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Former Principal Wins $155 Million in Charter Lawsuit...For Now

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by Andrew Ujifusa

In 2006, Katherine Murphy, the principal of Aventura City Excellence School in Aventura, Fla., a charter school founded in 2003, was fired from her job. Subsequently in 2007, Murphy filed suit against Aventura City Manager Eric Soroka, who together with the Aventura City Council act as the City Excellence School's board, and Charter Schools USA, a charter management organization which runs operations at the school. Murphy accused them of breach of contract, conspiracy, and inflicting emotional distress. The jury's verdict from late Nov. 2 and list of monetary damages to Murphy (to the tune of $155 million) can be read here.

The most controversial part of the case was the allegation that Murphy took a bribe to enroll a student at City Excellence who was not at the top of the waiting list to get into the school. According to a Miami Herald story in 2007, a compensation referee deciding on Murphy's eligibility for unemployment benefits stated that Sokora did allege that Murphy took the bribe, but Sokora denied making the accusation.

The Herald reported Nov. 5 that in Murphy's suit against Sokora and Charter Schools USA concerning the bribery and other allegations, the jury sided with Murphy on Nov. 2, and awarded her $155 million related to conspiracy, defamation, and other damages. (Each specified damage carries its own price tag, as you can read in the complaint.)

Charter Schools USA manages 48 charter schools in five states, although the majority of them are in Florida. The group's schools serve a total of 40,000 students. An attorney for Charter Schools USA, Ed Pozzuoli, said that in fact the company is (for now) liable for only $60,000 out of the entire $155 million in damages due to a breach of contract. But Pozzuoli also said the company is challenging that decision because the company maintains that no such breach was committed. The Nov. 5 story in the Herald says the city is also challenging the jury's verdict.

A spokesman for Charter Schools USA, Colleen Reynolds, later told me that the company doesn't hire the principal or assistant principal at the school, and "only provides administrative services."

I called and emailed a city attorney for Aventura, Michael Popok, for comment, but he hadn't gotten back to me as of Tuesday morning. I will update the post if he or another attorney does.

According to this document from Aventura, by the way, the charter school's operating budget is about $7.7 million, roughly one-twentieth the amount of damages awarded to Murphy, if the number stands.

City Excellence historically does very well on Florida's school grading system: In eight years, it has received an "A" grade seven times, and its only lower grade, a B, was during its first year of operation, in 2003. In the 2010-11 year, 13 percent of its students received free or reduce-price lunch, while 41 percent of its students were classified as "minority."

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