03-003167 Joe Bernard vs. Jim Paul, Superintendent Of Schools Of Escambia County Status: Closed Recommended Order on Wednesday, June 9, 2004.

Summary: Petitioner failed to show that the superintendent did not have good cause for failing to re-new Petitioner`s annual contract, where superintendent had a good faith belief that Petitioner had improperly taken gifts.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOE BERNARD, )

)

Petitioner, )

)

vs. ) Case No. 03 - 3167

)

JIM PAUL, SUPERINTENDENT OF )

SCHOOLS OF ESCAMBIA COUNTY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal

proceeding and hearing before P. Michael Ruff, a duly - designated

Administrative Law Judge of the Division of Administrative

Hearings on January 29, 2004, in Pensacola, Florida.

APPEARANCES

For Petitioner: Michael J. DeMarko, Esquire

Post Office Box 12721

Pensacola, Florida 32502

and

Todd M. LaDouceur, Esquire

King & La Douceur, P.A.

1622 North 9th Avenue

Pensacola, Florida 32503

For Respondent: R. John Westberry, Esquire

Holt & Westberry

1108 North 12th Avenue, Suite A

Pensacola, Florida 32503

STATEMENT OF THE ISSUE

The issue to be resolved in this proceeding concerns

whether the Petitioner has suffered an injury protected by the

provisions of Chapter 120, Florida Statutes, when the

Respondent, the su perintendent of education of Escambia County,

acting pursuant to his statutory authority, Section

1012.22(1)(a)(3), Florida Statutes, refused to re - nominate the

Petitioner for employment. 1/

PRELIMINARY STATEMENT

This cause arose when Superintendent Paul failed to re -

nominate Mr. Bernard, the Petitioner, for a contract of

employment for the 2003 - 2004 school year. He informed

Mr. Bernard of that decision by letter of May 9, 2003. The

Petitioner, Joe Bernard, had been employed by the Escambia

County Schoo l Board (School Board) as the Risk Management

Director, pursuant to a 12 - month, non - instructional contract.

That contract expired on June 30, 2003. Near the end of each

year, the superintendent is required to nominate or re - nominate

employees who possess contracts of employment with definite

durations (a/k/a annual contracts). The nomination or re -

nomination is made to the School Board, which by statute must

accept or reject the nomination or re - nomination for cause.

Superintendent Paul failed to re - no minate Bernard for a new

contract for employment. Thus, there was no decision for the

School Board to make with regard to Mr. Bernard, as to his

position as the school district's risk manager. The School

Board had no occasion to decide whether Bernard sh ould be re -

employed for the 2003 - 2004 school year. The petition filed by

Bernard initiating this proceeding alleged that the School Board

and the superintendent failed to renew his employment contract

"primarily on a false and libelous investigative repor t

published by the superintendent on April 30, 2003."

On November 4, 2003, the Administrative Law Judge entered

an Order dismissing the petition as to the School Board because

it had taken no action which affected Bernard's substantial

interests for purpos es of Sections 120.57 and 12.569, Florida

Statutes, jurisdiction.

Thereafter, the superintendent filed a Motion to Dismiss

Bernard's Petition alleging that Bernard did not have a

protected property interest in continued employment. The

response to the m otion, filed by Bernard, relied on the

authority of Davis v. The School Board of Gadsden County , 646

So. 2d 766 (Fla. 1st DCA 1994) and Yunker v. University of

Florida , 602 So. 2d 557 (Fla. 1st DCA 1992). The arguments on

the Motion to Dismiss and the res ponse hereto were heard at the

outset of the hearing on the merits. The Motion to Dismiss was

denied without prejudice to its being addressed in post - hearing

submittals and in the Recommended Order.

This cause came on for hearing as noticed. The Petition er,

Mr. Bernard, presented seven witnesses and Petitioner's exhibits

1, 2, 4, 6, 7, 9, 11 - 14, and 17, were admitted into evidence.

The Respondent cross - examined the witnesses and had two exhibits

admitted into evidence. Upon concluding the proceeding, a

transcript thereof was obtained and the parties submitted

Proposed Recommended Orders which are being considered in the

rendition of this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Jim Paul served as the

superintendent of School s for Escambia County. Joe Bernard was

the director of risk management for Escambia County Schools,

supervised by Superintendent Paul. Mr. Bernard began working

for the school district in 1986. In January 2000, he began

serving as the risk manager.

2. AON Consulting is a firm involved in arranging for and

inaugurating employee benefit plans, such as medical and dental

benefits. It consulted in such an effort for the School Board

and had a contract with the Escambia County School District

designed to he lp the district contract with various health care

insurers concerning medical and dental benefits for district

employees.

3. Under its arrangement with the Escambia County School

District, AON Consulting (AON) would bill the school district by

the hour fo r its consulting services and additionally would

charge for costs involved for travel, food, and lodging. The

bills were submitted in total amounts without being itemized.

4. When Mr. Bernard became the risk manager for the School

Board and the superinte ndent, the AON contract was under his

budgetary supervision. He was the administrator of that

contract and was charged with ensuring that bills were

authorized when submitted by AON and that services performed by

AON and paid for by the school district we re within budgetary

requirements and guidelines. Mr. Bernard did not request or

require that AON bills be itemized.

5. When Mr. Bernard became the director of risk

management, AON already had the consulting contract with the

school district. For the fis cal year 2002 - 2003, the contract

was awarded through a bidding process. Several vendors bid on

securing the contract. Mr. Bernard served on the evaluation

committee that reviewed all bids. Other members of the

committee were Dr. Garber, Barbara Luker, a nd Gary Moyer.

6. The evaluation committee interviewed the final two

vendors/bidders and then recommended that the superintendent

award the contract to AON. Mr. Bernard was the superintendent's

expert with regard to insurance matters and the superinten dent

relied on him a great deal in determining who would be awarded

the contract. Mr. Bernard recommended AON and the contract was

awarded to AON.

7. Thereafter, in February 2003, at a School Board

meeting, Mr. Bernard arranged for an agenda item for t he B oard

to consider regarding an increase he proposed to AON's "purchase

order" so as to provide AON an additional $25,000. Ms. Stidham,

an Escambia County School Board member had questions and

concerns about the non - itemized billing received from AON. She

wanted a detailed itemization on all AON invoices. Because of

her concern, the issue she raised was referred to Sam Scallan,

the B oard's D irector of I nternal A uditing.

8. Mr. Scallan conducted an analysis of invoices for AON

Consulting and sent his findings to Superintendent Paul. The

Scallan analysis indicated that AON was not billing for

reimbursements in accordance with Florida Statutes. It

indicated that expenses reimbursed by the district included some

exorbitant meal expenses for district em ployees and their

guests. It also indicated that the director of risk management

(Mr. Bernard) and his guest, had been furnished with substantial

meals on three different occasions and that other expenses

reimbursed by the district to AON, included busine ss dinners, a

retirement gift, and cigars.

9. Superintendent Paul ordered an investigation of the

matter because of Mr. Scallan's analysis. Dr. Doug Garber, the

assistant superintendent of Human Resources was appointed to

conduct the investigation.

10 . Dr. Garber interviewed Mr. Bernard and took a recorded

statement from him during his investigation. Mr. Bernard stated

that he was familiar with the Florida Statute regarding gifts

and gratuities, as well as the School Board policy and knew that

"[Y]ou 're not supposed to [accept gifts]."

11. Mr. Bernard had developed a business and personal

relationship with Chris Clark, the AON consultant, whereby each

would purportedly take turns paying for each other's meals.

When Mr. Clark was in town, he and Mr. Bernard would sometimes

have breakfast, lunch or dinner together. They would take turns

buying meals at McGuire's Restaurant and the Pensacola Yacht

Club. They had a $400.00 meal expense at Sandor's Restaurant in

South Walton County (for four people). M r. Bernard maintains

that he paid his share of that bill by giving Mr. Clark $200.00

in cash on that occasion. They also attended Atlanta Braves

baseball games in Atlanta and three NASCAR races. Mr. Bernard

maintains he paid Mr. Clark for the NASCAR raci ng tickets in

cash. When on the Atlanta trips, they would have dinner at

Bones Steakhouse in Atlanta. Mr. Clark would typically pick up

the tab for the meal and Mr. Bernard and his guest would pay the

tab for the remainder of the weekend (lodging, cab fa re, drinks,

etc.).

12. Mr. Bernard stated that he did not know that Mr. Clark

was billing improperly because the bills were never itemized.

Mr. Bernard contends that Mr. Clark charged the school district

for bills that Mr. Bernard had already paid for hi mself.

Mr. Bernard testified that he always reciprocated when dealing

with vendors. The reason he states he reciprocated or took

turns in paying the restaurant and other bills is that he did

not want to create the appearance of an impropriety.

13. Cynth ia Craig is an Escambia County school district

vendor. She testified that she and Mr. Bernard would take turns

buying lunches for each other but they would occasionally lose

track of who's turn it was to pay. She also stated that she and

Mr. Bernard woul d sometimes consume alcohol during business

lunches.

14. Dr. Garber provided Mr. Bernard with a number of

opportunities to clear the matter up concerning the allegations.

Mr. Bernard provided Dr. Garber with the names of two witnesses

that he wanted to b e contacted and interviewed who he felt had

information favorable to him. Dr. Garber attempted multiple

times to contact those witnesses but was unable to reach them.

Dr. Garber told Mr. Bernard on two or three occasions that he

had not been able to reac h the witnesses and requested that

Mr. Bernard get verification from his witnesses so their

information could be included in Dr. Garber's report.

Dr. Garber was prepared to give credence to the witnesses

identified by Mr. Bernard and attempted to contact them, but was

unable to subpoena them or otherwise force them to testify.

15. Dr. Garber completed his investigation and issued a

report on April 30, 2003. The report to the superintendent

concluded that Mr. Bernard had not violated the Code of Ethics

pr ovided in Section 112.314(h), Florida Statutes, but that he

did violate School Board Rule 3.08, which essentially prohibits

employees from taking anything of value from vendors of the

school district.

16. As a result of the investigation AON reimbursed the

school district $5,700.00, for expenses improperly billed by

Mr. Clark. Mr. Bernard only provided receipts for $900.00 of

such expenses. Mr. Bernard had not provided any additional

receipts as of the time of the hearing, although he possibly

could ha ve obtained receipts from his credit card company or

through cancelled checks obtained from his bank. Dr. Garber

stated that he was prepared to consider any additional

information shedding light on the subject matter of the

investigation that Mr. Bernard could have provided, and gave him

an opportunity to do so.

17. Before taking any action regarding Mr. Bernard's

future with the School Board and the superintendent's office,

Superintendent Paul waited for the investigation to be

completed. After the inve stigation was completed the

superintendent decided not to re - new Mr. Bernard's contract.

18. Superintendent Paul decided not to renew the contract

because he believed that Mr. Bernard's effectiveness in

negotiating future health insurance rates and plan s for 10,000

employees, dependents, and retirees had been damaged. The

superintendent had lost confidence in Mr. Bernard's judgment.

19. On May 9, 2003, the superintendent sent Mr. Bernard a

letter advising him that his employment contract would not be

re - newed. He was allowed to serve - out the end of his existing

contract, however, and then left the school district in May 2003

on administrative leave. His contract actually expired June 30,

2003. It was an annual employment contract. He had received

all the pay he was entitled to under the contract and according

to the terms of the contract, Mr. Bernard did not possess any

expectancy of continued employment beyond the end of the 12 -

month term of the contract.

20. Paragraph 9 of Mr. Bernard's contract of employment

provided as follows:

"It is expressly understood and agreed by

and between the parties hereto that neither

the Employee nor the School Board owes any

further contractual obligation to the other

after June 30, 2003, and that no expectancy

of re - employment may be derived from the

execution or performance of this agreement."

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction of the subject matter of and the parties to this

proceeding. §§ 120.569 and 120.57, Fla. Stat. (2003).

22. Florida law does not establish a protected property

interest for employees in non - tenured, year - to - year positions

which are subject to an annual re - appointment. See Sullivan v.

School Bd. of Pinellas County , 773 F.2d 1182, 1186 (11th C ir.

1985). It has been held in Board of Regents v. Roth , 408 U.S.

564 (1972), that in order to have a constitutionally protected

property interest in continued employment, a non - tenured school

district employee must have more than an unilateral expectatio n

of continued employment. He must have a legitimate claim of

entitlement. See also Fertally v. Miami - Dade Community College ,

651 So. 2d 1283 (Fla. 3d DCA 1995)(holding that non - renewal of a

community college professor's annual contract did not affect he r

substantial interest for purposes of Section 120.57, Florida

Statutes). See also Herold v. University of South Florida , 806

So. 2d 638 (Fla. 2d DCA 2002). In this connection, as quoted

above, Mr. Bernard's employment contract provided that neither

he n or the School Board had any further contractual obligation,

each to the other, after the expiration of the contract on

June 30, 2003, and that "no expectancy of re - employment may be

derived from the execution or performance of this agreement."

23. The con tract was completed for the 2002 - 2003 school

year as of June 30, 2003. The plain language of that contract

indicated that there was no entitlement to continued employment

beyond that contract year. This was not a situation where

Mr. Bernard was discharge d prior to the expiration of his annual

contract, in which event he would be entitled to a proceeding

and hearing to determine whether there was good cause to

discharge him prior to the end of the contract period. In

Mr. Bernard's case, the contract perio d ended under the

contract's terms. Thus, Mr. Bernard could not really show that

he had a substantial interest in his employment as the

district's risk manager that was adversely affected by the non -

renewal of his contract because his substantial interest in that

employment ended when the contract ended, under the above -

referenced facts and legal authority.

24. There is, thus, no dispute that Mr. Bernard's contract

was allowed to reach its conclusion and that the contract by its

very terms precluded any e ntitlement to re - appointment. Rather,

Mr. Bernard in essence contends that, as the superintendent

admitted, the failure to re - nominate him was due to the facts

the superintendent maintains he learned through Dr. Garber's

investigation and the investigativ e report. Mr. Bernard

maintains that the report is "inaccurate or libelous" and in

essence put forward false facts upon which the superintendent

based his decision. He thus maintains that he is entitled to a

hearing to, in effect, "clear his name" relyin g on Davis v. The

School Board of Gadsden County , supra , and Yunker v. University

of Florida , supra . Mr. Bernard maintains that this authority

indicates that a hearing is required before an Administrative

Law Judge where the failure to renew a year - to - yea r contract for

a long - term employee, is based on inaccurate and libelous

statements, articulated and published by the agency head where

the action of the agency head, would have a stigmatizing effect

on the employee's employment history and opportunity to secure

new employment after such a failure to re - nominate. He

maintains that these cases are authority for the remedy of re -

instatement if it is proven that such a long - term employee is

not re - hired based upon "inaccurate and libelous" statements

upon whi ch the agency head relied in his decision.

25. In the Davis case, an employee, a school custodian,

was terminated after a group of students accused him of speaking

inappropriately to them. Because of his dismissal, he was

deprived of the opportunity to finish out his employment

contract for that school year. The hearing officer in that case

entered a recommended order crediting the employee, Mr. Davis's

account of the facts and rejecting the students' version as not

credible, concluding that the eviden ce was insufficient to meet

the School Board's burden of proving by a preponderance of

evidence that the recommendation for termination was for just

cause. The board and hearing officer in that case found that

Davis would have been re - appointed if he had not been named in

the accusations which were ultimately found to have been false.

In the Yunker case, the court determined that the employee

should have an opportunity to present proof that allegations of

misconduct, dishonesty, etc., were not true if the decision not

to re - appoint would have a stigmatizing effect on his employment

history and opportunity for new employment.

26. In the case at hand, however, Mr. Bernard was not

terminated for cause or otherwise. His contract was simply

allowed to expire by its own terms. Based upon the finding of

the investigation conducted by Dr. Garber and Mr. Bernard's

quality of response to that investigation and investigative

report, the superintendent determined that he no longer had

trust and confidence in Mr. Be rnard, given all the facts found

herein concerning his relationship with Mr. Clark, AON and the

quality of his response to the allegations and investigatory

facts. Superintendent Paul simply decided that he no longer had

trust and confidence in Mr. Bernar d sufficient to re - new his

contract.

27. Mr. Bernard was given ample opportunity to demonstrate

that he had paid his half of the improperly billed expenses and

failed to do so, that is, assuming that a showing that he had

paid one - half of the relevant e ntertainment expenses would be

exculpatory. That, in fact, has not been shown. Rule 3.08

seems to implicate that accepting gifts or premiums must be for

the benefit of the schools or that an employee accepting such a

gift or premium must use the gift for the benefit of the entire

school. That was not shown to have been the purpose or use of

the gifts or premiums involved, i.e. , the food, drinks, and

entertainment opportunities. Mr. Bernard did not prove that he

had paid his entire share of those expense s.

28. In the Davis case, the allegations against the

employee were proven to be false. In the instant case,

Mr. Bernard has not established that the allegations, findings,

and conclusions in Dr. Garber's investigation were false.

Irrespective of the issue of the gifts themselves, the

superintendent lost confidence in Mr. Bernard and his

objectivity when it came to Mr. Bernard's consideration of any

issues regarding a major vendor for the School Board, such as

AON. The facts found reveal that he belie ved in good faith, at

least, that Mr. Bernard could no longer be objective in his

decision - making because of his relationship with Mr. Clark and

AON, including, but not limited to the fact that Mr. Bernard

personally agendaed and propounded an item on the School Board's

agenda whereby AON was apparently given a $25,000

increase in fees above those due under its then - current

contract, which occurred after Mr. Bernard assumed his position.

29. To the extent that Mr. Bernard is claiming that non -

renewal of his contract implicated a protected liberty interest

warranting a "name clearing hearing," even though his contract

expired under its own terms, a claimant, in proving deprivation

of a constitutionally - protected liberty interest, must establish

that the de termination "was attended by stigmatizing charges

which 'might seriously damage his standing and associations in

his community' or foreclose 'his freedom to take advantage of

other employment opportunities.'" Sullivan , supra ; Yunker ,

supra .

30. Factual ly, Mr. Bernard's non - renewal of his contract

does not implicate a protected liberty interest. The

superintendent's letter, whereby he informed Mr. Bernard that

his contract would not be renewed (Exhibit 14 in evidence), does

not contain publication of in formation that would place

Mr. Bernard's name, reputation, honor, or integrity in issue, or

that would reasonably foreclose his opportunity to take

advantage of other employment opportunities, by the terms and

language of the letter. Accordingly, given th e above F indings

of F act based upon evidence of record, it is determined that the

superintendent's decision was appropriately within his

discretion, in deciding not to enter into a new contract with

Mr. Bernard.

RECOMMENDATION

Having consideration the fo regoing Findings of Fact,

Conclusions of Law, the evidence of record, the candor and

demeanor of the witnesses and the pleadings and arguments of the

parties, it is, therefore,

RECOMMENDED that the petition of Joseph Bernard be denied.

DONE AND ENTERED thi s 9th day of June, 2004, in

Tallahassee, Leon County, Florida.

S

P. MICHAEL RUFF

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(8 50) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of June, 2004.

ENDNOTE

1/ The case has been re - styled by the undersigned to reflect

that Joe Ber nard filed the petition and has the burden of proof.

COPIES FURNISHED:

Michael J. DeMarko, Esquire

Post Office Box 12721

Pensacola, Florida 32591 - 2721

Todd M. LaDouceur, Esquire

King & LaDouceur, P.A.

1622 North 9th Avenue

Pensacola, Florida 32503

R obert J. Sniffen, Esquire

Moyle, Flanigan, Katz, Raymond

& Sheehan, P.A.

The Perkins House

118 North Gadsden Street

Tallahassee, Florida 32301

R. John Westberry, Esquire

Holt & Westberry, P.L.

1108 - A North 12th Avenue

Pensacola, Florida 32501

Superin tendent Jim Paul

Escambia County School Board

215 West Garden Street

Pensacola, Florida 32597

Daniel J. Woodring, General Counsel

Department of Education

325 West Gaines Street, Room 1244

Tallahassee, Florida 32399 - 0400

NOTICE OF RIGHT TO SUBMIT EXCEP TIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.