A $75,000 payment to settle a lawsuit filed by a woman who tripped and fell at Waimea Middle School is raising questions about who is liable for accidents at charter schools.

The Charter School Commission is temporarily withholding the money from “per pupil funds” allotted by the state to the Big Island charter school. It did so at the request of the Attorney General’s Office, which negotiated the settlement.

Joe Uno, chairman of Waimea’s governing board, Ho‘okako‘o Corp., has warned that a “slip and fall” case could bankrupt any charter school if it can’t rely on the Statewide Risk Management Program to cover liability claims.

He and other school officials strongly opposed withholding the school funds, and some commissioners also expressed concern about using money that was appropriated to educate children to instead cover liability costs.

“One of the things we have to be clear, if we do use this kind of funding in this kind of case, it sets a precedent,” Commissioner Harald Barkhoff said at the commission’s general meeting Dec. 12. “My big concern is this money is intended to help the students; this is for the school to function.”

The case, Miller-Potter v. State of Hawaii, et al., was filed in Circuit Court in November 2016 by Pamela Miller-Potter. She had attended an evening meeting at the school and tripped over a low bench in the dark where a hallway light had burned out, and injured her face and teeth. The case was settled through mediation.

The Legislature approved the settlement along with others in HB 942 last session, which specified the $75,000 should be paid by the school with funding from EDN600, the state budget category for charter schools.

“This problem got created when the Legislature, rather than saying the agency should pay, they said the school should pay,” said Commissioner Mitch D’Olier. “That’s where the problem is. If the same act could be amended to say the department should pay, that would solve the problem.”

The Charter School Commission requested an emergency appropriation to cover the cost of the Wai­mea case, rather than using school funds, according to Executive Director Sione Thompson. The governor’s office relayed the request to the Department of Education, which responded that the issue was out of the department’s purview.

“We are back to, How do we deal with this outstanding liability?” said Commission Chairman John Kim.

Charter schools are run by their own governing boards and overseen by the Charter Commission rather than the Department of Education.

But unlike most charter schools, Waimea Middle used to be a Department of Education school before converting to charter status. It sits on land owned by the Department of Education, and its facilities are still maintained by the state.

School officials also point out that the school’s performance contract with the commission also says it shall be covered under the Statewide Risk Management Program for liability, property, crime and automobile insurance.

“This is a larger issue that we’re dealing with because it pertains to all of the charter schools in various ways, depending on a school’s agreement with their individual landlord,” Kim said. “It’s an issue that the staff is taking forward because we need to clean that up. Otherwise the schools, as this example shows, are left hanging. They are state agencies and not allowed to purchase insurance on their own.”

“I received a couple calls from schools, ‘What do you mean we are not covered? Are we at risk?’” Kim said. “My answer was to go back and look at your agreement with your landlord and see what the maintenance is and the liability.”

In response to Barkhoff’s concern about possible harm to the students due to withholding funds, Thompson said Waimea Middle has received 60% of its annual funding already.

“We don’t foresee the $75,000 being withheld as being critical to their operation,” Kim added.

The school has requested more time to meet with legislators and the governor’s office and to gather information before responding to the commission’s concerns. At their last meeting, commissioners voted to keep withholding the funds while the school and other parties work to resolve the matter.