Chariho Reg'l Sch. Dist. v. State

• Decision Date: 30 May 2019
• Docket Number: No. 2017-239-Appeal.,2017-239-Appeal.
• Citation: 207 A.3d 1007
• Parties: CHARIHO REGIONAL SCHOOL DISTRICT, BY AND THROUGH the CHARIHO REGIONAL SCHOOL COMMITTEE v. STATE of Rhode Island et al.
• Court: Rhode Island Supreme Court

207 A.3d 1007

CHARIHO REGIONAL SCHOOL DISTRICT, BY AND THROUGH the CHARIHO REGIONAL SCHOOL COMMITTEE

v.STATE of Rhode Island et al.

No. 2017-239-Appeal.

Supreme Court of Rhode Island.

May 30, 2019

Jon M. Anderson, Esq., for Plaintiff.

John Tarantino, Esq., Vicki J. Bejma, Esq., for Defendants.

Present: Suttell, C.J., Goldberg, Flaherty, and Indeglia, JJ.

Chief Justice Suttell, for the Court.

This matter arises from a contract dispute between the plaintiff, Chariho Regional School District (Chariho or plaintiff),¹ and the Rhode Island Department of Education (RIDE), the Rhode Island Department of Administration (DOA), the Rhode Island Council on Elementary and Secondary Education, and former Commissioner of Education Kenneth Wagner (Wagner) (collectively, the state defendants). Chariho appeals from an order of the Superior Court granting the state defendants' motion to dismiss. This case came before the Supreme Court pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After considering the parties' written and oral submissions and reviewing the record, we conclude that cause has not been shown and that this case may be decided without further briefing or argument. For the reasons set forth in this opinion, we vacate the order of the Superior Court.

IFacts and Travel

In July 1996, plaintiff's predecessor, the Chariho Regional High School District, conveyed a parcel of property on the Chariho campus to RIDE to be "use[d] for ‘vocational purposes.’ " The plaintiff remained responsible for operation of the Chariho Area Career and Technical Center (Chariho CTC) located on that property following the transfer of title.² Nearly fourteen years later, on June 22, 2010, after receiving approval from the Board of Regents,³ plaintiff and RIDE, through then-Commissioner of Education Deborah Gist, entered into an agreement to convey the property back to plaintiff, "provided that Chariho continues to provide career and technical programs to students" (the CTC transfer agreement). Significantly, in paragraph 1(d), the CTC transfer agreement also provided that, "[f]or so long as Chariho operates a career and technical center, RIDE warrants that it will not approve the establishment of any career and technical center in the towns of Charlestown, Hopkinton, Narragansett, New Shoreham, Richmond, South Kingstown, and Westerly * * *."

The plaintiff filed a complaint in Superior Court on August 3, 2016, alleging that the state defendants had breached paragraph 1(d) of the CTC transfer agreement by authorizing career and technical programs at Westerly High School and Narragansett High School.⁴ Additionally, plaintiff alleged that Wagner had unilaterally repudiated the CTC transfer agreement by stating that paragraph 1(d) was not enforceable and that the agreement had never been in effect. The plaintiff sought a declaration that the state defendants had breached the CTC transfer agreement, rendering the transfer of title to the property to Chariho void, as well as a permanent injunction to enforce paragraph 1(d) of the agreement.

In response to the complaint, the state defendants filed a motion to dismiss for lack of jurisdiction pursuant to Rule 12(b)(1) of the Superior Court Rules of Civil Procedure, failure to state a claim under Rule 12(b)(6), and failure to join indispensable parties pursuant to Rule 12(b)(7). The state defendants first argued that the complaint should be dismissed pursuant to Rules 12(b)(1) and 12(b)(7) because a court is precluded from exercising jurisdiction over a declaratory-judgment action where a plaintiff has failed to include all parties with an interest in the action and who would be affected by a declaration in plaintiff's favor—in this case, the school departments of the four other towns listed in paragraph 1(d) of the CTC transfer agreement: Narragansett, New Shoreham, South Kingstown, and Westerly. As to Rule 12(b)(6), the state defendants argued, inter alia , that no breach had occurred based on the plain language of the agreement, and that, if there had been a breach, the sole remedy, pursuant to the agreement, was termination of the contract.

Additionally, the Narragansett School Committee (Narragansett) and the Westerly School Committee (Westerly) filed motions to intervene, arguing that they had an interest in the action and the right to intervene pursuant to Rule 24(a)(1) and (2). The plaintiff countered that Narragansett and Westerly were not proper parties to the action because they did not have the power to sue or be sued and could not demonstrate an interest independent of the state.

Following a November 21, 2016 hearing on the motions to intervene and the state defendants' motion to dismiss, the hearing justice rendered a decision from the bench, granting all motions. As to the motion to dismiss, however, the hearing justice stated that his ruling granting the motion was conditional, and that plaintiff would have thirty days to amend its complaint to add the two remaining school departments listed in paragraph 1(d): New Shoreham and South Kingstown.⁵ An order granting the motions to intervene was entered on December 6, 2016.

The plaintiff filed an amended complaint within thirty days of the hearing justice's ruling on the motion to dismiss, adding the Narragansett School Department, New Shoreham School Department, South Kingstown School Department, and Westerly School Department as defendants, and also adding a claim for violation of the Contract Clause of the Rhode Island Constitution.⁶ The state defendants subsequently filed a motion to dismiss the amended complaint pursuant to Rule 12(b)(6), reiterating the same argument as in their prior motion to dismiss. Narragansett, Westerly, and the South Kingstown School Committee⁷ (South Kingstown) (collectively, the school committee defendants) also filed a motion to dismiss plaintiff's amended complaint.⁸ The school committee defendants argued that paragraph 1(d) of the CTC transfer agreement was void ab initio because it divested the Board of Regents and the school committees of statutorily authorized power to regulate educational programs.

The plaintiff objected to defendants' motions to dismiss, arguing that it had sufficiently pled a claim for breach of contract because it alleged that RIDE had approved multiple programs, and that a school offering more than one career and technical education program is a "center" within the meaning of the contract. The plaintiff further argued that it was entitled to a declaration that a breach rendered the transfer of title void, given the language contained in the CTC transfer agreement and the fact that the agreement did not specify termination as the "exclusive remedy." Finally, plaintiff asserted that paragraph 1(d) of the CTC transfer agreement was not void ab initio because the state was acting within its power to enter into contracts.

A hearing on the motions to dismiss the amended complaint was held on March 20, 2017. The state defendants argued that the language of paragraph 1(d) of the CTC transfer agreement was unambiguous in that it distinguished between a program and a "center," which the state defendants argued meant "a place, where here in this particular building it is a center for vocational education[,]" and that RIDE had not approved any other "center" in breach of the agreement. The state defendants further reiterated at the hearing that termination of the agreement was the exclusive remedy available to Chariho in the event of a breach. The plaintiff countered that breach of the agreement was a question of fact and, furthermore, that the consequence of the term "of no force and effect" in the CTC transfer agreement rendered the contract void ab initio .

Following arguments from plaintiff and the state defendants, the hearing justice rendered a decision from the bench granting the state defendants' motion to dismiss the amended complaint. As to the claim for breach of contract, the hearing justice concluded that he thought the language of paragraph 1(d) was "crystal clear," and further that "allowing the establishment of a particular type of program in another South County school is not a breach of this agreement."⁹ The hearing justice also found that, in the event of a breach, the plain language of paragraph 3(a) of the CTC transfer agreement providing for plaintiff's remedy could not "be stretched to suggest that the conveyance, that the property be re-conveyed, that it's void ab initio." The hearing justice did not hear argument on the school committee defendants' motion to dismiss the amended complaint, nor did he make a ruling on that motion.

An order granting the state defendants' motion to dismiss plaintiff's amended complaint entered on May 9, 2017, and plaintiff filed a notice of appeal on May 23, 2017.

IIStandard of Review

"The sole function of a motion to dismiss is to test the sufficiency of the complaint." Pontarelli v. Rhode Island Department of Elementary and Secondary Education , 176 A.3d 472, 476 (R.I. 2018) (brackets omitted) (quoting Narragansett Electric Company v. Minardi , 21 A.3d 274, 277 (R.I. 2011) ). "In reviewing the grant of a motion to dismiss pursuant to Rule 12(b)(6), this Court applies the same standard as the hearing justice." Rein v. ESS Group, Inc. , 184 A.3d 695, 699 (R.I. 2018) (quoting Goddard v. APG Security-RI, LLC , 134 A.3d 173, 175 (R.I. 2016) ). Therefore, "[i]n conducting our review, we ‘assume the allegations contained in the complaint to be true and view the facts in the light most favorable to the plaintiffs.’ " Id. (brackets omitted) (quoting Goddard , 134 A.3d at 175 ). We will affirm a trial justice's grant of a motion to dismiss "when it is clear beyond a reasonable doubt that the plaintiff would not be entitled to relief from the defendant under any set of facts that could be proven in support of the plaintiff's claim." Id. (quoting Goddard , 134 A.3d at 175 ).

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