Allegheny Intermediate Unit v. East Allegheny School District

203 A.3d 371
CourtCommonwealth Court of Pennsylvania
DecidedJanuary 25, 2019
Docket484 C.D. 2018
StatusPublished
Cited by5 cases

This text of 203 A.3d 371 (Allegheny Intermediate Unit v. East Allegheny School District) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allegheny Intermediate Unit v. East Allegheny School District, 203 A.3d 371 (Pa. Ct. App. 2019).

Opinion

OPINION BY PRESIDENT JUDGE LEAVITT

East Allegheny School District (School District) appeals an order of the Court of Common Pleas of Allegheny County (trial court) entering judgment in favor of the Allegheny Intermediate Unit (Intermediate Unit) on a breach of contract action. The trial court ordered the School District to pay $3,023,067, plus interest, to the Intermediate Unit for special education services it had provided to the School District's students over the course of several years. On appeal, the School District argues that it did not have a contractual obligation to make these payments because the Intermediate Unit did not issue invoices for these services in a timely manner. The School District also argues that the Intermediate Unit was not entitled to invoke nullum tempus occurrit regi ("time does not run against the king") to defeat the applicable statute of limitations that barred at least some of the Intermediate Unit's breach of contract claims. Finally, the School District argues the trial court abused its discretion in awarding interest on the judgment. For the reasons to follow, we affirm.

Background

The Intermediate Unit provides special education services to students in 42 school districts and five vocational schools in Allegheny County, including those enrolled in the School District. 1 Joint Stipulation of Facts, ¶ 2; Reproduced Record at 299a (R.R. ___). The Intermediate Unit provides "District Based" services in the School District's classrooms and "Center Based" services in schools operated by the Intermediate Unit. Joint Stipulation of Facts, ¶ 15; R.R. 301a. Beginning with the 2009-2010 school year, and for each of the school years between 2010-2011 and 2014-2015, the Intermediate Unit and the School District entered into a separate "Educational Services Agreement" (contract) with respect to these special education services. Under each contract, the Intermediate Unit agreed to provide special education services to the School District's students, and the School District agreed to pay the Intermediate Unit for the services it provided. Each yearly contract imposed a payment schedule upon the School District. For example, for the 2011-2012 school year, the contract provided that the School District was to remit its payment as follows:

Sept. 15, 2011 20% of total 10/11 bill as advance payment for the 2011/2012 school year. Nov. 15, 2011 25% of actual billing for 11/12 based on student information in the Special Education Database. Advance (20%) payment will be deducted from the total bill. Feb. 15, 2012 25% of actual bill based on student information in the Special Education Database. March 15, 2012 25% of actual bill based on student information in the Special Education Database. May 15, 2012 25% of actual bill based on student information in the Special Education Database.

R.R. 536a (emphasis in original). Each successive contract contained a substantially similar payment schedule.

Prior to the inception of the 2010-2011 school year, the School District requested a modification to the above-stated payment schedule because of its financial difficulties, and the Intermediate Unit agreed. Under the modification, the Intermediate Unit agreed to invoice the School District $75,000 a month for 10 months; at the end of the school year, the Intermediate Unit would issue an invoice that reconciled the School District's accumulated payment to the actual cost of services provided. The modification, memorialized in an email dated August 26, 2010, stated as follows:

We will invoice [the School District] mid September. The invoice will be $75,000 based on the estimate (that was mailed out prior to the new year starting) divided by 10 months. Obviously, the final invoice (June) will be reconciled based on the actual utilization of services....

R.R. 881a. The modification was agreed to by the parties in each successive contract, with an increase in the monthly payment to $85,000 for the 2014-2015 school year.

In the Spring of 2015, the Intermediate Unit discovered that it had not issued the above-described reconciliation invoice for several school years. 2 On June 2, 2015, the Intermediate Unit sent the School District the reconciliation invoice for the 2014-2015 school year. Joint Stipulation of Facts, ¶ 27; R.R. 303a ( See Summary Spreadsheet at R.R. 503a-16a). Then, on June 16, 2015, the Intermediate Unit issued final reconciliation invoices for each contract year. Joint Stipulation of Facts, ¶ 28; R.R. 303a ( See Summary Spreadsheet at R.R. 872a-75a). The School District informed the Intermediate Unit that it would not pay any of the invoices, including the invoice for the 2014-2015 school year.

In March 2016, the Intermediate Unit filed the instant action against the School District for breach of contract and unjust enrichment. The Intermediate Unit asserted that the School District breached the parties' contract by not paying in full for the special education services it had received for the school years 2010-2011 through 2014-2015. The Intermediate Unit contended that the School District owed $3,300,250, plus interest, for services provided over the five school years. 3

Initially, the parties filed cross-motions for partial summary judgment on the question of whether the statute of limitations barred any part of the Intermediate Unit's breach of contract action. By order of September 12, 2017, the trial court denied the School District's motion, holding that the Intermediate Unit, as an agency of the Commonwealth, could invoke the doctrine of nullum tempus occurrit regi. The parties then addressed the issues of liability and damages.

The parties filed a joint stipulation of facts and motions for partial summary judgment on the issue of liability. Following argument, the trial court granted the Intermediate Unit's motion, holding the School District liable for breach of contract. The trial court denied the School District's motion for partial summary judgment on liability.

On December 13, 2017, the trial court conducted a trial on the issue of damages. At trial, the Intermediate Unit offered evidence that upon further reconciliation, the amount the School District owed was $3,023,067. Thereafter, the parties submitted proposed findings of fact and conclusions of law. On February 5, 2018, the trial court entered judgment in favor of the Intermediate Unit in the amount of $3,023,067, and interest in the amount of $194,483.98, for a total judgment of $3,217,550.98. The trial court assessed 12% annual interest, to accrue from the date of the order until final payment on the judgment. On March 16, 2018, the trial court denied the School District's motion for post-trial relief.

On appeal, 4 the School District raises several assignments of error by the trial court. First, the School District argues that the trial court erred in holding that it breached its contract with the Intermediate Unit. Second, the School District argues that the trial court erred in holding that the statute of limitations did not bar the Intermediate Unit's breach of contract claims that arose prior to March 4, 2012.

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Bluebook (online)
203 A.3d 371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allegheny-intermediate-unit-v-east-allegheny-school-district-pacommwct-2019.