Arkansas Tech University v. Link

17 S.W.3d 809, 341 Ark. 495, 2000 Ark. LEXIS 289
CourtSupreme Court of Arkansas
DecidedJune 1, 2000
Docket99-665
StatusPublished
Cited by62 cases

This text of 17 S.W.3d 809 (Arkansas Tech University v. Link) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arkansas Tech University v. Link, 17 S.W.3d 809, 341 Ark. 495, 2000 Ark. LEXIS 289 (Ark. 2000).

Opinion

ANNABELLE Clinton Imber, Justice.

The appellees, who semployees tice. University (“ATU”), filed this action in the Chancery Court of Pope County against ATU, the president of ATU, and the members of its Board of Trustees. At issue in this interlocutory appeal by ATU and the Board is the trial court’s denial of their motion to dismiss appellees’ second amended petition for declaratory judgment and injunction. Specifically, ATU and the Board argue on appeal that appellees are barred from filing this suit against the State by the doctrine of sovereign immunity; that appellees’ claims against a state agency and state officials are solely for breach of contract and, therefore, should be brought before the Arkansas Claims Commission; and that appellees have not pled facts sufficient to state a claim under any recognized exception to the sovereign-immunity doctrine. We hold that the trial court should have dismissed appellees’ second amended petition because it fails to state a claim upon which relief can be granted.

Beginning in the 1960s, ATU provided its employees who had reached the age of fifty-five and who had worked at the university for twenty years with the ability to retire and receive health insurance for the rest of their lives, with ATU bearing the full cost of that insurance. This unwritten policy was never adopted by the Board of Trustees; nor was it included in any written contract or state statute. When the cost of health insurance began to increase dramatically in 1993, ATU began to reconsider its policy of providing health insurance to its eligible retirees at no cost to them. A presidential task force was created to study the issue, and in June 1997, Dr. Robert Brown, ATU President, presented a report on health insurance to the Board of Trustees. He presented the Board with four possible options regarding post-retirement health-insurance benefits. The Board voted to (1) let existing eligible retirees maintain their lifetime health-insurance coverage, with ATU bearing the full cost; (2) give employees age fifty-five or older who have served ATU for at least twenty years the option of retiring by July 1, 1998, in order to receive the same health-insurance benefits as current retirees; and (3) give employees not yet meeting the fifty-five/ twenty criteria the ability to retire upon reaching age sixty after they have served ATU for at least ten years, at which time the same health-insurance benefits given to current retirees would be provided by ATU until those retirees become eligible for Medicare. After the Board adopted these changes, this lawsuit was filed.

The original plaintiffs below, the appellees on appeal, were seven tenured ATU professors. Three of those plaintiffs satisfied the fifty-five/twenty requirement. The appellees filed a petition for declaratory judgment on December 29, 1997, in which they alleged that ATU had contractually obligated itself to provide the lifetime health-insurance benefit to those retirees meeting the fifty-five/ twenty criteria at no cost to the retirees, and that the benefit was an essential term of the parties’ employment agreement. Appellees also alleged that the health-insurance benefit was deferred compensation in which they had a “vested contract right” or a “contractual property right,” and that the Board’s action was “a taking of plaintiff’s vested property rights and a breach of contract.” In count one of the petition, the appellees asked the trial court to “determine the actions of Defendants constitute a breach of the parties’ employment agreements [.]” In count two, the appellees asked the court to enter a preliminary injunction to protect a vested contract right. In count three, they asked the court to find ATU’s actions actionable under 42 U.S.C. § 1983; and, in count four, they asked for attorneys fees and costs pursuant to 42 U.S.C. § 1988 and Ark. Code Ann. § 16-22-308.

ATU and the Board moved to dismiss, and argued that the trial court was without subject-matter jurisdiction because the appellees’ claim is for breach of contract, which, under the doctrine of sovereign immunity, is cognizable solely in the Arkansas Claims Commission. The appellees responded by arguing that, regardless of the sovereign-immunity doctrine, the State could still be enjoined by a court of equity when the actions of the State are illegal, unconstitutional, ultra vires, in bad faith, or arbitrary. They also argued that 42 U.S.C. § 1983 authorizes the court to enjoin state agencies and officers from depriving people of their constitutional rights. Furthermore, appellees argued that their lawsuit was not for breach of contract, but sought declaratory judgment to determine the parties’ contract rights and an injunction to prohibit an unconstitutional taking of property rights. In support of these arguments, the appellees relied on the case of Jones v. Cheney, 253 Ark. 926, 489 S.W.2d 785 (1973). ATU replied that sovereign immunity was nonetheless a bar to the action because injunctive relief was not necessary to the claim, and the appellees had not pled specific facts showing bad faith, ultra vires acts, or unconstitutionality sufficient to waive sovereign immunity. After a hearing, the trial court dismissed the members of the Board in their individual capacities, but refused to dismiss ATU and the board members in their official capacities based on certain exceptions to the sovereign-immunity doctrine established by this court in the case of Toan v. Falbo, 268 Ark. 337, 595 S.W.2d 936 (1980), and based on the provisions of 42 U.S.C. § 1983, that authorize state courts to enjoin state agencies and officers from depriving people of constitutional rights. On January 30, 1998, ATU and the Board filed an answer in which they again argued that the trial court was without jurisdiction and alleged the affirmative defense of sovereign immunity, as set forth in Article 5, section 20, of the Arkansas Constitution.

In June of 1998, Judge Swindell recused from the case, whereupon Judge Brantley was assigned to preside over the case. ATU and the Board then moved for summary judgment, contending that 42 U.S.C. § 1983 was inapplicable and sovereign immunity deprived the trial court of jurisdiction because the claim by the appellees was in essence a contract dispute. The trial court granted ATU and the Board summary judgment on the 42 U.S.C. § 1983 claim, but denied summary judgment on the issue of whether the appellees have a property interest or right in the post-retirement health-insurance benefit.

While the motion for summary judgment was pending, the appellees filed two amended petitions for declaratory judgment. The first amended petition added a plaintiff, and also added Robert Brown, president of ATU, as a defendant.

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Bluebook (online)
17 S.W.3d 809, 341 Ark. 495, 2000 Ark. LEXIS 289, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arkansas-tech-university-v-link-ark-2000.