METROPOLITAN SCHOOL DIST. SW ALLEN CTY. v. Allen County

• Decision Date: 06 August 2001
• Docket Number: No. 02A03-0012-CV-445.,02A03-0012-CV-445.
• Citation: 753 N.E.2d 59
• Parties: METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY, Appellant-Respondent, v. ALLEN COUNTY, Indiana, Appellee-Petitioner.
• Court: Indiana Appellate Court

753 N.E.2d 59

METROPOLITAN SCHOOL DISTRICT OF SOUTHWEST ALLEN COUNTY, Appellant-Respondent, v. ALLEN COUNTY, Indiana, Appellee-Petitioner.

No. 02A03-0012-CV-445.

Court of Appeals of Indiana.

August 6, 2001.

William T. Hopkins, Jr., Karen A. Festa, Barnes & Thornburg, Fort Wayne, IN, Attorneys for Appellant.

G. William Fishering, Laura L. Reuss, Beers Mallers Backs & Salin, LLP, Fort Wayne, IN, Attorneys for Appellee.

OPINION

BAKER, Judge.

Appellant-respondent Metropolitan School District of Southwest Allen County (School District), appeals the trial court's judgment entered in favor of the appellee-petitioner Allen County, Indiana (Allen County). Specifically, the School District maintains that the trial court's decision reversing the State Board of Education's (the Board) ruling was arbitrary, capricious and unsupported by the evidence. The Board had determined that Allen County was obligated to pay the School District $101,448.72 in transfer tuition fees with respect to eight minor students who were located in the School District, along with an eight percent penalty and an amount for attorney's fees.

FACTS

The facts most favorable to the judgment are that during the 1980s and 1990s, eight students were placed in Anthony Wayne Services group homes, which were state-licensed, not-for-profit facilities for developmentally disabled individuals. Those students were located in the School District, under eighteen years of age and unemancipated. The Allen County Office of Family and Social Services Administration (FSSA) was involved in placing two of the students in the group homes, and the Allen County FSSA Division of Disabilities and Rehabilitative Services, (DARS) was involved in the placement of the other six students.

During the relevant time periods, the parents of the students resided in Allen County, but not in the School District. The parties provided letters to the Board which each student and his or her parent had received from the State Department of Public Welfare (DPW). That correspondence indicated that the DPW had approved Medicaid funding for each student's care in the group home. Another set of documents showed that the students were certified for admission to the Anthony Wayne Services group homes, which are classified as Intermediate Care Facilities for the Mentally Retarded (ICF-MR).

The County paid the School transfer tuition for the eight students for the 1990-93 school years with no objection. The County refused to pay the 1993-94 transfer tuition bill, however, because the amount had increased from previous years to $101,448.72. In response, the School District sent a letter to the County Auditor requesting payment of the transfer tuition for the eight students.

When payment was not forthcoming, the School District petitioned the Board in 1996, requesting that Allen County be ordered to pay the 1993-94 transfer tuition. Allen County refused to pay and counterclaimed against the School District for return of the previously paid transfer tuition. Thereafter, on February 6, 1997, the Board adopted the hearing officer's decision that ruled in favor of the School District. Specifically, Allen County was ordered to pay transfer tuition to the School District in the amount of $101,448.72 for the eight students. The Board also awarded the School District an eight percent penalty along with $11,104.54 in attorney's fees and costs. Thus, the Board denied Allen County's counterclaim.

Allen County then appealed the Board's decisions to the Allen Circuit Court. Following a hearing that commenced on August 3, 2000, the trial court reversed the Board's decision and granted judgment for Allen County on its counterclaim in the amount of $109,670.95. In essence, the trial court determined that no statutory provision existed that would support either the obligation of Allen County to pay or the right of the School District to retain the amount of funds that Allen County had already paid. Thus, the trial court reasoned that equity required that the School District return the amount to Allen County. The School District now appeals.

DISCUSSION AND DECISION

I. Standard of Review

We initially observe that judicial review of an administrative decision is limited. State v. C.M.B. III Enters., Inc., 734 N.E.2d 653, 658 (Ind.Ct.App.2000), trans. denied. When reviewing an administrative agency's decision, appellate courts stand in the same position as the trial court. Amoco Oil Co. v. Comm'r of Labor, 726 N.E.2d 869, 872 (Ind.Ct.App.2000). Review of an agency's decision is confined largely to the agency record, and an administrative agency decision should be reversed only if it is:

(1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without observance of procedure required by law; or (5) unsupported by substantial evidence.

IND. CODE § 4-21.5-5-14; see also Ind. Alcoholic Beverage Comm'n v. Edwards, 659 N.E.2d 631, 632 (Ind.Ct.App.1995). The party seeking judicial review bears the burden of demonstrating that the agency's action is invalid. I.C. § 4-21.5-5-14(a).

When reviewing an agency's decision, the trial court is not to conduct a trial de novo, reweigh the evidence or judge the credibility of witnesses. Stated another way, a court's "review of an agency's decision cannot be considered de novo in the sense of a complete retrial of the issues involved. Rather, [the court] must go no further than to examine the propriety of the agency's facts as the agency found them and the propriety of the agency's order in light of the facts found." Taylor v. Ind. Family & Soc. Servs., 699 N.E.2d 1186, 1189 (Ind.Ct.App.1998). Both trial and appellate courts are bound by the agency's findings of fact if those findings are supported by substantial evidence. Id.

A trial court is charged with determining whether an administrative agency's findings of facts are based on substantial evidence and whether the conclusions of law have a reasonably sound basis of evidentiary support. Ind. Civil Rights Comm'n v. S. Ind. Gas & Elec. Co., 648 N.E.2d 674, 680 (Ind.Ct.App.1995),trans. denied. A trial court may vacate or reverse an agency's decision only if the evidence, when viewed as a whole, demonstrates that the conclusions reached by the agency are clearly erroneous. City of Indianapolis v. Hargis, 588 N.E.2d 496, 498 (Ind.1992). We note that if a reasonable person would conclude that the evidence and the logical and reasonable inferences therefrom are of such a substantial character and probative value so as to support the administrative determination, the substantial evidence standard is met. Id. This court gives considerable weight to an agency's interpretation of its own statutes. See Taylor, 699 N.E.2d at 1191. Moreover, we pay due deference to the interpretation of a statute by the administrative agency that is charged with its enforcement in light of its expertise in its given area. Ballard v. Book Heating & Cooling, Inc., 696 N.E.2d 55, 56 (Ind.Ct.App.1998),trans. denied.

II. The School District's Claims

The School District contends that the trial court misapplied the standard of review and erroneously vacated the Board's decision with respect to payment of the tuition costs and placement of the students. The School District goes on to assert that the trial court reweighed the evidence as to both considerations and erroneously substituted its judgment for that of the Board.

We first turn to the relevant statutory provisions involved in this case. IND. CODE § 20-8.1-6.1-5, the "Placement Statute," provides that:

(a) a student who is placed in a state licensed private or public health care facility, child care facility, or foster home:

(1) by or with the consent of the division of family and children;

(2) by a court order; or

(3) by a child-placing agency licensed by the division of family and children;

may attend school in the school corporation in which the home or facility is located. If the school corporation in which the home or facility is located is not the school corporation in which the student has legal settlement, the county of the student's legal settlement shall pay the transfer tuition of the student.

(Emphasis supplied). The "Legal Settlement Statute," I.C. § 20-8.1-6.1-1, states that:

(a) The legal settlement of a student shall be governed by the following provisions:

(1) If the student is under eighteen (18) years of age, or is over that age but is not emancipated, the legal settlement of the student is in the attendance area of the school corporation where the student's parents reside.

(2) Where the student's mother and father, in a situation otherwise covered in subdivision (1), are divorced or separated, the legal settlement of the student is the school corporation whose attendance area contains the residence of the parent with whom the student is living, in the following situations:

(A) Where no court order has been made establishing the custody of the student.

(B) Where both parents have agreed on the parent or person with whom the student will live.

(C) Where the parent granted custody of the student has abandoned the student. In the event a dispute between the parents of the student, or between the parents and any students over eighteen (18) years of age, the legal settlement of the student shall be determined as otherwise provided in this section.

(3) Where the legal settlement of a student, in a situation to which subdivision (1) or otherwise applies, cannot reasonably be determined, and the student is being supported by, cared for by, and living with some other person, the legal settlement of the student shall be in the attendance area of that person's residence, except where the parents of the student are able to support the student but have placed him in the home of

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