FILED Dec 04 2017, 6:03 am
CLERK Indiana Supreme Court Court of Appeals and Tax Court
ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEES Zachary S. Kester Scott L. Bunnell Charitable Allies, Inc. Joshua A. Atkinson Indianapolis, Indiana Michelle K. Floyd Hunt Suedhoff Kalamaros LLP Fort Wayne, Indiana Attorneys for Patricia Roe
Linda L. Vitone Kimberly E. Howard Smith Fisher Maas Howard & Lloyd, PC Indianapolis, Indiana Attorneys for Aliza Anderson, Lorri Bryant, Dr. Cathi Cornelius, Lauren Peterson, Lauren Wright, and Robert Dotson John W. Mervilde Rick D. Meils Meils Thompson Dietz & Berish Indianapolis, Indiana Attorneys for Marshawn Wolley Jeffrey D. Hawkins Mark D. Gerth Adam S. Ira Kightlinger & Gray, LLP Indianapolis, Indiana Attorneys for Chi Blackburn, Brooke Dunn, Frances L. Hudson, Tanjla Lawrence, Frances Malone, Latika Warthaw, Flanner House Elementary School, Inc. Curtis T. Hill, Jr. Attorney General of Indiana Kyle Hunter Deputy Attorney General Indianapolis, Indiana Attorneys for the State of Indiana
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 1 of 21 IN THE COURT OF APPEALS OF INDIANA
Flanner House of Indianapolis, December 4, 2017 Inc., Court of Appeals Case No. 49A02-1612-PL-2942 Appellant-Plaintiff, Appeal from the Marion Superior v. Court. The Honorable John F. Hanley, Judge. Flanner House Elementary Trial Court Cause No. School, Inc., Aliza Anderson, 49D11-1508-PL-26396 Chi Blackburn, Lorri Bryant, Dr. Cathi Cornelius, Robert Dotson, Brooke Dunn, Frances L. Hudson, Tanjla Lawrence, Frances Malone, Lauren Peterson, Patricia Roe, Latika Warthaw, Marshawn Wolley, Lauren Wright, and Liberty Mutual Insurance Group, Appellees-Defendants,
and
State of Indiana,
Appellee-Intervenor.
Friedlander, Senior Judge
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 2 of 21 [1] Flanner House of Indianapolis, Inc. (Flanner House) appeals the trial court’s
entry of summary judgment in favor of Flanner House Elementary School, Inc.
(Flanner School, Inc.) and its individual directors and officers (collectively 1 “Appellees”). We affirm.
[2] Flanner House presents three issues for our review, which we restate as:
1. Whether the trial court erred in granting summary judgment in favor of the Appellees on the issue of compliance with the notice requirement of the Indiana Tort Claims Act (the Act). 2. Whether application of the Act to charter schools and their organizers violates the equal privileges and immunities clause of the Indiana Constitution. 3. Whether application of the Act to charter schools and their organizers violates the open courts clause of the Indiana Constitution. [3] Flanner School, Inc. is a nonprofit Indiana corporation that was established in
early 2002. On February 27, 2002, Flanner School, Inc. entered into a charter
school agreement with the Mayor of Indianapolis to establish a charter school
named Flanner House Elementary School (Elementary School). Flanner
School, Inc. operated the Elementary School as a charter school under this
agreement until its charter was revoked on September 11, 2014. During that
1 Flanner House filed a motion to dismiss Chi Blackburn, Brooke Dunn, and Frances Malone, which the trial court granted on November 21, 2016. On January 24, 2017, Tanjla Lawrence was also dismissed from the case. Finally, on February 6, 2017, the trial court granted Flanner House and Liberty Mutual Insurance Group’s stipulation of dismissal of Liberty Mutual from this cause.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 3 of 21 time, Flanner School, Inc. leased its school building from Flanner House, a
separate nonprofit Indiana corporation.
[4] In August 2015, Flanner House sued Flanner School, Inc. for breach of
contract, sued the Appellees for negligence and fraud, and sued Liberty Mutual
Insurance Group for bad faith. In its complaint, Flanner House alleged that
Flanner School, Inc. breached the lease by failing to pay monthly rent and that
the Appellees owed a duty to Flanner House, which they recklessly breached by
failing to hold regular meetings, operating the school without adequate
oversight, and failing to adequately oversee the financial and educational
activities of the school. To support its claims of fraud, Flanner House also
claimed that the Appellees made false statements that caused it harm. In
November 2016, on Flanner House’s motion, the trial court dismissed all of the
fraud claims.
[5] From July through October 2016, the Appellees, some individually and some
jointly, filed motions for summary judgment. All of the Appellees argued that
Flanner House had not provided them with notice under the Act, and Appellee
Patricia Roe additionally argued in the alternative that no duty was owed to
Flanner House. Flanner House responded that the Appellees were not entitled
to notice under the Act and alleged that extending the protections of the Act to
the Appellees violates the Indiana Constitution. Having received notice from
the court that the constitutionality of the Act was being challenged in this
action, the State filed motions to intervene and to bifurcate the constitutional
issues, both of which were granted. After hearing argument on the motions for
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 4 of 21 summary judgment, the trial court entered final judgment for the Appellees.
This appeal followed.
[6] On appeal from a summary judgment, we apply the same standard of review as
the trial court: summary judgment is appropriate only where the designated
evidentiary matter shows there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of law. Young v. Hood’s
Gardens, Inc., 24 N.E.3d 421 (Ind. 2015); see also Ind. Trial Rule 56(C). Where
the challenge to the trial court’s summary judgment ruling presents only legal
issues, not factual ones, we review the issues de novo. Ballard v. Lewis, 8
N.E.3d 190 (Ind. 2014).
1. “Charter School” [7] Flanner House asserts the trial court erred by granting summary judgment for
the Appellees on the issue of its compliance with the tort claim notice
requirement. The Act governs civil lawsuits against governmental entities and 2 their employees. Ind. Code §§ 34-13-3-1 (1998), -3 (2016). Under the dictates
of the Act, a charter school is a governmental entity. Ind. Code § 34-6-2-49(a)
(2013). The Act provides that a claim against a governmental entity is barred
unless notice is filed with the governing body of the governmental entity within
180 days after a loss occurs. Ind. Code § 34-13-3-8 (1998).
2 There being no disagreement about the particular version of a statute applicable to this case, we cite the current version for the sake of efficiency and ease of the reader, unless otherwise noted.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 5 of 21 [8] In this litigation, Flanner House did not provide notice of its claims to the
Appellees as required by the Act. The thrust of Flanner House’s argument is
that Flanner School, Inc. is not a “charter school,” as that term is used in the
Act, and therefore is not entitled to the notice required under the Act.
Although Flanner House acknowledges that the Elementary School is a charter
school, it contends Flanner School, Inc. is not a charter school but is instead an
organizer of a charter school and therefore a distinct entity from the charter
school itself. Accordingly, Flanner House argues that Flanner School, Inc. is
not entitled to the notice provisions of the Act because it is not a governmental
entity under the Act. The question before us then is whether our legislature
intended to include the nonprofit organizer of a charter school in the meaning
of that term for purposes of the Act.
[9] A question of statutory interpretation is a matter of law, and we are neither
bound by, nor are we required to give deference to, the trial court’s
interpretation. Perry-Worth Concerned Citizens v. Bd. of Comm’rs of Boone Cnty.,
723 N.E.2d 457 (Ind. Ct. App. 2000), trans. denied. Accordingly, our review is
de novo. Ballard, 8 N.E.3d 190. When interpreting a statute, we look to the
express language of the statute and the rules of statutory construction. Ind. State
Teachers Ass’n v. Bd. of Sch. Comm’rs of City of Indianapolis, 693 N.E.2d 972 (Ind.
Ct. App. 1998). This court is required to ascertain and execute legislative intent
and to interpret the statute in such a manner as to prevent absurdity and to
advance public convenience. Id. In so doing, we must be aware of the purpose
of the statute, as well as the effect of such an interpretation. Id. We read the
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 6 of 21 individual sections of an act as a whole and strive to give effect to all of its
provisions such that no part of the act is held meaningless if it can be reconciled
with the rest of the statute. Citizens Action Coal. of Ind., Inc. v. Ind. Statewide Ass’n
of Rural Elec. Coops., Inc., 693 N.E.2d 1324 (Ind. Ct. App. 1998). We presume
that our legislature intended its language to be applied in a logical manner
consistent with the underlying goals and policy of the statute. Id. Moreover, in
this case we are mindful that because the Act is in derogation of the common
law, it must be strictly construed against limitations on a claimant’s right to
bring suit. Simpson v. OP Prop. Mgmt., LLC, 939 N.E.2d 1098 (Ind. Ct. App.
2010).
[10] A charter school is a public elementary school that is established by and
operates under a charter. Ind. Code § 20-24-1-4 (2005). A charter is a contract
between an organizer (a nonprofit corporation and its independent board) and
an authorizer (the executive of a consolidated city) for the establishment of a
charter school. Ind. Code §§ 20-24-1-3 (2013), -7 (2017), and -2.5(3) (2015). In
the present case, Flanner School, Inc. is the organizer, and the Mayor of
Indianapolis is the authorizer.
[11] To establish a charter school, an organizer may submit to the authorizer a
proposal, which is a detailed implementation plan that includes both
governance and educational matters, all of which are the ultimate responsibility
of the organizer. The proposal must contain at least the following information:
(1) identification of the organizer,
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 7 of 21 (2) a description of the organizer’s organizational structure and governance plan,
(3) the following information for the proposed charter school:
(a) name,
(b) purposes,
(c) governance structure,
(d) management structure,
(e) educational mission goals,
(f) curriculum and instructional methods,
(g) methods of pupil assessment,
(h) admission policy and criteria,
(i) school calendar,
(j) age or grade range of students to be enrolled,
(k) description of staff responsibilities,
(l) description of the physical plant,
(m) budget and financial plans,
(n) personnel plan, including methods for selection, retention, and compensation of employees,
(o) transportation plan,
(p) discipline program,
(q) plan for compliance with any applicable desegregation order,
(r) date when the charter school is expected to:
(i) begin school operations, and
(ii) have students attending the charter school,
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 8 of 21 (s) arrangement for providing teachers and other staff with health insurance, retirement benefits, liability insurance, and other benefits, and
(4) the manner in which the authorizer must conduct an annual audit of the program operations of the charter school.
See Ind. Code § 20-24-3-4 (2017).
[12] The authorizer reviews and evaluates the application under criteria consistent
with nationally recognized principles and informs the organizer whether the
proposal is accepted or rejected. Ind. Code §§ 20-24-3-4.5 (2015) and -9 (2017).
If the proposal is rejected, the organizer may amend and resubmit the proposal
to the same authorizer or submit a proposal to another authorizer. Ind. Code §
20-24-3-11 (2017). If the proposal or amended proposal is accepted, the
organizer is granted a charter by the authorizer, and the organizer may begin
operation of the charter school in accordance with the operating plan as
submitted in its proposal as well as the rights and obligations set forth in its
charter. Ind. Code § 20-24-3-1 (2013), see also Ind. Code § 20-24-4-1 (2017)
(setting forth charter requirements).
[13] The organizer’s duties do not end when the charter is signed and the charter
school is operational. Once established, each charter school must set annual
performance targets designed to help the school meet applicable federal, state,
and authorizer expectations. Ind. Code § 20-24-4-1(b). Moreover, at the time
period covered by Flanner House’s complaint, the organizer was required each
year to submit to the department of education information concerning: (1) the
number of students enrolled in the charter school, (2) the name and address of
each student, (3) the name of the school corporation in which the student has Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 9 of 21 legal settlement, (4) the name of the school corporation, if any, that the student
attended during the immediately preceding school year, and (5) the grade level
in which the student will enroll in the charter school. Ind. Code § 20-24-7-2
(2009) and (2013).
[14] Additionally, the organizer is the fiscal agent for the charter school and has
exclusive control of the financial matters of the school and of funds received by
the school. Ind. Code § 20-24-7-1 (2015). On behalf of a charter school, an
organizer may apply for and accept independent financial grants and funds
from sources other than the department of education. Further, an organizer
must make all applications, enter into all contracts, and sign all documents
necessary for aid, money, or property received by the charter school from the
federal government. Ind. Code § 20-24-7-5 (2005). An organizer also may be
requested at any time to provide to the authorizer the financial reports of the
school. Ind. Code § 20-24-7-8 (2013).
[15] Moreover, the organizer is required to publish an annual performance report
that provides information regarding student enrollment, graduation rate,
attendance rate, test scores, average class size, the school’s performance
category, number and percentage of students in special programs, advanced
placement, course completion, percentage of graduates considered college and
career ready, school safety, financial information, teacher
certification/licensing, percentage of grade 3 students reading at grade 3 level,
number of students expelled, chronic absenteeism, habitual truancy, number of
students who have dropped out of school, number of in and out of school
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 10 of 21 suspensions, number of student work permits revoked, and number of students
receiving an international baccalaureate diploma. Ind. Code §§ 20-24-9-6
(2005), 20-20-8-8 (2017).
[16] If an organizer is notified by the authorizer that it is failing to comply with the
conditions of the charter, applicable federal and state laws, or generally
accepted fiscal management and government accounting principles, or if the
school is failing to meet the educational goals set out in the charter, it must
remedy the deficiencies or face revocation of the school’s charter. Ind. Code §
20-24-9-4 (2017). The authorizer also has the authority to decline to renew a
school’s charter. In both instances, the organizer is allowed representation by
counsel and time to prepare a response, as well as an opportunity to submit
documents and testimony in support of continuation of the charter school. Ind.
Code § 20-24-4-3 (2013). In the event of a school closing, the organizer must
ensure the transfer of all school records, including student records, to the
department of education. Ind. Code § 20-24-9-4.6 (2017).
[17] As demonstrated by the statutes, the organizer determines the organization and
management of the school, receives the charter for the charter school, is
responsible for the implementation of the charter, is accountable for the
financial and academic viability of the school, and insures compliance with
federal and state laws and authorizer expectations. A charter school cannot
exist without an organizer, and the organizer is required to have nonprofit
status. Based upon our review of the relationship, responsibilities, duties, and
authority of a charter school organizer as set out in these statutes, we conclude
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 11 of 21 that an organizer of a charter school is not an entity separate from the charter
school. Rather, an organizer and a charter school jointly are the charter school.
[18] In making this determination, we note the similarity of charter school
organizers to public school corporations, and we recognize that organizers are
indeed considered school corporations for certain state and federal funding
opportunities. Ind. Code § 20-24-7-15 (2016). Public school corporations are
political subdivisions under the Act with governing bodies (boards) that
administer the affairs of the school corporations. Ind. Code § 34-6-2-110(9)
(2007); Ind. Code § 20-26-2-2 (2005). Like charter school organizers, public
school corporations may take charge of, manage, and conduct the educational
affairs of the school corporation; employ certain staff; make budgets and
appropriate and disburse funds; make all applications, enter into contracts, and
sign all documents necessary for the receipt of aid, money, or property from the
state, the federal government, or any other source. Ind. Code § 20-26-5-4
(2016). Additionally, public school corporations are required by Indiana Code
section 20-20-8-3 (2015) to publish an annual performance report.
[19] Thus, we conclude that an organizer of a charter school is included in the term
“charter school” for purposes of Ind. Code § 34-6-2-49(a). Accordingly,
Flanner School, Inc. was entitled to notice of Flanner House’s claims as
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 12 of 21 provided for in the Act, and the trial court properly granted summary judgment 3 for Flanner School, Inc.
[20] Understanding that Flanner House gave no notice of its tort claim and having
determined that a charter school organizer is a “charter school” and entitled to
notice of Flanner House’s tort claim, we turn to the charter school directors and
officers named by Flanner House as additional defendants. The notice
requirement of the Act applies not only to suits against governmental entities
but also to suits against employees of governmental entities. Ind. Code § 34-13-
3-3; Davidson v. Perron, 716 N.E.2d 29 (Ind. Ct. App. 1999), trans. denied.
[21] We further note that the Act prohibits suits against individual board members
concerning acts taken by the board where the member was acting within the
scope of the member’s employment. Ind. Code § 34-13-3-5 (2003). A suit filed
against a board member individually must allege, including a reasonable factual
basis, an act or omission by the member that is criminal, clearly outside the
scope of the employee’s employment, malicious, willful and wanton, or
calculated to benefit the employee personally. Id. Here, Flanner House named
the directors and officers individually concerning their actions taken as a whole
board. There were no allegations of individual board members acting outside
3 In the Statement of the Facts section of its brief to this Court, Flanner House briefly mentions that Appellee Wolley had notice of its claim. See Appellant’s Br. p. 16. To the extent that this could be considered an argument of substantial compliance with the notice provision under the Act, Flanner House’s claim is waived for failure to present cogent argument and citation to authority. See Thacker v. Wentzel, 797 N.E.2d 342 (Ind. Ct. App. 2003) (stating this Court will not consider appellant’s assertion on appeal when appellant fails to develop argument and present cogent argument supported by authority); see Ind. Appellate Rule 46(A)(8)(a).
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 13 of 21 the scope of their employment or in an improper manner. Thus, entry of
summary judgment for the directors and officers was also proper based upon
Flanner House’s failure to provide a notice of tort claim.
2. Equal Privileges and Immunities Clause [22] By granting summary judgment for the Appellees, the trial court implicitly
found constitutional the provisions of the Act relating to charter schools.
Flanner House claims that application of the Act to include not only charter
schools but also their organizers violates two provisions of the Indiana
Constitution.
[23] When a statute is challenged as violating the Indiana Constitution, our standard
of review is well settled. “A statute is presumed constitutional until the party
challenging its constitutionality clearly overcomes the presumption by a
contrary showing.” VanDam Estate v. Mid-America Sound, 25 N.E.3d 165, 168
(Ind. Ct. App. 2015), trans. denied. If there are two reasonable interpretations of
the statute, one constitutional and the other not, we will choose the
interpretation that will uphold the constitutionality of the statute. Sims v. U.S.
Fid. & Guar. Co., 782 N.E.2d 345 (Ind. 2003). We do not presume the General
Assembly violated the constitution unless we are compelled to do so by the
unambiguous language of the statute. VanDam Estate, 25 N.E.3d 165. This
Court should nullify a statute on constitutional grounds only where such result
is clearly rational and necessary. Id.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 14 of 21 [24] First, Flanner House asserts that extending the notice and governmental
immunity provisions of the Act to charter schools and their organizers violates
the equal privileges and immunities clause. Article I, section 23 of the Indiana
Constitution provides, “The General Assembly shall not grant to any citizen, or
class of citizens, privileges or immunities, which, upon the same terms, shall
not equally belong to all citizens.” To determine a statute’s validity under this
provision, we employ a two-part test: 1) the disparate treatment accorded by
the legislation must be reasonably related to inherent characteristics that
distinguish the unequally treated classes, and 2) the preferential treatment must
be uniformly applicable and equally available to all persons similarly situated.
Whistle Stop Inn, Inc. v. City of Indianapolis, 51 N.E.3d 195 (Ind. 2016). Both
parts of the test must be satisfied for the statute to be constitutional. Id. In
evaluating a statute under this test, we must give considerable deference to
legislative discretion. Giles v. Brown Cty., 868 N.E.2d 478 (Ind. 2007). Further,
the burden is on the party challenging the statute to negate every conceivable
basis for disparate treatment of two classes. Whistle Stop Inn, Inc., 51 N.E.3d
195.
[25] Flanner House contends the disparately treated classes are charter schools,
private schools, and nonprofit corporations. Flanner House, however, does not
engage in any meaningful discussion or analysis of the required two-part test.
Instead, it merely argues that allowing charter schools and their organizers to be
protected by the Act is unfair, and it characterizes charter schools as having
only public school “status” for the purpose of dealing with students and their
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 15 of 21 parents but maintains that charter schools are actually private, nonprofit
corporations with regard to their transactions with other businesses.
Appellant’s Br. p. 29.
[26] Charter schools are neither private schools nor nonprofit corporations; rather,
by the plain terms of the statute creating them, they are public schools. See Ind.
Code § 20-24-4-1. Contrary to Flanner House’s argument, this legislative
designation does not change depending on with whom the charter school is
dealing. Further, although an organizer of a charter school is an entity that has
been determined by the Internal Revenue Service to be operating under
nonprofit status, see Ind. Code § 20-24-1-7, it is not a nonprofit entity separate
from the school. Rather, as we determined earlier in this opinion, an organizer
and a charter school, together, are the charter school. See Issue 1, supra. As
discussed previously in this opinion, charter schools must be organized and
operate according to a charter agreement and are subject to extensive,
particularized statutes for their governance and educational matters with a
considerable level of governmental oversight. These stringent statutory
guidelines and requirements apply only to charter schools and their organizers
who, although having the status of a nonprofit entity, are a very specific type of
nonprofit performing under a specific charter agreement as the organizer,
administrator, and fiscal agent of a charter school. These characteristics are
unique and inherent to charter schools, and they distinguish charter schools
from both private schools and other nonprofit corporations.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 16 of 21 [27] In addition, the disparate treatment conferred by the legislation must be
reasonably related to the inherent characteristics differentiating the classes.
Whistle Stop Inn, Inc., 51 N.E.3d 195. As our Supreme Court has explained:
Legislative classification becomes a judicial question only where the lines drawn appear arbitrary or manifestly unreasonable. So long as the classification is based upon substantial distinctions with reference to the subject matter, we will not substitute our judgment for that of the legislature; nor will we inquire into the legislative motives prompting such classification. Collins v. Day, 644 N.E.2d 72, 80 (Ind. 1994).
[28] The matter of developing the public school system rests with the legislature,
which has considerable discretion as to the methods of organization and
administration of the system. Hoagland v. Franklin Twp. Cmty. Sch. Corp., 27
N.E.3d 737 (Ind. 2015). In exercising this discretion, the legislature established
charter schools as unique education entities that exist as public schools. The
legislature also classified charter schools as government entities for purposes of
the Act. In fact, all public schools are classified as government entities under
the Act. See Ind. Code § 34-6-2-110(9).
[29] The Act was adopted to establish procedures for cases involving the prosecution
of tort claims against governmental entities. Hasty v. Floyd Mem’l Hosp., 612
N.E.2d 119 (Ind. Ct. App. 1992). By establishing notice requirements and
limitations on recovery from government entities, including public schools, the
Act advances the legislative policies of protecting the State’s finances while
ensuring that public employees can exercise their independent judgment
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 17 of 21 necessary to carry out their duties without the threat of civil litigation over
decisions they make within the scope of their employment. Noble Cty. v. Rogers,
745 N.E.2d 194 (Ind. 2001). By their very definition, charter schools are public
schools, and, as such, they are reasonably classified by the legislature as
governmental entities under the Act as are traditional public schools. See Meury
v. Eagle-Union Cmty. Sch. Corp., 714 N.E.2d 233 (Ind. Ct. App. 1999) (citing Ind.
Code § 34-13-3-8 and stating that notice provision of Act applies to public
school corporations and their employees).
[30] Moreover, the legislative intent underlying the establishment of charter schools
was to provide innovative and autonomous programs that serve the different
learning styles and needs of public school students, offer public school students
appropriate and innovative choices, provide varied opportunities for
professional educators, allow public schools freedom and flexibility in exchange
for exceptional levels of accountability, and provide parents, students,
community members, and local entities with an expanded opportunity for
involvement in the public school system. Ind. Code § 20-24-2-1 (2005). By
extending the liability protections of the Act to charter schools, the legislature
furthered its overall purpose of providing innovative programs for public school
students and educators while preserving the public treasury and protecting
public employees acting within the scope of their employment. We conclude
the disparate application of the Act in this instance constitutes treatment that is
reasonably related to the inherent characteristics that differentiate charter
schools from private schools and other nonprofit corporations.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 18 of 21 [31] As to the second part of the test, Flanner House does not dispute that the
preferential treatment of charter schools under the Act is uniformly applicable
and equally available to all charter schools. Flanner House has not met its
burden to negate every conceivable basis which might support the 4 classification. We conclude that application of the notice and liability
limitations of the Act to charter schools is constitutional under section 23.
3. Open Courts Clause [32] Flanner House asserts that extending the immunity under the Act to charter
schools and their organizers will violate the open courts clause of the Indiana
Constitution. The open courts clause provides: “All courts shall be open; and
every person, for injury done to him in his person, property, or reputation, shall
have remedy by due course of law. Justice shall be administered freely, and
without purchase; completely, and without denial; speedily, and without
delay.” Ind. Const. art. I, § 12.
[33] The courts of our state have uniformly held that in cases involving injury to
person or property, article I, section 12 does not prevent the legislature from
modifying or restricting common law rights and remedies. McIntosh v. Melroe
4 In arguing that application of the Act in this case violates our state’s equal privileges and immunities clause, Flanner House states that the damages it sustained stem from its contractual relationship with Flanner School Inc. and that applying the Act to charter schools and their organizers improperly gives the government a competitive advantage in its commercial dealings, such as entering leases. These contentions are not applicable here as the Act provides immunity for governmental entities only with regard to civil actions in tort. See Ind. Code § 34-13-3-1; see also Orem v. Ivy Tech State Coll., 711 N.E.2d 864 (Ind. Ct. App. 1999) (holding the Act is inapplicable to breach of contract cause of action), trans. denied.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 19 of 21 Co., a Div. of Clark Equip. Co., Inc., 729 N.E.2d 972 (Ind. 2000). Yet, the
legislature’s actions in this regard are not without limits; any legislative
alteration must not interfere with constitutional rights. Martin v. Richey, 711
N.E.2d 1273 (Ind. 1999). Legislation that restricts a complete tort remedy must
be a rational means to achieve a legitimate legislative goal. Id.
[34] As we have noted in this opinion, one of the primary concerns the Act was
intended to address was protection of the public treasury, and by extension the
taxpayers, from a multitude of tort lawsuits and the possibility of enormous
monetary liabilities if government entities were held legally accountable in civil
litigation in the same fashion as private entities and persons. VanDam Estate, 25
N.E.3d 165. With regard to governmental immunity in the Act, our supreme
court has stated, “In tort cases, the source of authority or lack thereof to sue the
State originally arose from rights at common law, not from rights contained in
the Constitution. Thus, it is within the legislature’s authority to expand or
restrict the scope of sovereign immunity through the Tort Claims Act.” State v.
Rendleman, 603 N.E.2d 1333, 1337 (Ind. 1992). Rendleman concerned a suit
against the State for damages allegedly sustained in a motor vehicle accident
involving Rendleman and an Indiana State Trooper. In holding that the law
enforcement immunity section of the Act was a constitutional exercise of
legislative authority, the Court stated: “That [the law enforcement immunity
section] may result in Rendleman bearing the full economic burden of his
injuries and damages without the ability to insure himself against such losses, is
a matter of policy for the legislature, not this Court, to address.” Id.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 20 of 21 [35] Similarly, the extension of the immunity provision of the Act to a charter
school and its organizer, which we determined are, jointly, a charter school, is a
rational means to achieve the legitimate legislative goal of protecting the public
treasury. Accordingly, we conclude that Indiana Code sections 34-13-3-3 and
34-6-2-49(a) reflect a proper exercise of the legislature’s authority and do not
violate article I, section 12 of the Indiana Constitution.
[36] Having concluded that the trial court properly entered summary judgment for
the Appellees and that there are no constitutional violations, we affirm the trial
court’s judgment.
[37] Judgment affirmed.
Mathias, J., and Crone, J., concur.
Court of Appeals of Indiana | Opinion 49A02-1612-PL-2942 |December 4, 2017 Page 21 of 21