Opinion ID: 2547502
Heading Depth: 2
Heading Rank: 1

Heading: the district court correctly granted summary judgment in favor of the school district on oman's breach of contract claim

Text: ¶ 15 Oman originally filed suit in the United States District Court for the District of Utah, seeking recovery under 42 U.S.C. § 1983. Oman also brought five state law claims pursuant to the federal court's supplemental jurisdiction, including a breach of contract claim. In 2005, the federal court granted summary judgment to the District on Oman's § 1983 claim. As part of its summary judgment order, the federal court made several findings and conclusions regarding the Classified Agreement, including the following: During the two months that Morrison conducted surveillance on Plaintiff, he continued to turn in time cards reporting eight hours worked on District business each day, even though most of his days were spent at work sites for his own personal contracting business. It is disingenuous for Plaintiff to argue that as long as he had his cell phone with him, he was still working for the District. Plaintiff's representations to the District regarding his work hours provided a sufficient basis for termination for cause. (Emphasis added.) ¶ 16 Having disposed of the § 1983 claim over which it had subject matter jurisdiction, the federal district court declined to exercise supplemental jurisdiction over Oman's remaining state law claims and dismissed them without prejudice.
¶ 17 Following the dismissal in the federal court, Oman filed an action in state court. In his complaint, Oman alleged the same five causes of action that had been dismissed without prejudice by the federal court, including the breach of contract claim. The state district court granted summary judgment to the District on Oman's breach of contract claim, relying on two alternative bases. First, the court independently looked at the issues and found that Oman had been properly terminated for cause and that the District was not contractually required to give any prior notice, opportunity to be heard, or progressive discipline to [Oman] prior to his termination. Second, the state district court noted that the findings and conclusions [of the federal court] involve precisely the same issues as those raised in [Oman's] breach of contract [claim]. The district court thus concluded that under the doctrine of issue preclusion, it was bound by the federal court's determinations that Oman was properly terminated for cause under the Classified Agreement and that Oman was not contractually entitled to the procedures he sought. [3] ¶ 18 On appeal, Oman argues that both conclusions were erroneous. We hold that a combination of the two theories on which the district court relied provides a sufficient basis on which to affirm the summary judgment.
¶ 19 In his memorandum opposing summary judgment to the district court-and in his opening brief to this courtOman argued that the District breached the Classified Agreement by failing to follow the procedures contained therein. We disagree and conclude that the district court was correct in holding that Oman's arguments failed, as a matter of law, based on the Classified Agreement. ¶ 20 Oman first argues that section 8.5.3(1) of the Classified Agreement required the District to notify him when his actions placed his continued employment at risk. Second, Oman argues that section 8.5.4(1) required the District to inform him that his continued employment was in question, inform him of the reasons, and give him an opportunity to correct the problems. Third, Oman argues that section 8.3 of the Classified Agreement required the District to conduct individual employee evaluations at least once annually. Oman asserts that he did not receive such evaluations and that an evaluation would quickly have addressed and resolved any problems associated with his activities. ¶ 21 On summary judgment, the district court reviewed Oman's claims and the Classified Agreement. It concluded that, as a matter of law, the Classified Agreement provides for a dual track of termination: one for unsatisfactory conduct ... and the second for cause. The court further concluded that [t]ermination for cause under the Classified Agreement is sufficient grounds, standing alone, for termination, and no prior notice or warning, or opportunity to correct the conduct[] is required to be afforded to the employee. Finally, the court determined that [t]here exists no issue of material fact that [Oman] was properly terminated by [the District] for cause under the terms of the Classified Agreement, or that [the District] was not contractually required to give any prior notice, opportunity to be heard, or progressive discipline to [Oman] prior to his termination. Based on these determinations, the district court granted summary judgment in favor of the District on Oman's breach of contract claim. We affirm the district court's grant of summary judgment. ¶ 22 If the terms of a contract are unambiguous, the contract may be interpreted as a matter of law. Green River Canal Co. v. Thayn, 2003 UT 50, ¶ 17, 84 P.3d 1134 (internal quotation marks omitted). Like the district court, we find that the terms of the Classified Agreement are unambiguous and we therefore interpret them as a matter of law. ¶ 23 We first address Oman's claim that he was entitled to notice when his actions placed his employment at risk. This claim is based on section 8.5.3(1) of the Classified Agreement. Oman's reliance on this section is misguided. Under the Classified Agreement, there are two tracks of termination. The first is termination for unsatisfactory action or conduct, which is addressed in section 8.5.3(1). The second is termination for cause, which is addressed in section 8.5.3(2). Oman was terminated for cause under section 8.5.3(2). [4] Accordingly, the procedures governing termination for unsatisfactory conduct contained in section 8.5.3(1) do not apply, and Oman was, therefore, not contractually entitled to them. ¶ 24 We next address Oman's claim that he was entitled to notice and an opportunity to correct the problem. This claim is based on section 8.5.4(1) of the Classified Agreement. Again, Oman's reliance is misplaced. Section 8.5.4(1) contains the notice requirements applicable when an employee's contract is not being renewed. These requirements do not apply to Oman because his termination was not due to the District's decision not to renew his contract; rather, he was terminated during his contract term. Accordingly, the notice provisions of section 8.5.4(2) apply. That section specifies the notification requirements when an employee is terminated during his contract term. Oman has not argued that the District failed to meet these notification requirements. Indeed, the record shows that the District met them. ¶ 25 Finally, we address Oman's claim that he was entitled to performance evaluations under section 8.3 of the Classified Agreement. We agree with Oman that the terms of the Classified Agreement specify that the District should evaluate each permanent employee at least once annually. Nevertheless, this requirement does not bear on Oman's termination. The evaluation requirements in section 8.3 are exclusive of the termination procedures in section 8.5. Thus, any failure of the District to give performance evaluations does not preclude the District from terminating an employee under the procedures contained in the Classified Agreement. The issue in this case is whether the District properly followed the termination procedures in the Classified Agreement when it fired Oman. Whether the District conducted performance evaluations of its employees has no bearing on the resolution of this issue. ¶ 26 We therefore hold that the district court properly interpreted the Classified Agreement. As a matter of law, the District was not contractually obligated to satisfy the procedural requirements that Oman argued were required thereunder.
¶ 27 In his reply brief to this court, Oman raises, for the first time, an additional argument to support his claim that summary judgment was inappropriate on his breach of contract claim. Oman contends that under any interpretation of the classified agreement, there was still a triable issue as to whether Oman's conduct was sufficient grounds for termination for cause. We could disregard this argument because it was not presented to the district court during the summary judgment proceedings. See State v. Labrum, 925 P.2d 937, 939 (Utah 1996) (Issues not raised before the trial court are usually waived and cannot be raised on appeal.). Nevertheless, we choose to address it, and we conclude that the issue was resolved by the federal district court and that the state district court was bound by the federal court's determination under the doctrine of issue preclusion. ¶ 28 The doctrine of res judicata embraces two distinct theories: claim preclusion and issue preclusion. Buckner v. Kennard, 2004 UT 78, ¶ 12, 99 P.3d 842. This appeal raises only the latter principle of issue preclusion. [5] Issue preclusion, which is also known as collateral estoppel, prevents parties or their privies from relitigating facts and issues in the second suit that were fully litigated in the first suit. Id. (internal quotation marks omitted). The purposes of issue preclusion include (1) preserving the integrity of the judicial system by preventing inconsistent judicial outcomes; (2) promoting judicial economy by preventing previously litigated issues from being relitigated; and (3) protecting litigants from harassment by vexatious litigation. Id. ¶ 14. ¶ 29 Issue preclusion applies only when the following four elements are met: (i) the party against whom issue preclusion is asserted must have been a party to or in privity with a party to the prior adjudication; (ii) the issue decided in the prior adjudication must be identical to the one presented in the instant action; (iii) the issue in the first action must have been completely, fully, and fairly litigated; and (iv) the first suit must have resulted in a final judgment on the merits. Collins v. Sandy City Bd. of Adjustment, 2002 UT 77, ¶ 12, 52 P.3d 1267 (internal quotation marks omitted). ¶ 30 Oman argues that issue preclusion does not apply in this case. Specifically, he argues that there was no final adjudication because the federal court dismissed his state law breach of contract claim without prejudice. ¶ 31 In making this argument, Oman confuses issue preclusion with claim preclusion. [C]laim preclusion bars a party from prosecuting in a subsequent action a claim that has been fully litigated previously. Snyder v. Murray City Corp., 2003 UT 13, ¶ 34, 73 P.3d 325 (emphasis added)(internal quotation marks omitted). On the other hand, issue preclusion ... prevents parties or their privies from relitigating facts and issues in the second suit that were fully litigated in the first suit. Id. ¶ 35 (emphasis added) (internal quotation marks omitted). While claim preclusion corresponds to causes of action, issue preclusion corresponds to the facts and issues underlying causes of action. And where two causes of action embody the same dispositive issue, a prior determination of that issue in the context of one cause of action can have a preclusive effect in later litigation regarding the other cause of action. As we have previously held, issue preclusion prevents the relitigation of issues that have been once litigated and determined in another action even though the claims for relief in the two actions may be different. Penrod v. Nu Creation Creme, Inc., 669 P.2d 873, 875 (Utah 1983) (emphasis added); see also Restatement (Second) of Judgments § 27 (1982) (When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim. (emphasis added)). That is precisely the situation in this case. ¶ 32 Underlying the § 1983 claim was the dispositive issue of whether the District breached the Classified Agreement when it fired Oman for cause. Indeed, when Oman filed his complaint in federal court, his basis for the § 1983 cause of action was twofold: (1) that the District's pre-termination conduct deprived him of due process rights secured by the Fifth and Fourteenth Amendments to the United States Constitution, and (2) that the District's decision to suspend, and later terminate, his employment violated the terms of the Classified Agreement. Thus, a resolution of the § 1983 claim, as framed by Oman, required the federal court to resolve the underlying issue of whether the District violated the Classified Agreement when it fired Oman. The issue was squarely before the federal court, was litigated by the parties, and was necessary to the court's final judgment on the § 1983 claim. [6] Accordingly, the federal court made findings and conclusions regarding the alleged breach of contract-including the previously quoted conclusion that the District had a sufficient basis for firing Oman for cause under the Classified Agreement-and these findings and conclusions are binding in subsequent actions under the doctrine of issue preclusion. ¶ 33 Although Oman's breach of contract claim was not litigated in the federal court, it is based upon the same underlying issue that was resolved by the federal court: whether the District had a sufficient basis for terminating Oman for cause under the Classified Agreement. The state district court was therefore bound by the federal court's conclusion that [Oman]'s representations to the District regarding his work hours provided a sufficient basis for termination for cause. Accordingly, even if Oman had argued to the district court that his conduct did not give the District a basis for terminating him for cause, the argument would have failed based on the federal court's prior ruling. We therefore hold that the district court properly granted summary judgment to the District on Oman's breach of contract claim.