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Perlin v. Bd. of Education of City of Chicago





APPEAL from the Circuit Court of Cook County; the Hon. ARTHUR L. DUNNE, Judge, presiding. MR. JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:

Plaintiffs filed a complaint for declaratory judgment and to recover salary lost as a result of a 4-week layoff ordered by defendants, the Board of Education of the City of Chicago (the Board) and its General Superintendent of Schools (the Superintendent). Pursuant to defendants' motion, the trial court dismissed plaintiffs' complaint with prejudice. Plaintiffs' motion to vacate the dismissal was denied and they have appealed. The sole issue before this court is whether the complaint states a cause of action. We reverse and remand.

Plaintiffs are certificated principals of Chicago public schools and the Chicago Principals Association (the Association), a voluntary organization of Chicago public school principals recognized by the Board as the official organization representing the Association's member principals in professional matters, including, among other things, questions pertaining to salaries and working conditions. On February 23, 1977, the Board adopted the Superintendent's recommendations for the second phase in a program for reducing the Board's projected financial shortage. As part of the reductions, the work year for principals was to be shortened from 12 months to 11 months. The layoff was to occur at various times during July and August of 1977, with an approximate loss to the principals of $1,365,629 in salary.

The Association instituted a grievance procedure against the Board to prevent the layoff of the principals. On June 14, 1977, the Board denied the relief requested and plaintiffs filed their 4-count complaint on June 17.

Count I of the complaint alleges a breach of contract. Although there was no written contract between the parties, plaintiffs allege that the terms of their employment were governed by Board Report 71-270, entitled "Administrative Compensation Plan," a memorandum of understanding between the parties and the Board's annual budget. The Administrative Compensation Plan set the principals' positions on a 12-month basis and the principals' salaries were established by the annual budget. Attached to plaintiffs' complaint are letters from the Board and the Board's advertisements for applicants to fill vacant principal positions. The exhibits state that the principals' employment was governed by the Administrative Compensation Plan. Plaintiffs further allege that they undertook their employment for the full 12 months and that the Board's actions amounted to a unilateral alteration of their contract after plaintiffs had accepted employment and performed for most of the year. Plaintiffs also allege that there were funds available to pay them and that their percentage of salary reduction far exceeded reductions of any other class of the Board's employees.

Count II is based on the theory of promissory estoppel. Plaintiffs allege that the Administrative Compensation Plan had converted the principals' positions from a 10-month to a 12-month basis, thereby affirmatively representing that the principals' work year would extend over the full calendar year. Plaintiffs attached a copy of section 4-48 of the Rules of the Board, which requires principals to apply for a leave of absence in order to be absent from their duties during July and August. Plaintiffs allege that further evidence of the full calendar work year is found in the budgets for the fiscal years beginning September 1, 1971, which specified that the position of principal is a 12-month position. Plaintiffs also allege that the Board's representations were reasonably expected to induce the principals into making themselves available for work throughout the entire year and that the principals have performed in reliance on the Board's representations. Plaintiffs claim that funds are available to pay them and therefore, because of the Board's representations and the principals' reliance on those representations, the Board should be estopped to reduce the principals' work year and salary by laying them off for a month.

In count III, plaintiffs allege that the Board's action in ordering the layoff is arbitrary, capricious and discriminatory against the principals because they are suffering a greater financial loss than others in full year, administrative and supervisory positions who were also laid off and because there is no reasonable distinction between the principals and other 12-month employees who were not laid off for one month. Count IV alleges that Board Report 77-109-17, which provides for the layoff, constitutes a law impairing the obligation of contracts and thus violates both the Federal and State constitutions.

Plaintiffs asked that the trial court declare the rights of the parties and enjoin defendants from proceeding with the layoff. Plaintiffs additionally asked that they be paid their full compensation in the event that they were actually laid off.

Defendants responded to the complaint with a motion to strike and dismiss which attacked the complaint as a whole. Defendants allege that the principals were not hired on a calendar year basis and that their rights are governed by section 34-84 of the School Code. (Ill. Rev. Stat. 1975, ch. 122, par. 34-84.) Defendants also allege that the memorandum of understanding and the Administrative Compensation Plan are not contractual, but are policy statements which may be modified at will. Defendants allege that the exhibits attached to the complaint show that the budget does not guarantee payment where layoff is necessary due to lack of funds and that plaintiffs admit the projected shortage of funds. Defendants further allege that they have the power to order good faith layoffs, that other employees were laid off as well, that the money plaintiffs allege is available for their salaries is not an existing fund and that there is no need for principals during the summer because of the virtual elimination of summer school programs.

After considering the arguments of the parties, the trial court dismissed the action with prejudice. This appeal followed.


Plaintiffs contend that their complaint was improperly dismissed because they have alleged sufficient facts to state causes of action based on theories of contract, promissory estoppel and discrimination against the principals. We agree.

• 1 A motion to dismiss may be filed under either section 45 or section 48 of the Civil Practice Act. (Ill. Rev. Stat. 1977, ch. 110, pars. 45 and 48.) Although the Board has not specified the section under which it has brought its motion, we note that it raises none of the grounds specified in section 48 and we will therefore treat it as a motion under section 45. Cain v. American National Bank & Trust Co. (1975), 26 Ill. App.3d 574, 325 N.E.2d 799.

A section 45 motion attacks only the legal sufficiency of the complaint and may not raise any factual issues. (Johnson v. Nationwide Business Forms, Inc. (1976), 41 Ill. App.3d 128, 359 N.E.2d 171; Cain.) The motion admits all well-pleaded facts (Acorn Auto Driving School, Inc. v. Board of Education (1963), 27 Ill.2d 93, 187 N.E.2d 722), and it must clearly appear that there are no facts which would entitle plaintiffs to relief for the dismissal to be warranted. (Courtney v. Board of Education (1972), 6 Ill. App.3d 424, 286 N.E.2d 25.) On review, the allegations must be interpreted in the light most favorable to plaintiffs in determining whether their complaint has set forth a cause of action on which relief may be granted. J.J. Harrington & Co. v. Timmerman (1977), 50 Ill. App.3d 404, 365 N.E.2d 721; Wooded Shores Property Owners Association, Inc. v. Mathews (1976), 37 Ill. App.3d 334, 337, 345 N.E.2d 186, 189.

Defendants rely generally on the Board's statutory powers in support of their motion. Among the Board's powers, which are enumerated in article 34 of the School Code (Ill. Rev. Stat. 1977, ch. 122, pars. 34-1 through 34-128), are the power to "prescribe the duties, compensation and terms of employment of its employees * * *" (Ill. Rev. Stat. 1977, ch. 122, par. 34-16) and to "employ teachers and other educational employees and fix their compensation." (Ill. Rev. Stat. 1977, ch. 122, par. 34-18(8).) Principals are to be employed as the Board deems it necessary, in accordance with the rules and regulations of the Board. ...

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