DECATUR — Former Decatur School Superintendent Dave Smith lost the appeal in his lawsuit against the Decatur School District, but he's not giving up.

Smith filed the lawsuit against the school district in November of 2008, asking to be compensated for the remainder of his three-year contract - of which he served less than one month.

The Arkansas Court of Appeals issued a judgment on Feb. 15, written by Judge Rita Gruber, denying Smith’s appeal and affirming Benton County Circuit Court Judge Doug Schrantz' decision in favor of the Decatur School District.

Smith's attorney, Randy Coleman, said that he plans to file for a rehearing from the Arkansas Court of Appeals and petition for review by the Arkansas Supreme Court.

“We respectfully disagree with the standards the court of appeals reviewed the decision by,” Coleman said.

The statute does not give the ADE authority to terminate any services or contracts for a school district, he said.

The case involves first impression, according to Coleman, meaning that no precedent has been set for either side on the case. The disputed statute, which deals with the ADE‘s authority to declarea school district in fiscal distress and remove local school boards and administrators, has never been interpreted by the courts, he explained.

The Court of Appeals judgment states that the court believes it is implicit that the ADE does have authority to terminate superintendents' contracts.

“To accede to Smith’s position would lead to an absurd result in that the ADE would be placed in the anomalous position of, after having taken over the management of a district in fiscal distress, having to pay two individuals to act as superintendent of that district,” the judgment states.

The judgment reasons that because the ADE took over the management of the school district, the district had no choice but to comply with its order to remove Smith as superintendent.

David Matthews, attorney for the Decatur School District, said he was pleased with the Court of Appeals decision.

“It’s good news for the school district at this point,” said the school’s current superintendent, Larry Ben.

The first clue that Decatur Schools were in financial trouble came when Smith’s predecessor, Mike Parrish, received a letter in April of 2007 from the Arkansas Department of Education noting the district’s declining balance, the judgment states. Parrish abruptly left thedistrict shortly afterward, and the school board voted to hire Dave Smith as superintendent in June of 2007.

In January of 2008, school board members, misled by inaccurate financial reports and unaware that a financial disaster was brewing, voted to renew Smith's contract until the 2010-2011 school year.

In early July, the Arkansas Board of Education declared the district to be in fiscal distress; and on July 31, the state Board of Education voted to take control of the district, dissolve the local school board and terminate Smith’s employment.

In the aftermath of the decision, the state Board of Education appointed Le-Roy Ortman to serve as superintendent. The school's former district treasurer, Tina Murray, was arrested for stealing $40,000 from the school. Financial reports were so bungled it was difficult to tell exactly how far the school was in the red, officials said.

Under Ortman’s steady guidance, the district was able to recover financially over the next two years. The state Board of Education voted to reconstitute the district early last Spring. Ortman re-entered retirement in June on 2010, leaving the Decatur School District with more than 10 percent of its budget to carryover into the next year.

As a final victory, a local school board was elected again in October.

News, Pages 16 on 03/02/2011