Case Title: Shields v. Gerhart

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1989-03-01T00:00:00Z

Document:
NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-148


Carol Shields                                Supreme Court

     v.                                      On Appeal from
                                             Addison Superior Court
Rolland Gerhart, et al.
                                             March Term, 1989


Linda Levitt, J.

William A. Hunter, Ludlow, for plaintiff-appellee

Jeffrey L. Amestoy, Attorney General, and Ron Shems, Assistant Attorney
  General, Montpelier, for defendants-appellants


PRESENT:  Allen, C.J., Peck, Gibson, and Dooley, JJ.


     DOOLEY, J.   This is a civil rights action in which the plaintiff,
Carol Shields, alleges that defendants, the Vermont Department of Social and
Rehabilitation Services (SRS) and three employees of the department, revoked
her license to run a day-care center in retaliation for her activities in
opposing an SRS policy against the use of corporal punishment in licensed
day-care facilities.  This interlocutory appeal is brought from the opinion
and order of the trial court denying defendants' motion to dismiss.  We
affirm.
     Plaintiff was licensed to run a day-care facility in her home in 1978
in accordance with 33 V.S.A. {{ 2752(2), 2852(9).  Between 1978 and
September, 1981 when she applied for a new license because she was moving
her home and the facility, plaintiff and SRS disagreed over plaintiff's use
of physical discipline on children in her day-care facility.  In November of
1981, plaintiff was notified orally that a new license would not be granted
unless she ceased using corporal punishment.  At that time, SRS had in
effect regulation 124.40, which prohibited "cruel, severe, unusual or
unnecessary punishment" of children in licensed day-care facilities.  SRS
interpreted the legislation to prohibit corporal punishment.  Plaintiff was
a vociferous opponent of this SRS interpretation.  She argued against it in
the press and before the Legislature.
     In January of 1982, plaintiff formally applied for a new license for
the relocated facility and was denied in March.  Despite the denial, she
operated a day-care center without a license until she received notice of a
violation of SRS licensing requirements.  She again applied for a license
and was denied.  This time she appealed and was allowed to operate pending
the appeal.  She prevailed on appeal and was licensed through June, 1984.
     In April, 1984, plaintiff applied for a renewal of her license, and she
was visited by Durwood Collier and Frederick Satink, SRS employees and
defendants in this action.  During this visit, defendants noticed effluent
rising to the surface in plaintiff's yard, near where the children played.
Plaintiff told the inspectors of a problem with her septic system and that
arrangements had been made to correct the problem as soon as the ground was
dry enough.  Plaintiff's correction plan had been approved by the local
health official.
     At this point, the parties' factual versions differ substantially, and
the presence of differing facts before the court is itself a matter of
dispute between the parties.  Although we are reviewing a motion to dismiss,
defendant attached to the motion extensive factual material.  Plaintiff
responded to the motion, arguing in part that the factual material could not
be considered.  The court below denied summary judgment without giving
plaintiff an opportunity to respond to the factual material. FN1.  Although the
court described the motion as one for summary judgment, it did not attempt
to resolve the various factual disputes.  In view of this confused record,
we have taken the facts from plaintiff's complaint.  This version is denied
by defendants.  We have also reviewed the deposition and affidavits
submitted by defendants and do not believe that consideration of this
         material would affect the outcome of the narrow issues before this Court.
     At the inspection, the two SRS inspectors indicated that plaintiff's
license could be revoked because of the septic system failure, but that the
septic system problem would not be an impediment to plaintiff running a
registered family day-care home.  Thereafter, plaintiff applied to be a
registered day-care home and did not disclose the septic system problem on
the application.  Defendant Satink again visited plaintiff on May 18, 1984.
He stated that plaintiff would never be registered or licensed because she
had failed to disclose the septic system failure on the application; that
she could not receive a hearing on this denial, or, if she did, she could
not operate pending the hearing; and, that if she continued to pursue her
application, she would be required to put in a mound system at a cost of
$7,000 to $10,000.  He asked to enter plaintiff's home, and she refused.
     As a result of defendant Satink's visit, plaintiff mailed a letter to
SRS relinquishing her facility license as of May 25, 1984.  The letter was
mailed on May 21 or 22, 1984, and received on May 24, 1984.  On May 22,
1984, defendant Roland Gerhart, Director of the Division of Licensing and
Regulation of SRS, mailed to plaintiff a notice that her license was revoked
as of June 24, 1984, and her application to be registered was denied.  The
decision was based on four grounds including the septic system failure and
plaintiff's refusal to admit defendant Satink into her home on May 18th.
     Plaintiff sued on May 19, 1987, and commenced the action by serving the
Deputy Attorney General pursuant to V.R.C.P. 4(d)(2).  Service was accepted
with a notation that acceptance was for defendants in their official
capacity only.  The complaint alleged that defendants had violated
plaintiff's rights under the United States Constitution (FN2) and sought relief
under the Civil Rights Act, 42 U.S.C. { 1983 (1982), for damages caused by
these violations.  The complaint further alleged that defendants had
violated her rights under the Vermont Constitution (FN3) and sought damages for
these violations.  In essence, plaintiff's position is that defendants
revoked her day-care facility license in retaliation for her opposition to
the corporal punishment policy and that they used fraud and deception to
induce her to abandon her license and forego her appeal rights.
     Defendants answered the complaint and filed their motion to dismiss on
three grounds: (1) plaintiff's Civil Rights Act claims are time-barred
because they were not brought within the three year period allowed by 12
V.S.A. { 512(4); (2) her claims under the Vermont Constitution are time-
barred for the same reason; and (3) defendants are immune from liability in
this suit.  Defendants attached to the motion the deposition of plaintiff,
along with various exhibits, and a number of affidavits.  Plaintiff
responded, in part, by seeking to amend the complaint to name defendants "in
their individual capacities."  The trial court granted the motion to amend 
(FN4) and denied the motion to dismiss, treating it as a motion for summary
judgment.  Defendants raise here the same grounds for dismissal that they
urged in the trial court, adding that the trial court misallocated the
burden of proof on the immunity question. (FN5) 
     The first issue deals with the statute of limitations for the Civil
Rights Act claims.  Defendants allege that the causes of action accrued on
May 18, 1984, or earlier, and since the applicable limitation period is
three years and plaintiff filed the complaint on May 19, 1987, the action
must be dismissed.  The trial court agreed that the applicable limitation
period is three years but held that the cause of action did not accrue until
June 24, 1984, when plaintiff was required to close her day-care center.
     In Wilson v. Garcia,