S.M.H. v. Schmitt

618 S.W.3d 531

S.M.H., Respondent,

v.Eric SCHMITT, Attorney General of the State of Missouri, and Sarah Steelman, Commissioner of Administration, State of Missouri, Appellants.

No. SC 98675

Supreme Court of Missouri, en banc.

Opinion issued March 8, 2021

Rehearing Denied April 6, 2021

The state was represented by Katherine S. Walsh, Solicitor General D. John Sauer and Jesus A. Osete of the attorney general's office in Jefferson City, (573) 751-3321.

S.M.H. was represented by Stephen M. Gorney and Christopher D. Dandurand of The Gorny Law Firm LC in Kansas City, (816) 756-5071; and Mary Doerhoff Winter of Bartimus, Frickleton, Robertson, Rader PC in Jefferson City, (573) 659-4454.

Zel M. Fischer, Judge

S.M.H. seeks compensation from Missouri's Legal Expense Fund to satisfy a default judgment against an employee of the St. Louis Public School District. Because the St. Louis Public School District is not an "agency of the state," the Legal Expense Fund has no obligation to satisfy the default judgment entered against district employee Allen Merry.

Factual and Procedural Background

The General Assembly created the Transitional School District of the City of St. Louis pursuant to § 162.1100.1,¹ to exist coterminous with the boundaries of the St. Louis Public School District. The Transitional School District of City of St. Louis is the only district subject to § 162.1100. The governing board of the Transitional School District is to consist of three residents of the district: one member appointed by the governing body of the St. Louis Public School District; one appointed by the mayor of the City of St. Louis; and one appointed by the president of the board of aldermen of the City of St. Louis. § 162.1100.2(1).

In the event the state board of education declares the Transitional School District to be unaccredited, "the member of the governing board of the transitional district appointed by the governing body ... [is] replaced by a chief executive officer [("CEO")] nominated by the state board of education and appointed by the governor with the advice and consent of the senate. The [CEO] need not be a resident of the district, ... shall be paid in whole or in part with funds from the district, and shall have all other powers and duties of any other general superintendent of schools." § 162.1100.1(2). This new entity, consisting of the CEO and two remaining members of the governing board of the Transitional School District, is called the Special Administrative Board.

S.M.H.'s Declaratory Judgment

S.M.H., a student in the Transitional School District, sued a former teacher, Allen Merry, alleging sexual abuse occurred while S.M.H. attended a school in the Transitional School District, and obtained a default judgment against Merry for $4 million. During the period of abuse alleged in S.M.H.'s lawsuit, the Transitional School District had lost its state accreditation. As a result, the Special Administrative Board governed the district and employed Merry.

After obtaining the default judgment against Merry, S.M.H. filed a declaratory judgment action against Eric Schmitt as Attorney General and the Commissioner of Administration (collectively, "the State"), seeking satisfaction of the judgment from the Legal Expense Fund. The State refused to satisfy the judgment and moved to dismiss the action, arguing Merry was not an employee of a state agency and, therefore, not covered by the Legal Expense Fund. S.M.H. moved for summary judgment and the circuit court sustained the motion, ordering the State to authorize payment from the Legal Expense Fund to satisfy the default judgment.

In sustaining S.M.H.'s motion for summary judgment, the circuit court concluded: (1) Merry was an employee of a state agency and entitled to a defense; (2) Merry properly tendered defense of S.M.H.'s claims against him to the Attorney General; and (3) Merry cooperated by tendering his defense to the Attorney General even though the Attorney General refused on numerous occasions to provide a defense.

The State appealed, arguing the circuit court erred in entering summary judgment in S.M.H.'s favor because Merry was not employed by a state agency and an issue of material fact existed concerning whether Merry tendered the defense of S.M.H.'s claims to the Attorney General. After opinion by the court of appeals, this Court granted transfer and has jurisdiction. Mo. Const. art. V, § 10. The judgment is reversed.

Analysis

The dispositive issue in this case is whether the Special Administrative Board of the Transitional School District is an "agency of the state" for purposes of the Legal Expense Fund. The State argues the Special Administrative Board is a political subdivision, not a state agency. S.M.H. contends the Special Administrative Board's relationship to the State transformed it into a state agency. While "agency of the state" is not specifically defined in § 105.711, this Court concludes the General Assembly did not intend the Legal Expense Fund to cover the Special Administrative Board of the Transitional School District; therefore, the Legal Expense Fund was not obligated to satisfy the default judgment entered against Merry.

This Court outlined the standard of review for summary judgment in Goerlitz v. City of Maryville :

The trial court makes its decision to grant summary judgment based on the pleadings, record submitted, and the law; therefore, this Court need not defer to the trial court's determination and reviews the grant of summary judgment de novo. In reviewing the decision to grant summary judgment, this Court applies the same criteria as the trial court in determining whether summary judgment was proper. Summary judgment is only proper if the moving party establishes that there is no genuine issue as to the material facts and that the movant is entitled to judgment as a matter of law. The facts contained in affidavits or otherwise in support of a party's motion are accepted as true unless contradicted by the non-moving party's response to the summary judgment motion. Only genuine disputes as to material facts preclude summary judgment. A material fact in the context of summary judgment is one from which the right to judgment flows.

333 S.W.3d 450, 452-53 (Mo. banc 2011) (internal quotation marks and citations omitted).

"This Court reviews questions of statutory interpretation de novo. " Ivie v. Smith , 439 S.W.3d 189, 202 (Mo. banc 2014). "This Court's primary rule of statuary interpretation is to give effect to legislative intent as reflected in the plain language of the statute at issue." Parktown Imports, Inc. v. Audi of Am., Inc. , 278 S.W.3d 670, 672 (Mo. banc 2009). Additionally, "when construing a statute, this Court considers statutes involving similar or related subject matter when the statutes illuminate the meaning of the statute being construed." BASF Corp. v. Dir. of Revenue , 392 S.W.3d 438, 444 (Mo. banc 2012).

Only Agencies of the State Are Covered by the Legal Expense Fund

Section 105.711.2 provides in pertinent part, "[m]oneys in the state legal expense fund shall be available for the payment of any claim or any amount required by any final judgment rendered by a court of competent jurisdiction against ... [t]he State of Missouri, or any agency of the state[.]" The statute does not provide a definition of the word "agency." "In the absence of a statutory definition, words will be given their plain and ordinary meaning as derived from the dictionary." State v. Stewart , 560 S.W.3d 531, 534 (Mo. banc 2018).

The word "agency" means "a department or other administrative unit of a government." Webster's Third New Int'l Dictionary 40 (3d ed. 2002). The use of "state agency" or "agency of the state" in statutory and legal terminology "often refers to a division or a department of state government performing (typically) the functions of the executive branch of state government." P.L.S. ex rel. Shelton v. Koster , 360 S.W.3d 805, 815 (Mo. app. 2011). This Court concludes the General Assembly clearly intended for the Special Administrative Board to function as a school district, not as part of the executive branch of state government. The Special Administrative Board, therefore, is excluded from coverage under the Legal Expense Fund.

The Special Administrative Board Functions as a School District, Not a State Agency

First, public school districts in Missouri are regularly considered political subdivisions—not agencies of the state. See Mo. const. art X, § 15 ("The term "other political subdivision," ... shall be construed to include ... school [districts]"). Public school districts, as political subdivisions, are distinct from "agencies of the state." See P.L.S. , 360 S.W.3d at 812-13. In P.L.S ., the court of appeals observed, while school districts are certainly "governmental instrumentalities," they are not "agencies of the state" under the "technical, governmental sense." Id. at 813. Instead, school districts are "political subdivisions" and "considered legally separate, special-purpose, local governmental subdivisions with powers similar to those of a town, village, or county." Id. at 815.

Because school districts are not "agencies of the state," district employees are routinely excluded from statutory provisions covering employees of "agencies of the state." See e.g. , id. at 815 (noting "for purposes of Chapter 36, ... the terms ‘agency,’ ‘state agency,’ and ‘agency of the state’ are defined to specifically exclude ‘offices of the elected officials, the general assembly, the judiciary and academic institutions.’ ") (quoting § 36.020 (1)); § 536.010(8) (" ‘State agency’ means each board, commission, department, officer or other administrative office or unit of the state other than ... a political subdivision of the state[.]").

Under § 162.621.1, the governing body of Transitional School District (including the Special Administrative Board) "has all the powers of other school districts under the laws of this state" except as specifically...