Dunn v. Reynolds Sch. Dist. No. 7 A Political Subdiv. Of The State Of Or.
| Decision Date | 15 November 2010 |
| Docket Number | No. CV-09-1259-HU,CV-09-1259-HU |
| Parties | SUSAN DUNN and HEIDI MASUNAGA, Plaintiffs, v. REYNOLDS SCHOOL DISTRICT NO. 7 a political subdivision of the State of Oregon and public body corporate, and ROBERT FISHER, an individual, Defendants. |
| Court | U.S. District Court — District of Oregon |
James Brown
Attorney for Plaintiffs
Peter R. Mersereau
MERSEREAU & SHANNON, LLP
Attorneys for Defendants
Plaintiffs Susan Dunn and Heidi Masunaga bring claims for violations of civil rights under 42 U.S.C. § 1983, wrongful discharge, breach of contract, and wage claims, against the Reynolds School District No. 7 and its former superintendent, Robert Fisher. Defendants move for summary judgment as to all claims against them, as well as for qualified immunity for Fisher. All parties have consented to entry of final judgment by a Magistrate Judge in accordance with Federal Rule of Civil Procedure 73 and 28 U.S.C. § 636(c)). For the reasons set forth below, I grant defendants' motion, in part, and deny, in part.
In the spring of 2009, plaintiff Susan Dunn was the principal of Davis Elementary School. She had a three-year contract that commenced July 1, 2008, and was scheduled to end on June 30, 2011. Pl.'s Resp. Def.'s Concise Statement Material Facts at 5 8; Def.'s Reply Pl.'s Concise Statement Material Facts at 5 1. Plaintiff Heidi Masunaga was the principal for Alder Elementary School, and also had a three-year contract that commenced on July 1, 2008 and was scheduled to end on June 30, 2011. Id. Both schools are part of defendant Reynolds School District No. 7 ("the District"), in Fairview, Oregon.
As part of their compensation, the District provided group health insurance to the plaintiffs. In addition, the District had a medical reimbursement program. In order to obtain the reimbursement benefit, the plaintiffs and other District employees submitted documents reflecting health expenses, and District administrators evaluated the documents before reimbursing the plaintiffs. The "Memorandum of Agreement between Reynolds School District and Reynolds Administrators' Association For 2003/04, 2004/05, 2005/06" outlined the reimbursement benefit as,
A. Medical Insurance:
....
3. The unused monthly portion of the budgeted insurance/TSA benefit shall remain in a pool for use by individual administrators to recover deductible or co-pay costs incurred under the above insurance plans.
Decl. Barrett Mesereau Ex. 9, at 2. The "Memorandum of Agreement between Reynolds School District and Reynolds Administrators' Association For 2006/07, 2007/08, 2008/09" was more specific about the benefit,
3. Administrators carrying individual or family medical insurance through the District may be reimbursed for the following:
a. Deductible costs for required medical procedures and required prescriptions covered by the insurance policy (e.g. insurance pays only 80%, reimbursable is remaining 20%).
b. Co-pay costs for medical visits or hospitalization (e.g. $15.00 fee for a doctor appointment).
Reimbursement is not available for:
a. Alternative medical procedures or healthy life style activities not covered by the insurance policy (e.g. spa, health club, vitamins, etc.).
b. Surgery or medical procedures, or prescriptions of an elective or optional nature even if covered by the insurance policy (e.g. cosmetic surgery).
On November 28, 2008, defendant Robert Fisher, the superintendent of the District, sent the plaintiffs a letter stating, in part,
The district made a series of errors in administering the program.
SPECIAL_CHARS_DOT The district did not pool the unused benefit dollars.
SPECIAL_CHARS_DOT The district paid for elective procedures.
SPECIAL_CHARS_DOT The district paid claims from documents that did not contain sufficient information to determine if the payment covered a co-payment or deductible.
SPECIAL_CHARS_DOT The district paid claims for non-covered items-effectively expanding the coverage to all out-of-pocket medical expenses.
These errors are serious. They involve questionable use of taxpayer dollars and they serve as an example of the district's poor management practices. Being proactive, I have board and legal support to:
SPECIAL_CHARS_DOT Seek investigation into the practices to determine if any crime has been committed in the administration of the program.
SPECIAL_CHARS_DOT Demand and pursue collection of all payments made to administrators for elective procedures.
SPECIAL_CHARS_DOT Bill and pursue collection of all payments for dental services, eyewear and contact lenses, and goods and services that were not covered by the insurance plan or the reimbursement program.
Id. Ex. 3, at 1; Ex. 4 at 1. The letter indicated that a review had been conducted of all records from July 1, 2002, through November 28, 2008. In Dunn's case, the letter indicated she was "paid $3,508.40 in error." Id., Ex. 3, at 2. In Masunaga's case, the letter indicated she was "paid $5,755.51 in error." Id., Ex. 4, at 2. Both letters asked the plaintiffs to "[p]lease review the enclosed copies of claims paid in error and respond to the district regarding your plans for repayment by December 17, 2008." Id., Ex. 3, at 2; Ex. 4, at 2.
According to plaintiffs, Fisher told them Decl. Robert Brown, Att. 8, at 4. Dunn and Masunaga, however, retained counsel, who wrote in a letter dated January 12, 2009, "It has been reported to me that the district's superintendent has intimated to one or more of the district's administrators it would not be in their best interests to involve legal counsel regarding these matters." Id., Att. 9, at 1; Att. 10, at 1.
The letter also formally alerted the District that plaintiffs did not believe the district had a legal right to demand the overpayments back, and asked that the Districts demands regarding the alleged overpayments cease and desist.
On April 3, 2009, Fisher sent Dunn and Masunaga letters restating the District's demands,
My review indicates that if you do not refund the medical expense reimbursement that was improperly approved, you may be in violation of ORS Chapter 244, as well as TSPC Standards for Competent and Ethical Performance of Oregon Educators, particularly OAR 584-020-0035(2)(a), which states that educators must "adhere to the conditions of a contract or the terms of appointment;" and (e) to "not use the district's or school's name, property, or resources for non-educational benefit or purposes without approval of the educator's supervisor of the appointing authority"-in this case the approval of the Board of Directors, which adopted the administrators' agreement and its terms.
Since you have not complied with my request for you to reimburse the District during the last four months, on behalf of the District, I am now giving you the following directives.
You are to refund to the District the total... that was paid to you as reimbursement for non-covered medical expenses.
You are hereby directed further to submit a check to my office for the full amount... made out to the District, by April 22, 2009.
Failure to repay the reimbursement not authorized under the terms and conditions of the Board-approved administrators' agreement will be considered insubordination on your part, because you will be willfully disobeying an order that the superintendent of the Reynolds School District has a right to give; and, you will be considered also in neglect of your duties, including your duty to accept only that compensation fromthe District which was authorized by the Board-approved administrators' agreement.
It is extremely important for you to know, to be informed, and to be aware that both insubordination and the neglect of duty are grounds for dismissal of a contract administrator under ORS 342.865(1). Therefore, it is my hope that you will comply with this directive.
Id. Att. 11, at 1-2; Att. 12, at 1-2.
On April 22, 2009, both plaintiffs submitted letters of resignation to Fisher, effective June 30, 2009. Mersereau Decl. Ex. 1, at 1; Ex. 2, at 1. Both plaintiffs mentioned in their letters that they had many unused vacation days and expected to be paid for them.
Fisher sent a follow-up letter on April 23, 2009, which stated, in part,
On April 22, 2009, you willfully disobeyed my order and did not repay the District... which you have been notified would be considered insubordination.
Before I make my recommendation to dismiss you from the Reynolds School District to the Board of Education, I am scheduling a pre-termination hearing for you to respond to the potential charges leading to your dismissal. The hearing will be on Tuesday, April 28, 2009... in my office.
Id. Att. 13, at 1, Att. 14, at 1.
School board member Shelly Chase testified that her understanding regarding Fisher's recovery method was that Id. Att. 19, at 2. Later, Chase was "told [Dunn and Masunaga] had not paid the money and [Fisher] was going to terminate them." Id., Att. 19, at 4. Another school board member, Richard Phelps, testified that "if [Fisher] recommended [termination] to the board, the board would stand behind it." Id., Att. 20, at 2. Yet another school board member, Donna Edgley, characterized Fisher's strategy, Id., Att. 22, at 2.
Despite the resignation letters, Fisher moved forward and held the scheduled April 28, 2009 pre-termination hearing. There are few details about what happened at the pre-termination hearing. On May 4, 2009, Fisher wrote the plaintiffs again:
Please be advised that I have accepted your resignation effective June...
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