Sugar Creek Charter Sch. Inc. v. State Carolina

• Decision Date: 02 August 2011
• Docket Number: No. COA10–965.,COA10–965.
• Court: North Carolina Court of Appeals
• Parties: SUGAR CREEK CHARTER SCHOOL, INC., et al., Plaintiffsv.STATE of North Carolina, et al., Defendants.

712 S.E.2d 730
270 Ed. Law Rep. 317

SUGAR CREEK CHARTER SCHOOL, INC., et al., Plaintiffs
v.
STATE of North Carolina, et al., Defendants.

No. COA10–965.

Court of Appeals of North Carolina.

Aug. 2, 2011.

[712 S.E.2d 731]

Appeal by plaintiffs from order entered 4 June 2010 by Judge Forrest Donald Bridges

[712 S.E.2d 732]

in Mecklenburg County Superior Court. Heard in the Court of Appeals 9 February 2011.

North Carolina Institute for Constitutional Law, by Jason Kay and Robert F. Orr, Raleigh, for Plaintiff–Appellants, Sugar Creek Charter School, Inc.; The Community Charter School; The Metrolina Regional Scholars' Academy, Inc.; Rocky Mount Preparatory School, Inc.; Socrates Academy, Inc.; Thomas Jefferson Classical Academy; and Union Academy; Deborah Hopkins, individually and as guardian ad litem of Sloane Hopkins, Killian Hopkins, and Skylar Hopkins; Gilbert Bailey, individually and as guardian ad litem of Virginia L. Bailey; Cheryl Drake–Bowers, individually and as guardian ad litem of Annika Bowers; James Barnhill and Sharon Barnhill, individually and as guardians ad litem of Austin Barnhill and James Cody Barnhill; Angela Hale, individually and as guardian ad litem of Mathew Perry, Zachary Perry, and Dustin Lee; Kay Crickmore and David Crickmore, individually and as guardians ad litem of Emily Crickmore, Rebecca Crickmore, Rachel Crickmore, and Katherine Crickmore; Pansy Flanagan, individually and as guardian ad litem of William L. Overton; William E. Davis, III and Aphrodite Davis, individually and as guardians ad litem of Eliana M. Davis; Shawn L. Jones, individually and as guardian ad litem of Katherine Jones; Patricia Seguine and Daniel Seguine, individually and as guardians ad litem of Courtney Seguine, Carter Seguine, and Jonah Seguine; Tawanda D. Blount, individually and as guardian ad litem of Bryson Blount; Todd Bennett and Wendy Bennett, individually and as guardians ad litem of Hannah Bennett, Victoria Bennett, and Olivia Bennett; James Smith and Susan Soule–Smith, individually and as guardians ad litem of Evan Smith and Molly Smith; Lynn Kroeger and Ken Kroeger, individually and as guardians ad litem of Peter Kroeger, Christina Kroeger, and Joseph Kroeger; Todd Havican, individually and as guardian ad litem of Kaitlyn Havican and Kelsey Havican; Ron L. Brown, individually and as guardian ad litem of Victoria A. Brown and Daniel S. Brown.

Attorney General Roy Cooper, by Assistant Attorney General Laura E. Crumpler, for the State.Teague Campbell Dennis & Gorham, L.L.P., by George W. Dennis III, J. Matthew Little, Raleigh, and John L. Kubis, Jr., Asheville, for Appellees County of Mecklenburg, County of Union, County of Nash, County of Halifax, County of Edgecombe, County of Rutherford, and County of Cleveland.Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by Jill R. Wilson, Robert J. King III, Greensboro, and Julia C. Ambrose, Raleigh, for Appellees Charlotte–Mecklenburg County Board of Education, Union County Board of Education, Nash–Rocky Mount Board of Education, Halifax County Board of Education, Edgecombe County Board of Education, Rutherford County Board of Education and Cleveland County Board of Education.

ERVIN, Judge.

Plaintiffs appeal from an order dismissing their declaratory judgment action for failure to state a claim for which relief can be granted. After careful consideration of Plaintiffs' challenges to the trial court's order in light of the record and the applicable law, we conclude that the trial court's order should be affirmed.

I. Background

The present case arises from a dispute over the extent to which a charter school may apply for funds from the capital outlay fund of the county in which the charter school is located. Plaintiffs are charter schools, charter school students, and the parents of charter school students. Defendants are the State of North Carolina, various North Carolina counties in which charter schools are located, and the boards of education that have been established in those counties.

In their amended complaint, Plaintiffs alleged that “they receive disparate and discriminatory treatment in North Carolina by and through a discriminatory funding practice permitted and enforced by the Defendants” and that they were “being denied the opportunity to receive from counties or local

[712 S.E.2d 733]

school administrative units capital funding freely granted to traditional public schools.” The claims asserted in Plaintiffs' amended complaint rest, at least in part, on N.C. Const. art. IX, § 2(1), which requires the General Assembly to establish a “general and uniform system of public schools;” N.C. Const. art. I, § 19; and the Fourteenth Amendment to the United States Constitution. ¹ According to Plaintiffs:

The present interpretation and enforcement scheme of the Defendants, which deprives charter schools and charter school students of the opportunity to be uniformly considered for expenditures from the capital outlay fund by the counties or local administrative units, detrimentally and unconstitutionally affects the rights of the Plaintiffs to the equal opportunity for a sound basic education in that the discriminatory funding scheme deprives, depletes, or redirects the funding resources of charter schools that are necessary to provide students with the capital facilities sufficient to offer an equal opportunity for a sound basic education.²

Based upon these allegations, Plaintiffs sought a declaration that: (1) “the charter school funding statutes are facially unconstitutional or unconstitutional to the extent they are applied to prohibit” Defendants from “extending to the Plaintiffs the opportunity to be uniformly considered for expenditures from the capital outlay fund” or that (2) the charter school funding statutes, “consistent with the North Carolina Constitution and other statutory provisions,” either “permit” or “must permit” Plaintiffs to have the “opportunity to be uniformly considered for expenditures from the capital outlay fund by the County Defendants.”

All Defendants sought dismissal of Plaintiffs' amended complaint pursuant to N.C. Gen.Stat. § 1A–1, Rule 12(b)(6). After hearing argument concerning Defendants' dismissal motion, the trial court entered an order dismissing Plaintiffs' amended complaint on 4 June 2010. Plaintiffs noted an appeal to this Court from the trial court's order.

II. Legal Analysis A. Standard of Review

The standard of review utilized in reviewing orders granting dismissal motions made pursuant to N.C. Gen.Stat. § 1A–1, Rule 12(b)(6), is well established:

The standard of review of an order allowing a Rule 12(b)(6) motion is “whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory[.]” “The complaint should be liberally construed, and the court should not dismiss the complaint unless it appears beyond doubt that [the] plaintiff could prove no set of facts in support of his claim which would entitle him to relief.” We evaluate all facts alleged and permissible inferences therefrom in the light most favorable to plaintiff.

Goodman v. Holmes & McLaurin Attorneys at Law, 192 N.C.App. 467, 473, 665 S.E.2d 526, 531 (2008) (quoting Bowman v. Alan Vester Ford Lincoln Mercury, 151 N.C.App. 603, 606, 566 S.E.2d 818, 821 (2002), and State ex rel. Cooper v. Ridgeway Brands Mfg., LLC, 184 N.C.App. 613, 618, 646 S.E.2d 790, 795 (2007) (internal quotation omitted), aff'd in part and reversed in part on other grounds, 362 N.C. 431, 666 S.E.2d 107 (2008), and citing Stephenson v. Town of Garner, 136 N.C.App. 444, 447, 524 S.E.2d 608, 611, disc. review denied, 352 N.C. 156, 544 S.E.2d 243 (2000)). We will now utilize this standard of review to evaluate Plaintiffs' challenges to the trial court's order.

[712 S.E.2d 734]

B. Analysis of Plaintiff's Claims

1. Statutory Construction Issues

The initial issue that we must address is whether a charter school has a legal right to apply for funding from the capital outlay fund maintained by the board of education in the county where the charter school is located. Based upon our analysis of the relevant statutory provisions, we conclude that charter schools are not entitled to request such funding.³

N.C. Gen.Stat. § 115C–238.29A “authorize[s] a system of charter schools to provide opportunities for teachers, parents, pupils, and community members to establish and maintain schools that operate independently of existing schools [.]” Although charter schools are undoubtedly public schools, they are exempt from the obligation to comply with many of the statutory provisions that govern the operation of traditional public schools, according to N.C. Gen.Stat. § 115C–238.29E, which provides, in pertinent part, that:

(a) A charter school that is approved by the State shall be a public school within the local school administrative unit in which it is located....

(b) A charter school shall be operated by a private nonprofit corporation that shall have received federal tax-exempt status[.]

(c) A charter school shall operate under the written charter signed by the entity to which it is accountable under subsection (a) of this section and the applicant....

(d) The board of directors of the charter school shall decide matters related to the operation of the school, including budgeting, curriculum, and operating procedures.

...

(f) Except as provided in this Part and pursuant to the provisions of its charter, a charter school is exempt from statutes and rules applicable to a local board of education or local school administrative unit.

The structure of public school budgeting and financial accounting is outlined in the “School Budget and Fiscal Control Act,” which appears in Chapter 115C, Article 31, of the North Carolina General Statutes. N.C. Gen.Stat. § 115C–426, which is entitled “Uniform Budget Format,” specifies the required funding categories and provides, in pertinent part, that

(a) The State...