Court Opinion

ID: 4569746
Source: CourtListenerOpinion
Date Created: 2020-09-25 14:05:39.297887+00
Date Added: 2024-06-11T09:27:58.000736
License: Public Domain

RENDERED: SEPTEMBER 18, 2020; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                           Court of Appeals

                            NO. 2019-CA-001430-MR

BRACKEN COUNTY BOARD OF EDUCATION                                    APPELLANT

                APPEAL FROM FRANKLIN CIRCUIT COURT
v.              HONORABLE THOMAS D. WINGATE, JUDGE
                        ACTION NO. 18-CI-00843

AUGUSTA INDEPENDENT BOARD OF EDUCATION; and
KENTUCKY BOARD OF EDUCATION/KENTUCKY
DEPARTMENT OF EDUCATION                                               APPELLEES

                                    OPINION
                                   AFFIRMING

                                   ** ** ** ** **

BEFORE: KRAMER, LAMBERT, AND TAYLOR, JUDGES.

KRAMER, JUDGE: The Bracken County Board of Education (Bracken) appeals

an order of the Franklin Circuit Court, in which the circuit court vacated, on

subject matter jurisdiction grounds, the Kentucky Department of Education’s
(“KDE’s”) administrative disposition of litigation Bracken had instituted against

appellee Augusta Independent Board of Education. Finding no error, we affirm.

             In general, a common school district in Kentucky with a higher

population of pupils who are its legal residents is entitled to a greater distribution

from the Fund to Support Education Excellence in Kentucky (“SEEK”). See

generally Kentucky Revised Statutes (KRS) 157.360. With that in mind, this case

stems from an ongoing dispute between two neighboring school districts (i.e.,

Bracken and Augusta) over whether and under what circumstances a student

should be considered the “legal resident” of a school district, and accordingly

enrolled in that school district, if he or she is purportedly residing with an informal

caregiver rather than a legal custodian.

             The crux of this dispute involves Bracken’s accusation that Augusta (a

city school district located in the county of Bracken) improperly enrolled

approximately sixty of Bracken’s legal residents, and therefore received SEEK

funds per each pupil which Bracken would have otherwise received. Bracken

alleges Augusta perpetrated this alleged impropriety in large part by encouraging a

number of Bracken families to: (1) appoint legal residents of Augusta as their

children’s “educational powers of attorney” (POAs); (2) ostensibly represent that

their children “reside” with the POA; and (3) based upon that representation, to

claim the POA’s Augusta residence as a pretext for securing their children’s

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enrollment in Augusta’s schools, rather than Bracken’s schools – thereby allowing

the parents to enroll their children in Augusta schools on a tuition-free basis, and

allowing Augusta to claim their children, for purposes of SEEK funding, as its

legal residents.

             With that said, Bracken sought to resolve this dispute by initiating

proceedings before the Kentucky Department of Education (KDE), asserting that

KDE, by and through its Commissioner of Education (“Commissioner”) and the

Kentucky Board of Education (“Board”), had subject matter jurisdiction to resolve

the issue at the heart of its claims against Augusta – namely, whether the

approximately sixty pupils qualified as legal residents of Bracken or Augusta.

However, none of the families or children at issue was named as a party in the

underlying action.

             Over Augusta’s protests, the Commissioner determined that by virtue

of KRS 157.350, the KDE (by and through its Commissioner and Board) had the

requisite subject matter jurisdiction to resolve whether the approximately sixty

pupils qualified as legal residents of Bracken or Augusta. The Commissioner

proceeded to determine that a majority of the approximately sixty students Bracken

had identified in its suit were indeed the legal residents of Bracken, rather than

Augusta. Based upon that essential determination, the Commissioner then made

several other determinations. Specifically, the Commissioner: (1) concluded that

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“Augusta acted in bad-faith and attempted to subvert the nonresident student

agreements[1] when it instructed parents of students who resided in the Bracken

district that POAs were an alternative to paying tuition to attend Augusta”; (2)

directed Augusta regarding the type of evidence Augusta must collect from

students utilizing POAs if it wished to continue claiming them as its legal residents

for enrollment purposes; and, the Commissioner further directed:

              3. Concerning all students enrolled in Augusta pursuant
              to a POA in 2018-2019 and 2019-2020 school years,
              which could potentially include students addressed in this
              Appeal, Augusta shall provide KDE copies of said POAs
              by September 1st of each year or within 15 days of
              receipt if after September 1st and a statement executed by
              the DPP and Superintendent addressing each student and
              setting forth an explanation for why enrollment in
              Augusta is warranted and how the decision was
              ascertained and supported. The primary fact to be
              considered is where a student lies his or her head most
              nights, but additional supporting information must be
              provided to KDE to show how same was established.

              4. Augusta will be subject to an attendance review
              conducted by KDE at the conclusion of the 2018-19
              school year to verify the accuracy of its attendance
              records. This review will be conducted using the scope
              and procedures outlined on the “Attendance Review
              Program Form” that is available for review on KDE’s
              website. The procedures, however, will be expanded to
              provide further testing for nonresident students covered

1
 The “nonresident student agreements” referenced by the Commissioner are a facet of KRS
157.350(4), and are discussed in-depth below. As with his other determinations, the
Commissioner’s conclusion that Augusta “acted in bad-faith and attempted to subvert the
nonresident student agreements” – essentially a determination that Augusta was in breach of
contract – depended upon the Commissioner’s “legal residence” determinations.

                                              -4-
             by POAs. If Augusta is found to be in compliance with
             the regulations regarding nonresident students, and the
             terms of this agreement, then Augusta will be placed
             back in the normal rotation cycle for future attendance
             reviews.

             Augusta filed an administrative appeal with the Board. The Board

affirmed the Commissioner’s determination of subject matter jurisdiction, along

with the remainder of the Commissioner’s order that had depended upon his

residency determinations.

             Thereafter, Augusta sought relief in Franklin Circuit Court. In

disposing of this matter, the circuit court expressed dismay over the

Commissioner’s and Board’s assumptions that they were authorized to determine

the legal residences of approximately sixty individuals – none of whom had ever

been parties to the proceedings. Notwithstanding, the circuit court vacated after

determining that KDE (by and through its Commissioner and the Board) had

lacked subject matter jurisdiction to resolve this dispute.

             This appeal followed.

             As indicated, the question presented in this appeal is whether KDE

has subject matter jurisdiction to adjudicate whether a pupil qualifies as a legal

resident of a given school district. The statute which Bracken, the Commissioner,

and the Board relied upon to answer that question in the affirmative, KRS 157.350,

provides in relevant part as follows:

                                          -5-
Each district which meets the following requirements
shall be eligible to share in the distribution of funds from
the fund to support education excellence in Kentucky:

      (1) Employs and compensates all teachers
      for not less than one hundred eighty-five
      (185) days. The Kentucky Board of
      Education, upon recommendation of the
      commissioner of education, shall prescribe
      procedures by which this requirement may
      be reduced during any year for any district
      which employs teachers for less than one
      hundred and eighty-five (185) days, in
      which case the eligibility of a district for
      participation in the public school fund shall
      be in proportion to the length of time
      teachers actually are employed;

      (2) Operates all schools for a minimum
      school term as provided in KRS 158.070 and
      administrative regulations of the Kentucky
      Board of Education. If the school term is
      less than one hundred eighty-five (185)
      days, including not less than one hundred
      seventy (170) student attendance days as
      defined in KRS 158.070 or one thousand
      sixty-two (1,062) hours of instructional
      time, for any reason not approved by the
      Kentucky Board of Education on
      recommendation of the commissioner, the
      eligibility of a district for participation in the
      public school fund shall be in proportion to
      the length of term the schools actually
      operate;

      (3) Compensates all teachers on the basis of
      a single salary schedule and in conformity
      with the provisions of KRS 157.310 to
      157.440;

                             -6-
(4) Includes no nonresident pupils in its
average daily attendance, except:

      (a) 1. Pupils listed under a
      written agreement, which may
      be for multiple years, with the
      district of the pupils’ legal
      residence.

      2. If an agreement cannot be
      reached, either board may
      appeal to the commissioner for
      settlement of the dispute.

      3. The commissioner shall
      have thirty (30) days to resolve
      the dispute. Either board may
      appeal the commissioner’s
      decision to the Kentucky Board
      of Education.

      4. The commissioner and the
      Kentucky Board of Education
      shall consider the factors
      affecting the districts, including
      but not limited to academic
      performance and the impact on
      programs, school facilities,
      transportation, and staffing of
      the districts.

      5. The Kentucky Board of
      Education shall have sixty (60)
      days to approve or amend the
      decision of the commissioner;
      and

(b) A nonresident pupil who attends a
district in which a parent of the pupil is
employed. All tuition fees required of a

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                    nonresident pupil may be waived for a pupil
                    who meets the requirements of this
                    paragraph.

                    This subsection does not apply to those
                    pupils enrolled in an approved class
                    conducted in a hospital and pupils who have
                    been expelled for behavioral reasons who
                    shall be counted in average daily attendance
                    under KRS 157.320[.]

(Emphasis added.)

             As to why Bracken believed KDE had subject matter jurisdiction in

this context – a belief that KDE’s Commissioner and Board adopted – Bracken

began by noting that under subsection (4) of this statute, SEEK funds could not

properly be distributed to a school district if the school district’s “average daily

attendance” included “nonresident pupils,” unless the “nonresident pupils” in

question were, pursuant to section (4)(a)1., “listed under a written agreement,

which may be for multiple years, with the district of the pupils’ legal residence.”

Further, Bracken observed that section (4)(a)2. provided, “If an agreement cannot

be reached, either board may appeal to the commissioner for settlement of the

dispute.”

             From these provisions, Bracken surmised that any “agreement”

contemplated in subsection (4)(a)1. would necessarily include an agreement

between the two school districts regarding who their respective legal residents were

– otherwise, how could they effectuate an agreement regarding their nonresidents?

                                          -8-
And, while Bracken conceded it had entered into written nonresident agreements

with Augusta as contemplated by subsection (4)(a)1., it asserted that there had

been no meeting-of-the-minds regarding who their respective legal residents were:

Because Augusta had simply concluded on its own volition that the pupils who had

utilized the POAs qualified as its residents, it had not “listed” them in any

nonresident agreement with Bracken and had instead secured SEEK distributions

based upon “average daily attendance” reports that had factored the attendance of

those pupils – as Augusta’s legal residents – into their averages.

                Bracken reasoned, therefore, that because no “agreement” existed

between itself and Augusta regarding the legal residences of the POA pupils, the

Commissioner was accordingly empowered, pursuant to subsection (4)(a)3., to

“resolve” whether the POA pupils were legal residents of Bracken or legal

residents of Augusta, and that subsection (4)(a)3. likewise empowered the

Kentucky Department of Education to review the Commissioner’s determination in

that respect.

                To be sure, an administrative agency such as the KDE, through its

Commissioner and Board, is empowered and required to determine its own subject

matter jurisdiction before proceeding in any given matter. See Liquor World of

Corbin, LLC v. Commonwealth Dep’t of Alcoholic Beverage Control, 458 S.W.3d
814, 816 (Ky. App. 2014). However, any such agency determination is subject to

                                          -9-
de novo review from the courts, and it is further qualified by “Kentucky’s strong

stance against vague delegations” of power referred to as the “nondelegation

doctrine.” Board of Trustees of Judicial Form Retirement System v. Attorney

General of the Commonwealth of Kentucky, 132 S.W.3d 770, 781-82, 784 (Ky.

2003) (describing at length the “nondelegation doctrine” in Kentucky). This

doctrine compels us to strictly limit an agency’s authority to that clearly delegated

and no more.

             In other words, our common law has long adhered to the doctrine that

the powers of administrative agencies “are limited to those conferred expressly by

statute or which exist by necessary and fair implication. . . . But these implications

are never extended beyond fair and reasonable inferences.” Blue Boar Cafeteria

Co. v. Hackett, 312 Ky. 288, 227 S.W.2d 199, 201 (Ky. 1950). “Powers not

conferred are just as plainly prohibited as though expressly forbidden[.]”

Louisville and Jefferson County Planning Commission v. Schmidt, 83 S.W.3d 449,

460 n.14 (Ky. 2001) (quoting Allen v. Hollingsworth, 246 Ky. 812, 56 S.W.2d 530,

532 (1933)) (Keller, Justice, concurring).

             With that in mind, Bracken – like the Commissioner and Board below

– concedes that nothing in KRS 157.350 or any other statute expressly confers to

KDE subject matter jurisdiction to determine the legal residence of any individual.

But, Bracken insists the “dispute” that the Commissioner is empowered to

                                         -10-
“settle[]” or “resolve” pursuant to KRS 157.350(4)(a)2. and (4)(a)3. necessitated or

fairly implied that authority.

             We disagree. In Shawnee Telecom Resources, Inc. v. Brown, 354
S.W.3d 542, 551 (Ky. 2011), the basic principles of statutory construction were

summarized as follows:

                     In construing statutes, our goal, of course, is to
             give effect to the intent of the General Assembly. We
             derive that intent, if at all possible, from the language the
             General Assembly chose, either as defined by the
             General Assembly or as generally understood in the
             context of the matter under consideration. . . . We
             presume that the General Assembly intended for the
             statute to be construed as a whole, for all of its parts to
             have meaning, and for it to harmonize with related
             statutes. . . . We also presume that the General Assembly
             did not intend an absurd statute or an unconstitutional
             one. . . . Only if the statute is ambiguous or otherwise
             frustrates a plain reading, do we resort to extrinsic aids
             such as the statute’s legislative history; the canons of
             construction; or, especially in the case of model or
             uniform statutes, interpretations by other courts. . . .

(Citations omitted.)

             Here, the “dispute” identified in KRS 157.350(4)(a)2. and (4)(a)3.

contemplates a dispute that two opposing school districts could have exclusively

resolved on their own and in a binding manner by entering into an “agreement”

(e.g., a contract) with one another; pursuant to section (4)(a)2., the Commissioner

only becomes involved if they do not reach an agreement. And for at least two

reasons, it would lead to absurdity if we were to presume that the General

                                         -11-
Assembly, in drafting this provision, intended two opposing school districts to

“agree” on a third party’s legal residence. First, the “agreement” would never be

binding upon any third party. See Harlan Public Service Co. v. Eastern Const.

Co., 254 Ky. 135, 71 S.W.2d 24, 29 (1934) (explaining that to constitute a binding

contract, minds of the parties must meet, and one cannot be bound to a contract to

which he was not a party, nor by uncommunicated terms without his consent).

               Second, courts are not bound by agreements between contracting

parties as to the interpretation of the law. See Swift & Co. v. Hocking Valley R.

Co., 243 U.S. 281, 289, 37 S. Ct. 287, 289, 61 L. Ed. 722 (1917). And, as the

phrase implies, an individual’s “legal residence” is a legal determination – that is, a

mixed question of law and fact determined by courts, not school districts. See,

e.g., Beechwood Board of Education v. Wintersheimer, 493 S.W.3d 390 (Ky. 2016)

(adjudicating liability for school tuition based upon legal residency);2 see also

2
 In his order, the Commissioner asserted that KRS 158.120(1) illustrated that the Board at least
had statutory authority to determine the legal residences of students. In relevant part, it provides:

       Any board of education may charge a reasonable tuition fee per month for each
       child attending its schools whose parent, guardian, or other legal custodian is not
       a bona fide resident of the district. Any controversy as to the fee shall be
       submitted to the Kentucky Board of Education for final settlement.

         However, the Commissioner was incorrect on this point, too. While KRS 158.120(1)
relates to tuition fees charged to an individual who is not a “bona fide resident of the district,” it
explicitly states that the Board is authorized to resolve “[a]ny controversy as to the fee.”
Wintersheimer, 493 S.W.3d 390, illustrates that controversies over the residency status of the
individual charged the fee are reserved for the courts.

                                                 -12-
Wirth v. Board of Educ. for Jefferson County, 262 Ky. 291, 90 S.W.2d 62, 64

(1935), explaining:

             The residence of Wirth while in the home of Heady is a
             mixed question of law and fact. We are convinced from
             a review of the evidence adduced, without giving weight
             to the chancellor’s finding of facts, that the residence of
             Wirth, so long as he continues to remain in the home of
             Heady, is definitely fixed and governed by the principles
             stated in Board of Trustees of Stanford Graded Common
             School District v. Powell, 145 Ky. 93, 140 S.W. 67, 36
             L.R.A. (N.S.) 341, Ann. Cas. 1913B, 1016, and Crain v.
             Walker, 222 Ky. 828, 2 S.W.(2d) 654. They are
             conclusive in the present one. And, accordingly, for
             common school purposes so long as he remains at
             Heady’s home, Wirth is a resident of the common school
             district in which Heady resides, and he is entitled to
             attend, free of tuition, the common schools taught
             therein.

             That aside, KRS 157.350(4)(a)4. removes any doubt that the “dispute”

contemplated in KRS 157.350(4)(a)2. and (4)(a)3. was never intended to

encompass a determination of an individual’s legal residence. To review, it

provides that in resolving the “dispute,” “The commissioner and the Kentucky

Board of Education shall consider the factors affecting the districts, including but

not limited to academic performance and the impact on programs, school facilities,

transportation, and staffing of the districts.” (Emphasis added.)

             As a general rule of statutory construction, the enumeration of a

particular thing or class demonstrates that the omission of another thing or class is

an intentional exclusion. See Palmer v. Commonwealth, 3 S.W.3d 763, 764 (Ky.

                                         -13-
App. 1999). Here, the “factors” the General Assembly directed the Commissioner

and Board to consider in resolving the “dispute” are not factors bearing upon

determining the location of an individual’s legal residence; they are “factors

affecting the districts.” In other words, the “dispute” in question relates to policy

matters involving whether, and to what extent, two school districts can and should

arrange with one another to accept nonresident students.

               In short, the fact that KRS 157.350(4) mentions “legal residence” is

not an invitation for two school districts, with or without the assistance of KDE, to

legally determine a particular individual’s (or sixty individuals’) legal residence.

At most, the statute’s use of the term is merely an acknowledgement that a legal

fiction must serve as the foundation of any nonresident agreement: While school

districts have no authority to adjudicate an individual’s legal residency, they are

presumptively aware of who their legal residents are by virtue of their continuing

statutory duties to diligently investigate who their legal residents are and to

maintain a school census to that effect.3 Moreover, we note that if a student under

3
  Children of school age are required to attend school, and the compulsory attendance laws in
each school district are to be enforced by a director of pupil personnel (DPP) under the direction
of the local board of education and its superintendent. See KRS 159.010(1)(a); see also KRS
159.130 (providing the director of pupil personnel “may investigate in their district any case of
nonattendance at school of any child of compulsory school age or suspected of being of that
age”). To that end, DPPs, working under the direction of superintendents, are obligated to
“institute and maintain a complete, accurate, permanent, and continuous census of all children
between the ages of five (5) and twenty-one (21) enrolled in the public schools in the district.”
KRS 159.250.

                                               -14-
an informal custodianship arrangement were to seek enrollment in a school district

in which his or her legal guardians do not reside, those statutory duties are

certainly broad enough to obligate the two school districts to reasonably

communicate that fact with one another (for the sake of tuition liability and SEEK

funding), and if necessary, to seek judicial declaratory relief in that regard which,

at minimum, would involve both school districts and the student’s legal

representative.

             In light of the foregoing, we AFFIRM.

             ALL CONCUR.

 BRIEFS FOR APPELLANT:                     BRIEF FOR APPELLEE AUGUSTA
                                           INDEPENDENT BOARD OF
 Suzanne Cassidy                           EDUCATION:
 Covington, Kentucky
                                           Stephen D. Wolnitzek
                                           Covington, Kentucky

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