81 A.3d 1282
D.C.2013Background
- Kamit Institute’s charter was revoked by the PCSB on August 12, 2010 after initiation of revocation proceedings.
- Kamit's July 2010 budget payment of $703,691 was placed in escrow after the revocation, with some disbursements approved for operating expenses and wind-down costs.
- Remaining escrow balance was $165,936.33, which Kamit sought to use to reimburse severance payments to staff and faculty.
- Kamit had made severance payments totaling $361,253.90 pursuant to a July 2010 severance package approved by Kamit’s board and memorialized in agreements with employees.
- The District sought to intervene to protect public funds and requested immediate return of escrow funds; the court ordered the escrowed funds to be held pending dispute resolution.
- DC law § 38-1802.13a mandates dissolution of a charter school nonprofit upon charter revocation and directs liquidation of assets with any surplus going to the District.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kamit has standing to appeal the escrow dispute. | Kamit asserts injury from denial of reimbursement. | District/PCSB contend Kamit has no cognizable interest post-revocation. | Kamit lacks standing; dismissal of the appeal. |
| Whether § 38-1802.13a requires dissolution and divestiture of Kamit's assets, depriving Kamit of a legally protected interest. | Kamit argues potential protections under existing contract law. | PCSB and District rely on mandatory dissolution and asset liquidation to the District. | § 38-1802.13a applies; Kamit has no residual interest and cannot recover escrow funds. |
Key Cases Cited
- Kamit Institute for Magnificent Achievers v. District of Columbia Public Charter School Board ( Kamit I ), 55 A.3d 894 (D.C. 2012) (precedent on Kamit's standing and review of charter revocation consequences)
- Grayson v. AT&T Corp., 15 A.3d 219 (D.C. 2011) (business judgment rule and corporate decision-making standards)
- United States Parole Comm’n v. Geraghty, 445 U.S. 388 (U.S. Supreme Court, 1980) (standing and mootness concepts in a time frame)
- Exxon Corp. v. Eagerton, 462 U.S. 176 (U.S. Supreme Court, 1983) (Contract Clause and state regulatory power over contract rights)
- Comford v. United States, 947 A.2d 1181 (D.C. 2008) (perfunctory argument waived; need developed argumentation)