BEFORE THE IOWA CIVIL RIGHTS COMMISSION

ORLANDO RAY DIAL, COMMISSIONER; CRISTEN HARMS, and MIKE DE VOLDER, Complainants,

and

IOWA CIVIL RIGHTS COMMISSION,

VS.


FRIEDMAN MOTORCARS, LTD., MIKE FRIEDMAN, TIM MANNING, GARY FRIEDMAN, SCOTT HENRY, PAT SULLIVAN and CHERYL RUBLE, Respondents.

RULING ON PARTIAL MOTION TO DISMISS:

Findings of Fact:

1B. Respondents Scott Henry, Pat Sullivan, and Cheryl Ruble filed a partial motion to dismiss in three divisions. After the opportunity was given to present evidence, and after argument by counsel, the motion was denied. (Tr. at 33-49). The findings of fact and conclusions of law set forth below clarify and expand the reasons for that decision.

Division I (Commissioner Dial's Complaint):

2B. The first division of the motion requested that Commissioner Dial's complaint, CP # 06-89-18956, against Respondents Scott Henry and Pat Sullivan be dismissed for the following reasons:

a. These Respondents were not notified of the finding of probable cause or no probable cause as required by 161 Iowa Administrative Code § 3.12(3).

b. These Respondents were not provided with a synopsis of the facts leading to a finding of probable cause or a written recommendation for a resolution of the case as required by 161 Iowa Administrative Code § 3.12(6).

c. These Respondents were not notified in writing of the time, date, and location of any conciliation meeting as required by 161 Iowa Administrative Code § 3.12(7).

d. These Respondents were not served with the Notice of Hearing as required by 161 Iowa Administrative Code § 4.1 (1).

3B. It is not disputed that probable cause was found in regard to sex and race discrimination ;n hiring and in regard to all allegations concerning failure to consider, harassment and unequal service set forth in Commissioner Dial's complaint or that conciliation was attempted from approximately March 30, 1990 until April 16, 1990. (Request for Admissions and Response). See Conclusion of Law No. 2B. Official notice is also taken that, during conciliation, offers and counteroffers for settlement are often transmitted orally. Fairness to the parties does not require that they be given an opportunity to contest this fact.

4B. There is no evidence in the record, with respect to Commissioner Dial's complaint, indicating (a) whether Scott Henry or Pat Sullivan were or were not notified of the finding of probable cause by certified mail within 15 days of that determination, (b) whether Scott Henry or Pat Sullivan were or were not provided with a synopsis of.the facts leading to a finding of probable cause and a written recommendation for a resolution of the case, or (c) who was or was not notified in writing of the time, date, and location of any conciliation meeting. Nor is there any evidence that either Scott Henry or Pat Sullivan were prejudiced by any failure of the Commission to perform any of these acts.

5B. A letter, dated January 22,1990, informing some of the parties of the probable cause finding, was attached to the request for admissions. This letter indicates that copies were sent to Commissioner Dial and Respondents Friedman Motorcars, Ltd., Mike Friedman, and Tim Manning. There is nothing in the request for admissions or the letter to indicate whether or not a similar letter was sent to Scott Henry or Pat Sullivan. In the absence of such evidence, it cannot be reasonably inferred that the absence of Scott Henry's or Pat Sullivan's name on the January 22nd letter indicates they were not sent such a notification. See Conclusion of Law No. 2B.

6B. During the course of the hearing, Respondent Scott Henry stipulated that he was served with the Notice of Hearing as reflected in the records of service. (Tr. at 45- 46). Although no notice was served directly on Pat Sullivan, one was mailed to and received by his attorney. (Tr. at 41, 43). Official notice is taken of the record listing the parties served with the Notice of Hearing, including Scott Henry, and indicating the mailing of the notice to Respondents Henry, Sullivan, and Ruble's attorney Mary Bernabe, who represented the Respondents during the preheating stage of the litigation. Both Ms. Bernabe and Patrick Brick, Respondents' counsel at trial, are with the same law firm. Ms. Bernabe participated in the scheduling conference where the original dates for the hearing were discussed and agreed upon by counsel for the parties. Fairness to the parties does not require that they be given the opportunity to contest these facts. Respondents' counsel conceded that, during the investigation stage, the firm's appearance was made on behalf of all Respondents. (Tr. at 47).

Division 11 (Cristen Harms' Complaint):

7B. The second division of the motion requested that Cristen Harms' complaint, CP # 11-89-19422, against Cheryl Ruble be dismissed for the following reasons:

a. Respondent Ruble was not notified of the finding of probable cause or no probable cause as required by 161 Iowa Administrative Code § 3.12(3).

b. Respondent Ruble was not provided with a synopsis of the facts leading to a finding of probable cause or a written recommendation for a resolution of the case as required by 161 Iowa Administrative Code § 3.12(6).

c. Respondent Ruble was not notified in writing of the time, date, and location of any conciliation meeting as required by 161 Iowa Administrative Code § 3.12(7).


d. Respondent Ruble was not served with the Notice of Hearing as required by 161 Iowa Administrative Code § 4.1 (1).

8B. It is not disputed that probable cause was found on January 17,1990 or that conciliation was attempted from approximately January 31, 1990 until April 16, 1990. (Request for Admissions; Response to Request for Admissions).

9B. There is no evidence in the record, with respect to Cristen Harm's complaint, indicating (a) whether Cheryl Ruble was or was not notified of the finding of probable cause by certified mail within 15 days of that determination, (b) whether Cheryl Ruble was or was not provided with a synopsis of the facts leading to a finding of probable cause and a written recommendation for a resolution of the case, or (c) whether Cheryl Ruble was or was not notified in writing of the time, date, and location of any conciliation meeting as required. Nor is there any evidence that Cheryl Ruble was prejudiced by any failure of the Commission to perform any of these acts.

10B. A letter, dated January 22, 1990, informing some of the parties of the probable cause finding, was attached to the request for admissions. This letter indicates that copies were sent to Complainant Harms and Respondents Friedman Motorcars, Ltd., Mike Friedman, and Gary Friedman. There is nothing in the request for admissions or the letter to indicate whether or not a similar letter was sent to Cheryl Ruble. In the absence of such evidence, it cannot be reasonably inferred that the absence of Scott Henry's or Pat Sullivan's name on the January 22nd letter indicates they were not sent such a notification. See Conclusion of Law No. 2B.

11B. Although no notice of hearing was served directly on Cheryl Ruble, one was mailed to and received by her attorney. (Tr. at 41, 43). Official notice has already been taken of the record indicating the mailing of the notice to Respondents' attorney. See Finding of Fact No. 6B.

Division III (Mike DeVolder's Complaint):

12B. The third division of the motion requested that Mike DeVoider's complaint, CP # 11-89-19466, against Pat Sullivan be dismissed for the following reasons:

a. Respondent Sullivan was not notified of the finding of probable cause or no probable cause as required by 161 Iowa Administrative Code § 3.12(3).

b. Respondent Sullivan was not provided with a synopsis of the facts leading to a finding of probable cause or a written recommendation for a resolution of the case as required by 161 Iowa Administrative Code § 3.12(6).

c. Respondent Sullivan was not notified in writing of the time, date, and location of any conciliation meeting as required by 161 Iowa Administrative Code § 3.12(7).

d. Respondent Sullivan was not served with the Notice of Hearing as required by 161 Iowa Administrative Code § 4.1 (1).

13B. It is not disputed that probable cause was found on April 9, 1990 or that conciliation was attempted from approximately April 13,1990 until June 14, 1990. These facts were admitted by Respondent Sullivan through his failure to respond to the Commission's Request for Admissions which states these facts.

14B. There is no evidence in the record, with respect to Mike DeVoider's complaint, indicating (a) whether Pat Sullivan was or was not notified of the finding of probable cause by certified mail within 15 days of that determination, (b) whether Pat Sullivan was or was not provided with a synopsis of the facts leading to a finding of probable cause and a written recommendation for a resolution of the case or (c) whether Pat Sullivan was or was not notified in writing of the time, date, and location of any conciliation meeting as required. Nor is there any evidence that Pat Sullivan was prejudiced by any failure of the Commission to perform any of these acts.

15B. A letter, dated January 22, 1990, informing some of the parties of the probable cause finding, was attached to the request for admissions. This letter indicates that copies were sent to Complainant DeVoider and Respondents Friedman Motorcars, Ltd., Mike Friedman, and Scott Henry. There is nothing in the request for admissions or the letter to indicate whether or not a similar letter was sent to Pat Sullivan. In the absence of such evidence, it cannot be reasonably inferred that the absence of Pat Sullivan's name on the January 22nd letter indicates he was not sent such a notification. See Conclusion of Law No. 2B.

16B. Although no notice of hearing was served directly on Pat Sullivan, one was mailed to and received by his attorney. (Tr. at 41, 43). Official notice has already been taken of the record indicating the mailing of the notice to Respondents' attorney. See Finding of Fact No. 6B.

Conclusions of Law:

Official Notice:

1B. Official notice may be taken of all facts of which judicial notice may be taken and of matters within the specialized knowledge of the agency. Iowa Code § 17A.14(4). Judicial notice may be taken of matters which are "common knowledge or capable of certain verification." In Re Tresnak, 297 N.W.2d 109,112 (Iowa 1980). Official notice of documents reflecting mailing of the notice of herring is proper because judicial notice may be taken of "all the ... jurisdictional papers in a case on trial and the same need not be introduced in evidence." Searis v. Knapp, 5 S.D. 325, 327, 58 N.W. 807, 808 (1894) (taking judicial notice of summons and pleading), quoted in In Re Williams Estate, 90 S.D. 173,240 N.W.2d 74,76 (S.D. 1976); see Slater v. Roche, 148 Iowa 413, 126 N.W. 121 (1910)(taking judicial notice of writ of attachment and return of service as papers properly filed or returned). See Findings of
Fact Nos. 6B, 11 B, 12B.

Effect of Request for Admissions:

2B. The request for admissions is a discovery tool designed to elicit admissions from another party of the specific facts stated therein. Iowa R. Civ. P. 127. If a party serves a request for admissions upon any other party, and the receiving party either admits the matter, fails to respond within the time specified by rule, or responds with a limited denial, the matter sought to be admitted is conclusively established to the extent not denied. Iowa R. Civ. P. 127, 128. These discovery rules apply in administrative contested case hearings. Iowa Code § 17A.13(l). The party requesting the admissions may not necessarily seek admissions on every fact relating to a particular topic. Therefore, it cannot be reasonably inferred solely from the failure to mention a particular act by a party in the request for admissions, or in a supporting document, that the act did not take place.

Effect of Failure to Provide Evidence Demonstrating That the Commission Failed to Comply With 161 Iowa Administrative Code Sections 3.12(3), 3.12(6) and 3.12(7):

3B. Administrative rule 3.12(3) of the Iowa Civil Rights Commission provides that the Complainant and the Respondent shall be notified of the finding of probable cause by certified mail within 15 days of that determination. 161 I.A.C. § 3.12(3). Rule 3.12(6) provides that the Respondent shall be presented with a synopsis of the facts leading to a finding of probable cause along with a written recommendation for a resolution of the case. 161 I.A.C. § 3.12(6). Rule 3.12(7), provides that the Complainant and Respondent are also to be notified in writing of the time, date, and location of any conciliation meeting. 161 1. A. C. § 3.12(7).

4B. "It is hornbook law that ordinarily the burden rests on the moveant to support his or her motion." In Re Matzen, 305 N.W.2d 479, 481 (Iowa 1981). Argument by counsel on the record is not evidence in the record. See Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 255, 101 S.Ct. 1089, 67 L.Ed. 2d 207, 216 n.9 (1981)(burden of production of evidence cannot be met through argument of counsel). An attorney usually may not assert his personal knowledge of the facts in issue. Iowa Code of Professional Responsibility DR 7-105(C)(3).

5B. An attorney may, of course, concede facts adverse to his client's position. An attorney may also make a professional statement, which is:

a statement of fact presented to a court [or administrative agency] by an attorney in connection with a matter then before the court [or administrative agency] verified in effect by the oath the attorney took when he was admitted to the bar, and designed or calculated to influence the determination of a given cause or issue.

State v. Williams, 315 N.W.2d 45 (Iowa 1982). The other parties have the right to cross examine the attorney making the statement. See id. The custom is for the attorney to state on the record that he is making a professional statement immediately prior to the time he makes it. This alerts the counsel for the other parties who will have the opportunity to cross examine the attorney making the statement. No professional statement or other evidence in regard to the Commission's compliance with Rules 3.12(3), 3.12(6) and 3.12(7) with respect to Scott Henry, Pat Sullivan or Cheryl Ruble was introduced by any of the parties. See Findings of Fact Nos. 4B, 9B, 12B.

6B. By failing to provide any evidence that the Commission failed to comply with the requirements of 161 Iowa Administrative Code sections 3.12(3), 3.12(6) and 3.12(7), with regard to Scott Henry, Pat Sullivan, or Cheryl Ruble, as indicated in the three divisions of their Partial Motion to Dismiss, or to provide any stipulation of these failures from the Commission, Respondents Henry, Sullivan, and Ruble have failed to meet their burden of persuasion with respect to these alleged grounds for dismissal. See Findings of Fact Nos. 4B, 9B, 12B.

Ruling in the Alternative: Legal Effect of Any Failure By the Commission to Comply With 161 Iowa Administrative Code Sections 3.12(3), 3.12(6) and 3.12(7):

7B. If it were assumed for the sake of argument that the Commission did fail to comply with 161 Iowa Administrative Code sections 3.12(3), 3.12(6) and 3.12(7), such failure would not warrant dismissal of the complaints. Respondents argued, without citation of authority, that the failure to comply with these rules is more than a technical violation and that such failure requires dismissal. (Tr. at 41).

8B. The controlling authority, however, is to the contrary. In Hartwig v. Board of Nursing, 448 N.W.2d 321, 322-23 (Iowa 1989). the Iowa Supreme Court stated:

Petitioner suggests that any failure by an administrative agency to follow its own rules and regulations gives rise to a due process violation. We believe that this contention overstates the effect of such omissions. Neither Vitarelli v. Seaton, 359 U.S. 535,79 S.Ct. 968,3 L.Ed.2d 1012 (1959), nor Sherman v. Yakahi, 549 F.2d 1287 (9th Cir. 1977), cited by petitioner, stand for the proposition that all deviations by an agency from the agency's own rules give rise to a due process violation. This court has recognized that if an omitted procedural step required by a statute or regulation is not essential to accomplishing the primary purpose of an agency's mission but is designed only to assure order and promptness in the proceeding a failure to follow the prescribed procedure will not invalidate subsequent proceedings unless prejudice is shown.

Id. (citing e.g. Taylor v. Department of Transp., 260 N.W.2d 521, 523 (Iowa 1977)(emphasis added)).

9B. In the course of applying this standard, originally articulated in the Taylor case, to the Iowa Civil Rights Act, the Iowa Supreme Court held that, "[t]he principal purpose or objective of chapter 601A is 'to eliminate unfair and discriminatory practices in public accommodations and employment."' Foods, Inc. v. Iowa Civil Rights Commission, 318 N.W.2d 162, 170 (Iowa 1982). If these rules are "essential to the main objective of the statute" they may be considered mandatory and failure to follow them will invalidate subsequent proceedings. See id. Where the purposes (of a rule or statute are "subsidiary and incidental to the larger, remedial purpose of the Iowa Civil Rights Act," then they may be considered directory only. See id. It would, in the absence of prejudice, "be fundamentally unfair to deny [complainants] the protection of the Act" because such a rule was violated. See id. (holding that statutory requirement for confidentiality is incidental to larger purposes of the Act).

10B. It is clear that the primary purpose of administrative rules 3.12(3) and 3.12(7) is to ensure order and promptness in the proceedings, i.e. to ensure that the parties are given prompt notice of the probable cause finding and the conciliation meeting. See 161 I.A.C. § 3.12(3), 3.12(7). Violation of rules fulfilling this purpose -"will not invalidate subsequent proceedings unless prejudice is shown." Foods, Inc. v. Iowa Civil Rights Commission, 318 N.W.2d 162,170 (Iowa 1982). No prejudice has been shown here. See Findings of Fact Nos. 4B, 9B, 12B.

11 B. The purpose of rule 3.12(6) is also subsidiary and incidental to the objective of eliminating unfair and discriminatory employment practices as the provision of a written synopsis of the facts leading to a finding of probable cause along with a written recommendation for a resolution of the case is not essential to that goal. This is particularly true when conciliation was attempted, as it must be in order to proceed to hearing. See Iowa Code § 601A.15(3)(d), (5). See Finding of Fact No. 3B. These facts could have been reviewed orally during the conciliation process. Proposals and counterproposals for resolution of the case are also often orally transmitted during that process. In any event, no prejudice has been shown. See Findings of Fact Nos. 3B, 4B, 9B, 12B.

Provision to Respondents of the Notice of Hearing As Required by 161 Iowa Administrative Code Section 4.1(1):


12B. Commission Rule 4.1 (1) provides:

4.1(1) Notice of Hearing. Where conciliation efforts fail, the executive director, with the approval of a commissioner, shall serve upon the parties notice of an administrative hearing on the merits of a complaint.

161 I.A.C. § 4.1 (1).

13B. This rule implements the statutory requirements for notice, see Iowa Code § 17A.12(l), 601A.15(5), and the constitutional due process requirement that notice and an opportunity to be heard be given before deprivation by the government of a person's property-. See Cedar Rapids Human Rights Commission v. Cedar Rapids Community School District, 222 N.W.2d 391, 395 (Iowa 1974).

14B. It is this later aspect, that the final decision of the Commission can be afforded a finality which may either require a respondent to pay damages or which may deny a complainant damages, see Iowa Code § 601A.15(8), .17(2), which distinguishes the hearing process from the probable cause finding and conciliation process discussed previously. The effect of the probable cause finding is to trigger conciliation. See Iowa Code § 601A.15(3)(a). Conciliation is a process whereby a voluntary settlement is sought through "conference, conciliation, and persuasion." See Iowa Code § 601A.15(3)(d). Because of the voluntary nature of conciliation, no requirements of procedural due process apply to the probable cause finding or conciliation. See Estabrook v. Iowa Civil Rights Commission, 283 N.W.2d 306, 309-10 (Iowa 1979)(no probable cause finding does not implicate due process - requirements of procedural due process apply only to deprivation of liberty and property interests).

15B. In light of the Respondents' stipulation that Respondent Scott Henry was served with the notice of hearing, and of the findings that Pat Sullivan and Cheryl Ruble were not directly served with the Notice of Hearing, the issues remaining are (1) whether, under the standards given in Hartwig v. Board of Nursing and Foods, Inc. v. Iowa Civil Rights Commission, which were set forth above, is notice of hearing a directory or mandatory requirement? and (2) whether, if notice of hearing is a mandatory requirement, receipt of the notice by Respondents Sullivan's and Ruble's attorney fulfills that requirement?

16B. Despite the Commission's position to the contrary, (Tr. at 38, 44), provision of notice of hearing to a respondent is a mandatory requirement as it is essential to fulfill the Act's principal purpose of "eliminat[ing] unfair and discriminatory practices in public accommodations and employment."' Foods, Inc. v. Iowa Civil Rights Commission, 318 N.W.2d 162, 170 (Iowa 1982). This is so because, in order to accurately determine at hearing whether or not discrimination has occurred, the respondent must be given an opportunity to prepare and defend against the charges. Cf. Iron Workers Local No. 67 v. Hart, 191 N.W.2d 758, 768 (Iowa 1971) ("the key to pleading in an administrative process is nothing more or less than the opportunity to prepare and defend"). This can only occur if notice is given. Also, this statutory and rule requirement is constitutionally mandated. See Conclusion of Law No. 13B.

17B. Respondents argued, without citation of authorities, that cases pertaining to notice of appeal of contested cases were persuasive authority for the proposition that administrative agencies must "strictly comply with the provisions of the Code as they relate to notice" to the parties prior to a public hearing. (Tr. at 45). Respondents, however, conceded that, although they "couldn't find any rule that says service on the attorney will be deemed to be service upon the respondents. Perhaps if it's there, that will resolve, the issue." (Tr. at 41).

18B. Although there is no case law addressing these questions with respect to service of the notice of hearing under Iowa Code sections 17A.12(l) and 601A.15(5) or 161 Iowa Administrative Code Section 4.1(1), there is analogous authority with respect to service of the notice to appeal a contested case decision under Iowa Code section 17A.19(2). In Cowell v. All-American, Inc., 308 N.W.2d 92 (Iowa 1981), the court noted "[w]e have rejected a standard of strict or literal compliance with section 17A.19(2)." Id. at 94. Only "substantial compliance with statutory prerequisites is essential for the district court to acquire jurisdiction." Id. The Court held that a mailing of a copy of a petition for judicial review to the employer's attorney substantially complied with that statute's requirement that the copy be mailed to the last known address of the parties. Id. At that time, section 17A.19(2), like the present statutes and rules on service of notice of hearing, had no provision specifically allowing service on attorneys. Id. See Iowa Code § 17A.1 2(l), 601 A.15(5); 161 I.A.C. 6-4.1 (1).

19B. Another reason why receipt of the notice by Respondents' attorney is sufficient is that:

[A] service of such notice upon the attorneys of the appellee is not a substituted service, in the ordinary sense, such as leaving a copy at th,e place of residence with a member of the family; nor is it a constructive service, in the sense that a publication of a notice is. The relations of litigant to his attorneys in the litigation are so close and active, and the responsibility of an attorney to his client in such a case is so definite and quasi official in its nature, that a notice to the attorney should be deemed the practical equivalent of actual notice to the client.

Stevens v. Peoples Savings Bank, 185 Iowa 619, 624, 171 N W. 130,132 (1919)(cited with approval in Cowell v. All- American, Inc., 308 N.W.2d 92,95 (Iowa 1981)).

20B. While service of the notice of hearing in this case directly on respondents would certainly have fulfilled the statutory and rule notice requirements, mailing of the notice to their attorneys, and receipt of the notice by the attorneys, substantially complied with these requirements. See Cowell v. All-American, Inc., 308 N.W.2d 92,95 (Iowa 1981).

Ruling:

21 B. In light of the findings of fact and conclusions of law set forth above, the Respondents Partial Motion to Dismiss was properly overruled.