Board of Education v. Heister
| Decision Date | 13 April 2006 |
| Docket Number | No. 56, September Term, 2005.,56, September Term, 2005. |
| Citation | 392 Md. 140,896 A.2d 342 |
| Parties | BOARD OF EDUCATION OF TALBOT COUNTY, Maryland v. James D. HEISTER, et al. |
| Court | Court of Special Appeals of Maryland |
Douglas A. Collison (Kopen & Collison, LLP, Easton, on brief), for appellant.
James R. Whattam (Maryland State Teachers Assn. of Annapolis, on brief), for appellees.
Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ.
We consider here whether a contractual provision included in all employment contracts for primary and secondary public school teachers in the State of Maryland (as required specifically by the Code of Maryland Regulations (COMAR)), providing that, in the case of breach, "salary already accrued will be forfeited, in the discretion of the Local Board of Education," is a valid and enforceable liquidated damages clause or an unenforceable penalty.
James D. Heister and Christina L. Marvel (Appellees), teachers in the Talbot County Public Schools ("TCPS") at the times relevant to this litigation, breached in 2003 their employment contracts with the Talbot County Board of Education (the "County Board") by failing to provide notice of their resignations prior to the contractually required May 1 deadline.1 Following their resignations, accrued, but unpaid, salary for the school year August 2002 through August 2003 for Mr. Heister and Ms. Marvel was withheld, pursuant to the forfeiture provision in their employment contracts. Professionally certificated employees in the public schools of Maryland are required to execute one or the other of two employment contracts, depending on his or her certification status.2 The Regular Teacher's Contract3 states that "[i]f any of the conditions of this contract shall be violated by the certificated employee named herein, salary already accrued will be forfeited, in the discretion of the Local Board of Education." COMAR 13A.07.02.01.B(2).
On appeal to Dr. Karen B. Salmon, the then Interim Superintendent of the Talbot County Public Schools, in accordance with § 4-205(c) of the Education Article of the Maryland Code (1978, 2001 Repl.Vol.),4 the forfeitures against Mr. Heister and Ms. Marvel were upheld. Mr. Heister and Ms. Marvel separately appealed the Superintendent's decisions to the County Board. The County Board, in written memoranda on 25 February 2004, affirmed the Superintendent's decision. Consolidating their cases, Appellees appealed the County Board's decisions to the Maryland State Board of Education (the "State Board").
Affirming the decisions of the County Board, the State Board determined that the forfeiture provision was valid and enforceable. After acknowledging its broad statutory authority, the State Board noted that its "regulations are generally considered valid provided that the regulations do not contradict the statutory language or purpose." The State Board then stated the purposes of the forfeiture provision:
The forfeiture clause was designed to further the legitimate public purpose of helping to ensure that teachers do not resign beyond a specified mid-summer date when it is difficult to hire replacements. The deterrence of late resignations provides a local board the time needed to recruit and hire qualified teachers to fill the resulting vacancies before the new school year begins. Equally as important, the provision attempts to reasonably compensate the local board for damages incurred in recruiting and training a replacement teacher at the last moment and the additional costs of using substitute teachers.
After examining the legal elements of an enforceable liquidated damages clause, the State Board determined that the forfeiture provision in the teachers' employment contracts satisfied those elements and thus was a valid liquidated damages clause.
Appellees sought judicial review in the Circuit Court for Talbot County of the State Board's decision. The Circuit Court reversed the decision of the State Board and remanded the case to the State Board for further proceedings consistent with its ruling. The trial court judge orally explained the bases for the court's judgment as follows:
The Court obviously can understand the intent of the Talbot County Board of Education, the State Board of Education in enacting such clauses in their contracts. But from my very brief exposure to this case [ ] and the law behind it, I find that the fact that salary forfeitures are not set forth as a penalty that will be imposed. The notice going out to the employees does not state, it says it may be. Because of that the action of the superintendent acting on behalf of the board and subsequently the Talbot board and subsequently the state board, is discretionary and the exercise of that discretion is arbitrary by those persons who are exercising it. Furthermore the Court has heard nothing as to why [ ] Section 3-505 of the Labor and Employment Article [of the Maryland Code (1991, 1999 Repl.Vol.)] does not apply to teachers as well as any other employees. And that means that the forfeiture of monies already earned violates that section. And therefore the action of the boards is illegal.
The County Board appealed the Circuit Court's judgment to the Court of Special Appeals. On our initiative, we issued a writ of certiorari, before our colleagues on the intermediate appellate court could decide the case, to consider whether the forfeiture provision used in the employment contracts for professionally certificated employees of Maryland's public schools, teachers in this case, as mandated and set forth in COMAR, is a valid and enforceable contractual provision. Board of Educ. v. Heister, 388 Md. 404, 879 A.2d 1086 (2005).5
The material facts in the present case are not in dispute. The State Board, in its written opinion in this matter, detailed the factual backdrop:
James D. Heister
At the time of his resignation, Mr. Heister was a second year teacher with TCPS assigned to Easton High School to teach math. Mr. Heister was employed under a Provisional Contract as required by State Board regulation.6 The Provisional Contract contains the same forfeiture clause as the Regular Contract. See COMAR 13A.07.02.01C.
By letter of February 12, 2003, the Assistant Superintendent, John Masone, advised Mr. Heister that he would receive written notification from TCPS no later than May 1, 2003, if the local board were to decide not to renew his teaching contract. The letter also advised Mr. Heister of his obligation to provide timely written notice if he intended to resign from his position.7 The letter states, in part:
The Maryland employment contract also requires you to notify us, in writing, not later than May 1, 2003, if you wish to resign and thereby terminate your contract at the end of this school year. Resignations received after this date are considered to be in violation of the contract and may result in the suspension of your certification and/or forfeiture of salary. Please contact me immediately if you have any questions concerning the contractual rights and obligations described above.
By letter dated April 22, 2003, then Superintendent, J. Sam Meek, notified Mr. Heister that he was granted tenure.
On July 16, 2003, Mr. Heister met with Mr. Masone and turned in his resignation. The resignation letter states:
Due to a "Once in a life time" business opportunity I am turning in my resignation as a Mathematics Teacher at Easton High School. I do apologize for the late notice but the financing for the business has just been granted in the last two days. I have had a great experience with you and the rest of Talbot County Public Schools employees. I thank you for this experience and for the understanding that my resignation was not planned to be at such a late date.
When Mr. Masone reminded Mr. Heister of his contractual obligation and the penalties associated with an untimely resignation, Mr. Heister stated "I'll take my chances." See letter from Salmon to Cottington. The superintendent withheld the remaining payments of Mr. Heister's 12-month salary.8
TCPS provided substantial training and mentoring services to Mr. Heister during his employment with the school system. TCPS had no warning prior to July 16, 2003, that Mr. Heister did not intend to fulfill the obligations of his contract. TCPS has been unable to secure a replacement for Mr. Heister's position. A substitute teacher not certified in mathematics was placed in his classroom.9
On appeal, the local board unanimously upheld the superintendent's decision to withhold Mr. Heister's accrued salary. The local board found that the withholding of accrued salary was warranted, reasonable, and consistent with the terms of the Regular Contract as set forth in COMAR; that the forfeiture provision contains no language making it applicable only to individuals who resign during the school year; that it applies to Mr. Heister who completed teaching the school year; and that the forfeiture clause is valid and enforceable.
At the time of her resignation, Ms. Marvel was a first year certified teacher with TCPS assigned to Easton Middle School to teach math. Ms. Marvel was employed under the Regular Contract as required by State Board regulation. See COMAR 13A.07.02.01B.
By letter of February 12, 2003, the Assistant Superintendent, John Masone, advised Ms. Marvel that she would receive written notification from TCPS no later than May 1, 2003, if the local board were to decide not to renew her teaching contract. The letter also advised Ms. Marvel of her obligation to provide timely written notice if she intended to resign from her position. The letter contained the same language as the letter to Mr. Heister referenced above. On April 22, 2003, TCPS renewed Ms. Marvel's contract.
On August 4, 2003, the school system received a letter of resignation from Ms. Marvel. The resignation letter states as follows:
It is with deep regret...
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