Opinion
No. 1-1011 / 00-2013.
Filed May 15, 2002.
Appeal from the Iowa District Court for Sac County, RONALD H. SCHECHTMAN, Judge.
A teacher appeals the dismissal of his suit to recover money paid to a school district to release him from his contract. AFFIRMED.
Angela Althoff of Morain, Burlingame Pugh, P.L.C., West Des Moines, for appellant.
Phil Redenbaugh of Phil Redenbaugh, P.C., Storm Lake, for appellee.
Considered by HUITINK, P.J., and ZIMMER and VAITHESWARAN, JJ.
A school teacher terminated his employment with a school district, paid what the district sought to release him from his contract, then sued the district to recover some or all of the payment. The district court dismissed his petition on summary judgment. We affirm.
I. Background Facts and Proceedings
Christopher Crandell worked as a band director and coach for the Wall Lake View Auburn School District (WLVA). After he signed a contract with WLVA for another year, his wife sought and obtained a job in Johnston. Crandell then applied for a teaching job in Indianola. He was offered the position, subject to receiving a release from his WLVA contract.
Crandell tendered his resignation to WLVA. Upon receipt of the resignation notice, WLVA advertised for the teaching vacancy and received six to eight applications. Over the summer, the school district interviewed applicants and extended offers, none of which were accepted. The district superintendent kept Crandell apprised of their progress in finding a replacement and, at one point, advised him he would be held to his contract if the position was not filled.
Late in the summer, Crandell's attorney offered WLVA $2500 to release him from his contract. WLVA rejected the offer and made a counteroffer of $30,000. Without seeking his attorney's advice, Crandell paid the school district $30,000 and drafted and executed the following release:
This letter is to verify that the Wall Lake View Auburn has received the monetary agreed funds ($30,000), which allows Mr. Chris Crandell to be released of any further employment obligations with the Wall Lake View Auburn Community School District. This letter also sets Mr. Chris Crandell free to be employed by any other school District in the State of Iowa.
The district superintendent also executed the release and deposited the $30,000 into the school district's general fund.
WLVA interviewed and hired a replacement for Crandell's position shortly after the school year began. Crandell then demanded the return of a portion of his $30,000 payment. The school board twice considered and rejected this request.
Crandell filed suit against WLVA, alleging (1) unjust enrichment, (2) fraudulent misrepresentation, (3) civil rights violations under the rubric of 42 U.S.C. § 1983, (4) an independent due process violation, and (5) an independent equal protection violation. Both parties moved for summary judgment. The district court dismissed all five counts of the petition and this appeal followed.
We will uphold a grant of summary judgment when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Zohn v. Menard, Inc., 598 N.W.2d 323, 325 (Iowa Ct. App. 1999).
II. Unjust Enrichment
Crandell contends WLVA unjustly enriched itself when it accepted the $30,000 and used the funds for general school purposes. Unjust enrichment is a remedy of restitution based on an implied-in-law contract. Iowa Waste Systems, Inc. v. Buchanan County, 617 N.W.2d 23, 29 (Iowa Ct. App. 2000). To recover under this theory, Crandell had to show: (1) he conferred a benefit on WLVA to his own detriment, (2) WLVA had an expectation of receiving the benefit, (3) WLVA accepted and retained the benefit under circumstances making it inequitable not to pay for the value, and (4) there is no remedy at law that can appropriately address the claim. Id. at 30.
Crandell could not satisfy the first element. He paid the district so that he could obtain a release from his contract. This was for his benefit, as the release then allowed him to take the job in Indianola. The release he executed confirms the bargained-for exchange. See Davenport Bank Trust Co. v. State Cent. Bank, 485 N.W.2d 476, 479 (Iowa 1992) (stating party may discharge a contractual obligation by a separate agreement to accept substitute performance in full satisfaction of a pre-existing claim); Kissner v. Brown, 487 N.W.2d 97, 98 (Iowa Ct. App. 1992) (stating party may provide valid consideration in full satisfaction of an existing claim). As the exchange did not work to Crandell's detriment, he has no claim for unjust enrichment.
Crandell nevertheless maintains that the release is invalid because "there was misrepresentation underlying the accord." However, the summary judgment record contains no indication that Crandell was duped or coerced into executing the release. Cf. Stetzel v. Dickenson, 174 N.W.2d 438, 443 (Iowa 1970) (finding no undue influence at time release was signed). In fact, the record shows the opposite. Crandell drafted the release without the assistance of the school district. Prior to executing it, he had regular contact with the district concerning the district's efforts to obtain a replacement. He therefore, had all the relevant facts before him when he agreed to pay WLVA. See 66 Am. Jur. 2d Restitution Implied Contracts § 108 (2001) (stating a person cannot recover money voluntarily paid with full knowledge of the facts and without fraud, duress or extortion). Given this knowledge, the fact that WLVA was later able to hire a replacement is immaterial. See McEnany v. West Delaware County Comm. Sch. Dist., 844 F. Supp. 523, 529 (N.D.Iowa 1994) (stating parties to a settlement agreement cannot avoid the agreement simply because the agreement ultimately proves to be disadvantageous); Assaad-Faltas v. University of Arkansas, 708 F. Supp. 1026, 1032 (E.D.Ark. 1989) (noting public policy in favor of voluntary settlement would be thwarted if person could maintain action after negotiating a settlement). The district court did not err in rejecting this claim as a matter of law.
III. Fraudulent Misrepresentation
Crandell asserts WLVA falsely represented to Crandell that the $30,000 was compensation for past and future damages resulting from his resignation. He maintains there are genuine issues of material facts as to whether WLVA knew or should have known that its representation was inaccurate and made with bad faith and whether Crandell detrimentally relied on the misrepresentation.
To establish a claim of fraudulent misrepresentation, a plaintiff must prove: (1) the defendant made a representation to the plaintiff, (2) the representation was false, 3) the representation was material, (4) the defendant knew the representation was false, (5) the defendant intended to deceive the plaintiff, (6) the plaintiff acted in reliance on the truth of the representation and was justified in relying on the representation, (7) the representation was a proximate cause of plaintiff's damages, and (8) the amount of damages. Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 400 (Iowa 2001).
This claim fails as a matter of law because Crandell cannot prove WLVA knew the $30,000 compensation figure to be false when made. The district superintendent testified that, at the time of the offer, he believed he would be unable to replace Crandell for the school year. In fact, the school district did not obtain a suitable replacement for Crandell until after the school year started, despite significant efforts throughout the summer. Additionally, the $30,000 figure was approximately $2,000 more than Crandell was making at the time of his resignation and the superintendent testified that he anticipated having to compensate existing staff for additional time, requiring expenditures of additional money. On these undisputed facts, Crandell does not state a false misrepresentation claim.
IV. Section 1983
Crandell also claimed he was deprived of property without due process, denied the equal protection of the law as guaranteed by the United States Constitution, and discriminated against on the basis of gender. He does not pursue his gender discrimination claim but seeks damages pursuant to 42 U.S.C. § 1983 for the claimed due process and equal protection violations.
Section 1983 authorizes damages when a "person" acting "under color of" state law, custom, or usage "subjects any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights privileges or immunities secured by the constitution and law." Teague v. Mosley, 552 N.W.2d 646, 648 (Iowa 1996).
A. Substantive Due Process . Crandell contends the due process clause of the United States Constitution required WLVA to have objective, rational criteria for fixing the amount of money it would accept in satisfaction of a teaching contract. He argues that such criteria were entirely lacking here, as the district superintendent conceded the $30,000 figure had "no rhyme or reason to it." This contention implicates substantive rather than procedural due process principles.
Under principles of substantive due process, the government is prohibited from engaging in arbitrary or wrongful actions " `regardless of the fairness of the procedures used to implement them.' " In re Detention of Garren, 620 N.W.2d 275, 284 (Iowa 2000) (citations omitted). A substantive due process analysis, requires us to first determine the nature of the protected right. State v. Hernandez-Lopez, 639 N.W.2d 226, 238 (Iowa 2002). If the right is fundamental, we must apply a strict scrutiny analysis. Id. If it is not, we need only apply a rational basis test. Id.
Our highest court has recognized that a non-probationary teacher has a protected property interest in continued employment, triggering procedural and substantive due process protections upon termination. See Lee v. Giangreco, 490 N.W.2d 814, 817 (Iowa 1992). This interest is not implicated here, as WLVA fully intended to keep Crandell on as a teacher. What is implicated is Crandell's interest in obtaining a release from employment. See Strayer v. Remsen-Union Comm. Sch. Dist., 668 F. Supp. 1275, 1275 (N.D.Iowa 1987).
Assuming without deciding that this interest is a protected property right, we conclude that either under a strict scrutiny or rational basis test, WLVA did not arbitrarily infringe on that right. The district offered to release Crandell from his contract in exchange for a $30,000 payment. Crandell was free to accept or reject this offer. He chose to accept it.
Contrary to Crandell's assertion, the $30,000 was not a fine or penalty arbitrarily exacted by the school district, but a legitimate offer to resolve a contract dispute, based on a good faith belief that the district would be unable to replace Crandell. Our legislature has expressly authorized this type of arrangement. See Iowa Code § 279.13 (stating a contract with another school district is invalid until "a release from the other contract is achieved"); Ashby v. School Twp. of Liberty, 250 Iowa 1201, 1208, 98 N.W.2d 848, 854 (1959) (stating statute implies that teacher and board may agree to release of obligations). Additionally, WLVA's superintendent stated in a deposition that the $30,000 figure was based on his approximation of how much such contracts with his staff were worth. He further stated — "I knew I wasn't too far off base with Mr. Crandell." This was a reasoned method of calculating the counteroffer. Finally, WLVA's refusal to refund some or all of the $30,000 once it found a replacement did not render the payment a prohibited penalty. The amount sought by WLVA was proportional to its anticipated loss. See Independent School Dist. of Manchester v. Dudley, 195 Iowa 398, 399, 192 N.W. 261, 262 (1923). Equally important, WLVA in no way coerced Crandell into making the payment. Crandell accepted the first counter-offer made by the district in negotiations that he initiated. Therefore, the $30,000 counteroffer was not an arbitrary fine or penalty and the district court correctly dismissed the due process claim.
Crandell argues that the district superintendent acted in bad faith when he independently investigated his efforts to secure another job prior to making the counteroffer. The record does not support this contention. Crandell, not the superintendent, initiated settlement negotiations and Crandell, not the superintendent, drafted the release.
B. Equal Protection
Crandell contends the district court should not have dismissed his equal protection claim because he and another teacher who was released from her contract without a payment were similarly situated, generating a fact question on this claim.
Equal protection of the laws means similarly situated persons must receive similar treatment under the law. Grovijohn v. Virjon, ___ N.W.2d ___, ___ (Iowa 2002). Unless a suspect class is involved, the government action need only have a rational basis. See Bowers v. Polk County Bd. of Supr's, 638 N.W.2d 682, 689 (Iowa 2002). A classification is reasonable if it is "based upon some apparent difference in situation or circumstances of the subjects placed within one class or the other which establishes the necessity or propriety of distinction between them." Id. (citations omitted).
The classification that Crandell appears to challenge here is between persons who were released from their contract without payment and those, like him, that were released with a payment. The record indicates an art teacher at WLVA was allowed to break her contract without payment based on her need to move to another city to be closer to her children. No replacement had been found at the time of her release. We agree with the district court that this teacher was not similarly situated to Crandell because she did not voluntarily negotiate a release from her contract in exchange for a payment. See Strayer, 668 F. Supp. at 1275 (analyzing differences in circumstances of teachers released from their contracts). Crandell failed to generate a fact issue with regard to his equal protection claim and it was therefore correctly dismissed by the district court. We do not need to address the court's dismissal of Crandell's two remaining claims, as our analysis of his section 1983 causes of action disposes of them.
AFFIRMED.