State Bd. of Educ. v. Waldrop

• Decision Date: 26 July 2002
• Citation: 840 So.2d 893
• Parties: STATE BOARD OF EDUCATION et al. v. Ronald WALDROP et al.
• Court: Alabama Supreme Court

840 So.2d 893

STATE BOARD OF EDUCATION et al. v. Ronald WALDROP et al.

1010120.

Supreme Court of Alabama.

July 26, 2002.

Bill Pryor, atty. gen., and Michael R. White, deputy atty. gen. and gen. counsel, Alabama Department of Education; Roger L. Bates and E. Shane Black, deputy attys. gen., of Hand Arendall, L.L.C., Birmingham, for appellants Alabama State Board of Education and Dr. Ed Richardson, State Superintendent of Education (in his official capacity).

James R. Seale of Hill, Hill, Carter, Franco, Cole & Black, P.C., Montgomery, for appellants Local School Boards of Superintendents (in their official capacities).

William T. Stephens and William F. Kelley, Alabama Teachers' Retirement System, Montgomery; A. Lee Miller III, legal division, Department of Finance, for appellant Robert L. Childree, Comptroller of the State of Alabama (in his official capacity).

Jerry Batts of Sherrill, Batts & Shipman, L.L.C., Athens, for appellants Athens City School Board and its Superintendent (in his official capacity).

Donald B. Sweeney, Jr., of Bradley, Arant, Rose & White, L.L.P., Birmingham, for appellants Pell City School Board and its Superintendent (in his official capacity).

Clatus Junkin and Charles E. Harrison of Junkin & Harrison, Fayette, for appellees.

STUART, Justice.

The State Board of Education; Ed Richardson, in his official capacity as State Superintendent of Education; Robert L. Childree, in his official capacity as comptroller of the State of Alabama; the Teachers' Retirement System of Alabama; and all city and county school districts in Alabama, including their superintendents, in their official capacities (those entities and individuals are hereinafter referred to as the "Board"), appeal from a September 6, 2001, order of the trial court awarding attorney fees to the plaintiff, Ronald Waldrop, as representative of a class of Alabama schoolteachers. The trial court awarded Waldrop $287,500 in attorney fees based upon the "common-benefit" exception to the American rule governing the recovery of attorney fees. We reverse the trial court's order requiring the Board to pay Waldrop's attorney fees.

Background

Waldrop, a teacher in Fayette County, learned that in 1995 the Alabama Legislature had passed Act No. 95-314, Ala. Acts 1995, known as the Foundation Program Fund Act and codified at § 16-13-230 et seq., Ala.Code 1975 (amended in 1997) (the act before its amendment is hereinafter referred to as "the Foundation Act"). The Foundation Act set standards for the adoption by the State Board of Education of a "salary matrix" for public schoolteachers in the State based upon their "degree level, certification, and public education experience." § 16-13-231.

However, the Foundation Act also permitted the State Board of Education to vest in the local boards the discretion to pay teachers less than 100% of the amount established in the salary matrix, even though the local boards received from the Legislature sufficient funds with which to pay the salaries at 100%. Under the Foundation Act, local boards were required to pay no less than 95% of the salary amounts specified in the "state salary matrix by cell"; they could withhold up to 5% from the teachers' salaries. Because many local boards exercised this discretion and withheld the 5%, teachers possessing the same qualifications, degrees, and experience levels were being paid different salaries throughout the State.

In the summer of 1996, Waldrop contacted the Alabama Education Association ("AEA"), complaining that the Foundation Act conflicted with § 16-24-4, Ala.Code 1975, which provided then, and which still provides, that "no salary schedule shall operate to compensate teachers in less sums than the sums contained in a minimum salary schedule" adopted by the State Board of Education. Waldrop contended that Dr. Paul Hubbert, the executive director of the AEA, told Waldrop that nothing could or would be done about Waldrop's concerns.

In September 1996, Waldrop filed an action in federal court, alleging that the discretion granted the local boards of education by the Foundation Act constituted an equal-protection violation pursuant to 42 U.S.C. § 1983. Waldrop and the defendants subsequently entered into a joint stipulation, agreeing to dismiss, without prejudice, the pending federal action.¹

On February 18, 1997, Waldrop filed an action in the state court, in which he asserted the same claims alleged in his federal action. He sought a judgment declaring a portion of the Foundation Act unconstitutional, backpay with interest, and an award of attorney fees and costs.

According to testimony before the trial court, shortly after Dr. Hubbert's meeting with Waldrop, the AEA proposed legislation that would modify the Foundation Act to eliminate that portion of the Foundation Act that granted a local board discretion to pay its teachers less than the State-mandated salary. This legislation was introduced in the Legislature on February 4, 1997, two weeks before Waldrop filed his state-court action. The legislation was approved by the Governor on April 29, 1997, see Act No. 97-238, Ala. Acts 1997 (codified at § 16-13-231.1, Ala.Code 1975), after Waldrop had initiated his state-court action but before anything of substance had occurred in the action.

On October 19, 1998, more than one and one-half years after the amendment to the Foundation Act became law, the trial court entered a summary judgment in Waldrop's state-court action, declaring unconstitutional that portion of the Foundation Act that granted local boards the discretion to pay teachers an amount less than the State-mandated salary. The trial court then set a hearing to address damages for the plaintiff class and to address all pending motions. This hearing was held on January 8, 2001.

On February 6, 2001, the trial court issued a "Final Order"; that order stated that it resulted from a "final hearing on all pending matters." In that order, the trial court reaffirmed its holding as to the unconstitutionality of the Foundation Act and calculated damages for the plaintiff class at $91,508,074. The trial court, however, held that it was precluded from awarding the damages of $91,508,074, because the Board was protected by sovereign immunity from an award that would impact the State treasury. The trial court's order also indicated that "all costs are taxed to Defendants." The trial court's order was silent on Waldrop's request for an attorney-fee award.

Waldrop filed a Rule 59, Ala. R. Civ. P., motion, to alter, amend, or vacate the judgment; in his motion, Waldrop requested that the trial court reconsider its refusal to award damages to the plaintiff class. Waldrop's motion did not request the trial court to reconsider his claim for attorney fees. The trial court denied Waldrop's Rule 59 motion by an order entered on March 14, 2001. On April 26, 2001, Waldrop filed a notice of appeal, challenging the trial court's finding that sovereign immunity barred the award of damages against the Board. The Board cross-appealed and filed a motion to dismiss, on the basis that Waldrop's appeal was untimely. Waldrop subsequently withdrew his notice of appeal, asserting that because the trial court had not disposed of his pending request for attorney fees, the February 6, 2001, order was not a final order and therefore was not appealable.

On June 21, 2001, Waldrop moved the trial court for a hearing on his attorney-fee request. The trial court granted this motion. Waldrop's request for attorney fees was argued before the trial court on August 13, 2001; no ore tenus evidence was presented at this hearing.

On September 6, 2001, the trial court entered an order awarding Waldrop and members of the plaintiff class attorney fees. The trial court concluded that Waldrop's action had prompted the Legislature to amend the Foundation Act and that the action had benefited the general public and rendered a public service.

The trial court, using the lodestar method to calculate the fee, awarded attorney fees to Waldrop's counsel in the amount of $287,500 and expenses in the amount of $13,303. The court's award was based upon arguments made before the court and time sheets either submitted to the trial court or discussed with the trial court during the hearing on the attorney-fee award. Waldrop's two attorneys stated that they had spent a combined 667.6 hours on this litigation (which has been pending since 1996) and that their regular hourly rates were $200 and $150, respectively. Using these figures, the trial court calculated an attorney fee of $115,000 and applied a multiplier of 2.5 to this figure.

The Board appeals, asserting that the trial court's award of attorney fees is improper because, it argues, (1) no common benefit resulted from Waldrop's action; (2) if any common benefit did result, the benefit occurred upon the Governor's signing into law the amendment to the Foundation Act, and the fees awarded to Waldrop's counsel were generated after that time; (3) 30 days after the entry of the February 6, 2001, order, the trial court lost subject-matter jurisdiction over the issue of attorney fees; (4) the doctrine of sovereign immunity bars an award of attorney fees against the Board in this case; and (5) Waldrop failed to carry his burden of proof in establishing his claim for attorney fees.

Standard of Review Applicable to a Trial Court's Attorney-Fee Award

This Court has previously recognized that "[t]he determination of whether an attorney fee is reasonable is within the sound discretion of the trial court and will not be disturbed on appeal absent an abuse of that discretion." Ex parte Edwards, 601 So.2d 82, 85 (Ala.1992), citing Varner v. Century Fin. Co., 738 F.2d 1143 (11th Cir.1984). See also Knox Kershaw, Inc. v. Kershaw, 598 So.2d 1372 (Ala.1992); Lanier v. Moore-Handley, Inc., 575 So.2d 83 (Ala.1991).

However, the Board argues that a de novo review is appropriate in this case. The Board...