Junction City Sch. Dist. v. Alphin

JUNCTION CITY SCHOOL DISTRICT v. Margaret
ALPHIN

CA 96-288                                          ___ S.W.2d ___

                  Court of Appeals of Arkansas
                           Division IV
               Opinion delivered February 19, 1997


1.   Schools & school districts -- judicial determinations pursuant
     to Arkansas Teacher Fair Dismissal Act -- standard on review.
     -- Appellate review of judicial determinations pursuant to the
     Arkansas Teacher Fair Dismissal Act is limited to a
     determination of whether the circuit court's decision is
     clearly erroneous.

2.   Schools & school districts -- requirements of Teacher Fair
     Dismissal Act -- teachers may reasonably expect district to
     comply with its own declared policy. -- The Teacher Fair
     Dismissal Act has three requirements: (1) that each district
     have a set of written personnel policies; (2) that each
     district have a committee on personnel policies consisting of
     five classroom teachers and three administrators; (3) that the
     school board approve or adopt any proposed policy or
     modification to existing policy; strict compliance with the
     Teacher Fair Dismissal Act is required by law; school policy
     is part of teachers' contracts as a matter of law, and
     teachers may reasonably expect the district to comply with its
     own declared policy. 
3.   Schools & school districts -- appellant failed to comply with
     its own policy -- trial court's finding not clearly erroneous.
     --  At the time appellee's contract was reduced, appellant had
     both a personnel policy in place and a policy that generally
     addressed the issue of teacher dismissal, which contained some
     thirteen criteria to be used in determining action on teacher
     contracts; it was undisputed that the superintendent used only
     two of thirteen enumerated criteria and that the authority to
     set standards was vested in the committee by operation of law
     and required by policy, but the superintendent testified that
     he alone decided which criteria to use in reducing the
     district's work force; the superintendent failed to provide
     the guarantees enumerated in policy; the trial court's finding
     that appellant failed to strictly comply with its own policy
     was not clearly erroneous; state law precluded the district
     from circumventing the criteria for fairness in dismissal set
     out in its own policy. 

4.   Schools & school districts -- award of attorney's fees --
     action brought pursuant to Teacher Fair Dismissal Act within
     meaning of general statute authorizing attorney's fees. -- An
     action brought pursuant to the Teacher Fair Dismissal Act is
     both a civil action and "a claim for `labor or services'"
     within the meaning of Ark. Code Ann.  16-22-308 (Repl. 1994),
     the general statute authorizing attorney's fees; the subject
     matter of the underlying litigation is solely dispositive of
     whether Ark. Code Ann.  16-22-308 may be invoked. 

5.   Schools & school districts -- trial court failed to exercise
     its discretion to award or deny attorney's fees -- case
     reversed and remanded. -- Because the trial court failed to
     exercise its discretion to award or deny an attorney's fee,
     reversal and remand was required for consideration of the
     issue. 


     Appeal from Union Circuit Court; David F. Guthrie, Judge;
affirmed on direct appeal; reversed and remanded on cross-appeal.
     Brazil, Adlong, Murphy & Osment, by: William Clay Brazil and 
Compton, Prewett, Thomas & Hickey, P.A., by:  William I. Prewett,
for appellant. 
     Mitchell, Blackstock, & Barnes, by: Clayton R. Blackstock, for
appellee. 

     Olly Neal, Judge.
     Appellant school district takes this appeal from a November
28, 1995, order of the Union County Circuit Court.  Appellee
Margaret Alphin is a school teacher in the Junction City School
District who, by action of the Junction City School Board on April
28, 1994, suffered a loss of 3/7th of her regular salary when the
district unexpectedly resolved to reduce its expenditures by
eliminating or reducing staff positions during the 1993-94 school
year.  The trial court correctly found that appellant's action in
reducing Ms. Alphin's contract was in violation of the Arkansas
Teacher Fair Dismissal Act, Ark. Code Ann.  6-17-1501 (Repl. 1993)
et seq., and, therefore, we affirm the judgment.  The court's
decision to disallow appellee an attorney's fee was erroneous as a
matter of law, and we therefore reverse on Ms. Alphin's cross-
appeal.
     Junction City School District is located on the Arkansas-
Louisiana state line and is comprised of students from both states. 
Historically, both states have shared the financial burden of
providing an education for the district's students.  In March 1994,
the district was notified by the Arkansas Education Department that
the State of Arkansas would immediately terminate turn-back funds
that Arkansas had provided in previous years.  Upon the school
district's request, the Union County Circuit Court entered a
temporary injunction, holding the impending termination of funding
in abeyance until the 1994-95 school year.  Ms. Alphin requested a
hearing before the school board, which was granted, and the hearing
was conducted July 6 and 7, 1994.  The board ultimately decided to
offer appellee a part-time position, which amounted to a 3/7th
reduction in her salary instead of the original proposition of a
4/7th reduction.  Ms. Alphin accepted the modification subject to
her right to appeal the board's decision.  She subsequently took an
appeal to the Union County Circuit Court.
     In the circuit court's November 28, 1995, order, the court
adopted the findings it set out in its September 20, 1995, letter
opinion.  The court found that appellant failed to comply with its
own policy and applicable state law in reducing appellant's
contract, and that the board's decision to do so was arbitrary and
capricious.  Ms. Alphin was awarded back pay for the period in
which she received a reduced salary, reinstatement of her full-time
status as a teacher, and an attorney's fee.  The court later
retracted the award of attorney fees.   
     At trial, Junction City School Superintendent Alvin Kelly
testified that when it became apparent that the district would have
to eliminate some staff positions, it was he who was designated by
the school board to develop criteria to be used in determining
which contracts to reduce or terminate.  At the time of the 1993-94
"funding crisis," the district had two separate policies in effect.
Policy GAAB related to the hiring, termination, and demotion of
certified personnel and contained both objective and subjective
standards for employee dismissal.  Policy GKBA dealt with selection
and dismissal of professional personnel and contained a provision
for the development of a reduction in force policy by a committee
composed of representatives from the major categories of personnel
in the district, and approval by the board.  The Junction City
School Personnel Policy Committee devised a reduction in force
policy (RIF), which was submitted to the board on April 26th and
28th 1994, and ultimately rejected.  Mr. Kelly admitted that
teaching certification and seniority in the district were the sole
factors he considered in terminating employees.  
     The district urges first that the applicable standard of
appellate review of judicial determinations pursuant to the
Arkansas Teacher Fair Dismissal Act is whether the trial court
erred in finding that the board's decision is supported by a
rational basis.  This is somewhat of a misstatement of the law.  In
such appeals our review is limited to a determination of whether
the circuit court's decision is clearly erroneous.  Helena-West
Helena School District v. Davis, 40 Ark. App. 161, 842 S.W.2d 873
(1992); Murray v. Altheimer-Sherril Public Schools, 294 Ark. 403,
743 S.W.2d 403 (1988) (decision under prior law).  Here, the trial
court held that the manner in which the board attempted to reduce
appellee's contract was not in compliance with its own personnel
policies and therefore violated state law.  The court concluded
that because the board made its decision without reference to its
own policies, any action the board took was, as a matter of law,
arbitrary and capricious.
     The Teacher Fair Dismissal Act has three requirements: 1) that
each district have a set of written personnel policies;  2) that
each district have a committee on personnel policies consisting of
five classroom teachers and three administrators;  and 3) that the
school board approve or adopt any proposed policy or modification
to existing policy.  Ark. Code Ann.  6-17-201 (Repl. 1993); 6-17-
203 (Repl. 1993); and 6-17-205 (Repl. 1993).  Strict compliance
with the Teacher Fair Dismissal Act has been required by law since
1989.  See Lester v. Mount Vernon-Enola School District, 323 Ark.
728, 917 S.W.2d 540 (1996).  School policy is part of teachers'
contracts as a matter of law and teachers may reasonably expect the
district to comply with its own declared policy.  Ark. Code Ann. 
6-17-204(a)(Repl. 1993);  Lauren Maxwell v. Southside School
District, 273 Ark. 89, 618 S.W.2d 148 (1981).
     At the time Ms. Alphin's contract was reduced, appellant had
a personnel policy in place.  The only provision in the unified
policy that specifically addresses the issue of reduction in force
is the portion of policy GKBA which states:
          The Board of Education shall have the authority to
          terminate, demote, or reassign personnel within the
          School District at times when reduction in staff
          becomes necessary and essential to the successful
          financial operations of the district....  A specific
          and detailed plan of action for the reduction in the
          number of personnel, developed by representatives from
          the administrative, instructional, and auxiliary staff,
          and recommended to the superintendent for presentation
          to the Board of Education will be in compliance with
          statutory requirements and in accordance with Board
          of Education Policies.
          
          Should a RIF become necessary, implementation
          procedures will be designed (1) to maintain a high
          quality educational program and (2) to assure fair
          and equitable treatment of all district employees. 

Under these terms, the district guaranteed only that it would
reduce its force in a manner that would maintain educational
standards, that it would not discriminate against any employee, and
that any RIF policy would be developed by the committee and
approved by the board.  Inherent is the requirement that the board
must adopt any standard to be used.
     Policy GAAB, which was also in effect, addresses generally the
issue of teacher dismissal, demotion, selection, and transfer. 
That section of the policy provides that both objective and
subjective criteria will be used in determining action on teacher
contracts.  Those criteria include teacher certification, years
experience teaching, years experience teaching in the district,
years experience teaching a certain grade or subject, and any
degrees, endorsement hours beyond degree, and voluntary
participation in workshops, seminars, etc.  Subjective
considerations include past performance, ability, leadership, and
personality.  It is undisputed that superintendent Kelly used only
two of thirteen enumerated criteria.
     The court concluded that policy GAAB supplied the criteria for
reduction that were missing from policy GKBA.  The authority to set
standards is vested in the committee by operation of law and
required by policy GKBA.  Because superintendent Kelly testified
that he alone decided which criteria to use in reducing the
district's work force and because he failed to provide the
guarantees enumerated in policy GAAB, we cannot say the trial
court's finding that appellant failed to strictly comply with its
own policy is clearly erroneous.  Although the district had no
specific RIF policy, the terms contained in policy GAAB were a part
of its contract with appellee.  We recognize that the district was
under stringent time restraints.  However, state law precludes the
district from circumventing the criteria for fairness in dismissal
set out in its own policy.  See Murray v. Altheimer-Sherril Pub.
Schools, 294 Ark. 403, 743 S.W.2d 403 (1988) (decision under prior
law).  
     An action brought pursuant to the Fair Dismissal Act is both
a civil action and "a claim for `labor or services'" within the
meaning of Ark. Code Ann.  16-22-308 (Repl. 1994), the general
statute authorizing attorney's fees.  Sosebee v. County Line Sch.
Dist., 320 Ark. 412, 897 S.W.2d 556 (1995); City of Ft. Smith v.
Driggers, 305 Ark. 409, 808 S.W.2d 748 (1991).  The supreme court
held in Driggers that the subject matter of the underlying
litigation is solely dispositive of whether Ark. Code Ann.  16-22-
308 may be invoked.  
     Because the trial court failed to exercise its discretion to
award or deny an attorney's fee, reversal and remand is required
for consideration of the issue.  See Chrisco v. Sun Industries,
Inc., 304 Ark. 227, 800 S.W.2d 717 (1990).
     Affirmed on direct appeal; reversed and remanded on cross
appeal.  
     Robbins, C.J., and Roaf, J., agree.