Potlatch Educ. v. Potlatch School Dist.

• Decision Date: 03 February 2010
• Docket Number: No. 35606.,35606.
• Citation: 226 P.3d 1277
• Parties: POTLATCH EDUCATION ASSOCIATION and Doug Richards, Plaintiffs/Appellants, v. POTLATCH SCHOOL DISTRICT NO. 285 and Board of Trustees, Potlatch School District No. 285, Defendants/Respondents.
• Court: Idaho Supreme Court

226 P.3d 1277

POTLATCH EDUCATION ASSOCIATION and Doug Richards, Plaintiffs/Appellants, v. POTLATCH SCHOOL DISTRICT NO. 285 and Board of Trustees, Potlatch School District No. 285, Defendants/Respondents.

No. 35606.

Supreme Court of Idaho, Boise, January 2010 Term.

February 3, 2010.

Rehearing Denied March 17, 2010.

John E. Rumel, Boise, for appellant.

Anderson, Julian & Hull, LLP, Boise, for respondents. Brian Julian argued.

W. JONES, Justice.

I. NATURE OF THE CASE

The Potlatch Education Association and Doug Richards, a teacher in Potlatch, Idaho, allege that the Potlatch School District breached the Master Agreement governing the terms of teacher employment in the district. They seek to compel the School District to classify as "professional leave" a day that Richards took off defending his final project in pursuit of his Master's Degree in Educational Administration.

II. FACTUAL AND PROCEDURAL BACKGROUND

Doug Richards is a music teacher for the Potlatch School District in Potlatch, Idaho. In May of 2007, he took a day off work to defend his final project toward his Master's Degree in Educational Administration from the University of Idaho at Coeur d'Alene. He requested that the school principal classify the day off as "professional leave" under the Master Agreement between the Potlatch Education Association (PEA) and the School District, but the principal refused and instead classified the day as "personal leave." The PEA filed a grievance on Richards's behalf, but the Potlatch School District Board of Trustees ultimately affirmed the principal's decision.

Richards and the PEA ("Appellants") sued the School District and its Board of Trustees (collectively "School District") for breach of contract, seeking declaratory and injunctive relief, and moved for summary judgment. Both parties waived a jury trial. The School District filed a response and consented to the response being treated as a cross-motion for summary judgment. The district court granted summary judgment in favor of the School District.

On appeal, Appellants rely on the Master Agreement, which provides paid professional leave to teachers to "pursue professional development," so long as the teacher obtained written approval from the school principal. Appellants argue that Richards's degree in educational administration was a professional-development activity and that the Master Agreement obligated the School District to count his day off as a professional-leave day. The School District responds that the Master Agreement gives it discretion in granting permission to take professional leave, and that, because Richards is a music teacher, the School District properly exercised its discretion in good faith when it refused to grant Richards paid leave to pursue a degree that would enable him to switch into an administrative position.

III. ISSUES ON APPEAL

1. Whether the district court properly granted summary judgment dismissing Appellants' claim for breach of contract.

2. Whether the School District is entitled to attorney fees on appeal.

IV. STANDARD OF REVIEW

When this Court reviews a grant of summary judgment, it does so under the same standard employed by the district court. Boise Tower Assocs. v. Hogland, 147 Idaho 774, 779, 215 P.3d 494, 499 (2009). "The fact that the parties have filed cross-motions for summary judgment does not change the applicable standard of review, and this Court must evaluate each party's motion on its own merits." Intermountain Forest Mgmt., Inc. v. La. Pac. Corp., 136 Idaho 233, 235, 31 P.3d 921, 923 (2001). Summary judgment is proper "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." I.R.C.P. 56(c). Where the case will be tried without a jury, "the trial court as the trier of fact is entitled to arrive at the most probable inferences based upon the undisputed evidence properly before it and grant the summary judgment despite the possibility of conflicting inferences." P.O. Ventures, Inc. v. Loucks Family Irrev. Trust, 144 Idaho 233, 237, 159 P.3d 870, 874 (2007). This Court freely reviews the entire record before the district court to determine whether either side was entitled to judgment as a matter of law and whether inferences drawn by the district court are reasonably supported by the record. Id.; Walker v. Hollinger, 132 Idaho 172, 176, 968 P.2d 661, 665 (1998).

V. ANALYSIS

A. The District Court Properly Granted Summary Judgment to the School District on the Breach of Contract Claim

When interpreting a contract, this Court begins with the document's language. Cristo Viene Pentecostal Church v. Paz, 144 Idaho 304, 308, 160 P.3d 743, 747 (2007). "In the absence of ambiguity, the document must be construed in its plain, ordinary and proper sense, according to the meaning derived from the plain wording of the instrument." C & G, Inc. v. Rule, 135 Idaho 763, 765, 25 P.3d 76, 78 (2001). Interpreting an unambiguous contract and determining whether there has been a violation of that contract is an issue of law subject to free review. Opportunity, L.L.C. v. Ossewarde, 136 Idaho 602, 605-06, 38 P.3d 1258, 1261-62 (2002). A contract term is ambiguous when there are two different reasonable interpretations or the language is nonsensical. Swanson v. Beco Constr. Co., 145 Idaho 59, 62, 175 P.3d 748, 751 (2007). Whether a contract is ambiguous is a question of law, but interpreting an ambiguous term is an issue of fact. Bakker v. Thunder Spring-Wareham, L.L.C., 141 Idaho 185, 190, 108 P.3d 332, 337 (2005) (quotation omitted).

The Master Agreement describes several different types of leave available to teachers. Section 10.5 of the Master Agreement specifically addresses professional leave, and provides:

Attendance at educational meetings or visiting other schools is permitted at full pay if such absence is approved by the Principal. If any certificated personnel wishes [sic] to be absent from duty for a brief period to attend a professional meeting, to visit schools, or otherwise pursue professional development, a written request for approval of such absence should be signed by the Principal and filed in the Superintendent's office a least two (2) days prior to the first day of anticipated absence. Professional leave is not to exceed two (2) days per year and is non-cumulative. The Principal may make exceptions on the number of days allowed when necessary.

Section 15.1 requires the parties to establish a salary schedule that will "[s]timulate professional growth while in service," and allows teachers to earn a higher salary if they receive certain amounts of academic credit in any field of study, both within and outside of education. Here, the parties do not dispute the underlying facts, and both contend the contract language is unambiguous. This case therefore hinges on an issue of law: the legal effect of the professional-leave terms in the Master Agreement. See Taylor v. Just, 138 Idaho 137, 140, 59 P.3d 308, 311 (2002) (stating that courts should apply the plain meaning of the terms if they are "clear and unambiguous").

Even though the plain text of the Master Agreement seems to impart unfettered discretion to the principal in authorizing professional leave, this Court implies a covenant of good faith and fair dealing into all contracts. Lettunich v. Key Bank Nat'l Ass'n, 141 Idaho 362, 368, 109 P.3d 1104, 1110 (2005); Taylor v. Browning, 129 Idaho 483, 490, 927 P.2d 873, 880 (1996). This doctrine applies to all employment relationships, including those between a public school teacher and a school district. Smith v. Meridian Joint Sch. Dist., 128 Idaho 714, 721, 918 P.2d 583, 590 (1996); Mitchell v. Zilog, Inc., 125 Idaho 709, 715, 874 P.2d 520, 526 (1994). "Any action by either party which violates, nullifies or significantly impairs any benefit of the employment contract is a violation of the implied-in-law covenant." Metcalf v. Intermountain Gas Co., 116 Idaho 622, 627, 778 P.2d 744, 749 (1989). This is an "objective determination of whether the parties have acted in good faith in terms of enforcing the contractual provisions," an inquiry wholly independent of the employer's subjective intent. Jenkins v. Boise Cascade Corp., 141 Idaho 233, 243, 108 P.3d 380, 390 (2005) (citing Metcalf, 116 Idaho at 627, 778 P.2d at 749). However, such a covenant is only implied if it is compatible with the terms the parties agreed to. Idaho Power Co. v. Cogeneration, Inc., 134 Idaho 738, 750, 9 P.3d 1204, 1216 (2000). The plain meaning of the Master Agreement requires a teacher seeking professional leave to first obtain the principal's written approval. Since there is no language to the contrary, the law places an implied duty of good faith and fairness on the principal and the School District when withholding permission to take professional leave.

As Appellants conceded during oral argument, there was no indication of bad faith on the School District's part. Section 10.5 of the Master Agreement states that teachers may take professional leave "to attend a professional meeting, to visit schools, or otherwise pursue professional development" only after obtaining the principal's approval. This provision nowhere conveys an entitlement to take professional leave. Instead, it vests the School District with discretion in permitting teachers to take up to two days of leave and, so long as it does so in good faith, the authority to deny such leave. According to his contract with the School District, Richards is an "Elementary/Secondary Music Teacher," but he requested professional leave to defend a Master's Degree in Educational Administration. This program is not pedagogical but instead prepares students to be principals, superintendents, and other administrators. The principal and the School District could have in good faith interpreted the contract...