MOSAICA ACADEMY CHARTER SCHOOL, Lisa Mayo and Desiree McCall v. COMMONWEALTH of Pennsylvania, DEPARTMENT OF EDUCATION; Eugene Hickok, In His Capacity As Secretary of Education of The Commonwealth of Pennsylvania; The School District of Philadelphia Board of Education and David Hornbeck, In His Capacity as Superintendent of The School District of Philadelphia v. Bensalem Township School District, Ruth E. Bell, President, Board of School Directors
Nos. 89 MAP 2001, 90 MAP 2001
Supreme Court of Pennsylvania
Decided Dec. 31, 2002
813 A.2d 813
Justice NEWMAN did not participate in the consideration or decision of this case.
MOSAICA ACADEMY CHARTER SCHOOL, Lisa Mayo and Desiree McCall v. COMMONWEALTH of Pennsylvania, DEPARTMENT OF EDUCATION; Eugene Hickok, In His Capacity As Secretary of Education of The Commonwealth of Pennsylvania; The School District of Philadelphia Board of Education and David Hornbeck, In His Capacity as Superintendent of The School District of Philadelphia v. Bensalem Township School District, Ruth E. Bell, President, Board of School Directors
Appeal of School District of Philadelphia Board of Education and David Hornbeck, In His Capacity As Superintendent of The School District of Philadelphia.
Supreme Court of Pennsylvania.
Submitted Nov. 20, 2001.
Decided Dec. 31, 2002.
William R. Lloyd, Harrisburg, for appellant amicus curiae, PA State Educ. Ass‘n.
Janetta Fink Call, for appellees, Mosaica Academy Charter School, Lisa Mayo and Desiree McCall.
Jason R. Wiley, New Britain, for appellees, Bensalem Tp. School Dist. and Ruth E. Bell.
Karen S. Feuchtenberger, Harrisburg, for appellee, Com. Dept. of Educ.
Before ZAPPALA, C.J., and CAPPY, CASTILLE, NIGRO, NEWMAN, SAYLOR and EAKIN, JJ.
OPINION
Chief Justice ZAPPALA.
This direct appeal involves a declaratory judgment action brought by Mosaica Academy Charter School to compel Philadelphia School District to pay its tuition subsidies due under the Charter School Law
The facts of this case are undisputed. On March 31, 1998, Bensalem Township School District received Mosaica Academy‘s charter school application. The application stated that Mosaica Academy intended to contract with its affiliate company, Mosaica Education, Inc., (MEI), to receive educational and administrative services. Bensalem Township School District reviewed the application and, on June 24, 1998, granted the charter. After Mosaica Academy determined that sixty percent of its student body resided in Philadelphia, it sought the statutorily mandated subsidies from Philadelphia School District pursuant to Section 17-1725-A. of the CSL.
On September 4, 1998, Mosaica Academy, along with Lisa Mayo and Desiree McCall (collectively Mosaica), filed a petition for review in Commonwealth Court against the Commonwealth of Pennsylvania, Department of Education, Eugene Hickok, in his capacity as Secretary of Education, the School District of Philadelphia Board of Education, and David Hornbeck, in his capacity as Superintendent of the School District of Philadelphia (collectively Philadelphia School District). The petition for review requested that the Commonwealth Court:
(1) Compel the Philadelphia School District to provide statutorily required transportation to and from school for the Philadelphia children who attend Mosaica; or, in the alternative;
(2) Order the Department of Education to pay Mosaica the transportation reimbursement subsidies intended to be paid to the Philadelphia School District for Mosaica students, as well as the cost of educating the enrolled Philadelphia School District children;
(3) Declare the scope of the responsibilities of the Commonwealth, Department of Education set forth in the Charter School Law as well as the scope of the responsibilities of the Philadelphia School District under the Charter School Law.4
Philadelphia School District denied that Mosaica had a right to the relief requested. It asserted that the charter issued to Mosaica violates the CSL because Mosaica was impermissibly created as the alter ego of MEI and because Mosaica failed to obtain a regional charter when it intended to recruit most of its students from outside of Bensalem. Philadelphia School District also asserted that it had no duty to transport its resident students to Mosaica. Philadelphia School District further sought to join MEI and asserted a counterclaim against MEI and Mosaica, claiming unjust enrichment and seeking injunctive and declaratory relief. Philadelphia School District also moved to join as additional defendants Bensalem Township School District and Ruth Bell, in her capacity as President of the Board of School Directors (collectively BTSD), and filed a three-count joinder complaint against them.5 Mosaica, MEI and BTSD filed preliminary objections.
On May 12, 1999, the Commonwealth Court overruled the preliminary objections of Mosaica and MEI without opinion. That same day, the Commonwealth Court issued an opinion and order sustaining in part and overruling in part BTSD‘s preliminary objections.6
The parties filed cross-motions for summary judgment. By order dated July 20, 2000, the Commonwealth Court granted the joint motion for summary judgment filed by Mosaica and MEI. It also granted summary judgment in favor of the Commonwealth, Department of Education, and BTSD.7 It dismissed all claims Philadelphia School District had asserted against the various parties. The court held that, although the CSL provided an appeal for the denial of a charter school application, an appeal is not permitted where a charter application has been granted. It ruled that the exclusive remedy for the revocation or termination of a charter lies in Section 17-1729-A.(a) of the CSL. Thus, it concluded that Philadelphia School District‘s challenge to the grant of Mosaica‘s
As to declaratory relief, the Commonwealth Court ordered Philadelphia School District to provide transportation to Philadelphia students who attend Mosaica and reimburse Mosaica for the cost of educating the enrolled Philadelphia residents. The Commonwealth Court ruled that if Philadelphia School District does not meet its statutory obligation under the CSL, the Commonwealth of Pennsylvania, Department of Education, shall pay to Mosaica those reimbursement subsidies due pursuant to Section 17-1725-A.(a)(5) of the CSL.8 Finally, it ordered Philadelphia School District to pay Mosaica costs and attorneys fees upon the submission of time records and costs to the court.
On December 18, 2000, the Commonwealth Court entered an order pursuant to the Declaratory Judgment Act,
Philadelphia School District filed a direct appeal to this Court pursuant to Section 723 of the Judicial Code. Id. at
Because these are issues of law, our review is plenary. Phillips v. A-Best Products, 542 Pa. 124, 665 A.2d 1167, 1170 (1995). In addressing these issues, we keep in mind that in construing statutory language, “[w]ords and phrases shall be construed according to rules of grammar and according to their common and approved usage.”
Philadelphia School District argues that the Commonwealth Court‘s decision effectively insulates the grant of a charter application from administrative and judicial review. It concedes that the CSL is silent as to any appeal procedure from the grant of a charter, but argues that such silence does not denote the lack of any right to appeal. It contends that the Legislature could not have intended to grant local school boards unfettered discretion in this regard. We disagree.
The General Assembly went to great lengths to permit the establishment of charter schools that operate independently from the existing school district structure in order to improve pupil learning and to encourage the use of innovative teaching methods. Id. at
Most significantly, the CSL vests the discretion to grant or deny an application for a charter in the hands of the local board of school directors of the district where the charter school will be located. Id. at
The CSL is explicit as to the procedure a charter applicant must utilize to appeal the local board of directors’ decision to deny a charter application. Id. at
As we have concluded that there can be no direct attack on a local board of directors’ grant of a charter, Philadelphia School District‘s attempt to collaterally attack or revoke BTSD‘s grant of Mosaica‘s charter in the instant declaratory judgment action must likewise fail. Accordingly, we hold that Philadelphia School District‘s challenge to BTSD‘s grant of Mosaica‘s charter does not constitute a defense to Mosaica‘s claim for tuition subsidies.11
Contrary to Philadelphia School District‘s contentions, however, this conclusion does not render inviolate a local school board‘s grant of a charter. The General Assembly provided an exclusive remedy for the revocation or termination of a charter in Section 17-1729-A., entitled “Causes for nonrenewal or termination.” This section gives the local board of school directors of the chartering district the ability to revoke or fail to renew a charter based upon several enumerated grounds, including violations of the charter, violations of the CSL, or violations of any provision of law of which the charter school has not been exempted.
We further note that the Declaratory Judgments Act,
The second issue for review is whether the CSL requires a school district to provide transportation to resident students attending a charter school located outside of its district. Prior to amendments in 1999 and 2000,13 which are not relevant here, Section 17-1726-A. provided as follows:
Students who reside in the school district in which the charter school is located or who are residents of a school district which is part of a regional charter school shall be provided transportation to the charter school on the same terms and conditions as transportation is provided to students attending the
schools of the district. Nonresident students shall be provided transportation under section 1361. Districts providing transportation to a charter school outside the district shall be eligible for payments under section 2509.3 for each public school student transported.
This provision directs that students attending charter schools located within their district shall receive the same transportation privileges that are provided to students attending schools of the district. It separately addresses the transportation to be afforded to those attending a charter school outside their resident district, as is the case here, and states that transportation shall be provided under Section 1361.14 Although the parties do not dispute that Section 1361 governs, they disagree as to the application of our case law interpreting Section 1361, specifically Babcock School District v. Potocki, 502 Pa. 349, 466 A.2d 616 (1983).
In Babcock, a student and his parents commenced an action in mandamus to compel his school district to provide him transportation to a public school located outside the district. We recognized that Section 1361 was designed to ensure the adequate transportation of resident pupils attending non-public school under circumstances where a district has determined to transport public school children. We concluded, however, that the plain language of Section 1361 provides only that the board of school directors “may” provide for free transportation and not that it “must” do so. We therefore held that Section 1361 does not mandate that pupils be transported to public schools outside the school district.
The Commonwealth Court in the instant case held that charter schools are not “public” schools as defined by the Public School Code or the CSL and therefore our decision in Babcock is not controlling. Contrary to this holding, the parties appear to concede that a charter school is in fact a “public” school by definition.15
Philadelphia School District argues that, according to Babcock, it has the statutory discretion to provide transportation to its resident students attending Mosaica, but is not required to do so. Mosaica and the Department of Education contend that although Babcock is generally the controlling law on the issue of out-of-district transportation of students to public schools, when the Legislature enacted Section 17-1726-A. of the CSL, it carved out an exception to the Babcock holding. Mosaica and the Department of Education rely on the portion of Section 1361 that states: “When provision is made by a
Although Philadelphia School District‘s approach has superficial appeal, we find the arguments presented by Mosaica and the Department of Education more consistent with the legislative intent behind the charter school system. There is a degree of ambiguity in the Legislature‘s cross-reference to Section 1361 in Section 17-1726-A. of the CSL. While it is true that the precise language in Section 1361 relied upon by Mosaica and the Department of Education applies to nonpublic schools, it cannot be ignored that the sole statutory provision the Legislature referred to in addressing the transportation of charter school students outside their district, i.e., Section 1361, was designed to provide adequate transportation to resident pupils attending nonpublic schools. Babcock, 466 A.2d at 617. The CSL also states that funding for the transportation of students to charter schools is provided pursuant to Section 2509.3, which deals exclusively with private schools. Thus, although the General Assembly was clear in defining a charter school as a public school, it went to great lengths to treat the charter schools akin to private schools for purposes of transportation. Finally, as noted, the CSL defines charter school as an “independent public school,”
The third issue for review is whether the Commonwealth Court erred in awarding Mosaica attorneys’ fees and costs as “ancillary relief” under Sections 7538 and 7541(b) of the Declaratory Judgments Act. The American Rule states that a litigant cannot recover counsel fees from an adverse party unless there is express statutory authorization, a clear agreement of the parties or some other established exception. Lavelle v. Koch, 532 Pa. 631, 617 A.2d 319, 323 (1992). In Pennsylvania, the American Rule is embodied in
Thus, we must determine whether there is express statutory authorization or some other established exception for the imposition of attorneys’ fees found in the aforementioned provisions of the Declaratory Judgments Act.
We begin our analysis with an examination of Section 7538, entitled Applications for relief, which states,
(a) General Rule.--Judicial relief based on a declaratory judgment or decree may be granted whenever necessary or proper, subject to Chapter 55 (relating to limitation of time). If an application for supplemental relief is deemed sufficient the court shall, on reasonable notice, require any adverse party whose rights have been adjudicated by a previously entered declaratory judgment or decree to show cause why further relief should not be granted.
(b) Form of application.--An application for relief or supplemental relief under this subchapter shall be in the form prescribed by general rules.
Finding that subsection (a) provided for relief where the rights of a party have been adjudicated by a “previously entered declaratory judgment,” the Commonwealth Court noted that it had granted Mosaica declaratory relief and ordered Philadelphia School District to provide transportation to Philadelphia students attending Mosaica. The court relied on the language of Section 7538, which states: “further relief, based on a declaratory judgment or decree, may be granted when necessary or proper.” Id. at
Philadelphia School District argues that there is no case in this Commonwealth granting attorneys’ fees as “ancillary relief” under the Declaratory Judgments Act. It concedes that “supplemental relief” may be granted, but submits that such term does not encompass attorneys’ fees,
Our research has revealed that counsel fees have been awarded as supplemental relief pursuant to the Declaratory Judgments Act under limited circumstances. In Kelmo Enterprises Inc. v. Commercial Union Insurance Company, 285 Pa.Super. 13, 426 A.2d 680 (1981), the insureds filed a petition for declaratory judgment, seeking an adjudication of their rights under their insurance policy as well as attorneys’ fees and costs incurred in the declaratory judgment action.18
On appeal from the lower court‘s grant of attorneys’ fees, the insurance company argued that the Declaratory Judgment Act contained no specific authorization for an award of counsel fees. The Superior Court held that while that was true, the Act has been “declared to be remedial ... and is to be liberally construed and administered.”
The Kelmo court recognized the general rule against the imposition of counsel fees, but held that it would be anomalous to grant an insured attorneys’ fees expended in defense of the underlying tort action, but to deny the fees in an action brought to vindicate the contractual duty to defend. Accordingly, it held that “an insured who is compelled to bring a declaratory judgment action to establish his insurer‘s duty to defend an action brought by a third party may recover his attorneys’ fees incurred in the declaratory judgment action if the insurer has, in bad faith, refused to defend the action brought by the third party.” Id. at 685.
Thus, the court in Kelmo utilized Sections 7538 and 7541(b) to award counsel fees as supplemental relief under the Declaratory Judgments Act to effectuate the declaratory judgment previously entered by the court. Although we do not find that such ruling is erroneous, we hold that it is not applicable here. The Commonwealth Court did not award Mosaica attorneys’ fees to enforce its previously entered declaratory judgment. Rather, the Commonwealth Court simply looked with disfavor upon Philadelphia School District‘s tactics in challenging BTSD‘s grant of Mosaica‘s charter and concluded that attorneys’ fees and costs were warranted as “ancillary relief.” Unlike Kelmo, the declaratory judgment arose from the various parties’ claims against each other seeking declarations as to their obligations under a recent piece of groundbreaking legislation. As the Declaratory Judgments Act does not expressly authorize the award of counsel fees and because the award of counsel fees was not implemented as supplemental relief to effectuate the declaratory judgment pursuant to
In summary, we affirm those portions of the Commonwealth Court‘s orders that entered summary judgment in favor of Mosaica, MEI, BTSD, and the Commonwealth, Department of Education, and dismissed all the claims against them, on the ground that Philadelphia School District cannot collaterally attack the charter BTSD granted to Mosaica. We also affirm that portion of the Commonwealth Court‘s orders that declared that Philadelphia School District must provide transportation to its resident students attending Mosaica, which is located outside the district. Finally, we reverse the order of the Commonwealth Court that granted attorneys’ fees and costs to Mosaica.
Justice NEWMAN files a concurring opinion.
Justice NIGRO files a dissenting opinion.
Justice NEWMAN, concurring.
I join the Majority in concluding that the Philadelphia School District: (1) may not collaterally attack the grant of a Charter School application; (2) is obligated to fund the transportation of its resident students attending Mosaica Academy Charter School; and (3) is not required to pay counsel fees and costs. However, I write separately to reflect my view that there is a more direct and straightforward statutory mandate for the Philadelphia School District to provide transportation for its resident students to the Mosaica Academy Charter School contained in Section 1361 of the Public School Code of 1949, Act of March 10, 1949, P.L. 30, as amended,
The Majority reasons that, while by definition a charter school is a public school, the General Assembly intended that it be treated as a private school for the purposes of transporting non-resident students. It holds that, because the CSL indicates that transportation for non-resident students must be provided by Section 1361 [relating to transportation to other than regular public schools], the General Assembly intended that charter schools be treated like private schools for transportation purposes and, if the district transports its students to public schools, as the Philadelphia School District does, then it must transport students to other than public schools, including charter schools.
Section 1726-A of the Charter School Law clearly delineates between transportation for students residing in the district in which the charter school they attend is located, and transportation for students residing in a district other than the district in which the charter school they attend is located. Section 1726-A of the CSL provides as follows:
Students who reside in the school district in which the charter school is located or who are residents of a school district which is part of a regional charter school shall be provided transportation to the charter school on the same terms and conditions as transportation is provided to students attending the schools of the district. Nonresident students shall be provided transportation under section 1361. Districts providing transportation to a charter school
outside the district shall be eligible for payments under section 2509.3 for each public school student transported.
The board of school directors in any school district may, out of the funds of the district, provide for the free transportation of any resident pupil to and from the kindergarten, elementary school, or secondary school in which he is lawfully enrolled, provided that such school is not operated for profit and is located within the district boundaries or outside the district boundaries at a distance not exceeding ten miles by the nearest public highway.... When provision is made by a board of school directors for the transportation of public school pupils to and from such schools ... the board of school directors shall also make identical provision for the free transportation of pupils who regularly attend nonpublic kindergarten, elementary or high schools.... The board of school directors shall provide such transportation whenever so required by any of the provisions of this act or of any other act of Assembly.
Accordingly, I believe that there is a clear mandate to the Philadelphia School District contained within Section 1726 A of the CSL and Section 1361 of the Public School Code to provide transportation services to its resident students attending charter schools located outside the district.
Justice NIGRO, dissenting.
In West Chester Area School District v. Collegium Charter School, 812 A.2d 1172, 2002 WL 31852855 (Pa. 2002), I outlined my position that the Charter School Law (“CSL“),
Significantly, in the charter school application that Mosaica submitted to BTSD, it projected that just 80 of its 400 students would reside in Bensalem Township, with the remaining 320 students residing outside the district. See Operating Budget, attached as Exhibit C to Revised 1997 Charter School Application (“Application“). Mosaica therefore expected a full eighty percent of its student body to come from other school districts, and in its application specifically identified Northeast Philadelphia and Lower Bucks County, both of which border BTSD, as regions in which it would conduct enrollment meetings. Application at 37. In spite of having targeted those areas, when Mosaica was asked on the application form about the efforts it had made “to notify those districts from which [it] would draw students,” it responded only that it had “met with the school board and the administration of BTSD on several occasions.” Id. at 25 (emphasis added). As such, it acknowledged that it had made no effort to notify the other school districts, much less discuss with those districts whether making a charter school available to their resident children would promote the legislative purposes underlying the CSL. See
Nevertheless, after BTSD granted Mosaica‘s application for a local charter on June 24, 1998, Mosaica immediately began accepting hundreds of applications for enrollment from students in the Philadelphia School District. Almost exactly as predicted, by July 14, Mosaica had accepted 449 students-256 from the Philadelphia School District, and the remainder from Bensalem, Neshaminy and Bristol Townships.1 Based on the number of students from Philadelphia, Mosaica sent a bill to the Philadelphia School District on July 17, 1998, demanding monthly payments of $117,082.24, i.e., $457.35 per month for each of the 256 students. It further indicated in an accompanying letter that it expected the Philadelphia School District to reallocate its transportation resources to provide transportation to Mosaica students living within its borders. See Letter from Gene Eidelman, Acting Head of Mosaica to David Hornbeck, Superintendent of the Philadelphia School District, dated July 17, 1998.
According to the majority, the Philadelphia School District cannot defend itself against this claim for over $1.4 million in annual tuition subsidies and transportation services because the CSL does not specifically provide for an appeal from a local board of school directors’ decision to grant a charter.2 However, when the regional
Here, of course, Mosaica did not utilize the regional charter school application procedures and thus did not give the Philadelphia School District the opportunity to vote on its charter application. Nevertheless, Mosaica drew approximately 60% of its students from Philadelphia and sought to divert to its independent venture over $1.4 million in Philadelphia taxpayers’ money that was presumably already budgeted for the Philadelphia public school system. The fundamental unfairness of this process is self-evident and, in my view, is not what the General Assembly intended. Accordingly, I would hold the charter invalid, at least insofar as it purports to impose obligations on the Philadelphia School District, and would thereby relieve the Philadelphia School District of any obligation to pay tuition subsidies to Mosaica or provide transportation to Mosaica students.
PROGRESSIVE NORTHERN INSURANCE COMPANY, Appellee v. Gene SCHNECK and Brenda L. Schneck, Individually and as Parents and Natural Guardians of Nathan and Ryan Schneck, Appellants.
Supreme Court of Pennsylvania.
Argued May 14, 2002.
Decided Dec. 31, 2002.
Notes
Students who reside in the school district in which the charter school is located or who are residents of a school district which is part of a regional charter school shall be provided transportation to the charter school on the same terms and conditions as transportation is provided to students attending the schools of the district. School districts of the first class shall also provide transportation to the students if they are the same age or are enrolled in the same grade, grades or their grade equivalents as any students of the district for whom transportation is provided under any program or policy to the schools of the district. Such transportation shall be provided to charter school students each school day whether or not transportation is provided during the same school day to students attending school of the district. Nonresident students shall be provided transportation under section 1361. Districts providing transportation to a charter school outside the district shall be eligible for payments under section 2509.3 for each public school student transported.
The board of school directors in any school district may, out of the funds of the district, provide for the free transportation of any resident pupil to and from the kindergarten, elementary school, or secondary school in which he is lawfully enrolled, provided that such school is not operated for profit and is located within the district boundaries or outside the district boundaries at a distance not exceeding ten miles by the nearest public highway.... When provision is made by a board of school directors for the transportation of public school pupils to and from such schools ... the board of school directors shall also make identical provision for the free transportation of pupils who regularly attend nonpublic kindergarten, elementary or high schools.... The board of school directors shall provide such transportation whenever so required by any of the provisions of this act or of any other act of Assembly.
(b) Effect of alternative remedy.--The General Assembly finds and determines that the principle rendering declaratory relief unavailable in circumstances where an action at law or in equity or a special statutory remedy is available has unreasonably limited the availability of declaratory relief and such principle is hereby abolished. The availability of declaratory relief shall not be limited by the provisions of
1 Pa.C.S. § 1504 (relating to statutory remedy preferred over common law) and the remedy provided by this subchapter shall be additional and cumulative to all other available remedies except as provided in subsection (c). Where another remedy is available the election of the declaratory judgment remedy rather than another available remedy shall not affect the substantive rights of the parties, and the court may pursuant to general rules change venue, require additional pleadings, fix the order of discovery and proof, and take such other action as may be required in the interest of justice.