Two former high-ranking public school district employees [Plaintiffs], alleging breach of their employment contract with the school district, appealed a federal district court's granting the Board of Education's motion for summary judgment.*
Plaintiff's contended that the federal district court was incorrect in concluding that they did not possess the contractually requisite certifications for their positions at the time of their terminations, and that the district court erred in concluding that the Board of Education had not waived its right to invoke the relevant provision set out in Plaintiffs’ employment contracts.
With respect to Plaintiffs’ breach of contract claims, the Circuit Court had earlier remanded the issue for further proceedings as to whether Plaintiffs’ internship certificates satisfied the certification requirement in the parties’ employment contracts and whether the Board of Education had waived its right to invoke this contractual requirement. On remand, the district court concluded that the answer to both of these questions was “no,” and the instant appeals followed.
Noting that under New York law a plaintiff must establish that (1) “a contract exists,” (2) “plaintiff performed in accordance with the contract,” (3) “defendant breached its contractual obligations,” and (4) “defendant’s breach resulted in damages.”
Further, in determining a party’s obligations under the contract, the Circuit Court opined that "it is well-settled that a court’s role 'is to ascertain the intention of the parties at the time they entered into the contract'" and in the event that intent is discernible from the plain meaning of the language of the contract, the court needs to look no further.” In contrast, should a court find an ambiguity in the contract, it "will look to extrinsic evidence," citing Schron v. Troutman Sanders LLP, 20 N.Y.3d 430.
Paragraph 13 of Plaintiffs’ employment agreements provided that if Plaintiff “fail[ed] to maintain any certifications or qualifications required of h[er] position (i.e., qualifications required by the Department of Civil Service or State Education Department), then this agreement "shall immediately become null and void.”
Further, Paragraph 13 required Plaintiffs to “pass[] any examination the Department of Civil Service may deem appropriate for the position” and the “[f]ailure of either party . . . to insist upon strict compliance with any provision of the [a]greement shall not be construed to be a waiver thereof.”
The Circuit Court's ruling states that "the district court concluded that the relevant employment agreements 'required Plaintiffs to obtain certifications that would allow them to perform the duties of their positions, as those positions were defined and bargained for under the agreements," and that the 'internship certificates' that Plaintiffs held did not so qualify." However, the district court did not question that the internship certificates were “valid credential[s]” authorizing Plaintiffs “to act within the area of service for which the certificate is valid.” Rather the district court "determined that the “internship certificates did not qualify Plaintiffs to perform their positions under their contracts” because the certificates required the Board of Education “to undertake additional supervisory responsibilities related to Plaintiffs’ educational program and outcomes . . . that were not contemplated under the employment agreements.”
The Circuit Court of Appeals said it could not agree with the district court that, on this record and as a matter of law, the internship certificates did not qualify Plaintiffs to perform the duties contemplated by their employment agreements explaining that a reasonable factfinder could conclude that the employment agreements indicated that the “certifications or qualifications” required under the agreement were those “qualifications [that are] required by the Department of Civil Service or State Education Department” in view of the fact that the State Education Department submitted an amicus brief explicitly indicating that in its view the "Plaintiffs’ internship certificates 'w[ere] an acceptable certification allowing them to serve in their roles as school district leaders.'”
Thus, considering the State Education Department’s stated position, the Circuit Court said it could not say that "no reasonable juror could find that Plaintiffs’ internship certificates – which in the Department’s view qualify as certifications ... required by the ... State Education Department" would not allowed Plaintiffs to work as contemplated at the time of such contracting.
In Appeal of Coughlin, Decisions of the Commissioner of Education No. 14,751, the State Education Commissioner stated “an internship certificate is recognized by the State Education Department as a valid credential authorizing the holder to act within the area of service for which the certificate is valid”.
The Circuit Court viewed Decision of the Commissioner No. 14,751, together with the State Education Department’s amicus brief, as "extrinsic evidence" that is probative of the parties’ understanding of the phrase “any certifications or qualifications required of h[er] position” at the time the contracts were executed.
However, given that this is a breach of contract case rather than an action that calls upon the Circuit Court to construe or interpret the relevant regulations, the Court said it agreed with the Board of Education that there is no reason for us to defer to the State Education Department’s interpretation of the regulations in this case and do not purport to do so here.
For this same reason, however, the Court of Appeals "decline the Board of Education's invitation to examine post-Coughlin revisions to the relevant regulations in an effort to surmise whether the Commissioner would view an internship certificate as an acceptable alternative to the traditional school district leader certificate.
In the words of the Circuit Court, "Put simply, this is not a case in which 'the extrinsic evidence is so one-sided that no reasonable factfinder could decide contrary to one party’s interpretation' of the contract." Citing SCS Commc’ns, Inc. v. Herrick Co., 360 F.3d 329, and other decisions, the Circuit Court opined “When the language of a contract is susceptible to different interpretations and where there is relevant extrinsic evidence of the parties’ actual intent, then the contract’s meaning becomes an issue of fact precluding summary judgment [and ] the Board of Education’s arguments that the internship certificates indisputably do not enable Plaintiffs to perform their contemplated duties are unavailing on a motion for summary judgment and are better made [by] the factfinder at trial."
As the State Education Department explicitly recognized that school leaders have “[r]esponsibilty for the . . . performance evaluation of certified personnel” and still concluded that “[P]laintiffs’ respective . . . [i]nternship [c]ertificates were an acceptable certificate authorizing them to perform the duties of their positions,” the Circuit Court said that "[given] this competing evidence", it concluded that there is a genuine factual dispute as to whether Plaintiffs were foreclosed from performing the duty of evaluating school personnel." Further, there is no evidence that the internship certificate would have precluded Plaintiffs from acting as the superintendent’s designee, such that they could not have performed this aspect of their duties.
Finding that the Board of Education failed to demonstrate that, as a matter of law, the internship certificates did not allow Plaintiffs to perform the contemplated duties of their employment nor did the Board of Education demonstrate that Plaintiffs’ continued employment with the internship certificates would “foist additional, mandatory supervisory responsibilities on the District and/or the [s]uperintendent that the parties had not bargained for under the employment agreements”, the Circuit Court concluded that genuine issues of material fact preclude the entry of summary judgment in favor of the Board of Education.
The Circuit Court then vacated the judgments of the district court and remanded the cases "for further proceedings consistent with this order."
* Although Plaintiffs pursued separate appeals in this case, the United States Court of Appeals for the Second Circuit address both matters in a single order because the parties were represented by the same counsel, the issues presented were substantially the same, and the same district court order was on appeal in both cases.
Click HERE to access the Second Circuit's decision posted on the Internet.