Father Flanagan's Boys Home v. Department of Social Services

583 N.W.2d 774, 255 Neb. 303, 1998 Neb. LEXIS 207
CourtNebraska Supreme Court
DecidedSeptember 4, 1998
DocketS-96-1208, S-96-1209
StatusPublished
Cited by15 cases

This text of 583 N.W.2d 774 (Father Flanagan's Boys Home v. Department of Social Services) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Father Flanagan's Boys Home v. Department of Social Services, 583 N.W.2d 774, 255 Neb. 303, 1998 Neb. LEXIS 207 (Neb. 1998).

Opinion

Stephan, J.

The issue presented in these consolidated appeals is whether the Nebraska Department of Health and Human Services (the Department), formerly known as the Department of Social Services, is obligated to compensate a nonpublic school system for providing educational services to wards of the state and wards of the courts (state wards) placed in such schools. In actions filed in the district court for Lancaster County, Father Flanagan’s Boys Home (FFBH) alleged that the Department failed to pay the cost of educating state wards placed in schools which FFBH owns and operates. In both cases, FFBH contended that under Neb. Rev. Stat. § 79-445(2) (Reissue 1994), now codified at Neb. Rev. Stat. § 79-215(2) (Reissue 1996), it was entitled to reimbursement for both regular and special education costs. The Department conceded that state wards were placed in the Boys Town Schools to be educated and acknowledged its obligation to reimburse FFBH for the cost of special education, but denied any obligation to pay for the regular education services which FFBH provided to the wards.

The district court determined as a matter of law that the Department was required to reimburse FFBH for the entire cost of educating state wards who had been placed in FFBH’s schools. In case No. S-96-1208, the district court entered judg *305 ment for FFBH in the amount of $4,661,200.96, representing the cost of providing regular and special education at the Boys Town Schools for the period from the summer term of 1990 through the summer term of 1993. In case No. S-96-1209, the judgment was entered for FFBH in the amount of $3,372,985.33, the cost of regular and special education services provided by FFBH to state wards during the 1993-94, summer 1994, and 1994-95 school terms. The Department appeals from the final judgment in each case, and finding no error, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Case No. S-96-1208

The facts were submitted by stipulation of the parties. FFBH is a Nebraska corporation which owns and operates Wegner Elementary School, Boys Town High School, and Father Flanagan High School (Boys Town Schools), which maintain a special education program approved by the Nebraska Department of Education. The State of Nebraska neither owns nor controls the Boys Town Schools.

Prior to the 1990-91 school year, state wards were placed in the Boys Town Schools pursuant to arrangements with the Department or the state courts. Pursuant to § 79-445, as amended, FFBH billed the Department for the cost of special education provided to state wards placed in the Boys Town Schools. The Department reimbursed FFBH for the claimed special education costs. During the 1990-91 school year, FFBH began billing the Department for the cost of providing both regular and special education to state wards placed in the Boys Town Schools. The Department made three payments as reimbursement for FFBH’s expenditures for both regular and special education. However, on March 5, 1992, the Department informed FFBH that its payment to reimburse FFBH for the cost of regular education of state wards was made in error and requested that FFBH return $817,964.44. FFBH refused, and as a result, since March 1992, the Department has refused to reimburse FFBH for providing regular and special education to state wards. Notwithstanding the dispute as to whether the state is obligated to pay FFBH for regular education services provided *306 to its wards, the Department has continued to place state wards in the Boys Town Schools and the schools have continued to provide both regular and special education to the wards.

On April 12, 1994, FFBH filed a petition seeking reimbursement for the cost of educating state wards placed in the Boys Town Schools. During the proceedings, the Department admitted that it had a contract with FFBH concerning payment of educational expenses associated with state wards; however, the Department asserted that the contract required it to pay only for the cost of a ward’s special education expenses, not his or her regular education expenses. (We note that the contract itself is not in the record.) In addition, the parties stipulated that none of the wards receiving education from the Boys Town Schools resided on the Boys Town campus.

Following a hearing on cross-motions for summary judgment, the district court entered summary judgment for FFBH on the issue of liability. The court first determined that the payment of educational costs for state wards during the time period at issue was governed by § 79-445(2), which the court found to be clear and unambiguous. Specifically, the district court stated:

There is no indication anywhere in the statute or from the surrounding sections that there was any intent on the part of the Legislature to limit compensation solely to the ward’s “special” education costs. Rather the statute clearly states “the cost of his or her education ... shall be paid by the state.” Although one of the conditions of receiving payment for educating a ward is that such ward be in an institution that maintains a special education program, there is no evidence that reimbursement for costs of educating a ward is limited only to “special” education costs nor should this court impose such a limitation on the plain language of the statute. This court finds that Section 79-445(2) requires the Department to reimburse an institution such as [FFBH] for both the costs of regular and special education of the wards placed with such institution.

The district court then addressed the Department’s contention that reimbursing FFBH for the cost of educating state wards violated article VII, § 11, of the Nebraska Constitution. Relying upon Cunningham v. Lutjeharms, 231 Neb. 756, 437 *307 N.W.2d 806 (1989); State ex rel. Bouc v. School Dist. of City of Lincoln, 211 Neb. 731, 320 N.W.2d 472 (1982); and Lenstrom v. Thone, 209 Neb. 783, 311 N.W.2d 884 (1981), the district court determined that the Department’s contention was without merit because under the aforementioned decisions of this court, “the only action prohibited by the current language of section 11 of Article VII is a direct appropriation from the legislature to a nonpublic school.” In addition, the court concluded, citing State ex rel. Creighton Univ. v. Smith, 217 Neb. 682, 353 N.W.2d 267 (1984), that “the education of children who are wards of the state or a court is the fulfillment of ‘a governmental duty and further[s] a public purpose.’ ” Following the partial summary judgment order, the parties entered into a stipulation in which they agreed that the amount of unpaid education costs at issue during the time period involved in case No. S-96-1208 was $4,661,200.96, which included special education costs of $613,146.36 and regular education costs of $4,048,054.60.

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Bluebook (online)
583 N.W.2d 774, 255 Neb. 303, 1998 Neb. LEXIS 207, Counsel Stack Legal Research, https://law.counselstack.com/opinion/father-flanagans-boys-home-v-department-of-social-services-neb-1998.