Board v. Mitchell

• Decision Date: 10 December 2008
• Docket Number: No. 1-08-0139.,1-08-0139.
• Citation: 899 N.E.2d 1160,387 Ill. App. 3d 117
• Parties: The BOARD OF EDUCATION OF BREMEN HIGH SCHOOL DISTRICT NO. 228, Plaintiff-Appellant, v. Richard C. MITCHELL, Defendant-Appellee. (The Board of Review of the Department of Employment Security; J. Hunt Bonan, as Chairman of the Board of Review; William J. Nolan and Stanley L. Drassler, Jr., as Members of the Board of Review; The Department of Employment Security; and James P. Sledge, as Director of the Department of Employment Security, Defendants.)
• Court: United States Appellate Court of Illinois

899 N.E.2d 1160

387 Ill. App. 3d 117

The BOARD OF EDUCATION OF BREMEN HIGH SCHOOL DISTRICT NO. 228, Plaintiff-Appellant, v. Richard C. MITCHELL, Defendant-Appellee (The Board of Review of the Department of Employment Security; J. Hunt Bonan, as Chairman of the Board of Review; William J. Nolan and Stanley L. Drassler, Jr., as Members of the Board of Review; The Department of Employment Security; and James P. Sledge, as Director of the Department of Employment Security, Defendants.)

No. 1-08-0139.

Appellate Court of Illinois, First District, Third Division.

December 10, 2008.

Raymond A. Hauser, Christopher L. Petrarca, Jane E. Li, Hauser, Izzo, DeTella & Petrarca, LLC, Flossmoor, IL, for Plaintiff-Appellant.

James P. Madigan, Lamba Legal, Chicago, IL, for Defendant-Appellee.

Justice THEIS delivered the opinion of the court:

Plaintiff Board of Education of Bremen High School District No. 228 (the Board) appeals from an order dismissing its complaint for administrative review for lack of standing because it was not the party of record in the administrative proceeding below. On appeal, the Board contends that it was the proper plaintiff because, pursuant to the Illinois School Code (105 ILCS 5/1-1 et seq. (West 2006)) (School Code), a board of education is the body politic and corporate authorized to employ defendant and to sue and be sued on behalf of a school district. In response, defendant argues that Bremen High School District No. 228 (the School District) was the party of record in the proceedings below. Therefore, the School District was the only party authorized under the Administrative Review Law (735 ILCS 5/3-102 et seq. (West 2006)) to file a complaint for administrative review. We reverse and remand for further proceedings.

The essence of this appeal concerns the identity of the proper party to bring the complaint for administrative review. For the purpose of describing the facts of this case, we will use the neutral term "employer" to represent the Board and the School District interchangeably until we determine which party is authorized to file the complaint in the circuit court. However, where context requires, we will refer specifically to "Board of Education, Bremen Community High School District No. 228," or the Board, and "Bremen Community High School District No. 228," or the School District.

In March 2004, defendant Mitchell entered into an employment contract with "Board of Education, Bremen Community High School District No. 228" to serve as superintendent of "Bremen Community High School District No. 228." He was terminated in 2006 following a disciplinary action.

Defendant then filed a claim for unemployment benefits with the Department of Employment Security (Department). In his application for benefits, defendant identified the School District as his employer. Thereafter, all subsequent correspondence related to defendant's claim identified the School District as the employer. Defendant identified the Board as his supervisor and the entity that ultimately discharged him.

A claims adjudicator for the Department determined that defendant was eligible to receive unemployment benefits. The Department sent a letter to the employer informing it of the benefits determination. The employer, through a third-party unemployment claims processing service, protested the benefits determination on behalf of the employer, asserting that defendant was ineligible for unemployment benefits because he was terminated for misconduct.

The employer filed an appeal and requested a hearing to review the benefits determination. The Department conducted a telephone hearing in which defendant testified on his behalf and Dr. David Corbin, an administrator, testified on behalf of the employer. During the hearing, Dr. Corbin testified that defendant was fired because he produced an offensive video that later aired on a television news broadcast. Defendant claimed that he was fired in retaliation for filing a discrimination lawsuit with the Illinois Human Rights Commission. He submitted a copy of that complaint, among other things, into evidence. The hearing referee affirmed the claims adjudicator's decision to award benefits to defendant. The employer then appealed the decision to the Department's Board of Review, which also affirmed the benefits award.

The Board then filed a complaint for administrative review in the circuit court. Defendant filed a motion to dismiss the complaint on the grounds that the Board was not a party to the proceedings below and had no standing to file the complaint. The circuit court found in favor of defendants and dismissed the complaint with prejudice. The Board now appeals.

On appeal, the Board argues that the circuit court erred in dismissing its complaint for lack of standing because, despite the fact that only the School District was a named party in the administrative proceedings below, the Board was defendant's employer and the only party that could have brought the complaint for administrative review in the circuit court. It argues that under the School Code, a board of education has exclusive authority over all employment, supervisory, and termination decisions involving the superintendent. Moreover, a board of education is expressly authorized to sue and be sued in all judicial proceedings involving the school district. In contrast, the School Code does not define or assign functions to a school district. Rather, our courts have defined a school district as a geographical area that generally lacks the capacity to sue unless expressly authorized by statute to do so.

In response, defendant maintains that the School District participated as the party of record in the administrative proceedings, not the Board. Therefore, only the School District had standing to appeal the Department's decision. Defendant also contends that the Board forfeited its argument that it should have been named as the employer because it failed to raise the issue during the administrative proceedings below. Nevertheless, he argues, he correctly identified the School District as his employer because it was the entity that made unemployment insurance contributions to the Department.

This case puts us squarely at the intersection of the School Code (105 ILCS 5/1-1 et seq. (West 2006)), the Unemployment Insurance Act (820 ILCS 405/100 et seq. (West 2006)), and the Administrative Review Law (735 ILCS 5/3-101 et seq. (West 2006)). Ultimately, we must construe the relevant provisions of each of these acts to determine which entity was defendant's employer, which entity defendant should have named as his employer in his unemployment claim, and which entity should have brought the administrative review complaint.

A school district is a quasi-municipal corporation created by the state to act as its administrative arm in implementing the establishment of free schools. Board of Education, Joliet Township High School District No. 204 v. Board of Education, Lincoln Way Community High School District No. 210, 231 Ill.2d 184, 203, 325 Ill.Dec. 217, 897 N.E.2d 756, 767 (2008). A quasi-municipal corporation possesses the same degree of power as a municipal corporation but lacks the same scope of political and legislative authority. People v. Deatherage, 401 Ill. 25, 44, 81 N.E.2d 581, 592 (1948); People ex rel. Leland v. Board of Education of City of Chicago, 325 Ill. 320, 322, 156 N.E. 305 (1927).

As a quasi-municipal corporation, a school district may only act through its agents and officials. See People ex rel. Birkett v. City of Chicago, 325 Ill.App.3d 196, 204, 259 Ill.Dec. 180, 758 N.E.2d 25, 31 (2001). Our supreme court has explained that a school district is "the territory included within its corporate boundaries," whereas a board of education "furnishes the method and machinery for the government and management of the district." Board of Education of District No. 88, Cook County v. Home Real Estate Improvement Corp., 378 Ill. 298, 303, 38 N.E.2d 17, 20 (1941). See also Cooney v. Society of Mount Carmel, 75 Ill.2d 430, 433, 27 Ill.Dec. 485, 389 N.E.2d 549, 551-52 (1979) (noting that a school district is a "geographical area," whereas a board of education is a "group of persons").

The School Code does not further define a school district or comment on the scope of its authority. However, it specifically designates the board of education as the governing body through which a school district operates. 105 ILCS 5/1-3 (West 2006); 105 ILCS 5/10-10 (West 2006) ("All school districts * * * shall be governed by a board of education"). The board of education possesses those powers expressly granted to it in the School Code as well as those implied powers necessary to effect them. 105 ILCS 5/10-20 (West 2006); Spinelli v. Immanuel Lutheran Evangelical Congregation, Inc., 118 Ill.2d 389, 403, 113 Ill.Dec. 915, 515 N.E.2d 1222, 1228 (1987).

Of particular importance, the School Code gives a board of education exclusive jurisdiction over "all employment decisions pertaining to the superintendent," who operates under the direction of the board of education. 105 ILCS 5/10-16.7, 10-21.4 (West 2006). These provisions explicitly confer upon a board of education the power to hire, fire, and supervise superintendents. Daleanes v. Board of Education of Benjamin Elementary School District 25, Du Page County, 120 Ill.App.3d 505, 511, 75 Ill.Dec. 823, 457 N.E.2d 1382, 1386 (1983).

A board of education also qualifies as an employing unit under the Unemployment Insurance Act. Section 204 of that Act defines an employing unit as "any individual or type of organization, including the State of Illinois, each of its political subdivisions and municipal corporations, and each instrumentality of * * * the foregoing" which has had an individual in its employment. 820 ILCS 405/204 (West 2006). The Department's administrative rules adopt the statutory definition of employing unit as well. 56 Ill. Adm.Code § 2720.1, as...