Herrera v. Union No. 39 School District

Herrera v. Union No. 39 School District (2005-204)

2006 VT 83

[Filed 04-Aug-2006]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2006 VT 83

                                No. 2005-204


  Dr. Ebaristo "Abe" Herrera                     Supreme Court
    
                                                 On Appeal from
       v.                                        Windsor Superior Court


  Union No. 39 School District and               March Term, 2006
  James Van Hoof


  Theresa S. DiMauro, J.

  Michael Marks of Tarrant, Marks & Gillies, Montpelier, for
    Plaintiff-Appellant.

  Kaveh S. Shahi of Cleary Shahi & Aicher, P.C., Rutland, for
    Defendants-Appellees.


  PRESENT:  Reiber, C.J., Johnson, Skoglund and Burgess, JJ., and 
            Martin, Supr. J. (Ret.), Specially Assigned

        
       ¶  1.  JOHNSON, J.   This appeal arises out of an employment dispute
  between plaintiff Dr. Ebaristo Herrera, former principal of Black River
  Union High School, and defendants Union No. 39 School District and Dr.
  James Van Hoof, the District's superintendent.  Plaintiff appeals from the
  superior court's grant of summary judgment in favor of defendants. 
  Plaintiff contends the court erred by concluding that the District's
  decision to place him on paid administrative leave for the remainder of his
  term of employment without a hearing did not breach plaintiff's employment
  contract or deprive him of a protected property or liberty interest without
  due process of law.  We reverse in part and remand.

       ¶  2.  The superior court determined that the following facts are
  undisputed.  See V.R.C.P. 56(c)(2) ("All material facts set forth in the
  statement required to be served by the moving party will be deemed to be
  admitted unless controverted by the statement required to be served by the
  opposing party.").  In 2000, plaintiff was hired by the District to serve
  as principal of Black River Union High School in Ludlow, Vermont. 
  Plaintiff's employment contract provided for a two-year term, beginning
  July 1, 2000, and continuing through June 30, 2002.  The contract also
  provided that plaintiff would be notified in writing whether his contract
  would be renewed for the next school year, and that "[s]hould the
  [District's school board] choose not to re-employ [plaintiff] for said
  year, or should the Board suspend or dismiss [plaintiff] during the term of
  this Agreement, [plaintiff] shall be entitled to appeal such action
  pursuant to [16 V.S.A. § 243]."

       ¶  3.  In February 2001, the relationship between plaintiff and Dr.
  Van Hoof began to deteriorate, based at least in part on accusations by Dr.
  Van Hoof regarding plaintiff's job performance.  In the spring of 2001, Dr.
  Van Hoof asked the District's school board to terminate plaintiff's
  employment, but the board decided not to do so after members of plaintiff's
  staff and the community showed support for plaintiff at a public meeting.
   
       ¶  4.  In the fall of 2001, Dr. Van Hoof again began accusing
  plaintiff of poor job performance, issuing several negative reports on his
  performance.  On November 9, 2001, Dr. Van Hoof compiled these reports into
  a single evaluation, which he provided to the board.  On November 28,
  plaintiff met with the board to discuss this evaluation.  At that meeting,
  the board invited plaintiff and Dr. Van Hoof into an executive session,
  where the board, plaintiff, and Dr. Van Hoof briefly discussed Dr. Van
  Hoof's evaluation of plaintiff.  The board then presented plaintiff with a
  document entitled "Settlement and Release Agreement," along with a copy of
  plaintiff's employment contract and a copy of 16 V.S.A. § 243, the statute
  governing the employment of school principals.  The board gave plaintiff
  the choice of resigning, pursuant to the agreement, with full pay and
  benefits, or facing immediate termination.  Plaintiff did not respond to
  the request for his resignation, and the board informed him that he would
  be placed on administrative leave until the board received his response. 
  The board ordered plaintiff not to talk to anyone but his immediate family,
  his attorney, and his financial advisor about the proposed agreement or the
  decision to place him on administrative leave.

       ¶  5.  On December 19, 2001, the board met again and voted to place
  plaintiff on paid administrative leave for the remainder of the 2001-02
  school year.  It also voted not to renew plaintiff's employment contract. 
  Neither issue was part of the board's agenda.  The board's decision
  appeared in an article in the December 20 edition of the Rutland Herald,
  under the headline, "BRHS principal is fired by the Board; Personnel
  evaluation is cited."  The article stated that the board had made its
  decision on the basis of Dr. Van Hoof's evaluation of plaintiff's
  performance, but also based on "potentially costly and damaging reasons"
  that were "not fit for public review."  The article quoted board member
  John Perry as saying that revealing the true reasons for the board's
  actions would be "doing a great disservice."  Perry said that by doing so,
  he "would be putting the taxpayers in jeopardy. . . .  It is incredibly
  frustrating not to be able to stand up and tell you why I [voted to fire
  [plaintiff]).  You all would pay for it."  Dr. Van Hoof was quoted in the
  article as saying, "For [plaintiff] to sit there and lead people to believe
  that he doesn't know why he's at this point, that's ridiculous."
   
       ¶  6.  On December 20, the board sent plaintiff two letters formally
  informing him of its actions.  The first letter stated that the board had
  voted to place him on "a paid leave of absence for the remainder of the
  2001/02 school year," during which he would be "relieved of all duties,
  responsibilities and authority."  The second letter stated that the board
  had voted not to renew plaintiff's contract for the 2002-03 school year,
  "based upon the performance deficiencies as set forth in the
  Superintendent's November 9, 2001 performance evaluation."  The letter
  continued,

    As provided by your Employment Contract and state statute, you
    have fifteen (15) calendar days from the delivery of this letter
    to request a meeting with the School Board concerning the
    non-renewal.  If you request such a meeting, you will be allowed
    to "present written information or oral information through
    statements of others and you may be represented by counsel."  If
    you request such a meeting, it will be held in executive session
    unless both you and the Board agree to hold the matter in public. 
    After such a meeting, the School Board shall decide whether or not
    to offer you an opportunity to renew your contract and any such
    decision by the Board shall be final.

  Plaintiff responded with a written request for a public hearing and meeting
  regarding both the decision to place him on administrative leave and the
  decision not to renew the contract.  The board agreed to schedule a hearing
  for January 11, 2002, on the nonrenewal of plaintiff's contract, but
  declined to engage in any further consideration of its decision to place
  plaintiff on leave, explaining that "[n]othing in your contract or 16
  V.S.A. § 243 provides for a challenge to such an action.  As such, we will
  not be dealing with this issue at the January 11 meeting."
   
       ¶  7.  On January 11, 2002, the board met with plaintiff to
  reconsider its nonrenewal of plaintiff's contract.  The meeting was not
  public.  At the meeting, plaintiff presented witnesses and submitted
  documents rebutting some of the allegations in Dr. Van Hoof's evaluation. 
  On January 16, the board notified plaintiff in writing that his contract
  still would not be renewed.  After receiving this letter, plaintiff sought
  employment with other school districts, including districts in other
  states, but was unsuccessful.  He alleges he lost one job opportunity when
  a local newspaper republished a report about the board's decision to place
  him on administrative leave.

       ¶  8.  In May 2003, plaintiff brought an action in the superior court. 
  His complaint alleged that defendants: (1) deprived him of due process
  under color of state law under 42 U.S.C. § 1983; (2) violated his
  employment contract and his statutory rights as a principal; (3) committed
  defamation; and (4) discriminated against him on the basis of race in
  violation of the Vermont Fair Employment Practices Act.  The complaint also
  contained a request for punitive damages and attorneys' fees.  Defendants
  moved for summary judgment on all counts.  The court granted defendants'
  motion in part, entering judgment in defendants' favor on the due process
  and contractual claims.  It concluded that the January 11, 2002 board
  meeting satisfied the demands of due process, and that the District was not
  contractually or statutorily required to provide plaintiff with a hearing
  specific to its decision to place plaintiff on administrative leave.  The
  court denied summary judgment on the defamation and discrimination claims. 
  These claims were tried before a jury; the jury found in favor of
  defendants on both counts.  This appeal followed.
   
       ¶  9.  On appeal, plaintiff does not challenge the jury's verdict. 
  Instead, he contends the superior court erred by granting summary judgment
  on the first two counts of his complaint.  We review a trial court's
  decision on summary judgment according to the same standard as the trial
  court.  In re Kurrelmeyer, 2006 VT 19, ¶ 7, 17 Vt. L. Wk. 66, 895 A.2d 207.  "Summary judgment is appropriate where the undisputed facts
  demonstrate either party is entitled to judgment as a matter of law."  Id.
  (citing V.R.C.P. 56(c)(3)).  For the reasons stated below, we agree that
  the court was incorrect in granting summary judgment to defendants on
  plaintiff's breach-of-contract and § 1983 claims.  We thus reverse the
  court's judgment in part and remand for further proceedings.

                           I.  Breach of Contract


       ¶  10.  We first address plaintiff's claim that the District breached
  his employment contract by denying him the procedural protections of 16
  V.S.A. § 243 before terminating his employment.  The undisputed facts
  establish that the District took actions that were tantamount to a mid-year
  dismissal of plaintiff from his position as principal.  Such a dismissal
  was not permitted under plaintiff's contract without a hearing and a
  written decision establishing just cause for the dismissal.  Thus, as a
  matter of law, the District's actions breached plaintiff's employment
  contract.  We reverse the superior court's ruling on summary judgment and
  remand so that the superior court may determine plaintiff's damages.
   
       ¶  11.  Plaintiff's employment contract provided that, "should the
  Board suspend or dismiss [plaintiff] during the term of this Agreement,
  [plaintiff] shall be entitled to appeal such action pursuant to [16 V.S.A.
  § 243]."  This clause incorporated by reference 16 V.S.A. § 243, which
  governs the appointment and dismissal of school principals.  Section 243
  provides for two methods for ending the employment of a principal:
  nonrenewal, under § 243(c); and dismissal, under § 243(d).  The two methods
  are accomplished using two quite different sets of procedures.  When a
  district decides not to renew a principal's contract, it must notify the
  principal in writing at least 90 days prior to the expiration of the
  contract.  16 V.S.A. § 243(c).  The writing must "recite the grounds for
  nonrenewal," but the grounds available to the district are flexible, and
  can include "elimination of the position, performance deficiencies or other
  reasons."  Id.  Within fifteen days of receiving this notice, the principal
  whose contract is not being renewed may request "a meeting with the school
  board."  Id.  This triggers the following procedures:

    At the meeting the school board shall explain its position, and
    the principal shall be allowed to respond.  The principal and any
    member of the board may present written information or oral
    information through statements of others, and the principal and
    the board may be represented by counsel.  The meeting shall be in
    executive session unless both parties agree in writing that it be
    open to the public.  After the meeting, the school board shall
    decide whether or not to offer the principal an opportunity to
    renew his or her contract.  The school board shall issue its
    decision in writing within five days.  The decision of the school
    board shall be final.

  Id. (emphasis added).  These are the procedures to which the board referred
  when it agreed to hold the January 11, 2002 meeting regarding the
  nonrenewal of plaintiff's contract.

       ¶  12.  The procedural protections § 243 provides against a dismissal
  during the term of a principal's contract are substantially stronger than
  those against nonrenewal of the principal's contract.  Section 243(d)
  provides:
   
    Dismissal.  During the term of a contract, a principal may be
    dismissed by the board for just and sufficient cause by written
    notice setting forth the grounds therefor.  The board may provide
    that its order shall take effect immediately, or following a
    hearing.  In either case, the principal shall be given an
    opportunity to request in writing a hearing within the 15 days
    following delivery of the notice.  Within 15 days following
    receipt of a request for hearing from the principal, the board
    shall conduct such a hearing.  The clerk of the board shall advise
    the principal and the superintendent of the time and place of
    hearing by written notice at least five days before the date of
    the hearing.  The hearing shall be in executive session unless
    both parties agree in writing that it be open to the public.  The
    principal and any member of the board may present witnesses and
    written evidence and cross examine witnesses, and the principal
    and the board may be represented by counsel.  Either the principal
    or the school board may arrange for the taking of a verbatim
    record of the proceedings.  After the hearing, the board shall
    affirm, modify or reverse its earlier action.  Within five days
    after the conclusion of evidence in the case, the board shall
    issue a written decision which includes findings of fact and
    conclusions of law.  Within 30 days of the day the written
    decision is delivered, the principal may appeal to the superior
    court under the rules for appeals from decisions in contested
    cases.

  16 V.S.A. § 243(d) (emphasis added).  As opposed to the "meeting" that
  follows a preliminary nonrenewal decision, a principal is entitled to a
  "hearing" before or after dismissal, where both sides may cross-examine
  witnesses regarding the existence of "just and sufficient cause."  Id. 
  Perhaps most importantly, the written decision required after such a
  dismissal hearing, in contrast to the written decision that follows a
  nonrenewal meeting, must include "findings of fact and conclusions of law,"
  and the board's decision is subject to superior court review.  Id.  Thus,
  by waiting until the end of a contract term to end a principal's
  employment, a school district can act on less substantial grounds, avoid a
  formal hearing that includes the cross-examination of witnesses, findings
  of fact, and conclusions of law, and issue a final decision that is not
  subject to superior court review.  

       ¶  13.  The District provided only the process applicable to a
  nonrenewal, and explicitly refused to hold the type of hearing that would
  accompany a dismissal.  Thus, we must decide whether the District's
  decision to place plaintiff on paid administrative leave triggered the same
  procedural protections as a decision to dismiss him.  If so, the District's
  failure to provide a § 243(d) hearing breached plaintiff's contract.
   
       ¶  14.  Plaintiff presents two arguments for applying the protections
  of § 243(d) to the District's actions here.  First, he argues that his
  employment contract entitled him to the same process regardless of whether
  he was suspended or dismissed.  Second, he argues that suspending him for
  the remainder of his contract was effectively the same as dismissing him. 
  We need not address the question of whether plaintiff was entitled to a §
  243(d) hearing prior to a suspension, as we conclude that in this case,
  plaintiff's suspension was tantamount to a dismissal.  

       ¶  15.  Practically speaking, the District's course of action had the
  same effect as a dismissal:  it ended plaintiff's employment relationship
  with the District in the middle of the school year.  The labeling of this
  action as a "placement on administrative leave" instead of a "dismissal"
  does not exempt the District from the procedural requirements of
  plaintiff's contract and § 243(d).  The only difference between plaintiff's
  administrative leave and a typical dismissal is that the District continued
  to provide plaintiff with pay and benefits while he was on administrative
  leave.  This distinction is important, especially in determining whether an
  employee has a property interest for due process purposes, e.g., infra, ¶
  26, but it is not dispositive here.  Section 243 does not limit the
  procedures applicable to the termination of a principal's employment based
  on the continuation of pay or benefits.  Instead, the statute focuses on
  the timing of the termination.  Thus, a dismissal entitles a principal to
  the procedures of § 243(d), provided it takes place "[d]uring the term of a
  contract."  A "nonrenewal," which has the same effect on the principal's
  future employment with the district but is distinguished by its occurrence
  at the expiration of a contractual term, entitles the principal to the less
  rigorous procedural protections of § 243(c).
   
       ¶  16.  We will not read into the statute a definition of the word
  "dismissal" as "dismissal without pay."  See State v. O'Neill, 165 Vt. 270,
  275, 682 A.2d 943, 946 (1996) ("It is inappropriate to read into a statute
  something which is not there unless it is necessary in order to make the
  statute effective.").  Dismissals from employment can occur under a variety
  of circumstances; some may include severance pay, others may include a
  continuation of benefits, and many may include neither of these.  All that
  can reasonably be implied from "dismissal" as it is used in § 243(d) is the
  termination of the employment relationship on the employer's terms.  It is
  undisputed that the District intended to end plaintiff's employment prior
  to the expiration of his contract. The board gave plaintiff the choice
  between resignation and immediate termination, and when he refused to
  resign, its response was to place him on administrative leave.  The board
  stated, in its letter to plaintiff describing the administrative leave
  arrangement, "It is the Board's view that this action will allow you the
  maximum possible time to secure alternative employment," and informed
  plaintiff that he was "relieved of all duties, responsibilities and
  authority."  The board did not provide plaintiff with an opportunity to
  improve his performance or otherwise earn some continuation of his
  employment with the District once he was placed on administrative leave,
  and by its concurrent decision not to renew his contract, it ensured that
  its action was permanent.  The District even went so far as to inform the
  State, when plaintiff sought unemployment benefits, that plaintiff had been
  fired.  The District's action against plaintiff was not a suspension; it
  was a dismissal with pay during the term of plaintiff's contract.  Section
  243(d) thus entitled plaintiff to a formal hearing, with written findings
  and an opportunity to appeal the board's decision to the superior court.

       ¶  17.  Defendants argue that the superior court was nonetheless
  correct in granting them summary judgment on plaintiff's contractual claims
  because: (1) plaintiff failed to appeal to the superior court within the
  relevant time limits; (2) plaintiff received the process he was entitled to
  under § 243(d) at the meeting he had with the board on January 11, 2002;
  and (3) plaintiff was not entitled to damages for any breach of contract
  because he was paid in full through the end of his contract.  We address
  these arguments in turn.
   
       ¶  18.  Defendants contend plaintiff lost his opportunity to appeal
  the board's decision to place him on administrative leave when he did not
  file his appeal with the superior court within the thirty-day limit imposed
  by § 243(d).  See 16 V.S.A. § 243(d) ("Within 30 days of the day the
  written decision is delivered, the principal may appeal to the superior
  court under the rules for appeals from decisions in contested cases."). 
  This argument is without merit on its face, as the board did not hold a
  hearing as required under § 243(d), and thus, did not issue a written
  decision pursuant to that section.  The plain language of § 243(d) provides
  that the thirty-day time limit begins on "the day the written decision is
  delivered."  Id.  Without a written decision, no such time limit applies. 
  Defendants argue in the alternative, however, that the time limitations of
  Vermont Rule of Civil Procedure 75 apply to limit plaintiff's right to
  appeal.  Rule 75 provides for superior court review of administrative
  actions, and includes a thirty-day limitation for review "after notice of
  any action," except that, "in the event of a failure to act," a six-month
  limitations period applies.  V.R.C.P. 75(c). If either limitation were
  applied to this appeal, plaintiff's complaint in the superior court would
  be untimely, as it was brought over a year after the board's dismissal of
  plaintiff.  The superior court did not address this argument, as it decided
  against plaintiff on other grounds.

       ¶  19.  We conclude that the time limitations of Rule 75 have no
  effect on this appeal.  The statute of limitations and other avoidance
  defenses must be pled as affirmative defenses, or else they are waived. 
  Lillicrap v. Martin, 156 Vt. 165, 170, 591 A.2d 41, 43 (1991) (citing
  V.R.C.P. 8(c)); see also Fyles v. Schmidt, 141 Vt. 419, 422, 449 A.2d 962,
  964 (1982) (stating that Rule 75's time limitations are not
  jurisdictional).  The only affirmative defense contained in defendants'
  pleadings was "16 V.S.A. section 243," without any explanation.  The
  pleadings contained no statute-of-limitations argument in any form, whether
  under § 243(d) or Rule 75.  Thus, plaintiff's action cannot be dismissed as
  untimely filed.
   
       ¶  20.  Defendants' next argument is that the board's meeting with
  plaintiff on January 11, 2002, provided plaintiff with the process he was
  entitled to under his contract and § 243(d).  We disagree.  First, the
  procedures provided for under § 243(d), as we have discussed above, are
  very different from those provided for in § 243(c).  See supra, ¶¶
  11-12 (noting, among other distinctions between § 243(d) and § 243(c),
  requirement of just cause, cross-examination of witnesses, written decision
  with findings of fact and conclusions of law, and right to appeal).  More
  importantly for these purposes, the board limited the topic of the January
  11 meeting to the subject of plaintiff's nonrenewal, stating, "[W]e will
  not be dealing with [the issue of administrative leave] at the January 11
  meeting."  We cannot conclude that a meeting on a different subject,
  conducted according to looser procedural requirements, measured according
  to a more deferential decision-making standard, and subject to less
  rigorous review, if any, was sufficient to excuse the District from
  providing the hearing plaintiff was entitled to under his contract and the
  applicable statute.  The District's failure to provide that hearing was a
  breach of plaintiff's contract.
   
       ¶  21.  Defendants' final contention is that because the District
  paid plaintiff in full through the expiration of his contract, plaintiff
  cannot recover for any breach of the contract.  This statement of the law
  is incorrect in several respects.  First, plaintiff is entitled to at least
  nominal damages for the District's failure to provide him with the hearing
  required by his contract.  See Restatement (Second) of Contracts § 346
  (1981) (stating that if a breach of contract "caused no loss or if the
  amount of the loss is not proved . . . a small sum fixed without regard to
  the amount of loss will be awarded as nominal damages").  Courts do not
  typically reverse and remand solely for the purpose of awarding nominal
  damages, id. § 346 cmt. b, but as we are remanding for further proceedings
  on other grounds, entry of judgment for nominal damages will be appropriate
  on remand if no other damages are found.

       ¶  22.  Second, plaintiff may be entitled to consequential damages
  resulting from defendants' breach.  Damages for breach of contract
  generally fall into two categories: "losses that naturally and usually flow
  from the breach itself," and consequential damages.  A. Brown, Inc. v. Vt.
  Justin Corp., 148 Vt. 192, 195-96, 531 A.2d 899, 901 (1987).  Consequential
  damages are appropriate when they may "be reasonably supposed to have been
  in the contemplation of both parties at the time they made the contract,"
  and they satisfy the requirements of causation, certainty and
  foreseeability.  Id. at 196, 531 A.2d  at 901-02.  Plaintiff did not suffer
  any immediate loss from defendants' breach, as he received his contractual
  pay and benefits, but he alleges that defendants' breach resulted in harm
  to his professional reputation and lost employment opportunities that, if
  proven, should be recoverable through consequential damages.  
   
       ¶  23.  Defendants correctly state that in wrongful discharge cases,
  harm to the discharged employee's reputation is ordinarily considered to be
  outside the range of reasonably foreseeable losses, and thus, damages are
  limited to lost wages and related economic damages.  See, e.g., Stancil v.
  Mergenthaler Linotype Co., a Div. of Eltra Corp., 589 F. Supp. 78, 85
  (D.Haw. 1984) (adopting "the majority view that damages for injury to
  reputation are not properly awardable in a breach of contract suit");
  O'Leary v. Sterling Extruder Corp., 533 F. Supp. 1205, 1209 (E.D.Wis. 1982)
  ("The courts seem to be in general agreement that damages for injury to
  reputation are not properly awardable in a breach of contract suit.");
  Daley v. Town of W. Brookfield, 476 N.E.2d 980, 980 n.1 (Mass. App. Ct.
  1985) (stating that "[d]amages for injury to reputation are usually not
  available in contract actions" because they are "remote and not within the
  contemplation of the parties"); J. Calamari & J. Perillo, The Law of
  Contracts, § 14-18, at 617 (3d ed. 1987) ("Damages for injury to the
  employee's reputation are ordinarily said to be too remote and not in the
  contemplation of the parties.").  While this is a correct statement of the
  general rule, that rule is simply an application of the consequential
  damages standard to the facts of the typical wrongful discharge case.  It
  may be that in practically all cases of wrongful discharge, damages
  resulting from harm to a plaintiff's reputation are speculative or outside
  the contemplation of the parties, but such damages remain appropriate where
  a plaintiff "proves with sufficient evidence that a breach of contract
  proximately caused the loss of identifiable professional opportunities." 
  See Redgrave v. Boston Symphony Orchestra, Inc., 855 F.2d 888, 894 (1st
  Cir. 1988) (en banc) (holding that such a claim is "sufficiently different
  from a nonspecific allegation of damage to reputation that it appropriately
  falls outside the general rule that reputation damages are not an
  acceptable form of contract damage.").  Here, plaintiff seeks to prove that
  the harm to his reputation caused by the lack of a sufficient hearing
  caused him to lose specific job opportunities, and that such losses were
  foreseeable by both parties, given the public profile of his position.  He
  is entitled to those damages if he can prove they satisfy our general
  requirements for consequential damages.  We thus remand for the superior
  court to enter judgment in favor of plaintiff on the issue of defendants'
  liability for breach of contract, and to determine the amount of
  plaintiff's damages.  See V.R.C.P. 56(c)(3) ("A summary judgment,
  interlocutory in character, may be rendered on the issue of liability alone
  although there is a genuine issue as to the amount of damages."). 

                              II.  Due Process
   
       ¶  24.  We next address plaintiff's claim that defendants deprived
  him of due process under color of state law.  Title 42 U.S.C. § 1983
  creates a cause of action for any person injured by a deprivation of rights
  secured by federal law.  To establish a claim for a violation of procedural
  due process rights, plaintiff first must show that he was deprived of a
  constitutionally protected interest.  Hegarty v. Addison County Humane
  Soc., 2004 VT 33, ¶ 15, 176 Vt. 405, 848 A.2d 1139.  We look only to the
  nature of the interest at stake, not its weight or importance to the
  plaintiff, in determining whether "the interest is within the Fourteenth
  Amendment's protection of liberty and property."  Bd. of Regents of State
  Colls. v. Roth, 408 U.S. 564, 570-71 (1972).  Plaintiff bases his
  procedural due process claims against defendants on deprivations of both
  his property and his liberty.  We hold that the superior court was correct
  to grant summary judgment to defendants on the question of plaintiff's
  property interest, but that summary judgment was premature regarding the
  deprivation of plaintiff's liberty interest.

                      A.  Plaintiff's Property Interest


       ¶  25.  Constitutionally recognized property interests in public
  employment arise from state-law rules or understandings that secure certain
  benefits.  Id. at 569-70.  For example, the United States Supreme Court has
  recognized a property interest for employees who are statutorily entitled
  to their jobs unless they are dismissed for cause.  See, e.g., Cleveland
  Bd. of Educ. v. Loudermill, 470 U.S. 532, 538-39 (1985).  When an employee
  has a protected property interest, the government may not impinge this
  right without notice and an adequate opportunity to be heard.  Quinn v.
  Grimes, 2004 VT 89, ¶ 8, 177 Vt. 181, 861 A.2d 1108.
   
       ¶  26.  Plaintiff grounds his property deprivation claim on his
  asserted "right to serve as principal for the full term of his contract,
  absent just cause to dismiss him and a hearing."  Although the terms of
  plaintiff's contract and the provisions of 16 V.S.A. § 243 create a
  property interest in his employment, his interest extends only as far as
  the economic benefits that flow from his employment.  A public employee
  "does not have any right to actually hold [a] position and execute the
  duties of [his] office."  See  Harris v. Bd. of Educ. of the City of
  Atlanta, 105 F.3d 591, 596 (11th Cir. 1997); see also Royster v. Bd. of
  Trs. of Anderson County, 774 F.2d 618, 621 (4th Cir. 1985) (concluding that
  "[superintendent's] contract afforded him only the right to be fully
  compensated, and not the right to occupy the office of superintendent");
  Kinsey v. Salado Indep. Sch. Dist., 950 F.2d 988, 997 (5th Cir. 1992) (en
  banc) (holding that claimant did not have a protected property interest in
  serving as superintendent).  Plaintiff was paid in full through the end of
  his contract.  Accordingly, defendants did not deprive plaintiff of a
  protected property interest, and no process was due under the Fourteenth
  Amendment.

                      B.  Plaintiff's Liberty Interest


       ¶  27.  Plaintiff next asserts defendants deprived him of liberty
  without due process.  Among the freedoms encompassed by the Fourteenth
  Amendment's protection of liberty is the right "to engage in any of the
  common occupations of life."  Roth, 408 U.S.  at 572.  When the government
  makes charges that could damage an employee's reputation in the process of
  firing or declining to rehire him, due process requires that the employee
  be afforded the opportunity to refute the charges levied against him.  Id.
  at 573.  To establish a claim for a deprivation of liberty without due
  process under § 1983, plaintiff must show that defendants "create[d] and
  disseminate[d] a false and defamatory impression about [him] in connection
  with his termination," and that he was denied an effective name-clearing
  hearing.  See Codd v. Velger, 429 U.S. 624, 628 (1977).  
   
       ¶  28.  Courts have recognized an implicit requirement that the
  defamatory statements be more than "vague statements of unspecified
  incompetence."  O'Neill v. City of Auburn, 23 F.3d 685, 693 (2d Cir. 1994). 
  Virtually every federal circuit recognizes a specificity requirement and
  has dismissed claims on the ground that the alleged statements were too
  vague to implicate a liberty interest.  See, e.g., Head v. Chicago Sch.
  Reform Bd. of Trs., 225 F.3d 794, 802 (7th Cir. 2000) (holding that charge
  of "ineptitude" did not implicate a liberty interest); Green v. St. Louis
  Housing Auth., 911 F.2d 65, 69 (8th Cir. 1990) ("Falsely charging an
  employee with unsatisfactory job performance when terminating him does not
  infringe his liberty interest . . . .").  Statements accompanying a
  termination will implicate a liberty interest, however, "when they
  denigrate the employee's competence as a professional and impugn the
  employee's professional reputation in such a fashion as to effectively put
  a significant roadblock in that employee's continued ability to practice
  his or her profession."  Donato v. Plainview-Old Bethpage Cent. Sch. Dist.,
  96 F.3d 623, 630-31 (2d Cir. 1996).  Notably, Donato involved the
  termination of an assistant principal, and the court relied heavily on
  Huntley v. Community School Board, 543 F.2d 979, 986 (2d Cir. 1979), where
  the acting principal of a Brooklyn school was deprived of liberty without
  due process when the school board fired him and released a public statement
  containing "charges which might impair his chances of future employment as
  a school supervisor and which might damage his professional reputation." 
  See Donato, 96 F.3d  at 631 (comparing facts with Huntley). 
   
       ¶  29.  In this case, the words used to describe plaintiff's
  termination implied that plaintiff was not simply incompetent, but that he
  had engaged in some kind of serious misconduct.  Members of the board told
  a reporter that plaintiff's performance evaluation contributed to their
  decision, but according to the reporter, "also said there had been
  potentially costly and damaging reasons for the firing-reasons not fit for
  public review."  In addition, the superior court  recognized that in the
  educational community, an administrator is placed on administrative leave
  during the school year only for serious misconduct, and once this occurs,
  the administrator becomes virtually unemployable.  The circumstances
  surrounding plaintiff's dismissal, coupled with the strong, yet ambiguous,
  public statements by defendants, could have led potential future employers
  to conclude that plaintiff had not only performed poorly as principal, but
  was also unfit to work in a school environment in any capacity.  See Green,
  911 F.2d  at 69 (stating that a liberty interest is implicated by
  allegations that "injure the employee's good name, reputation, honor or
  integrity," as such charges "imply an inherent or at least a persistent
  personal condition, which both the general public and a potential future
  employer are likely to want to avoid.  Inadequate job performance, in
  contrast, suggests a situational rather than an intrinsic difficulty; as
  part of one's biography it invites inquiry, not prejudgment." (quotations
  omitted)).  The combination of defendants' actions and their statements
  could thus have amounted to "charge[s] against [plaintiff] that might
  seriously damage his standing and associations in the community."  Roth,
  408 U.S.  at 573.

       ¶  30.  Defendants argue that the jury's verdict in their favor on
  plaintiff's defamation claim precludes his claim of a deprivation of
  liberty.  Defamation and liberty deprivations of this sort are somewhat
  similar, but not identical, and we have no way of knowing on what grounds
  the jury rejected plaintiff's defamation claim. To prove defamation,
  plaintiff would have had to show, by clear and convincing evidence, that
  defendants made false statements knowingly or with reckless disregard for
  their veracity.  Palmer v. Bennington Sch. Dist., Inc., 159 Vt. 31, 39, 615 A.2d 498, 503 (1992).  The jury could have rejected the defamation claim
  because it did not find defendants to have made false statements knowingly
  or recklessly, or because plaintiff failed to meet the "clear and
  convincing evidence" standard required for defamation.  Id.  It thus
  remains possible for plaintiff to prove each element of his deprivation of
  liberty claim despite the jury's rejection of his defamation claim.  
   
       ¶  31.  Defendants finally argue that even if they did make
  statements that could have injured plaintiff's reputation, plaintiff was
  given an adequate opportunity to clear his name at the January 11, 2002
  meeting.  According to defendants, plaintiff was given sufficient notice
  and was allowed to present evidence on all relevant issues.  As we have
  discussed above, however, the January 11 meeting seemed to address only
  plaintiff's performance evaluation.  The meeting does not appear to have
  addressed any other allegations of misconduct-such as those "not fit for
  public review."  Yet, in the Rutland Herald article, if it was accurate,
  the board members implied that they had some extraordinary reason, beyond
  plaintiff's alleged incompetence, for dismissing him.  The Due Process
  Clause entitled plaintiff to some opportunity to confront and refute such
  allegations.  

       ¶  32.  The questions of what took place at the January 11 meeting,
  what issues the meeting addressed, and whether plaintiff had an opportunity
  to address the allegations against him are all material facts that have not
  been resolved by the superior court.  Summary judgment was thus
  inappropriate.  See V.R.C.P. 56(c)(3) ("Judgment shall be rendered
  forthwith if . . . there is no genuine issue as to any material fact and .
  . . any party is entitled to a judgment as a matter of law.").  We
  therefore remand so that the superior court may determine whether plaintiff
  was deprived of a constitutionally protected liberty interest.

       Reversed in part and remanded for further proceedings consistent with
  the views expressed herein.



                                       FOR THE COURT:



                                       _______________________________________
                                       Associate Justice