Pa. Dep't of Educ. v. D.E.

COMMONWEALTH OF PENNSYLVANIA DEPARTMENT OF EDUCATION, Plaintiff, v. D.E., individually and on behalf of A.H.D. and A.D., Defendant.

DARLINE E., individually and on behalf of Az.D. and Am.D., Plaintiff, v. PEDRO RIVERA, in his official capacity as Secretary of Education for

the Commonwealth of Pennsylvania Department of Education,

and COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF EDUCATION, Defendants.

CIVIL ACTION No. 17-4433

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

APRIL 5, 2019

MEMORANDUM

ROBERT F. KELLY, Sr. J.

This consolidated action stems from a Pennsylvania hearing officer's order instructing Plaintiff Commonwealth of Pennsylvania Department of Education ("PDE") to reimburse two educational trust funds and resolve an unpaid private school tuition reconciliation that Young Scholars Kenderton Charter School ("Kenderton Charter") allegedly owed to the Y.A.L.E. School ("Y.A.L.E.").¹ PDE's only remaining claim in this case is against Defendant D.E. ("Parent") under the Individuals with Disabilities in Education Act ("IDEA"), 20 U.S.C. §§ 1400 et seq., which seeks reversal of the Office of Dispute Resolution ("ODR") hearing officer's orders requiring PDE to reimburse the educational trust accounts and pay the tuition reconciliation. Parent also has a claim seeking attorney's fees, litigation costs, and enforcement of the hearing officer's decision.

Presently before the Court are PDE's Motion for Summary Judgment against D.E., Individually and on behalf of A.H.D. and A.D., and Parent's Motion for Judgment on the Administrative Record.² For the reasons detailed below, PDE's motion is denied and Parent's motion is granted to the extent it can be construed consistent with an appropriate modification of the hearing officer's order.

I. BACKGROUND

Parent is the mother of A.H.D. and A.D. (collectively, "Students"), who are eligible for special education and related services under the IDEA. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 2; Def.'s Resp. in Opp'n Mot. Summ. J. 2-3.) Initially, both Students attended elementary school in the School District of Philadelphia ("the District"). (Def.'s Resp. in Opp'n Mot. Summ. J. 3.) The District was their Local Education Agency ("LEA") until the summer of 2013,when it converted the Students' elementary school into a charter school, with Kenderton Charter assuming responsibility for its operations. (Id. at 3-4.)

Both Students were then enrolled at Kenderton Charter throughout the 2013-14, 2014-15, and 2015-16 school years. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 2.) However, in July 2014, Parent filed two due process complaints with ODR on behalf of Students, seeking an order requiring Kenderton Charter to place the Students at a private school and provide each with a compensatory education. (Id.) In December 2014, administrative decisions ("2014 Decisions") were docketed that ordered Kenderton Charter to place Students at a private school for the remainder of the 2014-15 school year, pay their private tuition, and establish a compensatory education fund. (Id.; Def.'s Resp. in Opp'n Mot. Summ. J. 4.) Kenderton Charter complied with the decisions and placed Students at Y.A.L.E. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 2-3.) In addition, it created two education trust funds with the Advocacy Alliance Education Fund Trust to satisfy Students' compensatory education awards.³ (Def.'s Resp. in Opp'n Mot. Summ. J. 5.)

Kenderton Charter paid Y.A.L.E. tuition invoices for the education services provided to Students during the 2014-15 school year, and it maintained Students' placement at Y.A.L.E. for the 2015-16 school year. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 3-4.) In September 2015, Y.A.L.E. and Kenderton Charter executed contracts providing that Kenderton Charter paymonthly tuition invoices to Y.A.L.E. for the education services during the 2015-16 school year. (Id. at 3.) Kenderton Charter paid Y.A.L.E. all of the monthly tuition invoices associated with A.H.D.'s education, except for the combined amount of $8,872.50 owed for the months of May and June 2016. (Id.) Similarly, Kenderton Charter failed to pay monthly tuition invoices associated with A.D.'s education for April, May, and June 2016, totaling $16,134.80, as well as a 2015-16 tuition reconciliation that totaled $4,386.00. (Id. at 5.) Kenderton Charter closed at the end of the 2015-16 school year and abandoned its charter. (Id. at 4.)

Following Kenderton Charter's closure, Students were enrolled back in the District. (Id.) The District continued Students placement at Y.A.L.E., and there was no disruption of their education throughout, at least, the 2016-17 school year. (Def.'s Resp. in Opp'n Mot. Summ. J. 6.) Beginning in July 2016, the District was responsible for satisfying Students' tuition invoices from Y.A.L.E. (Id.)

In September 2016, Parent's counsel informed PDE of the unsatisfied monthly invoices associated with Students' 2015-16 school year at Y.A.L.E. and asked PDE to fulfill Kenderton Charter's obligation to pay the tuition. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 4.) PDE informed Parent, in October 2016, that it would not pay the tuition bills Kenderton Charter owed to Y.A.L.E, stating that payment of the bills was an issue between Kenderton Charter and Y.A.L.E. (Id.) Sometime after, Parent's counsel provided Y.A.L.E. with information for contacting and obtaining the tuition payments from Students' trust accounts. (Def.'s Resp. in Opp'n Mot. Summ. J. 7.) In January 2017, following receipt of Parent's counsel's information, Y.A.L.E. contacted Students' trusts and requested payment of the unpaid tuition. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 4.) The following month, Y.A.L.E. contacted Parent and asked herto authorize the trusts to pay the tuition invoices. (Id.) Parent then authorized the trusts to pay Y.A.L.E. for the unpaid tuition. (Id. at 4-5.)

On February 16, 2017, Parent filed two due process complaints with ODR on behalf of A.D. and A.H.D. against PDE and Kenderton Charter. (Def.'s Resp. in Opp'n Mot. Summ. J. 7.) The due process complaints sought reimbursement of tuition that Parent allegedly paid from Students' compensatory education trusts to Y.A.L.E. in satisfaction of the monthly tuition invoices. (Id. at 8.) On February 17, 2017, PDE asked Parent's counsel to provide copies of the receipts showing Parent paid the tuition owed to Y.A.L.E. and confirmed that: (1) the Students received the private school services; (2) Kenderton Charter was invoiced for the tuition payments, not Parent; (3) Kenderton Charter failed to make the tuition payments; (4) it was Y.A.L.E. that was a creditor seeking payments from PDE; and (5) Parent had no obligation to make tuition payments. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 5.) PDE further requested confirmation that Parent paid Y.A.L.E. for the education services and sought copies of the payment receipts. (Id.) By check dated February 23, 2017, the trusts paid $8,872.50 from A.H.D.'s compensatory education trust and $16,134.80 from A.D.'s compensatory education trust. (Id.; Def.'s Resp. in Opp'n Mot. Summ. J. 9.)

PDE and Parent submitted the due process matters to the hearing officer for a decision on stipulations of fact without the need for a hearing. (Pl.'s Mem. Law in Supp. Mot. Summ. J. 5.) On July 6, 2017, the hearing officer issued two decisions ("2017 Decisions") relating to Students' due process matters, finding that Students did not receive the "free" education to which they were entitled and ordering PDE to pay the monthly invoices associated with Students' education services, as well as the tuition reconciliation payment associated with A.D.'s education. (Id.) The hearing officer made findings of fact, which included, inter alia, that theStudents did not receive "a free public education" at no cost, that the "repeated attempts by [Y.A.L.E.] to collect the [Kenderton Charter] debt creates a reasonable inference that [Y.A.L.E.] would soon take action to obstruct [Students'] free education absent payment from [Parent]," and that "PDE must step in for [Kenderton Charter] . . . because [Kenderton Charter] is defunct and unable to correct the FAPE denial." (Def.'s Resp. in Opp'n Mot. Summ. J. 8, Ex. A ("2017 Decisions")).)⁴

On January 22, 2018, PDE filed an Amended Complaint in this Court against Parent under the IDEA and brought state law claims against Y.A.L.E. for unjust enrichment and indemnification. As it pertains to Parent, PDE seeks reversal of the hearing officer's decisions requiring it to pay the monthly invoices and tuition reconciliation. On April 23, 2018, we dismissed with prejudice PDE's indemnification claim against Y.A.L.E. (See Doc. No. 21.) Presently, before the Court are PDE's Motion for Summary Judgment and Parent's Motion for Judgment on the Administrative Record. Importantly, in the time since these motions were filed, Y.A.L.E. has reimbursed the Students' trusts for the amount paid by Parent and has resolved the tuition reconciliation invoice with PDE as part of a settlement agreement. (Def.'s Resp. in Opp'n Mot. Summ. J. 9, Ex. F ("Email from Special Needs Trust"), Ex. H ("Dec. 27, 2018 Email").) Parent now contends that this reimbursement satisfies the hearing officer's orders and PDE's claims against Parent are now moot. (See generally Def.'s Reply in Supp. Mot. J. Admin. R.)

II. LEGAL STANDARD

A. Summary Judgment

Federal Rule of Civil Procedure 56(a) states that summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The Court asks "whether the evidence presents a sufficient disagreement to require submission to the jury or whether . . . one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). The moving party has the initial burden of informing the court of the basis for the motion and identifying those portions of the record that...