CITY OF NORTH WILDWOOD VS. BOARD OF EDUCATION OF THE CITY OF WILDWOOD (L-0402-15, CAPE MAY COUNTY AND STATEWIDE) ( 2019 )


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  •                                 NOT FOR PUBLICATION WITHOUT THE
    APPROVAL OF THE APPELLATE DIVISION
    This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
    internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
    SUPERIOR COURT OF NEW JERSEY
    APPELLATE DIVISION
    DOCKET NO. A-4138-16T2
    CITY OF NORTH WILDWOOD,
    Plaintiff-Appellant,
    v.
    BOARD OF EDUCATION OF
    THE CITY OF WILDWOOD,
    Defendant-Respondent.
    _____________________________
    Argued October 3, 2018 – Decided July 8, 2019
    Before Judges Fuentes, Vernoia and Moynihan.
    On appeal from the Superior Court of New Jersey, Law
    Division, Cape May County, Docket No. L-0402-15.
    Joseph Francis Betley argued the cause for appellant
    (Capehart & Scatchard PA, attorneys; Joseph Francis
    Betley, of counsel; Kelly E. Adler, on the briefs).
    William Stephen Donio argued the cause for respondent
    (Cooper Levenson PA, attorneys; William Stephen
    Donio and Kelli A. Prinz, on the brief).
    PER CURIAM
    Since 2002, the Board of Education of the City of Wildwood (the Board)
    has leased space at St. Simeon's by-the-Sea Episcopal Church in North
    Wildwood to serve as a school facility for its preschool and kindergarten
    students. The Board leases this space because the City of Wildwood's existing
    elementary school is at full capacity and consequently unable to accommodate
    all of the students who fall within this age-group. On June 6, 2014, the City of
    North Wildwood (North Wildwood) challenged the Board's authority to lease
    and operate this educational facility located outside of its jurisdictional
    boundaries. North Wildwood views the Board's actions as ultra vires and as an
    intrusion on its municipal sovereignty. The Law Division did not find any legal
    or factual grounds to support North Wildwood's position. We affirm.
    I
    North Wildwood initially challenged the Board's operation of this school
    in a petition before the State Commissioner of Education (Commissioner), who
    referred the matter to the Office of Administrative Law for the development of
    an evidentiary record before an Administrative Law Judge (ALJ). The parties
    participated in discovery, and ultimately filed cross-motions for summary
    disposition, which the ALJ scheduled for oral argument on July 24, 2015. On
    July 23, 2015, North Wildwood moved before the ALJ to withdraw its Petition
    A-4138-16T2
    2
    without prejudice, to permit it to seek declaratory and injunctive relief against
    the Board in the Superior Court.
    On August 14, 2015, North Wildwood filed a verified complaint in the
    Law Division seeking declaratory and injunctive relief. North Wildwood argued
    the Board did not have the legal authority to lease property located outside its
    municipal borders to operate an educational program for its students. North
    Wildwood also sought an order compelling the Board to find a suitable site to
    operate these educational programs within the City of Wildwood. Toward that
    end, North Wildwood sought an injunction prohibiting the Board from: (1)
    extending its lease beyond the 2015-2016 school year; and (2) operating any
    educational program located outside the City of Wildwood. Finally, without
    citing any legal authority to support this claim, North Wildwood asked the court
    to award it attorney's fees and costs incurred in the prosecution of this civil
    action. The Board filed a responsive pleading that included its own request for
    affirmative relief in the form of a declaratory judgment validating the manner it
    had operated its preschool and kindergarten programs since 2002.
    While the matter proceeded in the Law Division through discovery, the
    ALJ granted North Wildwood's motion to withdraw its petition before the
    A-4138-16T2
    3
    Commissioner but decided to dismiss the matter with prejudice. The ALJ
    provided the following explanation for taking this action:
    It was only after the extensive case analysis, workup
    and motion practice that North Wildwood abruptly
    withdrew its petition on July 23, 2015, one day before
    oral argument, cognizant that the case was close to
    being decided with finality. And North Wildwood . . .
    re-filed [its] claims with the Superior Court . . . .
    Nonetheless the majority rights and obligations still
    must be decided under education law ([T]itle 18A and
    [A]dministrative [C]ode 6A). . . . A Superior Court
    Judge would have to resort to Title 18A or
    Administrative Code 6A to decide the case.
    ....
    I CONCLUDE that the petition filed by North
    Wildwood must be DISMISSED with prejudice. North
    Wildwood's re-filing with the Superior Court under the
    Declaratory Judgment Act was strategic, tactical in
    nature, and jurisdictionally improper in the opinion of
    the undersigned. It came very late in the process and
    more importantly on the eve of possibly deciding the
    outcome of the case. The Commissioner of Education
    has primary jurisdiction over education matters. The
    Superior Court generally defers administrative matters
    to the respective state agencies where special expertise
    exists under the principle of exhaustion of
    administrative remedies or primary jurisdiction. R.
    4:69-5. It would be unfair and prejudicial to [the
    Board] if the Superior Court invoked the exhaustion of
    administrative remedies or primary jurisdiction
    doctrines; rejected the relief sought by North
    Wildwood; and only to have the case refiled before the
    Commissioner. The taxpayers of both cities would
    A-4138-16T2
    4
    incur unnecessary legal expenses and an unnecessary
    delay in knowing the outcome of the case.
    On January 4, 2016, the Commissioner adopted the ALJ's Initial Decision,
    and included the following admonition:
    [T]he Commissioner makes no findings as to the merits
    of [North Wildwood's] pending Superior Court action.
    Certainly, [North Wildwood] can elect to pursue its
    claim elsewhere . . . but not while leaving the door open
    to duplicative future litigation before the
    Commissioner. Given this late stage, and the well-
    documented efforts already expended by [the Board] to
    defend against and resolve this action, [North
    Wildwood] should be precluded from returning to the
    Commissioner with the same claim.
    After 242 days of discovery in the Law Division, North Wildwood and the
    Board filed cross-motions for summary judgment which the court heard on
    March 3, 2017. On April 28, 2017, the motion judge issued an order granting
    the Board's motion for summary judgment and dismissing North Wildwood's
    complaint with prejudice.
    As a threshold issue, the judge found North Wildwood had standing to
    seek declaratory relief because "the permissible locations where a municipality
    may host students for public education is a question of public interest, and given
    the liberalized standard for standing in New Jersey, the facts show . . . [North
    Wildwood] has a sufficient stake in the outcome." Although the Commissioner
    A-4138-16T2
    5
    had previously dismissed with prejudice North Wildwood's petition, the motion
    judge concluded this did not preclude it from bringing this declaratory judgment
    action in the Law Division.      The judge characterized the Commissioner's
    decision as predicated "purely on procedural grounds." In the judge's view,
    because the Commissioner did not decide the merits of the action, the doctrine
    of res judicata did not apply.
    Against this backdrop, North Wildwood appeals arguing the Law Division
    erred in holding: (1) this issue was within the primary jurisdiction of the
    Commissioner; and (2) N.J.S.A.18A:20-4.2(a) gives the Board the express or
    implied authority to lease private property outside its municipal borders to
    operate a kindergarten or preschool program. In response, the Board argues
    whether it may lease space for the purposes of educating its preschool and
    kindergarten students involves the interpretation of Title 18A, and thus falls
    squarely within the primary jurisdiction of the Commissioner.
    II
    Before we begin our legal analysis, we will briefly describe the factual
    background that led to this legal dispute between these two public entities. The
    Board is "a body corporate" organized under N.J.S.A. 18A:10-1, responsible for
    A-4138-16T2
    6
    the operation of the public schools in the City of Wildwood. The Board has a
    send-receive relationship with North Wildwood for grades nine through twelve.
    In 2002, the Board entered into a lease agreement with St. Simeon's to use
    and occupy an annex to the church to house its preschool and kindergarten
    students. The Board formally approved this arrangement in the public session
    of a meeting, in accordance with the Open Public Meetings Act, N.J.S.A. 10:4-
    6 to -21. Since 2003, the Board has formally approved the renewal of the lease
    a number of times. The most recent lease which the Board approved on April
    25, 2016, was for a three-year term beginning September 1, 2016 and ending on
    August 31, 2019.    The State Department of Education, represented by the
    Executive County Superintendent of Schools for Cape May County, formally
    approved the use of the Annex as additional classroom space.
    The Annex is located on the border of North Wildwood and the City of
    Wildwood and contains six classrooms, a teacher's lounge, two girl's bathrooms,
    two boy's bathrooms, three office spaces, a kitchen, and a playground. As of
    October 2016, 129 children were enrolled in the preschool and kindergarten
    classes.   The Board and North Wildwood have separate liability insurance
    policies covering the Annex. In the event of a fire-related emergency at the
    A-4138-16T2
    7
    Annex, both the City of Wildwood Fire Department and the North Wildwood
    Fire Department have agreed to respond.
    In a certification dated April 21, 2015, Kevin Yucco, the City
    Administrator of North Wildwood, claimed he first became aware that the Board
    was operating a school at the Annex in 2014, when the Chief of Police told him
    that the Cape May County Prosecutor's Office requested that he "enter into a
    Memorandum of Agreement 1 with [the Board] for the preschool and
    kindergarten students from the City of Wildwood that attend s chool at . . . the
    Annex at St. Simeon's." Yucco claimed that prior to this, he assumed St.
    Simeon's was operating a private day care or preschool program.
    The Board claims North Wildwood was aware that it was using the Annex
    to accommodate its preschool and kindergarten programs because Patrick
    Rosenello, the current Mayor of North Wildwood, was a member of the Board
    as a Sending District Representative 2 when the Board first leased the Annex in
    1
    See N.J.A.C. 6A:16-6.2(b)(13).
    2
    Rosenello submitted a certification in response to the Board's position in this
    litigation in which he admits he was a member of the Board in 2002. However,
    he claims he was not aware of the lease arrangement because his role on the
    Board was statutorily circumscribed pursuant to N.J.S.A. 18A:38-8.1 and by a
    resolution the Board adopted prior to 2002 that limited his participation to
    "matters concerning Wildwood High School."
    A-4138-16T2
    8
    2002. The Board also notes that North Wildwood's Police and Fire Departments
    have conducted safety drills and presentations at the Annex during the relevant
    time period.    The record also contains several articles published in local
    newspapers regarding Wildwood's students utilizing the Annex.
    III
    We first address North Wildwood's standing to bring this action in the
    Law Division. The issue of standing is a legal question, which is subject to this
    court's de novo review. Courier-Post Newspaper v. Cty. of Camden, 
    413 N.J. Super. 372
    , 381 (App. Div. 2010) (citing In re Project Authorization Under N.J.
    Register of Historic Places Act, 
    408 N.J. Super. 540
    , 555 (App. Div. 2009)).
    "Standing 'refers to the plaintiff's ability or entitlement to maintain an action
    before the court.'"     In re Adoption of Baby T, 
    160 N.J. 332
    , 340
    (1999) (quoting N.J. Citizen Action v. Riviera Motel Corp., 
    296 N.J. Super. 402
    ,
    409 (App. Div. 1997)). New Jersey courts liberally grant a litigant standing to
    sue. Jen Elec., Inc. v. Cty. of Essex, 
    197 N.J. 627
    , 645 (2009). Generally, there
    is standing if the party seeking relief has "a sufficient stake and real adverseness
    with respect to the subject matter of the litigation [and a] substantial likelihood
    of some harm . . . in the event of an unfavorable decision[.]" Jen Elec., Inc., 197
    N.J. at 645 (quoting In re Adoption of Baby T, 
    160 N.J. at 340
    ).
    A-4138-16T2
    9
    "The threshold to prove a party's standing is 'fairly low.'" EnviroFinance
    Grp., LLC v. Envtl. Barrier Co., LLC, 
    440 N.J. Super. 325
    , 340 (App. Div. 2015)
    (quoting Reaves v. Egg Harbor Twp., 
    277 N.J. Super. 360
    , 366 (App. Div.
    1994)).   Thus, where "the proceeding serves the public interest" and the
    "plaintiff is not simply an interloper," standing will likely be found. N.J. Citizen
    Action, 296 N.J. Super. at 415 (quoting In re Quinlan, 
    70 N.J. 10
    , 34-35 (1976)).
    In determining the question of a party's standing in a civil matter, a court should
    also consider if the issue implicates a substantial public interest. In re Grant of
    Charter to Merit Preparatory Charter Sch. of Newark, 
    435 N.J. Super. 273
    , 280
    (App. Div. 2014) (finding standing where the issue involved a "substantial
    public interest"); Finkel v. Twp. Comm. of Hopewell, 
    434 N.J. Super. 303
    , 315-
    16 (App. Div. 2013).
    North Wildwood argues it has standing because the legal question raised
    here is a novel one that implicates a matter of substantial public importance, to
    wit, "whether a public school district can continually and/or permanently operate
    its educational programs beyond its geographic and political limits . . . [.]"
    North Wildwood postulates several scenarios in which it would be required to
    expend municipal resources based only on Wildwood students' participation in
    and attendance of programs offered at the Annex.
    A-4138-16T2
    10
    These possible situations include: (1) dispatching public safety personnel
    from its Police and Fire Departments in response to incidents arising from the
    presence of students in the Annex; (2) participating in fire inspections and drills
    at the Annex; and (3) allocating North Wildwood employees to perform crossing
    guard duties for Annex-students. North Wildwood's arguments are predicated
    on the concern that, should a Wildwood student be injured or otherwise in need
    of emergency care at the Annex, North Wildwood public safety personnel would
    be required to assume the role of first responders.
    By contrast, the Board argues North Wildwood has not provided any
    competent evidence that shows that in the twelve years the Annex has housed
    this educational program, North Wildwood has expended municipal resources
    exclusively due to Wildwood's children's use of the Annex. The Board also
    points out that North Wildwood is obligated to provide emergency services to
    anyone leasing the St. Simeon's site. Thus, North Wildwood has not suffered
    any actual harm nor expended additional resources due to the Board's use of the
    Annex.
    Despite the Board's logically compelling arguments, the Law Division
    found North Wildwood had standing to raise this issue. The motion judge held
    that "the permissible locations where a municipality may host students for public
    A-4138-16T2
    11
    education is a question of public interest . . . [.]" In light of our State's well-
    settled jurisprudence in favor of granting a litigant standing to sue in cases
    involving issues of public interest, Jen Elec., Inc., 197 N.J. at 645, we hold that
    North Wildwood has, by the slimmest of margins, provided a sufficient basis to
    establish standing to litigate this case.
    We turn next to the issue of jurisdiction. In this respect, we agree with
    the motion judge that the Commissioner has primary jurisdiction.               The
    dispositive legal question is "whether [the Board] is permitted to have students
    attending school outside of its municipality, either temporarily or permanently."
    The judge thus rejected North Wildwood's attempt to reframe the issue to a
    determination of whether the Board was acting outside of its statutory authority.
    As the motion judge correctly held, the statutes applicable to this issue are all
    under Title 18A. Thus, this issue squarely falls under the Commissioner's
    primary jurisdiction.
    We review the Law Division's decision de novo because it was based
    entirely on a question of law. State v. Quaker Valley Farms, LLC, 
    235 N.J. 37
    ,
    55 (2018). To determine whether the doctrine of primary jurisdiction applies, a
    court must weigh the following factors:
    1) whether the matter at issue is within the conventional
    experience of judges; 2) whether the matter is
    A-4138-16T2
    12
    peculiarly within the agency's discretion, or requires
    agency expertise; 3) whether inconsistent rulings might
    pose the danger of disrupting the statutory scheme; and
    4) whether prior application has been made to the
    agency.
    [Muise v. GPU Inc., 
    332 N.J. Super. 140
    , 160 (App.
    Div. 2000) (quoting Boldt v. Correspondence Mgmt.,
    Inc., 
    320 N.J. Super. 74
    , 85 (1990)).]
    Because the controversy before us involves the application and
    interpretation of Title 18A, the Commissioner has primary jurisdiction to hear
    and determine all of the issues raised by the parties. Bower v. Bd. of Educ. of
    E. Orange, 
    149 N.J. 416
    , 420 (1997); G.D.M. v. Bd. of Educ. of Ramapo Indian
    Hills Reg'l High Sch. Dist., 
    427 N.J. Super. 246
    , 259 (App. Div. 2012). The
    New Jersey School Laws, N.J.S.A. 18A:1-1 to -76-4, empower local school
    boards to operate public schools for their respective districts. See N.J.S.A.
    18A:8-1; N.J.S.A. 18A:10-1; N.J.S.A. 18A:11-1. The Department of Education
    is "a principal department in the executive branch of the state government."
    N.J.S.A. 18A:4-1.       The Commissioner is "[t]he chief executive and
    administrative officer of the department," who has "general charge and
    supervision of the work of the department," N.J.S.A. 18A:4-22(a), and has
    "jurisdiction to hear and determine . . . all controversies and disputes arising
    under the school laws . . . [.]" N.J.S.A. 18A:6-9.
    A-4138-16T2
    13
    As an appellate court, we owe "institutional respect . . . for the
    Commissioner's first-instance jurisdiction 'to hear and determine . . . all
    controversies and disputes arising under the school laws[.]'"           Archway
    Programs, Inc. v. Pemberton Twp. Bd. of Educ., 
    352 N.J. Super. 420
    , 424 (App.
    Div. 2002) (second and third alterations in original) (quoting N.J.S.A. 18A:6-
    9). Moreover, "[t]he Commissioner's authority is plenary." 
    Ibid.
     (citing Abbott
    v. Burke, 
    100 N.J. 269
    , 301 (1985)). Thus, "the Commissioner of Education has
    primary jurisdiction to hear and determine all controversies arising under the
    school laws." Bower v. Bd. of Educ. of E. Orange, 
    149 N.J. 416
    , 420 (1997)
    (citing N.J.S.A. 18A:6-9). The Board of Education is the "agency ultimately
    charged with implementation of the school laws."          The Commissioner's
    "statutory interpretation is entitled to considerable weight, where not
    inconsistent with the statute and in harmony with the statutory purpose."
    Kletzkin v. Bd. of Educ.of Spotswood, 
    136 N.J. 275
    , 278 (1994).
    We thus affirm the Law Division's order dismissing North Wildwood's
    declaratory judgment action.    We do not express any opinion concerning
    whether North Wildwood is barred from seeking any relief before the
    Commissioner under the doctrine of res judicata or judicial estoppel.
    Affirmed.
    A-4138-16T2
    14