State ex rel. Saint Louis Charter Sch. v. State Bd. of Educ.

• Decision Date: 18 September 2012
• Docket Number: No. WD 74318.,WD 74318.
• Citation: 376 S.W.3d 712
• Parties: STATE of Missouri, ex rel. SAINT LOUIS CHARTER SCHOOL, Appellant, v. STATE BOARD OF EDUCATION, and Department of Elementary and Secondary Education; and Special Administrative Board of the Transitional School District of the City of St. Louis, Respondents.
• Court: Missouri Court of Appeals

376 S.W.3d 712

STATE of Missouri, ex rel. SAINT LOUIS CHARTER SCHOOL, Appellant,

v.STATE BOARD OF EDUCATION, and Department of Elementary and Secondary Education; and Special Administrative Board of the Transitional School District of the City of St. Louis, Respondents.

No. WD 74318.

Missouri Court of Appeals,

Western District.

Sept. 18, 2012.

Jay Summerville, St. Louis, MO; Jeffery T. McPherson, Clayton, MO; Sherry L. Doctorian, St. Louis, MO, for appellant.

James R. Layton, Jefferson City, MO and Thomas L. Caradonna, St. Louis, MO, for respondent.

Before DIVISION ONE: JAMES M. SMART, Presiding Judge, LISA WHITE HARDWICK and GARY D. WITT, Judges.

LISA WHITE HARDWICK, Judge.

Saint Louis Charter School (“SLCS”) appeals the circuit court's decision denying its request for mandamus relief. SLCS contends the court erred in refusing to direct the Department of Secondary and Elementary Education (“DESE”) to authorize payment of the amount of state school aid that DESE determined SLCS was underpaid for three years. SLCS also asserts the court erred in refusing to direct DESE to determine the amount of state aid that SLCS was allegedly underpaid for a fourth year and to authorize payment of that amount to SLCS. Because the circuit court has not yet ruled on SLCS's request for judicial review of DESE's decision not to authorize payment of the amount SLCS was underpaid, there is no final judgment in this case. Therefore, the appeal is dismissed, and the cause is remanded to the circuit court for further proceedings.

Factual and Procedural History

SLCS is a charter school created pursuant to the Charter Schools Act, Sections 160.400 to 160.420, RSMo.¹ A charter school is an independent public school that may be operated in an urban or metropolitan school district. § 160.400. SLCS is operatedin the Saint Louis Public School District (“School District”).

For several years, SLCS received its state school aid funds directly from the School District. Under this system, DESE calculated the School District's annual state aid apportionment using a statutory formula and paid that amount in twelve monthly installments. §§ 163.031, 163.081.2, RSMo 2000. For purposes of this calculation, students attending charter schools within the District were counted in the School District's enrollment figures because they resided in the District. § 160.415.1, RSMo 2000. DESE would distribute the state school aid funds to School District, and the School District, acting as a disbursal agent, was then responsible for distributing the funds to the charter schools operating within their boundaries within twenty days after receiving payment from DESE. §§ 163.081, 163.087, 160.415.2, RSMo 2000. The School District was required to pay charter schools an amount calculated pursuant to the statutory formula plus any other state or federal aid received “on account of” children who were attending charter schools instead of the District's schools. §§ 160.415.2, 163.081.2, RSMo 2000.

After July 2006, a charter school could declare itself to be a “local educational agency” (“LEA”) and, by doing so, receive its monthly state school aid payments directly from DESE instead of the school district. § 160.415.4. In 2007, SLCS declared itself to be an LEA and, starting with fiscal year (“FY”) 2007–2008,² SLCS began receiving its state school aid funds directly from DESE.

Shortly after SLCS became an LEA, an independent financial consultant reviewed SLCS's past financial operations and found discrepancies between the amount of state funding to which SLCS was entitled and the amount of state funding SLCS had actually received from the School District when the District was acting as the disbursal agent. In letters sent to DESE in early and mid–2007, SLCS questioned the amount of the School District's payments for FY 2006–2007 and requested DESE's assistance in resolving the matter. In response, DESE told SLCS that it was unable to confirm an underpayment and asked SLCS to provide copies of monthly payment transmittals received from the School District.

In October 2008, SLCS sent DESE a statement of claims and demand for adjudication requesting that DESE adjudicate its claims that the School District had underpaid it during each year from FY 2003–2004 through FY 2006–2007. In addition, SLCS requested that DESE pay it $3,858,637.55, the total amount it claimed the School District had underpaid between 2003 and 2007, and deduct that amount from DESE's next state school aid apportionment to the School District. SLCS also asked that DESE provide a timeframe for when it would resolve these issues.

By January 21, 2009, DESE had not issued a ruling or indicated a timeframe for when a resolution might be expected. Consequently, SLCS filed a petition for a writ of mandamus compelling DESE and the State Board of Education to adjudicate its claim of underpayment and to authorize payment to SLCS in the amount of the underpayment. The School District moved for leave to intervene, which the circuit court granted.

After SLCS filed its original petition, DESE advised SLCS in a letter, dated April 1, 2009, that it was “unable to make the correction in payment as requested.” DESE explained that, while Section 160.415.5 “authorizes corrections in erroneousmonthly state aid payments and the resolution of disputes regarding such payments,” SLCS did not dispute the amount of any of the School District's payments until “well after” SLCS had elected to become an LEA and to receive state aid payments directly from DESE.³ DESE further explained:

The calculation of charter payments under the current foundation formula is a complex process which has required both DESE and the [School District] to interpret several areas of the law. As you know, reasonable minds can differ in making these interpretations. Nevertheless, differences in the methods used by the [School District] and DESE in making these calculations do not justify the remedy of reducing payment to the [School District] prospectively based upon past payments that were made and accepted without dispute.

SLCS subsequently filed an amended petition. In Count I of its amended petition, SLCS again sought a writ of mandamus compelling DESE: (1) to adjudicate SLCS's claims of underpayment from FY 2003–2004 through FY 2006–2007; (2) to authorize payment to SLCS of the amount due; and (3) to deduct the same amount from the next school state aid apportionment to the School District. In Count II of its amended petition, SLCS sought judicial review of DESE's April 1, 2009 letter denying its request that DESE make the correction in payments to make up the alleged underpayments.⁴ SLCS asserted DESE's April 1, 2009 letter was a final administrative decision subject to judicial review under Section 536.150.

Both DESE and the School District moved to dismiss SLCS's petition. After hearing legal arguments on SLCS's petition and the motions to dismiss, the court issued its “Order, Judgment, and Writ of Mandamus” on November 30, 2009. In this order, the court sustained the petition for writ of mandamus and directed DESE “to perform the duty of adjudicating [SLCS]'s claims for underpayment forthwith.”

In February 2010, DESE provided to SLCS its calculations of the statutory amounts that SLCS was entitled to receive for FY 2003–2004 through FY 2006–2007. After SLCS received these calculations, it filed a motion to compel asking the court to order DESE to deduct the difference between DESE's calculated statutory amounts and the payments SLCS claimed the District made during the fiscal years in question from DESE's next school aid apportionment to the District. SLCS further asked the court to order DESE to pay that amount, which it asserted totaled $4,309,488.17 including interest, to SLCS.

The circuit court granted the motion to compel in part. In its order, the court found that DESE had completed a portion of the adjudication of the dispute between SLCS and the School District by determining the amounts the School District should have paid to SLCS in the relevant school years. To “complete the adjudication,” the court ordered that SLCS and the School District provide DESE with a stipulation of the amount of payments that the School District actually made to SLCS “in the relevant school years.” If SLCS and the School District could not agree on a stipulation, they were to give DESE the evidence they believed was relevant to determining the amount of payments made. Based on the information it received from SLCS and the School District, DESE was to provide the court with an adjudication of the amount of any underpayments or overpayments. The order concluded with the court's stating that, after it received DESE's adjudication, the court would “then determine whether any additional relief is required.”

SLCS and the School District filed a stipulation stating the amount of the School District's payments for FY 2004–2005, FY 2005–2006, and FY 2006–2007. They provided no information regarding payments for FY 2003–2004. DESE calculated the amount of the underpayment for FY 2004–2005 to be $562,710.62, for FY 2005–2006 to be $623,716.13, and for FY 2006–2007 to be $1,501,142.44.

SLCS subsequently filed a motion for summary judgment in which it requested a writ of mandamus compelling DESE to pay it these amounts, plus $676,416.27 for FY 2003–2004,⁵ and to deduct the amount from the next state school aid apportionment to the School District. The court denied the summary judgment motion. SLCS then filed a request for payment in which it asked the court for a judgment directing DESE “to determine the amounts due for the 2003–2004 school year and pay over the amounts improperly withheld for the 2003–2004 through 2006–2007 school years.”

In July 2011, the court denied SLCS's request for payment after finding that “mandamus does not lie to compel the transfer of funds.” SLCS appeals.

Authority for Appellate Review

Before we can address SLCS's points on...