Kingston Hill Acad. v. Chariho Reg'l Sch. Dist..

• Decision Date: 06 June 2011
• Docket Number: No. 2010–362–M.P.,2010–362–M.P.
• Citation: 21 A.3d 264,268 Ed. Law Rep. 900
• Parties: KINGSTON HILL ACADEMY and The Compass Schoolv.CHARIHO REGIONAL SCHOOL DISTRICT.
• Court: Rhode Island Supreme Court

21 A.3d 264

268 Ed. Law Rep. 900

KINGSTON HILL ACADEMY and The Compass School

v.CHARIHO REGIONAL SCHOOL DISTRICT.

No. 2010–362–M.P.

Supreme Court of Rhode Island.

June 6, 2011.

Jon M. Anderson, Esq., Providence, for Petitioner Chariho Regional School District.Timothy J. Groves, Providence, Esq., for Respondent The Compass School.Sara Rapport, Esq., Providence, for Respondent Kingston Hill Academy.Present: SUTTELL, C.J., FLAHERTY, ROBINSON, and INDEGLIA, JJ.

OPINION

Justice INDEGLIA, for the Court.

The Chariho Regional School District (Chariho or petitioner) filed a petition for the issuance of a writ of certiorari seeking our review of a decision of the Rhode Island Board of Regents for Elementary and Secondary Education (the board) upholding the decision of the commissioner of elementary and secondary education (the commissioner) to characterize the petitioner's asserted affirmative defense as a counterclaim and to sever it for separate proceedings. The petitioner also seeks review of the portion of the board's decision reversing the commissioner's interpretation of G.L.1956 § 16–77.1–2(d) to require that the local-district payments for Chariho students attending Kingston Hill Academy (Kingston Hill or respondent) and The Compass School (Compass or respondent), collectively respondents or charter schools, be calculated based on the number of students attending the charter schools as of June 30 of the “reference year.” ¹ This Court granted the petition, and Chariho's case came before the Supreme Court for oral argument on May 5, 2011, pursuant to an order directing the parties to appear and show cause why the issues raised in this petition should not be decided summarily. After considering the parties' submitted memoranda and oral arguments, we are satisfied that cause has not been shown and proceed to decide the petition at this time. For the reasons set forth in this opinion, we affirm the decision and order of the board, deny the petition for certiorari, and quash the writ heretofore issued.

IFacts and Travel

The respondents are two charter public schools serving the Chariho school district. On January 14 and 15, 2010, respondents requested that Deborah Gist, the commissioner, grant an expedited hearing to address “the dispute between [Chariho] and [the charter schools] regarding nonpayment by Chariho of tuition owed” to respondents. The charter schools averred that they both had submitted invoices to Chariho (Kingston Hill in September and October 2009 and Compass in October 2009 and January 2010) seeking quarterly tuition payments for students residing in the Chariho school district who attended the charter schools during the 2009–2010 school year. Also, they both asserted that Chariho did not make payment on the invoices and was in arrears. The respondents alleged that the total amount due and payable to them by Chariho was $413,231.84.

In correspondence dated January 15, 2010, Chariho objected to the requests for an expedited hearing and denied Kingston Hill's allegations. The petitioner objected to the requests on the grounds that RIDE had prejudged the matter; that expedition was not necessary because any remedy could not be effectuated until the next state-aid payment was made to Chariho in April 2010; and that respondents' claims should not be consolidated. Additionally, Chariho argued that it would be prejudiced by an expedited hearing because it planned to raise “as an affirmative defense” that Kingston Hill had “unclean hands” as a result of discriminatory policies,² and it contended that the need for extensive discovery on this issue precluded expedition.

The parties appeared before a hearing officer on February 5, 2010, to address these issues. After hearing the arguments of the parties, on March 1, 2010, the hearing officer issued an interlocutory decision approved by the commissioner addressing respondents' requests for an expedited resolution and petitioner's objections. First, the commissioner dismissed the contention that a RIDE employee had prejudged the matter. Next, she determined that expedition was unnecessary and consolidated the claims. Finally, the commissioner concluded that, with regard to the affirmative defense of unclean hands, petitioner was “attempting to assert something in the nature of a counter claim,” and she “sever[ed] this claim” for a later hearing because it was “tangential, at best, to the tuition reimbursement claims which [were] at the heart of [the] matter.” She concluded that the remaining issue presented could be resolved “based on memoranda of law to be submitted by the parties,” and no further hearings on this matter were necessary.

Accordingly, the parties submitted memoranda to support their respective positions. Kingston Hill argued that Chariho incorrectly interpreted § 16–77.1–2(d) ³ and § 16–77.1–2(e) ⁴ to require it to remit tuition payments to charter schools for a number of students as determined by a “reference year” ⁵ rather than on the basis of actual enrollment of Chariho district students in the charter schools each quarter. Kingston Hill contended that such an interpretation “defie[d] the plain language of the statute and r [an] contrary to its purpose and intent” and also “contravene[d] the directive of [RIDE]” to “charter schools to issue invoices to local school districts based on the students actually in attendance during each quarter of the current fiscal year.” The respondent argued that the “reference year” was relevant only to “calculating state funding of charter public schools.” (Emphasis added.) Therefore, it “request[ed] that the amount of $259,504 be deducted from the state aid to be paid to Chariho, and that this arrearage be paid directly to Kingston Hill.”

Compass offered substantially similar arguments. Likewise, it argued in its memorandum that “the reference year student membership is appropriate for calculating state aid, but not appropriate for calculating the local district's obligations.” (Emphasis added.) Compass asserted that Chariho was responsible for payments to Compass calculated on the basis of “the number of Chariho students enrolled, or registered, in Compass for the 2009–10 school year.” Therefore, it requested as relief “that the total amount over thirty (30) days in arrears, $241,791.84, be deducted from the state aid to Chariho and paid by the state directly to Compass.”

Conversely, Chariho argued that the commissioner could not compel Chariho to make payments to the charter schools or direct portions of Chariho's state aid to respondents because it would amount to aiding or perpetuating discrimination toward disabled students. Furthermore, it maintained that § 16–77.1–2 dictates that the payments it must remit to the charter schools be based on the number of students enrolled as of June 30 of the reference year. Therefore, Chariho requested that the commissioner refrain from lending the charter schools an advantage over the traditional public schools through “exemption [from] the reference year requirement.”

After reviewing the parties' submitted memoranda, the hearing officer endeavored to resolve the “financial dispute about how the local share of charter school reimbursement should be computed.” The hearing officer found that “[t]he statute could not be clearer” and that it unambiguously directed that the “reference year” was to be used to calculate the district's share. As such, Chariho was “directed to pay forthwith all sums due and owing to [the charter schools] using as a computational basis the reference year.” The hearing officer noted “that [the] matter [was] immediately appealable to the Board of Regents.” The commissioner endorsed the decision.

The charter schools filed an appeal with the board from the decision of the commissioner. Chariho filed a cross-appeal challenging the interlocutory decision “ ‘severing’ [its] affirmative defense.” On October 7, 2010, the board issued a decision reversing the commissioner's interpretation of § 16–77.1–2 and “hold[ing] that Chariho must pay tuition to [the charter schools] for each Chariho student attending the charter public school that school year.” The board based its conclusion on the plain language of the statute, the purpose of the statute, and its opinion that a contrary interpretation “would produce results which are illogical, unworkable, and absurd.” Accordingly, it directed Chariho “to pay * * * all sums due and owing to Compass and to Kingston Hill for fiscal year 2010 * * * using as a computational basis the number of Chariho students who were actually enrolled in [the charter schools] * * *, at the start of each quarter.” It directed Chariho to do the same for fiscal year 2011. Further, the board affirmed the decision of the commissioner to sever Chariho's counterclaim.

On October 20, 2010, Chariho petitioned this Court for a writ of certiorari to review the board's decision. To support its petition, Chariho argued that the board erred in violation of due process when it affirmed the commissioner's decision severing its “affirmative defense” of unclean hands. Additionally, it argued that notwithstanding this error, the board's interpretation of § 16–77.1–2 was incorrect as a matter of law because it “rewrote” the statute to require Chariho to make payment based on “actual enrollment.” Chariho also filed motions in this Court for a stay of the board's decision and for summary remand to the board to elaborate on its decision to affirm the commissioner's decision to sever its “affirmative defense,” both of which we denied on October 22 and November 22, 2010, respectively. On November 22, 2010, this Court granted Chariho's petition for a writ of certiorari. We denied Chariho's renewed motion for a stay on February 11, 2011.

IIIssues for Review

The petitioner presents three issues. Specifically, (1) whether the commissioner and board properly “sever[ed] Chariho's affirmative defense * * * without holding a hearing as to...