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Summit Sch., Inc. v. Commonwealth, Department of Education

Commonwealth Court of Pennsylvania

January 15, 2015

The Summit School, Inc., t/d/b/a Summit Academy, Petitioner
v.
Commonwealth of Pennsylvania, Department of Education, Respondent

Argued November 13, 2014

Court of ORIGINAL JURISDICTION.

James H. Norris, Jr., Pittsburgh, for petitioner.

Howard G. Hopkirk, Harrisburg, for respondent.

BEFORE: HONORABLE DAN PELLEGRINI, President Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE MARY HANNAH LEAVITT, Judge.

OPINION

Page 193

RENÉE COHN JUBELIRER, Judge

Before this Court, in our original jurisdiction, are the Motion for Summary Judgment filed by The Summit School, Inc., t/d/b/a Summit Academy (Academy) (Academy's Motion) and the Motion for Summary Relief filed by the Commonwealth of Pennsylvania, Department of Education (Department) (Department's Motion) in this declaratory judgment action (Amended Complaint) filed by the Academy.[1] The parties agree that there are no outstanding issues of material fact and argue that they are entitled to judgment as a matter of law on the proper interpretation and implementation of Section 2561(6) of the Public School Code of 1949 (School Code).[2] The question before this Court is whether, pursuant to Section 2561(6) of the School Code, the Department has to reimburse the Butler Area School District (District) in the amount of 150% of the District's tuition rate for the non-resident students the Academy educates on the District's behalf pursuant to a contract between the District and the Academy.

I. Background

The Academy seeks a declaratory judgment under the Declaratory Judgments

Page 194

Act[3] requiring the Department to reimburse the District, with which the Academy has a contract, the 150% tuition rate set forth in Section 2561(6) of the School Code. The Amended Complaint[4] avers the following. The Academy is a residential facility for adjudicated delinquents that is licensed by both the Department of Human Services (formerly the Department of Public Welfare) to provide care for up to 353 students, and by the Department as a private academic secondary school. (Amended Compl. ¶ ¶ 5-7.) Since 1997, the District has had a contract with the Academy to fulfill the District's " obligation to administer and deliver educational services to students at the Academy," pursuant to Section 1306(a) of the School Code[5] (Agreement). (Amended Compl. ¶ ¶ 8, 10.) The Agreement for the 1999-2000 school year is attached to the Amended Complaint as Exhibit A. According to a Department Basic Education Circular (BEC), which is attached to the Amended Complaint as Exhibit B, a host school district, like the District, is permitted to " contract with another educational entity to provide the education of students at the institution" and allows the host school district to finance that contract by " charging the . . . resident school district [(home school district)] the tuition rate as determined by [Section 2561] of the School Code." (Amended Compl. ¶ ¶ 12, 14-15; BEC at 1.)

In 2001 and 2002, the District billed the home school districts, i.e., the districts where the Academy's students would have attended school had they not been adjudicated delinquent, the 150% rate. (Amended Compl. ¶ 19.) On behalf of the home school districts, the Department paid that rate to the District, which then remitted that money to the Academy less an administrative fee. (Amended Compl. ¶ 19.) The actual cost of educating the students at the Academy exceeds the 150% rate. (Amended Compl. ¶ 20.) Beginning in 2003, the Department refused to reimburse the District at the 150% rate, instead reimbursing it for 100% of the District's tuition rate. (Amended Compl. ¶ 21.) The Department challenged the 150% rate, and the Academy believes the Department also advised at least one home school district that it was paying too much. (Amended Compl. ¶ 23.) The Academy asserts that the Department is violating ...


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