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North Slope Borough v. Barraza (11/24/95), 906 P 2d 1377
NOTICE: This opinion is subject to formal correction
before publication in the Pacific Reporter. Readers
are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0607, fax (907) 276-5808.
THE SUPREME COURT OF THE STATE OF ALASKA
NORTH SLOPE BOROUGH, )
) Supreme Court No. S-6433/6434
Appellant, )
and Cross-Appellee, ) Superior Court No.
v. ) 2BA-90-118 CI
)
GEORGETTE BARRAZA, ) O P I N I O N
)
Appellee, )
and Cross-Appellant.) [No. 4285 - November 24, 1995]
______________________________)
Appeal from the Superior Court of the State
of Alaska, Second Judicial District, Barrow,
Michael I. Jeffery, Judge.
Appearances: Darlene M. Erickson, North
Slope Borough, Barrow, for Appellant and
Cross-Appellee. Robert K. Reiman, Law
Offices of Robert K. Reiman, Anchorage, for
Appellee and Cross-Appellant.
Before: Moore, Chief Justice, Rabinowitz,
Matthews, Compton, and Eastaugh, Justices.
COMPTON, Justice.
MATTHEWS, Justice, concurring.
I. INTRODUCTION
North Slope Borough terminated Georgette Barraza's
employment before she received a hearing. Within three weeks
from the date of her termination, a hearing was held before a
hearing officer. Eventually the hearing officer awarded Barraza
back pay through the final day of the termination hearing.
However, the hearing officer did not issue any decision until
four months after the hearing. He then issued an interim
decision, but delayed issuing his findings of fact and
conclusions of law, and a partially amended decision, for an
additional four months, a total of eight months after the hearing
was held.
Barraza appealed to the superior court. The superior
court held not only that Barraza should receive back pay through
the time the hearing officer issued his interim decision, but
that Barraza should also receive attorney's fees. However, the
superior court later reduced the attorney's fees award based upon
Barraza's "dilatory conduct."
North Slope Borough appeals the superior court's
decision, arguing that the superior court should not have
extended the time Barraza was eligible for back pay, and that the
attorney's fees award should have been reduced even further.
Barraza cross-appeals, arguing that the superior court should
have extended back pay to the date when the hearing officer
issued his final decision, i.e., the date he issued his findings
of fact and conclusions of law.
II. FACTS AND PROCEEDINGS
Georgette Barraza was hired by the North Slope Borough
(NSB) in mid-1988. After taking steps to address what it
perceived as Barraza's inadequate performance, NSB notified
Barraza on January 2, 1990, that she would be terminated
effective February 1. Barraza requested and received a hearing
regarding the propriety of her termination. The hearing was
held from February 15-17. Following the hearing, Barraza
requested that the hearing officer receive and consider briefing
on Barraza's eligibility for rehire.
The hearing officer issued an interim decision on
June 21, explaining that:
Although it has been the intent of the
hearing officer to delay issuing a decision
until formal findings of fact and conclusions
of law have been prepared, the parties are
entitled to a timely decision. Accordingly,
the hearing officer's decision is presented
[now]. Formal findings of fact and
conclusions of law shall be prepared and
forwarded to the parties at a later date.
The last sentence of this statement apparently was prompted by a
NSB ordinance requiring that:
In all cases, the board or hearing officer
shall report the findings, conclusions and
decision to all parties in writing.
North Slope Borough Code of Ordinances (NSBC) ' 2.20.180(E)
(1986). The hearing officer decided that:
1. [NSB] had just cause to terminate
[Barraza];
2. Discrimination on the basis of race or
national origin was not a factor in
[Barraza's] termination;
3. [Barraza] was entitled to an adversarial
hearing prior to her termination and
accordingly is entitled to receive payment of
wages through and including February 17,
1990;
4. The hearing officer has jurisdiction to
determine the issue of eligibility for
rehire; and
5. [NSB] had a sufficient basis to deny
[Barraza] rehire eligibility.
At Barraza's request the hearing officer issued a
clarification of the decision's effective date. He stated that
he
appreciate[d] the fact that it is difficult
for either party to appeal the decision
without knowing the findings of fact and
conclusions that led to the decision.
Accordingly, it is the decision of the
hearing officer that the effective date of
the decision . . . is that date upon which
the findings of fact and conclusions of law
are issued.
On October 8 the hearing officer issued findings of
fact and conclusions of law and an amended1 decision.
Barraza appealed to the superior court, Alaska R. App.
P. 602(a)(2), challenging the hearing officer's determination
that back pay was not due through the date the findings of fact
and conclusions of law were issued. NSB cross-appealed on
several grounds.
The superior court affirmed the hearing officer's
conclusion that Barraza's due process rights were violated by
NSB's failure to offer her a pre-termination adversarial hearing.
As recompense for this violation, the superior court awarded
Barraza back pay through the date of the hearing officer's
interim decision, i.e., June 21, 1990. However, the court did
not state the amount of this back pay. The court also held that
Barraza was required to mitigate damages. Therefore, the court
retained jurisdiction to adjudicate this issue "if the parties
cannot reach agreement as to the appropriate amount of mitigation
to be credited against the back pay award."
Seven months later, after the parties were unable to
agree on "the appropriate amount of mitigation," but were able to
stipulate to certain facts, the superior court held a hearing.
It concluded essentially that Barraza was due full pay and
benefits for the period until the hearing officer's interim
decision was issued, less mitigation. This holding came in spite
of the fact that during the last six months of Barraza's
employment, she was absent from work for a substantial amount of
time due to elective surgery. Instead of focusing on this last
six month period as representative of Barraza's loss, the hearing
officer focused instead on the year immediately preceding this
period, during which Barraza had completed a work schedule with
NSB that was free from significant absences.
Barraza then requested attorney's fees and costs.
After initially awarding Barraza $9,000 in attorney's fees, the
superior court reconsidered the award at NSB's request and
reduced the award by $1,000. The superior court claimed it made
the reduction pursuant to Appellate Rule 510(b), citing Barraza's
dilatory conduct as the reason for a fifteen month delay in the
superior court proceedings.
NSB appeals, claiming that the superior court erred in
(1) enlarging the back-pay award, (2) failing to consider
Barraza's attendance record in calculating back pay, and (3)
awarding $8,000 in attorney's fees.2 Barraza cross-appeals,
claiming that the superior court should have extended the back
pay until October 8, 1990, the date the hearing officer issued
his findings of fact and conclusions of law.
III. DISCUSSION
A.The Back-Pay Award
The hearing officer awarded Barraza back pay from the
date of her termination to the date of the post-termination
hearing.3 The superior court extended the back pay award to the
date the hearing officer issued his interim decision.4 NSB
argues that the superior court erred in extending the award
beyond the date of the hearing. Barraza, in her cross-appeal,
argues that the award should have been extended to October 8, the
date the hearing officer issued findings of fact and conclusions
of law.
We have held that when a constitutionally unlawful
dismissal is cured by a post-termination hearing, the appropriate
relief is back pay up to the time of the curative hearing. See
Storrs v. Municipality of Anchorage, 721 P.2d 1146, 1151 (Alaska
1986); Kenai Peninsula Borough Bd. of Educ. v. Brown, 691 P.2d
1034, 1039 (Alaska 1984). In cases where this rule has been
applied, a decision regarding the propriety of the employee's
termination was made at the time of the post-termination hearing.
See, e.g., Brown, 691 P.2d at 1036. In the present case,
however, the hearing officer did not issue a decision until four
months after the hearing. In an effort to harmonize our
precedent with the facts of this case, the superior court
concluded that "[u]ntil there is some announcement of what the
decision is, the hearing is not over and back pay must continue."
We agree with this reasoning.
Until the hearing officer issued a decision, Barraza
could not know whether she would be reinstated, or whether she
should look for alternative employment. Thus, the damages
flowing from the deprivation of her due process right to a pre-
termination adversarial hearing did not cease until the decision
was issued. After the decision was issued, Barraza could be
fairly certain that she had lost, and that she should look for
alternative employment. Although formal findings and conclusions
were to be prepared and forwarded to the parties at a later date,
the hearing officer left little doubt as to the finality of his
decision. He wrote in the June 21, 1990 decision: "Any party
may appeal this decision to the superior court in accordance with
North Slope Borough ordinances, state statutes, and court rules."
Although Barraza was entitled to a detailed statement of findings
and reasons supporting the decision, the delay of four months
between the decision and the issuance of the findings was not so
unreasonable as to create an independent due process violation.
The superior court properly awarded back pay to the date of the
interim decision.5
B.Computation of Back Pay
NSB contends that the superior court erred in
estimating the number of hours Barraza would have worked between
her dismissal and the hearing. This determination is a factual
one. This court will set aside the superior court's findings of
fact only if they are clearly erroneous and "leave[] this court
with 'a definite and firm conviction on the entire record that a
mistake has been made.'" Klosterman v. Hickel Inv. Co., 821 P.2d
118, 121-22 (Alaska 1991) (quoting Parker v. Northern Mixing Co.,
756 P.2d 881, 891 n.23 (Alaska 1988)).
During the final six months of her employment, Barraza
took a substantial amount of leave due to elective surgery and
the corresponding recovery.6 However, during her first year of
employment with NSB she worked an average of 72.6 out of 75
available hours per pay period. NSB argues that the superior
court should have used Barraza's average time per pay period for
the final six months of her employment to calculate the back pay.
Instead, the superior court credited Barraza as though she would
have worked full-time.
NSB fails to cite persuasive authority in arguing that
the final six months of Barraza's employment provide an
appropriate measure for the back wage calculation. NSB offers no
support for the arbitrary six month period it claims should be
utilized. Instead, NSB provides reference to authority that
states the general proposition that damages should seek to
compensate the claimant for what was lost. See, e.g.,
Restatement (Second) of Contracts ' 344 (1971).
The superior court's holding indicates that it did
consider Barraza's frequent absences during her final six months
of employment. Nevertheless, the superior court concluded that
Barraza was entitled to back pay as though she worked a normal
schedule (i.e., one without significant absences) during the
relevant period. In computing Barraza's back wages, the superior
court apparently concluded that the extensive absences during
Barraza's last six months of employment were not indicative of
her attendance record.
The superior court's determination is reasonable. NSB
offers no evidence that Barraza's extensive absences during the
last six months of her employment would have continued into the
following months. The inordinate absences were due to surgery
and recovery. In fact, Barraza's leave hours dropped
significantly in the final month of her employment, indicating
that her weakened condition was greatly improving. Therefore,
the superior court's finding regarding the hours Barraza would
have worked was not clearly erroneous. See Klosterman, 821 P.2d
at 121-22.
C.The Award of Attorney's Fees
1.The initial award of attorney's fees
Appellate Rule 508 governs awarding attorney's fees in
superior court, on an appeal from an administrative decision.
Rosen v. State Bd. of Pub. Accountancy, 689 P.2d 478, 480 n.3
(Alaska 1984). The award of these fees is committed to the
discretion of the superior court and will not be overturned
absent an abuse of discretion. Id. at 482-83. The superior
court need not explain its basis for awarding fees; it must only
explain denials. Id. at 480.
NSB asserts that the superior court abused its
discretion in awarding Barraza $8,000 in attorney's fees. Its
chief complaints regard the structuring of Barraza's agreement
for fees with her attorney, which provided that her attorney was
to be paid for one-third of the amount recovered less costs, and
that the amount recovered included attorney's fees. NSB's focus
on the structure of Barraza's agreement with her attorney is
misplaced. The superior court stated:
Such arrangements are irrelevant to the
attorney's fee award. The fee award is based
on the value of the services rendered . . . .
Therefore, there appears to be no link between the fee
arrangement and the amount awarded by the superior court.
NSB further alleges that the superior court's use of
the phrase "measure of success" implicates the provisions of
Civil Rule 82, since it is only under Rule 82 that we have
endorsed this factor in awarding attorney's fees. Therefore, NSB
argues that the limitations of Civil Rule 82 apply. NSB provides
no authority for the proposition. More importantly, the superior
court's use of this factor in awarding the fees does not on its
face constitute an abuse of discretion.
For these reasons, NSB's contentions regarding the
initial award of attorney's fees should be rejected.
2.The reduction of attorney's fees
Both parties take issue with the superior court's
reduction of attorney's fees. NSB asserts that the reduction
should have been greater than $1,000. Barraza argues that no
reduction should have been made.
Barraza argues that since the superior court based the
reduction of attorney's fees upon delay, and that since a
reduction in prejudgment interest cannot be based upon delay,7
neither can a reduction in attorney's fees.
Barraza did not raise this issue in her statement of
points on cross-appeal, nor did she amend her statement of points
on cross-appeal. Alaska R. App. P. 204(a)(5)[a]. Further, NSB
did not respond to this argument in its responsive brief.
Therefore, Barraza has waived this issue. Oceanview Homeowners
Ass'n, Inc. v. Quadrant Constr. and Eng'g., 680 P.2d 793, 797
(Alaska 1984) (in general, issues omitted from appellant's
statement of points on appeal will not be considered by this
court).8
IV. CONCLUSION
The superior court's determination that back pay should
extend to the date the hearing officer issued his interim
decision is AFFIRMED. The superior court's award of attorney's
fees is AFFIRMED.
MATTHEWS, Justice, concurring.
I agree with the majority opinion. I write separately
to more fully explain the context in which this case is presented
and to express more fully my reasons for awarding back pay up to,
but not beyond, the point at which the hearing officer announced
his decision.
I.
Just cause existed for Barraza's termination. She was
found to have wilfully refused to carry out certain reasonable
requests by her employer and she was found to be incapable of
doing some of the things that were required of her. She is
therefore entitled to no damages for being fired. However, as
this case is presented, both parties agree that there was a
procedural due process violation associated with her firing and
that she is entitled to some damages because of this violation.
For purposes of this appeal the borough does not take
issue with the superior court's finding that Barraza's right to a
fully adverse pre-termination hearing was violated. Borough
Ordinance 11.05.2 does provide for a pre-termination hearing.9
The hearing offered is not the same as a court trial as there is
no opportunity to confront adverse witnesses and cross-examine
them.
Does Alaska law require a court trial-like proceeding
before a government employee can be fired? Our most complete
case in this area is Storrs v. Municipality of Anchorage, 721
P.2d 1146 (Alaska 1986), where we stated that ordinarily a public
employee has a right to an "adversarial hearing" before
dismissal.10 Id. at 1150. However, what we said before
mentioning the right to an adversarial hearing may tend to
suggest that the contemplated hearing need not be as complete as
a full trial. The full paragraph reads as follows:
In Nichols v. Eckert, 504 P.2d 1359,
1365 (Alaska 1973), the court ruled that a
post-termination hearing was constitutionally
deficient because the discharged employee was
not permitted to call witnesses on her
behalf. Although a full judicial hearing is
not required, the employee must be allowed to
present a defense by testimonial and other
evidence. Id. Three justices concurred in
an opinion concluding that, absent
extraordinary circumstances, the hearing
should occur prior to termination. Id. at
1366. We therefore conclude that a public
employee ordinarily has the right to an
adversarial hearing before he may be
effectively dismissed.
Storrs, 721 P.2d at 1150. Our summary in Storrs of the issue in
Nichols is accurate. The deprivation complained of in that case
was the right of the dismissed teachers to call witnesses on
their behalf. We stated: "[W]e conclude that appellants must be
given the opportunity to present their own defense by testimony
and other evidence. . . . A full judicial hearing is not
necessary . . . ." Nichols, 504 P.2d at 1365.
In the present case, the personnel rules gave Barraza,
in a pre-termination hearing context, the opportunity to present
witnesses by affidavit as well as notice of the reasons for the
proposed action, the right to answer orally or in writing, and
the right to be represented by an attorney. Arguably, this was
enough to satisfy the rudiments of the adversarial hearing
requirement under Nichols and Storrs. Given the posture of this
case as it is presented to us, we need not and do not decide this
question.
II.
We now know that Barraza would have been terminated
even if her due process rights had been observed punctiliously.
Thus here, as in Revelle v. Marston, 898 P.2d 917 (Alaska 1995),
the absence of a nexus between the assumed violation and her
termination can justify the conclusion that back pay is not
warranted. Revelle at 928. Interests separate from her interest
in continued employment with the borough should be looked at in
an effort to determine whether back pay is warranted. From an
employee's standpoint the relevant interests involved are these:
(1)The employee needs an accurate
decision.
(2)The employee needs notice of the
decision. This tells her either that
she should go back to work or look for
new work.
(3)The employee needs a prompt decision.
Promptness often is needed if the remedy
of reinstatement is to be realistic, and
it avoids the hardship associated with
being unemployed and not knowing whether
one should seek another permanent job.
In this case Barraza was notified that she had lost on
June 21, 1990. The hearing officer's decision of that date was
in writing and was announced because, as the hearing officer
stated, "the parties are entitled to a timely decision."
Although formal findings and conclusions were to be prepared and
forwarded to the parties at a later date, the hearing officer
left little doubt as to the finality of his decision. He wrote
in the June 21, 1990 decision: "Any party may appeal this
decision to the superior court in accordance with North Slope
Borough ordinances, state statutes, and court rules."
How are the interests identified above advanced by
running back pay to the time of the hearing, to the time of the
announced decision, or to the time of entry of final findings of
fact and conclusions of law? The employee's interest in accuracy
is not particularly time sensitive. That interest is furthered
by having a hearing and by requiring findings of fact and
conclusions of law but it would be difficult to make a case that
the decision is more accurate if made later, or if made earlier.
The other two interests, notice and promptness, are
time sensitive. It is better for the employee economically, in
terms of the availability of remedies, and probably emotionally,
to receive a prompt decision. The employee may be damaged by
delay to the extent that she has not sought alternative sources
of employment while waiting for the post-termination hearing
decision. This damage can be seen as independent of lost wages
from the job from which she has been terminated and to which she
may have no continuing right if, as in this case, the substantive
grounds on which her termination is based are legally justified.
Further, as a secondary goal, an award of damages up to the time
of the decision may tend to encourage a prompt decision. Often
however, as in this case and as in Storrs and Casey v. City of
Fairbanks, 670 P.2d 1133 (Alaska 1983), the promptness of the
decision will be beyond the control of the employer.
Until Barraza knew the reasons for the hearing
officer's decision and received findings of fact and conclusions
of law she could not appeal. Of what importance is the right of
appeal to the back pay issue? The exercise of an appeal advances
the employee's interest in accuracy. However, if this interest
is to receive recognition, back pay should run until the appeal
is decided either at the first or second tier of the court
system. An employee might argue that until the case is finally
decided on appeal she would be justified in not seeking another
job because of the possibility of ultimately obtaining court
ordered reinstatement. The reasonableness of such a decision
would, in general, be doubtful given the lengthy delays
unfortunately but typically involved in the appellate process.
To run back pay in favor of an employee who was fired
for just cause until judicial appellate processes are completed
would impose an excessive financial burden on public employers.
Every dismissed employee would receive, in effect, a couple of
years of severance pay. This financial burden, in turn, would
inhibit the discharge of employees who should be discharged, and
hinder the efficiency of government operations.
Based on the foregoing, my conclusion is that it was
appropriate under the circumstances of this case to extend the
damage award to the time of the decision of June 21, 1990. That
was the point at which Barraza had reasonably definite knowledge
that she had lost her challenge and knew, or should have known,
that the time had come for her to seek alternative employment.
Running the award for a longer period is not justified as the
government's interests in fiscal integrity and an efficient
public service outweigh the potential benefits to the employee.
_______________________________
1 The amendment was due to Barraza's post-hearing
briefing on the eligibility for rehire issue.
2 NSB does not appeal the superior court's conclusion
that Barraza's due process rights were violated by NSB's failure
to offer her a pre-termination hearing. In reaching this
conclusion, the superior court relied on Storrs v. Municipality
of Anchorage, 721 P.2d 1146 (Alaska 1986). In Storrs, we held
that a public employee is ordinarily entitled to an "adversarial
hearing" prior to termination, but that "a full judicial hearing
is not required." Id. at 1150. NSB's personnel rules entitle an
employee five days notice of dismissal, the right to be
represented by counsel, and the right to "answer orally or in
writing and to furnish affidavits and other documentary evidence
in support of the answer." Because NSB has not appealed the
superior court's due process decision, we do not reach the issue
of whether the rights afforded employees under NSB's personnel
rules satisfy the "adversarial hearing" requirement. Nor do we
decide if Barraza's post-termination hearing cured any due
process defect. See id. (In limited circumstances, "a post-
termination adversarial hearing may satisfy the requirements of
Alaska's Due Process Clause.").
3 We review the hearing officer's decision exercising our
independent judgment. See Handley v. State, Dept. of Revenue,
838 P.2d 1231, 1233 (Alaska 1992) ("The 'substitution of
judgment' test is used for questions of law where no agency
expertise is involved.").
4 We review the superior court's decision de novo. See
Tesoro Alaska Petroleum Co. v. Kenai Pipeline Co., 746 P.2d 896,
903 (Alaska 1987) ("[W]hen the superior court acts as an
intermediate court of appeal, no deference is given to [its]
decision.").
5 NSB asserts that the superior court's award of back pay
to Barraza for the period from the end of her hearing to the date
of the hearing officer's issuance of his final decision
constitutes a "windfall" and unjust enrichment. In making this
argument, NSB relies on federal cases that indicate a plaintiff
may not recover compensatory, versus nominal, damages for a
denial of due process unless the deprivation was unjustified.
See, e.g., Brewer v. Chauvin, 938 F.2d 860, 862-63 (8th Cir.
1991) (citing Carey v. Piphus, 435 U.S. 247 (1978)). According
to these cases, if it can be demonstrated that the plaintiff
would have been fired if a proper hearing had been held, then
there is no basis to claim lost compensation; this would amount
to a windfall, since the violation is the denial of procedural
due process and not the loss of public employment. Id. at 862,
864. However, these cases interpret the federal constitution's
due process clause and largely would deny any back pay in the
interim between the dismissal and the curative hearing.
In this context, we have provided greater due process
protection under Alaska's constitution than is available under
the federal constitution, and have not embraced the federal
courts' view that such an award constitutes a windfall. See
Storrs v. Municipality of Anchorage, 721 P.2d 1146, 1148-51
(Alaska 1986) (engaging in separate analysis of the federal and
Alaska constitutions), cert. denied, 479 U.S. 1032 (1987).
6 Barraza worked only 48 hours total during 6 weeks from
late October through November 1989.
7 NSB has argued that Barraza should forfeit the amount
of prejudgment interest on damages, since the superior court
found that Barraza's counsel was responsible for a fifteen month
delay in completing the litigation. However, NSB fails to cite
any precedent from this jurisdiction endorsing its proposition.
As Barraza notes, in Farnsworth v. Steiner, 638 P.2d 181 (Alaska
1981), this court addressed the denial of prejudgment interest,
stating:
[E]ven a lengthy delay attributable to the
plaintiff is not an occasion for such denial.
Since an award of interest is not a penalty
but compensation [for the time that a
judgment creditor has been less than whole],
fault for the delay between the injuring
event and payment of consequential damages is
irrelevant.
Id. at 184 (citing Beech Aircraft Corp. v. Harvey, 558 P.2d 879,
887-88 (Alaska 1976)). NSB's argument is contrary to established
precedent. It provides no rationale why this court should
reverse its prior determination on the issue.
8 As authority for reducing the award of attorney's fees,
the superior court cited Appellate Rule 510(b), which states:
For any infraction of these rules, the
appellate court may withhold or assess costs
or attorney's fees as the circumstances of
the case and discouragement of like conduct
in the future may require; and such costs and
attorney's fees may be imposed on offending
attorneys or parties.
Alaska R. App. P. 510(b). However, the court merely referred to
Barraza's "dilatory conduct" as the basis for the reduction. The
court should have specified particular conduct which might have
supported a finding that an infraction of the rules had occurred.
9 Borough Ordinance 11.05.2 provides:
Borough Service employees who hold permanent
status against whom dismissal, demotion or
suspension for more than 30 days as proposed
is [sic] entitled to:
11.05.2(1) Five days written
notice stating the specific reasons
for the proposed action;
11.05.2(2) An opportunity to
answer orally or in writing and to
furnish affidavits and other
documentary evidence in support of
the answer;
11.05.2(3) Be represented by an
attorney;
11.05.2(4) A written decision and
specific reasons therefore at the
earliest practicable date.
10 This statement is dictum, as the holding of Storrs was
that the collective bargaining agreement validly substituted a
post-termination hearing for pre-termination proceedings that
would otherwise have been required. That post-termination
hearing was to take place before the superior court (since the
union declined to pursue Storrs' termination grievance) but
Storrs waived his right to a "prompt post-termination hearing"
before the court by not requesting one and refusing a trial type
hearing when one was eventually offered. Id. at 1150.