Flanner House of Indianapolis, Inc., Appellant-Plaintiff, v. Flanner House Elementary School, Inc., Aliza Anderson, Chi Blackburn, Lorri Bryant, Dr. Cathi Cornelius, Robert Dotson, Brooke Dunn, Frances L. Hudson, Tanjla Lawrence, Frances Malone, Lauren Peterson, Patricia Roe, Latika Warthaw, Marshawn Wolley, Lauren Wright, and Liberty Mutual Insurance Group, Appellees-Defendants, and State of Indiana, Appellee-Intervenor.
Case No. 49A02-1612-PL-2942
Court of Appeals of Indiana
December 4, 2017
Friedlander, Senior Judge
Appeal from the Marion Superior Court. The Honorable John F. Hanley, Judge. Trial Court Cause No. 49D11-1508-PL-26396
ATTORNEY FOR APPELLANT
Zachary S. Kester
Charitable Allies, Inc.
Indianapolis, Indiana
ATTORNEYS FOR APPELLEES
Scott L. Bunnell
Joshua A. Atkinson
Michelle K. Floyd
Hunt Suedhoff Kalamaros LLP
Fort Wayne, Indiana
Attorneys for Patricia Roe
Linda L. Vitone
Kimberly E. Howard
Smith Fisher Maas Howard & Lloyd, PC
Indianapolis, Indiana
Attorneys for Aliza Anderson, Lorri Bryant, Dr. Cathi Cornelius, Lauren Peterson, Lauren Wright, and Robert Dotson
John W. Mervilde
Rick D. Meils
Meils Thompson Dietz & Berish
Indianapolis, Indiana
Attorneys for Marshawn Wolley
Jeffrey D. Hawkins
Mark D. Gerth
Adam S. Ira
Kightlinger & Gray, LLP
Indianapolis, Indiana
Attorneys for Chi Blackburn, Brooke Dunn, Frances L. Hudson, Tanjla Lawrence, Frances Malone, Latika Warthaw, Flanner House Elementary School, Inc.
Curtis T. Hill, Jr.
Attorney General of Indiana
Kyle Hunter
Deputy Attorney General
Indianapolis, Indiana
Attorneys for the State of Indiana
I N THE COURT OF APPEALS OF INDIANA
[1] Flanner House of Indianapolis, Inc. (Flanner House) appeals the trial court’s entry of summary judgment in favor of Flanner House Elementary School, Inc. (Flanner School, Inc.) and its individual directors and officers (collectively “Appellees”).1 We affirm.
[2] Flanner House presents three issues for our review, which we restate as:
- Whether the trial court erred in granting summary judgment in favor of the Appellees on the issue of compliance with the nоtice requirement of the Indiana Tort Claims Act (the Act).
- Whether application of the Act to charter schools and their organizers violates the equal privileges and immunities clause of the Indiana Constitution.
- Whether application of the Act to charter schools and their organizers violates the open courts clause of the Indiana Constitution.
[3] Flanner School, Inc. is a nonprofit Indiana corporation that was established in early 2002. On February 27, 2002, Flanner School, Inc. entered into a charter school agreement with the Mayor of Indianapolis to estаblish a charter school named Flanner House Elementary School (Elementary School). Flanner School, Inc. operated the Elementary School as a charter school under this agreement until its charter was revoked on September 11, 2014. During that time, Flanner School, Inc. leased its school building from Flanner House, a separate nonprofit Indiana corporation.
[4] In August 2015, Flanner House sued Flanner School, Inc. for breach of contract, sued the Appellees for negligence and fraud, and sued Liberty Mutual Insurance Group for bad faith. In its complaint, Flanner
[5] From July through October 2016, the Appellees, some individually and some jointly, filed motions for summary judgment. All of the Appellees argued that Flanner House had not provided them with notice under the Act, and Appellee Patricia Roe additionally argued in the alternative that no duty was owed to Flanner House. Flanner House responded that the Appellees were not entitled to notice under the Act and alleged that extending the protections of the Act to the Appellees violates the Indiana Constitution. Having received notice from the court that the constitutionality of the Act was being challenged in this action, the State filed motions to intervene and to bifurcate the constitutional issues, both of which were granted. After hearing argument on the motions for summary judgment, the trial court entered final judgment for the Appellees. This appeal followed.
[6] On appeal from a summary judgment, we apply the same standard of review as the trial court: summary judgment is appropriate only where the designated evidentiary matter shows there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Young v. Hood’s Gardens, Inc., 24 N.E.3d 421 (Ind. 2015); see also
1. “Charter School”
[7] Flanner House asserts the trial court erred by granting summary judgment for the Appellees on the issue of its compliance with the tort claim notice requirement. The Act governs civil lawsuits against governmental entities and their employees.
[8] In this litigation, Flanner House did not provide notice of its claims to the Appellees as required by the Act. The thrust of Flanner House’s argument is that Flanner School, Inc. is not a “charter school,” as that term is used in the Act, and therefore is not entitled to the notice required under the Act. Although Flanner House acknowledges that the Elementary School is a charter school, it contends Flanner School, Inc. is not a charter school but is instead an organizer of a charter school and therefore a distinct entity from the charter school itself. Accordingly, Flanner Hоuse argues that Flanner School, Inc. is not entitled to the notice
[9] A question of statutory interpretation is a matter of law, and we are neither bound by, nor are we required to give deference to, the trial court’s interpretation. Perry-Worth Concerned Citizens v. Bd. of Comm’rs of Boone Cnty., 723 N.E.2d 457 (Ind. Ct. App. 2000), trans. denied. Accordingly, our review is de novo. Ballard, 8 N.E.3d 190. When interpreting a statute, we look to the express language of the statute and the rules of statutory construction. Ind. State Teachers Ass’n v. Bd. of Sch. Comm’rs of City of Indianapolis, 693 N.E.2d 972 (Ind. Ct. App. 1998). This court is required to ascertain and execute legislative intent and to interpret the statute in such a manner as to prevent absurdity and to advance public convenience. Id. In so doing, we must be aware of the purpose of the statute, as well as the effect of such an interpretation. Id. We read the individual sections of an act as a whole and strive to give effect to all of its provisions such that no part of the act is held meaningless if it can be reconciled with the rest of the statute. Citizens Action Coal. of Ind., Inc. v. Ind. Statewide Ass’n of Rural Elec. Coops., Inc., 693 N.E.2d 1324 (Ind. Ct. App. 1998). We presume that our legislature intended its language to be applied in a logical manner consistent with the underlying goals and policy of the statute. Id. Moreover, in this case we are mindful that because the Act is in derogation of the common law, it must be strictly construed against limitations on a claimant’s right to bring suit. Simpson v. OP Prop. Mgmt., LLC, 939 N.E.2d 1098 (Ind. Ct. App. 2010).
[10] A charter school is a public elementary school that is established by and operates under a charter.
[11] To establish a charter school, an organizer may submit to the authorizer a proposal, which is a detailed implementation plan that includes both governance and educational matters, all of which are the ultimate responsibility of the organizer. The proрosal must contain at least the following information:
- identification of the organizer,
- a description of the organizer’s organizational structure and governance plan,
- the following information for the proposed charter school:
- name,
- purposes,
- governance structure,
- management structure,
- educational mission goals,
- curriculum and instructional methods,
- methods of pupil assessment,
- admission policy and criteria,
- school calendar,
- age or grade range of students to be enrolled,
- description of staff responsibilities,
- description of the physical plant,
- budget and financial plans,
-
personnel plan, including methods for selection, retention, and compensation of employees, - transportation plan,
- discipline program,
- plan for compliance with any applicable desegregation order,
- date when the charter school is expected to:
- begin school operations, and
- have students attending the charter school,
- arrangement for providing teachers and other staff with health insurance, retirement benefits, liability insurance, and other benefits, and
- the manner in which the authorizer must conduct an annual audit of the program operations of the chartеr school.
See
[12] The authorizer reviews and evaluates the application under criteria consistent with nationally recognized principles and informs the organizer whether the proposal is accepted or rejected.
[13] The organizer’s duties do not end when the charter is signed and the charter school is operational. Once established, each charter school must set annual performance targets designed to help the school meet applicable federal, state, and authorizer expectations.
[14] Additionally, the organizer is the fiscal agent for the charter school and has exclusive control of the financial matters of the school and of funds received by the school.
[15] Moreover, the organizer is required to publish an annual performance report that provides information regarding student enrollment, graduation rate, attendance rate, test scores, average class size, the school’s performance category, number and percentage of students in special programs, advanced placement, course completion, percentage of graduates considered
[16] If an organizer is notified by the authorizer that it is failing to comply with the conditions of the charter, applicable federal and state laws, or generally accepted fiscal management and government accounting principles, or if the school is failing to meet the educational goals set out in the charter, it must remedy the deficiencies or face revocation of the school’s charter.
[17] As demonstrated by the statutes, the organizer determines the organization and management of the school, receives the charter for the charter school, is responsible for the implementation of the charter, is accountable for the financial and academic viability of the school, and insures compliance with federal and state laws and authorizer expectations. A charter school cannot exist without an organizer, and the organizer is required to have nonprofit status. Based upon our review of the relationship, responsibilities, duties, and authority of a charter school organizer as set out in these statutes, we conclude that an organizer of a charter school is not an entity separate from the charter school. Rather, an organizer and a charter school jointly are the charter school.
[18] In making this determination, we note the similarity of charter school organizers to public school corporations, and we recognize that organizers are indeed considered school corporations for certain statе and federal funding opportunities.
[19] Thus, we conclude that an organizer of a charter school is included in the term “charter school” for purposes of
[20] Understanding that Flanner House gave no notice of its tort claim and
[21] We further note that the Act prohibits suits against individual board members concerning acts taken by the board where the member was acting within the scope of the member’s employment.
2. Equal Privileges and Immunities Clause
[22] By granting summary judgment for the Appellees, the trial court implicitly found constitutional the provisions of the Act relating to charter schools. Flanner House claims that application of the Act to include not only charter schools but also their organizers violates two provisions of the Indiana Constitution.
[23] When a statute is challenged as violating the Indiana Constitution, our standard of review is well settled. “A statute is presumed constitutional until the party challenging its constitutionality clearly overcomes the presumption by a contrary showing.” VanDam Estate v. Mid-America Sound, 25 N.E.3d 165, 168 (Ind. Ct. App. 2015), trans. denied. If there аre two reasonable interpretations of the statute, one constitutional and the other not, we will choose the interpretation that will uphold the constitutionality of the statute. Sims v. U.S. Fid. & Guar. Co., 782 N.E.2d 345 (Ind. 2003). We do not presume the General Assembly violated the constitution unless we are compelled to do so by the unambiguous language of the statute. VanDam Estate, 25 N.E.3d 165. This Court should nullify a statute on constitutional grounds only where such result is clearly rational and necessary. Id.
[24] First, Flanner House asserts that extending the notice and governmental immunity provisions of the Act to charter schools and their organizers violates thе equal privileges and immunities clause.
[25] Flanner House contends the disparately treated classes are charter schools, private schools, and nonprofit corporations. Flanner House, however, does not engage in any meaningful discussion or analysis of the required two-part test. Instead, it merely argues that allowing charter schools and their organizers to be protected by the Act is unfair, and it characterizes charter schools as having only public school “status” for the purpose of dealing with students and their parents but maintains that charter schools are actually private, nonprofit corporations with regard to their transactions with other businesses. Appellant’s Br. p. 29.
[26] Charter schools are neither private schools nor nonprofit corporations; rather, by the plain terms of the statute creating them, they are public schools. See
[27] In addition, the disparate treatment conferred by the legislation must be reasonably related to the inherent characteristics differentiating the classes. Whistle Stop Inn, Inc., 51 N.E.3d 195. As our Supreme Court has explained:
Legislative classification becomes a judicial question only where the lines drawn appear arbitrary or manifestly unreasonable. So long as the classification is based upon substantial distinctions with reference to the subject matter, we will not substitute our judgment for that оf the legislature; nor will we inquire into the legislative motives prompting such classification.
Collins v. Day, 644 N.E.2d 72, 80 (Ind. 1994).
[29] The Act was adopted to establish procedures for cases involving the prosecution of tort claims against governmental entities. Hasty v. Floyd Mem’l Hosp., 612 N.E.2d 119 (Ind. Ct. App. 1992). By establishing notice requirements and limitations on recovery from government entities, including public schools, the Act advances the legislative policies of protecting the State’s finances while ensuring that public employees can exercise their independent judgment necessary to carry out their duties without the threat of civil litigation over decisions they make within the scope of their employment. Noble Cty. v. Rogers, 745 N.E.2d 194 (Ind. 2001). By their very definition, chаrter schools are public schools, and, as such, they are reasonably classified by the legislature as governmental entities under the Act as are traditional public schools. See Meury v. Eagle-Union Cmty. Sch. Corp., 714 N.E.2d 233 (Ind. Ct. App. 1999) (citing
[30] Moreover, the legislative intent underlying the establishment of charter schools was to provide innovative and autonomous programs that serve the different learning styles and needs of public school students, offer public school students appropriate and innovative choices, provide varied opportunities for professional educators, allow public schools freedom and flexibility in exchange for exceptional levels of accountability, and provide parents, students, community members, and local entities with an expanded opportunity for involvement in the public school system.
[31] As to the second part of the test, Flanner House does not dispute that the preferential treatment of charter schools under the Act is uniformly applicable and equally available to all charter schools. Flanner House has not met its burden to negate every conceivable basis which might support the classification.4 We conclude
3. Open Courts Clause
[32] Flanner House asserts that extending the immunity under the Act to charter schools and their organizers will violate the open courts clause of the Indiana Constitution. The open courts clause provides: “All courts shall be open; and every person, for injury done to him in his person, property, or reputation, shall have remedy by due course of law. Justice shall be administered freely, and without purchase; completely, and without denial; speedily, and without delay.”
[33] The courts of our state have uniformly held that in cases involving injury to person or property,
[34] As we have noted in this opinion, one of the primary concerns the Act was intended to address was protection of the public treasury, and by extension the taxpayers, from a multitude of tort lawsuits and the possibility of enormous monetary liabilities if government entities were held legally accountable in civil litigation in the same fashion as private entities and persons. VanDam Estate, 25 N.E.3d 165. With regard to governmental immunity in the Act, our supreme court has stated, “In tort cases, the source of authority or lack thereof to sue the State originally arose from rights at common law, not from rights сontained in the Constitution. Thus, it is within the legislature’s authority to expand or restrict the scope of sovereign immunity through the Tort Claims Act.” State v. Rendleman, 603 N.E.2d 1333, 1337 (Ind. 1992). Rendleman concerned a suit against the State for damages allegedly sustained in a motor vehicle accident involving Rendleman and an Indiana State Trooper. In holding that the law enforcement immunity section of the Act was a constitutional exercise of legislative authority, the Court stated: “That [the law enforcement immunity section] may result in Rendleman bearing the full economic burden of his injuries and damages without the ability to insure himself against such losses, is a mattеr of policy for the legislature, not this Court, to address.” Id.
[35] Similarly, the extension of the immunity provision of the Act to a charter school and its organizer, which we determined are, jointly, a charter school, is a rational means to achieve the legitimate legislative goal of protecting the public treasury. Accordingly, we conclude that
[36] Having concluded that the trial court properly entered summary judgment for the Appellees and that there are no constitutional violаtions, we affirm the trial court’s judgment.
[37] Judgment affirmed.
Mathias, J., and Crone, J., concur.