HILL CITY EDUC. v. Hill City School Dist., 22945.
| Decision Date | 07 April 2004 |
| Docket Number | No. 22945.,22945. |
| Citation | 2004 SD 47,678 N.W.2d 817 |
| Parties | HILL CITY EDUCATION ASSOCIATION, Petitioner and Appellee, v. HILL CITY SCHOOL DISTRICT 51-2 and Board of Education, Respondents and Appellants. |
| Court | South Dakota Supreme Court |
Anne Crowson Plooster, South Dakota Education Association, Pierre, South Dakota, Attorney for petitioner and appellee.
Donald P. Knudsen of Gunderson, Palmer, Goodsell & Nelson, Rapid City, South Dakota, Attorneys for respondents and appellants.
[¶ 1.] Under the Hill City School District's collective bargaining agreement with the Hill City Education Association, health benefits were to be provided to the District's employees. At the end of the school term in June, the District terminated health benefits for those employees who would not be returning the next year. The Association contested the decision, and the dispute went to the Department of Labor. In denying the Association's grievance, the Department found that the negotiated agreement was ambiguous on when benefits were to end and ruled that the District's past practices controlled. The circuit court reversed, holding that the agreement was not ambiguous and that non-returning employees were entitled to receive health benefits until the negotiated agreement expired in August. We affirm because the negotiated agreement unequivocally provided that all employee contracts would commence on August 15, 2000 and end on August 15, 2001.
[¶ 2.] On July 11, 2000, the Hill City School District and the Hill City Education Association entered into a negotiated agreement. Article IX, Section 9.4 stated that the "provisions of the Agreement shall be effective as of the 15th day of August 2000, and shall continue and remain in full force and effect as binding on the parties until the 15th day of August 2001." In the spring of 2001, the District notified staff members who would not be returning for the following school year that their health insurance "terminates June 30, 2001."
[¶ 3.] When the parties were unable to reach a satisfactory resolution, the Association petitioned the South Dakota Department of Labor. The petition alleged that the District violated, misinterpreted, or inequitably applied the negotiated agreement when it terminated health benefits in June for "certified staff members" who would "not be returning" for the next school year. The Association claimed that under the terms of the agreement, the District was required to provide health and dental insurance until August 15, 2001.1 The Department concluded that the District had not violated the negotiated agreement because it was ambiguous on when benefits were to end for "teachers not returning for the next year"; consequently, the District's past practice of terminating benefits at the end of the school term was controlling.
[¶ 4.] On appeal, the circuit court reversed the Department's decision. In a memorandum opinion, the court scrutinized each part of the negotiated agreement claimed by one side or the other to be controlling and then concluded that, as a whole, the agreement was not ambiguous on the duration of benefits. The court ruled that teachers who had fulfilled their obligations under their individual contracts remained entitled to benefits until August 15. Furthermore, the court held that because the negotiated agreement was unambiguous, the District's past practices could not modify the agreement.2 In this appeal, the District questions "whether [it] violated, misinterpreted or inequitably applied the negotiated agreement when it cancelled fringe benefits at the end of the school year rather than at the end of the term of the negotiated agreement for certified staff members who resigned, retired or whose contracts were not renewed."3
[¶ 5.] Our standard of review for agency decisions is governed by SDCL 1-26-36. Great weight is given to an agency's findings on factual questions and inferences drawn from them. SDCL 1-26-36; Moonlight Rose Co. v. South Dakota Unemployment Ins. Div., 2003 SD 96, ¶ 5, 668 N.W.2d 304, 307 (citation omitted). With questions of law, however, our review is de novo. Id. Contract interpretation presents a question of law. Auto Owners Ins. Co. v. Enterprise Rent-A-Car Co.-Midwest, 2003 SD 52, ¶ 7, 663 N.W.2d 208, 209-10.
[¶ 6.] When disputes arise over a contract, they are resolved with reference to contract law. Wessington Springs Educ. Ass'n v. Wessington Springs School Dist. 36-2, 467 N.W.2d 101, 104 (S.D.1991). Both sides here agree that the negotiated agreement is not ambiguous. "[A] contract is ambiguous only when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire agreement." Estate of Fisher v. Fisher, 2002 SD 62, ¶ 12, 645 N.W.2d 841, 845 (citation omitted).
[¶ 7.] The District's argument rests on the proposition that teachers whose contracts are not renewed for the following school term are no longer considered "employees" under the negotiated agreement when they complete the school term. Thus, in the District's reasoning, non-returning teachers who complete all their contractual obligations are not entitled to benefits up to the expiration of the negotiated agreement. On the other hand, returning teachers who complete all their obligations are entitled to benefits until the expiration of the negotiated agreement.
[¶ 8.] The District supports its position by characterizing individual teacher contracts as in force only during the "school term." Non-returning teachers, the District argues, "earned the salary stated in the individual teacher contracts between September 5, 2000 and May 24, 2001," and therefore, when their contracts are fully performed, their employment ends. This is a misreading. Those individual contracts simply obligate employees to perform their duties during the school term, as set out in the school calendar.4 Under the provisions of the negotiated agreement, however, the teachers also earn a full year of health and dental benefits by performing their contractual obligations between September 5, 2000 and May 24, 2001.
[¶ 9.] The plain effect of the contractual language contemplates that benefits arising under the agreement end on the "15th day of August," not at the end of the school term. And because the individual contracts do not provide a terminal date, the District's reference to SDCL 13-43-6.3 is of no avail. That statute provides that a contract of a teacher who fails to accept an offer of renewal "shall result in the termination of the existing contract between the teacher and the district at the end of its term." Here, the end of the term for each contract was August 15. The negotiated agreement effectively provided that all its provisions were incorporated in each teacher's contract because Article IX, section 9.2 of the negotiated agreement states, "[t]he terms and conditions of this Agreement shall be reflected in individual teacher contracts."
[¶ 10.] The District also argues that a notification of nonrenewal terminates a teacher's contract. But nonrenewal means only...
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..."[n]on-returning employees maintain their status as employees until the expiration of the negotiated agreement." Hill City Educ. Ass'n v. Hill City School Dist. 51-2, 2004 SD 47, ¶ 13, 678 N.W.2d 817, 821. However, we specifically noted that we did not interpret that case to "include those ......
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