Maasjo v. McLaughlin School Dist. No. 15-2

• Decision Date: 22 April 1992
• Docket Number: 17673,Nos. 17665,s. 17665
• Citation: 489 N.W.2d 618,77 Ed.LawRep. 496
• Parties: 77 Ed. Law Rep. 496 Dennis MAASJO, Appellee, v. McLAUGHLIN SCHOOL DISTRICT # 15-2, Appellant. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 618

489 N.W.2d 618

77 Ed. Law Rep. 496

Dennis MAASJO, Appellee, v. McLAUGHLIN SCHOOL DISTRICT # 15-2, Appellant.

Nos. 17665, 17673.

Supreme Court of South Dakota.

Considered on Briefs April 22, 1992.

Decided Aug. 12, 1992.

Wayne F. Gilbert of Johnson Huffman, P.C., Rapid City, for appellee.

Ronald R. Johnson, Lemmon, for appellant.

MILLER, Chief Justice.

McLaughlin School District (District) appeals from circuit court's order which reversed a decision by the school board (Board) to terminate Dennis Maasjo's superintendent's contract. We reverse.

FACTS

On May 21, 1989, Board offered Maasjo a superintendent's contract. On May 22, 1989, Maasjo executed a written contract of employment with Board. Under the contract, Maasjo agreed to act as Superintendent of the McLaughlin Public Schools for the 1989-90 and 1990-91 school terms. Maasjo had not received his South Dakota teaching certificate at this time. The president of Board executed the contract on June 12, 1989.

At the time Maasjo was offered the contract, he was certified to be a superintendent in the states of Montana and North Dakota. On June 12, 1989, the South Dakota Board of Education certified Maasjo as a secondary school principal; however, he was informed at that time that he would have to complete an additional six credit hours of post-graduate courses in school administration to become certified as a superintendent in this state.

Thereafter, on July 20, 1989, Maasjo prepared an "Application for Authority to Act" ¹ as superintendent for the 1989-90 school year. The application also set forth a plan of courses which Maasjo had to follow to become certified. The completion date for the courses was listed as "summer '90."

On July 20, 1989, Board's president, Wallace Schott, signed the application which was then approved by Dr. Henry Kosters, the State Superintendent of the South Dakota Board of Education. The State Board of Education's approval authorized Maasjo to serve as superintendent only for 1989-90 school term.

At a board meeting in January or February of 1990, Maasjo requested leave to attend summer school for "continuing education." On April 9, 1990, Board first became aware that Maasjo was operating under an Authority to Act. It denied his request for leave.

On April 16, 1990, Board voted to terminate Maasjo's contract because he was not "certified" to be the superintendent for the two-year term of the contract. On April 17, 1990, Board sent Maasjo a notice which stated that it did not intend to renew his contract for the 1990-91 school term. The notice also stated that Board had only recently learned that Maasjo was not "fully certified" for the superintendent's position, and that it would "require extensive absence from duties" for Maasjo to become certified. The notice also provided that his lack of certification and the expiration of his Authority to Act "may constitute plain violation of contract and incompetence" and subjected him to dismissal. The notice provided Maasjo the opportunity to answer and present evidence or a statement on his behalf at a Board meeting April 25, 1990.

On April 25th, Board held an informal hearing in executive session pursuant to SDCL 13-43-10.2. Board's president, Wallace Schott, testified under oath that he signed and dated Maasjo's application on July 20, 1989, but that he was unaware the application was for Maasjo. ² Board then went into executive session and discussed the matter. Board voted not to renew Maasjo's contract and to dismiss him when his authority to act expired. ³ The transcript from this hearing is included in the record.

Maasjo appealed Board's decision and the circuit court held a limited de novo hearing. At this hearing, the court heard additional testimony from past and current board members. The court filed a memorandum decision and entered findings of fact and conclusions of law in which it concluded that Board had acted arbitrarily and capriciously and contrary to law in not renewing Maasjo's contract. The court also concluded that Board's decision to terminate Maasjo was clearly erroneous and that Board had breached the contract. The court entered judgment in favor of Maasjo and against District for the amount of the 1990-91 contract salary plus interest. District appeals from this decision.

DECISION

Standard of Review

Recently, we set forth the standard of review in an appeal from a circuit court order which reversed a school board decision:

Under the applicable rules of appellate procedure, we must affirm the circuit court unless its determinations are clearly erroneous. [citations omitted] Therefore, the question is not whether substantial evidence in the record supports [the decision of] Board, but whether substantial evidence in the record supports [the decision of] the circuit court.

Kellogg v. Hoven Sch. Dist. No. 53-2, 479 N.W.2d 147, 150 (S.D.1991) (emphasis in original). We now clarify that this is the appropriate standard of review when there is essentially no record for the circuit court to review. In Kellogg, Board held no formal hearing and made no findings of fact or conclusions of law. The only written record of Board's deliberations was the minutes of the meetings and a one-page letter to Kellogg denying his petition.

In contrast, in this case, Board's April 25, 1990, meeting was transcribed by a court reporter, the witnesses were sworn, and evidentiary objections were made. Board did not enter findings of fact or conclusions of law, but it did inform Maasjo of its decision by letter on May 3, 1990. The testimony at the circuit court's de novo hearing was merely for "supplementing of the record." Both parties agreed that they should not present testimony that had already been presented at the Board hearing. Additionally, the trial court stated: "Well, the only evidence I intend to hear today is evidence concerning the legality of Board's decision. I do not intend to substitute myself for the Board[.]"

In Kellogg, we stated: " '[O]n appeal to the circuit court, pursuant to SDCL 13-46-6, the doctrine of separation of power limits the scope of review to that provided in SDCL 1-26-36.' " 479 N.W.2d at 149 (quoting Dale v. Bd. of Educ., 316 N.W.2d 108, 112 (S.D.1982)). SDCL 1-26-36 provides:

The court shall give great weight to the findings made and inferences drawn by an agency on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional or statutory provisions;

(2) In excess of the statutory authority of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Clearly erroneous in light of the entire evidence in the record; or

(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

A court shall enter its own findings of fact and conclusions of law or may affirm the findings and conclusions entered by the agency as part of its judgment. The circuit court may award costs in the amount and manner specified in chapter 15-17. (Emphasis added.)

In other words, the scope of review is limited to determining the legality of the school board's decision. Moran v. Rapid City Area Sch. Dist., 281 N.W.2d 595 (S.D.1979). ' "[T]he trial de novo required by SDCL 13-46-6 permits an independent inquiry into the facts, but only for the purpose of passing on the legality of board's decision." ' Dale, supra at 111 (quoting Mortweet v. Ethan Bd. of Ed., Davison Cty., 90 S.D. 368, 373-74, 241 N.W.2d 580, 582 (1976)). "The circuit court must determine (1) whether the board possessed the administrative power to make the decision (which is not in issue here), and (2) whether the board acted unreasonably or arbitrarily, or whether the board manifestly abused its discretion." Lantz v. Chamberlain Indep. Sch. Dist. # 1, 254 N.W.2d 155, 158 (S.D.1977).

In this case, the circuit court entered Conclusion of Law IV, which stated: "Insofar as the Board decided not to renew the contract between the parties, the action of Board was arbitrary, capricious, and otherwise contrary to law." Under Moran, this is a determination that Board acted illegally. "In determining whether the school board's decision was arbitrary, capricious or an abuse of discretion, the circuit court must ascertain whether there is substantial evidence to support the school board's decision." Moran, 281 N.W.2d at 599 (emphasis added). Substantial evidence means such relevant and competent evidence as a reasonable mind might accept as adequate to support a conclusion. Id. We must determine whether Board was clearly erroneous by examining the evidence supporting its decision.

I.

Whether Board's decision was clearly erroneous, arbitrary,

capricious, or an abuse of discretion.

With the scope of our review in mind, we turn to Board's decision. On April 17, 1990, Board sent Maasjo a notice that his contract would terminate at the expiration of the authority to act. The letter stated in pertinent part:

Your contract as superintendent of McLaughlin School District No. 15-2 was valid only for one school year because of lack of superintendent endorsement to your South Dakota Teachers Certificate effective for the stated two year term of your contract. Your contract terminates as a matter of law at the expiration of your authority to act for the 1989-1990 school term. You are notified that the school board of McLaughlin School District 15-2 intends not to renew your contract for the 1990-1991 school term. You are entitled to the informal private conference in executive session provided by SDCL 13-43-10.2.

Your present contract was signed with thee (sic) understanding that you were fully certified for thee (sic) position. Thee (sic) board recently...