Hoagland v. Franklin Twp. Cmty. Sch. Corp.

10 N.E.3d 1034

Lora HOAGLAND, Appellant/Plaintiff,

v.FRANKLIN TOWNSHIP COMMUNITY SCHOOL CORPORATION, Appellee/Defendant.

No. 49A02–1301–PL–44.

Court of Appeals of Indiana.

June 10, 2014.

Ian W. Thompson, Greenwood, IN, Attorney for Appellant.

V. Samuel Laurin, III, Bryan H. Babb, Joel T. Nagle, Bose McKinney & Evans LLP, Indianapolis, IN, Attorneys for Appellee.

OPINION

VAIDIK, Chief Judge.

Case Summary

Indiana's public schools lost hundreds of millions of dollars when new property-tax caps went into effect in 2010. Franklin Township Community School Corporation (“Franklin Township”)—one of a number of school corporations hit hardest by the new property-tax caps—responded by eliminating student transportation for the 2011–2012 school year. Franklin Township later contracted with an educational service center to provide student transportation for an annual fee. In November 2011 township parents filed a class-action lawsuit against the school corporation, challenging the constitutionality of its actions.

Though this case raises a number of legal questions, one is of primary importance: did Franklin Township act unconstitutionally with respect to student transportation? Applying our Supreme Court's reasoning in Nagy v. Evansville–Vanderburgh School Corp., 844 N.E.2d 481 (Ind.2006), we conclude that it did. We affirm in part and reverse in part.

Facts and Procedural History

In 2010 the Franklin Township School Board voted to eliminate student transportation for the 2011–2012 school year. Franklin Township then transferred its transportation equipment, including its buses, to Central Indiana Educational Service Center (“CIESC”).¹ CIESC, in turn, offered transportation services to Franklin Township parents. Parents who signed a transportation contract with CIESC received a year of transportation to and from school for one child for $475 and a $20 non-refundable deposit. A year of transportation for each additional child cost $405. Franklin Township did not receive any of the money paid to CIESC. Signing a contract with CIESC was optional; some parents chose to utilize CIESC for student transportation while other parents made alternate arrangements.

In July 2010, in response to an inquiry from the State Examiner, the Attorney General of Indiana issued an official opinion advising that Indiana's public-school corporations were “not authorized to assess and collect a bus[-]rider fee from a student in order for that student to receive transportation to and from the student's school to receive a public education. Such a fee is unconstitutional.” Appellants' App. p. 23. The Attorney General cited our Supreme Court's opinion in Nagy, 844 N.E.2d at 481, explaining that Nagy “provides the following analytical framework [ ] for examining a fee or charge for services by a public[-]school corporation”:

Is the program, activity, project, service[,] or curricula mandated by the legislature or permitted by the legislature? If so, then “the legislature has made a policy decision regarding exactly what qualifies for funding at public expense.”

Although the legislature has the authority to place appropriate condition[s] or limitations on funding for such programs, “absent statutory authority, fees or charges for what are otherwise public education cost items cannot be levied directly or indirectly against students or their parents.”

Id. at 26–27 (citations omitted, formatting altered). Citing several sections of the Indiana Code, the Attorney General concluded that the Indiana General Assembly “has identified transportation of school children as a part of what would constitute a uniform system of public education in Indiana,” and pursuant to Nagy, a “school[-]bus rider fee is unconstitutional” under Article 8, Section 1 of the Indiana Constitution. Id. at 30–31.

Despite this, Franklin Township proceeded with its plan to discontinue student transportation, and township parents were faced with a choice: pay the transportation fee or make alternate transportation arrangements for their children. Lora Hoagland, whose two sons qualified for the federal free-and-reduced-lunch program, opted to drive her children to and from school.

On November 10, 2011, the Attorney General issued a second official opinion addressing Franklin Township's actions directly. Again citing Nagy, the Attorney General advised that:

An [Educational Service Center] is the agent of the school corporation and may not charge parents for transporting students to and from school. Such a fee is unconstitutional.

Franklin Township Community School Corporation's transportation arrangement does not comply with state law as the school is attempting to do indirectly what it is prohibited from doing directly.

* * * * * *

Schools may utilize private parties for provision of student[-]transportation services, but neither the school nor the private party may charge fees to the parents for the provision of such services.

Schools may utilize [Educational Service Centers] for provision of student transportation services, but neither the school nor the [Educational Service Center] may charge fees to parents for the provision of such services.

Id. at 33 (emphasis added, formatting altered).

The next day Hoagland and Donna Chapman—a Franklin Township parent who had entered into a transportation contract with CIESC—filed a class-action lawsuit against Franklin Township and CIESC, alleging that Franklin Township had “unlawfully fail[ed] to provide transportation,” and seeking declaratory, injunctive, and monetary relief. Id. at 10–11. After the lawsuit was filed, the Franklin Township School Board voted to resume busing its students to and from school at no charge.

The trial court granted Hoagland's request for class certification and created two classes: “the paying class”—those individuals who entered into a contract with CIESC and paid the transportation fee—and “the non-paying class”—those individuals who made alternate transportation arrangements for their children. Hoagland is the named plaintiff for the non-paying class and Chapman is the named plaintiff for the paying class.

CIESC filed a motion to dismiss the claims against it. Appellee's App. p. 10–25. The trial court granted CIESC's motion. Appellants' App. p. 92. Chapman appealed, and another panel of this Court affirmed.²Chapman v. Cent. Ind. Educ. Ctr., 49A05–1209–PL–478, 2013 WL 1846610 (Ind.Ct.App. Apr. 30, 2013), trans. denied.

Only Hoagland's and Chapman's claims against Franklin Township remained. In August 2012, all three parties filed summary-judgment motions. After oral argument, the trial court granted summary judgment for Franklin Township. Appellants' App. p. 49–61. In relevant part, the court concluded that: (1) the Indiana Tort Claims Act (“ITCA”) barred Hoagland's and Chapman's claims; (2) Hoagland and Chapman were not entitled to monetary damages; and (3) Franklin Township did not violate the Indiana Constitution by discontinuing student transportation to and from school. Id. at 50.

Hoagland—but not Chapman—appeals.

Discussion and Decision

On appeal, Hoagland contends that Franklin Township, through CIESC, violated the Indiana Constitution by charging a transportation fee. She argues that student transportation to and from school is an integral part of public education, so Franklin Township may not charge for it—or discontinue it. In response, Franklin Township argues that Hoagland's claim is barred by the ITCA and the Indiana Constitution does not authorize the monetary relief that Hoagland seeks. Franklin Township also contends that it has no constitutional duty to bus its students to and from school under the Education Clause or any other Indiana law.³

I. Standard of Review

Hoagland appeals the trial court's grant of summary judgment for Franklin Township. “In reviewing an appeal of a motion for summary judgment ruling, we apply the same standard applicable to the trial court.” Meredith v. Pence, 984 N.E.2d 1213, 1218 (Ind.2013) (citations omitted). Our review is limited to the facts that were designated to the trial court, Ind. Trial Rule 56(H), and summary judgment shall be granted where the designated evidence “shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” T.R. 56(C). “All facts and reasonableinferences drawn from those facts are construed in favor of the non-moving party.” Meredith, 984 N.E.2d at 1218 (citation omitted). “When faced with competing motions for summary judgment, our analysis is unchanged and we consider each motion separately construing the facts most favorably to the non-moving party in each instance.” Id. (internal quotation omitted). Where, as here, the facts are not disputed, our review is de novo. Justice v. Am. Family Mut. Ins. Co., 4 N.E.3d 1171, 1174–75 (Ind.2014).

II. Hoagland's State Constitutional Claim is not Subject to the ITCA

Whether the ITCA applies to state constitutional claims appears to be an issue of first impression. This Court has previously held that claims against school corporations are subject to the ITCA. See Simpson v. OP Prop. Mgmt., LLC, 939 N.E.2d 1098, 1102 (Ind.Ct.App.2010), trans. denied; Meury v. Eagle–Union Cmty. Sch. Corp., 714 N.E.2d 233, 241 (Ind.Ct.App.1999), trans. denied. Hoagland acknowledges that she is suing a school corporation. However, she argues that she is asserting a state constitutional claim, not a tort claim, and asks us to declare that the ITCA does not apply to her state constitutional claim.

This issue has been raised in federal district court. In 2000, in an opinion on summary judgment, Judge John Tinder wrote:

The Defendants first argue that the Plaintiff has waived his [Indiana] constitutional claims for failure to file a timely tort claim notice. They have not cited to any case which holds that a state constitutional claim is governed by [the ITCA], and the court's own research has located none. It is unclear whether the ...