Beischel v. Stone Bank School Dist., 03-2182.

• Decision Date: 29 March 2004
• Docket Number: No. 03-2182.,No. 03-2327.,03-2182.,03-2327.
• Citation: 362 F.3d 430
• Parties: Karen BEISCHEL, Plaintiff-Appellee, Cross-Appellant, v. STONE BANK SCHOOL DISTRICT, Board of Education for Stone Bank School District, Margaret D. Kasimatis, Amy Lentz, Susan Musche, and Kathy Rosenheimer, Defendants-Appellants, Cross-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

362 F.3d 430

Karen BEISCHEL, Plaintiff-Appellee, Cross-Appellant, v. STONE BANK SCHOOL DISTRICT, Board of Education for Stone Bank School District, Margaret D. Kasimatis, Amy Lentz, Susan Musche, and Kathy Rosenheimer, Defendants-Appellants, Cross-Appellees.

No. 03-2182.

No. 03-2327.

United States Court of Appeals, Seventh Circuit.

Argued January 7, 2004.

Decided March 29, 2004.

Rehearing and Rehearing En Banc Denied April 28, 2004.

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Jacob Peter Westerhof (argued), DeWitt, Ross & Stevens, Madison, WI, for Plaintiff-Appellee.

Nathan A. Fishbach (argued), Whyte Hirschboeck Dudek, Milwaukee, WI, for Defendant-Appellant.

Before FLAUM, Chief Judge, and MANION and EVANS, Circuit Judges.

TERENCE T. EVANS, Circuit Judge.

Karen Beischel's 2-year contract as district administrator and principal of the tiny Stone Bank School District in Oconomowoc, Wisconsin, was not renewed. Beischel, however, was not about to go away without a fight, so she sued the District and some of the individual board members in federal court where she prevailed on some claims and lost on others. The District has appealed.

The Stone Bank School District serves approximately 315 families in one school covering kindergarten through eighth grade. In 1997 the District hired Beischel to be both its administrator and the principal of its school. She was given a contract for a 2-year term ending on June 30, 1999. In general, her duties included the "supervision and management of the professional work of the schools [sic] and the promotion of the pupils." In particular, her duties involved establishing a curriculum, preparing a budget, resolving problems with students, parents, and staff, participating in community events as a representative of the District, and working with the school board. She was to work "under the direction" of the board.

Problems began in the first year of the contract, but, hoping things would improve, the board voted to give Beischel the statutory maximum salary increase for the next year. Rather then improving, however, the situation deteriorated. By August or September 1998, members of the board raised concerns about Beischel's performance with the board president, Margaret Kasimatis. The board, which under § 118.24 of the Wisconsin Statutes has sole authority to terminate or renew employment contracts with administrators, began to discuss whether Beischel's contract should be renewed when it expired in June. After several meetings, on January 14, 1999, the board issued a formal notice to Beischel advising her that it was considering not renewing her contract. The notice advised Beischel that within 7 days she had a right to request a hearing on the contract nonrenewal. The notice also indicated that if she requested a hearing, one would be held 2 weeks later on January 28.

By letter delivered to Kasimatis on January 21, Beischel requested a public hearing and also asked for a written list of the reasons the board was considering the nonrenewal of her contract. The board drew up a list and sent it, along with supporting documents and exhibits, to Beischel and her attorney on January 22.

Beischel's attorney objected to the January 28 hearing date and requested more time to prepare. The District offered to delay the hearing if, in turn, Beischel would agree that District policy 2001.5 did not apply to the proceedings. That policy said that at least "5 months prior to the expiration of the administrator's contract, the Board will indicate in writing (by registered mail) if the Board decides on termination of the administrator's contract. Dismissal procedures as defined in section 118.24 of the Wisconsin Statutes will be followed." The board asked for Beischel's agreement because it feared that a delay in the hearing date might run afoul of the policy. Beischel refused to agree that the policy did not apply, but she continued to demand a delay of the hearing date. Her requests were denied. Beischel also requested that the District retain an independent adjudicator to preside over the hearing, which otherwise, under Wisconsin law, would be presided over by the board. That request was also denied.

Getting nowhere, on January 28 Beischel filed an action in the state circuit court for Waukesha County seeking a temporary restraining order to prohibit convening the hearing that evening. The restraining order was entered; it prohibited the District from holding a hearing before February 15. The hearing finally went forward on February 23, 1999, and ran for 12 hours before wrapping up at 6 o'clock the next morning. At the hearing, Beischel called as many witnesses as she wished, including board members. Later that day, the board voted 4 to 1 not to renew her contract. The notice of nonrenewal was hand-delivered to Beischel's office and also sent to her residence via registered mail that same day.

Meanwhile, in the circuit court action, Beischel's attorney requested time to amend the pleadings to include claims involving the nonrenewal proceedings. No amendments were ever filed, however, and the case was set for dismissal on January 10, 2000. Beischel agreed to the dismissal but requested attorney's fees as a "prevailing party" on her claims regarding the hearing date. That request was denied, and the case was dismissed by order on May 30, 2000.

Then on May 4, Beischel initiated the present proceedings in the district court where summary judgment motions were filed. Each side prevailed on some issues and lost on others. The bottom line was that Beischel was granted judgment on her claim that she had been denied a property interest without due process of law. The defendants, except for Kathy Rosenheimer, were denied qualified immunity on that claim. However, the defendants won dismissal of Beischel's claim based on a denial of a liberty interest without due process of law and all of her claims under Wisconsin law. Even though there is no final judgment in the case, the defendants have appealed both the decision denying qualified immunity and the decision on the merits. We, of course, have appellate jurisdiction over the decision denying qualified immunity as a matter of law. Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985). And although we are ordinarily "skittish" about the doctrine of pendent appellate jurisdiction, see Greenwell v. Aztar Indiana Gaming Corp., 268 F.3d 486 (7th Cir.2001), we agree with the parties who contend that the issues on the merits are so intertwined with the appealable claim that jurisdiction exists over the entire appeal. And as it turns out, the dispositive issues in our decision today are issues on the merits rather than on qualified immunity.

Although the claims in this case are brought under four theories (federal due process, breach of contract, violation of Wisconsin Statutes § 118.24(6) and (7) and violation of school board policy number 2001.5), they fall into two main categories for our analysis: notice of nonrenewal of the contract and the fairness of the hearing itself. We review a district court's decision on summary judgment de novo, drawing our own conclusion of law and fact from the record before us. Thiele v. Norfolk & Western Ry. Co., 68 F.3d 179 (7th Cir.1995).

As argued before us, the notice claims involve the timing of the notice under state statute, the contract, and the District policy. There is no claim that the notice was inadequate to inform Beischel of what was happening.

As to timing, § 118.24(7) Wis. Stat. requires a preliminary notice that the board is considering nonrenewal of a contract 5 months prior to its expiration. Section 118.24(6) Wis. Stat. requires that the actual nonrenewal be communicated to the employee 4 months prior to the expiration of the contract. Beischel's contract says that nonrenewal of the contract "shall be governed by Sec. 118.24(6) and (7), Wisconsin Statutes." In contrast, the District policy says that at least 5 months prior to the expiration of the contract the board will indicate in writing "if the Board decides on termination of the administrator's contract." The policy also states, however, that dismissal procedures defined in § 118.24 Wis. Stat. will be followed. Before Beischel obtained the state court restraining order, the hearing was scheduled so it would be convened in compliance with her contract, the state statute, and the policy. Delaying the hearing meant that the final decision on her status was made 4 months, not 5, prior to the termination of her contract. In other words, it was in compliance with her contract and the state statute but not the District policy.

We need not determine the effect of noncompliance with the policy. The notice claims are barred by the doctrine of claim preclusion and were properly dismissed. It is well-settled that "a final judgment is conclusive in all subsequent actions between the same parties as to all matters which were litigated or which might have been litigated in the former proceedings." DePratt v. West Bend Mut. Ins. Co., 113 Wis.2d 306, 334 N.W.2d 883, 885 (1983). Three elements must exist for claim preclusion to apply. There must be an identity between the parties or their privies in the former and present lawsuits. There must be an identity between the causes of action in the two suits. And finally, there must have been a final judgment on the merits in a court of competent jurisdiction in the first lawsuit. Northern States Power Co. v. Bugher, 189 Wis.2d 541, 525 N.W.2d 723 (1995). Beischel's claim is that there was no identity between the causes of action in the two suits she filed. We disagree. Wisconsin has adopted a transactional approach to this issue. Under this approach, a second suit is ordinarily barred "if both suits arise from the same transaction, incident or factual situation...." Pliska v. City of Stevens Point, Wis., 823 F.2d 1168, 1173 (7th Cir.1987).

Under this analysis, Beischel's notice claims are barred. A...