Opinion
No. 632 M.D. 2011
05-23-2012
Chester Community Charter School, Petitioner v. Commonwealth of Pennsylvania, Department of Education, Secretary of Education, Chester-Upland School District, and Chester-Upland School District Board of Directors, Respondents
BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE ROBERT SIMPSON, Judge HONORALBE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY PRESIDENT JUDGE PELLEGRINI
Before this Court is an Application for Summary Relief filed by Chester Community Charter School (Chester School) in support of its Petition for Review in the Nature of a Complaint in Equity seeking to obtain funds due from the Chester-Upland School District (School District) for school year 2011-2012 that were not withheld by the Secretary of Education (Secretary). For the reasons that follow, the Application is denied.
Applications for summary relief are governed by Pa. R.A.P. 1532(b), which provides: "At any time after the filing of a petition for review in an appellate or original jurisdiction matter the court may on application enter judgment if the right of the applicant thereto is clear." "In ruling on application for summary relief, we must view the evidence of record in the light most favorable to the non-moving party and enter judgment only if there is no genuine issue as to any material facts and the right to judgment is clear as a matter of law." Central Dauphin School District v. Department of Education, 598 A.2d 1364, 1366-67 (Pa. Cmwlth. 1991).
As in Chester Community Charter School v. Commonwealth of Pennsylvania, et al, (No. 135 M.D. 2009), Chester School is seeking payment for underfunding of its charter school. Unlike in that case, where the underlying issue was the amount Chester School should have received for prior school years (1998-2007) for special education, this case focuses not on the amount that it should receive but rather on funding for the current school year, 2011-2012, that has not been paid because there are not funds available to pay Chester School.
On December 28, 2011, Chester School filed a Petition for Review in the Nature of a Complaint in Equity alleging that during the current 2011-2012 school year, it was not receiving the public funds on which it depended to meet its financial obligations. It claimed that for ten consecutive months as of the date of the filing of the Petition, the School District had refused to release the statutory funds that were due and owing pursuant to Section 1725-A(a)(5) and (6) of the Charter School Law and instead was converting them for its own use to the detriment of Chester School. Chester School alleged that it was undisputedly owed $3,862,983.40, and entitled to receive approximately $18 million more for the balance of the 2011-2012 school year. Chester School sought a declaratory judgment, writ of mandamus, permanent injunction and other equitable relief against the School District, the Department of Education (Department) and the Secretary.
Act of June 19, 1997, P.L. 225, 24 P.S. §17-1725-A(a)(5) and (6), added by the act of June 29, 2002, P.L. 524. The Charter School Law amended the Public School Code of 1949, Act of March 10, 1949, P.L. 30, as amended, 24 P.S. §§1-101-37-2702.
The complaint originally had seven counts: Count I - Mandamus (regarding an order to remit all due and owing funding); Count II - Declaratory Judgment (declaring that the Commonwealth Respondents violated the Charter School Law by not remitting full payment to Chester School for all outstanding months); Count III - Permanent Injunction (permanently enjoining the Commonwealth Respondents from failing to remit funding to Chester School for all months that are presently due and owing); Count IV - Mandamus (regarding calculation of the Charter School's lease); Count V - Mandamus (compelling the School District to remit all funding due and owing to Chester School for all past due months); Count VI - Declaratory Judgment (declaring that the School District violated the Charter School Law in March through December by failing to remit full funding to Chester School on the fifth day of each month); and Count VII - Permanent Injunction (permanently enjoining the School District from failing to fully fund Chester School on the fifth day of each month). Subsequent to filing its Petition, Chester School filed a supplement to its Application for Summary Relief and withdrew Counts III and IV. The net effect is that they are not seeking an order seeking funds that it may be due in the future.
Chester School then filed an Application for Summary Relief which is presently before this Court requesting that the School District and/or the Department be required to remit it those funds. It argues that a mandamus order is appropriate because under 24 P.S. §17-1725A(a)(5), the School District has a mandatory duty to make monthly payments to a charter school, and if the School District fails to make the payment, once the charter school provides the estimated amount of payment, the Secretary is required to deduct the estimated amount from payments to the School District and pay the charter school. Notwithstanding this clear statutory mandate, it contends that the School District has failed to remit full statutory funding to Chester School by the fifth day of every month for 11 consecutive months (March 2011 through January 2012). It also contends that it has provided the Secretary with the estimated amount that it has been underpaid with supporting documentation but the Secretary has refused to withhold the funds and that an order in mandamus directing the Secretary should be issued.
It also filed an Application for a Special and Preliminary Injunction which this Court denied by order dated January 30, 2012.
For a charter school to seek redress for underpayment of funds, the procedures set forth in Section 1725(a)(5) & (6) of the Charter School Law provides the sole and exclusive remedy. Chester Community Charter School v. Department of Education, 996 A.2d 68 (Pa. Cmwlth. 2010) (Chester I). Under those provisions, if a school district does not make its required statutory payments, the Secretary, upon notification by the affected charter school, shall deduct the estimated amount as documented by the charter school from any and all state payments made to the school district. Simply, if funds are available, the Secretary has no discretion to decline to withhold the estimated amount of payment from a school district. If it disagrees with the withholding, a school district has 30 days to challenge the accuracy of the estimated amount withheld and require the Secretary to provide it with a hearing on the propriety of the estimated deduction. Under this statutory scheme, if the Secretary does not withhold the funds in response to the charter school asking him to deduct the funds with proper documentation, because it is a non-discretionary act, we would order in mandamus the Secretary to withhold the funds triggering the school district's right to appeal. Similarly, once the school district appeal has been resolved, the Secretary is then required to remit those funds.
Sections 1725(a)(5) and (6) provide:
(5) Payments shall be made to the charter school in twelve (12) equal monthly payments, by the fifth day of each month, within the operating school year. A student enrolled in a charter school shall be included in the average daily membership of the student's district of residence for the purpose of providing basic education funding payments and special education funding pursuant to article XXV. If a school district fails to make a payment to a charter school as prescribed in this clause, the secretary shall deduct the estimated amount, as documented by the charter school, from any and all State payments made to the district after receipt of documentation from the charter school.
(6) Within thirty (30) days after the secretary makes the deduction described in clause (5), a school district may notify the secretary that the deduction made from State payments to the district under this subsection is inaccurate. The secretary shall provide the school district with an opportunity to be heard concerning whether the charter school documented that its students were enrolled in the charter school, the period of time during which each student was enrolled, the school district of residence of each student and whether the amounts deducted from the school district were accurate.
While acknowledging that they owe money, the School District and the Department argue that issuing a mandamus order directing the Secretary to withhold funds for Chester School is seeking, at best, the execution of an impossible duty. They contend that if we order that the funds be withheld that the School District claims it is owed, it would become impossible for the Department to avoid the School District's closure because the remaining appropriation would be inadequate. In addition to the closure of the School District, they argue that to permit Chester School to collect all that it claims it is due is not a clear right under the Charter School Law because such a statutory construction would be absurd or unreasonable.
While mandamus will lie to compel performance of a ministerial act or mandatory duty, Germantown Business Association v. City of Philadelphia, 534 A.2d 553, 554 (Pa. Cmwlth. 1986), in this case, to withhold funds, "[i]t is a fundamental principle that mandamus will not issue, as a rule, where it is apparent that the writ will be futile or ineffectual by reason of the inability of the respondent to comply therewith." Commonwealth ex. rel. McLaughlin v. Erie County, 375 Pa. 344, 350, 100 A.2d 601, 604 (1953). "Although want of funds may not be conclusive ground against issuing the writ, and may not always prevent such issuance, the court in its discretion may refuse the remedy if it is satisfied that the respondent has not the necessary money or the means of procuring it to comply with the mandate." Id. See also Board of Commissioners of the County of Schuylkill v. Kantner, 26 A.3d 1245 (Pa. Cmwlth. 2011); Township of Forks v. Forks Township Municipal Sewer Authority, 759 A.2d 47 (Pa. Cmwlth. 2000); Board of Commissioners of Potter County, et al v. Turner, 382 A.2d 1248 (Pa. Cmwlth. 1978).
A corollary to whether the respondent refuses to perform its statutory duty is its defense of impossibility. In Cabell v. City of Hazelton, 506 A.2d 1001, 1003 (Pa. Cmwlth. 1986), we explained that defenses to an action in mandamus followed those in a civil action which included the affirmative defense of impossibility of performance. See Pa. R.C.P. No. 1030.
The dissent contends that impossibility of performance is not a defense to the issuance of a mandamus because the Department is not arguing that there are insufficient funds to withhold, but only that if the money is withheld, Chester School will have to close. Closure of the public schools, the dissent posits, is an insufficient defense and mandamus should issue. What the dissent overlooks is that Chester School, on April 12, 2012 after the briefs were filed and shortly before oral argument, filed a supplement to its application for summary relief. In that supplement, Chester School increased the amount it contends that should be withheld from approximately $6.9 million (Chester School Brief at p. 10 ) to approximately $19.6 million (Summary Relief Supplement at ¶ 25). In its opposition to the original motion for summary relief, the Department attached this Court's denial of Chester School's application for a preliminary injunction in this matter which provided at paragraph 47 of the finding of facts that:
47. The monthly budget of the School District is approximately $8,000,000. Much of the School District's funds are received in the early months of the school year from real estate taxes. In July 2011, the School District received federal funds that had been withheld by the Department from the 2010-2011 school year funding. In July, 2011, the School District began to receive funds from the Department for the 2011-2012 school year funding. (H.T. at 160-161.) The total amount of funds received from the Department for the current fiscal year is less than $15,000,000. (H.T. at 162.) Approximately $5,000,000 of those funds consisted of federal funds. (H.T. at 163.) Federal funds are not passed through as payment to charter schools. (H.T. at 163.)
A motion for summary relief may be granted only where no material fact is in dispute and the right of the moving party to relief is clear. Pa. R.C.P. No. 1532(b). In this case, we do not know the amount with certainty claimed to be owed by Chester School or the effect of the order on the School District or Chester School. Given the facts underlying the School District's and Department's claims regarding the impossibility of performance if we were to order the funds to be withheld and the other factors relating to whether a permanent injunction should be issued have not been satisfied, the criteria necessary to grant summary relief have not been satisfied.
A permanent injunction may only be granted when 1) the right to relief is clear; 2) the relief is necessary to prevent a legal wrong for which there is no adequate redress at law; and 3) greater injury will result from refusing rather than granting the relief requested. P.J.S. v. Pennsylvania State Ethics Commission, 669 A.2d 1105 (Pa. Cmwlth. 1996).
Accordingly, Chester School's motion for summary relief is denied.
/s/_________
DAN PELLEGRINI, President Judge Judges Cohn Jubelirer and Leavitt did not participate in the decision in this case. ORDER
AND NOW, this 23rd day of May, 2012, the Application for Summary Relief filed by the Chester Community Charter School is denied.
/s/_________
DAN PELLEGRINI, President Judge BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge
DISSENTING OPINION BY JUDGE BROBSON
I respectfully dissent.
The majority avoids the clear mandate of Section 1725-A of the Charter School Law (Law) out of concern for the harm that the Chester-Upland School District (District) and the Department of Education (Department) claim would befall the District if this Court orders the Secretary of Education (Secretary) to deduct from the State payments to the District the amount that the Law requires the Secretary to deduct. Because of this alleged harm to the District, whether real or perceived, the majority excuses the Secretary from performing his mandatory duty under the Law. See Chester Community Charter School v. Department of Education, 996 A.2d 68 (Pa. Cmwlth. 2010) (Chester I).
Act of March 10, 1949, P.L. 30, as amended, added by Section 1 of the Act of June 19, 1997, P.L. 225, 24 P.S. § 17-1725-A.
The majority reasons that the writ of mandamus should not issue in this case because the Secretary cannot comply. I disagree. The Law requires that the estimated amount due the Chester Community Charter School (Charter School) be deducted from any and all State payments due the School District. The majority opines that if there are no such State monies against which the deduction can be applied, the Secretary cannot comply with Section 1725-A(a)(5) of the Law. But the Department and the District do not advance this hypothetical in their argument opposing the Charter School's application for summary relief. Instead, they argue that if the required deductions are made, there will not be enough money left to fund the District's operations. In other words, their shared position is that the Secretary could comply with the Law, but doing so would be detrimental, and possibly fatal, to the District.
Notwithstanding, at page 6, the majority essentially concludes, without any factual record, that there are no monies against which the Secretary could deduct the amount estimated by the Charter School. For purposes of what is currently before the Court, however, it matters not. Mandamus will compel the Secretary to deduct the estimated amount from any and all State payments made to the District, in compliance with Section 1725-A(a)(5) of the Law. In other words, the Secretary must deduct only in the event of a State payment to the District. A fortiori, the Secretary does not violate Section 1725-A(a)(5) if there are no State payments to the District. There is, therefore, no risk that a writ of mandamus in this case, directing the Secretary to comply with Section 1725-A(a)(5), would compel the Secretary to engage in an impossible act.
Although I am not unsympathetic to the District's plight, we do not consider the consequences, or harm, that compliance with a mandatory duty under the law may have when ruling on a request for relief in the nature of mandamus. In mandamus, the harm to be avoided is a violation of law, in this case Section 1725-A(a)(5) of the Law. See Burns v. Bd. of Dirs. of Uniontown Area Sch. Dist., 748 A.2d 1263, 1267-70 (Pa. Cmwlth. 2000) (holding that mandamus is relief sought to cure statutory harm or statutory breach). "Mandamus will . . . lie to compel the official performance of a ministerial act or a mandatory duty where there is a clear legal right in the plaintiff, a corresponding duty in the defendant, and the lack of an adequate and appropriate remedy at law." Victoria Gardens Condo. Ass'n v. Kennett Twp. of Chester Cty., 23 A.3d 1098, 1109 (Pa. Cmwlth. 2011). Here, all of these elements are present.
As a Court, we are entrusted with upholding the laws of this Commonwealth. In crafting Section 1725-A(a)(5), (6) of the Law—i.e., the statutory remedy for resolving funding disputes between charter schools and school districts, "[i]t is clear . . . that as between the school district and the charter school, the legislature has decided that more harm will befall a charter school that is not paid timely and accurately than upon a school district that may experience a delay in the receipt of the state subsidy to which it is entitled." Chester I, 996 A.2d at 78. The General Assembly did not make any exceptions to the deduction mandate in Section 1725-A(a)(5) for distressed school districts. As reasonable as such an exception might be, especially in light of the particular circumstances of the District, it is not the role of this Court to create one.
Based on the undisputed facts, the clear and unambiguous language of the Law, and this Court's opinion in Chester I, I would grant summary relief in favor of the Charter School on Count I of its original jurisdiction petition for review (mandamus), and direct the Secretary to "deduct the estimated amount, as documented by the [Charter School], from any and all State payments made to the [District]" until such time as the dispute over the Charter School's claim and the District's defenses are adjudicated at the agency level. As the Court noted in Chester I, to the extent there are any concerns that the withholding required by the Law may adversely affect the District, the Department should act with all due haste in resolving the controversy.
Because I would grant the relief requested in Count I, I would deny the Charter School's application for summary relief on the remaining counts. Granting the mandamus relief adequately restores the parties to the appropriate procedural posture under the Law. The Charter School is entitled to nothing more and nothing less in the context of this original jurisdiction proceeding. See GTECH Corp. v. Commonwealth, Dep't of Revenue, 965 A.2d 1276 (Pa. Cmwlth. 2009) (en banc) (recognizing original jurisdiction over claim that agency refused to afford administrative remedy). --------
/s/_________
P. KEVIN BROBSON, Judge Judges McCullough and Covey join in this dissenting opinion.
This increase in funding from the filing of the briefs creates a material issue of fact as to whether there are funds available to withhold. Courts should not issue orders unless they are reasonably sure that they can be followed.