This opinion will be unpublished and may
not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).


Gary Holmgren,


City of Saint Paul, et al.,

Filed September 28, 1999
Affirmed in part, reversed in part, and remanded
Lansing, Judge

Ramsey County District Court

Kevin J. Short, 333 South Seventh Street, Suite 2890, Minneapolis, MN 55402 (for appellant)

Clayton M. Robinson, Jr., St. Paul City Attorney, James F. Jerskey, Assistant City Attorney, 550 City Hall, 15 West Kellogg Boulevard, St. Paul, MN 55102 (for respondent)

Considered and decided by Lansing, Presiding Judge, Peterson, Judge, and Amundson, Judge.

U N P U B L I S H E D   O P I N I O N


The district court entered summary judgment on Gary Holmgren's claims for breach of contract, tortious interference with contract, and defamation. At the close of evidence, the court directed a verdict against Holmgren's remaining cause of action, a Public Employment Labor Relations Act (PELRA) claim. We affirm the summary judgment rulings, but reverse and remand the directed verdict on the PELRA claim because the intentional-discrimination evidence was sufficient to present a fact question for jury determination. We also reverse the denial of Holmgren's motion to amend because the disputed evidence on the PELRA claim is sufficient to establish a prima facie case for punitive damages. Affirmed in part, reversed in part, and remanded.


Gary Holmgren is a firefighter for the City of St. Paul. In a May 1997 complaint, he alleged the city (1) committed an unfair labor practice prohibited by PELRA, Minn. Stat. § 179A.13, subd. 2 (1998); (2) breached the city's collective-bargaining agreement; (3) tortiously interfered with his employment agreement with the fire department; and (4) defamed him. The allegations are based on a series of events between October 1994 and May 1996 involving the fire department's testing procedures and disciplinary practices.

The first incident involved an October 1994 Fire Equipment Operator (FEO) examination. When Holmgren turned in his written examination, the city employee monitoring the exam told him one of his answers was incorrect. Holmgren disagreed, and the two argued. A retired fire captain interceded, reviewed Holmgren's test, and told the monitor that Holmgren's answer was correct. When Holmgren took the driving section of the test, he was required to drive a fire truck in reverse to within 18 inches of a gate. The tester measured the distance by holding a clipboard, approximately 12 inches in length, between the fire truck and the gate. Based on that measurement, Holmgren understood he had passed. The department later notified him that he had failed. Holmgren filed a grievance. The Civil Service Commission determined the test was unfair and ordered a retest with standardized measurements, which Holmgren passed. During discovery, Holmgren learned his score for the reverse driving test had been altered from 95 to 85. Had this score not been altered, he would have passed the examination.

On March 30, 1995, Holmgren took the fire captain examination. After the examination, the monitor reviewed the results and threw out six of the questions, which resulted in more firefighters passing the examination. Holmgren and other firefighters filed a lawsuit challenging the testing procedure. The city was required to rescore the examination.

Holmgren eventually reached the top of the fire captain promotion waiting list, but was not promoted for eight months. Six sitting captains resigned during that eight-month period.

Five days before the fire captain's examination, Holmgren was involved in a fire station conversation during which a firefighter uttered a racial slur. The regular shift captain was absent, and Holmgren telephoned him to ask that he be allowed to serve as acting captain. The captain told Holmgren that James Logan, the senior firefighter on duty and an African American, would be in charge. Holmgren relayed the information to his co-workers. A firefighter, whom a witness identified as Steven Sarafolean, commented that "they're giving it to him because he's black," or "they're giving it to the n****r." Holmgren told Sarafolean to "shut up." Logan, who was in another room, overheard racist comments. He inferred that Holmgren made the comments because Holmgren was hanging up the phone when Logan walked into the room. Logan stated Sarafolean later admitted that he made the comments. Sarafolean previously had made a racist comment about one of Logan's children.

The city conducted a disciplinary hearing and issued a letter stating Holmgren would be disciplined with a one-day suspension. Holmgren requested a hearing, and the city withdrew the letter of suspension from Holmgren's file. Eight months later, after receiving a letter from Sarafolean accusing Holmgren of making the racial slur, the city issued another letter of suspension for the same incident. Holmgren again challenged the suspension. At the disciplinary hearing, the committee ruled Holmgren should not be disciplined. Sarafolean was not investigated or disciplined in connection with the racial-slur incident.

We address, in sequence, Holmgren's assertions that the district court erred in (1) entering summary judgment on breach-of-contract, tortious-interference-with-contract, and defamation claims; (2) directing a verdict on unfair labor practices under PELRA; and (3) denying his motion to add a punitive-damages claim to the complaint.



Summary judgment is proper when the moving party demonstrates the absence of genuine issues of material fact and if either party, as a matter of law, is entitled to judgment. Minn. R. Civ. P. 56.03; Thiele v. Stich, 425 N.W.2d 580, 583 (Minn. 1988). The nonmoving party is entitled to the beneficial view of the evidence. Grondahl v. Bullock, 318 N.W.2d 240, 242 (Minn. 1982). On appeal we independently determine whether summary judgment was properly entered. Martin v. Spirit Mountain Recreation Area Auth., 566 N.W.2d 719, 721 (Minn. 1997) (internal quotation omitted).

Breach of Contract

Article 33 of the collective bargaining agreement between Holmgren's union and the city requires "just cause" for any disciplinary action. The contract defines disciplinary action as issuance of an "oral reprimand, written reprimand, suspension, demotion or discharge." The district court concluded that the letters issued to Holmgren in connection with the racial-slur incident did not constitute a disciplinary action within the meaning of the contract because they were merely notices of suspension -- a disciplinary measure that was never enforced against Holmgren -- and they were subsequently removed from Holmgren's file. We agree with the district court's reasoning. On appeal Holmgren reshapes his argument by asserting that the letters, even if withdrawn, constituted written reprimands. We reject that argument for three reasons. First, the argument was not squarely made to the district court. See Thiele, 425 N.W.2d at 582 (reviewing court generally considers only issues presented and considered by district court). Second, the text of the letters clearly documents the intention to suspend Holmgren, not to serve as a written reprimand. Cf. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 67 (Minn. 1979) (when interpreting contract terms, courts apply plain and ordinary meaning). Third, irrespective of designation, the letters were withdrawn as a result of Holmgren's affirmative requests for relief. The district court properly entered summary judgment on the breach-of-contract claim.

Tortious Interference with Contract

In his complaint, Holmgren alleged two theories of tortious interference. First, he claimed the monitor interfered with his contractual right to promotion by modifying the results of his FEO and fire captain examinations. Second, he claimed Captain Fuller improperly procured Holmgren's discipline without just cause, in violation of the collective-bargaining agreement.

On appeal Holmgren does not argue the first theory, and our affirmance of summary judgment on the breach-of-contract claim necessarily affirms the district court's dismissal of the second theory. As a predicate to tortious interference with contract, an existing contract must be breached. See Kjesbo v. Ricks, 517 N.W.2d 585, 588 (Minn. 1994) (listing elements). Holmgren could not demonstrate that any breach of the collective-bargaining agreement occurred, and the district court properly granted summary judgment on this claim.


Holmgren argues the two letters of suspension, which both stated that he made a racial slur against Logan, were defamatory. The district court dismissed the claim because Holmgren could "not point to any injury to his reputation or any lowering of his standing in the eyes of the community. Therefore, he [could] not establish prima facie one of the elements for a cause of action for defamation." See Stuempges v. Parke, Davis & Co., 297 N.W.2d 252, 255 (Minn. 1980) (setting forth elements of defamation). Holmgren admits he cannot show harm to his reputation or that it was lowered in the estimation of the community. He argues, however, that the statements in the letters relate to his "business, trade or professional conduct" and are therefore defamatory per se; thus, general damages must be presumed. See Becker v. Alloy Hardfacing & Eng'g Co., 401 N.W.2d 655, 661 (Minn. 1987).

Cases in which statements about employees have been found defamatory per se involve direct commentary on the employees' abilities or conduct in their professional capacities. See, e.g., id. at 657-58 (former employer's statement to new employer that employee had stolen confidential material was defamatory per se); Imperial Developers, Inc. v. Seaboard Sur. Co., 518 N.W.2d 623, 627 (Minn. App. 1994) (statement that a trucking company routinely breached its contracts was defamatory per se), review denied (Minn. Aug. 24, 1994). Although racial slurs are professionally reprehensible, the statement that Holmgren made a racial slur to another employee while on the job at the fire station does not relate to Holmgren's ability or conduct in his capacity as a firefighter and does not meet the standard necessary for per se defamation.


On appeal from a directed verdict, this court makes an independent determination of whether the evidence was sufficient to present a fact question to the jury. Nemanic v. Gopher Heating & Sheet Metal, Inc., 337 N.W.2d 667, 669 (Minn. 1983). In making this determination, we review the evidence in the light most favorable to the nonmoving party. Boone v. Martinez, 567 N.W.2d 508, 510 (Minn. 1997).

PELRA prohibits a public employer from committing an "unfair labor practice" by "discriminating against an employee because the employee has signed or filed an affidavit, petition, or complaint" against the employer. Minn. Stat. § 179A.13, subds. 1, 2(4) (1998). The district court noted that no controlling case law "establish[es] the elements of a civil cause of action for unfair labor practices" and applied the three-part burden-shifting test of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S. Ct. 1817 (1973), to Holmgren's claim of unfair labor practices. Both parties acceded to that structure in the district court and have proceeded on appeal under the assumption that the McDonnell Douglas standard applies in this case. Accordingly, we apply that standard to the present case without resolving the question of whether McDonnell Douglas is the correct standard to be applied in all cases involving claims for unfair labor practices. Cf. Lesmeister v. Dilly, 330 N.W.2d 95, 100 (Minn. 1983) (applying, without precedential effect, law "that is not in accord with settled doctrine" when parties have acquiesced to its application).

Under McDonnell Douglas, the employee-plaintiff has the initial burden of establishing a prima facie case of discrimination. 411 U.S. at 802, 93 S. Ct. at 1824. Once the employee has established a prima facie case, the burden shifts to the employer to articulate a legitimate and nondiscriminatory reason for the adverse employment action. Id. Upon articulation of a legitimate and nondiscriminatory reason for the adverse employment action, the burden shifts back to the employee to show that the proffered reasons were not the true reason for the action, but were instead a pretext for discrimination. Id. at 804, 93 S. Ct. at 1825.

The district court found, and the city apparently concedes by not offering any argument to the contrary, that Holmgren made a prima facie showing of unfair treatment by the city. But the district court also found, and Holmgren concedes, that the city rebutted the prima facie showing by articulating legitimate and nondiscriminatory reasons for investigating Holmgren and for not immediately promoting him. The parties dispute whether the city's proffered reasons were pretexts for discriminatory treatment. To succeed on his claim, Holmgren must show (1) that the city's proffered reasons are pretexts, and (2) that intentional discrimination is the real reason for its actions. Russell v. Men's Wearhouse, Inc., 170 F.3d 1156, 1157 (8th Cir. 1999).

Holmgren admits he cannot prove the city's initial investigation into the racial slur incident and its first letter of suspension were pretexts, given its duty to quickly investigate and discipline racial harassment. When Holmgren contested the suspension, however, the city conducted an investigation, determined there was no proof he had uttered the offensive statement, and withdrew the letter from his file. Yet nearly one year later, the city issued a second letter of suspension, even though the only new "evidence" it obtained was the handwritten statement of Sarafolean accusing Holmgren of having made the racist comment.

Holmgren also argues that the city's explanation for the delay in promoting him was a pretext for retaliatory discrimination because the city had never before waited so long to fill retirement vacancies. Although, the "mere recitation of statistics" is not probative of a claim that discrimination was pretextual, Albertson v. FMC Corp., 437 N.W.2d 113, 117 (Minn. App. 1989), Holmgren's showing of discriminatory treatment in the investigation supports his argument that the city's rationale for its failure to quickly promote him also demonstrates pretext. These facts, when viewed cumulatively, are sufficient to create a fact question for the jury.

Holmgren has likewise come forward with evidence sufficient to create a fact question on whether the city's targeting him for investigation and failing to promote him promptly were intentionally discriminatory acts. Despite its policy of investigating claims of racial harassment and despite witnesses' reports that Sarafolean himself had made the slur, the city never investigated Sarafolean in connection with the incident. And, at the final civil service hearing, Fire Chief Fuller stated he relied on District Chief Babler's recommendation that Holmgren be disciplined. At the same hearing, however, Babler testified that he had not recommended disciplining Holmgren. Holmgren also has offered evidence tending to show that the test monitor had a personal grudge that provided a motive to alter his test scores. Finally, it is undisputed that he has been involved in lawsuits, directly challenging the city's examination procedures, during the time of the alleged discrimination.

These facts, taken together, demonstrate that Holmgren has produced evidence sufficient to create a fact question for the jury on both pretext and discriminatory motivation for disparate treatment. We therefore reverse the directed verdict and remand the issue for a jury's consideration.


In denying Holmgren's motion to amend his complaint to add a claim for punitive damages, the district court ruled that Holmgren's allegations "simply do not amount to a prima facie showing that there is clear and convincing evidence that Defendants acted with a deliberate disregard for [his] rights." See Swanlund v. Shimano Indus. Corp., 459 N.W.2d 151, 154 (Minn. App. 1990) (requirement that damages be proved by "clear and convincing evidence" at trial is "implicitly incorporated into the requirement that the movant present a prima facie case of willful indifference") (citation omitted), review denied (Minn. Oct. 5, 1990). The same evidence that requires a factual determination on the pretext issue also constitutes a prima facie showing that the true reason for the city's actions was intentional discrimination. We therefore reverse the district court's denial of Holmgren's motion to add a claim for punitive damages on his PELRA claim.

Affirmed in part, reversed in part, and remanded.