Pace v. Hymas

726 P.2d 693, 111 Idaho 581, 1 I.E.R. Cas. (BNA) 594, 1986 Ida. LEXIS 569
CourtIdaho Supreme Court
DecidedOctober 28, 1986
Docket15972
StatusPublished
Cited by32 cases

This text of 726 P.2d 693 (Pace v. Hymas) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pace v. Hymas, 726 P.2d 693, 111 Idaho 581, 1 I.E.R. Cas. (BNA) 594, 1986 Ida. LEXIS 569 (Idaho 1986).

Opinions

BISTLINE, Justice.

On June 30, 1981, Lois Pace was laid off from her tenured faculty position with the University of Idaho on the grounds of a financial exigency. At the time she was discharged, Pace held the position of professor in the home economics program of the University’s College of Agriculture. Pace was one of five members of a cooperative extension service offered by the University through the research and extension division of the College of Agriculture.

At the time of her discharge, Pace had 31 years’ experience in her profession, the last nine being with the University of Idaho.1 Pace was the most experienced of the five members of the extension service program, but the only one laid off. When she was terminated, Pace was 54 years old; she could have voluntarily retired with full benefits with only one more year of service.

After being discharged, Pace filed suit against the defendants. Pace’s complaint alleges that the defendants denied Pace her due process rights in discharging her. The defendants answered Pace’s complaint, denying liability and alleging several affirmative defenses.

A central issue in the case is whether there was a valid financial exigency to justify the defendants’ decision to terminate Pace. The defendants argued there was; Pace argued there was not.

For ease in handling the case, the district court bifurcated the trial. The first part of the trial was to deal solely with the issue of whether or not a bona fide financial exigency existed. The second part of the trial would deal with (1) whether her discharge based on the alleged financial exigency violated due process subject to a remedy pursuant to 42 U.S.C. § 1983, and (2) all the other issues in the case. The district court, in a pre-trial order, also ruled that the [583]*583defendants would have the burden of proving that a financial emergency existed. Neither side objected to the district court’s decision to bifurcate the trial, but the defendants did object to the district court’s decision to place the burden of proving a financial exigency on them.

The first part of the trial, heard by the district court without a jury, commenced on November 5, 1984. The evidence introduced in this stage of the trial included the following: On April 10, 1981, the State Board of Education issued a declaration of financial exigency. The declaration included the University of Idaho’s Agricultural Research and Cooperative Extension Service. On May 12, 1981, President Gibb informed Pace that because of the financial exigency, she would be laid off.

Pace was a tenured faculty employee. The University’s faculty-staff handbook defines “tenure” as follows:

A condition of presumed continuing employment that is accorded faculty members by the regents, usually after a probationary period, on the basis of an evaluation and affirmative recommendation by a faculty committee with concurrence by the faculty member’s departmental administrator and college dean and by the president. After tenure has been awarded, the faculty member’s service can be terminated only for adequate cause, the burden of proof resting with the University of Idaho (see 4550), ...or under conditions of financial exigency as declared by the Board (see 4580), or in situations where extreme shifts of enrollment have eliminated the justification for the existence of the position.

R., Yol. 5, p. 298 (emphasis added). “Financial exigency” is defined by the Handbook as follows:

A demonstrably bona fide, imminent financial crisis which threatens the viability of an agency, institution, office or department as a whole or one or more of its programs, or other distinct units, and which cannot be adequately alleviated by means other than a reduction in the employment force.

R., Vol. 5, p. 319 (emphasis added). There is no dispute that these two definitions were a part of Pace’s contract of employment.

The defendants do not argue that Pace was discharged for any reason other than the alleged existence of a financial exigency. Thus, the propriety of discharging her hinged on whether a financial exigency did exist.

In 1981, the Idaho legislature appropriated $12,197,600 for fiscal year 1982 for the Agricultural Research and Cooperative Extension Service (the “Service”). The Service had requested $12,610,500, which resulted in an alleged shortfall of $412,900. The fiscal year 1982 appropriation, however, was $773,100 greater than the 1981 appropriation.

House Concurrent Resolution No. 24, 1981 Idaho Sess.Laws, p. 772, called for an “across-the-board” salary increase of seven percent. University officials did not treat this resolution as mandatory, because some university employees received more than a seven percent salary increase while others did not. The legislature appropriated $667,800 to fund the salary increase for the Service. The district court found that a portion of this amount could have been used to help alleviate the alleged financial crisis at the Service.

At the end of the 1981 fiscal year, a $383,500 surplus was discovered in the Service’s budget. Of this amount, $135,000 was already committed to research projects and was not available for personnel costs. The purchase of word processing and other equipment took another $135,000 from the surplus. The remaining $112,000 of the surplus was totally uncommitted. This amount was used for costs other than personnel. The district court found that this amount could, have been used to alleviate the Service’s financial crisis. The evidence also showed increases in the Service’s fiscal year 1982 budget.

The district court found that alternatives other than a reduction in personnel were not considered by the State Board of Edu[584]*584cation when it declared the financial exigency. The Board of Education was not informed of and “did not consider the dollar savings possible by freezing or reducing the increases in such budget areas as salary, travel, capital outlay, supplies, or equipment.” R., Vol. 5, p. 321.2 The Board of Education also was never informed of the $383,500 surplus which existed at the end of fiscal year 1981 in deciding to declare the financial exigency.

Based upon these facts, the district court held that because of the definitions of “tenure” and “financial exigency,” as found in the University of Idaho’s faculty handbook, and which were part of Pace’s contract, the defendants had failed to prove a “demonstrably bona fide financial exigency.” (Emphasis added.) Specifically, the court held that the defendants had “failed to prove that the financial crisis could not have been ‘adequately alleviated by means other than a reduction in the employment force.’ ” R., Vol. 5, p. 322, quoting the faculty handbook, Ex. No. 208.

After entering findings of fact and conclusions of law, the district court certified its decision on the matter of financial exigency as final, and this Court granted the defendants’ motion to appeal by certification.. Subsequently, attorneys for the American Association of University Professors filed a motion, which was granted, to participate as amicus curiae.

The defendants raised eight issues on appeal.

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Bluebook (online)
726 P.2d 693, 111 Idaho 581, 1 I.E.R. Cas. (BNA) 594, 1986 Ida. LEXIS 569, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pace-v-hymas-idaho-1986.