LAUSD Must Pay Charter School $7.8 Million

LOS ANGELES (CN) – An arbitrator ordered Los Angeles Unified School District to pay $7.8 million for failing to provide rent-free public school facilities to a west San Fernando Valley charter school.
     The $7,752,740 award to Ivy Academia Charter School, of West Hills, includes $653,000 in legal fees, plus another $14,000 in administrative fees to the American Arbitration Association and $152,213 to the arbitrator.
     The award came despite the fact that the CEO of the charter school was sentenced to prison for embezzlement. (See below.)
     Arbitrator John Zebrowski found that the school district conceded that it had not complied with Proposition 39 – the Smaller Classes, Safer Schools and Financial Accountability Act – when failed to provide rent-free facilities for three school years, from 2007 to 2010.
     Ivy had to spend $3,247,117 of general fund money to lease and equip facilities inferior to the rent-free space in the school district.
     “One factor looming over these proceedings is that, in a very real sense, the persons most damaged by LAUSD’s failure to obey the law were the individual students of Ivy whose educational experience was degraded by LAUSD’s wrongful conduct,” Zebrowski wrote in his March 15 final arbitration award.
     The district was able to avoid litigation because LAUSD “routinely requires” arbitration clauses in contracts with charter schools, Zebrowski said.
     Ivy’s attorney Paul Minney did not respond to requests for comment by phone and email.
     But in a statement to the Los Angeles Times he said: “Ivy was forced to cobble together multiple private facilities that were inferior and didn’t have things like playing fields, libraries, permanent science labs, and enough special education space.”
     The school district’s attorney David Huff said the district was “grateful” that Ivy had failed to secure the higher damages award of $24 million it was seeking.
     Huff said during a phone interview that Ivy’s former chief executive and principal had been convicted in an embezzlement scheme. Yevgeny Selivanov was sentenced in 2013 to nearly five years in prison for embezzling more than $200,000 in public funds. His wife Tatyana Berkovich was sentenced to 45 days in jail for her role in the scheme, according to contemporary news reports.
     “It was our theory that even if we had made the offer of space to Ivy that we were supposed to – and which we admitted that we did not do – the two people running Ivy wouldn’t have accepted it because they had this scheme going,” Huff told Courthouse News.
     Huff said Selivanov had leased a commercial space for $18,000 a month using a for-profit corporation and subleased it to Ivy for $43,000 a month.
     “So it’s a $25,000 a month profit that would have evaporated if they accepted any space the district had offered,” Huff said.
     Zebrowski was not persuaded. He found that it was the district’s failure to provide rent-free space that “created the environment in which Mr. Selivanov’s crimes could be perpetrated.”
     “Ivy as an entity was a victim of those crimes, not the perpetrator,” Zebrowski wrote.
     Huff said he expected the district to challenge part of the award or ask a court to vacate it.

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