Kenai school district drops suit against fired teacher, says he wasn't dishonest

The Kenai Peninsula Borough School District dropped its lawsuit against Matthew Fischer in October, ending a dispute of more than 10 years over repaying the district's health plan after a 2015 car crash. On Oct. 23, the state court paid Fischer the $367,677 it had been holding.

The district fired Fischer, a Skyview Middle School teacher, in December 2022. Its dismissal letter said he hadn't reported his insurance settlements to the plan administrator and had "withheld and misappropriated" the district's trust funds, Among its grounds was immorality, which the letter tied to a theft offense.

In a statement posted Tuesday, the district said Fischer "gave notice to the district and its third-party health care administrator" of his settlements and "did not act in any fraudulent or dishonest manner in his representation of health care costs owed to the district." It said it regrets the stress the process caused him and recognizes his longstanding service to his students.

The statement refers to itself as a release that the mediator and the district's independent litigation counsel developed to settle any related claims with finality. It is not a court finding, and no court ruling in the record found fraud. The statement gives no dollar figures.

The crash and the bill

In November 2015, a crash caused by another driver broke Fischer's femur. The district's self-funded health plan, which the district and its employees both pay into, covered his medical claims. He later received $500,000 from two insurers: $300,000 from USAA and $200,000 from State Farm.

The plan requires repayment from recoveries like those. Fischer twice asked the district to waive some or all of it, and it did not agree. The district billed him about $164,000 in May 2018 and sued him in February 2019.

In court

The superior court found Fischer broke his contract with the health plan, and the Alaska Supreme Court upheld that finding on May 24, 2024. It rejected his argument that the district waived repayment by waiting more than two years after learning of his first settlement, and his argument that it failed to limit its losses.

But the justices also ruled that Fischer had raised a real dispute over which costs came from the crash, saying the plan administrator's sworn statement didn't explain how the district tied his treatment to the accident. Fischer argued no more than about $106,000 was related. A later order said the ruling "necessarily voided" the final judgment against him and that attorney fees would be decided again. No court ever set a new amount.

Fischer argued in the trial court that the suit was meant to "impugn [his] character and render [him] ineffective as a negotiator on the Health Care Committee for the Teacher's Union." The Supreme Court's opinion notes the claim without ruling on it.

The money

The $367,677 matches an amended judgment entered against Fischer in February 2023, which included about $164,000 in damages, $58,000 in interest and $138,000 in attorney fees, plus costs.

After the Supreme Court ruling, Fischer asked the court to return the money, and the district asked it to hold the funds in trust. The court sided with the district in May 2025, and the money went into the court registry that June, listed as received from the Kenai Peninsula Borough. The records don't show how it was collected.

How it ended

In June, the trial court granted the district's request for a settlement conference or other dispute resolution, and a mediation was set for Sept. 24. The district told the Supreme Court on Oct. 5 that the case was resolved, and the justices dismissed a petition Fischer had pending there.

On Oct. 19, the district's attorney filed agreements to dismiss the case with prejudice, which bars the district from refiling the same claims, and to release the money. Judge Kelly Lawson approved both Oct. 22, and the check went to Fischer the next day.

What isn't public

Board agendas and posted minutes reviewed show no vote on the settlement, though minutes from a Nov. 2 meeting that listed a closed session "if needed" aren't posted yet, and the statement doesn't name Superintendent Clayton Holland or board President Jason Tauriainen. The full terms, whether the district recovered any money and what it spent on more than seven years of litigation aren't in the public record. The $138,000 fee award came in 2023, before the appeal and the rest of the case. Fischer's view of the settlement isn't in the public record.