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Richardson v. Relf

Supreme Court of Alabama

May 4, 2018

Ed Richardson and Reginald Eggleston, individually and in their official capacities as Interim Superintendent of the Alabama Department of Education and Chief Administrative Officer of the Alabama State Board of Education, respectively, and Gordon Stone, individually and in his official capacity as Mayor of the Town of Pike Road
v.
Edwina A. Relf and Tislam D. Ellis

          Appeal from Montgomery Circuit Court (CV-18-92)

          MAIN, Justice.

         Ed Richardson and Reginald Eggleston, individually and in their official capacities as interim superintendent of the Alabama Department of Education and chief administrative officer of the Alabama State Board of Education, respectively, and Gordon Stone, individually and in his official capacity as mayor of the Town of Pike Road (hereinafter collectively referred to as "the defendants"), appeal from an injunction entered by the Montgomery Circuit Court ("the trial court") staying the sale of Georgia Washington Middle School, located in Montgomery, and the sale of any other real property owned by, or the closure of any other schools operated by, the Montgomery County Board of Education. We hold that the trial court never had subject-matter jurisdiction over this case. Accordingly, we dismiss the appeal and order the trial court to dismiss the case.

         Facts and Procedural History

         The Montgomery County School System operates approximately 55 schools, 11 of which are on the "failing-schools" list established under the Alabama Accountability Act of 2013, codified at § 16-6D-1 et seq., Ala. Code 1975. Other Montgomery County schools, although not on the failing-schools list, are among Alabama's lowest achieving schools. As of early 2017, the Montgomery County Board of Education ("the MCBOE") was not in compliance with the School Fiscal Accountability Act, codified at § 16-13A-1 et seq., Ala. Code 1975 ("the SFAA"), because:

(a) The MCBOE did not have a permanent chief school financial officer;
(b) it had not met various financial requirements of the SFAA or was not timely in meeting those requirements;
(c) a majority of schools under the MCBOE's supervision were "priority schools" under the Educational Accountability and Intervention Act of 2013, codified at § 16-6E-1 et seq., Ala. Code 1975 ("the EAIA"), in other words, schools that were substantially and chronically underperforming based on indicators such as low proficiency scores, low graduation rates, high absentee rates, fiscal deficiencies, and school-safety or transportation issues;
(d) the Child Nutrition Program operations in its schools were inefficient, unorganized, and lacked accountability;
(e) student enrollment had declined consistently at an average rate of 1.85% per year since 2013; and
(f) the MCBOE had consistently operated with a general-fund balance that contained an accounting error of almost $4 million.

         On January 12, 2017, the Alabama State Board of Education ("the ASBOE") intervened in the operations of the MCBOE under the intervention process authorized by the EAIA. The EAIA eliminated barriers to the implementation of reforms that had encumbered intervention procedures under earlier statutes. The predicate for intervention is the unwillingness or inability of a local school board to properly manage its affairs. Intervention and the "direct and comprehensive control over [a local board's] decision making and operational functions" are warranted "when the demonstrated inability of [a local board of education] to discharge administrative, operational, or instructional functions threatens to deprive students of essential educational services." § 16-6E-2(1), Ala. Code 1975.

         The MCBOE consented to the intervention, which has begun to stabilize its school system both academically and financially. The MCBOE's financial position has improved under the guidance and direction of the ASBOE intervention team, including the retention of funds in the State's General Fund necessary to offset revenue shortfalls and expenditure overruns in fiscal year 2017, the negotiation of a treasury-management relationship with a local bank to generate recurring annual interest income, the reorganization of the Child Nutrition Program to maximize operating efficiency and accountability; and the enhancement of operating efficiency and accountability in custodial-services operations.

         In mid-September 2017, then superintendent of the Alabama Department of Education ("the Department"), Michael Sentance, resigned his position. On September 14, 2017, the ASBOE appointed Dr. Ed Richardson as interim superintendent of the Department.[1]

         Around the same time Richardson accepted the appointment as interim superintendent, a lawsuit was filed in the Montgomery Circuit Court challenging the State's intervention into the Montgomery County School System and alleging multiple abuses of authority by Sentance and others. See Murrell v. Sentance, Case No. CV-2017-000501 ("Murrell"). The Montgomery Circuit Court entered an order staying "the proposed or putative transfers or other employment actions described in the verified complaint, including the transfers of not only the named Plaintiffs but of others similarly situated ... pending further review by, and orders of, this Court." The circuit court further directed the parties to mediate the case. Richardson and the other defendants settled the case in order to allow the intervention process to proceed smoothly. Because the parties successfully reached a mediation agreement, the circuit court dismissed the Murrell case on January 22, 2018.

         During the pendency of the Murrell case, the MCBOE voted in October 2017 to sell Georgia Washington Middle School to the Town of Pike Road, subject to the results of an impact study to determine the operational and financial effects of the sale on the MCBOE. After that study was performed and the results reviewed, the MCBOE voted on November 3, 2017, to rescind the sale of Georgia Washington Middle School. Nevertheless, on February 9, 2018, Richardson announced his decision to sell Georgia Washington Middle School to the Town of Pike Road over the objection of the MCBOE. Richardson contended that he had the power under the EAIA to authorize the sale.

         On February 23, 2018, different plaintiffs from those in the Murrell case -- Edward Simms, Edwina A. Relf, and Tislam D. Ellis -- filed another lawsuit naming as defendants Richardson, Eggleston, and Stone. They filed with the complaint a petition for a temporary restraining order ("TRO") and for preliminary injunctive relief, as well as an "Emergency Motion to Prevent Spoliation and to Preserve Evidence."

         The plaintiffs alleged that each of them was "a tax-paying resident of Montgomery County." The plaintiffs further alleged that Simms was "employed by the [MCBOE] as a teacher at Robert E. Lee High School" and was "the parent of a student enrolled at Georgia Washington Middle School." They alleged that Relf was "employed by the [MCBOE] as a Child Nutrition Program Manager at Chisholm Elementary School." They alleged that Ellis was "employed by the MCBOE as a teacher at Sidney Lanier High School." Simms later withdrew as a plaintiff in the case.

         The plaintiffs alleged in their complaint that Richardson and Eggleston had violated the EAIA and specifically challenged Richardson's authority to sell Georgia Washington Middle School.[2] The complaint alleged breach of the fiduciary duty of good faith and fair dealing against Richardson and breach of the fiduciary duty of loyalty against all defendants. The plaintiffs sought an injunction against Richardson to prevent the sale of Georgia Washington Middle School, a judgment declaring that Richardson was without authority under the EAIA to sell MCBOE property, and a review of the legality of Richardson's decision to sell Georgia Washington Middle School.

         On March 1, 2018, the trial court held a hearing on a request to reset the hearing on the petition for a TRO. During that hearing, the court suggested mediation. Soon after the hearing concluded, the court entered an order resetting the TRO hearing for March 29. Less than an hour later, the plaintiffs moved the trial court for an "Order to Maintain the Status Quo, " which expanded on the relief requested in their initial petition for a TRO. On March 5, the trial court granted the plaintiffs' motion and issued the following order:

"THIS CAUSE coming to be heard on this 1st day of March 2018, and after consideration of Plaintiffs' Motion for Order to Maintain Status Quo filed therewith, it is hereby
"ORDERED, ADJUDGED AND DECREED that said motion is GRANTED; the proposed sale of Georgia Washington Middle School described in the verified complaint, and the proposed sale and/or closure of any other real property owned by the Montgomery County Board of Education, are hereby STAYED pending further orders of this Court. The parties shall maintain ...

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