Stewart v. Fort Wayne Community Schools, 92S03-9012-CV-805

Docket NºNo. 92S03-9012-CV-805
Citation564 N.E.2d 274
Case DateDecember 27, 1990
CourtSupreme Court of Indiana

Page 274

564 N.E.2d 274
64 Ed. Law Rep. 893
Kathleen Ann STEWART, Appellant (Plaintiff Below),
FORT WAYNE COMMUNITY SCHOOLS, Appellee (Defendant Below).
No. 92S03-9012-CV-805.
Supreme Court of Indiana.
Dec. 27, 1990.
Rehearing Denied March 21, 1991.

Page 275

John S. Bloom, Bloom, Bloom & Fleck, Columbia City, for appellant.

Charles W. McNagny, Thomas M. Kimbrough, Barrett & McNagny, Fort Wayne, for appellee.

SHEPARD, Chief Justice.

This case presents the question whether there are circumstances in which a tenured teacher in Indiana may be discharged due to a reduction in force when a non-tenured teacher is retained in a position for which neither one is fully qualified under state law. We hold that the answer is yes.

Kathleen Stewart was hired by Fort Wayne Community Schools as a psychometrist in 1978. During her years with the school system, the student population continually declined, the property tax was frozen, and federal funds were constricted. Under these combined pressures, the school system was forced to reduce its teaching and administrative staff, including its staff of psychometrists. In May 1981, Dr. William Anthis, the superintendent of the school system, met with the psychometrists, including Stewart, to notify them of the impending reductions in force. Dr. Anthis advised them that as the administrative staff was reduced, those remaining would need to be able to wear a variety of professional hats. He indicated that an employee who held multiple certifications from the state would have a better chance of being retained than an employee who held only one certificate. Stewart held only one certificate, but she began to take classes toward her classroom teaching certificate. In the fall of 1981 and the summer of 1982, she took a total of twenty-four hours of classes toward her classroom teaching certificate, but she stopped more than thirty hours short.

Preparing for reductions in personnel, in November 1981 the school board decided to combine the previously separate positions of psychometrist and guidance counselor. Under state law, guidance counselors were required to have both a classroom teaching certificate and a guidance counselor certificate. The school board acknowledged in its 1981 employment policy that "[i]n some situations it may be necessary to give a ... Psychometrist a period of time to fully meet the certification requirements of the position to which he/she is assigned." Those who were to be retained but who were still working toward a required certification would hold the title of "acting psychometrist/counselor." Stewart was not certified as a classroom teacher or as a counselor.

During November 1981, a committee interviewed all psychometrists and counselors to determine who should remain in the reduced number of combined psychometrist/counselor positions. The committee considered four factors: the number of certificates held by the applicant, the applicant's interest, seniority, and other qualifications. Stewart, of course, held only one certificate. In addition, the committee members felt that Stewart had not exhibited much interest in pursuing her counselor certificate. They noted, for example, that she had responded ambivalently to a questionnaire regarding her preferred future assignments.

On March 22, 1982, Stewart was notified that she would be laid off at the end of the school year along with six other employees. Of those being retained in the acting psychometrist/counselor position, two were non-tenured psychometrists who held both psychometrist and teaching certificates but did not hold counselor certificates. Stewart complained to Superintendent Anthis in writing:

In my interview with the committee, I was asked for an instantaneous committment [sic] of intent to seek additional certification in counseling. Since such a committment [sic] would mean a definite change in lifestyle and career goals, this kind of instantaneous ultimatum seems an unfair labor practice. Indeed, to even call this an interview when one is already

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employed seems facetious and an intent to escape fair labor practice.

Record at 137.

Because the board had failed to notify Stewart that a state statute afforded her the right to a pre-termination hearing, 1 it decided to reinstate her for the 1982-83 school year as a psychometrist. Apparently by virtue of this rehire, Stewart obtained tenure. It is her status as a tenured teacher that now serves as the legal predicate for this lawsuit.

During the next school year, deputy school superintendent Dr. James Robbins notified Stewart by letter that the continuing decline in student enrollment necessitated further cutbacks in administrative personnel. Dr. Robbins' letter noted that the school system needed employees with dual certifications, that Stewart had only a psychometrist certificate, and that Stewart had less seniority than any other psychometrist with a single certificate. Dr. Robbins concluded his letter to Stewart by stating that the superintendent was recommending to the school board that her contract be cancelled at the end of the school year. His letter also informed her that she could contest the superintendent's recommendation by requesting a hearing with the school board.

Stewart did request a hearing, and one was held on March 14, 1983. At this hearing, the superintendent presented the reasons for his recommendation, and Stewart was given an opportunity to respond and present evidence. On March 28, 1983, the school board released its findings and conclusions. It decided that Stewart's contract should be cancelled, effective June 17, 1983.

Stewart sued the school system in the Whitley Circuit Court. Although Stewart's original complaint was not made a part of the record on appeal, it appears she claimed a right to reinstatement and back pay based on violations of Indiana's teacher tenure law, Ind.Code Sec. 20-6.1-4-10 (West 1984), and 42 U.S.C. Sec. 1983 (1988). Following a bench trial, the trial court found for the school system. Stewart appealed, and the Court of Appeals reversed on both counts. Stewart v. Fort Wayne Community Schools (1989), Ind.App., 545 N.E.2d 7.

Because this Court has not addressed directly the legal issues presented by the discharge of tenured teachers in Indiana since State ex rel. Thurston v. School City of Anderson (1957), 236 Ind. 649, 142 N.E.2d 914, we grant transfer. We affirm the trial court's decision in favor of the school system.

This case presents two issues:

I. Whether the school system's decision to discharge Stewart and retain non-tenured personnel violated Stewart's rights under state law.

II. Whether the school system's decision to discharge Stewart constituted an arbitrary and capricious deprivation of a protected property interest in violation of her federal constitutional right to substantive due process and, thus, in violation of her rights under 42 U.S.C. Sec. 1983.

I. Stewart's State Law Claims

Stewart's claims under state law essentially fall into two categories. First, she alleges the school system violated the teacher tenure law, as that law was interpreted in Watson v. Burnett (1939), 216 Ind. 216, 23 N.E.2d 420. Second, she alleges that the school board's decision was arbitrary and capricious and not based on the evidence before it.

The teaching profession in this state has long enjoyed statutory protection. Since the enactment of the teacher tenure law in 1927, now codified at Ind.Code Secs. 20-6.1-4-1 to -20 (West 1984 & Supp.1990), the Indiana legislature has provided experienced teachers with a legal shield that protects them from unjustified dismissals. Under this law, teachers attain tenure status after their fifth year of teaching. Ind.Code Sec. 20-6.1-4-9. Once tenured, a teacher may be discharged only for a limited number of statutorily enumerated reasons. Ind.Code Sec. 20-6.1-4-10. One of these is a

Page 277

"justifiable decrease in the number of teaching positions." Ind.Code Sec. 20-6.1-4-10(a)(5). The law also prescribes procedures which must be followed before a tenured teacher can be discharged. Ind.Code Sec. 20-6.1-4-11. Stewart does not claim that any procedural requirements were ignored by the board, but she does contend that the board's decision to discharge her as part of a reduction in force was illegal under the teacher tenure law and was not supported by the evidence.

Although the teacher tenure law erects many safeguards for tenured teachers, the law does not prescribe the standard by which courts are to review a school board's decision to discharge tenured personnel. While errors of law are readily discerned and resolved by courts, this statutory silence has generated much confusion about the appropriate analysis applicable to evidentiary error by boards. For example, both petitioner and respondent have assumed that the standard was enunciated in Metropolitan School District of Martinsville v. Mason (1983), Ind.App., 451 N.E.2d 349. In that case, the Court of Appeals considered whether a school board's decision to withhold a school bus contract from the sole bidder on grounds the bid was too high was either "arbitrary, capricious" or "unsupported by substantial evidence." Id. at 353. This two-pronged inquiry into the factual support for the decision was gleaned from Indiana's Administrative Adjudication Act. Ind.Code Sec. 4-21.5-5-14(d) (West Supp.1990) (previously codified at Ind.Code Sec. 4-22-1-18). 2 The Administrative Adjudication Act, however, does not control local school board decision-making. See, e.g., Ind.Code Sec. 4-21.5-1-3 (West Supp.1990) (act does not apply to agency of a political subdivision of the state); and Tippecanoe Valley School Corp. v. Leachman (1970), 147 Ind.App. 443, 261 N.E.2d 880 (local school board exempt from the act's requirements because it is not a state-wide agency). All in all, there seems to be little reason to ask both whether a school board's decision is "arbitrary and capricious"...

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