Preston v. Saucon Valley School District

DOYLE,1 Judge. David Preston appeals an order of the Court of Common Pleas of Northampton County, which granted the Saucon Valley School District’s (District) motion for summary judgment. Preston was employed as Superintendent of Schools by the District from July 1987 until June of 1993, when he retired. Pursuant to an employment contract executed between Preston and the District on November 30, 1989, the District was to pay Preston a designated annual salary of $63,720 for the 1989-90 school year, which would “be adjust [1121] ed on an annual basis” thereafter.2 The employment contract further provided that “[t]he superintendent shall be entitled to all rights and benefits incorporated in the ‘Administrator Compensation Plan’ currently in effect.” (1989 Contract, paragraph 6; Reproduced Record (R.R.) at 67a.) On October 14, 1991, the Saucon Valley School Board (Board I) adopted an Administrator’s Compensation Plan (ACP), known as the Saucon Valley School District Professional Contract, that established the salaries and benefits for administrators employed by the District, including Preston as superintendent. Specifically, the ACP established a salary for Preston of $72,580 for 1991 as well as his fringe benefits. On October 29, 1991, fifteen days after the ACP was adopted by the Board two members of Board I and Preston entered into an agreement, referred to as the “Addendum”, which amended Preston’s original 1989 employment contract. The Addendum provided for an increase in Preston’s salary to $78,386 beginning January 1, 1992,3 and gave Preston the same rights and benefits as provided in the ACP.4 Shortly thereafter, Board I was voted out of office and six new School Board members were elected (Board II); the new members took office on December 3, 1991. The next day, December 4, 1991, Board II adopted resolutions rescinding both the ACP and the Addendum, thereby revoking Preston’s increases in salary and benefits. Preston filed suit against the District in the common pleas court seeking $79,643 in salary and benefits that he was allegedly owed under the Addendum and the ACP. The District moved for summary judgment, and on June 6, 1994, the trial court granted that motion. The trial court recognized that only two members of Board I executed the Addendum. Therefore, the trial court reasoned, that, because Preston conceded that the full membership of Board I never publicly voted on the Addendum and because Preston failed to introduce evidence showing that Board I approved it in any other manner, the Addendum was invalid. However, after the trial court’s order was issued, Preston filed a motion for reconsideration. The trial court granted reconsideration on June 24, 1994 and vacated its prior order. Preston then introduced additional evidence in the form of affidavits of the members of Board I, which asserted that eight of the nine members of Board I approved the Addendum “in conference.”5 On July 7, 1994, the trial court again issued an order granting the District’s motion for summary judgment. The trial court recognized that a majority of Board I approved the Addendum and the ACP, but reasoned that the salary and benefits provided to Preston under those agreements violated Sections 1075 and 1164 of the Public School Code of 1949 (Code).6 In the trial court’s view, Section 1075 of the Code7 allows a board of school directors to fix a superintendent’s salary only at the “convention” at which the superintendent is elected and that a public meeting is required. With regard to Section 1164 of the Code, the trial court concluded [1122] that superintendents are excluded by that statute from the class of employees that may be covered by an administrator compensation plan.8 This appeal followed. Preston raises the following issues for our review: (1) that his original employment contract permits periodic increases in his salary and benefits; (2) whether the ACP, dated October 14, 1991, is such a periodic increase and is enforceable, and provides him with the benefits enumerated therein; (3) whether the Addendum is an enforceable agreement even though it was not approved at a public meeting as required by Section 508 of the Code, 24 P.S. § 5-508; and (4) whether the Addendum changed his employment contract and provided him with increases in salary and benefits. We will begin by considering Preston’s contentions that the ACP and the Addendum, executed between Preston and Board I, are enforceable agreements. Preston first argues that the Addendum is enforceable even though it was not adopted by Board I in accordance with the requirements of Section 508 of the Code, 24 P.S. § 5-508. Section 508 of the Code provides in pertinent part: The affirmative vote of a majority of all the members of the board of school directors in every school district, duly recorded, showing how each member voted, shall be required in order to take action on the following subjects: — (Emphasis added.) Entering into contracts of any kind, including contracts for the purchase of fuel or any supplies, where the amount involved exceeds one hundred dollars ($100). Fixing salaries or compensation of officers, teachers, or other appointees of the board of school directors. Failure to comply with the provisions of this section shall render such acts of the school directors void and unenforceable. Preston does not dispute that Board I did not comply with the requirements of Section 508. The record adequately established that the Addendum was signed by only two members of Board I, and that the Addendum was never placed before Board I at a public meeting, nor approved by a majority vote at a public meeting. Preston countered, however, by introducing into evidence affidavits of eight members of Board I, which confirmed that all eight members approved the Addendum “in conference.” It was never established, however, that any type of a formal meeting ever took place; Preston states in his brief only that the board members agreed upon the salary “in executive session.”9 He asserts that, while the aforementioned procedure does not comply with the technical mandates of Section 508, Board I’s approval of the Addendum is nevertheless valid under Mullen v. DuBois Area School District, 436 Pa. 211, 259 A.2d 877 (1969). We disagree. In Mullen, a teacher was abruptly dismissed by a school board after he had been employed by the school district as a temporary professional employee for over a year. The board based Mullen’s dismissal on a charge of “unsatisfactory service.” Mullen, however, had four consecutive satisfactory ratings and only his last review, which came only after he became the “building representative” for the local teachers’ union, was rated unsatisfactory. Thereafter, Mullen brought a mandamus action against the school board to force his reinstatement as a temporary professional employee and for economic damages. The common pleas court granted Mullen mandamus relief and the Supreme Court affirmed. One of the issues decided by the Supreme Court in Mullen was whether a valid employment contract existed, because the school directors failed to record their vote on the original contract in the minutes of the meeting. The court excused the school board’s technical error in [1123] failing to record its votes in the minutes, and held that a valid contract existed. The court believed that it would be unconscionable to hold that a valid employment contract did not exist under the circumstances presented in that case. The present case is distinguishable from Mullen because here the issue involves Board I’s failure to vote on the Addendum at a public meeting, not a mere technical error in recording Board I’s votes. Board I’s failure to publicly vote on the Addendum is too serious of an omission to excuse under the holding in Mullen. Section 508 of the Code plainly presupposes that a vote of the members of a school board be made at a public meeting, since the statute refers to the recording of the minutes of such meetings. See Morning Call, Inc. v. Board of School Directors, 164 Pa.Cmwlth. 263, 642 A.2d 619 (1994), petition for allowance of appeal denied, 539 Pa. 698, 653 A.2d 1235 (1994). We, therefore, hold that Board I violated Section 508 of the Code when it approved the Addendum in a private “executive session” and, accordingly, it is unenforceable. Furthermore, Board I’s failure to vote on the Addendum at a public meeting also violated Section 4 of the Sunshine Act (Act), Act of July 3, 1986, P.L. 388, as amended, 65 P.S. § 274, which states that “[official action and deliberations by a quorum of the members of an agency shall take place at a meeting open to the public-” Under Section 3 of the Act, 65 P.S. § 272, the term “official action” includes, inter alia, decisions concerning an agency’s business made by an agency, and specifically includes decisions of a school board that commit the board to a particular course of conduct, such as hiring a superintendent. Morning Call. While Section 8 of the Sunshine Act, 65 P.S. § 278, permits an agency to discuss employment matters in a private executive session, the final vote on those matters must be taken at a public meeting. Section 8(c) of the Sunshine Act, 65 P.S. § 278(e); Morning Call. In the instant case, the Addendum would have committed Board I to increasing Preston’s salary and benefits and, therefore, the vote on the Addendum constituted official action of Board I that was required to be taken at an open meeting. Morning Call. While eight members of Board I voted “in conference,” Board I never ratified that decision by voting on the Addendum at a public meeting as mandated by Section 8(c) of the Sunshine Act. Hence, we hold that the Board’s failure to vote on the Addendum at a public meeting violated the Sunshine Act, and is an additional reason why Board I’s actions must be set aside. In addition to the invalidity of the Addendum and the ACP with regard to Preston, even if they were valid, Board I’s approval of them would be unenforceable against Board II. In Scott v. Philadelphia Parking Authority, 402 Pa. 151, 166 A.2d 278 (1960), the Supreme Court determined that an employment contract entered into between an employee and the prior members’ of the Philadelphia Parking Authority was unenforceable against the new members of that Authority, and that it was beyond the power of the prior members to execute a contract that extended beyond their term of office. The Supreme Court wrote: In the performance of sovereign or governmental, as distinguished from business or proprietary functions, no legislative body, or municipal board having legislative authority can take action that will bind its successors.... It cannot enter into a contract which will extend beyond the term for which the members of body were elected. Id. at 158,166 A.2d at 282-83 (citations omitted). In Falls Township v. Scally, 115 Pa. Cmwlth. 56, 539 A.2d 912 (1988), this Court held that a three year employment contract, executed between Scally and a former township Board of Supervisors, did not bind a subsequent Board of Supervisors. Following Scott, we reasoned that Seally’s employment involved a government function and, absent a statute to the contrary, public policy prohibited the prior Board from binding the hands of its successor Board. The rational underlying this public policy is that officials can be tempted to favor their friends and retainers [1124] at the expense of the public good. Moore v. Luzerne County, 262 Pa. 216, 105 A. 94 (1918). The record in this case now before us shows that both the ACP and the Addendum were enacted shortly before the members of Board I relinquished their seats and Board II assumed power. The ACP, adopted on October 15, 1991, was intended to fix Preston’s salary for the calendar year of 1991;10 the Addendum, adopted just 14 days later, was intended to fix Preston’s salary at a still higher level, beginning in January of 1992. Applying the reasoning of Scott and Falls Toumship, Board I did not have the authority to enter into the Addendum and the provisions of the ACP regarding Preston, since those contracts were intended to extend beyond the term of Board I and bind Board II. Hence, we hold that both the ACP with regard to Preston’s employment and the Addendum are unenforceable against Board II. We recognize that Section 1073 of the Code, 24 P.S. § 10-1073, gives a school board the power to elect, at a public meeting, a superintendent to serve for a term of from three to five years, and that Preston’s 1989 employment contract was certainly binding on Board II. However, the issue here is not whether Board II was bound by the 1989 contract in general, since its term did not end until June 30, 1993, but rather whether Board II was bound by the salary increases for Preston in the ACP and the Addendum. Board I, via the Addendum and the ACP, attempted to give Preston the equivalent of a new contract that increased his salary and benefits, contrary to the terms of the 1989 agreement. While the 1989 contract permitted Preston’s salary to be adjusted on an annual basis, Board I violated that contract by giving Preston two salary increases within a 15 day period. Section 1073 of the Code simply does not condone Board I’s decision to rewrite Preston’s employment contract in the middle of its term, substantially increasing his salary and benefits, even by a vote at a public meeting. Furthermore, Section 1164 of the Code, 24 P.S. 11-1164, allows a school board to adopt an administrator’s compensation plan fixing the salaries of its “school administrators,” a term which includes only school employees below the rank of superintendent, assistant superintendent and executive director. Hence, under Section 1164 of the Code, since Preston was a superintendent, Board I could not use the ACP to increase his salary. Therefore, because the Code did not authorize Board I to enter into the Addendum, and because Preston’s salary could not be increased under the ACP, the exception to Scott does not apply and those contracts are not binding on Board II. Accordingly, the trial court’s order granting summary judgment in favor of the District is affirmed.11 ORDER NOW, October 13, 1995, the order of the Court of Common Pleas of Northampton County in the above-captioned matter is hereby affirmed. Footnotes [1] This case was reassigned to the writer on June 6, 1995. [2] The full term of the contract was from November 13, 1989 to June 30, 1993. [3] The Addendum attempted to set Preston's salary retroactively for the years 1990 and 1991 as well. [4] The preamble of the Addendum recognized that "a separate contract is required to be executed by the Board and Superintendent pursuant to the Public School Code (24 P.S. Sec. 10-1073).” (Addendum at p. 2; R.R. at 72a.) It further recited that "the Board unanimously approved the salary for the Superintendent at its October 28, 1991 meeting,” (Addendum at p. 1; R.R. at 71a) but apparently, no such meeting ever took place. [5] The affidavits of the eight board members on Board I, identical in every respect, recite that the terms of the Addendum "were specifically discussed and agreed upon in conference by eight (8) members of the Board_” (Exhibits E-M of Appellant's Brief.) However, there was no explanation of where or how this conference took place, whether at a meeting, by a telephone conference call, or otherwise. [6] Act of March 10, 1949, P.L. 30, its amended, 24 P.S. § 10-1075 and § 11-1164. [7] Section 1075 of the Code provides in relevant part: The board of school directors at any convention electing a district superintendent ... shall determine the amount of salary to be paid such district superintendent.... [8] Section 1164 of the Code limits the employees eligible for an administrator compensation plan under the following definition: “School administrator” shall mean any employe of the school entity below the rank of district superintendent.... (Emphasis added.) [9] See supra note 5. [10] We assume that this would have been a retroactive increase to January 1, 1991; the Addendum likewise stated that the higher 1991 salary began January of 1991. [11] Because we have determined that both the ACP and the Addendum were invalid, we need not consider Preston’s argument involving the interpretation of his original employment contract.