Paczosa v. Cartwright Sch. Dist. No. 83

• Decision Date: 23 June 2009
• Docket Number: No. 1 CA-CV 08-0539.,1 CA-CV 08-0539.
• Citation: 213 P.3d 222,222 Ariz. 73
• Parties: James PACZOSA, a married man; Tracy Faulkner, a married woman, Plaintiffs-Appellants, v. CARTWRIGHT ELEMENTARY SCHOOL DISTRICT NO. 83, a political subdivision of the state, Defendant-Appellee.
• Court: Arizona Court of Appeals

213 P.3d 222

222 Ariz. 73

James PACZOSA, a married man; Tracy Faulkner, a married woman, Plaintiffs-Appellants, v. CARTWRIGHT ELEMENTARY SCHOOL DISTRICT NO. 83, a political subdivision of the state, Defendant-Appellee.

No. 1 CA-CV 08-0539.

Court of Appeals of Arizona, Division 1, Department A.

June 23, 2009.

Law Offices of Kevin Koelbel PC by Kevin Koelbel, Chandler, Co-Counsel for Plaintiffs-Appellants.

The Counters Firm by Lisa J. Counters, Maricopa, Co-Counsel for Plaintiffs-Appellants.

Law Office of William R. Hobson, PC, Chandler, Co-Counsel for Plaintiffs-Appellants.

DeConcini McDonald Yetwin & Lacy, PC by Denise M. Bainton, Tucson, Attorneys for Defendant-Appellee.

OPINION

BARKER, Judge.

¶ 1 James Paczosa ("Paczosa") and Tracy Faulkner ("Faulkner") appeal from a grant of partial summary judgment on their claims for relief under the Arizona Declaratory Judgment Act. Finding no genuine issue of material fact or error of law, we affirm the judgment.

Facts and Procedural Background

¶ 2 The Cartwright Elementary School District No. 83 (the "District") employed Paczosa and Faulkner as school principals until 2007. Paczosa worked for the District for twenty-three years, serving the last nine as a principal, a position the Arizona Legislature classifies as an "administrator" because he was devoting less than fifty percent of his time to classroom teaching. See Ariz.Rev. Stat. ("A.R.S.") § 15-501(1) (2009). Before becoming an administrator, Paczosa served as a tenured teacher in the District. Faulkner worked for the District for twenty-five years, and had served as an administrator for the last fifteen years. Like Paczosa, she had previously worked for the District as a tenured teacher.

¶ 3 Paczosa and Faulkner's respective 2006-2007 contracts with the District provided in relevant part:

Administrator shall be provided the administrative fringe benefits set forth in Exhibit A [Cartwright Administrator fringe benefits] for the fiscal year this Contract is in effect.

In accordance with A.R.S. § 15-503, the Board shall notify Administrator on or before April 15th if the Board or its authorized representative does not intend to offer Administrator a contract for the next fiscal year, unless an alternative notification date is authorized by State law. If the Board fails to provide timely notification of non-renewal, the Board shall be deemed to have extended the normal expiration date of this Contract for one (1) year.

Any subsequent amendment or addendum to this Contract must be in writing and signed by the parties.

¶ 4 Exhibit A to the 2006-2007 contracts also provided for fringe benefits, including retirement benefits:

Retirement Program as specified in the Meet and Confer Agreement is only applicable for employees employed prior to July 1, 2005. In addition, administrators may choose to receive retirement benefits over the pay periods of one, two, or three contract years immediately prior to termination of employment. These benefits include the retirement bonus, medical insurance payment, sick/annual leave buy back, and unused vacation days. Vacation days will only be bought back during the last full year of contracted employment. A minimum of 50 sick/annual leave days plus vacation days must be available for the last contract year of the retirement agreement. These days may be prorated over the pay periods of the last contract year. All termination benefits will be computed based on the last completed full year contract. Any adjustments will be computed at termination of employment.

(Emphasis in original.)

¶ 5 In January 2007, Paczosa and Faulkner notified the District of their intent to use the Retirement Program benefit.¹ They requested that their incentive payments be spread over the last three years of their contracts, ending in 2010.²

¶ 6 On April 27, 2007, the District's Governing Board (the "Board") modified the fringe benefits. The fringe benefit changes incorporated the following language:

Retirement Program as approved by the Governing Board is only applicable for employees who notified the Superintendent or his designee in writing by February 1, 2007 of his/her desire to participate in the retirement program. Administrators must retire at the end of the 2007-08 year. Upon acceptance into the District Retirement Program, the administrator may choose to receive the 30% retirement bonus, health insurance cash settlement, and sick/annual leave and unused vacation days of all days over 50 (400 hours) in one of three payment options: 1) Evenly spaced payments added to their regularly bi-weekly paychecks[;] 2) A one-time payment in the final month; [o]r 3) Two equal separate payment[s], one in December, the second in the final month.

(Emphasis in original.)

¶ 7 On May 3, 2007, the District offered Paczosa and Faulkner contracts as principals for the 2007-2008 year that included these modified fringe benefits. The principals had until June 2, 2007 to accept; thereafter the contracts were deemed revoked by law. See A.R.S. § 15-503(D).

¶ 8 Paczosa and Faulkner did not sign the proffered 2007-2008 contracts. On May 31, they asked the District whether they could return to work under their old contracts. They were told that the Governing Board had scheduled a June 6 meeting to discuss issues relating to Paczosa's and Faulkner's contracts and that the District's position was that the 2007-2008 contract offers would be revoked if not signed by June 2. On June 1, Paczosa and Faulkner told the District that they would not sign the 2007-2008 contracts and that they planned to continue working under the 2006-2007 contracts because the District had not served a notice of "non-renewal" before April 15, 2007.

¶ 9 Paczosa and Faulkner filed a declaratory judgment action against the District in Maricopa County Superior Court on June 1, 2007. They sought a declaratory judgment under A.R.S. § 12-1831 that their 2006-2007 contracts had been automatically extended, that they were entitled to the retirement benefits set forth in the 2006-2007 contracts, and that they had three-year contracts of employment.

¶ 10 On June 9, 2007, the Board met to discuss Faulkner's and Paczosa's employment. The Board declared Faulkner's and Paczosa's positions vacant "due to the fact that they have not signed and returned the contracts offered for school year 2007-2008." Four days after the meeting, Paczosa and Faulkner requested positions as tenured teachers in the event the superior court found the terminations of their administrative contracts valid.

¶ 11 On June 14, 2007, Faulkner and Paczosa filed an amended verified complaint, together with an Application for Temporary Restraining Order, Preliminary Injunction, and Order to Show Cause. They sought to restrain the Board from filling their positions until the Application for Preliminary Injunction could be heard.

¶ 12 The superior court denied the application, finding that the relevant issue was a pure question of law on which Faulkner and Paczosa were not likely to succeed at trial. Specifically:

The relevant portion of A.R.S. § 15-503(D) sets two deadlines: April 15 for notice of "the board's intention not to offer a new contract," and May 15 for "offering a new contract." The former deadline is inapplicable as the board did not intend to refuse to offer Plaintiffs a new contract. It is undisputed that the board offered Plaintiffs a new contract before the later deadline of May 15. It did so on May 3. Another portion of A.R.S. § 15-503(D) provides that, where a new contract is offered, the offer must be accepted "within thirty days from the date of the written contract or the offer is revoked." It is also undisputed that no acceptance was communicated during this time period. The offer was, by operation of law, revoked thirty days after May 3, 2007.

Plaintiffs have not proved that they will likely succeed at trial. In fact, the seemingly uncontradicted evidence indicates the opposite.

The superior court further found that Paczosa and Faulkner had not established irreparable injury, both sides would suffer similar hardships, and neither side had made a showing sufficient to reach a conclusion on the public policy issue.

¶ 13 The District then filed a verified answer, and the parties filed cross-motions for partial summary judgment on whether Paczosa and Faulkner were entitled to continued employment as tenured teachers. Following oral argument, the superior court granted summary judgment to the District. Applying A.R.S. § 15-501(2), the court ruled that Paczosa and Faulkner did not meet its definition of certificated teachers and thus were not entitled to tenured teaching contracts for the 2007-2008 school year. The court rejected Paczosa's and Faulkner's ensuing motion for reconsideration and entered a judgment containing findings of fact and conclusions of law. This appeal followed. We have jurisdiction pursuant to A.R.S. § 12-210KB) (2003).

Discussion

1. As a Matter of Law, Under the Terms of the Benefits Program the District Governing Board Had Authority to Prospectively Modify the Benefits Program from Year to Year.

¶ 14 The superior court's judgment resolved all factual issues in favor of Paczosa and Faulkner. On appeal, we review de novo the court's application of the law to those facts. Trust v. County of Yuma, 205 Ariz. 272, 274, ¶ 7, 69 P.3d 510, 512 (App.2003).

¶ 15 Paczosa and Faulkner contend that after they indicated their intent to participate in the Benefits Program ("Program") over the next three contract years, the Board had no authority to change the retirement benefit. We disagree. The 2006-2007 employment contracts were "for a term of one (1) year, effective July 1, 2006, through June 30, 2007" and stated that the "[a]dministrator has no legitimate expectancy of employment beyond the term indicated herein." Furthermore, paragraph six provided:

Administrator shall be provided the administrative fringe benefits set forth in Exhibit A...