Schools win in lawsuit

— DECATUR - Judge Doug Schrantz ruled in favor of the Decatur School District after a summary judgment hearing on Feb. 19, relieving the schools of any financial obligations to former district superintendent Dave Smith.

Schrantz informed both parties of his decision in a judgment letter dated Feb. 22.

Smith filed a lawsuit against the school on Nov. 21, 2008, to receive pay for the remainder of his three-year contract.

Smith began serving as Decatur’s superintendent in July of 2007 and signed a threeyear contract with the district seven months later, in January of 2008. According to Smith’s contract with the school, he was to receive an $89,000 peryear salary, plus benefits. Stateappointed superintendent Le-Roy Ortman estimated the total would have amounted to around $300,000.

When the Decatur School Board learned that the district was in fiscal distress, and was facing possible annexationinto a neighboring district, it voted to suspend Smith with pay on July 2, 2008.

He was paid for only one month of his three-year contract - July 2008 - before the Arkansas State Board of Education voted to take control of the district and dismiss both Smith and the school board, according to the judgment letter.

Arkansas Department of Education officials estimated the district ended the 2008 school year with a negative balance of more than $60,000 and projected the school would end 2009 with a negative balance of $510,000.

During Smith’s tenure, the school district suffered declining balances in its general operating fund, failed to maintain and reconcile accounts, and suffered embezzlements, the judgment letter states.

“The facts of this case are undisputed; the only issue in question is whether it was possible for (the Decatur School District) to carry out its contract obligations to Mr. Smith,” the judgment letter said.

Schrantz found that because of the situation, the Decatur School District had no option but to follow the Arkansas Department of Education’s mandate to stop paying Smith.

“I was quite relieved,” Ortman said, “I would have to say my first thought was along the lines of, ‘There is still justice in this world.’”

Smith still has the rightto appeal Schrantz’s decision, according to David Matthews, attorney for the Decatur School District.

Smith’s attorney, Randy Coleman of Little Rock, told the Benton County Daily Record he plans to file an appeal.

For most cases, the next step would be the Court of Appeals, but this case will likely go straight to the Arkansas Supreme Court because it involves statutory construction, Matthews said.

Statutory construction requires the court to read a statute and make a decision on how the statute will be applied, Matthews explained. In this case they will have to examine the statute that has to do with the ADE’s ability to take over a school district and dismiss the school board and superintendent, he said.

If Smith’s lawsuit against the school goes before the Arkansas Supreme Court, it could be a precedentsetting case.

“It could be very important,” Matthews said.

If Smith does appeal his case, it will probably take about one year, he said.

The Greenland School District is in a similar situation. The district was declared in fiscal distress and the Arkansas Board of Education took control of the school at the same meeting in which it voted to take control of the Decatur School District. The former Greenland superintendent is now suing the school. An important difference is that the former Greenland superintendent did not have a signed contract in place with the district, Matthews said.

Tracy Neal contributed to this article.

News, Pages 1 on 03/03/2010