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Pressley Ridge School for Deaf v. Graham Local School District, Board of Education

United States District Court, S.D. Ohio, Western Division, Dayton

May 21, 2018


          Thomas M. Rose District Judge.


          Sharon L. Ovington United States Magistrate Judge.

         I. Introduction

         Plaintiff Pressley Ridge School for the Deaf provides special education and other services to students with special needs. It is located in Pittsburgh, Pennsylvania. The Graham Local School District is a public school district in Champaign County, Ohio.

         Invoking this Court's diversity jurisdiction, Pressley Ridge claims that Defendant Graham Local School District Board of Education (the Board or Defendant) breached a valid, enforceable contract by failing to pay Pressley Ridge for educational, residential, and related services it provided to a special-needs student, J.D., during the 2016-2017 extended school year. The parties have filed cross motions for judgment on the pleadings under Fed.R.Civ.P. 12(c), debating (in part) whether an enforceable contract existed between them during the 2016-2017 extended school year.

         II. The Pleadings and Attached Documents

         “For purposes of a motion for judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing party must be taken as true....” Tucker v. Middleburg-Legacy Place, 539 F.3d 545, 549 (6th Cir. 2008). Doing so reveals the following.

         A. Pressley Ridge's First Amended Complaint

         Pressley Ridge's Amended Complaint and attached documents describe events during two extended school years. In the first school year-2015-2016-all went well between the parties; in the second-2016-2017-things turned sour.

         In late May 2015, J.D. and his parents lived within the boundaries of the Graham Local School District. The parties acknowledge that J.D. is a “child with a disability” as defined by the Individual with Disabilities in Education Act (IDEA), 20 U.S.C. §1401(3). (Doc. #21, PageID #185, ¶8; Doc. #22, PageID #216, ¶6). Pressley Ridge alleges that J.D.'s disability required one-on-one attention during all waking hours.

         During the 2015-2016 extended school year, J.D. attended Pressley Ridge where he received educational, residential, and related services. His placement at Pressley Ridge was the result of a settlement agreement between J.D.'s parents and the Board that identified Pressley Ridge as the “least restrictive environment” for J.D. under the IDEA. (Doc. #21, PageID #186 and Exhibit B).[2]

         In furtherance of J.D.'s placement at Pressley Ridge, the Board and Pressley Ridge entered into a written, signed “Agreement for Provision of Special Education and Certain Related Services.” Id. at 186, Exh. D. This Agreement covered J.D.'s placement at Pressley Ridge during the 2015-2016 extended school year and spelled out the costs of educational and residential services and other matters. Id. at Exh. D. Pressley Ridge notes, “Defendant paid for all educational and related services provided by Pressley Ridge on Defendant's behalf to J.D. pursuant to J.D. IEP [Individualized Educational Program] and pursuant to the agreement between Pressley Ridge and Defendant for the extended school year 2015-2016.” Id. at 187, ¶22.

         On August 3, 2016, an annual review of J.D.'s IEP was conducted to plan for the next-2016-2017-school year. During the review, J.D.'s parents “raised concerns regarding a then-contemplated mission trip to Nicaragua, thus notifying Defendant of the upcoming trip and of their leaving the country.” Id. at 187 (citing Exh. C). The Amended Complaint does not specifically state whether J.D.'s parents went on the mission trip during any part of the 2016-2017 extended school.

         It is worth pausing to note that under the IDEA, “J.D. is required to receive a ‘free and appropriate public education' (‘FAPE') pursuant to a placement determined by an ‘IEP team' and reflected in a valid individualized education Program….” Id., PageID #185, ¶10; see Doc. #22, PageID #216, ¶8; see also F.H. ex rel. Hall v. Memphis City Schools, 764 F.3d 638, 641 (6th Cir. 2014) (“The IDEA guarantees these [disabled] children a Free Appropriate Public Education … in conformity with the IEP.”). “Crafted by a child's ‘IEP Team'-a group of school officials, teachers, and parents-the IEP spells out a personalized plan to meet all of the child's ‘educational needs.'” Fry v. Napoleon Community Schools, 137 S.Ct. 743, 749 (2017) (citations omitted).

         Returning to the Amended Complaint, Pressley Ridge's key allegations place its breach-of-contract claim in the limelight:

29. On or about August 3, 2016, J.D.'s IEP was formalized by and agreed to by the entire IEP Team.
30. According to the IEP, [t]he IEP team agreed and determined to continue J.D.'s placement at Pressley Ridge for the 2016-2017 extended school year.
31. Defendant supported J.D.'s continued placement at Pressley Ridge for the extended 2016-2017 school year as part of J.D.'s IEP team as J.D.'s district of residence.
32. The IEP presently in effect for J.D. reflects a continuation of J.D.'s prior placement with Pressley Ridge.
33. Following the August 3, 2016 IEP Team meeting, Pressley Ridge engaged in correspondence with Defendant regarding the re-enrollment of J.D. for the upcoming extended school year and annual costs.
34. As a result of the IEP Team meeting, the approval of the IEP, and as a result of these correspondences, Defendant entered into an agreement with Pressley Ridge for the 2016-2017 school year (the “Agreement”).
35. Pursuant to the Agreement, Pressley Ridge began providing educational and residential services to J.D. on behalf of Defendant as requested and required by Defendant and pursuant to J.D.'s IEP.
36. In recognition of the execution of the joint IEP, Pressley Ridge sent written confirmation of the Agreement to Defendant in September, 2016 to carry out the terms of the IEP.
37. In accordance with the Agreement, Defendant is required to remit fees for educational services either in full in advance, or in three equal installments during the course of the year.
38. In accordance with the Agreement, Defendant is required to remit fees for residential and related services at least monthly.

Id. at 187-88 (citations omitted).

         The parties' present dispute began rumbling in the fall of 2016 when Defendant did not timely pay for educational and residential services. Pressley Ridge began sending invoices to Defendant in August 2016, including an invoice for educational services and monthly invoices for residential services for the 2016-2017 extended school year. When Defendant did not timely pay for those services, id. at 189, ¶s 40-41, Pressley Ridge sent correspondence to Defendant in late November 2016 regarding the outstanding balance. “After correspondence from Pressley Ridge regarding Defendant's outstanding balance, on … November 28, 2016, Defendant remitted payment in the amount of $77, 910.45 to Pressley Ridge for services provided by Pressley Ridge pursuant to the 2016-2017 Agreement for the period August 3, 2016 through and including September 30, 2016.” Id. at ¶42 (citing Exh. F, Popovich affidavit). Yet, “Defendant failed to remit any other or further payments to Pressley Ridge pursuant to the Agreement.” Id. at ¶43 (citing Exh. F, Popovich affidavit).

         Defendant's explanation for its non-payment began to emerge in a letter to Pressley Ridge in February 2017. This letter is referred to in, and attached to, the Amended Complaint. In the letter, Defendant's Superintendent explained that the Board “no longer believes it has an obligation to provide a free education to [J.D.] under the presently existing circumstances as neither he nor his parents are residents of the Graham Local School District.” Id., Exh. G, PageID #204. The Superintendent stated that J.D.'s parents had moved out of the Graham Local School District on or about September 22, 2016. The Amended Complaint suggests, “Upon information and belief, … in contemplation of their disclosed mission trip, [J.D.'s parents] executed a Grandparent Power of Attorney on September 22, 2016 with J.D.'s grandmother…, pursuant to O.R.C. § 3109.52 et seq.” Id. at 190, ¶48. The Board believed the power or attorney was void and consequently failed to establish the residency of J.D.'s parents in the Graham Local School District.

         The Superintendent's letter also advised Pressley Ridge that the Board had filed declaratory-judgment action in the Champaign County Court of Common Pleas, Juvenile Division, contesting the validity of the power of attorney. The Superintendent does not state in the letter whether Juvenile Court found the grandparent power of attorney to be void or valid. The record in the instant case does not presently contain further information about the status of the case in Juvenile Court.[3]

         In response to the Board's act of filing a declaratory-judgment case in state court, J.D.'s parents and grandmother sought a “stay-put” Order from the Ohio Department of Education. In late March 2017, a state hearing officer issued a stay-put order requiring J.D.'s placement to remain at Pressley Ridge. Id., Exh. I. at PageID #110. The stay-put order noted, “The parents' move out of the country … has placed the question of financial responsibility at issue.” Id. But, because the Juvenile Court-not the hearing officer-had jurisdiction to resolve the validity of the power of attorney concerning J.D.'s care, the hearing officer declined to resolve the issue of financial responsibility for J.D.'s placement and care at Pressley Ridge. Id. at 110-11.

         The Amended Complaint asserts that between September 22, 2016 and February 21, 2017, Defendant “continued to accept Pressley Ridge's provision of educational and residential services to J.D. pursuant to the Agreement, and pursuant to J.D.'s IEP.” Id. at ¶50. Defendant also continued to discuss with Pressley Ridge “the provision of services to J.D. pursuant to J.D.'s IEP Team as a member of the IEP Team as J.D.'s district of residence.” Id. at ¶53. During that time period, Defendant also continued to correspond with Pressley Ridge about J.D.'s progress in meeting his IEP goals. And, “Between September 22, 2016 and at least February 21, 2017, Defendant continued to correspond ...

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