RANDOLPH S. STEPP v. MEDINA CITY SCHOOL DISTRICT BOARD OF EDUCATION, et al.
C.A. Nos. 15CA0071-M 15CA0073-M
IN THE COURT OF APPEALS NINTH JUDICIAL DISTRICT
September 19, 2016
2016-Ohio-5875
SCHAFER, Judge.
APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF MEDINA, OHIO CASE No. 14 CV 0874
Dated: September 19, 2016
DECISION AND JOURNAL ENTRY
SCHAFER, Judge.
{1} Defendants-Appellants, Karla Robinson, Susan Vlcek, William Grenfell, and Charles Freeman (collectively, “Board Members“), appeal the judgment of the Medina County Court of Common Pleas denying their collective motion for summary judgment on Plaintiff-Appellee, Randolph Stepp‘s, claims for breach of contract, defamation, and false light invasion of privacy. Defendant-Appellant, James Shields, also appeals the judgment of the Medina County Court of Common Pleas denying his separate motion for summary judgment on Stepp‘s tort claims. For the reasons set forth below, we affirm.
I.
{2} The Medina City Schools Board of Education (“the Board“) and Stepp entered into a three-year contract in 2006 to make Stepp the school district‘s superintendent. At the expiration of this initial contract in 2009, the Board elected to retain Stepp as superintendent and the parties entered into a new five-year contract. Under the terms of the new contract, Stepp was
{3} After the Board and Stepp entered into the new five-year contract, Stepp voluntarily forwent receiving any raises and merit bonuses at first. However, Stepp eventually approached Susan Vlcek, the president of the school board, in 2011 and discussed amending his contract to include a provision whereby the school district would pay the costs of his education. Specifically, Stepp proposed that the school district pay a sum of $30,000.00 annually for five years to cover the costs of his education and that these payments be disbursed from the Medina County Educational Service Center (ESC)1 rather than the school district treasurer, James Hudson. Stepp and Vlcek exchanged correspondence regarding this topic, with some of the correspondence being sent to James Shields, the school district‘s director of human relations and legal in-house counsel.
{5} In the fall of 2012, prior to when the Board Members allege that they learned about the ESC‘s $172,011.00 disbursement, Stepp and the school board began discussing a new contract to retain Stepp as the school district‘s superintendent. Stepp proposed a new contract
{6} On March 6, 2013, the Board met again and discovered that Stepp‘s 2013 contract bonus was actually worth $83,017.06 and had already been paid to him. The Board also purportedly first learned at this meeting about the ESC‘s $172,011.00 payment covering all of Stepp‘s student loans dating back to 1983. This information purportedly shocked the Board Members. This information also quickly became public knowledge and caused a major outcry from the community. The Board subsequently held numerous meetings with the general public to discuss Stepp‘s compensation.
{7} In March of 2013, a local newspaper sent a list of questions to the Board regarding Stepp‘s compensation. The Board subsequently issued a press release on March 22, 2013, wherein they provided answers to the newspaper‘s questions. Around this time, Shields made numerous statements to the Board, the teacher‘s union, and the school district‘s director of community relations denying any knowledge that the 2011 contract amendment was intended to
{8} As time passed, Stepp faced mounting pressure from the public and from individual Board members to resign his post as superintendent. The Board asked the school district‘s treasurer and the state auditor‘s office to separately investigate Stepp‘s use of school district funds. On April 8, 2013, the Board placed Stepp on paid administrative leave pending the results of the state auditor‘s investigation. The following week, the Board determined that they had violated Ohio‘s Open Meeting Act when they approved Stepp‘s 2013 contract. As such, the Board adopted a resolution rescinding the 2013 contract. The school district‘s treasurer, acting at the behest of the Board, then informed Stepp that his paychecks would be adjusted prospectively to recover amounts already paid to him under the 2013 contract. The treasurer also demanded that Stepp return the $83,017.06 bonus that was paid to him under the 2013 contract. In early October 2013, the Board adopted a resolution to not renew Stepp‘s 2009 contract when it expired on July 31, 2014.
{9} On October 22, 2013, the state auditor issued an interim report detailing $4,121.00 worth of inappropriate expenditures that Stepp had made during his tenure using ESC surplus funds that belonged to the school district. This report also determined that Stepp‘s use of ESC funds for certain non-service purposes violated the school district‘s purchasing rules. On October 28, 2013, the Board held a Loudermill hearing and passed a resolution to begin formal termination proceedings against Stepp. However, Stepp filed a federal lawsuit against the school district in November 2013 and the district court stayed the Loudermill hearing process. The district court did not lift the stay of the administrative process until April 17, 2014. In April
{10} Stepp filed a lawsuit against the Board Members and Shields on August 20, 2014, in the Medina County Court of Common Pleas4 asserting the following claims: (1) breach of contract against the Board Members with regard to the 2011 amended contract and the 2013 contract; (2) breach of contract against the Board Members by effectively and/or constructively discharging him; (3) defamation against the Board Members5 for the March 22, 2013 press release responding to the newspaper‘s written questions; (4) defamation against Shields for certain public statements that he made to the Board, the teacher‘s union, and the Director of Community Relations concerning the ECS‘s $172,011.00 payment covering Stepp‘s student loans; (5) false light invasion of privacy against the Board for the March 22, 2013 press release; (6) false light invasion of privacy against Shields for his public comments to the Board, the teacher‘s union, and the Director of Community Relations; and (7) a request for injunctive relief requiring the Board to correct the minutes from the January 7, 2013 meeting to reflect that the Board entered into executive session for one or more of the permissible purposes under
{11} The Board Members and Shields both denied the allegations contained in Stepp‘s complaint. The Board Members’ answer listed several affirmative defenses. The Board
{12} At the close of discovery, the Board Members and Shields filed separate motions for summary judgment on Stepp‘s claims. Stepp filed briefs opposing both defendants’ motions for summary judgment. Stepp then filed a motion for partial summary judgment on the Board Members’ affirmative defense to his breach of contract claims where the Board Members assert that Stepp‘s 2013 employment contract is invalid because the Board violated Ohio‘s Open Meetings Act when it approved the contract. Stepp also filed a motion for summary judgment on the Board Members’ counterclaim. The Board Members filed briefs in opposition to Stepp‘s motions for summary judgment.
{13} On August 13, 2015, the trial court issued a judgment entry ruling on the parties’ respective summary judgment motions. In its entry, the trial court denied the Board Members and Shields’ respective motions for summary judgment in their entirety. The trial court also denied Stepp‘s motion for summary judgment with regard to the Board Members’ counterclaim, but granted Stepp‘s motion for summary judgment with regard to the Board Members’ Open Meetings Act affirmative defense.
II.
The Board Members’ Fourth Assignment of Error
The trial court did not have subject matter jurisdiction over the constructive termination claim.
{15} In their fourth assignment of error, the Board Members argue that the trial court lacked jurisdiction over Stepp‘s breach of contract claims because Stepp resigned from his position without exhausting his administrative appeal remedies as required by
{16}
{17}
{18} Here, the Board Members contend that the trial court did not have subject matter jurisdiction over Stepp‘s breach of contract claim because Stepp resigned without fully undergoing the process set forth
{19} The Board Members’ fourth assignment of error is overruled.
The trial court erred in denying immunity to the individual board member defendants.
{20} In their second assignment of error, the Board Members argue that the trial court erred by denying their motion for summary judgment on Stepp‘s tort claims because they are entitled to immunity as employees of a political subdivision. We disagree.
A. Jurisdiction
{21} “The denial of a motion for summary judgment is not ordinarily a final, appealable order.” Buck v. Reminderville, 9th Dist. Summit No. 27002, 2014-Ohio-1389, ¶ 5. However,
B. Standard of Review
{22} We review an award of summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). Summary judgment is only appropriate where (1) no genuine issue of material fact exists; (2) the movant is entitled to judgment as a matter of law; and (3) the evidence can only produce a finding that is contrary to the non-moving party.
C. Immunity of Political Subdivision Employees
{24}
In a civil action brought against * * * an employee of a political subdivision to recover damages for injury, death, or loss to person or property allegedly caused by any act or omission in connection with a governmental or proprietary function, * * * the employee is immune from liability unless one of the following applies:
(a) The employee‘s acts or omissions were manifestly outside the scope of the employee‘s employment or official responsibilities;
(b) The employee‘s acts or omissions were with malicious purpose, in bad faith, or in a wanton or reckless manner;
(c) Civil liability is expressly imposed upon the employee by a section of the Revised Code.
Here, the parties do not dispute that the Board Members are employees of a political subdivision. See
{25} “One acts with a malicious purpose if one willfully and intentionally acts with a purpose to cause harm.” Moss v. Lorain Cty. Bd. of Mental Retardation, 185 Ohio App.3d 395, 2009-Ohio-6931, ¶ 19 (9th Dist.). “Willful misconduct implies an intentional deviation from a clear duty or from a definite rule of conduct, a deliberate purpose not to discharge some duty necessary to safety, or purposefully doing wrongful acts with knowledge or appreciation of the likelihood of resulting injury.” Anderson v. Massillon, 134 Ohio St.3d 380, 2012-Ohio-5711, paragraph two of the syllabus. “The term ‘bad faith’ embraces more than bad judgment or negligence; it is conduct that involves a dishonest purpose, moral obliquity, conscious wrongdoing, breach of a known duty through some ulterior motive or ill will partaking of the nature of fraud.” (Internal quotations and citations omitted.) Thomas v. Bauschlinger, 9th Dist. Summit No. 26485, 2013-Ohio-1164, ¶ 22. “Wanton misconduct is the failure to exercise any care toward those to whom a duty of care is owed in circumstances in which there is great probability that harm will result.” Anderson at paragraph three of the syllabus. Meanwhile, “[r]eckless conduct is characterized by the conscious disregard of or indifference to a known or obvious risk of harm to another that is unreasonable under the circumstances and is substantially greater than negligent conduct.” Id. at paragraph four of the syllabus. “The actor must be conscious that his conduct will in all probability result in injury.” O‘Toole v. Denihan, 118 Ohio St.3d 374, 2008-Ohio-2574, paragraph three of the syllabus. There must be a “perverse disregard of a known risk.” Id.
- “The Board was not aware of the extent of the reimbursement or that it applied to all [past] degrees.”
- “The past procedure for reimbursement was such that the Board was not informed of the payments/contracts between the Board and the Medina County Educational Service Center (ESC).”
- “The Board learned of [the ESC‘s $172,011.00] expenditure on March 6, 2013, as the result of the public records request.”
Stepp asserts that the language of the press release insinuates that he lied, concealed information, or misled the Board concerning the total cost of his degrees, the number of degrees for which he would obtain reimbursement under the 2011 contract amendment, and that he obtained reimbursement through the ESC to avoid detection due to the Board‘s lack of oversight of ESC contracts or payments. At the close of discovery, the Board Members filed a motion for summary judgment arguing, in part, that they are entitled to immunity as employees of a political subdivision. Stepp filed a motion opposing the Board Members’ request for summary judgment. The trial court ultimately denied the Board Members’ summary judgment motion, concluding that a question of material fact exists regarding whether the Board Members acted with a malicious purpose, in bad faith, or in a wanton or reckless manner.
{27} In their motion for summary judgment, the Board Members assert that they did not act with a malicious purpose, in bad faith, or in a wanton or reckless manner. In support of their motion for summary judgment, the Board Members rely solely upon Stepp‘s deposition testimony where Stepp could not say that the Board Members possessed sinister motives and
{28} After reviewing the record in this matter, we conclude that the Board Members failed to carry their initial Dresher burden. The only evidence cited within the Board Members’ motion for summary judgment as it pertains to the issue of immunity is Stepp‘s deposition testimony where Stepp comments on how the Board Members personally treated him during his tenure as superintendent. Stepp‘s testimony on this point, however, has absolutely no bearing on either intent or the level of knowledge that the individual Board Members possessed when they signed off on the press release. Additionally, we conclude that the Board Members’ conclusory assertion that their request for the state auditor to investigate Stepp‘s past expenses was not evidence of malice is insufficient for a moving party to discharge its initial burden on summary judgment. See Dresher v. Burt, 75 Ohio St.3d at 293. As such, we determine that the trial court did not err by denying the Board Members’ motion for summary judgment.
{29} The Board Members’ second assignment of error is overruled.
Shields’ Assignment of Error
The trial court committed prejudicial error when it denied Mr. Shields – a political subdivision employee – full, statutory immunity pursuant to
{30} Here, Stepp‘s defamation and false light invasion of privacy claims against Shields concern Shields’ March 2013 statements that were made to various people, such as the Board, the teacher‘s union, the school district treasurer, and the school district community relations director. As with Stepp‘s claims against the Board Members, the sole issue here
{31} After reviewing the record and applying the aforementioned summary judgment standard, we determine that Shields satisfied his initial Dresher burden. In his motion for summary judgment, Shields asserts that no genuine issue of material fact exists concerning whether he acted with a malicious purpose, in bad faith, or in a wanton or reckless manner when he addressed the Board Members, the teacher‘s union, and the director of community relations in March 2013 regarding Stepp‘s 2011 amended contract. In support of his motion for summary judgment, Shields cites to the deposition transcripts of board members Freeman and Grenfell, board president Vlcek, school district treasurer Hudson, and school district communications director Jeanne Hurt to support his assertion that he was not aware of the extent to which the school district would reimburse Stepp for his past academic degrees under the terms of the 2011 contract amendment prior to March of 2013. Additionally, Shields’ motion cites to the affidavit
Based upon [Shields‘] verbal and non-verbal response and demeanor during [their February and March 2013] meetings, it was clear to me that until [the March 2013 board meeting] Shields was completely unaware of certain matter pertaining to [Stepp‘s 2011 amended contract], specifically:
- that Stepp‘s Contract provided for the payment or reimbursement to Stepp for educational loans and expenses as far back as Stepp‘s undergraduate degrees;
- that payment to Stepp under the terms of his Contract would be as high as $175,000; and
- that the Contract‘s payment or reimbursement provision applied to any degree other than Stepp‘s M.B.A. which was being pursued at Case Western Reserve University at the time of the Contract.
Shields contends that this evidence demonstrates that his various statements in March 2013 regarding the 2011 amended contract were not made with a malicious purpose, in bad faith, or in a wanton or reckless manner. We agree that the evidence cited in Shields’ motion for summary judgment negates Stepp‘s contention that Shields’ March 2013 comments to the Board, the school district treasurer, the teacher‘s union, and the school district‘s communications director concerning the 2011 amended contract were made with malice, in bad faith, or in a wanton or reckless manner. As such, we conclude that Shields has satisfied his initial burden on summary judgment.
{32} With Shields having satisfied his initial burden, the burden then shifts to Stepp as the non-moving party to provide specific facts which would demonstrate the existence of a “genuine triable issue” to be litigated for trial. Tompkins, 75 Ohio St.3d at 449. In his brief in opposition to Shields’ summary judgment motion, Stepp asserts that Shields acted with malice when discussing the 2011 contract amendment with the Board, the teacher‘s union, the school
{33} Additionally, Stepp argues in his opposition brief that even if Shields “did not have actual knowledge that his statements were false, he certainly had a high degree of awareness of their probable falsity or serious doubts as to the truth of [his] statements[.]” On this point, Stepp appears to be arguing that Shields made the March 2013 statements in question in a reckless manner. In support of this assertion, Stepp cites to Shields’ own deposition testimony. Specifically, Stepp cites to the testimony where Shields admits: (1) that the language of the 2011 amended contract refers to “past degrees” (plural); (2) that Stepp had not obtained his M.B.A. at the time that the Board approved the 2011 amended contract and, thus, Stepp‘s M.B.A. did not constitute a “past academic degree” at that point in time; (3) that he was aware of Stepp‘s past academic degrees; (4) that Stepp expressly listed all three of his previously earned academic degrees in an August 4, 2011 email concerning the 2011 amended contract that was emailed to both Vlcek and himself; and (5) that he prepared the actual language of the 2011 amended contract based upon his prior discussions with Stepp and Vlcek.
{35} Accordingly, Shields’ sole assignment of error is overruled.
The Board Members’ First Assignment of Error
The trial court erred in failing to consider the finalized State Auditor‘s Opinion as admissible evidence.
{36} In their first assignment of error, the Board Members argue that the trial court erred by denying their motion to substitute the state auditor‘s interim report with the state auditor‘s final report. We decline to address the merits of the Board Members’ argument, however, as we determine that their argument was not properly preserved for appellate review.
{37} “Generally, the denial of summary judgment is not a final, appealable order.” Hubbell v. City of Xenia, 115 Ohio St.3d 77, 2007-Ohio-4839, ¶ 9. “[If] a trial court denies a motion in which a political subdivision * * * seeks immunity,” however, its “order denies the benefit of an alleged immunity and is therefore a final, appealable order pursuant to
{39} Although the Board Members argue on appeal that the auditor‘s final report “goes to the heart of the immunity issue” and is relevant to negating Stepp‘s defamation claim, they did not make these arguments in their motion. The Board Members’ motion merely asks the trial court to substitute the interim report with the final report while omitting any discussion or argument as to why the final report is integral to their defense. By not providing the trial court with this argument, the Board Members cannot now argue on appeal that the final report is crucial to their immunity affirmative defense. As such, we decline to address the Board Members’ first assignment of error.
{40} The Board Members’ first assignment of error is overruled.
Because there was no malice, bad faith, reckless or wanton behavior, there is no actual malice necessary to sustain Plaintiff‘s defamation and invasion of privacy claims.
{41} In their third assignment of error, the Board Members argue that if they are entitled to immunity, then they are also entitled to summary judgment on Stepp‘s tort claims. As noted earlier in this opinion, however, we affirm the trial court‘s denial of the Board Members’ request for immunity in their summary judgment motion and overrule their second assignment of error. Additionally, since this assignment of error pertains to the merits of Stepp‘s tort claims, it is beyond the scope of our review at this juncture. Makowski, 2011-Ohio-2382, at ¶ 7. Accordingly, we decline to address the Board Members’ third assignment of error as we are without authority to do so.
{42} Therefore, the Board Members’ third assignment of error is overruled.
III.
{43} The Board Members’ and Shields’ assignments of error are overruled. Accordingly, the judgment of the Medina County Court of Common Pleas is affirmed.
Judgment affirmed.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
Costs taxed to Appellants.
JULIE A. SCHAFER
FOR THE COURT
CARR, P. J.
MOORE, J.
CONCUR.
APPEARANCES:
JONATHAN D. GREENBERG, ERIC J. JOHNSON, and SARA RAVAS COOPER, Attorneys at Law, for Appellant.
DAVID DRECHSLER and MICHAEL J. MATASICH, Attorneys at Law, for Appellee.