Lakota Consol. Independent School v. Buffalo Center/Rake Community Schools

• Decision Date: 15 June 1983
• Docket Number: No. 68105,68105
• Citation: 334 N.W.2d 704
• Parties: 11 Ed. Law Rep. 1002 LAKOTA CONSOLIDATED INDEPENDENT SCHOOL, Appellant, v. BUFFALO CENTER/RAKE COMMUNITY SCHOOLS; Harold Davids; Karen Davids; Harm Davids and Hazel Davids as Guardians of Debra A. Davids, Duane A. Davids and Laura K. Davids, minors; Dewayne Maass; Berneice Maass; Gerhald Maass; as Guardian of Brenda Maass, Myrna Maass, and Donna Maass, minors; Gail Olthoff; Eunice Olthoff; and Delores J. Wertjes as Guardian of Rodney Richard Olthoff, a minor, Appellees.
• Court: Iowa Supreme Court

Page 704

334 N.W.2d 704

11 Ed. Law Rep. 1002

LAKOTA CONSOLIDATED INDEPENDENT SCHOOL, Appellant, v. BUFFALO CENTER/RAKE COMMUNITY SCHOOLS; Harold Davids; Karen Davids; Harm Davids and Hazel Davids as Guardians of Debra A. Davids, Duane A. Davids and Laura K. Davids, minors; Dewayne Maass; Berneice Maass; Gerhald Maass; as Guardian of Brenda Maass, Myrna Maass, and Donna Maass, minors; Gail Olthoff; Eunice Olthoff; and Delores J. Wertjes as Guardian of Rodney Richard Olthoff, a minor, Appellees.

No. 68105.

Supreme Court of Iowa.

June 15, 1983.

Murray H. Finley of Finley & Teas, Mason City, for cross-appellants Olthoff and Wertjes.

Richard A. Potter, Buffalo Center, for appellees.

Harold W. White of Fitzgibbons Brothers, Estherville, for appellant.

C.W. McManigal of Laird, Burington, Bovard, Heiny, McManigal & Walters, Mason City, for cross-appellant Buffalo Center/Rake Community Schools.

Considered en banc.

CARTER, Justice.

The plaintiff school district has appealed from district court orders dismissing its claim for a declaratory judgment, money damages, and injunctive relief against the defendant school district and certain individual defendants. Plaintiff's claim is based upon the tuition and bus transportation policies of the defendant school district for students residing in the plaintiff school district. The defendants have cross-appealed from the trial court's order denying their claim that plaintiff has failed to exhaust administrative remedies.

The plaintiff Lakota Consolidated Independent School (Lakota District) alleges in its petition that the defendant Buffalo Center/Rake Community Schools (Buffalo Center/Rake District) has acted contrary to law and has violated Iowa Code sections 282.1 and 285.1(11) (1981) by permitting students who reside in the Lakota District to attend the Buffalo Center/Rake District schools without payment of tuition and in providing bus transportation to those students outside the boundaries of the Buffalo Center/Rake District. It is alleged that the students in question continue to reside with their parents in the Lakota District even though they are the wards of legal guardians who live in the Buffalo Center/Rake District. The parents and guardians are named as defendants together with the Buffalo Center/Rake District.

After overruling the defendants' special appearance based on an alleged failure of the plaintiff to pursue available administrative remedies, the district court granted defendants' motion to dismiss the petition for failure to state a claim upon which relief can be granted. We consider the arguments presented by the Lakota District that this ruling was erroneous and also the claim of the defendants that the court should decline jurisdiction based on the Lakota District's failure to pursue available administrative remedies. Because the defendants' claim affects our jurisdiction, we consider that issue first.

I. Failure to Pursue Administrative Remedies.

Defendants urged in their special appearance in the district court and continue to argue on appeal that where an administrative remedy is provided by statute such remedy must be exhausted before resort may be had to the courts. It contends that the State Board of Public Instruction is an agency initially empowered to consider the complaints which have been lodged by the Lakota District in the present case. We have no problem in accepting defendants' argument with respect to the abstract principle involved, and we agree that it has been applied to claims involving school districts. See Griffith v. Red Oak Community School District, 167 N.W.2d 166, 171 (Iowa 1969). The difficulty which we face is to determine whether in fact an adequate administrative remedy is available to the Lakota District with respect to the matters complained of in its petition.

In State ex rel. Turner v. Iowa Electric Light & Power Co., 240 N.W.2d 912, 913-14 (Iowa 1976), we recognized the distinction which exists between three aspects of the exhaustion requirement. These are: (1) exhaustion of claims within an administrative agency before seeking judicial review of agency action, (2) the doctrine of primary jurisdiction recognized by courts as precluding a deliberate bypass of an adequate administrative remedy, and (3) the doctrine of exclusive jurisdiction whereby the legislature requires primary resort to an administrative agency with respect to a particular type of claim. Because no attempt to pursue an administrative remedy has previously been undertaken by the Lakota District, the first example of the exhaustion requirement is not involved in the present case.

The defendants contend that the legislature has provided that exclusive jurisdiction of the Lakota District's claims lies with the State Board of Public Instruction. In support of this contention, it relies on Iowa Code section 290.1 (1981) which provides:

Any person aggrieved by any decision or order of the board of directors of any school corporation in a matter of law or fact may, within thirty days after the rendition of such decision or the making of such order, appeal therefrom to the state board of public instruction; the basis of the proceedings shall be an affidavit filed with the state board by the party aggrieved within the time for taking the appeal, which affidavit shall set forth any error complained of in a plain and concise manner.

The trial court held that the appeal provided for in the foregoing statute would not permit consideration by the State Board of Public Instruction of the claims for damages and injunctive relief which are included in plaintiff's petition. We agree. Iowa Code section 290.6 (1981) provides, in part, "Nothing in this chapter shall be so construed as to authorize the state board of public instruction to render judgment for money." Nor does it appear that the state board is authorized to grant plaintiff the injunctive relief which it seeks against the defendants.

We have previously stated that "Inadequacy of that [administrative] remedy to provide the relief a litigant seeks constitutes some indication the remedy is not exclusive, and therefore, that an independent action can be maintained in a court before the administrative remedy is exhausted." Myers v. Caple, 258 N.W.2d 301, 304 (Iowa 1977), quoting Charles Gabus Ford, Inc. v. Iowa State Highway Commission, 224 N.W.2d 639, 647 (Iowa 1974). Similarly, "one test of exclusiveness is whether the administrative remedy is adequate. Inadequacy of that remedy to provide the relief to which the litigant would otherwise be entitled constitutes some indication that the remedy is not exclusive and that an independent action in court can be maintained." Myers v. Caple, 258 N.W.2d 301, 304 (Iowa 1977), quoting Oliver v. Iowa Power and Light Co., 183 N.W.2d 687, 691 (Iowa 1971). The major question one must ask in determining adequacy of remedy, is whether the relief sought is within the jurisdiction of the agency. Dehning v. Eads, 201 N.W.2d 454, 457 (Iowa 1972).

In Oliver v. Iowa Power & Light Co., 183 N.W.2d 687 (Iowa 1971), this court decided whether the plaintiff was required to exhaust his administrative remedies before instituting an independent accounting suit to recover for alleged overcharges of electricity. The court decided that an administrative remedy existed for only part of the complaint. If the plaintiff merely wanted the amount of the overcharge corrected prospectively, the court said that he could simply either complain informally to the agency or institute formal proceedings before the agency. However, to recover past payments of the wrong amount, the plaintiff could institute an independent court suit. "As to payments of wrong amounts, we think the administrative remedy is not sufficiently adequate to be primary. The courts remain open to such suits." Oliver, 183 N.W.2d at 692. Important to the court's decision was the fact that the relevant statute provided no machinery and granted no authority to the commission to require reparation by a utility for wrong amounts which had been charged. The statute "contains no intimation that a person's substantive right to recover past payments of wrong amounts is abrogated." Oliver, 183 N.W.2d at 692.

Myers v. Caple, 258 N.W.2d 301 (Iowa 1977), is another case where we determined that the parties did not have to exhaust administrative remedies before pursuing an action in court. In this case the trial court had issued an injunction to enjoin completion of a proposed levee, and directed removal of the portion of the levee which was already constructed. The defendant landowner argued that the trial court had no jurisdiction over the matter because the plaintiff landowner failed to exhaust his administrative remedies by first appealing from the adverse decision of the Natural Resources Council. In holding that this was a case where plaintiff was not required to exhaust his administrative remedies before seeking judicial relief, we determined there was no adequate remedy before the agency. We found that the primary purpose behind these particular statutes was to protect the state's interests in water resources. The agency had no power to "either award damages for injury to Myers' land or enjoin further damage to his property." Myers, 258 N.W.2d at 304.

Based upon application of the principles discussed in the foregoing cases, we hold that the plaintiff in the present case was not required to pursue an administrative remedy under section 290.1 before resorting to the district court. The trial court was correct in overruling the defendants' special appearance. The case is affirmed on defendants' appeal.

II. Does Plaintiff's Petition State a Claim Upon Which Relief Can Be Granted?

In reviewing the trial court's ruling that plaintiff's petition fails to state a claim upon which relief can be granted, the critical allegations are as follows. The Lakota District asserts that students residing within its district have been...