June 28, 2016

Mostly clear

Stepp files lawsuit against school board in federal court (Updated with text of lawsuit complaint)

Full text of lawsuit complaint

Press release issued by Stepp’s attorneys

Kiera Manion-Fischer and David Knox

Medina City Schools Superintendent Randy Stepp has filed a federal lawsuit charging school board members and other district officials with breach of contract, defamation and invasion of privacy.

The suit was filed Friday in U.S. District Court, Northern District, in Cleveland.

Named as defendants are school board President Karla Robinson and board members Susan Vlcek, Doug Adamczyk and William Grenfell; James Shields, the school district’s general counsel; and district Treasurer James Hudson.

Randy Stepp

Stepp was placed on paid leave April 8 pending completion of a special state audit of his use of a district “carryover fund” held by the Medina County Schools’ Educational Service Center.

On April 16, the school board rescinded Stepp’s new contract, arguing it was not valid because the board had violated the state’s open meeting law by failing to properly publicize the Jan. 7 meeting where it was approved.

The actions followed a public furor over the new contract, which provided Stepp an $83,000 “retention” signing bonus, and subsequent publicity about earlier contracts that obligated the district to pay for Stepp’s old college loans and for a master’s of business administration.

School board members have said they did not know the full cost of Stepp’s educational expenses, which totaled more than a quarter-million dollars.

A November 2011 amendment to Stepp’s 2009 contract provided for payment of “past academic degrees.” The following January, Stepp directed the county Educational Service Center to write a $172,000 check to the U.S. Deparment of Education to pay off his old college loans for his bachelor’s master’s and doctorate degrees in education from Ashland University.

The ESC fund also was used to pay more than $94,000 for his MBA degree from Case Western Reserve University, awarded in 2012.

Stepp’s lawsuit charges that the board was fully aware of the full cost of the contract provisions but falsely claimed ignorance in a March 22 press release.

“Before the press release was forwarded to the news outlets, however, Stepp had forwarded to the Board of Education his 2011 email communications with Vlcek and Shields discussing the cost of Stepp’s past academic degrees, the fact that the amendment applied to Stepp’s three past academic degrees, and the fact that payment would be made out of the ESC,” the lawsuit states.

In the emails and telephone conferences, Stepp had “estimated the cost of his past academic degrees at $150,000 to $175,000, and Stepp, Vlcek and Shields discussed the fact that the costs would be reimbursed from the Educational Service Center,” the suit states.

“Notwithstanding its falsity, the Board of Education issued the press release signed by all of the members of the Board at the time, including Vlcek, Robinson and Grenfell, and it was reprinted verbatim by The Medina Gazette and widely reported by other news outlets.”

The March 22 press release from the board was in the form of answers to questions sent to board members by The Gazette.

Asked “When the board agreed to pay the cost of Dr. Stepp’s past education, did you have a general idea of how large the bill would be?,” the board responded:

“The Board of Education encouraged Dr. Stepp’s education and professional development. The Board of Education was aware that Dr. Stepp was receiving tuition reimbursement. The Board was not aware of the extent of the reimbursement or that it applied to all degrees.”

The lawsuit charges Shields, the district’s general counsel, told board members, the district’s director of community relations and the Medina City Teacher’s Association that he did not believe the 2011 contract amendment was intended to authorize the reimbursement of Stepp’s costs for the past degrees.

The lawsuit said the statement “placed Stepp in a false light, namely, that Stepp acted improperly in relation to reimbursement for past academic degrees.”

The lawsuit does not state exactly when Shields made that statement.

The lawsuit also charges the district illegally reduced Stepp’s paycheck.

After the board rescinded Stepp’s contract, Hudson sent Stepp a letter April 23 saying he was “reducing his pay to the pre-2013 Contract level, and demanding that Stepp return the retention bonus,” according to the lawsuit.

Stepp announced at a March 8 board meeting that he had agreed to give back the bonus.

“The board did not ask me to give back that $83,000,” Stepp said at the meeting. “That was my choice. I offered it. I volunteered.”

But the lawsuit stated that the board pressured Stepp into volunteering to repay his bonus and forego merit raises and that he had reserved the right to rescind the offer “should the environment change or unforeseen circumstances arise.”

The lawsuit stated Stepp was revoking those offers and demanding both to keep the bonus and to receive promised “merit-based performance bonuses.”

In addition to allegations of illegally breaking the contract, the lawsuit seeks damages for “breach of contract, as well as damages for the injury to Dr. Stepp’s reputation and standing in the community, humiliation, mental anguish and suffering, as well as lost income and future earning capacity,” according to a press release from Stepp’s attorneys, David Drechsler and Michael J. Matasich of the Akron law firm of Buckingham, Doolittle and Burroughs.

The press release quotes Stepp saying, “I have put my heart and soul into serving the children and families of this district over the last 11 years and, by all accounts, I have been doing that job well.

“Without question, this is absolutely the last thing I ever wanted to see happen — but I was left with no other choice.”

The press release adds that Stepp “will not comment further on any aspect of this situation while litigation is ongoing.”

John Leatherman, president of the teachers’ union, responded Sunday to the lawsuit.

“I have to say, after spending time reviewing mounds of records and receipts, I don’t see how, with the frivolous spending of Mr. Stepp, he can claim to have put his heart and soul into serving our children and families,” he said.

The suit does not specify a dollar amount that Stepp seeking in damages.

But in addition to “the amount of the full value of the 2013 contract” — which was estimated by the teachers’ union to be worth $1.2 million — Stepp also is asking for “compensatory damages including, but not limited to, lost income, lost earning capacity, reputational damage, damage to his standing in the community, humiliation, mental anguish and suffering, and other money damages and special damages against the Board of Education, as well as against Vlcek, Robinson, Grenfell, Adamczyk, Shields and Hudson in their individual capacities.”

The suit also seeks punitive damages against Vlcek, Robinson, Grenfell, Adamczyk, Shields and Hudson, along with attorneys’ fees, interest and court costs.

Board President Karla Robinson declined to comment, saying she hadn’t yet had a chance to read the lawsuit.

“I just don’t feel comfortable commenting on something I haven’t seen,” she said. “We have to confer with our attorneys before we would comment on anything like that.”

Robinson said the board would discuss the lawsuit in executive session following today’s board meeting. Ohio’s open meetings laws allow public boards to discuss pending litigation in sessions closed to the public.

Adamczyk also said he was unable to comment because he had not yet seen the lawsuit.

None of the other school officials named in the lawsuit returned calls seeking comment Sunday.

Contact reporter Kiera Manion-Fischer at (330) 721-4049 or kfischer@medina-gazette.com and David Knox at (330) 721-4065 or dknox@medina-gazette.com.

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The Gazette is Medina County's daily local news source, serving the community since 1832. Contact The Gazette's news department at (330) 721-4065 or areanews@medina-gazette.com.