11-1300-12669-2

 

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

FOR THE STATE BOARD OF EDUCATION AND

THE COMMISSIONER OF CHILDREN, FAMILIES AND LEARNING

 

 

In the Matter of the Proposed Revocation/Suspension of the School Superintendent License of Jon E. Bathke

RULING ON MOTION FOR SUMMARY DISPOSITION

 

The above-entitled matter is before Administrative Law Judge Barbara L. Neilson on the Department of Children, Families and Learning’s motion for summary disposition.  Assistant Commissioner Tammy Pust filed this motion on March 23, 2000.  On March 29, 2000, the Administrative Law Judge notified both parties by letter of the deadlines for written responses and further explained to Mr. Bathke the standard of review for summary disposition motions.  On April 4, 2000, Mr. Bathke filed a written response to the summary disposition motion.  On April 12, 2000, the Assistant Commissioner submitted a reply.  The record with respect to the motion closed on April 12, 2000.

Bernard E. Johnson, Assistant Attorney General, 525 Park Street, Suite 200, St. Paul, Minnesota  55103-2106, represented the Assistant Commissioner of the Department of Children, Families and Learning (“Assistant Commissioner”).  Jon E. Bathke, 401 Sunrise Lane, Box 311, Grove City, Minnesota  56243, represented himself, without benefit of counsel. 

 

Based upon all the files, records and proceedings herein, and for the reasons set forth in the accompanying Memorandum, the Administrative Law Judge makes the following:

ORDER

IT IS HEREBY ORDERED as follows:

1.      Mr. Bathke is collaterally estopped from relitigating the facts established at the arbitration proceeding involving his termination. 

2.      The Assistant Commissioner’s motion for summary disposition is GRANTED as to the issue of the conduct in which Mr. Bathke engaged while employed as Superintendent of Independent School District No. 2396.  The Assistant Commissioner’s motion for summary disposition is otherwise DENIED since genuine issues of material facts remain for hearing.

3.      This matter shall be set on for hearing on June 21, 2000, commencing at 9:30 a.m. in the courtrooms of the Office of Administrative Hearings, 100 Washington Avenue South, Suite 1700, Minneapolis, Minnesota, for the presentation of evidence regarding whether Mr. Bathke’s conduct reflects immoral character or conduct and/or gross inefficiency or willful neglect of duty and, if so, what, if any, discipline should be imposed.  If this date is inconvenient for either of the parties, they must notify the Administrative Law Judge as soon as possible so that a new date may be selected.

 

 

Dated:  May 10, 2000                                        

BARBARA L. NEILSON

Administrative Law Judge

MEMORANDUM

Underlying Facts and Procedural History

On April 4, 1997, Jon E. Bathke was hired as superintendent of Independent School District No. 2396 (Atwater-Grove City–Cosmos).  Mr. Bathke’s employment contract was for a three-year period beginning July 1, 1997, and running through June 30, 2000.  On May 27, 1998, the School Board of Independent School District No. 2396 gave Mr. Bathke a Notice of Proposed Termination of his superintendent’s contract pursuant to Minn. Stat. § 125.12, subd. 8.[1] The School District based the proposed termination on alleged immoral conduct, insubordination, conduct unbecoming a superintendent, and willful neglect of duty. 

The specific factual grounds cited by the School District for Mr. Bathke’s proposed termination included allegations that Mr. Bathke had:  (1)  falsified mileage records and expense reports; (2)  expended School District funds without authorization; (3)  provided false, inaccurate and/or misleading information to the School District concerning mileage and expense reports, credit card charges, and/or reimbursement from third parties for expenses claimed; (4)  falsely certified that expenses charged on a School District credit card and/or reimbursement claims he submitted were for expenses directly related to School District business, that the claims were correct, and that no part had been paid; (5)  engaged in dereliction of his duty as Superintendent to prepare, review, and submit accurate mileage and expense reports and use a School District credit card only for expenses incurred on behalf of the School District that were directly related to the School District’s business; and (6)  engaged in dereliction of his duty as Superintendent to suggest policies, regulations, rules, and procedures to the School Board to ensure that School District employee business expense payment and reimbursement procedures and forms were appropriate.[2]  

Mr. Bathke challenged the school board’s decision to immediately terminate his contract.  A five-day termination hearing was held before an arbitrator on September 9, 10, 11, 24, and October 1 and 7, 1998.  At the hearing, Mr. Bathke was represented by counsel and Mr. Bathke testified on his own behalf.  Briefs and reply briefs were submitted by both the counsel for the School District and for Mr. Bathke.[3] 

On February 23, 1999, the arbitrator issued a decision denying Mr. Bathke’s challenge to the immediate termination of his superintendent’s contract.  The standard applied by the arbitrator was whether immediate discharge was warranted under Minn. Stat. § 125.12, subd. 8, including a consideration of whether “immediate discharge is warranted by the seriousness of the misconduct and by the danger the conduct presents to the school district as a whole.”[4]  In his 40-page Decision and Award, the arbitrator concluded that Mr. Bathke “did engage in the financial improprieties charged by the School District including submitting false mileage claims, retaining or attempting to retain reimbursement from sources outside the School District for expenses paid by the District, and, in one case paying his spouse’s expenses with the District’s credit card.”[5]  The arbitrator also found that “the evidence showed that there was a substantial pattern of conduct by the Superintendent that was either dishonest or wilfully in neglect of regular standards of propriety in financial transactions of which the Superintendent was aware.”[6]  The arbitrator determined that the evidence “amply supported the [School Board’s] conclusions that there were financial improprieties involving factually false representations that would have resulted, if not discovered, in the Superintendent retaining significant sums of money.”[7]  And the arbitrator determined that the financial improprieties in which Mr. Bathke had engaged were “serious and frequent enough to justify the School Board’s decision to terminate immediately.”[8] 

Pursuant to Minn. Stat. § 122A.20, subd. 1(a)(1) and (3), the Commissioner of Children, Families and Learning has the authority to revoke or suspend a school superintendent’s license for “immoral character or conduct” and/or “gross inefficiency or willful neglect of duty.”  In the instant matter, Assistant Commissioner Tammy Pust is recommending to the Commissioner that Mr. Bathke’s school superintendent’s license be revoked or suspended on these grounds based on the instances of financial misconduct established at Mr. Bathke’s arbitration hearing.[9]  In addition, the Assistant Commissioner argues that, since a judicial forum has already determined that Mr. Bathke’s contract should be immediately terminated based on his financial misconduct, no disputed issues of fact remain for the license disciplinary hearing, and summary disposition is appropriate.  More specifically, the Assistant Commissioner contends that the doctrine of collateral estoppel precludes Mr. Bathke from relitigating issues or facts concerning his conduct that were actually litigated or decided against Mr. Bathke in the earlier termination hearing.

In his response letter to the motion, Mr. Bathke asserts that there are genuine issues of material fact in dispute that preclude granting summary disposition.  Mr. Bathke alleges generally that the arbitration hearing and decision involved a “major misapplication of law as well as a major misinterpretation of relevant information.”  Mr. Bathke also denies that he engaged in financial improprieties, submitted false mileage claims, or attempted to retain funds to which he was not entitled.  According to Mr. Bathke, any errors regarding his mileage or expense reports were due to sloppy bookkeeping or miscommunication, and were not reflective of willful improprieties.     

Summary Disposition Standard

Summary disposition is the administrative equivalent of summary judgment.  Summary disposition is appropriate where there is no genuine issue as to any material fact and one party is entitled to judgment as a matter of law.[10]  The Office of Administrative Hearings has generally followed the summary judgment standards developed in judicial courts in considering motions for summary disposition regarding contested case matters.[11]  A genuine issue is one that is not sham or frivolous.  A material fact is a fact whose resolution will affect the result or outcome of the case.[12]

The moving party has the initial burden of showing the absence of a genuine issue concerning any material fact.  To successfully resist a motion for summary judgment, the nonmoving party must show that there are specific facts in dispute that have a bearing on the outcome of the case.[13]  A nonmoving party cannot rely on pleadings alone to defeat a summary judgment motion.[14]  The nonmoving party must establish the existence of a genuine issue of material fact by substantial evidence; general averments are not enough to meet the nonmoving party’s burden under Minn. R. Civ. P. 56.05.[15]  The evidence presented to defeat a summary judgment motion, however, need not be in a form that would be admissible at trial.[16]

When considering a motion for summary judgment, the Court must view the facts in the light most favorable to the non-moving party.[17]  All doubts and factual inferences must be resolved against the moving party.[18]  If reasonable minds could differ as to the import of the evidence, judgment as a matter of law should not be granted.[19]

Collateral Estoppel

Collateral estoppel prevents identical parties or those in privity with them from relitigating identical issues in a subsequent, distinct proceeding.[20]  In Graham v. Special School Dist. No. 1[21], the Minnesota Supreme Court held that the doctrine of collateral estoppel may be applied in appropriate instances to agency decisions.  In order for collateral estoppel to be applied to an agency decision, five factors must be met:

(1)  the issue to be precluded must be identical to the issue raised in the prior agency adjudication; (2)  the issue must have been necessary to the agency adjudication and properly before the agency; (3)  the agency determination must be a final adjudication subject to judicial review; (4)  the estopped party was a party or in privity with a party to the prior agency determination; and (5) the estopped party was given a full and fair opportunity to be heard on the adjudicated issues.[22]

Collateral estoppel is not to be rigidly applied.[23]  As a flexible doctrine, the focus is on whether its application would work an injustice on the party against whom the estoppel is urged.[24]  The doctrine of collateral estoppel applies to administrative hearings and to arbitration hearings.[25]

In Falgren v. Minnesota Board of Teaching[26], the Board of Teaching initiated a license revocation proceeding after a teacher had been terminated for engaging in immoral conduct involving nonconsensual sexual contact with a student.  The Minnesota Supreme Court determined that the doctrine of collateral estoppel prohibited the teacher from relitigating the nonconsensual sexual contact issue in the Board’s subsequent license revocation hearing.  The Court found that, for collateral estoppel purposes, the issue sought to be precluded in the license revocation hearing was identical to the issue decided in the termination proceeding.[27]  Although the Court found that the doctrine of collateral estoppel precluded the issue of whether the teacher actually engaged in nonconsensual contact, the court held that the Administrative Law Judge was still required to consider any additional evidence the teacher wished to present concerning the alleged immorality of his conduct and whether the Administrative Law Judge should recommend discipline based exclusively on immoral conduct.[28]  In reaching its decision, the Court emphasized that “immoral conduct” is a nebulous standard, and that conduct that one community might find immoral might not be characterized as immoral in another location.  Moreover, the Court noted that the Board was not required by the statute to revoke a license upon a finding of immoral conduct.  In addition, the Court explained that the evidence the teacher wished to introduce regarding his recent participation in therapy programs relating to “boundary laxness issues” would be relevant to whether the Administrative Law Judge should recommend revocation based exclusively on immoral conduct.[29] 

The Administrative Law Judge concludes that, in accordance with the Falgren case, the doctrine of collateral estoppel is applicable to Mr. Bathke’s license disciplinary proceeding.  The issues in this matter are whether Mr. Bathke’s conduct reflect immoral character or conduct and/or gross inefficiency or willful neglect of duty in violation of Minn. Stat. § 122A.20, subd. 1(a)(1) and (3), and whether the conduct justifies revocation or suspension of Mr. Bathke’s superintendent’s license.  The Judge finds that all five factors necessary for applying collateral estoppel to preclude relitigation of the facts establishing Mr. Bathke’s conduct while he served as Superintendent of Independent School District 2396 have been met.  First, the factual issues of financial misconduct considered at the termination hearing and decided adversely to Mr. Bathke are the same factual issues on which the Commissioner bases this license revocation/suspension matter.  Consequently, the “identical issues” requirement has been satisfied.  Second, the evidence presented at the arbitration hearing regarding Mr. Bathke’s conduct was necessary to the arbitrator’s decision to sustain Mr. Bathke’s termination from the School District.  Third, the arbitration hearing resulted in a final judgment on the merits and the termination of Mr. Bathke’s superintendent’s contract, and Mr. Bathke had the right to appeal the decision under Minn. Stat. ch. 572.  Fourth, Mr. Bathke was a party to the arbitration proceeding and is a party to the current licensing proceeding.  Fifth, Mr. Bathke was given a full and fair opportunity to be heard at the arbitration hearing.  Mr. Bathke was represented by counsel during the five-day hearing and, according to the arbitrator’s decision, testified extensively on his own behalf.[30]   Accordingly, Mr. Bathke is collaterally estopped from relitigating the factual issues of his misconduct that were established in the arbitration proceeding.  The Assistant Commissioner’s motion for summary disposition thus is granted as to the argument that the doctrine of collateral estoppel precludes Mr. Bathke from disputing the facts determined by the arbitrator concerning his conduct while Superintendent of Independent School District 2396.

Having found that Mr. Bathke is collaterally estopped from disputing the facts established in the arbitrator’s decision, the only remaining question is whether there are any genuine issues of material fact left for hearing.  Pursuant to the decision in Falgren, even if collateral estoppel is applied to the issue of the conduct that forms the basis for the present contested case proceeding, the Judge is still required to consider any additional evidence the Licensee may wish to present concerning the alleged immorality of his conduct and whether disciplinary action is warranted based on that conduct.  In this case, since the Assistant Commissioner has also alleged that Mr. Bathke’s conduct reflects gross inefficiency or willful neglect of duty, it is logical to provide Mr. Bathke with an opportunity to present further evidence concerning these additional grounds as well.[31]  In his response letter to the Assistant Commissioner’s summary disposition motion, Mr. Bathke offers only a categorical denial of any wrongdoing on his part and generally complains that the arbitrator’s decision was wrong and unjust.  It appears that the licensee in Falgren was afforded the right to present additional evidence concerning the alleged immorality of his conduct and the appropriateness of discipline even though he apparently made only a similar general denial. 

Accordingly, the Judge concludes that genuine issues of material fact remain for hearing regarding whether Mr. Bathke’s conduct as established in the arbitration proceeding reflects immoral character or conduct and/or gross inefficiency or willful neglect of duty and what, if any, disciplinary action the Department should take.  Therefore, this matter has been set for hearing on June 21.  Mr. Bathke may present any additional relevant evidence he wishes concerning these issues at that time, but will not be permitted to challenge the facts established in the arbitration proceeding.

B.L.N.