Calvary Christian School v. Huffstuttler

• Decision Date: 29 June 2006
• Docket Number: No. 05-343.,05-343.
• Citation: 238 S.W.3d 58
• Parties: CALVARY CHRISTIAN SCHOOL, INC., Terry Neeley, Michael Borden, M.C. Lewellen, Jr., David Rogers, Individually and in their Capacity as Directors of Calvary Christian School, and Suzanne Hess, Appellants, v. Ted HUFFSTUTTLER, Dorma Huffstuttler, and Preston Huffstuttler, Appellees.
• Court: Arkansas Supreme Court

238 S.W.3d 58

CALVARY CHRISTIAN SCHOOL, INC., Terry Neeley, Michael Borden, M.C. Lewellen, Jr., David Rogers, Individually and in their Capacity as Directors of Calvary Christian School, and Suzanne Hess, Appellants, v. Ted HUFFSTUTTLER, Dorma Huffstuttler, and Preston Huffstuttler, Appellees.

No. 05-343.

Supreme Court of Arkansas.

June 29, 2006.

Christopher W. Morledge, P.A., Forrest City, AR, and Sharpe, Reynolds & Tillman, by: J. Shelby Sharpe, Fort Worth, TX, for appellants.

Tony Wilcox, P.A., Jonesboro, and Richard L. Proctor, Wynne, AR, for appellees.

ANNABELLE CLINTON IMBER, Justice.

This case concerns the disenrollment of Appellee Preston Huffstuttler (Preston) by Appellant Calvary Christian School, Inc. (Calvary Christian). A jury awarded Preston damages for breach of contract, intentional interference with a contract, outrage, and defamation. The jury also awarded Preston's mother, Appellee Dorma Huffstuttler, damages for defamation. On appeal, Appellants Calvary Christian, Terral Neeley, Michael Borden, M.C. Lewellen, Jr., and David Rodgers, individually and in their capacity as directors of Calvary Christian, and Suzanne Hess, raise ten points for reversal. Those ten points can be grouped into three categories: (1) the circuit court did not have subject-matter jurisdiction of this case, (2) in the event the circuit court did have jurisdiction, the court erred in denying their directed-verdict motions on all the alleged claims, and (3) if the directed-verdict motions were correctly denied, the award of damages should be reversed. We affirm in part and reverse and dismiss in part.

Calvary Christian is a parochial school located in Forrest City. It is undisputed that Preston, a junior in high school, had attended Calvary Christian since kindergarten. During Preston's junior year, in September 2001, Preston discovered a video camera hidden in the duct work (the ventilation system) of his school classroom at Calvary Christian. He reported the video camera's presence to his teacher, Rhea Hall, and to his parents, Appellees Ted and Dorma Huffstuttler. Because the classroom was also used as a dressing room for school events, the Huffstuttlers became concerned and complained about the camera to school authorities at a school meeting attended by other parents. Suzanne Hess, one of the school's principals, initially denied the presence of the camera, but later admitted it was placed there by a school board member, M.C. "Buddy" Lewellen. Thereafter, a dispute concerning the school's loss of accreditation and the use of a hidden video camera developed between Calvary Christian and Ted and Dorma Huffstuttler. On January 10, 2002, the Huffstuttlers were asked to sign a new agreement,¹ whereby their family would agree to support the policies, procedures, staff, and administration of the school. The Huffstuttlers all signed that agreement. On January 17, however, the governing board of Calvary Christian decided to disenroll Preston. Immediately following Preston's disenrollment, the Huffstuttlers filed a complaint, seeking to keep their son enrolled in the school. Although the Huffstuttlers nonsuited their complaint on March 28, 2002, they reinstituted the suit by filing another complaint on September 26, 2003. In that complaint, the Huffstuttlers sought damages for breach of contract, intentional interference with contractual relationships, outrage, and defamation. In addition to compensatory damages, the Huffstuttlers requested punitive damages. Appellants filed a motion to dismiss and, alternatively, for summary judgment. In essence, Appellants challenged the circuit court's subject-matter jurisdiction because the case involved a parochial school. The circuit court denied the motion, and Appellants then filed a petition for a writ of prohibition with this court, which petition was denied on May 13, 2004.

The suit proceeded to trial, and the jury found in favor of the Huffstuttlers. They awarded (1) the Huffstuttlers $10,000 for breach of contract, (2) Preston $25,000 in compensatory damages and $75,000 in punitive damages for the tort of outrage, (3) Preston $25,000 in compensatory damages and $25,000 in punitive damages for intentional interference with the contract between the Huffstuttlers and Calvary Christian, (4) Preston $10,000 in compensatory damages and $15,000 for punitive damages for defamation, and (5) Dorma zero compensatory damages and $5,000 for punitive damages for defamation. Following the circuit court's entry of judgment on October 18, 2004, Appellants filed a motion for judgment notwithstanding the verdict (JNOV), and alternatively for new trial, on October 26, 2004. Pursuant to Ark. R.App. P.-Civil 4(b) (2006), the posttrial motion was deemed denied on November 25, 2004. Appellant timely filed a notice of appeal on December 1, 2004.

The case has been certified to this court by the Arkansas Court of Appeals as a case involving an issue of first impression, federal constitutional interpretation, substantial public interest, and one needing clarification and development of the law. Our jurisdiction is therefore proper pursuant to Ark. Sup.Ct. R. 1-2(b)(1), (3), (4), & (5) (2006).

In the first and second points on appeal, Appellants contend that the circuit court erred in denying the motion to dismiss because all of the claims arising out of Preston's disenrollment are outside the circuit court's subject-matter jurisdiction. In its order, the circuit court concluded that there was insufficient information to conclude that Calvary Christian, as a matter of law, was a "religious institution entitled to the protections and immunities of the First and Fourteenth Amendment." The circuit court further ruled that "exceptions to absolute immunity exist. These exceptions include instances wherein the Court may resolve the dispute through the application of neutral principles of law and where the conduct at issue affects the public morals, welfare and safety."

Our court reviews a trial court's decision on a motion to dismiss by treating the facts alleged in the complaint as true and by viewing them in the light most favorable to the plaintiff. Clowers v. Lassiter, 363 Ark. 241, 213 S.W.3d 6 (2005). In viewing the facts in the light most favorable to the plaintiff, the facts should be liberally construed in the plaintiff's favor. Id. Our rules require fact pleading, and a complaint must state facts, not mere conclusions, in order to entitle the pleader to relief. Id.; Ark. R. Civ. P. 8(a)(1) (2006).

To support the position that the circuit court was without jurisdiction to rule on the claims arising out of Preston's disenrollment, Appellants contend that religious, educational institutions have a constitutionally protected right to be free from civil court interference. Their argument is rooted in the U.S. Supreme Court's decision Watson v. Jones, 13 Wall. 679, 80 U.S. 679, 20 L.Ed. 666 (1871). In Watson, the Court first considered the issue of judicial involvement in a hierarchical² church's property dispute. Specifically, the Court was asked to determine which sect of the church had control over church property. As a result of the Court's holding that the civil courts were not allowed to interfere in the property dispute, this case became the landmark case for the principle that the judiciary cannot inquire into church matters — it is simply without jurisdiction to do so. The Court held, in part:

All who unite themselves to such a body do so with an implied consent to this government, and are bound to submit to it. But it would be a vain consent and would lead to the total subversion of such religious bodies, if any one aggrieved by one of their decisions could appeal to the secular courts and have them reversed. It is the essence of these religious unions, and of their right to establish tribunals for the decision of questions arising among themselves, that those decisions should be binding in all cases of ecclesiastical cognizance, subject only to such appeals as the organism itself provides for.

Id. at 729, 80 U.S. 679. Since Watson, the Supreme Court has dealt with a gamut of cases concerning the issue of when civil courts have jurisdiction to determine church disputes. Bouldin v. Alexander, 15 Wall. 131, 82 U.S. 131, 21 L.Ed. 69 (1872); Gonzalez v. Roman Catholic Archbishop of Manila, 280 U.S. 1, 50 S.Ct. 5, 74 L.Ed. 131 (1929); Kedroff v. Saint Nicholas Cathedral of the Russian Orthodox Church in North Am. 344 U.S. 94, 73 S.Ct. 143, 97 L.Ed. 120 (1952); Presbyterian Church v. Mary Elizabeth Blue Hull Mem. Church, 393 U.S. 440, 89 S.Ct. 601, 21 L.Ed.2d 658 (1969); Serbian Eastern Orthodox Diocese for the United States of Am. & Canada v. Milivojevich, 426 U.S. 696, 96 S.Ct. 2372, 49 L.Ed.2d 151 (1976); and Jones v. Wolf, 443 U.S. 595, 99 S.Ct. 3020, 61 L.Ed.2d 775 (1979). Yet, all but one of these cases, Serbian Eastern Orthodox for the United States of America & Canada v. Milivojevich, supra, dealt with church property disputes.³ In sum, the steadfast rule announced by the Court was that unless "neutral principles of law" apply, judicial scrutiny of ecclesiastical doctrine is banned under the First Amendment. This settled rule of law, however, has since been diluted with the Court recognizing the possibility of civil court review. In Gonzalez v. Roman Catholic Archbishop of Manila, supra, the Court stated:

In the absence of fraud, collusion, or arbitrariness, the decisions of the proper church tribunals on matters purely ecclesiastical, although affecting civil rights, are accepted in litigation before the secular courts as conclusive, because the parties in interest made them so by contract or otherwise.

Id. at 16-17, 50 S.Ct. 5. Thereafter, however, the Court retracted its "fraud, collusion, or arbitrariness" exception, noting that is was only dictum. In Serbian Eastern Orthodox for the United States of America & Canada v. Milivojevich, supra, the Court noted:

Whether or...