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Jeremie J. Cooksey v. Cargill Meat Solutions Corporation

May 17, 2013

JEREMIE J. COOKSEY, APPELLANT,
v.
CARGILL MEAT SOLUTIONS CORPORATION, APPELLEE,



On review from the Iowa Court of Appeals. Appeal from the Iowa District Court for Polk County, Scott D. Rosenberg, Judge.

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

Applicant asserts the district court and court of appeals erred in dismissing his appeal because he failed to name the Employment Appeal Board in the caption of the petition. DECISION OF COURT OF APPEALS VACATED, DISTRICT COURT JUDGMENT REVERSED, AND CASE REMANDED.

In this case, we granted further review to consider whether the failure of a party to list the Employment Appeal Board (EAB) as a respondent in the caption of a petition for judicial review of the final agency decision is fatal where the body of the petition makes it plain that the appeal is being taken from the final action of the agency and where the agency is timely served with the petition. The district court concluded that it was and dismissed the appeal. The court of appeals affirmed. For the reasons expressed below, we vacate the decision of the court of appeals, reverse the decision of the district court, and remand the case for further proceedings.

I. Factual and Procedural Background.

The facts are simple and undisputed. Jeremie Cooksey sought unemployment benefits from Iowa Workforce Development after his discharge from employment by Cargill Meat Solutions Corporation. The administrative law judge found that the employer discharged Cooksey for misconduct and, as a result, concluded that Cooksey was not entitled to benefits. The EAB affirmed the administrative law judge. Cooksey filed a petition for judicial review of agency action in Polk County District Court.

In the petition for judicial review, Cooksey named Cargill in the caption as a "defendant." The caption made no mention of the EAB. The first paragraph of the petition, however, stated:

This action is brought by Petitioner, Jeremie J. Cooksey, pursuant to Chapter 17A.19(2) of the Iowa Administrative Procedure Act . . . for review of the final agency action of the EMPLOYMENT APPEAL BOARD as set forth in the Decision filed 3/7/2011 . . . AND, as FINALLY determined in the Employment Appeal Board Decision of April 4, 2011, denying Petitioner's Application for Rehearing.

Cooksey attached a copy of the final decision to the petition. The petition and its attachments were timely served on the EAB.

The EAB filed a motion to dismiss on the ground that it was not named as a party in the petition. Cargill joined the motion to dismiss. The district court granted the motion to dismiss, and Cooksey appealed. We transferred the case to the court of appeals. The court of appeals affirmed. We granted further review. For the reasons expressed below, we vacate the decision of the court of appeals, reverse the decision of the district court, and remand the case to the district court for further proceedings.

II. Standard of Review.

We review the granting of a motion to dismiss for errors at law. Iowa R. App. P. 6.907; McCormick v. Meyer, 582 N.W.2d 141, 144 (Iowa 1998).

III. Discussion.

A. Preservation of Error. Cargill asserts that Cooksey failed to preserve error in the district court on the argument that he substantially complied with the requirements of Iowa Code section 17A.19(4) (2011). According to Cargill, Cooksey relied solely on a claim that Iowa Code section 17A.19(4) was unconstitutional.

Cooksey counters that in its order, the district court accepted the EAB's argument that naming the EAB in the caption is jurisdictional. Further, citing Doerfer Division of CCA v. Nicol, 359 N.W.2d 428, 437 (Iowa 1984), Cooksey claims jurisdictional questions are not subject to the same error preservation rules as other issues.

As a general rule, a party may raise a challenge to the subject matter jurisdiction of a court at any time. In re Jorgensen, 627 N.W.2d 550, 554 (Iowa 2001); St. Clair v. Faulkner, 305 N.W.2d 441, 445 (Iowa 1981). Cooksey, however, does not challenge the subject matter jurisdiction of the district court. Instead, he seeks to defend against a motion to dismiss. As a result, Doerfer and other similar cases are inapposite.

Nonetheless, we find the issue has been preserved. In paragraph ten of its motion to dismiss, the EAB asserted dismissal of the petition was required because Cooksey failed to substantially comply with the statutory prerequisites by failing to name the EAB in the petition's caption. Cooksey filed a resistance, which denied the EAB's allegation in paragraph ten "as the Board was and is not a proper, real party, whether below or at present." In practical terms, Cooksey recognized that ordinarily when an appeal of agency action is taken, only the real parties fight it out on appeal. While Cooksey's use of the terms "proper party" or "real party" may have been imprecise, inartful, or overbroad, Cooksey was plainly asserting that his failure to specifically name the EAB in the caption was not fatal given the nature of the EAB's interest in the appeal of its administrative action and the fact that the employer was named in the caption. Cooksey's brief presses the point, noting the EAB "did not perform any act as an employee nor as an employer." While Cooksey did not specifically argue that identifying the EAB's decision in the body of the petition and attaching the underlying order to the petition amounted to "substantial compliance," the EAB raised the issue of substantial compliance in its motion and the issue was contested by Cooksey. No one could have missed the issue.

Further, the district court's order dismissing the case relied upon "the reasons as stated in [the EAB's] motion to dismiss," which plainly includes the assertions in paragraph ten that Cooksey did not substantially comply with the requirement to name the agency as a respondent. See Murphree v. US Bank of Utah, N.A., 293 F.3d 1220, 1222--23 (10th Cir. 2002) (noting when the district court incorporated the defendant's arguments as the basis for granting summary judgment, the appellate court must review the "[d]efendant's memoranda . . . to determine whether the district court correctly granted summary judgment"); Mitchell v. Policherla, Nos. 237578, 238217, 2003 WL 21205982, at *1 (Mich. Ct. App. May 22, 2003) (considering statute of limitations claims raised in the defendants' arguments and incorporated into trial court rulings); see also People v. Fletcher, 917 P.2d 187, 197 (Cal. 1996) (finding, during the defendant's second trial, that error was preserved on an argument when the defendant raised the argument during his first trial and the district court incorporated the argument when the issue was raised during the second trial).

When the district court enters an order incorporating the reasons made in the motion to dismiss as grounds for dismissal, we take the order at face value. We assume that the district court read the motion to dismiss, understood the arguments that were made, and relied upon them in reaching a ruling. Any suggestion that the district court would be surprised under these circumstances amounts to an attack on the diligence of the district court that we refuse to entertain.*fn1 In short, the EAB is far off target when it claims substantial compliance is a newfound argument on appeal when the EAB raised the issue in its motion to dismiss, the defendant resisted it, and the district court incorporated the EAB's substantial compliance argument in its ruling.

In light of the district court's express incorporation of the substantial compliance arguments of the EAB in its ruling, and the contested nature of the issue below, we agree with the court of appeals that error was preserved on the substantial compliance question. As we recently noted in LaMasters v. State, 821 N.W.2d 856, 864 (Iowa 2012), "[i]f the court's ruling indicates that the court considered the issue and necessarily ruled on it, even if the court's reasoning is 'incomplete or sparse,' the issue has been preserved." See also State v. Paredes, 775 N.W.2d 554, 561 (Iowa 2009) (noting that "where a question is obvious and ruled upon by the district court, the issue is adequately preserved"); cf. Sorci v. Iowa Dist. Ct., 671 N.W.2d 482, 489--91 (Iowa 2003) (holding error not preserved on issues not presented to the district court). Similarly, in State v. Chrisman, 514 N.W.2d 57, 60 (Iowa 1994), we held a defendant preserved error when he challenged only the seizure of tennis shoes and not the search that led to their discovery. We noted "the district court ruled that the 'searches made herein were consensual,' " and thus the larger issue of the validity of the search was preserved. Id. Here, the issue of substantial compliance was plainly raised in the trial court and ruled upon by the district court.

In any event, even if Cooksey's resistance is considered flawed, the preservation issue was resolved when the district court ruled on the substantial compliance issue. In Otterberg v. Farm Bureau Mutual Insurance Co., 696 N.W.2d 24, 26 (Iowa 2005), the plaintiff filed a petition for declaratory judgment against Farm Bureau seeking uninsured motorist benefits. The uninsured motorist provision of Otterberg's policy stated Farm Bureau would pay damages for bodily injuries the insured is "legally entitled to recover" from the owner or operator of an uninsured vehicle. Id. Farm Bureau counterclaimed and then moved for summary judgment, claiming Otterberg was not "legally entitled to recover" damages under a provision in the workers' compensation statute. Id. Otterberg did not file a motion resisting the summary judgment motion and the district court, accepting Farm Bureau's argument, granted the motion. Id. at 27. Otterberg appealed, arguing that the "legally entitled to recover" language in his policy did not bar his recovery. Id.

On appeal, Farm Bureau argued Otterberg failed to preserve error on the "legally entitled to recover" provision because he failed to contest the issue in the district court. Id. Farm Bureau relied on Bill Grunder's Sons Construction, Inc. v. Ganzer, 686 N.W.2d 193 (Iowa 2004), in which we held, "if the movant [for summary judgment] has failed to establish its claim and the court nevertheless enters judgment, the non-movant must at least preserve error by filing a motion following entry of judgment, allowing the district court to consider the claim of deficiency."

Otterberg, 696 N.W.2d at 28 (quoting Ganzer, 686 N.W.2d at 197--98). We distinguished Ganzer,however,as a case where the issue raised on appeal by the nonresisting party "was not an issue considered and ruled on by the district court in ruling on the motion for summary judgment." Id. In contrast, we determined in Otterberg that the "legally entitled to recover damages" issue, which was raised on appeal by Otterberg, had been presented to and decided by the district court. Id. Because the issue was presented to and decided by the district court, we held the issue was preserved even though Otterberg did not resist the argument in response to the motion for summary judgment. Id. As noted by this court in rejecting Farm Bureau's argument that a rule 1.904(2) motion should have been filed to preserve the issue:

If the district court considered the issue raised on appeal by the non-movant in ruling on an uncontested summary judgment motion, the rationale for requiring the non-movant to file a postjudgment motion with the district court to preserve error on appeal is inapplicable. Thus, if a motion for summary judgment presented the issue to the district court and the district court ruled on it, the rule requiring the district court to first consider issues raised on appeal is satisfied.

Id.

In this case, the issue of substantial compliance was raised by the EAB in its motion for summary judgment and was ruled upon by the district court. Thus, under Otterberg the claim is preserved. See id.; see also State v. Brooks, 760 N.W.2d 197, 202--03 (Iowa 2009) (finding claim preserved when neither party raised the issue, but the district court ruled upon it); Yunek v. Cont'l Cas. Co., No. 11--1693, 2012 WL 3194113 at *4 (Iowa Ct. App. Aug. 8, 2012) (holding argument that terms in contract were ambiguous was preserved where nonmoving party failed to make the argument below but district court considered the issue in ruling on motion for summary judgment).

B. Positions of the Parties. On appeal, Cooksey asserts the district court erred in dismissing his petition because he substantially complied with Iowa Code section 17A.19(4), which provides "[t]he petition for review shall name the agency as respondent." While recognizing that the EAB was not named in the caption, he asserts that the technical omission does not defeat jurisdiction. Cooksey emphasizes that because the EAB was timely served and paragraph one of the petition specifically indicates it is an appeal of the EAB's final agency action, no prejudice is present.

Cargill asserts that because the EAB was not included as a respondent in the caption of the appeal, it was not named as a respondent in the petition as required by Iowa Code section 17A.19(4). Although conceding that substantial compliance is sufficient to satisfy the procedural prerequisites for jurisdiction, Cargill argues that Cooksey failed to substantially comply when he failed to name the EAB as a "respondent." While Cargill recognizes that the petition was timely served upon the EAB, Cargill argues that the failure to name the agency in the caption of the petition as a respondent is a fatal flaw requiring dismissal of the appeal.

C. Iowa Caselaw. We have confronted the question of the impact of the failure to properly name the administrative agency as a respondent in an administrative appeal. In Frost v. S.S. Kresge Co., 299 N.W.2d 646, 647 (Iowa 1980), we considered a case where a party named the Industrial Commission instead of the Industrial Commissioner in a petition for judicial review of agency action. Utilizing a substantial compliance standard, we held that the error did not defeat subject matter jurisdiction because the commissioner received actual notice of the proceeding and no prejudice occurred. Id. at 648. Similarly, in Buchholtz v. Iowa Department of Public Instruction, 315 N.W.2d 789, 792-- 93 (Iowa 1982), we held that naming the department of public instruction instead of the board of public instruction did not defeat jurisdiction in an action under the Iowa Administrative Procedure Act when there was no showing of prejudice and the record indicated the board received timely notice.

Further, in Green v. Iowa Department of Job Service, 299 N.W.2d 651, 654 (Iowa 1980), we considered whether a claimant seeking judicial review complied with Iowa Code section 96.6(8) (1979), part of the Iowa Employment Security Act, which stated that "any other party to the proceeding before the appeal board shall be named in the petition." (Citation and internal quotation marks omitted.) Though the claimant named her employer in exhibits mentioned in and attached to the petition, she did not designate her employer as a respondent in the caption of the petition. Id. We held ...


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