Plaintiff appeals a circuit court order granting defendant's motion for an accelerated judgment.
After being discharged from her employment with defendant, plaintiff filed a complaint with the Michigan Civil Rights Commission claiming that her termination constituted an unlawful employment discrimination on account of age and sex. While the proceedings were pending with the commission, plaintiff instituted suit in the circuit court seeking relief for the same alleged unlawful discrimination. This action was dismissed "with prejudice" on defendant's motion for accelerated judgment, which contended that plaintiff failed to first exhaust her administrative remedies before the commission. No appeal of the circuit court's order of dismissal was taken by plaintiff.
Subsequently, the commission dismissed plaintiff's action due to insufficient evidence to sustain the charge. Review of this determination was not pursued by plaintiff. Instead, she filed a second suit in the circuit court. This proceeding was dismissed on defendant's motion for accelerated judgment, which was based on the claim that plaintiff's suit was barred under the doctrine of res judicata. Plaintiff thereafter perfected this appeal.
Res judicata is a jurisprudential doctrine founded upon the premise that litigation of a controversy must have a termination point. Otherwise, judicial resources would be unnecessarily expended, and the rights of litigants would be subjected to interminable contest.
The doctrine of res judicata becomes applicable when an adjudicatory proceeding on a contested issue has progressed to a final determination, and all available courses of appeal have been exhausted or not pursued within the prescribed time limitations. Thereafter, that issue becomes settled and may not be relitigated between the same parties in a collateral proceeding, absent some compelling equity not here pertinent. See Howell v Vito's Trucking & Excavating Co, 386 Mich. 37; 191 N.W.2d 313 (1971), Gursten v Kenney, 375 Mich. 330; 134 N.W.2d 764 (1965). Further, this doctrine is applicable to administrative proceedings that are adjudicatory in nature and from which an appeal is provided, where the Legislature intends that the tribunal's judgment is to be final absent an appeal. Senior Accountants, Analysts & Appraisers Assoc v City of Detroit, 399 Mich. 449, 457-458; 249 N.W.2d 121, 124-125 (1976).
All proceedings initiated by plaintiff had the purpose of seeking relief for an alleged unfair
MCLA 37.4; MSA 3.548(4) provided as follows:
"The commission shall investigate alleged discrimination against any person because of religion, race, color or national origin in the enjoyment of the civil rights guaranteed by law and by the constitution of this state, and shall secure the equal protection of such civil rights without such discrimination. A complaint alleging an unlawful discriminatory practice is subject to the same procedure as a complaint alleging an unfair employment practice under Act No. 251 of the Public Acts of 1955, being sections 423.301 to 423.311 of the Compiled Laws of 1948. Appeals from final orders of the commission, including cease and desist orders and refusals to issue complaints, shall be tried de novo before the circuit court for the county of Ingham, the circuit court for the county wherein the alleged unlawful discriminatory practice is alleged to have occurred or where the person, firm or corporation against whom the complaint was filed, resides or has his principal place of business. If an appeal is not taken within 30 days after the service of an appealable order of the commission, the commission may obtain a decree for the enforcement of the order from the circuit court which would have had jurisdiction of the appeal."
Evident from the language used is a legislative intent that an unappealed order of the commission becomes final. After 30 days from receipt of the commission's order, if no appeal has been taken, enforcement of the order may be obtained merely
Accordingly, we conclude that the commission's order of dismissal became final when plaintiff failed to seek review within the prescribed time period. The circuit court order granting an accelerated judgment was a proper resolution of this case, albeit based upon the res judicata effect of a prior circuit court order on which we express no opinion as to propriety. Nevertheless, since the commission's order is final, plaintiff is precluded from further litigation of the issues determined by that order.
D.C. RILEY, P.J., concurred.
P.R. MAHINSKE, J. (dissenting).
This case presents questions dealing with the concurrent jurisdiction of the Michigan Civil Rights Commission and the circuit courts, and the application of the doctrine of res judicata following an erroneous dismissal "with prejudice" by the circuit court.
Plaintiff was employed by defendant as a secretary. She was fired in February, 1974, after working
In response to plaintiff's complaint defendant filed a motion for summary judgment. GCR 1963, 117.2(1) and 117.2(3). The asserted basis for defendant's motion was that plaintiff had failed to exhaust her administrative remedies. The circuit court agreed with defendant's position, and issued an opinion stating in part, "Plaintiff must first exhaust her administrative remedies before seeking redress in circuit court". On the basis of this finding the court dismissed plaintiff's complaint by order dated February 21, 1975. The order specified that the complaint was dismissed "with prejudice", and was signed by both parties' attorneys below the words, "Approved as to content and form".
Plaintiff did not appeal from the February, 1975, circuit court dismissal, but instead awaited the CRC's decision on whether to issue a charge. On May 14, 1975, the CRC decided not to issue a charge and dismissed plaintiff's petition on the basis of insufficient evidence. Plaintiff did not seek a reconsideration of this determination by the
On September 17, 1975, plaintiff filed a second action in the circuit court, based on her discharge from defendant's employ and alleging age discrimination and breach of implied contract. Plaintiff asserted that the court now had jurisdiction because plaintiff had exhausted her administrative remedies as the court had instructed her to do. Defendant responded with a motion for accelerated judgment, on the grounds that (1) plaintiff had failed to exhaust her administrative remedies, because she had failed to seek reconsideration by the CRC and/or to appeal to circuit court, and (2) plaintiff's suit was barred by the doctrine of res judicata. Again the circuit court agreed with defendant, and on November 15, 1976, entered an order dismissing the second complaint on both of the above grounds. It is from this second dismissal that plaintiff appeals as of right. I would reverse.
I — CONCURRENT JURISDICTION OF CIVIL RIGHTS COMMISSION AND CIRCUIT COURT
Plaintiff's first contention is that the circuit court erred in dismissing her first complaint. I agree. The right to obtain and retain employment without discrimination on the basis of age is a civil right. MCLA 423.301; MSA 17.458(1);
"Since Bolden [Bolden v Grand Rapids Operating Corp, 239 Mich. 318; 214 NW 241; 53 ALR 183 (1927)] and St. John [St John v General Motors Corp, 308 Mich. 333; 13 N.W.2d 840 (1944)] clearly affirm the existence of a cause of action for damages under a civil rights statute, and since the judicial remedies provision in § 29 of Article 5 clearly intended no displacement of judicial remedies, defendant's argument as to the `exclusive' jurisdiction of the Civil Rights Commission is without merit.
"We hold that plaintiff can maintain a civil damage action for redress of his statutorily created right to be free from discrimination in private employment, and that this remedy may be pursued in addition to the remedial machinery provided by statute." (Footnote omitted.)
Pompey dealt with race discrimination; this Court in Holmes, supra, held that that decision by its terms also applied to age discrimination.
In dismissing plaintiff's first suit, the trial court relied upon Michigan Civil Rights Commission v Clark, 390 Mich. 717; 212 N.W.2d 912 (1973), for the proposition that plaintiff was required to exhaust her administrative remedies before filing a complaint in circuit court. Clark provides no support for this proposition. Clark dealt with the question of whether a person against whom a complaint has been lodged by the CRC may, by seeking a judicial remedy, oust the CRC from consideration of a complaint against him. In the case at bar the question is whether or not a plaintiff asserting a
II — RES JUDICATA
Plaintiff did not appeal from the first circuit court dismissal. Instead, she waited until the CRC decided not to issue a charge, and then returned to the circuit court saying she had exhausted her administrative remedies. The circuit court again dismissed, this time on the basis of res judicata as well as failure to exhaust administrative remedies. On appeal plaintiff urges that this dismissal was also erroneous, and I would agree.
A. General Principles of Res Judicata
The policy considerations behind the rule of res judicata are well known. In Johnson v Haley, 357 Mich. 411, 418; 98 N.W.2d 555 (1959), our Supreme Court quoted as follows from Baldwin v Iowa State Traveling Men's Association, 283 U.S. 522, 525; 51 S.Ct. 517; 75 L Ed 1244 (1931):
"`Public policy dictates that there be an end of
By application of the doctrine of res judicata the courts seek to avoid the time and expense of repetitive litigation and the problem of inconsistent verdicts on the same cause of action. See Rose v Rose, 10 Mich.App. 233, 236; 157 N.W.2d 16 (1968). In order for a former judgment to be a bar, three requirements must be satisfied: (1) identity of subject matter, (2) identity of parties or their privies, and (3) a judgment on the merits. Tucker v Rohrback, 13 Mich. 73, 75 (1864); Curry v Detroit, 394 Mich. 327, 331; 231 N.W.2d 57 (1975).
In the present case it is undisputed that the parties and the subject matter are the same. What is disputed is whether the original dismissal was, or should be given the effect of, a judgment "on the merits". I would answer this difficult and many-faceted question in the negative.
B. Dismissals not for "Lack of Jurisdiction"
GCR 1963, 504.2 provides in pertinent part:
"For failure of the plaintiff to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against him.
* * *
"Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction, operates as an adjudication upon the merits." (Emphasis added.)
The type of dismissal provided for in this subrule, i.e., any involuntary dismissal not for lack of
"In general, a voluntary dismissal under sub-rule 504.1, is without prejudice, and thus does not prohibit subsequent prosecution of the same action, unless the order of dismissal specifically states that it is with prejudice. Conversely, an involuntary dismissal under sub-rule 504.2 operates as an adjudication on the merits — that is, with prejudice — thereby proscribing subsequent prosecution of the same claim, unless the order of dismissal specifies otherwise." 2 Honigman and Hawkins, Michigan Court Rules Annotated, Authors' Comments, Rule 504, p 333. (Emphasis added.)
Thus, in the case of an involuntary dismissal which is not for lack of jurisdiction, the plaintiff is barred from bringing a second action unless the order of dismissal specifies that the dismissal is "without prejudice". However, the corollary of the rule that any dismissal other than a dismissal for lack of jurisdiction operates as an adjudication on the merits is that a dismissal for lack of jurisdiction does not operate as an adjudication on the merits. Such a dismissal is by its nature "without prejudice". Indeed, in construing a virtually identical provision in FR Civ P, 41(b), the Federal courts have so held. In Miller v Saxbe, 396 F.Supp. 1260, 1261 (DDC, 1975), the first suit was dismissed for lack of "subject matter jurisdiction" because plaintiff had failed to comply with a 30-day filing requirement of the Equal Employment Opportunity Act. The court stated that res judicata was inapplicable:
Also stating that according to FR Civ P, 41(b) a dismissal for lack of jurisdiction did not operate as a dismissal on the merits were the Federal courts in Williams v Minnesota Mining & Manufacturing Co, 14 FRD 1, 8 (SD Cal, 1953), and Loucke v United States, 21 FRD 305, 309 (SD NY, 1957). Therefore, if in the present case the first dismissal was for "lack of jurisdiction", it need not necessarily be given res judicata effect.
C. "Lack of Jurisdiction": Failure to Exhaust Administrative Remedies
The question here, of course, is whether the first dismissal on the basis of failure to exhaust administrative remedies was a "dismissal for lack of jurisdiction", within the meaning of Rule 504.2. I would answer this question in the affirmative. The Federal courts construe "lack of jurisdiction" dismissals broadly, so as to include most of the situations which in Michigan are grounds for accelerated judgment.
The Costello Court went on to read "lack of jurisdiction" to mean any ground which did not go to the merits of the lawsuit, in accord with common law principles of res judicata.
In the case at bar, defendant argues that Costello applies only to nonspecifying dismissals, i.e., those in which the lower court has not specified whether the dismissal is with or without prejudice, as was the case in Costello. The Court in Weissinger v United States, 423 F.2d 795, 799 (CA 5, 1970), so read Costello. However, I do not agree that Costello must necessarily be so limited, and would choose not to so limit it here. In the first place, the Weissinger Court stated that the "with prejudice" order which it was considering was "entered after full trial on all issues and with complete findings and conclusions". 423 F2d at 800. This is clearly not the situation in the present lawsuit, where defendant moved for summary judgment in the first suit, and never defended on the merits. Secondly, the Costello language itself belies defendant's construction. In Costello, the Court specified that it spoke to "the scope of this
Also in support of this conclusion is the language from Michigan cases dealing with exhaustion of remedies. The Administrative Procedures Act (APA), MCLA 24.301; MSA 3.560(201), provides that when a person has exhausted his administrative remedies and is aggrieved by a final decision in a contested case, the decision is subject to direct review in the courts. Michigan Courts have construed this provision as meaning that the circuit court lacks subject matter jurisdiction until a person has exhausted his or her administrative remedies:
"* * * the statute [MCLA 24.301; MSA 3.560(201)] makes it clear that the circuit court's subject matter jurisdiction in this case depends upon exhaustion of administrative remedies." International Business Machines Corp v Department of Treasury, 75 Mich.App. 604, 609; 255 N.W.2d 702 (1977).
"We conclude that plaintiff National Bank had an adequate administrative remedy in this case and that
See also, St Paul Fire & Marine Insurance Co v Littky, 60 Mich.App. 375, 378; 230 N.W.2d 440 (1975); Hooper v United States, 326 F.2d 982, 984-985 (Ct Cl, 1964), cert den, 377 U.S. 977; 84 S.Ct. 1882; 12 L Ed 2d 746 (1964).
Thus, under the view expressed in the above cases, failure to exhaust administrative remedies is viewed as so serious that the court is deprived of subject matter jurisdiction. For this reason I do not hesitate to say that failure to exhaust is at least serious enough to come within the "lack of jurisdiction" exception of GCR 1963, 504.2. However, that does not end the inquiry.
D. Res Judicata Effect: Jurisdictional Rulings on Jurisdictional Issue Decided
Even though a judgment made on the grounds that the court lacks jurisdiction is not on the merits and is not conclusive as to the merits, it is conclusive as to what it did actually decide, i.e., the jurisdictional question presented. Restatement, Judgments, § 49, p 195. In Citizen's Mortgage Corp v Second Avenue Limited Dividend Housing Association, 72 Mich.App. 1, 4; 248 N.W.2d 699 (1976), this Court quoted as follows from the Restatement, supra:
"`b. Effect of judgment as to issues decided. Although, where the judgment for the defendant is not on the merits, the plaintiff is not precluded from maintaining a new action on the same cause of action, he is precluded from relitigating the very question which was litigated in the prior action.'"
In the conflict of laws area, Michigan cases also hold that the erroneous decision of a court that it has jurisdiction is res judicata. McDonald v McDonald, 74 Mich.App. 119, 123, fn 2; 253 N.W.2d 678 (1977); Johnson v Haley, supra, p 416. But what happens when the court which actually has jurisdiction erroneously decides that it lacks jurisdiction? This question is answered in Anno: Res judicata effect of judgment dismissing action, or otherwise denying relief, for lack of jurisdiction or venue, 49 ALR2d 1036, 1039:
"Since a judgment based on lack of jurisdiction of the court over the subject matter or over the defendant or on improper venue is not on the merits, it is obvious that such a judgment does not extinguish the cause of action and does not bar the plaintiff from maintaining another action on the same cause in a court having jurisdiction or in the proper district or county. Where a judgment dismissing an action for lack of jurisdiction is erroneous in that the court, in fact, had jurisdiction, the authorities are divided as to whether the judgment bars the plaintiff from maintaining a second action in an
* * *
"[20.] Of course, if the only available forum has denied relief for lack of jurisdiction of the subject matter, the question is res judicata, even though the judgment is erroneous". (Emphasis added; footnotes 17-19 omitted.)
Many cases are cited to support the proposition of footnote 20 in the above annotation. These cases include In re Quinney's Estate, 287 Mich. 329; 283 NW 599 (1939), where the Court stated at pp 338-339:
"While a dismissal on the ground the court has no jurisdiction of the subject-matter is a conclusive determination of want of jurisdiction, it is no adjudication of the merits and will not bar another action for the same cause. 34 C.J. p 795." (Emphasis added.)
The Quinney Court went on to decide that, despite the rule set forth therein, the probate court's erroneous ruling that it did not have jurisdiction did not bar the plaintiff from bringing another action in the probate court. I would find that the circumstances in the case at bar are peculiar enough to require a similar holding on our part.
E. Administrative Remedies Exhausted: A Different Jurisdictional Question
The rule that res judicata applies to questions of jurisdiction is inapplicable in several situations. One such situation is where the precise jurisdictional question is different in the second lawsuit than it was in the first. Annot., 49 ALR2d 1036, § 6(b). In United States v Reid, 104 F.Supp. 260,
"With respect to res judicata it is to be pointed out that our order of April 4, 1951 merely quashed the original service on the defendant, which was admittedly invalid; we passed on nothing except the validity of that particular service, and, as indicated, the Government is now relying upon an entirely different service; our holding that the original service was invalid is in no sense res judicata of the validity of the present service or of the jurisdiction of this Court in the present proceeding."
See also In re Kammerer's Estate, 8 Wis.2d 494; 99 N.W.2d 841 (1959). In the case at bar this first exception is applicable because the first dismissal occurred when plaintiff's case was still pending in the CRC. The jurisdictional question then was whether the court could take cognizance of plaintiff's claim while plaintiff was at the same time pursuing her administrative remedies. But when plaintiff returned in September, 1975, and filed her second complaint, the jurisdictional question had changed to one of whether or not the circuit court could entertain her claim when the CRC had refused to issue a charge. Because these questions are far from identical, the first determination was not res judicata as to the second complaint.
A second related exception to the application of res judicata is where there has been a change of circumstances, i.e., where "subsequent events occur which create a new legal situation or alter the legal rights or relations of the litigants". Annot., 49 ALR2d 1036, § 6(c), p 1058. In In re Raseman Estate, 18 Mich.App. 91, 104-105; 170 N.W.2d 503
"Plaintiff has asserted that the order of the probate court dated November 24, 1944, which was not appealed from is res judicata and therefore conclusive on this appeal. The doctrine of res judicata is not immutable. It reflects a policy of law which seeks to end litigation, but it is only a policy, not an absolute rule, and it need not be and has not been applied rigidly without regard to disparate factual situations. Just because the 1944 probate court order was not appealed from and the petition for modification was not filed until 1964 does not mean that unpaid arrearages are not subject to modification. Indeed, the fact that a petition for modification can be entertained at all establishes that the doctrine of res judicata does not apply — if the doctrine applied, no court could modify the 1944 order. The reason why it is subject to modification is the reason why it can be modified as to arrearages, because it operates in futuro as to facts that had not occurred when the order was entered. It is a general rule that res judicata applies only where there has been an adjudication on the merits. The 1944 probate court adjudication on the merits did not constitute an adjudication on the merits of the 1945 or later facts and, hence, did not operate in the nature of res judicata as to later facts which have never been the subject of adjudication so as to prevent modification of the 1944 order as to accrued and unpaid arrearages."
In the case at bar, as in Raseman, the jurisdictional facts existing when plaintiff filed her second complaint had never been litigated. Just as the statute involved in Raseman permitted modification and was thus antithetical to res judicata, so here the exhaustion doctrine inherently recognizes that at some future time, when plaintiff has exhausted his or her administrative remedies, the
Defendant argues that plaintiff had not satisfied the trial court's precondition to the assumption of jurisdiction, because plaintiff had not really exhausted her administrative remedies. There is no support in law or logic for this position. MCLA 24.301; MSA 3.560(201), provides as follows:
"When a person has exhausted all administrative remedies available within an agency, and is aggrieved by a final decision or order in a contested case, whether such decision or order is affirmative or negative in form, the decision or order is subject to direct review, by the courts as provided by law. Exhaustion of administrative remedies does not require the filing of a motion or application for rehearing or reconsideration unless the agency rules require the filing before judicial review is sought. A preliminary, procedural or intermediate agency action or ruling is not immediately reviewable, except that the court may grant leave for review of such action if review of the agency's final decision or order would not provide an adequate remedy." (Emphasis added.)
The Civil Rights Commission rules do not require
"Rule 7. (a) A claimant may request of the commission a reconsideration of its refusal to issue a charge. Any party may request a reconsideration of the terms of conciliation. Any such request shall be in writing, state specifically the grounds upon which it is based, and be filed within 30 days after the date of mailing of the notice of disposition of which reconsideration is requested. It shall be filed at any office of the commission by personal delivery or by registered or certified mail, return receipt requested." Administrative Code, 1970-1971 AACS, R 37.7(a), p 5351. (Emphasis added.)
"Rule 18.(a) Any party or intervener claiming to be aggrieved by a final order of the commission, including without limitation a refusal to issue a charge, may appeal to the circuit court of the state of Michigan having jurisdiction provided by law." Administrative Code, 1967 AACS, R 37.18(a), p 4084. (Emphasis added.)
Thus, if plaintiff had been required to exhaust any administrative remedies, as the circuit court told her she was, her task was complete when the commission refused to issue a charge. The circuit court could not incorporate into its decision a requirement of exhaustion that the law does not recognize. As for defendant's contention that "exhaustion of administrative remedies" includes appeal to circuit court, this is answered by the statute itself, which begins, "When a person has exhausted all administrative remedies available within an agency * * *." I am not aware that the circuit court is within the Civil Rights Commission. Plaintiff did all that she was "required" to do, and the circuit court erred in dismissing her second complaint on grounds of res judicata and failure to exhaust administrative remedies.
Finally, as to the notation "with prejudice",
"It is an unfair employment practice:
(a) For any employer, because any individual is between the ages of 18 and 60, or because of the sex of any individual, to refuse to hire or otherwise to discriminate against him with respect to hire, tenure, terms, conditions or privileges of employment. Any such refusal to hire or discrimination shall not be an unfair employment practice if based on law, regulation, the requirements of any federal or state training or employment program or on a bona fide occupational qualification. It shall not be an unfair employment practice to refuse to select an individual over the age of 35 because of his age for an apprenticeship or an on-the-job training program intended to have a duration of more than 4 months." MCLA 423.303a; MSA 17.458(3a). It should be noted that at the time of the plaintiff's discharge she was 58 years of age.
That section provided that the commission is empowered:
"To hold hearings, administer oaths, issue preliminary notices to witnesses to appear, compel through court authorization the attendance of witnesses and the production for examination of any books, papers or other records relating to matters under investigation or in question before the commission, take the testimony of any person under oath, and issue appropriate orders. The commission may make rules as to the issuance by individual commissioners of preliminary notices to appear."
We construe the term "appropriate orders" to include any monetary recompense to which a complainant may be entitled as a result of the unfair employment practice. Our conclusion is aided in substantial part from insight provided by § 605 of the new Michigan Civil Rights Act, which delineates the permissible scope of commission orders. That section states in pertinent part:
"(2) Action ordered under this section may include, but is not limited to: * * * (i) Payment to the complainant of damages for an injury or loss caused by a violation of this act, including a reasonable attorney's fee." MCLA 37.2605(2)(i); MSA 3.548(605)(2)(i). Additionally, our Supreme Court has held that jurisdiction of actions for violations of the act rests concurrently with the commission and circuit courts and that civil damage remedies may be pursued in the courts "in addition to the remedial machinery provided by statute". Pompey v General Motors Corp, 385 Mich. 537, 560; 189 N.W.2d 243, 255 (1971).
Further, where two or more forums have concurrent jurisdiction over the subject matter of a controversy, a judgment by one forum is conclusive as to all other forums with concurrent jurisdiction. Theisen v City of Dearborn, 5 Mich.App. 607; 147 N.W.2d 720 (1967), remanded on other grounds, 380 Mich. 621; 158 N.W.2d 483 (1968).