Cobb Cnty. Sch. Dist. v. Learning Ctr. Found. of Cent. Cobb, Inc.

Citations: 821 S.E.2d 127; 348 Ga. App. 66Docket: A18A1098

Court: Court of Appeals of Georgia; November 2, 2018; Georgia; State Appellate Court

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The Cobb County School District and eight individuals appeal a Fulton County Superior Court order denying their motion to dismiss a breach of contract complaint filed by the Learning Center Foundation of Central Cobb, Inc. (the Academy). The District argues that the court erred by not recognizing sovereign immunity as a defense. The Academy, previously a charter school authorized by the District and the Georgia Department of Education, claims that reporting errors by the District from 2014 led to underfunding of $2,086,560, resulting in less favorable treatment compared to traditional schools. The Academy alleges the District breached its obligations under the Charter Schools Act and related state regulations, which require equal funding treatment for charter schools. The trial court found the Academy presented a prima facie case for breach of contract and ruled that the District, by entering into the charter agreement, agreed to adhere to the Act's provisions. On appeal, the District contests that the Act's terms are incorporated within the charter agreement. The court noted that while the District has sovereign immunity from tort claims, such immunity may be waived by legislative act. The Georgia Constitution waives sovereign immunity for breach of written contracts with the state or its agencies.

The Georgia Constitution waives actions arising from contracts without further legislative action. The interpretation of the relevant statute is guided by principles of statutory construction, emphasizing the plain and ordinary meaning of the text, contextual understanding, and natural reading. OCGA § 20-2-2062 (1) defines a "charter" as a "performance-based contract" and establishes that parties entering a charter agree to be bound by the provisions of the Act as if they were explicitly included in the charter. This incorporation means the Act's provisions are fundamental to the charter agreement between the Academy and the District. Consequently, the Academy's breach of contract claim is not barred by sovereign immunity due to the constitutional waiver, leading to the affirmation of the trial court's order denying the District’s motion to dismiss. A concurrence notes the charter contract’s references to the Charter Schools Act of 1998 and its signatures from relevant educational authorities. A dissent argues the District is immune from suit for claims brought by the Academy, asserting that violations of civil statutes typically constitute tort claims, for which the District holds sovereign immunity. However, the majority opinion recognizes the Academy's claim as a breach of contract due to the statutory provisions being integrated into the charter by law.

The majority interprets the Charter Schools Act's definition of a "charter" as encompassing all provisions of the Act, thereby making it part of the charter contract which could be subject to breach claims. They assert that the Academy's lawsuit is an action ex contractu, with sovereign immunity waived, allowing the District to be sued. However, the dissent argues that this interpretation misreads the statutory language, which indicates that entering into a charter signifies agreement to adhere to the Charter Schools Act, not that the Act's provisions are inherently part of the charter contract. The dissent clarifies that the term "terms" refers to the charter's contractual language, while "article" and "provisions" denote the governing law. It points out that charter schools are generally exempt from most state regulations applicable to non-charter schools unless specified in the charter, including the Fair Dismissal Act. Consequently, the dissent concludes that the majority incorrectly asserts that the Charter Schools Act's provisions are contractual terms, and the Academy has not proven the existence of a written contract that the District allegedly breached, thus failing to establish a waiver of sovereign immunity.

The plaintiffs in Drumm v. George were unable to prove the existence of a written contract, resulting in the dismissal of their action due to sovereign immunity. The individuals named in the suit, including the Superintendent of Cobb County School District and several Board of Education members, were sued in their individual capacities. The District filed for interlocutory appeal, arguing that the trial court erred by not dismissing the individual defendants and by certain statutory provisions not being incorporated into the charter. However, the court did not rule on these issues, thus they could not be addressed on appeal. Sovereign immunity, established under the Georgia Constitution, protects county-wide school districts and extends to officials sued in their official capacities. The court emphasized that for an action ex delicto to proceed, it must stem from a duty imposed by law, not merely from a breach of contractual duty. Additionally, a statutory violation constitutes a tort if it protects a specific class of persons and addresses the harm intended. The Georgia Supreme Court has ruled that sovereign immunity is not waived for unwritten contracts with state agencies.

Sovereign immunity prevents lawsuits against the state, including its departments and officials, unless the state consents to such suits. According to the Georgia Constitution, only the General Assembly can waive sovereign immunity through specific legislative acts. Implied waivers are disfavored. The doctrine primarily protects state finances and bars damage recovery claims, though it allows for actions seeking injunctive relief. In cases involving charter schools, such as the one discussed, sovereign immunity does not eliminate the ability to challenge violations of the Charter Schools Act through actions like mandamus. OCGA § 20-2-2065 (a) specifies that charter schools are exempt from certain state and local regulations, provided the state board can establish relevant rules consistent with the article. Waivers granted under this section apply to all schools within a charter system.