recommended for publication in the official reports.
from an order of the Cir. Ct. No. 2010CV7338 for Milwaukee
Kessler, P.J., Brash and Dugan, JJ.
J. DIMOTTO, JUDGE.
KESSLER, P.J. Edward Towle appeals an order of the circuit
court granting summary judgment to Deborah Kerr, the Board of
Education of the School District of Brown Deer, and the
School District of Brown Deer. Towle contends that the
circuit court erred in finding that the defendants did not
breach Towle's contract when he was placed on an
administrative leave, that Towle's constitutional
property and liberty interests were not violated, that the
defendants did not violate a duty of good faith and fair
dealing, and that the defendants did not tortiously interfere
with Towle's contract or prospective contracts. We
Towle was the business manager for the School District of
Brown Deer from February 2007 through June 30, 2010.
Towle's final contract with the District ran from July 1,
2008 through June 30, 2010. On February 9, 2009, Kerr, as the
superintendent of the District, placed Towle on paid
administrative leave pending an investigation into financial
irregularities. Specifically, the District was investigating:
(1) insufficient funds in the District's bank account;
(2) wire transfers by unauthorized persons while Towle was
out sick; (3) procedures for obtaining draw requests on the
District's line of credit; and (4) disorganization.
On February 10, 2009, Kerr met with Kara Schuerman, the
president of the Brown Deer Education Association (BDEA).
Towle, as business manager of the District, was a member of
the District's bargaining team and had frequent contact
with the BDEA. The District and the BDEA were in the process
of labor negotiations. Kerr informed Schuerman that Towle was
placed on administrative leave pending an investigation into
financial irregularities. Kerr suggested that Schuerman
inform the BDEA that Towle was on leave to prevent
miscommunication during labor negotiations.
Schuerman subsequently sent the following email to the eleven
members of the BDEA:
I was asked to inform you, on behalf of Dr. Kerr, that our
business manager Edward Towle has been placed on
administrative leave for irregular accounting and business
Dr. Kerr is investigating details and working with the
[Department of Public Instruction] to perform necessary
budget predictions (a budget will be presented to the Finance
Committee March 9th). She has some ideas as to interim
business manager possibilities but we are not at that point
Dr. Kerr felt it important that you are made aware of the
issue as you will certainly hear rumblings in your building
and the community. We have no more
information other than the above first statement. If you have
any questions, please don't hesitate to ask me.
On February 13, 2009, counsel for the District informed
Towle's counsel of the specific areas of investigation.
Towle's counsel responded to the letter addressing the
District's concerns and then met with District officials
to discuss the concerns. On March 30, 2009, a public auditing
firm, Virchow, Krause & Company, LLP, sent the District
the results of its independent investigation. The report
identified irregular findings in multiple areas, including,
but not limited to, cash management, food service claims, and
budget variances. Towle continuously requested to return to
work, however, Kerr maintained Towle's administrative
Towle's counsel then suggested that Kerr write letters of
reference for Towle so that Towle could seek employment
elsewhere. On May 22, 2009, Kerr and Towle signed a
"Memorandum of Understanding," in which Kerr agreed
to provide Towle with letters of reference for other
employment opportunities and Towle agreed not to use those
letters in future litigation. Kerr and Towle also entered
into a "Tolling Agreement" regarding any injuries
alleged by Towle, giving Towle additional time to find new
employment without filing a notice of claim.
In the months that followed, Kerr provided multiple reference
letters on Towle's behalf, but Towle did not obtain
employment. In July 2009, Towle filed a notice of claim with
the District, seeking reinstatement and various damages. On
November 3, 2009, Kerr provided Towle with a notice that the
Board of Education of the School District of Brown Deer (the
Board) was considering non-renewal of Towle's contract.
On November 9, 2009, the Board denied Towle's claim. The
following day, Kerr filed charges against Towle with the
Board and sought termination of Towle's employment.
In January 2010, the parties attempted mediation, which was
unsuccessful. At the end of the month, Kerr sent a letter to
the Board president stating that the District no longer
wished to terminate Towle, but that it wished to proceed with
non-renewal proceedings. A hearing on Kerr's request for
non-renewal was ultimately scheduled for April 2010.
In the interim, Towle applied for a business manager position
with the Grayslake School District in Illinois. Kerr provided
Towle with a reference letter and Towle was offered the
position. On April 7, 2010, Towle signed a contract with the
Grayslake School District. Five days later, Towle submitted a
letter of resignation to the School District of Brown Deer.
Towle stated his effective resignation date as July 1, 2010.
The Board accepted Towle's resignation and the
non-renewal hearing was cancelled. Towle continued to receive
all economic benefits under his District contract through
June 30, 2010.
Following Towle's resignation letter, local media ran a
series of articles about Towle's administrative leave,
resignation, and payment. The Grayslake School District
rescinded Towle's offer. Kerr subsequently issued a
statement stating, as relevant:
Mr. Towle was hired before I assumed this position, and his
contract was extended in June 2008 for a two-year period.
However, I placed Mr. Towle on paid administrative leave
pending an investigation into serious concerns about
operations in the Business Office. After discussing this
matter with the Board and our legal counsel, we followed the
terms of his ...