S.M.H. v. Eric Schmitt, Attorney General of the State of Missouri, and Sarah Steelman, Commissioner of Administration, State of Missouri ( 2020 )

IN THE MISSOURI COURT OF APPEALS
WESTERN DISTRICT
S.M.H., )
Respondent, )
)
v. ) WD83050
)
ERIC SCHMITT, ATTORNEY ) FILED: June 16, 2020
GENERAL OF THE STATE OF )
MISSOURI, and SARAH STEELMAN, )
COMMISSIONER OF )
ADMINISTRATION, STATE OF )
MISSOURI, )
Appellant. )
Appeal from the Circuit Court of Cole County
The Honorable Patricia Joyce, Judge
Before Division Two: Mark D. Pfeiffer, P.J.,
and Alok Ahuja and Gary D. Witt, JJ.
While Respondent S.M.H. was a student in a high school in the St. Louis
Public School District, she was sexually molested by one of her teachers. During
the period when the abuse was occurring, the school district lost its state
accreditation. As a result, the Special Administrative Board of the Transitional
School District of the City of St. Louis, established by § 162.1100,1 became the
district’s governing body, and the employer of S.M.H.’s abuser.
S.M.H. obtained a default judgment for $4 million against the teacher who
had abused her. She then filed a declaratory judgment action in the Circuit Court
of Cole County against Attorney General Eric Schmitt and Commissioner of
1 Unless otherwise indicated, statutory citations refer to the 2016 edition of
Revised Statutes of Missouri, updated through the 2019 Cumulative Supplement.
Administration Sarah Steelman (collectively “the State”). In her declaratory
judgment action, S.M.H. contended that she was entitled to payment on the
judgment from the State Legal Expense Fund established by § 105.711.
The circuit court granted summary judgment to S.M.H. The State appeals.
It argues that the Legal Expense Fund is not liable to satisfy S.M.H.’s judgment,
because the teacher who molested her was not employed by an “agency of the state,”
as required by § 105.711.2(2). The State also contends that summary judgment for
S.M.H. was inappropriate because of the existence of genuine issues of material fact
concerning whether the accused teacher tendered the defense of S.M.H.’s claims to
the State, as required by § 105.716.2.
We affirm.
Factual Background
Between 2005 and 2009, S.M.H. attended Central Visual and Performing
Arts High School in the City of St. Louis. During the same period, Allen Merry
worked as a music teacher at the high school and at another school in the district.
S.M.H. alleged that, beginning in 2006 and continuing for several years, Merry
sexually abused her on the campus of the high school and on the campus of the
other St. Louis school at which he taught. In February 2012, Merry was arrested
and charged with eighteen counts related to the abuse and molestation of S.M.H.
He pleaded guilty to statutory rape, sodomy, sexual contact with a student by a
teacher, and sexual exploitation of a minor.
When the abuse started, the St. Louis Public School District was governed by
the locally elected Board of Education of the City of St. Louis. In June 2007, the St.
Louis Public School District lost its state accreditation. By operation of
§ 162.1100.3, the Special Administrative Board of the Transitional School District of
the City of St. Louis became the district’s governing body upon the district’s loss of
accreditation. See Bd. of Educ. of City of St. Louis v. Mo. State Bd. of Educ., 271
2
S.W.3d 1, 6 (Mo. 2008) (rejecting challenge brought by locally elected Board of
Education to the State’s accreditation decision, and to the constitutionality of
§ 162.1100).
On October 13, 2015, S.M.H. filed a petition against Merry in the Circuit
Court of the City of St. Louis, seeking damages for sexual and emotional abuse.
(Case No. 1522-CC10821). Although Merry was personally served, he did not
respond to the lawsuit. On January 11, 2018, S.M.H. filed a motion seeking a
default judgment against Merry. The circuit court granted the motion for default
judgment on March 6, 2018. After a hearing on the same day, the circuit court
awarded S.M.H. $4 million in damages.
After obtaining the default judgment against Merry, S.M.H.’s counsel
demanded satisfaction of the judgment from the Legal Expense Fund. The State
refused on the basis that Merry was not an employee of an “agency of the state,”
and therefore was not covered by the Fund.
On April 24, 2018, S.M.H. filed a declaratory judgment action against the
State in the Circuit Court of Cole County, seeking a finding that the Legal Expense
Fund was required to satisfy the default judgment.
The State filed a motion to dismiss S.M.H.’s petition for failure to state a
claim, in which it argued that the St. Louis Public School District was not an
“agency of the state,” even when it was governed by the Special Administrative
Board of the Transitional School District. For her part, S.M.H. filed a motion for
summary judgment, contending that the undisputed facts established that the
Legal Expense Fund was required to pay the default judgment. In opposing
S.M.H.’s summary judgment motion, the State repeated its argument that Merry
was not an employee of an “agency of the state.” It also argued that summary
judgment was unwarranted because a genuine issue of material fact existed as to
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whether Merry had tendered the defense of S.M.H.’s underlying civil action to the
State.
On July 25, 2019, the circuit court denied the State’s motion to dismiss and
sustained S.M.H.’s motion for summary judgment. The court ordered that the
Attorney General and the Commissioner of Administration authorize payment from
the Legal Expense Fund for S.M.H.’s default judgment, in the amount of $4 million
plus accrued interest.
The State appeals.
Standard of Review
Appellate review of the grant of summary judgment is
essentially de novo. “The criteria on appeal for testing the propriety of
summary judgment are no different from those which should be
employed by the trial court to determine the propriety of sustaining
the motion initially.” This Court reviews the record in the light most
favorable to the party against whom judgment was entered.
“Summary judgment is appropriate when the moving party has
[established], on the basis of facts as to which there is no genuine
dispute, a right to judgment as a matter of law.”
Newton v. Mercy Clinic E. Communities, 596 S.W.3d 625, 628 (Mo. 2020) (citations
omitted).
Discussion
The State asserts two Points on appeal. In the first, it argues that the Legal
Expense Fund does not provide coverage for S.M.H.’s default judgment against
Merry, because he was not employed by an “agency of the state.” In its second
Point, the State argues that even if Merry was an employee of an “agency of the
state,” genuine issues of material fact remain regarding whether he tendered the
defense of S.M.H.’s claims to the State, which is a precondition to coverage by the
Fund.
I.
The State’s first Point implicates questions of statutory interpretation.
4
“Statutory interpretation is a question of law, which is subject to de
novo review on appeal.” “The primary rule of statutory construction is
to ascertain the intent of the legislature from the language used, to
give effect to that intent if possible, and to consider words used in the
statute in their plain and ordinary meaning.”
Li Lin v. Ellis, 594 S.W.3d 238, 241-42 (Mo. 2020) (citations omitted).
A.
“In 1983, the Missouri Legislature enacted §§ 105.711-.726, creating the
State Legal Expense Fund.” State ex rel. Koster v. Kansas City Bd. of Police
Comm’rs, 532 S.W.3d 191, 194 (Mo. App. W.D. 2017) (citation omitted). The Legal
Expense Fund operates as “a voluntary assumption of defense and payment of
claims against State employees sued for their conduct arising out of and performed
in connection with official duties on behalf of the state.” Id. at 194-95 (citation and
internal quotation marks omitted).
In this case, Legal Expense Fund coverage depends on whether Merry is
considered an employee of an “agency of the state.” Section 105.711.2 provides in
relevant part:
Moneys 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:
(1) The State of Missouri, or any agency of the state . . .;
(2) Any officer or employee of the State of Missouri or any
agency of the state, . . . upon conduct of such officer or employee
arising out of and performed in connection with his or her official
duties on behalf of the state, or any agency of the state . . . .
In Smith v. State, 152 S.W.3d 275 (Mo. 2005), the Missouri Supreme Court
held that members of the St. Louis Board of Police Commissioners, and officers of
the St. Louis Police Department, were officers or employees of an “agency of the
state,” entitled to coverage under the Legal Expense Fund. The Court held that
“[t]he statutory framework governing the St. Louis Police Board” mandated the
conclusion that it was an “agency of the state,” “as opposed to a local or municipal
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agency.” Id. at 278. In reaching its conclusion, the Court emphasized the following
features of the St. Louis Police Board:
The members of the Board, other than the mayor of St. Louis ex-officio,
are appointed by the governor with the advice and consent of the
senate, and they receive their commissions from the governor. It is
also the governor who is authorized by statute to remove any
commissioner for misconduct in office. In addition, the general
assembly has imposed upon the Board numerous requirements
pertaining to the Board's duty to establish and employ a “permanent
police force,” including those that establish the qualifications of police
officers, the number of police officers of each rank that the Board may
employ, and the maximum amount that officers of each rank can be
paid. Further, the Board is required to make its records available for
inspection by the general assembly or any committee thereof. In all
these respects, the Police Board is answerable to the state rather than
the City.
In fact, the general assembly has expressly prohibited the City
of St. Louis and its officials from presuming to exercise authority or
control over the Board or the Police Department.
Smith, 152 S.W.3d at 278 (statutory citations omitted). In addition to the statutory
provisions establishing the Police Board, the Court also recognized the existence of
caselaw “consistently recogniz[ing]” the Police Board as a state agency in other
contexts. Smith, 152 S.W.3d at 278-79. “[B]ased on a structural analysis of the
statutes creating the Board and analogies to case law holding that the Board is an
agency of the state in other contexts,” the Supreme Court held that the St. Louis
Board of Police Commissioners is an “agency of the state” subject to Legal Expense
Fund coverage. Id. at 279.
We recognize that the legislature overruled the specific result in the Smith
case, and withdrew Legal Expense Fund coverage for police officers employed by the
St. Louis and Kansas City Boards of Police Commissioners, when it enacted a new
§ 105.726.3 in 2005. Section 105.726.3 (enacted by S.B. 420, 93rd Gen. Assembly,
1st Reg. Sess. (2005)), provides that
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Moneys in the state legal expense fund shall not be available for
the payment of any claim or any amount required by any final
judgment rendered by a court of competent jurisdiction against a board
of police commissioners established under chapter 84, including the
commissioners, any police officer, . . . or any other individual or entity
acting or purporting to act on its or their behalf. Such was the intent
of the general assembly in the original enactment of sections 105.711
to 105.726, and it is made express by this section in light of the
decision in Wayman Smith, III, et al. v. State of Missouri, 152 S.W.3d
275. Except that the commissioner of administration shall reimburse
from the legal expense fund the board of police commissioners
established under section 84.350, and any successor-in-interest
established pursuant to section 84.344, for liability claims otherwise
eligible for payment under section 105.711 paid by such board up to a
maximum of one million dollars per fiscal year.
§ 105.726.3 (emphasis added); see also State ex rel. Koster v. Kansas City Bd. of
Police Comm’rs, 532 S.W.3d 191, 196 (Mo. App. W.D. 2017); Thomas v. St. Louis Bd.
of Police Comm’rs, 447 F.3d 1082, 1086 (8th Cir. 2006) (recognizing that “in express
response to the Missouri Supreme Court’s [Smith] decision, the Missouri General
Assembly passed a law limiting the state’s obligations under the SLEF to the
boards of police commissioners” to a maximum of $1 million per fiscal year). The
same 2005 legislation also added a sentence to § 105.726.1, rejecting Smith’s
holding that the Legal Expense Fund statutes had the effect of waiving the State’s
own sovereign immunity. 152 S.W.3d at 280.
Although the General Assembly overruled the specific result in the Smith
case, and Smith’s holding that the Legal Expense Fund statutes waive the
sovereign immunity of the State, we do not believe that the legislature thereby
rejected the Supreme Court’s “structural analysis” of the statutes creating a
particular governmental entity, or the Court’s emphasis on the level of State control
over a particular agency, to determine whether an entity is an “agency of the state”
for purposes of Legal Expense Fund coverage. We note that at least two later cases
apply Smith’s analytical framework in deciding whether other public entities
constitute “agencies of the State” for purposes of the Legal Expense Fund. See
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P.L.S. ex rel. Shelton v. Koster, 360 S.W.3d 805, 817 (Mo. App. W.D. 2011) (“We
disagree with Plaintiff, however, that the state's relationship to the Board of Police
Commissioners of St. Louis[, at issue in Smith,] is comparable to the state's
relationship to its school districts.”); Pub. Sch. Retirement Sys. Of Mo. v. State Street
Bank & Trust Co., 640 F.3d 821, 832 (8th Cir. 2011) (Missouri law; relying on Smith
in determining whether state retirement systems would be considered “agencies of
the state” for purposes of Legal Expense Fund coverage). Under Article V, § 2 of the
Missouri Constitution, we are bound to follow Smith’s analysis “until that decision
is modified or overruled by the Supreme Court” or by express legislative action. Fay
v. Stephenson, 552 S.W.3d 753, 759 (Mo. App. W.D. 2018).
B.
Under the “structural analysis” mandated by Smith, the unique nature of the
Special Administrative Board which governs the St. Louis Public School District
after a loss of accreditation renders the District an “agency of the state” for
purposes of Legal Expense Fund coverage.
In Missouri, “[t]he powers, duties, and obligations of school districts” are
established by statute. State ex rel. Sch. Dist. of Springfield R-12 v. Wickliffe, 650
S.W.2d 623, 625 (Mo. 1983) (citation omitted). “Missouri law creates three different
types of school districts: seven-director districts, urban districts, and metropolitan
districts,” the latter of which is defined as “[e]very city in this state, not within a
county.” Brooks v. Bd. of Educ. of Sch. Dist. of Riverview Gardens, No. 4:10CV1043-
DJS, 2010 WL 11695144, at *2 (E.D. Mo. Aug. 12, 2010) (quoting § 162.571).2
In normal times, the metropolitan school district established for the City of
St. Louis is governed by the locally elected Board of Education of the City of St.
2 At present “St. Louis City is the only member” of the class defined as “any
city not within a county.” Jefferson Cty. Fire Protection Dists. Ass’n v. Blunt, 205 S.W.3d
866, 872 n.6 (Mo. 2006), overruled on other grounds, City of Aurora v. Spectra Communics.
Grp., LLC, 592 S.W.3d 764, 778 (Mo. 2019).
8
Louis. § 162.571; Bd. of Educ. of St. Louis v. Daly, 129 S.W.3d 405, 405 (Mo. App.
E.D. 2004). The Board of Education of the City of St. Louis has “all the powers of
other school districts under the laws of this state . . . and shall perform all duties
required by general laws of school districts.” § 162.621.1. This includes general and
supervisory control and management of the public schools and school property, the
appointment of the district’s officers and employees, and the establishment of their
compensation. Id.
In 1998, however, the Missouri legislature modified this framework by
enacting Senate Bill 781. Bd. of Educ. of City of St. Louis v. Mo. State Bd. of Educ.,
271 S.W.3d 1, 5 (Mo. 2008). S.B. 781 was enacted as part of the settlement of a
“long-running federal desegregation lawsuit regarding the City of St. Louis public
schools.” Id.; see also Liddell v. Bd. of Educ. of City of St. Louis, No. 4:72CV100
HEA, 2019 WL 1359290, at *1-2 (E.D. Mo. March 26, 2019). S.B. 781 enacted a new
§ 162.1100, which established within the City of St. Louis “a school district to be
known as the ‘Transitional School District of [the City of St. Louis],’” a district
“coterminous” with the boundaries of the St. Louis Public School District.
§ 162.1100.1. Under § 162.1100.1, the Transitional School District (or “TSD”) is a
“body corporate and politic and a subdivision of the state.” The operation of the
statute is limited to a “city not within a county,” § 162.1100.1 – meaning that it
applies only to the City of St. Louis. See footnote 2, above.
Section 162.1100 contemplates that – initially – the Transitional School
District would serve in a temporary, supportive role, as the St. Louis Public School
District transitioned from federal-court control back to control by its locally elected
Board of Education. The statute provides that the TSD
shall have the responsibility for educational programs and policies
determined by a final judgment of a federal school desegregation case
to be needed in providing for a transition of the educational system of
the city from control and jurisdiction of a federal court school
9
desegregation order, decree or agreement and such other programs and
policies as designated by the governing body of the school district.
§ 162.1100.1. As initially constituted, the governing board of the Transitional
School District consists of “three residents of the district,” one appointed by “the
governing body of the district” (i.e., the Board of Education of the City of St. Louis),
one by the mayor of the City of St. Louis, and one by the “president of the [City’s]
board of alderman.” § 162.1100.2(1). The locally elected Board of Education
continues to govern the public schools outside of the TSD’s limited statutory
purpose.
S.B. 781 provides, however, for a radical restructuring of the school district’s
governance in the event that the district loses its accreditation from the State Board
of Education. First, upon loss of State accreditation, the member of the Transitional
School District’s governing board appointed by the Board of Education of the City of
St. Louis is removed. § 162.110.2(2). That member is “replaced by a chief executive
officer nominated by the state board of education and appointed by the governor
with the advice and consent of the senate.” Id. The statute provides that
[t]he chief executive officer need not be a resident of the district but
shall be a person of recognized administrative ability, 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,
including appointment of staff. The chief executive officer shall serve
for a term of three years or until his successor is appointed or until the
transitional district is dissolved or terminated. His salary shall be set
by the state board of education.[3]
Second, upon the school district’s loss of accreditation, all of the powers and
responsibilities of the Board of Education of the City of St. Louis (except for the
Board’s auditing and public reporting obligations) are transferred to the Special
3 The duties of a superintendent of a metropolitan school district include
“general supervision, subject to policies established by the board, of the school system . . .
courses of instruction, discipline and conduct of the schools, textbooks and studies.”
§ 168.211.2. In addition, subject to the board’s approval, the superintendent is responsible
for “[a]ll appointments, promotions and transfers of teachers and all other employees.” Id.
10
Administrative Board of the Transitional School District. See §§ 162.621.2,
162.1100.3; see also Bd. of Educ. of City of St. Louis, 271 S.W.3d at 16-18; Liddell,
2019 WL 1359290, at *2 n.1 (proceeding to enforce the desegregation settlement;
recognizing that, by virtue of §§ 162.621.2 and 162.1100, the Special Administrative
Board “is the sole party with the power to enter into agreements or to pursue legal
action on behalf of the St. Louis Public Schools District,” and that it had been
substituted in the litigation for the Board of Education of the City of St. Louis).
In addition to the transfer of the existing powers of the Board of Education of
the City of St. Louis, § 162.1100.4 also expressly provides that
[t]he special administrative board's powers and duties shall
include:
(1) Creating an academic accountability plan, taking
corrective action in underperforming schools, and seeking relief from
state-mandated programs;
(2) Exploration of alternative forms of governance for the
district;
(3) Authority to contract with nonprofit corporations to
provide for the operation of schools;
(4) Oversight of facility planning, construction, improvement,
repair, maintenance and rehabilitation;
(5) Authority to establish school site councils to facilitate
site-based school management and to improve the responsiveness of
the schools to the needs of the local geographic attendance region of
the school;
(6) Authority to submit a proposal to district voters pursuant
to section 162.666 regarding establishment of neighborhood schools.
Third, § 162.1100.5 grants the governing body of the Transitional School
District special taxing powers, if those power are authorized by “[t]he provisions of a
final judgment as to the state of Missouri and its officials in a school desegregation
case.” § 162.1100.5(1). The statute provides that these special taxing powers will
not be subject to certain locally adopted tax abatements or tax increment financing,
11
or to the statutory provisions requiring school districts to “maintain a minimum
value of operating levy.” § 162.1100.5(2)(a), (2)(b), (3).
Fourth, § 162.1100 imposes a number of additional obligations on the Special
Administrative Board for the Transitional School District, which do not apply
generally to other districts. In multiple instances, the TSD’s performance of these
special, additional responsibilities is expressly made “subject to review and
approval of the state board of education.” Thus, the statute provides:
6. (1) The special administrative board established in
this section shall develop, implement, monitor and evaluate a
comprehensive school improvement plan, and such plan shall be
subject to review and approval of the state board of education. The
plan shall ensure that all students meet or exceed grade-level
standards established by the state board of education pursuant to
section 160.514;
(2) The special administrative board shall establish
student performance standards consistent with the standards
established by the state board of education pursuant to section 160.514
for preschool through grade twelve in all skill and subject areas,
subject to review and approval of the state board of education for the
purpose of determining whether the standards are consistent with
standards established by the state board of education pursuant to
section 160.514;
(3) All students in the district who do not achieve
grade-level standards shall be required to attend summer school;
except that the provisions of this subsection shall not apply to students
receiving special education services pursuant to sections 162.670 to
162.999;
(4) No student shall be promoted to a higher grade
level unless that student has a reading ability at or above one grade
level below the student's grade level; except that the provisions of this
subsection shall not apply to students receiving special education
services pursuant to sections 162.670 to 162.999;
(5) The special administrative board established in
this section shall develop, implement and annually update a
professional development plan for teachers and other support staff,
subject to review and approval of the state board of education.
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7. The school improvement plan established pursuant to this
section shall ensure open enrollment and program access to all
students in the district, and, consistent with the Missouri and United
States Constitutions, shall give first priority to residents of the city for
admission to magnet schools. The school board shall take all
practicable and constitutionally permissible steps to ensure that all
magnet schools operate at full capacity. Students who change
residence within the district shall be allowed to continue to attend the
school in which they were initially enrolled for the remainder of their
education at grade levels served by that school, and transportation
shall be provided by the district to allow such students to continue to
attend such school of initial enrollment.
8. To the extent practicable, the special administrative
board shall ensure that per pupil expenditures and pupil-teacher ratios
shall be the same for all schools serving students at a given grade
level.
9. The special administrative board shall ensure that early
childhood education is available throughout the district.
10. The special administrative board shall ensure that
vocational education instruction is provided within the district.
11. The special administrative board shall establish an
accountability officer whose duty shall be to ensure that academically
deficient schools within the district are raised to acceptable condition
within two years.
§ 162.1100.
Fifth, and finally, while § 162.1100.12 provides for the Transitional School
District to be dissolved on July 1, 2008, the legislature vested the State Board of
Education with the discretion to extend, terminate, or re-establish the TSD “at any
time” if it finds such action is necessary to “accomplish[ ] the purposes for which it
was established.”
The governing structure of the Transitional School District, following the
district’s loss of accreditation, is not identical to the structure of the St. Louis Board
of Police Commissioners, which the Missouri Supreme Court addressed in Smith.
But like the Police Board at issue in Smith, § 162.1100 subjects the Transitional
School District to significant and pervasive State control, completely unlike the
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governance of any other school district in the State. Significantly, the State’s
assumption of control over the Transitional School District specifically displaces,
and supersedes, the authority formerly exercised by the district’s locally elected
school board. On loss of state accreditation, the member of the TSD’s governing
body appointed by the elected local school board is removed, and is replaced by a
gubernatorial appointee who exercises all of the powers of a district superintendent.
Section 162.1100 explicitly provides that the new chief executive officer need not be
a district resident, that the chief executive officer shall have a guaranteed three-
year term of office, and that his or her compensation will be set by the State – not
by the Transitional School District.
Section 162.1100 specifically transfers all of the powers and responsibilities
previously invested in the locally elected school board to the Special Administrative
Board of the Transitional School District, except for “auditing and public reporting
powers.” § 162.621.2. The Special Administrative Board is given a series of
additional powers, many of which could fundamentally alter the manner in which
the district operates, such as the power to “explor[e] . . . alternative forms of
governance for the district,” to contract with nonprofit corporations to operate the
district’s schools, and to submit plans to voters to restructure the district’s
operations. § 162.100.4(2), (3), (6). The Transitional School District is given unique
taxing powers, which are not subject to locally approved tax abatements or tax
increment financing, or to the statutory provisions generally applicable to school
district tax levies. Section 162.1100 imposed numerous additional, unique
obligations on the Special Administrative Board, and specifies that the Special
Administrative Board’s performance of many of these additional duties “shall be
subject to review and approval of the state board of education.” § 162.1100.6(1), (2),
(5). The State Board of Education is given wide discretion to continue, terminate, or
resurrect the Transitional School District “at any time.” § 162.1100.12.
14
The mandatory takeover of the St. Louis Public School District by the Special
Administrative Board on the district’s loss of accreditation, and the statutory
provisions governing the operations of the Special Administrative Board, are wholly
unlike the statutory provisions applicable to other Missouri school districts which
may lose their State accreditation. When any other school district in Missouri loses
its State accreditation, the State Board of Education has several options at its
disposal. It may: allow the existing board of education to continue to govern the
district, with greater oversight; appoint a special administrative board to operate all
or part of the district; determine an alternative governing structure; attach the
district to another district(s); or establish one or more new school districts within
the territory of the lapsed district. § 162.081.3. If a special administrative board is
appointed, that special administrative board’s only statutory responsibility is to
operate the school district (or the part of the district it was appointed to govern)
until the district is accredited for two consecutive academic years. § 162.081.3(2)(a).
The special administrative boards which may be appointed in other Missouri school
districts are not subject to the numerous requirements, or levels of State control,
imposed on the Transitional School District.
Using Smith’s “structural analysis,” we conclude that the State’s pervasive
control renders the Transitional School District an “agency of the state” for
purposes of Legal Expense Fund coverage.
C.
Additional support for our conclusion comes from a statute which expressly
provides that other special administrative boards are not covered by the Legal
Expense Fund.
As discussed in § I.B, above, the State Board of Education is authorized (but
not required) to appoint a special administrative board or other alternative
governing body when other Missouri school districts lose their State accreditation.
15
See § 162.081.3. The statute providing this authority with respect to other school
districts explicitly provides:
Neither the special administrative board nor any other form of
governance appointed under this section nor its members or
employees shall be deemed to be the state or a state agency for
any purpose, including section 105.711, et seq. [(the Legal Expense
Fund statute)]. The state of Missouri, its agencies and employees shall
be absolutely immune from liability for any and all acts or omissions
relating to or in any way involving the lapsed district, a special
administrative board, any other form of governance appointed under
this section, or the members or employees of the lapsed district, a
special administrative board, or any other form of governance
appointed under this section. Such immunities, and immunity
doctrines as exist or may hereafter exist benefitting boards of
education, their members and their employees shall be available to the
special administrative board or any other form of governance
appointed under this section and the members and employees of the
special administrative board or any other form of governance
appointed under this section.
§ 162.081.5 (emphasis added).
Section 162.081.5’s exemption of special administrative boards from Legal
Expense Fund coverage is limited to special administrative boards “appointed under
this section.” “‘Where several words are followed by a clause as much applicable to
the first and other words as to the last, the clause should be read as applicable to
all.’” Spradling v. SSM Health Care St. Louis, 313 S.W.3d 683, 688 (Mo. 2010)
(quoting Norberg v. Montgomery, 173 S.W.2d 387, 390 (Mo. 1943)); accord, State v.
Champagne, 561 S.W.3d 869, 873–74 (Mo. App. S.D. 2018); see generally Antonin
Scalia & Bryan A. Garner, READING LAW: THE INTERPRETATION OF LEGAL TEXTS 147
(2012). The language of § 162.081.5 is very similar to the language of the statute at
issue in Norberg, which specified that the term “accounting officer” meant “the
county clerk, county comptroller, county auditor, accountant or other officer or
employee keeping the principal records of the county.” § 10934, RSMo 1939. The
Supreme Court held that the phrase “keeping the principal records of the county”
16
applied to all of the listed officers in the series, not just to the final phrase (“other
officer or employee”). Here too, the phrase “the special administrative board nor
any other form of governance appointed under this section” must be interpreted to
mean that the immunity provisions of § 162.081.5 apply only to governing bodies
“appointed under” § 162.081 itself.
The Special Administrative Board of the Transitional School District of the
City of St. Louis was not “appointed under” § 162.081. Instead, the Special
Administrative Board at issue here was appointed under § 162.1100, which provides
for a very different appointment process (three members, one appointed by the
governor, one by the mayor, and one by the president of the City’s board of
aldermen) than under § 162.081 (five or more members, all appointed by the State
Board of Education). Therefore, the specification in § 162.081.5, that “the special
administrative board . . . appointed under this section . . . shall [not] be deemed to
be . . . a state agency for [the] purpose [of] section 105.711,” does not apply to the
Special Administrative Board at issue in this case.4
The fact that the General Assembly expressly excluded other special
administrative boards from Legal Expense Fund coverage strongly suggests that
the opposite result should apply here, where no express statutory exclusion applies.
“The legislature's use of different terms in different subsections of the same statute
is presumed to be intentional and for a particular purpose.” State v. Moore, 303
S.W.3d 515, 520 (Mo. 2010) (citation omitted); accord, Alberici Constructors, Inc. v.
4 We recognize that § 162.081.5 was amended in 2019, to expressly apply not
only to a special administrative board, but also to “any other form of governance appointed
under this section.” See H.B. 604, 100th General Assembly, 1st Regular Session (2019).
But even before the 2019 amendment, § 162.081.5 was applicable only to “[a] special
administrative board appointed under this section.” § 162.081.5, RSMo 2016. Even under
this earlier version of § 162.081.5, the statement that “the special administrative board . . .
shall [not] be deemed to be . . . a state agency for [the] purpose [of] section 105.711” was
inapplicable to the Special Administrative Board of the Transitional School District of the
City of St. Louis.
17
Dir. of Revenue, 452 S.W.3d 632, 637 (Mo. 2015) (citing Moore); Am. Civil Liberties
U. of Mo. v. Ashcroft, 577 S.W.3d 881, 892 (Mo. App. W.D. 2019) (ascribing
significance to the “sharp contrast” between the powers given to the Secretary of
State to review referendum petitions under §§ 116.120 and 116.332). The fact that
§ 162.1100 does not expressly exclude Legal Expense Fund coverage for the Special
Administrative Board of the Transitional School District, when such an express
exclusion apparently applies to every other special administrative board which
might be established in Missouri, is significant.5
D.
In determining whether the Special Administrative Board of the Transitional
School District is an “agency of the state,” it is also significant to recall that this
unique entity has its genesis in the settlement of a lawsuit in which the State – not
just local entities – was held liable, and acknowledged its responsibility, for the
decades-long maintenance of racially segregated schools in the City of St. Louis.
Thus, when the Transitional School District was established by § 162.1100, it was
intended to discharge the State’s obligation to remedy the historical segregation of
St. Louis’ public schools; the TSD was not established merely as a mechanism to
enable local authorities to remedy a local problem.
As the Eighth Circuit recognized in reviewing the history of the
desegregation lawsuit:
In 1972, the plaintiffs brought an action against the Board of
Education of the City of St. Louis (City Board) alleging that the city
schools were segregated by race as a matter of state law and practice.
5 As explained in § I.B, above, special administrative boards appointed under
§ 162.081 are subject to substantially less State control than the Special Administrative
Board for the Transitional School District of the City of St. Louis. The legislature
nevertheless felt the need to specify in § 162.081.5 that these other special administrative
boards were not “agencies of the state” for purposes of Legal Expense Fund coverage. The
fact that the legislature felt it necessary to expressly exclude Legal Expense Fund coverage
for entities subject to lesser State control than the TSD, supports our conclusion that the
TSD is itself an “agency of the state.”
18
Thereafter, the State of Missouri was joined as a party defendant. We
. . . [held] that prior to 1865 the State prohibited the creation or
maintenance of schools for teaching black children to read or write and
that, after that date until 1980, the City Board and the State were
jointly responsible for maintaining a segregated school system. We
further noted that the City Board and the State failed to take effective
measures to desegregate the school system in the years immediately
following Brown v. Board of Education, 347 U.S. 483, 74 S. Ct. 686, 98
L. Ed. 873 (1954).
Liddell by Liddell v. Bd. of Educ. of City of St. Louis, 126 F.3d 1049, 1051–52 (8th
Cir. 1997) (other citations and footnote omitted). The enactment by the State of
§ 162.1100 “was a vital component of the settlement agreement disposing of the
federal desegregation litigation concerning St. Louis’ public schools.” Bd. of Educ.
of City of St. Louis, 271 S.W.3d at 10. The Missouri Supreme Court held that,
“‘[g]iven the long history of state-mandated, segregated schools [in Missouri], the
complexity of the issues, and the difficulty of developing a plan that will ensure that
students of all races will have a continuing equal opportunity for a quality,
integrated education’ the state possessed a substantial justification and an
important interest in reaching a settlement to dispose of the pending federal
litigation.” Id. (quoting Liddell, 126 F.3d at 1056).
In its order approving the settlement of the desegregation lawsuit, the
district court noted that Missouri’s Attorney General had personally appeared
before the court, and acknowledged the State’s responsibility for the segregation of
St. Louis’ public schools:
At the [settlement-approval] hearing, the Attorney General accepted
blame on behalf of the State for past segregation in its public schools
and apologized for this inequity. He noted that the continued funding
provided for by the state legislature in SB 718 was evidence that this
was not an empty apology.
Liddell v. Bd. of Educ. of City of St. Louis, No. 4:72CV100 SNL, 1999 WL 33314210,
at *3 (E.D. Mo. March 12, 1999); see also id. at *7 (“The Missouri Attorney General
has apologized in open court for past state constitutional transgressions.”).
19
The Transitional School District was created to remedy past wrongs
committed by the State, as part of the settlement of a long-running lawsuit in which
the State was a principal defendant. The TSD’s unique role in the resolution of the
St. Louis school desegregation litigation distinguishes it from every other school
district in the State, and supports our conclusion that it is an “agency of the state”
for purposes of § 105.711.
E.
In arguing for reversal, the State relies heavily on our decision in P.L.S. ex
rel. Shelton v. Koster, 360 S.W.3d 805 (Mo. App. W.D. 2011). P.L.S. addressed the
question whether a typical Missouri public school district (there, the Doniphan R-1
School District) qualified as an “agency of the state” for Legal Expense Fund
purposes. 360 S.W.3d at 808. P.L.S. concluded that the school district did not
constitute an “agency of the state,” and was therefore not entitled to Legal Expense
Fund coverage.
While the issue decided in P.L.S. has obvious superficial similarities to the
issue we address here, we conclude that P.L.S. is distinguishable, given the
radically different structure of the Transitional School District as compared to a
typical accredited Missouri district. P.L.S. recognized that school districts are “‘part
of state government,’” and that they are “governmental instrumentalities of the
state and serve important governmental purposes.” 360 S.W.3d at 813 (citations
omitted). The Court emphasized, however, that school districts are “political
subdivisions” of the state, and that, “like other political subdivisions authorized by
law, [school districts are] generally formed by the vote of the citizenry in the
geographic area desiring to establish the district.” Id. (citing § 162.211). “‘The
subdivision of the state into counties and school districts [is to] . . . enable the
people of the territory . . . to govern and manage their own local affairs.’” Id.
(citation omitted)
20
P.L.S. noted that “[t]he phrase ‘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.” 360 S.W.3d at 815. The Court observed that school districts did not
neatly fall within this conception of a “state agency”: “School districts are not
typically regarded as a division or department of state government, but, as already
mentioned, are considered legally separate, special-purpose, local governmental
subdivisions with powers similar to those of a town, village, or county, including the
ability to levy taxes.” 360 S.W.3d at 815. Despite the pervasive State regulation of
the functioning of public schools, the Court held that school districts were not
thereby rendered “state agencies”:
It is true that the school districts have a separate legal existence from
the municipalities and counties in which they are situated, and it is
true that the curriculum and various activities of school districts are
regulated in various ways by the state, but, as we have noted, the
school districts generally become a legal entity by the action of the
constituent voters, who also elect governing board members. The
school district voters thus share oversight of the school district with
the state board of education and the legislature. The district is
certainly not exclusively answerable to the governor and the
legislature. The hiring of employees, including bus drivers, the levying
of taxes, and so forth, are also subject to the control of the citizen
constituency in the district through their elected representatives.
Id. at 818 (footnote omitted).
The Court in P.L.S. expressed its concern that, if it held that the Legal
Expense Fund was responsible for defending and indemnifying tort claims brought
against the employees of a typical school district, then the Legal Expense Fund
would become responsible
for the defense and indemnity of employees of every public entity,
including every political subdivision, whether a county library, a school
district, a municipality, a public corporation, a sewer district, a village,
a township, and so forth, as well as every executive agency of the state.
In other words, the Commissioner of Administration would be quite
21
busy with coverage issues as to every governmental entity within the
state, from the tiniest sewer district to the largest municipality.
360 S.W.3d at 818-19.
The considerations animating our decision in P.L.S. are simply not present
here. While denominated a “political subdivision” of the State, the Transitional
School District was not “formed by the vote of the citizenry in the geographic area
desiring to establish the district.” Moreover, the purpose of the District’s creation
was not to “enable the people of the territory . . . to govern and manage their own
local affairs,” but instead to allow the State to remedy constitutional violations for
which the State was directly responsible. Moreover, in the Transitional School
District, “[t]he hiring of employees, . . . the levying of taxes, and so forth, are [not]
subject to the control of the citizen constituency in the district through their elected
representatives.” To the contrary, as we have explained above, the Transitional
School District is rendered exempt from many of the statutes governing the levying
of taxes in typical school districts; its superintendent (who has primary
responsibility for personnel decisions) is a gubernatorial appointee with a three-
year term who need not even be a district resident; and the school district’s
operating decisions are not subject to local control through the people’s elected
representatives. Finally, P.L.S.’s understandable concern that it would “open the
floodgates” and make the Legal Expense Fund responsible for every public entity in
the State is simply not implicated here: the Special Administrative Board of the
Transitional School District is a unique entity in the State, the sole member of a
class of one. Our holding that the actions of its employees are covered by the Legal
Expense Fund will have limited significance beyond the confines of this particular
entity (which has not operated the St. Louis Public School District since 2017).
Point I is denied.
22
II.
In its second Point, the State argues that the circuit court’s grant of summary
judgment was improper because a factual dispute exists as to whether S.M.H.’s
abuser (former teacher Allen Merry) tendered defense of S.M.H.’s lawsuit to the
State.
Section 105.716.2 requires persons covered by the Legal Expense Fund to
cooperate with the State’s investigation and defense of any claim:
All persons and entities protected by the state legal expense
fund shall cooperate with the [State] attorneys conducting any
investigation and preparing any defense under the provisions of
sections 105.711 to 105.726 by assisting such attorneys in all respects,
including the making of settlements, the securing and giving of
evidence, and the attending and obtaining witness to attend hearings
and trials. Funds in the state legal expense fund shall not be used to
pay claims and judgments against those persons and entities who do
not cooperate as required by this subsection.
“Essential to any such cooperation is that the defense of a claim be tendered
to the attorney general so the attorney general can control the defense and
settlement of covered claims as the statute requires.” Vasic v. State, 943 S.W.2d
757, 759 (Mo. App. E.D. 1997). “The failure of a defendant to tender defense to the
Attorney General and cooperate with the Attorney General in his defense prevents
payment from the Fund.” Sherf v. Koster, 371 S.W.3d 903, 908-09 (Mo. App. W.D.
2012) (citing Vasic).
In support of her summary judgment motion, S.M.H. submitted two
exchanges of correspondence to establish that Merry had, in fact, tendered defense
of S.M.H.’s claims to the State. In the first exchange, from 2015, her attorney wrote
by e-mail to the Solicitor General in the Office of the Attorney General. In his e-
mail, S.M.H.’s counsel stated that “[i]t is our understanding that Allen Merry has
requested the Attorney General’s Office defend him in [S.M.H.’s] litigation, and he
has tendered his defense to your office. [¶] Has the office made a coverage
23
determination . . .?” In response, the Solicitor General stated that “we declined Mr.
Merry’s request, telling him that the case did not fall within LEF coverage.”
The second exchange of correspondence occurred in 2018, before the circuit
court’s entry of a default judgment against Merry. In a January 26, 2018 letter to
the Attorney General, S.M.H.’s counsel wrote:
[Merry’s] defense has been tendered to your office on no fewer
than two occasions. We have written you on numerous occasions
affording your office ample opportunity to enter an appearance on his
behalf. We requested numerous continuances in furtherance of those
efforts. He is now in default.
We have filed the enclosed Motion for Default Judgment and
Entry of Judgment. On March 6, 2018 at 10:30 a.m., the Motion will
be heard and ruled upon in Division 20. The Court will hold a hearing
on damages only.
We will then make a demand on the Missouri State Treasurer
and the Legal Expense Fund for the damages awarded to our client.
This is your last opportunity to enter an appearance on behalf of Mr.
Merry.
The Attorney General’s First Assistant and Solicitor responded on March 2, 2018:
As you know, during Attorney General Koster’s tenure, [which ended
on January 1, 2017,] then-Deputy Attorney General Joseph
Dandurand concluded that the State Legal Expense Fund (“LEF”) does
not provide coverage to Mr. Merry. In particular, Judge Dandurand
concluded that Mr. Merry was not an “officer or employee of the State
of Missouri or any agency of the state.” § 105.711.2(2), RSMo. In
response to your recent correspondence, we have reexamined this
coverage issue, and we have reached the same conclusion as did Judge
Dandurand. Thus, our Office will not approve any payments out of the
LEF to satisfy a judgment against Mr. Merry, nor will our Office
represent Mr. Merry in the above-captioned litigation.
In its response to S.M.H.’s summary-judgment motion, the State did not
dispute the veracity of the correspondence on which S.M.H. relied to prove that
Merry had made an adequate tender. Instead, the State submitted the affidavit of
an Executive Secretary in the Attorney General’s Office, who had begun her
employment in the office in June 2018. The Executive Secretary stated that her
24
duties included serving “as custodian of the records recording communications
related to incoming civil matters submitted to the Office of the Attorney General.”
The Executive Secretary testified that the records in her custody “begin in 2009 and
go to December 20, 2018.” The Executive Secretary testified that she had searched
the records in her custody, and found “no record of Allen P. Merry communicating
with the Office of the Attorney General,” and “no record of Allen P. Merry tendering
any defense with the Office of the Attorney General.”
The State argues that this record creates a genuine issue of material fact
concerning whether Merry satisfied his statutory obligation to tender the defense of
S.M.H.’s claims to the State. We disagree. S.M.H.’s summary judgment evidence
established that Merry had requested a defense of S.M.H.’s claims from the State in
2015, but that his request was refused based on the Attorney General’s
determination that Merry was not covered by the Legal Expense Fund. The 2018
correspondence confirmed that the Attorney General’s Office had made a “no-
coverage” determination prior to 2017, and that, immediately before the default-
judgment hearing, the Office persisted in the view that S.M.H.’s claims were not
covered by the Legal Expense Fund.
Thus, S.M.H.’s evidence establishes that the State was given a timely
opportunity to assume Merry’s defense, but instead made (and persisted in) a
determination that Merry was not covered by the Legal Expense Fund. This was
sufficient to establish, as a matter of undisputed fact, that Merry had tendered the
defense of S.M.H.’s claims to the State.
The affidavit submitted by the State in opposition to S.M.H.’s motion did not
dispute S.M.H.’s evidence, or create a disputed factual issue requiring a trial. The
State’s affidavit merely established that no record of Merry’s tender of S.M.H.’s
lawsuit could be located within a file or database of “communications related to
incoming civil matters.” The State’s affidavit did not contest the authenticity of the
25
correspondence S.M.H. submitted – it only indicated that copies of that
correspondence could not be located in a particular records management system
within the Attorney General’s Office.
In these circumstances, the circuit court did not err in concluding that S.M.H.
had established, as a matter of undisputed fact, that Merry had tendered the
defense of S.M.H.’s claims to the State, as required by § 105.716.2.
Point II is denied.
Conclusion
The judgment of the circuit court is affirmed.
_______________________________________
Alok Ahuja, Judge
All concur.
26