Indiana High School Athletic Ass'n, Inc. v. Durham

• Citation: 748 N.E.2d 404
• Decision Date: 07 May 2001
• Docket Number: No. 49A05-9912-CV-00531.,49A05-9912-CV-00531.
• Parties: The INDIANA HIGH SCHOOL ATHLETIC ASSOCIATION, INC., Appellant-Defendant, v. Joan DURHAM, Individually, and Joan Durham as Natural Parent and Guardian of Bernard L. Durham, a Minor, and Bernard L. Durham, Appellees-Plaintiffs.
• Court: Court of Appeals of Indiana

748 N.E.2d 404

The INDIANA HIGH SCHOOL ATHLETIC ASSOCIATION, INC., Appellant-Defendant, v. Joan DURHAM, Individually, and Joan Durham as Natural Parent and Guardian of Bernard L. Durham, a Minor, and Bernard L. Durham, Appellees-Plaintiffs.

No. 49A05-9912-CV-00531.

Court of Appeals of Indiana.

May 7, 2001.

Robert M. Baker III, Johnson, Smith, Pence & Heath, LLP, Indianapolis, IN, Attorney for Appellant.

Harry L. Gonso, Mary Nold Larimore, Ice Miller, Indianapolis, IN, Attorneys for Appellees.

OPINION

VAIDIK, Judge.

Case Summary

The Indiana High School Athletic Association (IHSAA) appeals the trial court's issuance of a permanent injunction against the IHSAA's denial of full eligibility and a hardship exception for Bernard Durham (B.J.). The trial court found that the IHSAA's decision was arbitrary and capricious. Upon appeal, the IHSAA asserts that the trial court's findings are clearly erroneous, given the broad discretion afforded to its eligibility decisions. Because we agree that the IHSAA's decision to deny B.J. full eligibility and a hardship exception was arbitrary and capricious, we affirm the trial court.

Facts and Procedural History

In the summer of 1999, B.J. transferred from Park Tudor High School (Park Tudor) to North Central High School (North Central). B.J. participated in varsity cross-country and track during his freshman and sophomore years at Park Tudor. B.J. had attended private school, either at Park Tudor or at St. Richard's School since second grade. B.J. has three brothers who also attended private schools.

During 1998, B.J.'s mother, Joan Durham, and her husband, Tim Durham, separated and initiated divorce proceedings. Tim is not B.J.'s biological father. B.J.'s biological father lives in France and does not contribute to B.J.'s support. Around January or February of 1999, the time came to sign 1999-2000 re-enrollment contracts for B.J. and his three brothers in their private schools. At that time, Joan and Tim's divorce was not yet final. Joan decided not to sign the contracts because she could no longer afford the tuition to send her children to private schools.¹ She instead enrolled her sons including B.J. in the public school system where the family resided, Washington Township. B.J. enrolled in North Central.

In the fall of 1999, an IHSAA transfer form was completed on behalf of B.J. so that he could continue participating in sports at North Central. Joan indicated on the form that the recent divorce created such a financial burden on her that she could not afford to keep B.J. enrolled at a private school. Joan also provided the IHSAA with financial information and court filings to support the listed reason for B.J.'s transfer.

In 1997, before the divorce, the taxable income of the family was $405,590. However, after the separation, Joan's taxable income was $134,620, resulting in a sixty-seven percent drop in the family income. However, Joan's substantial debt and regular expenses greatly reduce the availability of this income. Further, Joan does not have significant assets that she can access to assist her in reducing her debt or paying her expenses.

Specifically, there are two mortgages on the family home, the first one is for $460,000, and the second mortgage is for $130,000. Thus, although the house's appraisal value is somewhere between $580,000 and $680,000, any proceeds from a sale of this home would be severely reduced by these mortgages. There was also a tax lien on the house at the time Joan had to make the decision of whether or not to re-enroll her children in private schools. This tax lien also prevented Joan from selling the family home. Joan's yearly fixed bills, including the mortgage and utilities, total over $96,000. In addition, charges at Park Tudor total $11,895 for tuition, fees, and books per child. Joan also has many other regular expenses, including credit cards, insurance, health care, camp, piano and tennis lessons, tutors, and household expenses such as groceries and landscaping. Further, the child support paid by Tim for his one child is not received in cash, as it is applied to paying off the tax lien on the house. Although she owns stock in the company for which she works, she has borrowed against that to keep her house. In fact, she receives temporary assistance from her parents in exchange for some work that she does for them to enable her to stay in the family home and continue to keep up payments on her debt.

Park Tudor, as the sending school, also had to offer the reason for B.J.'s transfer. Initially, Park Tudor had included in the transfer form that B.J. told coaches, administrators, and other students that "he wanted to go to a better track/c.c. [cross-country] program and that is why he is leaving." Record at 102. B.J. denied making such statements. However, Park Tudor changed its position after speaking with its athletic director who had subsequently learned that B.J.'s family situation prompted the transfer. Park Tudor recommended that B.J. be awarded full eligibility to compete in sports at North Central. On August 25, 1999, IHSAA Assistant Commissioner Sandy Searcy granted B.J. only limited eligibility, which prohibited B.J. from competing at the varsity level, and denied B.J. a hardship exception.

The Durhams, through North Central's athletic director, appealed that decision to the IHSAA Executive Committee. The Durhams were led to believe that the question of whether B.J. transferred for athletically motivated reasons would not be an issue discussed at the hearing scheduled before the Executive Committee. A hearing was held, at which B.J., Joan, and the athletic directors from both schools testified. Evidence was presented that B.J. had been running with the junior varsity cross-country team at North Central, and that if he enjoyed full eligibility, B.J. would be one of the school's top runners. Joan testified that B.J. had suffered a great deal as a result of the IHSAA's decision. She relayed that he had problems with anxiety in the past, and that his running had helped him through this difficult time for his family. B.J. testified that he did not want to leave Park Tudor, and that he refused to explain why he was leaving when asked about the move at Park Tudor. Assistant Commissioner Searcy also testified that she was convinced that the change in the Durham's financial circumstances was permanent and substantial although not beyond their control. Park Tudor's athletic director, referring to Park Tudor's initial comment on B.J.'s transfer form, stated that the reference was the result of bantering between athletes and coaches due to the rivalry with North Central.

The Executive Committee agreed with Assistant Commissioner Searcy's decision, denying B.J. full eligibility and issuing findings. The Executive Committee concluded that B.J. transferred schools without a change in residence and failed to fit within any of the criteria of the Transfer Rule² to gain full eligibility. Further, the Committee determined that B.J. did not meet the necessary conditions to gain full eligibility through the hardship exception to the Transfer Rule. Even though Searcy had testified that there had been a permanent and substantial change in financial circumstances, the IHSAA Executive Committee reasoned that B.J. failed to produce sufficient proof that the reason for transfer was beyond the control of him and his family. The IHSAA also noted that some evidence existed that the transfer may have been motivated by athletic reasons, even though the Durhams did not know that this was an issue before the Executive Committee.

The Durhams sought a temporary restraining order in court. On September 17, 1999, the trial court granted the temporary restraining order. On September 20, 1999, B.J. filed the complaint asking that the IHSAA's decision be overturned and that a permanent injunction be issued to allow B.J. to run cross-country on North Central's varsity team. On October 15, 1999, the trial court held a hearing on the request for injunctive relief. The court allowed the administrative record to be supplemented, but did not conduct a new evidentiary hearing.

On October 22, 1999, the court granted the permanent injunction, and issued findings and conclusions. The court found that the IHSAA's findings were arbitrary and capricious. The court concluded that B.J. had met the conditions of the hardship exception to the Transfer Rule by showing a significant change in financial circumstances caused by his mother's recent divorce. The trial court noted that Joan's total expenses before private tuition are about equal to her income. Moreover, the court reasoned that B.J. did not need to prove poverty status to fall within the confines of the Hardship Rule, as the IHSAA does not have an income test. The court instead determined that B.J. did meet the requirements listed in the Hardship Rule, concluding that allowing B.J. to enjoy full athletic eligibility would not violate the spirit of the Transfer Rule. The court noted that the only possible evidence of athletic motivation, the bantering among students and coaches, was hearsay within hearsay. Further, this evidence was not confirmed by personal knowledge, but rather was an assumption made due to a rivalry with North Central. The IHSAA appealed the trial court's findings. Initially, this court stayed the appeal so that the trial court could decide the issue of attorney fees. The trial court denied the Durhams' request for attorney fees, and the stay was lifted.

Discussion and Decision

Upon appeal, the IHSAA asserts that the trial court applied the standard of review over its decisions improperly. The IHSAA contends that its rulings are entitled to great deference and should be reversed only if they are willful and unreasonable without consideration of the facts and circumstances in the case. In this case, the IHSAA argues that the trial court merely reweighed the evidence and...