school district is not an agency of the Commonwealth but a local agency, which is not subject to the original jurisdiction of this Court
How later courts described this case
- school district is not an agency of the Commonwealth but a local agency, which is not subject to the original jurisdiction of this Court
Written by the judges who cited it.
The opinion
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Chester Community Charter School, :
Petitioner :
:
v. : No. 351 M.D. 2023
:
Commonwealth of Pennsylvania, :
Department of Education; Dr. Khalid N. :
Mumin, Secretary of the Pennsylvania :
Department of Education (in his official :
capacity); Chester Upland School :
District; and Nafis J. Nichols, Receiver :
for the Chester Upland School District :
(in his official capacity), :
Respondents : Argued: June 4, 2024
BEFORE: HONORABLE ANNE E. COVEY, Judge
HONORABLE MICHAEL H. WOJCIK, Judge (P.)
HONORABLE ELLEN CEISLER, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE CEISLER FILED: July 3, 2024
Before this Court are Preliminary Objections (POs) filed by the Chester
Upland School District (District) and Nafis J. Nichols, the District’s receiver
(Receiver), in response to a Petition for Review (PFR) filed by the Chester
Community Charter School (CCCS). CCCS’ PFR seeks declaratory, injunctive, and
mandamus relief against the District, Receiver, the Pennsylvania Department of
Education (Department), and the Department’s Secretary, Dr. Khalid N. Mumin
(Secretary) (collectively, Respondents). Also before this Court is an Application for
Relief in the Nature of a Motion for Judgment on the Pleadings (Application for
Relief) filed by the Department and the Secretary (collectively, the Commonwealth).
The issue before this Court is whether a 2015 settlement agreement (Agreement)
executed by Respondents and CCCS is valid and enforceable where the Agreement
reduces the tuition rates CCCS would ordinarily receive for special education
students pursuant to Section 1725-A of the Charter School Law.1
After review, we overrule the District’s POs, grant the Commonwealth’s
Application for Relief, and dismiss CCCS’ PFR as to the Commonwealth. Under
Section 761(a) of the Judicial Code, 42 Pa.C.S. § 761(a), this Court’s original
jurisdiction encompasses civil actions by or against the Commonwealth government,
including any officer thereof, when acting in his or her official capacity. Instantly,
only the Secretary and the Department are Commonwealth parties for purposes of
Section 761(a) of the Judicial Code. This Court’s original jurisdiction may only be
invoked for claims against the District, a local agency,2 and Receiver3 when those
claims are ancillary to a matter within our exclusive original jurisdiction.4 In the
absence of a Commonwealth party, we do not have jurisdiction over CCCS’ claims
1
Act of March 10, 1949, P.L. 30, as amended, added by the Act of June 19, 1997, P.L.
225, 24 P.S. § 17-1725-A. Section 1725-A of the Charter School Law establishes the formula for
calculating the tuition rates paid by school districts to charter schools.
2
See Borough of Hummelstown v. Lower Dauphin Sch. Dist., 357 A.2d 727, 29 (Pa.
Cmwlth. 1976) (school district is not an agency of the Commonwealth but a local agency, which
is not subject to the original jurisdiction of this Court).
3
Receiver is not an officer of the Commonwealth, the term of which is defined as an
individual to whom “some sovereign functions of government” have been delegated. Rank v.
Balshy, 475 A.2d 182, 184 (Pa. Cmwlth. 1984).
4
See Section 761(c) of the Judicial Code, 42 Pa.C.S. § 761(c), which provides that this
Court “shall have ancillary jurisdiction over any claim or other matter [that] is related to a claim
or other matter within [our] exclusive original jurisdiction.”
2
against the District and Receiver. Therefore, we transfer this matter to the Court of
Common Pleas of Delaware County (trial court) for disposition.5
I. Background
In 1994, the Department declared the District to be financially distressed
under Section 691 of the Public School Code of 1949 (School Code).6 On August
14, 2012, the Department declared the District was in financial recovery status, as
described in Section 621-A of the School Code.7 As a result, the Secretary appointed
a chief recovery officer to develop and implement a financial recovery plan for the
District. When the District’s Board of School Directors (Board) failed to approve
the financial recovery plan created by the chief recovery officer, the trial court
appointed a receiver to implement the District’s financial recovery plan.
In October 2015, the District, the Commonwealth, CCCS, and two other
District charter schools entered into a memorandum of understanding (MOU),8 by
which the charter schools agreed to receive reduced special education tuition rates
for the 2015-16 through 2024-25 school years. In addition, the charter schools
agreed to waive any tuition payments due for the 2014-15 school year. The terms
of the MOU were incorporated into an amended financial recovery plan (Amended
Plan) filed with the trial court on October 2, 2015. While the MOU only applied to
5
See Section 5103(a) of the Judicial Code, 42 Pa.C.S. § 5103(a), which provides that a
matter brought in a court that does not have jurisdiction shall not be dismissed but instead shall be
transferred to the proper tribunal.
6
Act of March 10, 1949, P.L. 30, as amended, added by the Act of Dec. 15, 1959, P.L.
1842, as amended, 24 P.S. § 6-691.
7
Added by the Act of July 12, 2012, P.L. 1142, 24 P.S. § 6-621-A.
8
Widener Partnership Charter School and Chester Charter School for the Arts are also
parties to the MOU and the Agreement. They have not challenged the Agreement’s validity.
3
the District’s three brick-and-mortar charter schools, the Amended Plan extended
the reduced special education tuition rates to the District’s cyber charter schools.
The trial court approved the Amended Plan in an order and opinion issued on
October 9, 2015. The trial court’s opinion reflected that the Agreement would shift
$20,000,000 from the charter schools that were parties to the Agreement to the
District.
The Commonwealth, the District, and CCCS subsequently executed the
Agreement, which included the modified special education tuition rates set forth in
the MOU. The agreed-upon tuition rates would remain in effect through the 2024-
25 school year, even if the District exited receivership or financial recovery status.
The parties “explicitly recognize[d]” that tuition rates would not be affected by
subsequently enacted legislation. PFR, Ex. A at 4. The parties also agreed that they
could not set aside the Agreement on the grounds of mistake of fact or law, or
subsequent changes in the law.
The District’s cyber charter schools appealed the trial court’s October 9, 2015
order to this Court, arguing that no statutory authority existed for modifying their
statutorily-mandated special education tuition rates. See In re Appointment of a
Receiver for Chester Upland School District (Pa. Cmwlth., No. 2095 C.D. 2015, No.
2096 C.D. 2015, No. 2097 C.D. 2015, No. 2098 C.D. 2015, No. 2181 C.D. 2015,
No. 2182 C.D. 2015, No. 2183 C.D. 2015, No. 2184 C.D. 2015, No. 2185 C.D. 2015,
No. 2186 C.D. 2015, No. 2228 C.D. 2015, and No. 2229 C.D. 2015, filed Sept. 13,
2018). Notably, CCCS did not appeal the October 9, 2015 order approving the
Amended Plan.
A three-judge panel of this Court ruled in favor of the cyber charter schools,
holding that a receiver could only modify a school district’s legal or contractual
4
obligations when otherwise exercising the powers granted to receivers in the School
Code. We further held that the term “legal obligation” did not include the District’s
“statutorily mandated” payments to charter schools. In re Appointment of a
Receiver, slip. op. at 8. Although a financially distressed school district may
renegotiate a contract to “effect needed economies in the operation of the district’s
schools[,]”9 the relevant provisions of the School Code did not permit a receiver to
“unilaterally modify” the tuition rates set forth in the Charter School Law. Id. at 9
(emphasis in original). Therefore, we concluded that the trial court erred in
approving a modification to the special education tuition rates paid to the District’s
cyber charter schools. We noted that the General Assembly crafted other means by
which a financially-distressed school district could obtain assistance, such as
entering into a “voluntary agreement”10 with a charter school for assistance in
repaying a loan provided by the Department. Id. at 10 n.25. Use of the term
“voluntary” signified the General Assembly’s intent that a cyber charter school
could not be compelled to assist a school district in financial recovery, and a receiver
could not “disregard the detailed funding formula mandated by Section 1725-A(a)
of the Charter School Law.” Id.
CCCS interpreted In re Appointment of a Receiver as prohibiting any
modification, voluntary or otherwise, of the special education tuition rates provided
9
See Section 642-A(a)(3) of the School Code, added by the Act of July 12, 2012, 24 P.S.
§ 6-642-A(a)(3).
10
Section 681-A of the School Code, added by the Act of July 12, 2012, P.L. 1142, 24 P.S.
§ 6-681-A, authorizes the Department to provide loans to school districts in financial recovery
status. Section 642-A(a)(18) of the School Code, 24 P.S. § 6-642-A(a)(18), permits the receiver
of a financially distressed school to enter into a “voluntary agreement” with the district’s charter
schools, by which the charter schools may assist the school district with repaying any loan provided
by the Department under Section 681-A of the School Code.
5
for in Section 1725-A(a) of the Charter School Law. Therefore, CCCS invoiced the
District for the tuition rates in effect prior to execution of the Agreement.
On February 25, 2021, the District initiated an action in the trial court that
sought reimbursement of $6,914,253.80 in funds that the District alleged were
improperly billed and collected by CCCS and/or withheld from the District’s state
subsidy by the Department (Reimbursement Action). The District contended that
this Court’s holding in In re Appointment of a Receiver did not undermine the
Agreement’s validity, as it was a voluntary agreement negotiated by the parties,
including CCCS. By way of relief, the District requested that the trial court issue an
order directing that CCCS and the Department honor the negotiated tuition rates in
the Agreement and refund to the District any amounts charged or withheld in excess
of those rates. The Reimbursement Action is currently pending with the trial court.
On August 8, 2023, CCCS filed its PFR with this Court, requesting a
declaration that the Agreement was void and unenforceable and an injunction
prohibiting its enforcement.11 CCCS also requested a writ of mandamus directing
that the District pay CCCS the tuition rates provided for in Section 1725-A of the
Charter School Law and compelling the Department to withhold from the District’s
11
Section 7532 of the Declaratory Judgments Act, 42 Pa.C.S. § 7532, grants courts of
record the “power to declare rights, status, and other legal relations whether or not further relief is
or could be claimed.”
To obtain permanent injunctive relief, a party must establish that its right to relief is clear,
that the injunction is necessary to avoid an injury that cannot be compensated by damages, and
that greater injury will result if the court does not grant the injunction. Mazin v. Bureau of Pro.
and Occupational Affairs, 950 A.2d 382, 389 (Pa. Cmwlth. 2008).
6
state subsidy any amount owed to CCCS.12 Finally, CCCS requested an award of
damages, as well as attorney’s fees and costs.
The District filed POs, asserting that the PFR should be dismissed because the
Reimbursement Action pending in the trial court involved the same parties, the same
issue – specifically, whether the Agreement is enforceable – and requested the same
relief.
In its Answer to the PFR, the Commonwealth denied the legal conclusions
therein and asserted the affirmative defenses of res judicata/collateral estoppel,
equitable estoppel, laches, waiver, and sovereign immunity. The Commonwealth
included a counterclaim in its answer, which sought a declaratory judgment that
CCCS is bound by the terms of the Agreement.
The Commonwealth subsequently filed its Application for Relief, which
largely reiterates the affirmative defenses raised in its Answer. More specifically,
the Commonwealth avers that CCCS’ PFR is barred by res judicata or collateral
estoppel because the Agreement was previously litigated and approved by the trial
court, that the doctrine of laches bars CCCS’ PFR, where CCCS waited eight years
to challenge the Agreement’s validity, that the doctrines of equitable estoppel and
waiver bar CCCS’ claims because CCCS explicitly waived its right to challenge the
Agreement based on subsequent changes in the law, and that CCCS is not entitled
to mandamus relief because the Agreement discharges the Commonwealth of its
12
Section 1725-A(a)(5) of the Charter School Law requires that a school district pay tuition
to charter schools in 12 monthly payments. If a school district fails to make the required payments,
the Secretary “shall deduct the estimated amount” from any state payments owed to the district.
24 P.S. § 17-1725-A(a)(5).
7
duty to pay the statutory tuition rates under Section 1725-A of the Charter School
Law.
II. Issues
The issues before the Court are whether the Agreement is void and
unenforceable and whether CCCS’ claims are barred by the doctrines of lis pendens,
res judicata or collateral estoppel, laches, equitable estoppel, and waiver.
III. Discussion
A. The District’s POs
In ruling on POs, we must accept as true all well-pleaded material facts in the
petition for review and all inferences reasonably deducible therefrom. Torres v.
Beard, 997 A.2d 1242, 1245 (Pa. Cmwlth. 2010). We are not required to accept as
true any conclusions of law, unwarranted inferences from facts, argumentative
allegations, or expressions of opinion. Id. Preliminary objections testing the legal
sufficiency of a pleading will be sustained only where the pleading clearly fails to
state a claim for which relief may be granted. Id.
In its POs, the District argues that the doctrine of lis pendens requires that the
PFR be dismissed, given the Reimbursement Action pending in the trial court. The
District maintains that because this matter and the Reimbursement Action concern
the same parties and issue, and seek the same relief, the PFR must be dismissed.
Alternatively, the District requests that this matter be stayed pending the trial court’s
resolution of the Reimbursement Action.
Rule 1028(a)(6) of the Pennsylvania Rules of Civil Procedure permits a party
to raise a preliminary objection based on the “pendency of a prior action.”
Pa.R.Civ.P. 1028(a)(6). The pendency of a prior action, or lis pendens, applies when
8
a previously filed case concerns the same parties, rights, and requested relief. Swift
v. Radnor Twp., 983 A.2d 227, 234 (Pa. Cmwlth. 2009). The doctrine of lis pendens
is designed to protect a defendant from having to defend several suits on the same
cause of action at the same time. Hillgartner v. Port Auth. of Allegheny Cnty., 936
A.2d 131, 137 (Pa. Cmwlth. 2007).
While we agree that the parties in the instant matter are also parties to the
Reimbursement Action, which similarly seeks to resolve the issue of whether the
Agreement is valid and enforceable, the relief requested for each matter is not the
same. The Reimbursement Action seeks repayment of $6,914,253.80 in funds that
the District alleges were overbilled by CCCS or improperly withheld from the
District’s subsidy by the Commonwealth. CCCS’ PFR, by contrast, is a suit in
equity that seeks declaratory, injunctive, and mandamus relief. Because the
requirements for lis pendens are not met, we must overrule the District’s POs.
B. Commonwealth’s Application for Relief
A motion for judgment on the pleadings is in the nature of a demurrer, for
which all of the nonmovant’s well-pleaded allegations are viewed as true. School
Express, Inc. v. Upper Adams Sch. Dist., 303 A.3d 186, 194 (Pa. Cmwlth. 2023)
(internal citations omitted). Only those facts specifically admitted by the nonmovant
may be considered against him. Id. A judgment on the pleadings should not be
entered where there are unknown or disputed issues of fact, and we must confine our
consideration to the pleadings and relevant documents. Additionally, this Court
must accept as true “all well[-]pled statements of fact, admissions and any
documents properly attached to the pleadings presented by the party against whom
the motion is filed.” N. Sewickley Twp. v. LaValle, 786 A.2d 325, 327 (Pa. Cmwlth.
2001). We will grant a motion for judgment on the pleadings only where the moving
9
party’s right to succeed is certain and the case is so free from doubt that a trial would
be a fruitless exercise. Id.
The Commonwealth’s Application for Relief cites several bases for
dismissing the PFR. First, the Commonwealth argues that the doctrines of res
judicata and collateral estoppel prevent CCCS from relitigating the tuition rates paid
under the Agreement. Next, the Commonwealth argues that the doctrine of laches
precludes CCCS from voiding the Agreement more than eight years after its
execution.13 Third, the Commonwealth argues that CCCS has waived its right to
challenge the Agreement and, thus, CCCS should be equitably estopped from so
doing. Finally, the Commonwealth argues that CCCS cannot state a claim for
mandamus where the Agreement was validly executed, and the Agreement’s terms
provide for the payment of reduced tuition rates. In the absence of a valid mandamus
claim, the Commonwealth argues that no basis exists for granting CCCS declaratory
and injunctive relief and awarding damages.
1. Res Judicata/Collateral Estoppel
Both res judicata and collateral estoppel serve to preclude a party from
pursuing litigation that revisits a claim or an issue that has been settled by a previous
action, thus preserving the interest in finality of judicial determinations, preventing
endless litigation, and precluding parties from obtaining the proverbial “second bite
of the apple.” In re Est. of Plance, 175 A.3d 249, 270 (Pa. 2017). Res judicata bars
an action when it shares with a prior action a common identity of issues, identity in
the cause of action, identity of persons and parties to the action, and identity of the
capacity of the parties suing or being sued. Collateral estoppel bars the relitigation
of issues necessarily determined between the parties in a prior proceeding that
13
We have reordered the Commonwealth’s arguments.
10
resulted in the entry of a final judgment. Com. v. Holder, 805 A.2d 499, 502 (Pa.
2002). Pennsylvania courts have applied the collateral estoppel doctrine only where
the issues in the two actions are sufficiently similar and material to justify invoking
the doctrine, where the issue was actually litigated, and a final judgment was issued
in the first action. An issue has been actually litigated when it was properly raised,
submitted for determination, and actually determined.
The Commonwealth argues that CCCS cannot challenge the lawfulness of the
reduced tuition rates incorporated into the Amended Plan approved by the trial court
on October 9, 2015. The Commonwealth contends that execution of the Agreement
after the trial court entered its order adopting the Amended Plan is irrelevant, as the
Agreement was based on the MOU that included the same reduced tuition rates.
Ultimately, CCCS agreed to accept reduced tuition payments, which the trial court
approved and which CCCS did not appeal.
CCCS denies that the issues resolved by the Agreement were actually litigated
or the subject of any judgment. Rather, CCCS argues that the Agreement is
governed by contract principles. In addition, CCCS argues that the doctrines of res
judicata or collateral estoppel requires the entry of a final judgment, which cannot
be satisfied by a “private agreement . . . even when that agreement is embodied in a
consent judgment or decree.” CCCS’ Br. at 9.
We agree with CCCS that the Agreement was not incorporated into the trial
court’s October 9, 2015 order. While that order did incorporate the terms of the
MOU, including the reduced tuition rates set forth in the Agreement, that order is
not at issue here. This Court is reviewing whether the Agreement is valid and
enforceable. Because it does not appear that the Agreement was ever reduced to a
final judgment, res judicata and collateral estoppel do not apply.
11
2. Laches
Laches is an equitable doctrine that bars relief when a complaining party is
guilty of want of due diligence in failing to promptly institute an action to the
prejudice of another. Wheels Mech. Contracting & Supplier, Inc. v. W. Jefferson
Hills Sch. Dist., 156 A.3d 356, 362 (Pa. Cmwlth. 2017). The doctrine of laches bars
the prosecution of stale claims under the maxim that “those who sleep on their rights
must awaken to the consequence that they have disappeared.” Id. (internal citations
omitted). Application of the doctrine of laches is a factual determination that is made
on a case-by-case basis. For laches to apply, a party must exhibit a lack of due
diligence in pursuing its cause of action, which results in prejudice to the other party.
The test for due diligence is not what a party knows, but what it might have known
by the use of information within its reach. Prejudice may be found where a change
in the relations of the parties has occurred during the period in which the complainant
failed to act.
The Commonwealth asserts that CCCS failed to exercise due diligence in
challenging the Agreement’s validity, despite having “all the information” necessary
to do so when the Agreement was executed in 2015. Commonwealth’s Br. at 22.
Instead, CCCS only raised its concerns with the Agreement in 2018, following this
Court’s decision in In re Appointment of a Receiver. The Commonwealth asserts
that prejudice to the District would clearly result if it was required to pay the
statutory tuition rates that have accrued since the Agreement’s execution in 2015.
While CCCS maintains that the Agreement was void ab initio, it denies that
it seeks relief dating back to 2015. CCCS instead asserts that it seeks judgment
based on the Commonwealth’s alleged refusal to withhold the District’s state
subsidy following this Court’s decision in In re Appointment of a Receiver.
12
Furthermore, CCCS denies that the Commonwealth will suffer any prejudice if
required to fulfill its statutory duties under Section 1725-A(a)(5), and it cannot assert
the doctrine of laches on the District’s behalf.
We are not persuaded by the Commonwealth’s argument. To prevail on the
defense of laches, the Commonwealth must establish a delay arising from CCCS’
failure to exercise due diligence and prejudice to the Commonwealth resulting from
the delay. Stilp v. Hafer, 701 A.2d 1387, 1391 (Pa. Cmwlth. 1997). Clearly, CCCS
failed to exercise due diligence in pursuing the instant claims. In light of the
“millions of dollars” CCCS alleges it is owed, it seems equally clear that the District
would be prejudiced should this Court declare the Agreement void. PFR ¶ 57.
Problematically, it is not clear what prejudice the Commonwealth, as the moving
party, would suffer. Thus, we are constrained to agree with CCCS that the doctrine
of laches is inapplicable.
3. Equitable Estoppel/Waiver
Equitable estoppel applies when a party, through words, conduct, or silence,
induces another party to act in reasonable reliance thereon. Dep’t of Revenue v. King
Crown Corp., 415 A.2d 927, 929 (Pa. Cmwlth. 1980). The two essential elements
of equitable estoppel are inducement and justifiable reliance on that inducement. In
re Twp. of Jackson, 280 A.3d 1074, 1083 (Pa. Cmwlth. 2022). The inducement may
be through words or conduct and the induced acts may be by commission or
forbearance, provided that a change in condition causes a disadvantage to the
induced party. Id. (internal citations omitted). The representation or conduct itself
must be sufficient to warrant the action of the party claiming estoppel.
13
The enforceability of a settlement agreement is governed by principles of
contract law. Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999) (internal citations
omitted). Parties to a contract can expressly or impliedly waive its provisions. Black
Top Paving Co., Inc. v. Dep’t of Transp., 466 A.2d 774, 776 (Pa. Cmwlth. 1983).
Waiver is the intentional and voluntary relinquishment of a known right. Com. v.
Lucarelli, 971 A.2d 1173, 1179 (Pa. 2009). Waiver of a known contractual right
may be established by a party’s express declaration. Moscatiello Constr. Co. v.
Pittsburgh Water and Sewer Auth., 648 A.2d 1249, 1251 (Pa. Cmwlth. 1994).
The Commonwealth argues that CCCS’ PFR is barred by the doctrines of
waiver and equitable estoppel because CCCS expressly agreed to accept the reduced
tuition rates set forth in the Agreement and agreed to waive its right to challenge the
Agreement, regardless of subsequent changes in the law. Because the
Commonwealth relied on the representations made by CCCS when executing the
Agreement, it maintains that CCCS has waived any right to bring the instant action.
CCCS maintains that the Agreement was a legal nullity from the beginning,
based on its analysis of In re Appointment of a Receiver. Thus, any waiver on CCCS’
part has no operative effect, and CCCS is entitled to collect the statutory tuition rates.
Regarding equitable estoppel, CCCS argues that the Commonwealth cannot invoke
the doctrine as a means of avoiding the mandate in Section 1725-A(a)(5) of the
Charter School Law that the Department deduct payments owed to CCCS from the
District’s state subsidy. CCCS contends that the Commonwealth cannot reasonably
rely on the Agreement to avoid fulfilling its statutory duties. CCCS also suggests
that the Department cannot establish any detriment, prejudice, or harm that will
result from complying with Section 1725-A(a)(5) of the Charter School Law.
14
At the outset, we must object to CCCS’ interpretation of In re Appointment of
a Receiver, and the controlling nature of that decision to the instant matter. In re
Appointment of a Receiver concerned whether a trial court could unilaterally reduce
a charter school’s tuition rates. This Court held that it could not, as the trial court’s
order permitted the receiver to disregard the statutory funding formula in the Charter
School Law, creating, in essence, a mandate that the District’s cyber charter schools
financially assist the District. Notably, CCCS did not appeal the trial court’s October
9, 2015 order, and the issue of whether a charter school could voluntarily enter into
an agreement with a financially-distressed school district to reduce the charter
school’s statutory funding was not before this Court. Even if In re Appointment of
a Receiver guided our decision here, CCCS explicitly agreed to waive any right it
otherwise had to challenge the Agreement, regardless of subsequent legal
developments.
The Commonwealth presents a compelling argument that CCCS’ PFR is
barred by the doctrines of equitable estoppel and waiver. The parties negotiated the
Agreement, by which CCCS agreed to accept reduced tuition payments from the
District and agreed to waive any rights it would otherwise have to challenge the
Agreement’s validity, including any challenge based on changes in the law. In
reliance on CCCS’ representations and the executed Agreement, the District paid
CCCS reduced tuition from 2015 to the present. The Department, in turn, did not
withhold sums from the District’s state subsidy, as it otherwise would have been
required to by Section 1725-A(a)(5) of the Charter School Law. CCCS abided by
the terms of the Agreement for years.
Moreover, this Court decided In re Appointment of a Receiver on September
13, 2018. CCCS waited until May 27, 2020, an additional 18 months before it sent
15
the District an invoice for the statutory tuition rates. Thus, nearly five years passed
before CCCS notified the District that it intended to collect the rates provided in
Section 1725-A of the Charter School Law. By accepting reduced tuition for several
years, CCCS induced the District to continue paying the reduced rates provided in
the Agreement. Consequently, the Department did not withhold funds from the
District’s subsidy and pay those amounts to CCCS. That the District and the
Department relied on CCCS’ conduct to their detriment seems indisputable, given
that CCCS’ May 27, 2020 invoice reflects a balance due from the District in the
amount of $8,913,383.63. Based on these facts, we are compelled to conclude that
CCCS’s claims, and its challenge to the Agreement’s validity, are barred by the
doctrine of equitable estoppel.
Even if CCCS was not equitably estopped from challenging the Agreement,
CCCS expressly waived its right to “re-open or set [the] Agreement aside in the
future on the grounds that it becomes aware of any mistake of fact or any mistake of
law (including any such mistake arising out of a subsequent change of law) relating
to this Agreement.” PFR, Ex. A, at 5. CCCS’ argument against waiver rests entirely
on its misreading of In re Appointment of a Receiver, an argument we have already
rejected.
4. Mandamus
Finally, the Commonwealth argues that, based on the above arguments and
CCCS’ execution of the Agreement in 2015, the Commonwealth and the District
cannot be compelled to pay the statutory tuition rates under Section 1725-A of the
Charter School Law. Therefore, CCCS cannot demonstrate it has a right to
mandamus relief.
16
CCCS essentially reiterates its argument that the Agreement is void and, as a
result, the District is required to pay the statutory tuition rates. If the District fails to
do so, the Commonwealth has a mandatory, non-discretionary duty to withhold the
District’s subsidies and pay those amounts to CCCS. In its PFR, CCCS suggests
that the authority of a charter school and a school district to enter into a voluntary
agreement is limited to loan repayment assistance under Section 681-A(f) of the
School Code. Otherwise, CCCS contends that a charter school and a school district
may not legally enter into any voluntary agreement.
A writ of mandamus is an extraordinary remedy that is used to compel the
performance of a ministerial act or mandatory duty. DeGeorge v. Young, 892 A.2d
48, 51 (Pa. Cmwlth. 2006). Mandamus may only be granted where the moving party
establishes a clear legal right, a corresponding duty on the part of the respondents,
and the lack of any other appropriate and adequate remedy. Id.
CCCS is correct that Section 1725-A(a)(5) of the Charter School Law requires
that a school district pay tuition to charter schools in 12 monthly payments. In the
event a school district fails to make the required tuition payments, the Secretary
“shall deduct the estimated amount” from any state payments owed to the district.
24 P.S. § 17-1725-A(a)(5). In voluntarily entering into the Agreement, CCCS
agreed to forgo the statutory tuition rates to which it would have been entitled. To
be enforceable, a settlement agreement must possess all the elements of a valid
contract, and the parties must agree upon all the terms and the subject matter thereof.
Mazzella v. Koken, 739 A.2d at 536.
CCCS has not suggested that the Agreement does not represent the negotiated
agreement of the parties, or that it somehow lacks the hallmarks of a valid contract.
CCCS has cited no language in the Charter School Law that prohibits CCCS from
17
negotiating an agreement whereby the District would pay CCCS reduced tuition
rates. Instead, CCCS appears to rely entirely on In re Appointment of a Receiver.
As previously discussed, In re Appointment of a Receiver does not control our
disposition here, where CCCS voluntarily entered into the Agreement with the
District and the Commonwealth, and expressly waived its right to thereafter
challenge the Agreement’s validity.
Moreover, we reject CCCS’ contention that the Charter School Law prohibits
voluntary agreements between a charter school and a school district, unless the
agreement concerns loan repayment assistance under Section 681-A(f). Indeed,
Section 672-A(b)(1) of the School Code, 24 P.S. § 6-672-A(b)(1),14 explicitly grants
a receiver the authority to implement the school district’s financial recovery plan.
The Amended Plan approved by the trial court on October 9, 2015, includes the
reduced tuition rates CCCS now disputes. Arguably, execution of the Agreement is
a necessary step in implementing the Amended Plan.
Under these circumstances, CCCS cannot demonstrate the existence of a
mandatory or ministerial duty, and its request for mandamus relief must fail.
Because we hold that the Agreement is valid and enforceable, CCCS’ claims for
injunctive and declaratory relief must likewise fail.
IV. Conclusion
Based on the foregoing discussion, because the requirements of lis pendens
are not met, we overrule the District’s POs. We grant the Commonwealth’s
Application for Relief on the basis that CCCS’ PFR is barred by the doctrines of
equitable estoppel and waiver. Accordingly, we dismiss CCCS’ PFR as to the
14
Added by the Act of July 12, 2012, P.L. 1142.
18
Commonwealth. In light of our holding that the Agreement is valid and enforceable,
the Commonwealth’s counterclaim seeking declaratory relief is rendered moot.
Because the District is not an agency of the Commonwealth, and Receiver is not an
officer of the Commonwealth, this Court does not have original jurisdiction over the
claims raised by CCCS against those parties. Therefore, we transfer this matter to
the trial court for disposition.
ELLEN CEISLER, Judge
19
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Chester Community Charter School, :
Petitioner :
:
v. : No. 351 M.D. 2023
:
Commonwealth of Pennsylvania, :
Department of Education; Dr. Khalid N. :
Mumin, Secretary of the Pennsylvania :
Department of Education (in his official :
capacity); Chester Upland School :
District; and Nafis J. Nichols, Receiver :
for the Chester Upland School District :
(in his official capacity), :
Respondents :
ORDER
AND NOW, this 3rd day of July, 2024, the Preliminary Objections filed by the
Chester Upland School District (District) and Nafis J. Nichols, Receiver for the
Chester Upland School District (Receiver), are hereby OVERRULED. The
Application for Relief in the Nature of a Motion for Judgment on the Pleadings filed
by the Commonwealth of Pennsylvania Department of Education (Department) and
Dr. Khalid N. Mumin, Secretary of the Department, (collectively, the
Commonwealth) is hereby GRANTED. The Petition for Review filed by the Chester
Community Charter School (CCCS) is hereby DISMISSED as to the
Commonwealth. Because this Court does not have original jurisdiction over claims
filed by CCCS against the District and Receiver, we transfer this matter to the Court
of Common Pleas of Delaware County for disposition.
ELLEN CEISLER, Judge