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Guthrie v. Missouri Department of Labor and Industrial Relations

Court of Appeals of Missouri, Western District, Fourth Division

October 25, 2016


         Appeal from the Circuit Court of Cole County, Missouri The Honorable Patricia S. Joyce, Judge

          Before: Mark D. Pfeiffer, Chief Judge, and Victor C. Howard and Gary D. Witt, Judges

          Mark D. Pfeiffer, Chief Judge

         The Missouri Department of Labor and Industrial Relations ("Department") initiated an appeal in this court[1] of the judgment of the Circuit Court of Cole County, Missouri ("circuit court"), refusing to follow the ruling of the Administrative Hearing Commission ("AHC") that attorney's fees to the prevailing party, Lucinda Guthrie ("Guthrie"), were limited to the section 536.087[2] prescribed rate of $75 per hour and, instead, awarding attorney's fees at a rate per hour in excess of the statutorily prescribed rate. We conclude that the AHC's attorney's fees ruling was supported by competent and substantial evidence and it was not contrary to the law or in excess of the agency's jurisdiction. Thus, we reverse the circuit court's judgment and reinstate the AHC's ruling.[3]

         Compliance with Briefing Requirements

         As a threshold matter, we address Guthrie's failure to comply with the briefing requirements of Rule 84.04.[4]

         When an appeal is taken from a circuit court judgment that reverses the decision of an administrative agency, we review the decision of the agency rather than of the circuit court, and the party aggrieved by the agency decision has the duty to file the appellant's brief and bears the burden of persuasion before this court. Rule 84.05(e). See Bird v. Mo. Bd. of Architects, Prof'l Eng'rs, Prof'l Land Surveyors & Landscape Architects, 259 S.W.3d 516, 520 n.7 (Mo. banc 2008) ("When a circuit court's judgment is appealed, the appellate court does not review the circuit court's decision, but rather the agency decision, that is, the AHC's findings and conclusions . . . . Accordingly, the circuit court's judgment-and of course the petition for review that began the circuit court process-is of no particular interest when the matter is appealed . . . to the court of appeals . . . ." (footnote and citation omitted)).

         Although the Department initiated this appeal as the party aggrieved by the circuit court's decision, Guthrie was responsible for filing the appellant's brief under Rule 84.05(e) because she was aggrieved by the AHC's decision. See Atwell v. Fitzsimmons, 452 S.W.3d 670, 673 n.2 (Mo. App. W.D. 2014). "[T]he party who contests the agency decision bears the burden of persuading the appellate court that the agency decision was in error, even though that party did not appeal to this court." Ringer v. Mo. Dep't of Health & Senior Servs., 306 S.W.3d 113, 114 (Mo. App. W.D. 2010). If a party prevails at the agency level, but then is later unsuccessful at the circuit court level, it is not that party's burden to claim error in an appellate brief because it prevailed at the agency level, which is the decision we review. Id.

         With that procedural backdrop, then, we note that Guthrie's points on appeal violate Rule 84.04(d)(2), in that they focus upon arguments related to circuit court rulings rather than challenged AHC rulings. "Compliance with Rule 84.04 briefing requirements is mandatory in order to ensure that appellate courts do not become advocates by speculating on facts and on arguments that have not been made." Summers v. Mo. Dep't of Corr., 459 S.W.3d 922, 923 (Mo. App. W.D. 2015) (internal quotation omitted). "An appellant's failure to substantially comply with Rule 84.04 preserves nothing for our review and is grounds for dismissing the appeal." Id. (internal quotation omitted). "Whether to dismiss an appeal for briefing deficiencies is discretionary. That discretion is generally not exercised unless the deficiency impedes disposition on the merits." Maskill v. Cummins, 397 S.W.3d 27, 31 (Mo. App. W.D. 2013) (internal quotation omitted). Generally speaking, "[a]n appellate court prefers to resolve an appeal on the merits of the case rather than to dismiss an appeal for deficiencies in the brief." Id. Here, despite the substantial noncompliance with Rule 84.04, we are able to discern the gist of Guthrie's allegations of error by the AHC and argument thereto; therefore, we have chosen to exercise our discretion to review the substance of Guthrie's claims on appeal.

         Factual and Procedural Background

         Guthrie was employed as Chief of Employer Contributions with the employment security division of the Department. She worked with the State Unemployment Tax Act ("SUTA") computer detection system, which aided the Department's efforts to find which companies rearranged their corporate organization for the express purpose of obtaining a lower unemployment insurance tax (known as "SUTA dumping"). The detection of SUTA dumping was within Guthrie's responsibilities.

         On Thursday, January 31, 2011, the Director of the Department ("Director")[5] gave Guthrie the choice between retirement or termination, allegedly for failing to detect SUTA dumping, and requested that she let him know her decision on Monday, February 4, 2013. Guthrie contacted her supervisor, Gracia Backer. Ms. Backer recommended that Guthrie contact attorney Roger Brown, because Backer was aware that he had worked for the Department before practicing law and that he had represented clients in merit system and in age and gender discrimination cases. Guthrie contacted Mr. Brown, and he agreed to represent her. With Guthrie's assistance as to the factual background, Mr. Brown prepared a letter for Guthrie to take into work on Monday to provide a timeline of compliance with the SUTA issues. The Director dismissed Guthrie from employment on Monday, February 4, 2013.

         Guthrie appealed her discharge to the Personnel Advisory Board, after which the Department reinstated Guthrie to her former position with all back pay and benefits, as though there had been no break in service. The Department filed a notice of reinstatement and requested that the AHC resolve Guthrie's attorney's fees claims (as the prevailing party) pursuant to sections 536.085 and 536.087. In Guthrie's application for attorney's fees, Mr. Brown's time was itemized and billed at the rate of $275 per hour and Mr. Brown's co-counsel, David Moen, itemized and billed his time at the rate of $250 per hour.

         The AHC held a hearing on the application. The Department did not contest that Guthrie was statutorily entitled to an award of attorney's fees as the prevailing party; rather, the issue raised by the Department was whether Guthrie's attorneys were limited to recovering the statutorily prescribed hourly rate of $75.

         Mr. Moen testified about the special factors he believed justified attorney's fees at a rate higher than $75 per hour. He stated that there was a limited number of qualified attorneys who could handle Guthrie's case, primarily because of the complicated reasons for Guthrie's dismissal, including the SUTA dumping, the DES's lack of a sophisticated computer system, and issues relating to "for the good of the service." Mr. Moen opined that the combined causes of action- merit system and discrimination-was a special factor. Mr. Moen further opined that a reasonable hourly rate for work performed by Guthrie's attorneys was $250 per hour. Mr. Brown testified that he charged Guthrie $275 per hour based on his experience and specialized knowledge. A representative from the Department's general counsel's office testified that from 2011 through 2013 there were 230 personnel cases on the AHC's website; 193 were closed and thirty-seven were open; of the thirty-seven open cases, sixteen cases were being handled by fourteen different attorneys, and two of those attorneys were from Jefferson City.

         The AHC found that Guthrie's costs and expenses totaled $1, 974.24, and Guthrie does not challenge the AHC's award of costs and expenses in that amount. Likewise, Guthrie does not contest the AHC's ruling as to the number of hours Guthrie's attorneys spent pursuing her merit system administrative appeal. What Guthrie challenges is the AHC's conclusion that the work performed by Guthrie's attorneys was limited to the statutorily prescribed hourly rate of $75, resulting in an award of attorney's fees in the amount of $13, 638.

         Guthrie petitioned the circuit court to review the amount of attorney's fees awarded by the AHC, alleging that special factors in her case justified a rate higher than $75 per hour for her attorney's fees. Guthrie also alleged that the AHC decision violated her constitutional due process right to have her case decided on the merits with the assistance of qualified counsel. The circuit court held a hearing and thereafter entered judgment, finding that special factors existed in this case to justify an award above $75 per hour. The circuit court awarded Guthrie a total of $47, 559.99 in attorney's fees, calculated at the rate of $275.00 per hour for Mr. Brown and $250.00 per hour for Mr. Moen.

         The Department timely appealed the circuit court's judgment.

         Standard of Review

         We review the decision of the AHC and not the decision of the trial court. Sprenger v. Mo.Dep't of Pub. Safety, 340 S.W.3d 109, 111 (Mo. App. W.D. 2010). When fees and expenses are awarded to a prevailing party pursuant to section ...

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