Bellak v. Franconia College, s. 7814

• Decision Date: 09 May 1978
• Docket Number: Nos. 7814,7971,s. 7814
• Citation: 118 N.H. 313,386 A.2d 1266
• Parties: Richard BELLAK v. FRANCONIA COLLEGE. David ACKLEY v. FRANCONIA COLLEGE.
• Court: New Hampshire Supreme Court

Page 1266

386 A.2d 1266

118 N.H. 313

Richard BELLAK v. FRANCONIA COLLEGE.

David ACKLEY v. FRANCONIA COLLEGE.

Nos. 7814, 7971.

Supreme Court of New Hampshire.

May 9, 1978.

Thomas M. Pancoast, Littleton, by brief and orally, for plaintiffs.

Wiggin & Nourie, Manchester (Kurt M. Swenson, Manchester, orally), for defendant.

LAMPRON, Justice.

These cases are actions in assumpsit to recover damages for breach of contract. Trial by the court resulted in a verdict for plaintiff Bellak in the amount of $5,680.00, and all questions of law were transferred by Batchelder, J. Trial by a Master (Michael L. Slive, Esq.) resulted in a verdict for plaintiff Ackley in the amount of $11,523.00, and all questions of law were reserved and transferred by Johnson, J. The cases were consolidated for purposes of appeal.

Both plaintiffs were members of the faculty of Franconia College at a time when the college was financially unstable. It was the practice of the college to extend offers of employment by letter, and the employee would accept the offer by signing and returning a copy thereof. The letters contained details, such as salary, and also contained the statement that all faculty appointments were subject to the provisions of the Franconia College personnel policy and bylaws. This procedure was used to appoint plaintiff Bellak to a two-year teaching position with an expiration date of August 31, 1977. Plaintiff Ackley's appointment was for three years with an expiration date of August 31, 1976. There is no question that contracts existed between the plaintiffs and the college, and that the faculty personnel policy and college bylaws were part of these contracts. It is the construction of the bylaws and personnel policy that is at issue.

The bylaws of the college which are pertinent in this case are the following:

1. Article I, § 5: "(The trustees) shall have the power to appoint all officers of instruction and administration and assign their duties and fix their salaries, and shall have the power lawfully to remove any person whom they have appointed. . . . (T)he trustees may expressly delegate any specific duty to any of its committees. . . ."

2. Article V, § 1: "Officers of instruction are appointed by the Board for fixed terms and their connection with the College ceases at the end of the term unless they are reappointed. They are subject to removal by the Board during term only for grave misconduct or neglect of duty or under circumstances of financial exigency."

The faculty personnel policy was adopted by the college board of trustees in 1973. It constitutes the basic agreement between the board and the faculty on points such as hiring, firing, sick leave, etc. A joint committee on contracts composed of two faculty members, two students, the president of the college and trustee members was created thereunder. The faculty and student members were to be elected by those respective bodies. This joint committee was given the exclusive authority to consider and recommend to the board of trustees for its approval the reappointment, "non-reappointment", and dismissal of faculty members.

It is undisputed that the events of these cases are a result of the financial problems of the college. In the fall of 1975, the president announced that the college was facing a large deficit, necessitating cut-backs in all areas of its operation. The faculty, knowing that some of their members would have to be severed, passed by majority vote a resolution requesting that the board of trustees immediately declare a state of financial exigency and terminate all faculty contracts effective at the end of the academic year. The faculty felt that this device would avoid the automatic "non-reappointment" of those faculty members whose contracts would naturally expire at the end of the school year. It would place all faculty on an equal level and allow the board to determine who could be terminated with the least impact on the college. The board followed the faculty's resolution and notified all faculty members by letter on December 16, 1975, that the terminations were due to the financial exigency and were effective on August 31, 1976.

The board then established a committee to determine which members would be retained. This committee, known as the Shafer-Horning committee, adopted guidelines which evaluated the impact a faculty member's termination would have on the functioning of the college. As a result of these guidelines, the board notified the plaintiffs that they would not be reappointed. Plaintiff Ackley was unemployed the following academic year. Plaintiff Bellak was eventually offered an appointment as a half-time officer of instruction at the college, which he accepted.

Plaintiff Bellak claimed at the trial below that his employment contract was breached because the board of trustees terminated his employment during term without regard to the faculty personnel policies, i.e., the board acted independently of, and without receiving a recommendation from, the joint committee on contracts, and without affording him an opportunity to be heard. Plaintiff Ackley contends that he could not be "non-reappointed" at the end of the term of his contract without the board first receiving such a recommendation from that same committee. As can be seen, the main difference in the two cases is that plaintiff Bellak was terminated during his contract and plaintiff Ackley was terminated at the end of his contract.

The fundamental rule of interpretation of a contract is that the...