meet to consider an appeal of the VPA board's decision. See Minn. Stat. § 471.705, subd. 1c (Supp. 1997) (listing notice requirements for open meeting law). He argues that the appeal therefore was unauthorized.
Regardless of the merits of the public notice argument, a failure by a city to comply with the notice requirements does not render invalid an action taken at a nonpublic meeting. See Sullivan v. Credit River Township, 299 Minn. 170, 176-77 & n.1, 217 N.W.2d 502, 507 & n.1 (1974) (interpreting version of statute prior to amendment providing for penalties). Instead, the open meeting law provides other penalties for violations, including a civil penalty, the right to an enforcement action, and costs. Minn. Stat. § 471.705, subd. 2. Thus, the alleged failure by the city to comply with the open meeting law notice requirements did not invalidate the personnel committee's action. In re Petition of D&A Truck Line, Inc., 524 N.W.2d 1, 6 (Minn. App. 1994) (rejecting argument that violation of open meeting law requires invalidation of action taken).
b. City Appeal; Ratification. Stafne next contends that the appeal to district court was untimely because it was not perfected until the city council ratified the personnel committee's decision to appeal, which occurred after the appeal time had run.
An appeal from a VPA board's decision may be taken to district court within 15 days after notice of the decision. Minn. Stat. § 197.46; see Schrader, 394 N.W.2d at 802 (providing either veteran or employer may appeal board's decision to district court). On August 5, 1997, the VPA board's July 24 decision was served on the city council during its regularly scheduled monthly meeting. The personnel committee then met and recommended an appeal. The mayor signed the notice of appeal and filed it on August 20, thereby meeting the 15-day limit. On September 2, 1998, the city council unanimously ratified the decision to appeal.
Counsel for respondent indicated at oral argument that Center City is a statutory city. See Minn. Stat. § 412.016, subd. 1 (1996) (defining every city that has not adopted a home rule charter as a "statutory city"). The city has the power to sue and be sued. Minn. Stat. § 412.211 (1996). Generally, a mayor has only the powers explicitly provided by law. See Wilson v. City of Minneapolis, 283 Minn. 348, 352-53, 168 N.W.2d 19, 22-23 (1969) ("in the discharge of their duties municipal officers cannot go beyond the law, nor delegate powers involving the exercise of judgment and discretion."); see 3 Eugene McQuillin, The Law of Municipal Corporations § 12.43 (3d ed. rev. vol. 1990) ("powers and duties of the mayor * * * rest almost entirely upon the proper construction of the charter and the ordinances or bylaws * * *"). "Generally, a governmental body may effectively ratify what it could previously have lawfully authorized." 4 Eugene McQuillin, The Law of Municipal Corporations § 13.47 (3d ed. rev. vol. 1992) (footnote omitted); see Gran v. City of St. Paul, 274 Minn. 220, 223, 143 N.W.2d 246, 249 (1996) (holding that where commission made award subject to contingency that it would be effective when ratified by city, ratification complete when city adopted resolution of ratification and authorized payment).
The city council had the power to bring the appeal, and it directed the committee to consider an appeal. At its first opportunity after the appeal was filed, the city council unanimously ratified it. We believe that the appeal was timely and proper.
c. Spouse as VPA Board Member. Stafne challenges the November 20, 1997, order by the district court in which it vacated the VPA board's decision. Stafne first claims that the city waived its right to object to Tiesh Stafne's position as a board member because it did not seek her recusal. See Independent Sch. Dist. No. 16 v. Eckert, 281 Minn. 445, 449-50, 161 N.W.2d 692, 695 (1968) (holding right to object to having veteran's employer on board waived by consenting to appointment). While the city did not undertake to procure her recusal, it raised the issue at the threshold when the city attorney cautioned that the board members could not act as advocates. Further, when Tiesh Stafne said that she was familiar with some documents from her former employment as the city clerk, board member Grundhofer warned that board members could not present evidence, and that she could not act as a witness either as Stafne's spouse or a former employee of the city. Tiesh Stafne indicated that she understood. Under these circumstances, although the city did not seek her recusal, the issue was not waived.
d. District Court Vacation and Remand of VPA Board Decision. We now consider whether the district court properly vacated the board's decision. We need not defer to the district court's review of the VPA board's decision. Myers, 461 N.W.2d at 244. Instead, we must determine whether the board's decision was supported by substantial evidence based on the record as a whole. Schrader, 394 N.W.2d at 801. Further, we must determine whether the board abused its discretion. Myers, 461 N.W.2d at 244.
The VPA board should be impartial and unbiased. Johnson v. Village of Cohasset, 263 Minn. 425, 435-36, 116 N.W.2d 692, 699 (1962) (providing that appointment of persons who might favor veteran by reason of friendship or business or political interests should be avoided); see Eckert, 281 Minn. at 449, 161 N.W.2d at 695 (noting impropriety of appointing one of veteran's employers to VPA board). Applying these principles, the issue becomes whether the board's decision was based on substantial evidence or was arbitrary and capricious.
After conducting our de novo review of the VPA board's decision, we conclude that no substantial evidence supports the board's decision and that it was arbitrary and capricious. Board member Ohnstad stated that he sought out information from the city clerk before the hearing. Tiesh Stafne also discussed information she had obtained about the allegations against her husband while she was city clerk. Only Tiesh Stafne and Ohnstad prepared the board's decision; Grundhofer indicated in his dissent that he neither participated in the decision nor had opportunity to review the majority decision before it was finalized. The decision was not the product of deliberation among all of the board members. Finally, the majority decision relied on evidence not in the record relating to Stafne's job description, the city's personnel policy, and Stafne's performance evaluation. For these reasons, we agree with the district court that the board's decision was not based on substantial evidence and was an abuse of discretion.
Stafne also challenges the November 20, 1997, order as erroneous, contending that the district court did not have the authority to remand for a second VPA hearing before a newly appointed VPA board. Stafne appears to argue that the same board should have been allowed to make the decision on remand. Veterans preference laws are to be liberally construed to accomplish the legislative purpose of protecting veterans from the political spoils system. Winberg v. University of Minn., 499 N.W.2d 799, 801 (Minn. 1993). Obviously, the district court could not condone a partial and biased result. Accordingly, the district court did not err in remanding the matter for a new hearing with a new VPA board because the prior VPA board was not impartial and considered matters outside of the record.
4. Final District Court Action.
Stafne next challenges the district court's February 11, 1998, ruling that he waived any rights he had to a second VPA hearing and that the city had properly terminated him.
Neither Stafne nor his attorney appeared at the February 9, 1998, hearing of the city's motion to terminate Stafne, or, alternatively, to escrow his salary payments. The district court ruled that Stafne's delaying tactics implied a disregard for VPA procedures. It found that his initial reappointment of his spouse to the second VPA board, contrary to the court's previous admonishment, confirmed Stafne's intent to delay the proceeding or to obtain a biased decision. The district court found that more than a year had passed since Stafne was initially terminated on the recommendation of a competent, disinterested hearing officer, during which time Stafne continued to receive his regular pay. The district court also found that Stafne's inexcusable delay prejudiced the city. Finally, it found that Stafne had waived his right to a second VPA hearing and that he was lawfully terminated on February 10, 1997.
An individual must claim his VPA rights in a timely manner to limit a municipality's liability to pay the veteran pending the outcome of the hearing. See State ex rel. Sprague v. Heise, 243 Minn. 367, 374, 67 N.W.2d 907, 912 (1954). We agree with the district court that Stafne's efforts toward vindication under the VPA were anything but timely; indeed, his delays simultaneously continued him on the city payroll and postponed final review of his termination.
We uphold the district court's finding that Stafne waived a second VPA hearing on the city's decision to terminate Stafne for gross misconduct.
5. Motion to Vacate Final District Court Order.
Stafne contends that the district court erred in denying his motion to vacate its February 11, 1998, order.
District court decisions on whether to grant a motion to vacate will not be reversed absent an abuse of discretion. Carter v. Anderson, 554 N.W.2d 110, 115 (Minn. App. 1996), review denied (Minn. Dec. 23, 1996). In a motion to vacate, the petitioner must show under Minn. R. Civ. P. 60.02:
(1) a reasonable claim on the merits;
(2) a reasonable excuse for its failure or neglect to act;
(3) that it has acted with due diligence after notice of entry of judgment; and
(4) that no substantial prejudice will result to the opponent.
Bentonize, Inc. v. Green, 431 N.W.2d 579, 582 (Minn. App. 1988).
Stafne challenges this order on three grounds. First, he contends that his attorney never received the city's notice of motion and motion. The district court noted that the motion papers filed with the court and those served on appellant were identical and the court administrator received all of the documents. The court further noted that Stafne's attorney chose to wait until February 6, 1998, (almost four weeks after being served) to contact the city's attorney and even then failed to tell him that the motion documents were missing. The district court found that the evidence strongly implied that appellant was properly served with the motion papers. The district court found that Stafne's attorney was aware of the motion date because the attorney sent a letter to the city's attorney asking him to withdraw the motion. The district court's determination is not clearly erroneous.
Stafne also argues that the city attorney's failure to sign and notarize the motion papers was in violation of Minn. R. Civ. P. 11. Rule 11 provides that every motion must be personally signed by an attorney. The motion shall be stricken if, after the omission is called to the attention of the movant, it is not signed promptly. Id. Stafne neither called this alleged error to the attention of his opponent nor moved to strike for noncompliance. See Minn. R. Civ. P. 12.06 (allowing motion to strike for failure to comply with rule 11). Consequently, he cannot prevail.
We agree with the district court that Stafne's reasons for not appearing at the February 9 hearing do not show a reasonable excuse under rule 60. The district court did not abuse its discretion. Minn. R. Civ. P. 60.02. Stafne's charge of bad faith by opposing counsel is not supported by the record.
 While the parties discuss a variety of other issues that were raised, they were not the basis for termination.