Southeast Files Motion to Dismiss

CAPE GIRARDEAU, Mo.,

April 8, 2005 – Legal counsel for Southeast Missouri State University today filed a motion to dismiss and a memorandum in support of the motion with the Butler County Circuit Clerk in connection with a lawsuit filed against the University in March by Three Rivers Community College (TRCC).

The motion to dismiss is based on the fact that Three Rivers Community College requested on Feb. 28 that the Coordinating Board for Higher Education (CBHE) intervene and mediate a dispute with Southeast concerning the sharing of operating costs at the higher education centers in Kennett, Malden and Sikeston, Mo.

Based on that request, both Southeast and TRCC officials participated on March 7 in a mediation session with Dr. Gregory Fitch, commissioner of higher education, resulting in agreement on some of the issues, while other issues still had to be resolved. Southeast’s motion to dismiss indicates that the intervention requested by TRCC has not been completed and, thus, a lawsuit should not have been filed until all possible solutions had been exhausted.

According to the motion, TRCC filed its lawsuit on March 16, before the CBHE’s conflict resolution procedures had been completed. On March 28, Fitch submitted a proposal resolving the issues to both TRCC and Southeast. On March 29, Southeast’s Board of Regents approved the agreement, although TRCC has rejected that proposal.

Under CBHE guidelines, affected parties have one month after they have received the commissioner’s resolution to send a written appeal to the CBHE. If there is an appeal, the CBHE will hold a public hearing on the matter and issue a written binding decision. According to the motion, parties may not seek judicial review until all administrative remedies have been exhausted.

According to the motion, all such remedies have not yet been exhausted and, thus, the lawsuit filed by TRCC was premature and should be dismissed.

# # #

IN THE CIRCUIT COURT OF BUTLER COUNTY, MISSOURI

 THREE RIVERS COMMUNITY COLLEGE,  )   By and Through its Board of Trustees,  )    )  

Plaintiff, 

)    )  

vs. 

)

 Case No. CV105-526CC

  )  BOARD OF REGENTS OF SOUTHEAST     )  MISSOURI STATE UNIVERSITY,    )   )  

Defendant. 

 

MOTION TO DISMISS

 COMES NOW Defendant Board of Regents of Southeast Missouri State University, by counsel, and for its Motion to Dismiss states to the Court as follows:

  1. This case primarily involves a contractual dispute between Plaintiff Three Rivers Community College (“TRCC”) and Defendant Board of Regents of Southeast Missouri State University (“Southeast”).
  2. When the dispute arose, TRCC requested intervention by the Coordinating Board for Higher Education (“CBHE”) pursuant to Chapter 173 of the Revised Statutes of Missouri and certain guidelines promulgated by the CBHE mandating conflict resolution proceedings in such situations. 
  3. Pursuant to TRCC’s request, the parties participated in mediation with the Commissioner of Higher Education, Dr. Gregory Fitch, on March 7, 2005.
  4. Since March 7, 2005, Dr. Fitch has continued his efforts to facilitate a resolution of the dispute between Plaintiff and Defendant.
  5. Even though TRCC initially requested mediation by Dr. Fitch, TRCC filed this action on March 16, 2005, before the CBHE-mandated conflict resolution procedures had been completed.
  6. On March 28, 2005, Commissioner Fitch submitted to TRCC and Southeast a written proposal resolving the issues in dispute between the parties.
  7. On March 29, 2005, the Board of Regents of Southeast Missouri State University unanimously approved the agreement proposed by Commissioner Fitch.  TRCC has rejected the Commissioner’s proposal. 
  8. CBHE Guidelines provide that affected parties have one month after receipt of the Commissioner’s resolution to send a written appeal to the CBHE.  If there is an appeal, the nine-member Coordinating Board is to hold a public hearing and issue a written decision that would be binding on all affected parties.
  9. Pursuant to §536.100 R.S.Mo., a party is not entitled to judicial review until all administrative remedies provided by law have been exhausted.
  10. Where administrative remedies have not been exhausted, a court lacks subject matter jurisdiction.  Farm Bureau Town & Country Insurance Co. of Missouri v. Angoff, 909 S.W.2d 348, 352 (Mo. 1995).
  11. Defendant incorporates its Memorandum in Support of Motion to Dismiss filed contemporaneously herewith.

WHEREFORE, for the reasons stated above, Defendant respectfully moves the Court to dismiss Plaintiff’s Petition, and for such other and further relief as the Court deems just and proper under the circumstances.

  Respectfully submitted,LIMBAUGH, RUSSELL, PAYNE & HOWARD2027 Broadway, P.O. Box 1150Cape Girardeau, MO  63702-1150Telephone:   (573) 335-3316Facsimile:  (573) 335-0621Email: jgrimm@limbaughlaw.com

By: ______________________________________       John W. Grimm #34834

 ATTORNEYS FOR DEFENDANT

CERTIFICATE OF SERVICE

 The undersigned hereby certifies that a copy of the foregoing was mailed, U.S. mail, postage prepaid, to the following counsel of record on this ____day of April, 2005 to:

Mr. L. Joe Scott Mr. Paul A. KidwellScott, Kidwell & Scott, LLPP.O. Box 1288Poplar Bluff, MO  63902

      _______________________________________

 

IN THE CIRCUIT COURT OF BUTLER COUNTY, MISSOURI

 THREE RIVERS COMMUNITY COLLEGE,  )   By and Through its Board of Trustees,  )    )  

Plaintiff, 

)    )  

vs. 

)

 Case No. CV105-526CC

  )  BOARD OF REGENTS OF SOUTHEAST     )  MISSOURI STATE UNIVERSITY,    )   )  

Defendant. 

 

MEMORANDUM IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS

 COMES NOW Defendant, Board of Regents of Southeast Missouri State University, by counsel, and for its Memorandum in Support of its Motion to Dismiss states to the Court as follows:

I. BACKGROUNDSince approximately 1988, Plaintiff Three Rivers Community College (“TRCC”) and Defendant Board of Regents of Southeast Missouri State University (“Southeast”) have offered post-secondary courses on a cooperative basis at the Bootheel Education Center in Malden.  The Bootheel Education Center is owned by Southeast.  In the late 1990s, Southeast established similar higher education centers in Kennett and Sikeston.  Southeast and TRCC similarly offered post-secondary courses on a cooperative basis at each of those learning centers. 

As early as 1998, Southeast and TRCC had a significant disagreement concerning the sharing of operating costs at the Bootheel Education Center in Malden.  Even as the parties continued to cooperate regarding course offerings at Malden, and in fact expanded services to Kennett and Sikeston, the issue regarding operating costs was never resolved.  By 2004, Southeast was losing approximately $800,000 per year because of its operation of the centers.  At the same time, TRCC was showing a net profit of approximately $900,000 per year.

In May of 2004, after TRCC threatened to move its classes elsewhere, Southeast reluctantly entered into a Rental Agreement whereby TRCC agreed to pay Southeast a very modest fee toward the operational costs of the centers.  In December of 2004, a dispute arose as to whether TRCC had met its financial obligations to Southeast under the Rental Agreement.  As a result of this dispute, on February 16, 2005, Southeast’s Board of Regents voted to terminate the Rental Agreement with TRCC.   On February 25, 2005, Southeast notified TRCC of its decision.

On February 28, 2005, TRCC’s President wrote a letter to Dr. Gregory Fitch,  Commissioner of Higher Education, requesting his intervention and mediation in accordance with Guidelines promulgated by the Coordinating Board for Higher Education (“CBHE”). A copy of that letter is attached hereto as Exhibit A and incorporated herein by reference.  As a result of TRCC’s request, Dr. Fitch facilitated a mediation session between the parties on March 7, 2005.

During the mediation session on March 7, 2005, the parties reached an agreement as to some of the issues in dispute, while other issues still had to be resolved.  Therefore, Dr. Fitch continued his efforts to resolve the remaining issues.  Even though TRCC was the party that initially requested mediation session by Dr. Fitch, however, TRCC filed this action on March 16, 2005, before the CBHE-mandated conflict resolution procedures had been completed.

Dr. Fitch did not abandon his efforts after this lawsuit was filed. Pursuant to CBHE Guidelines, he presented a proposed agreement to the parties on March 28, 2005, a copy of which is attached hereto as Exhibit B and incorporated herein by reference.  On March 29, 2005, Southeast Board of Regents unanimously approved the proposed agreement, and advised Dr. Fitch of its decision.  In its response to Dr. Fitch, TRCC states that the CBHE’s conflict resolution Guidelines are “void and unenforceable.”

II. ARGUMENT

  1. Authority of the Coordinating Board for Higher Education

The Department of Higher Education is a state agency established pursuant to §173.005 R.S.Mo.  The same statute created the Coordinating Board for Higher Education (“CBHE”), and named the Coordinating Board as the head of DHE.  The Coordinating Board is authorized to hire staff, such as Commissioner Fitch, in order to carry out its statutory powers, duties and functions.

The CBHE is responsible for supervising four-year institutions such as Southeast, §173.005 R.S.Mo., as well two-year institutions such as TRCC, §178.780 R.S.Mo.  The CBHE has numerous responsibilities that are set forth by statute, such as the following:

  1. establishing guidelines for appropriation requests by institutions of higher education (§173.005.2(3));
  2. developing arrangements for more effective coordination and mutual support among institutions in the utilization of facilities, faculty and other resources (§173.020(3));
  3. designing a coordinating plan for higher education in the state (§173.020(4)); and
  4. coordinating reciprocal agreements between Missouri state institutions of higher education (§173.030(5)).

In order to fulfill its statutory mission, the CBHE has periodically approved policy guidelines relating to new academic program proposals, changes to existing programs, and the off-site delivery of existing programs by public institutions.  Examples of those guidelines can be found at www.dhe.mo.gov/reviewacademicprograms.sthml.

B. Guidelines Applicable to This Case

On December 4, 2003, the CBHE unanimously approved the Public Policy Guidelines for Lower Division Course Work, Lower Division Certificate, and Associate Degree Delivery, attached hereto as Exhibit C and incorporated herein by reference.  Section 12 of the Guidelines provides the procedure for Conflict Resolution.  Specifically, Section 12.5 provides in relevant part, “Each of the affected public institutions in an unresolved conflict also has the option to request formal mediation.”

TRCC’s President, Dr. John Cooper, specifically cited Section 12 when he requested intervention by the CBHE on February 28, 2005.  Subsequently, however, TRCC apparently did not like the way the mediation it requested was being handled.  Therefore, TRCC chose to file this lawsuit rather than follow through with the dispute resolution procedures. 

Commissioner Fitch, however, did not abandon the process. Section 12.7 of the Guidelines provides, “The Commissioner of Higher Education will determine a resolution and communicate it to all of the involved parties within one month after receiving written notification of an unresolved conflict.”  In accordance with that section, Dr. Fitch prepared a propose agreement that was transmitted to TRCC and Southeast on March 28, 2005.  Southeast’s Board of Regents unanimously approved the proposal on March 29, 2005.Under Section 12.8 of the Guidelines, TRCC has one month to appeal the Commissioner’s decision to the full nine-member Coordinating Board.  If such an appeal is made, Section 12.9 requires the CBHE to hold a public hearing and render a binding decision.

C. Exhaustion of Administrative RemediesHere, Dr. Fitch’s March 28, 2005 proposed resolution correctly cites the numerous statutory provisions that give the CBHE broad authority to coordinate and regulate higher education within the state.  Missouri law is clear that a state administrative agency may establish rules within its statutory authority, and that those rules have the full force and effect of law.  State ex rel. Martin-Erb v. Missouri Comm’n on Human Rights, 77 S.W.3d 600, 606 (Mo. banc 2002); Missouri National Educ. Ass’n v. Missouri State Bd. of Mediation, 695 S.W.2d 894, 897 (Mo. banc 1985).  

The Guidelines discussed above establish a lawful procedure for conflict resolution that must be followed by institutions regulated by the CBHE.  Moreover, under §173.005.2(10) R.S.Mo., there are administrative consequences for failure to comply with such Guidelines:

If any institution of higher education in this state, public or private, willfully fails or refuses to follow any lawful guideline, policy or procedure established or prescribed by the coordinating board, or knowingly deviates from any such guidelines, or knowingly acts without coordinating board approval where such approval is required or willfully fails to comply with any other lawful order of the coordinating board, the coordinating board may, after a public hearing, withhold or direct to be withheld from that institution any funds the disbursement of which is subject to the control of the coordinating board….

Additionally, the Code of State Regulations not only restates the sanctions for failure to comply with CBHE Guidelines, but also provides that hearings conducted by the CBHE are subject to requirements of the Administrative Procedures Act, Chapter 536 R.S.Mo.  6 CSR 10-4.021.

Under Missouri law, exhaustion of administrative remedies is a prerequisite to subject matter jurisdiction. Farm Bureau Town & Country Ins. Co. of Missouri v. Angoff, 909 S.W.2d 348, 352 (Mo. 1995).  See also Neosho R-V School Dist. v. McGee, 979 S.W.2d 537 (Mo.App. S.D. 1998); Muth v. Board of Regents of Southwest Missouri State University, 887 S.W.2d 744 (Mo.App. S.D. 1994).  Where the court lacks subject matter jurisdiction, a prematurely-filed lawsuit must be dismissed.  McGee, 979 S.W.2d at 540.

In McGee, the Neosho school district had a dispute with the parents of a disabled student regarding the special educational services to be rendered to the student.  The parents requested a due process hearing as provided by Missouri law.  At that hearing, the school district’s attorney told the hearing panel that the parties had reached a tentative agreement, and that the parties had agreed to postpone the hearing until the settlement agreement could be finalized.  Further, if another hearing were required, the district’s attorney would advise the panel. 

Thereafter, the school district filed a lawsuit seeking enforcement of the tentative settlement agreement and an injunction prohibiting the student’s parents from convening the hearing panel.  Although the trial court ruled in favor of the school district, the Court of Appeals reversed, holding, “Section 536.100 permits appeals by those who have exhausted all administrative remedies provided by law and who are aggrieved by a final decision in a contested case.”  McGee, 979 S.W.2d at 540 (emphasis added). 

Similarly, the CBHE established guidelines for conflict resolution between institutions such as TRCC and Southeast. That procedure provides for mediation of disputes, resolution by the Commissioner, and the possibility for an appeal to the Coordinating Board before litigation is allowed.  Here, TRCC did not exhaust the administrative remedies before this action was filed.

III.  CONCLUSION

Quite simply, TRCC wanted the CBHE conflict resolution guidelines to apply when TRCC deemed it was to its advantage to do so.  Apparently, TRCC later determined it was not to its advantage to invoke the Guidelines, and abandoned the process in favor of filing this lawsuit.

TRCC’s change of heart regarding the applicability of the CBHE Guidelines was evident in a March 30, 2005 newspaper article in the Southeast Missourian newspaper.  When asked about Commissioner Fitch’s March 28, 2005 proposed resolution, the Chairman of TRCC’s Board of Trustees, John Stanard, stated, ”We think Commissioner Fitch is showing extreme bias toward Southeast Missouri State University with this proposal.”  A copy of the Southeast Missourian article is attached hereto as Exhibit D and incorporated herein by reference.

If TRCC disagrees with Commissioner Fitch’s proposal, its remedy is to appeal the Commissioner’s resolution to the CBHE, which would conduct a public hearing on the disputed issues.  Until that process has been completed, this action is premature, thereby depriving this Court of subject matter jurisdiction.  Accordingly, TRCC’s petition must be dismissed.

   Respectfully submitted,LIMBAUGH, RUSSELL, PAYNE & HOWARD2027 Broadway, P.O. Box 1150Cape Girardeau, MO  63702-1150Telephone:   (573) 335-3316Facsimile:  (573) 335-0621Email: jgrimm@limbaughlaw.com

By: ______________________________________       John W. Grimm #34834

ATTORNEYS FOR DEFENDANT

 

CERTIFICATE OF SERVICE

 The undersigned hereby certifies that a copy of the foregoing was mailed, U.S. mail, postage prepaid, to the following counsel of record on this ____day of April, 2005 to:

Mr. L. Joe Scott Mr. Paul A. KidwellScott, Kidwell & Scott,LLPP.O. Box 1288Poplar Bluff, MO  63902

      _______________________________________