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Ellis v. North Dakota State University

April 9, 2009

GEORGE A. ELLIS, PLAINTIFF AND APPELLEE
v.
NORTH DAKOTA STATE UNIVERSITY, DEFENDANT AND APPELLANT



Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Steven L. Marquart, Judge.

The opinion of the court was delivered by: VandeWalle, Chief Justice.

REVERSED AND REMANDED.

[¶1] North Dakota State University ("NDSU") appealed from a district court judgment finding NDSU engaged in age discrimination in terminating Ellis's employment and awarding him $256,206.16, which includes back pay, front pay, costs and disbursements, prejudgment interest, and attorney fees. After oral argument one of the Justices recused. The Court ordered a rehearing. We conclude the district court erred in its standard of review and we reverse and remand for further proceedings.

I.

[¶2] In 1974, George Ellis began working as the sports information director for NDSU. On June 30, 2004, NDSU terminated Ellis from this position after 30 years of employment. Ellis was 59 years old at the time of his termination. As sports information director, Ellis's responsibilities included disseminating information to the media; preparing news releases; designing media guidebooks, game programs, and special publications; managing home and away events, tournaments, office administration; and compiling statistics and biographical information on athletes and coaches. Ellis was also the sports information director for the North Central Conference ("NCC") from 1972 to 1998.

[¶3] Ellis testified he received numerous national awards while working at NDSU, including induction into the College Sports Information Directors of America Hall of Fame and the NCC Hall of Fame. Ellis also received the Warren Bird Award for Outstanding Service in the Field of Sports Information. Ellis testified he received in excess of 135 national awards for publications he had designed, including 56 "best in the nation" awards. During his last two years at NDSU, Ellis received "best in the nation" awards for his football program cover and his basketball program and second in the nation for the football program. In about 1989, the sports information director responsibilities were divided between Ellis and Jeff Schwartz, after Schwartz was hired as the women's sports information director. Schwartz was 32 years old when he was hired.

[¶4] In July 2001, NDSU hired Gene Taylor as athletic director after the previous athletic director had resigned. Before Taylor was hired, Lynn Dorn, who was the women's athletic director, served as interim athletic director for approximately six months. While acting as interim athletic director, Dorn asked the athletic department employees to provide her with a list of accomplishments and goals. In spring 2001, Dorn met with Ellis. During this meeting, Dorn asked Ellis how old he was, what his retirement plans were, and if he was seeking other employment. Ellis testified that Dorn also asked if he had any retirement plans and told him to begin looking for other employment because NDSU was going to Division I status and he would not be part of their future plans. At that time, Ellis was in his mid-fifties and had no plans to retire. Dorn testified she made no similar inquiries of other athletic employees regarding their age or retirement plans. Upon Taylor's arrival as athletic director, he met with Dorn. Taylor testified that when he met with Dorn, she told him about frustrations that had been raised regarding the sports information department, including both the men's and women's sports information directors.

[¶5] During Taylor's second year at NDSU in 2002-2003, Taylor assigned Troy Goergen, assistant athletic director for marketing, to supervise Ellis and Schwartz in the sports information department. Goergen was in his late twenties at the time and had no prior experience working in the sports information department. Goergen was to be the "go-between" with the coaches and the sports information directors, including communications with the coaches if any of the sports information director deadlines were not met. Taylor also gave Goergen the responsibility of conducting performance evaluations of Ellis and Schwartz.

[¶6] Based upon continuing complaints from the men's head coaches and alleged deficiencies in Ellis's job performance, Taylor began the process to terminate Ellis in January 2004, speaking with NDSU's human resources director. According to Taylor, in addition to the dissatisfaction of men's head coaches, the grounds for Ellis's termination included Ellis's failure to meet several media guide deadlines and his absence from sports information department meetings. On April 29, 2004, Ellis was notified of his dismissal during a meeting with Taylor and Goergen.

[¶7] After Ellis's termination, the sports information department was reorganized in October 2004. Before Ellis's termination, the department consisted of four people: the men's sports information director, the women's sports information director, and two part-time graduate assistants. The reorganization resulted in a staff of five, with the addition of a third full-time position. Before the reorganization, Ellis was responsible for the men's sports, including football, basketball, wrestling, baseball, golf, track and field, and cross country. Schwartz was responsible for six women's sports. After the reorganization, Schwartz became the director of athletic media relations. The reorganization also included hiring a 26-year-old graduate assistant as assistant director of athletic media relations at an annual salary of $25,000, and another former graduate assistant who was 26 years old, as a new full-time athletic media relations assistant at an annual salary of $22,000 per year.

[¶8] As part of the department's reorganization, Schwartz was assigned football, women's basketball and women's softball; the assistant director of athletic media relations was assigned volleyball, men's basketball, and baseball; and the athletic media relations assistant was assigned soccer, cross country, and track and field. A graduate assistant had responsibility for golf and wrestling. Testimony indicated this reorganization was structured in a manner that Ellis had suggested to Taylor on several occasions.

[¶9] After his termination, Ellis, with counsel, appealed his dismissal to NDSU's staff personnel board under Section 231 of NDSU's Policy Manual, and a hearing was held before the board. According to the combined notice of hearing, specifications of issues and pre-hearing order, the issue before the staff personnel board was whether Ellis's termination for cause was supported by a preponderance of the evidence. After a hearing on December 14, 2004, and January 25, 2005, the board concluded Ellis's termination was supported by a preponderance of the evidence.

[¶10] After exhausting his administrative remedies through NDSU's internal appeals process, Ellis commenced this lawsuit in district court against NDSU for violation of the North Dakota Human Rights Act, specifically alleging age and disability discrimination. Before trial, NDSU twice moved for summary judgment. The court denied NDSU's motions, concluding Ellis had offered evidence sufficient to establish a prima facie case of discrimination.

[¶11] After a bench trial in October 2006, the district court issued findings of fact, conclusions of law and order for judgment in favor of Ellis. The court concluded NDSU had intentionally discriminated against Ellis because of his age when it terminated his employment, but rejected Ellis's claims of discrimination based upon disability. The court also concluded NDSU was equitably estopped from asserting a statute of limitations defense and awarded damages to Ellis, including back pay, front pay, costs and disbursements, prejudgment interest and attorney fees. The order awarded Ellis back pay of $55,883.66 from the date of the complaint was filed, two years of front pay in the amount of $98,861.26, plus attorney fees and costs and prejudgment interest.

[¶12] Ellis sought attorney fees and costs in the amount of $96,007.50, and the court awarded Ellis's fees and costs in the amount requested. On November 20, 2006, judgment was entered in favor of Ellis in the amount of $256,206.16.

II.

[¶13] On appeal, NDSU argues Ellis's action was not commenced within the applicable statute of limitations. The district court, however, concluded equitable estoppel applied to toll the statute of limitations, and Ellis's initiation of the lawsuit was therefore timely.

[¶14] Generally, "[a]bsent valid service of process, even actual knowledge of the existence of a lawsuit is insufficient to effectuate personal jurisdiction over a defendant." Muhammed v. Welch, 2004 ND 46, ¶ 11, 675 N.W.2d 402; see also Riemers v. State, 2006 ND 162, ¶ 7, 718 N.W.2d 566.

[¶15] Under N.D.C.C. § 14-02.4-19 (2004), "[a]ny person claiming to be aggrieved by any discriminatory practice . . . in violation of this chapter may file a complaint of discriminatory practice with the department or may bring an action in the district court . . . within three hundred days of the alleged act of wrongdoing." Further, under N.D.C.C. § 32-12.2-04(5), a person bringing a legal action against the State must also deliver a copy of the summons and complaint to the director of the office of management and budget at the time the summons and complaint is served in the action.

[¶16] Here, NDSU terminated Ellis as sports information director on June 30, 2004. The parties do not dispute that Ellis personally served NDSU's president, Joseph Chapman, with a copy of the summons and complaint on April 29, 2005, two days after the 300-day statutory period expired. The district court, however, held NDSU was equitably estopped from asserting the statute of limitations defense based on the conduct of NDSU's general counsel.

[¶17] North Dakota has codified the doctrine of equitable estoppel in N.D.C.C. § 31-11-06:

When a party, by that party's own declaration, act, or omission, intentionally and deliberately has led another to believe a particular thing true and to act upon such belief, that party shall not be permitted to falsify it in any litigation arising out of such declaration, act, or omission.

We have recognized that equitable estoppel may preclude the application of a statute of limitations by a party whose actions induce another party to not file a claim within a prescribed statutory period. See Muhammed, 2004 ND 46, ¶ 18, 675 N.W.2d 402; Hoffner v. Johnson, 2003 ND 79, ¶¶ 25-26, 660 N.W.2d 909; Narum v. Faxx Foods, Inc., 1999 ND 45, ¶ 24, 590 N.W.2d 454.

[¶18] To prove equitable estoppel under N.D.C.C. § 31-11-06, the plaintiff must show: 1) the defendant made statements, and from the nature of the defendant's statements and all the surrounding facts and circumstances, the statements were made with the idea the plaintiff would rely on them; 2) the plaintiff relied on the defendant's representations or acts and, as a result of that reliance, the plaintiff failed to commence the action within the prescribed period; and 3) the defendant's acts giving rise to the assertion of estoppel must have occurred before the limitation period's expiration. See Muhammed, 2004 ND 46, ¶ 19, 675 N.W.2d 402; Burr v. Trinity Med. Cent., 492 N.W.2d 904, 908 (N.D. 1992).

[¶19] We have also explained that a false representation may occur where a party fails to disclose a material fact that the party is bound in good faith to reveal. Muhammed, 2004 ND 46, ¶ 20, 675 N.W.2d 402 (citing Krueger v. St. Joseph's Hosp., 305 N.W.2d 18, 25 (N.D. 1981)). "For an estoppel to arise from silence, the silence must be accompanied by a duty to speak out, reasonable reliance on the silence, and resulting prejudice." Muhammed, at ¶ 20 (citing Ray Co., Inc. v. Johnson, 325 N.W.2d 250, 254 (N.D. 1982)). When the duty to disclose exists, the injured party need not demonstrate an affirmative deception in order to postpone the running of a statute of limitations. Muhammed, at ¶ 20 (citing Snortland v. State, 2000 ND 162, ¶ 15, 615 N.W.2d 574).

[¶20] Here, approximately 13 days before the 300-day statutory period had run, Ellis's counsel sent an e-mail correspondence to NDSU's general counsel stating, "This suit is ready to be commenced. Please let me know if you are willing to admit service on behalf of the University." NDSU's general counsel replied to the e-mail stating:

Yes, I'd appreciate if you'd send it here. What I normally do, since it goes down to State Risk Management, and then to the AG, is send it to them and leave the date open so we don't have to ask for an extension right away as this ...


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