Thomas M. Durkin, United States District Judge
By minute order dated September 30, 2016 (R. 81), the Court denied the parties' pending cross-motions for summary judgment (R. 49, 51), stating that a written opinion would follow. The Court now sets forth the reasons for its September 30, 2016 order.
A. Introduction
B. The First Lawsuit
C. Meetings To Establish John's Educational Program For Post-Senior Year And Subsequent Settlement Of The First Lawsuit
D. Post-Settlement Disputes
E. The Present Lawsuit
I. Subject Matter Jurisdiction
A. Jurisdiction Based On Breach Of An Agreement To Settle A Federal Claim
B. Federal Question Jurisdiction Based On The IDEA
C. Federal Question Jurisdiction Based On An Embedded Issue Of Federal Law
D. Supplemental Jurisdiction
II. Summary Judgment
A. Standard of Review
B. State Law Breach Of Contract Claims
D. Equitable Issues: Failure To Cooperate, Estoppel, and Unclean Hands
This case concerns the high school education of John Miksis. John is currently twenty-six years old, but, when the events at issue began, he was a twelve-year old child with Down Syndrome who was about to enter the ninth grade. Defendant Evanston Township High School District #202 is a public educational agency that receives federal funding. As such, Defendant is subject to federal education laws and regulations, including the Individuals with Disabilities Education Act, 20 U.S.C. § 1400 et seq., as amended by the Individuals with Disabilities Education Improvement Act ("IDEIA"), P.L. 108-446, 118 Stat. 2647(Dec. 3, 2004) (hereinafter ("the IDEA" or "the Act")).
The IDEA is a federal statutory scheme governing the education of disabled students like John, which seeks "to ensure that all children with disabilities have available to them a free appropriate public education that emphasizes special education and related services designed to meet their unique needs and prepare them for further education, employment, and independent living." 20 U.S.C. § 1400(d)(1)(A). The term "free appropriate public education," or "FAPE," is defined in the Act as "special education and related services that — (A) have been provided at public expense, under public supervision and direction, and without charge; (B) meet the standards of the State educational agency; (C) include an appropriate preschool, elementary school, or secondary school education in the State involved; and (D) are provided in conformity with the individualized education program required under section 1414(d) of [the Act]." 20 U.S.C. § 1401(9).
In the spring of 2004, John's parents, Michael and Christine Miksis, were in discussions with Defendant about the individualized education program, or "IEP,"
By the time the Seventh Circuit remanded the lawsuit to the district court, John was in his third year of high school. Thereafter, another year passed while the parties attempted to settle the case. In the fall of John's senior year, Defendant filed a motion to dismiss the federal lawsuit, arguing that, because John was about to finish his senior year, the lawsuit was moot. John's parents contested that motion, arguing that the case was not moot
In a ruling issued on March 16, 2009, Judge Holderman rejected Plaintiffs' arguments that the underlying merits issues about the educational services to which John was entitled presented a live controversy. According to Judge Holderman, the question of what educational services John was entitled to during his first four years of high school was different than the same question asked about John's IDEA-eligible years after his senior year of high school. The federal lawsuit filed by John's parents, Judge Holderman concluded, dealt only with the former question, which all parties agreed no longer needed to be decided:
John M. v. Bd. of Educ. of Evanston Twp. High Sch. Dist. 202, 2009 WL 691276, at *4 (N.D. Ill. Mar. 16, 2009) (footnote omitted). Nevertheless, Judge Holderman agreed with Plaintiffs' additional arguments that the first lawsuit was not entirely moot, because, in addition to seeking a change in Defendant's proposed IEP for John, Plaintiffs also were seeking compensatory
Around the time the parties were addressing the mootness issue in the first lawsuit, they also were meeting outside the litigation to discuss John's placement after the end of his senior year and during the final years of his IDEA eligibility. These discussions occurred during two meetings in the spring of 2009. The first meeting took place on March 27, and the second meeting took place on May 15. In both instances, the meeting was led by Bob Gottlieb, who at the time was Defendant's Director of Special Education. Believing they had reached an agreement regarding John's educational placement during these meetings, the parties subsequently entered into a settlement of the first lawsuit. The Settlement Agreement provided that Plaintiffs would release Defendant from their claims in the lawsuit, and, in return, Defendant agreed to provide certain special educational services during John's first post-senior year of IDEA-eligibility (2009-2010 academic year) as follows:
R. 49-3 at 2 (Settlement Agreement, ¶ 1). The Agreement goes on to address John's final IDEA-eligible secondary school years (2010-2011 academic year; 2011-2012 academic year through October 14, 2012) as follows:
Id. at 7-8 (Settlement Agreement, ¶ 2).
The Agreement concludes with an acknowledgement that it "is a release and settlement of disputed claims, as provided for herein[] ... entered into solely as and for a compromise settlement of such disputed claims." Id. at 5 (Settlement Agreement, ¶ 9). It was signed on July 11, 2009 by each of John's parents and by John, and on July 17, 2009 by Eric Witherspoon, Superintendent of Evanston Township High School District #202. Id.
On July 1, 2009, Maria Smith replaced Gottlieb as Defendant's Director of Special Education. R. 52-5 at 2 (Smith Declaration). Smith did not participate in either of the two meetings held in the spring of 2009 or in the negotiation or execution of the Settlement Agreement. See R. 49-7 at 18-21 (Smith Deposition). Shortly after Smith took over and at the beginning of John's first post-senior secondary school year, disputes arose over the nature and scope of the educational support and services to which Defendant had agreed.
The first dispute centered on John's enrollment in classes at Oakton Community College. John began his placement at Orchard Academy on August 31, 2009. A few weeks prior to that date, Christine Miksis had emailed Tim Bobrowski, Director of Orchard Academy, indicating that a settlement had been reached in the lawsuit and that she had enrolled John in classes at Oakton.
On or about September 9, 2009, Smith had a telephone conversation with Bobrowski regarding John's program at Orchard. It was then that she first learned John had been attending community college classes since the start of the school year and Orchard had been providing aides and supports for those classes. According to Bobrowski, Smith notified him "that John's attendance at Oakton was a unilateral action by John's parents, that the District had not agreed to and did not authorize Orchard to provide services and transportation related to Oakton courses, and that Orchard should cease providing such services and transportation to John." R. 52-4 at 8 (Bobrowski Decl. ¶ 29). "Based on Dr. Smith's direction, on or around September 9, 2009, Orchard discontinued providing John services related to his attendance at courses at Oakton." Id. (Bobrowski Decl. ¶ 30). Also on September 9, Smith spoke with Christine Miksis by telephone. After the call, Christine wrote Smith an email stating the following:
R. 49-8 at 1.
That same day, Defendant's attorney, Patricia Whitten, sent Plaintiffs' then-attorney, Michael Graham, a letter setting forth Defendant's position regarding the community college issue:
R. 52-6 at 14.
Thereafter, it appears the parties reached a truce of sorts, with John's parents providing transportation and tutoring for John's community college classes at their own expense while John also continued to participate in Orchard's program when he was not attending academic classes at the community college. John's parents sought to preserve their rights under the IDEA and the Settlement Agreement by sending Smith a letter, stating, among other things, that they "may seek reimbursement" for the costs they incur to provide the aides and supports terminated by Smith.
In the early part of 2010, John's attendance at Orchard declined even further and Smith apparently came to the decision that this was not acceptable. Rather than call a meeting to communicate her decision and discuss whether mutual resolution of the problem was possible, Smith sent John's parents a letter. The letter was sent by regular mail on or about March 5, 2010, and stated that John's placement at Orchard would be terminated effective March 15 based on his nonattendance:
R. 52-6 at 19.
An identical letter also was sent by Whitten to Plaintiffs' new attorney, Stephen Glick. See R. 52-6 at 22. Glick responded to a telephone voice message conveying the same information, apparently left by another of Defendant's attorneys (John Relias), with an email dated March 15, 2010 (the effective date of John's termination per the March 5 letter):
R. 52-6 at 26.
The record does not contain any information about further communication that might have taken place between the parties or their representatives after the March 15, 2010 email message from Glick to Relias.
Per the Settlement Agreement, John applied to attend the PACE program sometime in October 2009. R. 52 at 19 (Def. SOF, ¶ 71). PACE denied John's application for admission on or about February 20, 2010, approximately three weeks before John was disenrolled from the school district. Plaintiffs allege that Defendant played a role in PACE's rejection of John's application. Defendant denies that allegation.
In May 2010, John's parents applied for John to attend the Elmhurst Learning and Success Academy ("ELSA"), believing that program (although apparently not a residential program like PACE) was the most comparable program to PACE in the area. Christine testified that her attorney informed Defendant's attorney about John's application to ELSA. R. 49-4 at 115. Smith denies receiving the information, however. John was accepted by ELSA and was still attending that program at the time this lawsuit was filed. Smith testified that she did not learn of John's attendance at ELSA until around the time Defendant was contacted by Plaintiffs' attorney seeking reimbursement for the program just prior to the filing of this lawsuit.
On October 9, 2012, Plaintiffs filed a "Complaint for Breach of Contract" against Defendant in the Circuit Court of Cook County, Illinois. The complaint alleges that, in September 2009, Defendant made a number of "placement/transition planning decisions," which "did not comply with either the express terms" of the Settlement Agreement or the "transition plan" the parties had agreed to in the meetings held in the spring of 2009. R. 1-1 at 3. The complaint also alleges that Plaintiffs "sought assistance" from Defendant for an alternative program to PACE, but that Defendant "refused to find an appropriate program" and then "refused to support" John's placement in the ELSA program.
Defendant responded to the state court complaint by removing it to federal court, arguing that Plaintiffs' breach of contract claims implicated rights under the IDEA for which federal jurisdiction was proper. Upon its removal, the case was originally assigned to Judge Guzman, who referred it to a magistrate judge for possible settlement. Settlement was unsuccessful, and, on January 14, 2013, the case was reassigned to the undersigned judge. Upon reassignment, the Court immediately raised the question of the propriety of the removal. Defendant filed a brief in support of removal jurisdiction, arguing that Plaintiffs' claim for breach of contract arose under federal law because of "the interrelationship between the Settlement Agreement and the IDEA." R. 26 at 2. Defendant further argued that federal question jurisdiction existed because, in order to determine whether Plaintiffs are entitled to the relief they seek, the Court must interpret and apply principles from the IDEA. Id. at 3. Plaintiffs declined to file a written response to Defendant's jurisdictional arguments, stating orally on the record that they did not oppose Defendant's removal petition. Relying on the arguments and citations to authority in Defendant's removal brief, the Court found it had subject matter jurisdiction, R. 27, and the case proceeded to discovery. More than a year later, the parties filed cross-motions for summary judgment.
Plaintiffs' motion for summary judgment argues that the evidence is undisputed that Defendant breached the terms of the Settlement Agreement and John's agreed-to transition plan, first, by terminating the aides and supports John had been receiving from Orchard Academy, which allowed him to take academic classes at Oakton Community College, and, second, by terminating his placement in Orchard and his enrollment in the school district, and by refusing to pay for his placement in the ELSA program. Defendant's cross-motion for summary judgment argues that Plaintiffs' claims should be denied as a matter of law, first, because Plaintiffs failed to comply with the IDEA's requirement for exhaustion of administrative remedies, and second, because John's parents failed to cooperate with Defendant's efforts to provide John with a FAPE. The Court addresses these summary judgment issues below, but, before doing so, the Court first must reexamine the basis for federal jurisdiction over this dispute.
"Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) (internal citations omitted). Although the parties do not contest the Court's exercise of subject matter jurisdiction over Plaintiffs' claims, "neither the parties nor their lawyers may stipulate to jurisdiction or waive arguments that the court lacks jurisdiction."
The parties' summary judgment arguments caused the Court renewed concerns about the basis for its jurisdiction over this matter. Therefore, the Court had an independent duty to look into the question. If in reexamining the jurisdictional question the Court were to determine that subject matter jurisdiction is lacking, the case would have to be remanded to state court. See 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."). A remand would be required even if it would impose a hardship on the parties. See Hartland Lakeside Joint No. 3 Sch. Dist. v. WEA Ins. Corp., 756 F.3d 1032, 1036 (7th Cir. 2014) ("If this case is returned to state court, it must start a new ... and more than two years will have been lost. But practical considerations never justify a federal court's adjudication of a suit over which it lacks subject-matter jurisdiction.").
Defendant cites to "28 U.S.C. § 1400 et seq.,"
If the only claim Plaintiffs are making is for breach of the Settlement Agreement, the Court would not have subject matter jurisdiction. A settlement agreement is a type of contract, and it is well established that a claim for breach of contract generally does not give rise to federal question jurisdiction even if part of the consideration for the agreement is dismissal of an earlier federal suit alleging claims arising under federal law. See Kokkonen, 511 U.S. at 382, 114 S.Ct. 1673 ("enforcement of the settlement agreement is for state courts, unless there is some independent basis for federal jurisdiction"); McCall-Bey v. Franzen, 777 F.2d 1178, 1189-90 (7th Cir. 1985) ("there is no inherent federal jurisdiction to enforce agreements to settle federal suits"). There is an exception for when jurisdiction is preserved in the original lawsuit by the district court either "incorporat[ing] the agreement's terms into the dismissal order or expressly retain[ing] jurisdiction over the agreement." T St. Dev., LLC v. Dereje & Dereje, 586 F.3d 6, 11 (D.C. Cir. 2009);
Plaintiffs contend that, notwithstanding the principles discussed above, the IDEA confers federal court jurisdiction to enforce settlement agreements resolving an IDEA claim. Plaintiffs rely on two provisions of the IDEA, one that applies to enforcement of settlement agreements reached during the IDEA-prescribed mediation process, and one that applies to enforcement of settlement agreements reached during the IDEA-mandated "resolution" process.
The Settlement Agreement in this case was not reached by means of either a mediation or a resolution session, as defined under the IDEA.
The Court must "begin with the fundamental principle that federal courts are courts of limited jurisdiction," and, therefore, jurisdictional statutes cannot be construed "any broader than their language will bear." In re Application of Cnty. Collector of Cnty. of Winnebago, Ill., 96 F.3d 890, 895 (7th Cir. 1996). The Court agrees with Defendant that there is no apparent justification for allowing federal court enforcement of IDEA settlement agreements entered into as part of either the administrative mediation or resolution processes but not other IDEA settlement agreements. But the Court is unable to find any authority to support the view that it can assert federal jurisdiction based on an implied statutory jurisdiction-conferring provision.
As one court explained, while the exercise of jurisdiction over other types of settlement agreements in IDEA cases might be "a logical extension" of the IDEA jurisdictional provisions, "it is not the role of the courts to append new provisions to statutes whenever doing so might comport with some of Congress's goals." Bowman v. Dist. of Columbia, 2006 WL 2221703, *2 (D.D.C. 2006) (internal quotation marks and citation omitted). "Had Congress intended that all [IDEA] settlement agreements... be enforceable in federal court, it could have easily adopted a provision to that effect." Traverse Bay Area Intermediate Sch. Dist. v. Mich. Dep't of Educ., 2007 WL 2219352, *7 (W.D. Mich. July 27,
Given that the IDEA does not confer federal court jurisdiction over Plaintiffs' breach of contract claim and that Plaintiffs have not and cannot allege that jurisdiction is properly fixed in this Court based on the diverse citizenship of the parties (28 U.S.C. § 1332), the Court must consider whether there is any other basis for it to continue to assert subject matter jurisdiction over Plaintiffs' claims seeking recovery for breach of the Settlement Agreement.
In the first place, the above-quoted portion of the R.K. opinion is dicta; the court already had determined that 20 U.S.C. § 1415(f)(1)(B) conferred subject matter jurisdiction in that case because the settlement agreement in question had been entered into as a result of an IDEA mediation session. Moreover, the jurisdictional principle alluded to by the R.K. court — often referred to as jurisdiction arising out of an "embedded" federal claim
The only other basis for federal jurisdiction over Plaintiffs' claim for breach of the Settlement Agreement is supplemental jurisdiction. See 28 U.S.C. § 1367(a) (in an action for which the court has federal question jurisdiction, court may also exercise jurisdiction over any state law claims that are so related to the federal claims "that they form part of the same case or controversy"). As previously noted, Plaintiffs have alleged facts that could give rise to an alternative claim for violations of the IDEA independent of their claim for breach of the Settlement Agreement. The question remains, however, whether they are asserting that alternative claim.
In sum, if Plaintiffs had decided not to invoke their federal rights, their claims would belong in state court. But it appears that Plaintiffs are proceeding with both state and federal claims (notwithstanding that Plaintiffs have on occasion argued inconsistently that this case presents only a simple breach of contract claim). Accordingly, the Court finds that it has federal question jurisdiction over Plaintiffs' IDEA claims, and supplemental jurisdiction over Plaintiffs' state law claims for breach of the Settlement Agreement.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court considers the entire evidentiary record and must view all of the evidence and draw all reasonable inferences from that evidence in the light most favorable to the nonmovant. Ball v. Kotter, 723 F.3d 813, 821 (7th Cir. 2013). To defeat summary judgment, a nonmovant must produce more than "a mere scintilla of evidence" and come forward with "specific facts showing that there is a genuine issue for trial." Harris N.A. v. Hershey, 711 F.3d 794, 798 (7th Cir. 2013). Ultimately, summary judgment is warranted only if a reasonable jury could not return a verdict for the nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The parties purport to set forth the material undisputed facts regarding their
Because the parties' summary judgment arguments on Plaintiffs' state law claims are more easily resolved than their arguments regarding Plaintiffs' IDEA claims, the Court will address the state law claims first.
Defendant's primary argument for summary judgment is that Plaintiffs' claims should be dismissed because Plaintiffs failed to exhaust their administrative remedies. The exhaustion requirement is found in two separate provisions of the IDEA. First, § 1415(i)(2)(A) provides that a cause of action may be brought for violation of the IDEA by any party aggrieved by a final decision of a State educational agency made after an impartial due process hearing, conducted pursuant to subsection (f) of § 1415. See 20 U.S.C. § 1415(i)(2)(A). This provision has been read as according a right to judicial review of a claim based on the IDEA only after "all administrative proceedings are completed." Honig v. Doe, 484 U.S. 305, 327, 108 S.Ct. 592, 98 L.Ed.2d 686 (1988) (citing to § 1415(e)(2), the predecessor to § 1415(i)(2)(A)); see also Jamie S. v. Milwaukee Pub. Sch., 668 F.3d 481, 494 (7th Cir. 2012) ("Ordinarily, a plaintiff may not file an IDEA lawsuit without first exhausting available administrative remedies.").
The second exhaustion requirement is found in § 1415(1) of the IDEA, which provides that:
20 U.S.C. § 1415(l). By virtue of § 1415(l), courts have held that the requirement of administrative exhaustion applies not only to claims brought under the
Defendant argues that, pursuant to § 1415(l), exhaustion is required for Plaintiffs' claims even if the theory of those claims is breach of the Settlement Agreement. By its plain terms, however, § 1415(1) only applies to non-IDEA claims brought under the Constitution or other federal law. It does not apply to state law breach of contract claims such as Plaintiffs' claims for breach of the Settlement Agreement. See Fortes-Cortes, 128 F.Supp.3d at 465-66 ("[P]laintiff's transportation-reimbursement claim does not implicate the IDEA's exhaustion requirement. Properly viewed, that claim is not brought under the IDEA. It is, rather, a request for enforcement of the stipulated order entered in Fortes-Cortes I."); C.B. v. Sonora Sch. Dist., 691 F.Supp.2d 1123, 1147 (E.D. Cal. 2009) ("There is no question that the IDEA's exhaustion requirements are limited to claims for violations of federal rights.") (citing cases).
Again, Defendant relies on R.K., 2007 WL 2778702, this time for the exhaustion requirement as applied to IDEA settlement agreements. But the R.K. court specifically noted that exhaustion applied only to the plaintiff's federal claims, not to his state law claims. Id. at *5 n.4 (citing cases). Defendant incorrectly cites to the result in that case, whereby the court ultimately applied exhaustion to a claim for breach of a settlement agreement. The court did so, however, because it found that the plaintiff's claim for a declaration of rights under the settlement agreement at issue in that case was in fact a federal, not state, law claim because that agreement was entered into during an administrative proceeding over which Congress has provided an enforcement mechanism. Id. at *6. As previously discussed, the Settlement Agreement here was not entered into pursuant to a mediation or resolution session, and therefore, the IDEA does not create an enforcement mechanism for that agreement.
Defendant nonetheless argues that Plaintiffs' breach of contract claim is really an IDEA claim in disguise because Plaintiffs seek reimbursement for tuition and other expenses, for compensatory education, and for attorneys' fees. According to Defendant, these remedies are only available under IDEA. But only some of the remedies Plaintiffs seek, like compensatory education and attorneys' fees, are only available under the IDEA. For their state law breach of contract claim, Plaintiffs are entitled to recover "an amount equivalent to the difference between the benefits [they] actually received and those to which [they were] due under the Agreement." Roboserve, Inc. v. Kato Kagaku Co., 78 F.3d 266, 278 (7th Cir. 1996). While the issue is not currently before the Court, it is likely that, under this contract measure of damages, Plaintiffs at the very least
Finally, the Court disagrees with Defendant that cases other than R.K. involving the issue of exhaustion and IDEA settlement agreements establish a general rule of exhaustion for breach of IDEA settlement agreement claims. The cases Defendant cites all deal with settlement agreements reached during the administrative process, rather than an agreement, like the Settlement Agreement here, entered into to resolve federal court litigation. Aside from the fact previously discussed that, as a matter of statutory construction, IDEA's exhaustion requirement simply does not apply to Plaintiffs' state law breach of contract claims, the Court also cannot ignore the strong federal policy favoring the voluntary resolution of disputes. See, e.g., Metro. Hous. Dev. Corp. v. Vill. of Arlington Heights, 616 F.2d 1006, 1013 (7th Cir. 1980). As aptly stated in Pesek v. Donahue, 2006 WL 1049969 (N.D. Ill. Feb. 9, 2006), "a settlement allows parties to resolve their disputes by compromise, taking into consideration all relevant risks and costs. In a settlement, each side gives up something ... [to avoid] the risk of suffering its worst case result.... A settlement reflects the parties' mutual decision that a compromise is preferable to the risk and uncertainty of trial.... Moreover, each side obtains through settlement the benefits of immediacy — that is, a settlement ends the litigation and the attendant disruption of it, rather than allowing it to continue for, in some instances, years." Id. at *4; see also Aro Corp. v. Allied Witan Co., 531 F.2d 1368, 1372 (6th Cir. 1976) ("Public policy strongly favors settlement of disputes without litigation.... By such agreements are the burdens of trial spared to the parties, to other litigants waiting their turn before over-burdened courts, and to the citizens whose taxes support the latter."); Johnson v. Hermanson, 221 Ill.App.3d 582, 164 Ill.Dec. 57,582 N.E.2d 265, 267 (1991) ("Public policy in Illinois favors settlements and dictates that, absent fraud or duress, settlements once made should be final.").
Even if the Court disregards the fact that Defendant's cases all involve settlements of administrative claims as opposed to settlement of a federal lawsuit, those cases still do not persuade the Court to adopt Defendant's view that claims for breach of IDEA settlement agreements are necessarily subject to administrative exhaustion. Indeed, as one court has described it, the law in this area is "muddle[d]." S. Kingstown Sch. Comm. v. Joanna S., 2014 WL 197859, at *9 (D.R.I. Jan. 14, 2014) (citing Weber, Settling IDEA Cases, at 641-42 ("even though IDEA ... has been around since the 1970s, litigants are still without clear guidance about how the mechanisms of settlement should work,
Finally, several of the cases cited by Defendant require administrative exhaustion of entirely new and previously unexhausted IDEA claims that were unrelated to the issues resolved by the settlement agreement.
Requiring administrative exhaustion of a claim for breach of a settlement agreement to resolve a federal lawsuit "puts the aggrieved party literally back at square one, having to litigate the case that was supposed to have been resolved." Weber, Settling IDEA Cases, at 664. In addition, requiring further exhaustion creates uncertainty surrounding the enforceability of settlement agreements, and the prospect of unenforceability encourages parties "to bide [their] time for so long as [they are] benefited from doing so, and then breach the agreement with no fear of sanction. The [breaching party] would have lost nothing. It would then face only the same prospect of suit on the underlying [] charge it would have faced prior to its entering the [settlement] agreement." Safeway Stores, Inc., 714 F.2d at 573. The other party to the agreement, "on the other hand, would have suffered serious prejudice..... Suit undertaking to prove [his or her claim] would have been substantially
Because the Court believes that, as a matter of statutory interpretation, the administrative exhaustion requirement does not apply to Plaintiffs' state law breach of contract claims, it does not need to even consider the policies behind the administrative exhaustion doctrine. Nevertheless, it is worth noting that those policies would not be furthered by requiring exhaustion here. To decide whether Defendant breached this Agreement, the Court need not, as Defendant contends, "decide whether the marking of `Community College' on John's Transition Plan required Orchard Academy to support John's courses at Oakton." R. 60 at 2. The issue instead, is whether Defendant agreed to provide the services in question by virtue of the language in the Agreement stating that "[a]s discussed during [the May 15, 2009 IEP meeting], ... John will attend Orchard Academy ... in its intensive individualized transition program." R. 1-1 at 7. Similarly, the Court need not, as Defendant contends, "understand and interpret the impact of John's parent's failure to contest the May 15, 2009 IEP within ten days of receipt." R. 60 at 2. Instead, the issue is whether the services at issue were a part of the Agreement and, if they were, whether Defendant failed to provide them. No special expertise interpreting and applying the IDEA or additional fact-finding regarding John's abilities and educational goals is required to address these contractual issues. Instead, the Court's job is simply to interpret and apply the Agreement. See H.C. ex rel. L.C., 341 Fed.Appx. at 690 ("This enforcement dispute is purely a matter of determining defendant's obligation under the settlement agreement.... As such, resolution of the dispute will not benefit from the `discretion and educational expertise [of] state and local agencies, [or the] full exploration of technical educational issues' related to the administration of the IDEA.") (citation omitted); Weber, Settling IDEA Cases, at 664 (actions to enforce settlement agreements usually "will hinge on the straightforward question whether the parties have or have not complied with the letter of the agreement"); cf. J.K. v. Council Rock Sch.
In addition, one of the most important reasons for requiring administrative exhaustion in the IDEA context — the "inherently changing nature" of what constitutes a FAPE under the circumstances, W.L.G., 975 F.Supp. at 1328 — also is not a concern here. The parties determined what an appropriate secondary education would be for John once and for all when they entered into the Settlement Agreement, which was intended to resolve all aspects of John's secondary school education through the date on which his eligibility for services and aides under the IDEA was to expire. There simply is no need to revisit John's IEP in order to conclude that Defendant failed to abide by the terms of the Settlement Agreement. For this reason, as well as the reasons previously discussed, the Court concludes that Plaintiffs are not required to exhaust their administrative remedies before bringing suit to recover for breach of the Settlement Agreement.
Plaintiffs' first breach of contract claim involves Defendant's termination of Orchard aides and supports for John's academic classes at Oakton Community College.
The issue before the Court is whether the facts are undisputed that the supports and aides in question were part of the agreed-to terms of the Settlement Agreement. If they were, then Defendant breached the Agreement by directing Orchard to terminate them. While it is apparent from the record that Smith believed the Agreement did not provide for those aides and supports, it is unclear the basis for her belief when she admittedly was not involved in the settlement process. Her belief seems to have been based on the same argument Defendant puts forth in its summary judgment briefs, which is that the Agreement does not refer to Oakton or community college as being part of John's educational plan for the 2009-2010 school year; it only refers to Orchard Academy. See R. 49-4 at 75, 77. Defendant also points out that the Agreement includes an integration clause, which states that "[t]his Agreement contains all the terms and conditions agreed upon by the parties and no provisions or requirements expressly determined herein may be amended, altered, modified or canceled, except by express written instrument signed and dated by all parties." R. 49-3 at 4 (Settlement Agreement, ¶ 7).
"A binding completely integrated agreement discharges prior agreements to the extent that they are within its scope." RESTATEMENT (2d) OF CONTRACTS § 213. "[A] writing's completeness as measured against it remains a legal question to be determined by the trial judge." J&B Steel Contractors, Inc. v. C. Iber & Sons, Inc., 162 Ill.2d 265, 205 Ill.Dec. 98, 642 N.E.2d 1215, 1219 (1994). The Illinois Supreme Court has held that a purchase order that "specifically referred to a telephone proposal that was to be incorporated into the contract" was "clearly, on its face, incomplete." Eichengreen v. Rollins, Inc., 325 Ill.App.3d 517, 259 Ill.Dec. 89, 757 N.E.2d 952, 958 (2001) (discussing J&B Steel Contractors, 205 Ill.Dec. 98, 642 N.E.2d at 1220-21). In those circumstances, "the parol evidence rule did not preclude the plaintiff `from offering proof of terms allegedly agreed to during the telephone proposal that [were] consistent with and would supplement, but not contradict, the purchase order.'" Id. (quoting J&B Steel Contractors, 205 Ill.Dec. 98, 642 N.E.2d at 1221); see also In re Peregrine Fin. Group, Inc., 487 B.R. 498, 511 (Bankr. N.D. Ill. 2013) ("Even when a contract contains a clear integration clause, parol evidence may be admitted to explain ambiguous terms.").
The introductory language to the paragraph of the Settlement Agreement that deals with John's placement at Orchard Academy states: "As discussed during John's Individual Education Plan (`IEP') meeting held by the parties on May 15, 2009...." R. 49-3 at 2. By this language, the parties appear to have incorporated the specific details of John's program at Orchard Academy that were agreed to at the May 15, 2009 meeting. Thus, the parties' dispute over the terms on which the first lawsuit was settled cannot be resolved solely on the basis of what is stated in the written agreement itself. By including language in that written document referencing what was agreed to at the May 15, 2009 meeting, both parties "assumed the risk" that the other side "would recollect the discussion [at the May 15, 2009 meeting] differently from how they did," and they are "liv[ing] with the consequences" of that decision now. Lynch, Inc. v. SamataMason Inc., 279 F.3d 487, 491 (7th Cir. 2002).
Defendant also ignores other evidence in the record that supports Christine Miksis's testimony that there was such an agreement. That evidence includes the meeting notes from the March 27, 2009 meeting,
Finally, Plaintiffs point out that in mid-August, Christine Miksis communicated by email with Bobrowski about the community college classes, and that at the start of the school year, an employee of Orchard, Sarissa Hahn, communicated with John's parents about the aides and supports Orchard would be providing for John's classes. This correspondence supports Plaintiffs' position that the Agreement reached by the parties at the May 15 meeting included Orchard aides and supports for John's academic courses at Oakton. At the very least, it shows that Christine understood the Agreement in this way. It suggests, as well, that Bobrowski also understood the Agreement in this way, because there is no indication that, after receiving Christine's email, he questioned Christine regarding her expectation that Orchard would be providing aides and supports for John's community classes. What is more, Orchard Academy in fact did provide the aides and supports for John's academic classes at Oakton, until Smith intervened a week or so into the school year and directed Bobrowski to cease doing so.
The above test for whether an agreement existed between the parties must be applied at the time they entered into the alleged settlement. Thus, the crucial issue here is whether there was an actual meeting of the minds, i.e., both sides understood the same thing, at the May 15 meeting. Neither party has sufficiently focused on that issue. It is true, as Plaintiffs argue, that the only witness present at the May 15 meeting whose testimony is before the Court on summary judgment is Christine Miksis. Plaintiffs therefore argue that they are entitled to summary judgment in their favor on this issue. But the Court disagrees, for several reasons.
First, notes taken at the May 15 meeting indicate that a discussion took place that suggests John's parents may have abandoned their position from the March 27 meeting regarding John taking community college classes.
In sum, it is up to the trier of fact to decide whether there was a meeting of the minds at the May 15 meeting regarding John's enrollment in community college classes and Orchard's support for those classes. Therefore, summary judgment in favor of Plaintiffs on their breach of contract claim regarding Orchard aides and supports for community college classes would not be appropriate. If that issue is to be resolved, it must be at trial.
Plaintiffs' second breach of contract claim involves Defendant's termination of John's placement at Orchard Academy and disenrollment in the school district for nonattendance. The Court finds that the following facts are undisputed and relevant to that claim: (1) in the fall of 2009, John both attended academic classes at Oakton Community College and participated in Orchard Academy programs when he was available to do so outside of his academic classes; (2) Smith did not object to this arrangement out of deference to John's parents' desire for John to take academic classes at Oakton; (3) the parties met on several occasions in this time period to discuss Orchard Academy assessments of John and to map out details of John's IEP for the 2009-2010 school year; (4) Smith discussed John's lack of attendance with the parents during some of these meetings, but never invoked the school district's attendance policy or warned John's parents that John was at risk of having his Orchard placement terminated or being disenrolled from the school district because of his absences; (5) on or about March 5, 2010, Smith sent John's parents a letter by regular mail notifying them that John's placement at Orchard would be terminated as of the end of the day on March 15, 2010 because of his failure to attend more than one day a week since January; (6) in addition to notifying John's parents of John's termination for nonattendance, Smith's letter also offered to reinstate John's Orchard program provided John's parents agreed to Defendant's proposed IEP, which included the requirement that John attend Orchard
Plaintiffs argue that Defendant breached the Settlement Agreement when it terminated John's program at Orchard Academy and enrollment in the school district for nonattendance. Defendant argues, however, that the termination was proper because of John's failure to attend and pursuant to the school district's "practice," R. 52 at 16 (Def. SOF ¶ 65), of disenrolling students for nonattendance. The evidence in the record regarding the existence of such a "practice" consists solely of Smith's testimony, which is vague and offers no details or proof that the "practice" even exists. See R. 49-7 at 98-100. Defendant also describes the "practice" as a "neutral District policy," R. 61 at 15, but again, offers no evidence to back up that characterization, either as to the existence of a "policy" or as to the "neutral" manner in which it supposedly has been applied. In any event, Defendant fails to support any legal argument that the school attendance practice or policy constitutes a defense to Plaintiffs' breach of contract claims.
Defendant entered into the Settlement Agreement, which indisputably provides that John is to be enrolled in Orchard Academy for the 2009-2010 school year. Nothing in the Agreement states that Defendant had the discretion to terminate that program and disenroll John from the school district due to nonattendance. The Third Circuit "has explained in the IDEA context that when a `settlement agreement was voluntarily and willingly entered by the parties,' the agreement constitutes `a binding contract between the parties and should have been enforced as written.'" J.K., 833 F.Supp.2d at 447 (quoting D.R., 109 F.3d at 898). Moreover, it further has said that "[a] parent may waive her child's right to a FAPE" by entering into a agreement "settl[ing] for less than s/he later believes the law provides." Id. (quoting Ballard, 273 Fed.Appx. at 188). So too can a school district "contract[] to provide certain benefits above those that the IDEA requires." Id. at 448 (emphasis added). In other words, Defendant may believe it had a right under its attendance policy to terminate the Orchard Program and disenroll John (a position Plaintiffs strongly dispute), but even if Defendant were correct, that does not mean Defendant had a contractual right under the Settlement Agreement to do so.
It is undisputed that Smith tolerated John's nonattendance during the fall of 2009, which suggests that John's full-time attendance at Orchard was not a required condition of the Settlement Agreement, or that, if it was, Defendant waived the condition
But Defendant's breach of the Settlement Agreement in the manner described above does not resolve the disputed issues before the Court. Because John was not attending Orchard more than one day a week, it would be difficult for Plaintiffs to argue that John suffered any injury as a result of Defendant's termination of his Orchard placement. The injury Plaintiffs suffered, and for which they seek recovery, is Defendant's refusal to pay for John's educational program beginning in the 2010-2011 academic year through the last day before John turned twenty-two. According to Plaintiffs, John's disenrollment constituted an anticipatory breach of the remaining, unexecuted parts of the Settlement Agreement. As such, Plaintiffs argue, they were entitled to treat the Settlement Agreement as having been unilaterally terminated by Defendant, to seek replacement services for the unperformed services in the Agreement still owed by Defendant, and to then seek recovery from Defendant for the costs of those replacement services (i.e., the ELSA program).
"When a party to an executory contract gives notice of his intention not to comply with his obligations, the other party may treat such notice as an anticipatory breach and consider the contract terminated without waiting for the completion of the contract pursuant to its terms. However, before the renunciation can be treated as an anticipatory breach, there must be a positive and unequivocal manifestation of intention that the party will not render the
Defendant relies on Smith's March 5, 2010 letter to argue that it did not unequivocally repudiate that portion of the Settlement Agreement relating to John's placement in PACE or another similar program beginning in the 2010-2011 academic year. That letter on its face suggests that the only consequences of John's nonattendance were for the remainder of the 2009-2010 academic year. After notifying John's parents regarding their options for reinstating John's program in that year, the letter, in closing, states that, "[i]n any event, we should schedule a meeting in the near future to discuss John's placement for 2010-2011 pursuant to the settlement agreement." R. 52-6 at 19. It is undisputed that the parties never met after this point "to discuss John's placement for 2010-2011 pursuant to the settlement agreement." Such a meeting would not have been required, however, if John had been accepted into PACE. If, as Smith testified, she did not know at the time she wrote the March 5 letter that John's application to PACE had been rejected, then it seems odd she suggested a meeting to discuss John's placement for the following year. One possible explanation for Smith's suggestion for a meeting is that, as Christine Miksis testified at her deposition, Smith already had repudiated the PACE placement even before she knew that John had not been accepted. According to Christine, at several meetings held in December 2009 and January 2010, Smith and Whitten, Defendant's attorney, had informed Plaintiffs that Defendant "was not going to give assistance for PACE" because "it was not an ISBE-approved facility." R. 49-7 at 99, 104 ("They brought in the person who is in charge of placements from ETHS who stated unequivocally that there was no way that the high school would support a placement at PACE."). There is no contrary evidence in the record to dispute this testimony.
Smith's statements to Plaintiffs at the meetings in January to the effect that Defendant would not pay for a placement at PACE because it was not a state-approved school constituted an unequivocal repudiation of the PACE provision of the Settlement Agreement. But after that repudiation, Plaintiffs learned John had not been accepted into PACE. This new development meant that another contractual provision came into play, the provision stating that if John was not accepted into PACE, "the parties agree to meet to discuss and consider other appropriate placement options for John's post-secondary transition education." R. 49-3 at 3. Defendant argues that the Agreement "clearly predicates any alternative placement for John other than PACE on a meeting of and approval by the IEP team." R. 55 at 26. But according to Christine, not only had Defendant already repudiated its obligation to pay for the PACE program, it also had repudiated its obligation to pay for any comparable program. Christine testified that when Smith and Whitten told her that Defendant would not pay for PACE because it was not a state approved program, Plaintiffs sought Smith's assistance in finding a comparable replacement program to PACE. The only program Smith would suggest was one of Orchard's programs, which Plaintiffs did not believe was comparable to PACE. In other words, according to Christine's testimony, Defendant repudiated both the PACE placement and any reasonable alternative to PACE.
Added to the above evidence is the undisputed fact that, notwithstanding the closing sentence in the March 5 letter about meeting to discuss next year's placement, Defendant never called a meeting to have that discussion. Moreover, Smith testified that the reason she did not contact Plaintiffs about an alternative program to PACE after she learned of PACE's rejection of John's application was that she "wasn't notified that he had applied or accepted and so I didn't see any reason to ask the parent." R. 49-4 at 65. When asked to explain her answer further, and, specifically, whether she felt "the contract obligated her to try to convene a meeting," Smith responded "[n]o, and I don't even think he was still going to school at that time." Id. In other words, Smith apparently believed that Defendant could invoke a school attendance policy to disenroll John from the school district and thereby terminate John's future rights under the Settlement Agreement. To the extent Smith's testimony was ambiguous on this point, Defendant was not the least bit vague in its response to Plaintiffs' Local Rule 56.1 Statement. Defendant's response unequivocally states:
R. 61 at 16-17 (¶ 38) (emphasis added).
But Defendant's assertion that it had no further obligations to John under the Settlement Agreement is directly contradicted by the terms of the Settlement Agreement, which provides that:
R. 1-1 at 7 (emphasis added). As this contractual language shows, the Agreement plainly provides that Defendant did have a continuing obligation to Plaintiffs notwithstanding Defendant's termination of John's program at Orchard Academy. This was a contractual obligation, independent of John's enrollment in the school district, and thus it could not legally be declared terminated by virtue of disenrollment. In short, Defendant's position that it had no further contractual obligations to Plaintiffs unless and until they reenrolled John in the school district is simply not accurate. The contractual provision related to the PACE placement for the following school year and beyond continued to be in effect. Defendant's position that it was no longer in effect by virtue of John's disenrollment constituted a repudiation of that part of the Agreement.
In sum, Smith's repudiation of PACE and failure when asked to suggest any suitable replacement options was followed by John's disenrollment. Smith's position was that John's disenrollment cut off his
In addition to the above, anticipatory breach is not the only contract law principle potentially applicable to Plaintiffs' claim to recover the costs of the ELSA placement. "It is black letter law in Illinois and elsewhere that only a `material' breach of a contract provision by one party will justify non-performance by the other party." Sahadi v. Cont'l Ill. Nat'l Bank & Trust Co., 706 F.2d 193, 196 (7th Cir. 1983). "[T]he determination of `materiality' is a complicated question of fact, involving an inquiry into such matters as whether the breach worked to defeat the bargained-for objective of the parties or caused disproportionate prejudice to the non-breaching party, whether custom and usage considers such a breach to be material, and whether the allowance of reciprocal non-performance by the non-breaching party will result in his accrual of an unreasonable or unfair advantage." Id. Assuming Plaintiffs breached the meet-to-discuss provision in the Agreement, the Court concludes that breach was not material to Defendant's contractual obligation to pay for a replacement program for PACE. The bargained-for objective of the contracting parties was to provide John with a residential placement program at Defendant's expense beginning in the 2010-2011 academic year.
Moreover, the Court rejects Defendant's apparent belief that the Agreement's meeting requirement imposed obligations only on John's parents. See R. 55 at 27 (arguing that John parents were "not relieve[d]... of the responsibility in the Agreement to meet with the IEP team to decide on any alternative placement that would be made for PACE") (emphasis added). The obligation to meet and discuss was an obligation imposed under the Agreement on both parties. See, e.g., J.K., 833 F.Supp.2d at 453 ("The settlement agreement merely provides that `the parties agree to reconvene the IEP team ... to discuss transition activities during the 2009-2010 school year' ... One cannot fairly read this language to impose a duty only on the District to convene the IEP team or develop a draft IEP.") (emphasis in original) (footnote omitted). As in J.K., "the contract evinces no ambiguity" as to whether John's parents were solely responsible for convening a meeting to discuss alternative programs to PACE; "[t]o the contrary, the contract plainly states that `the parties' ... will perform th[at] task[ ].'" Id. Thus, either Plaintiffs' failure to convene a meeting to discuss a replacement program did not breach any obligation it had under the Settlement Agreement "as the contract did not impose a duty on [Plaintiffs] to accomplish [that] task," id. at 454, or, the meet-to-discuss provision imposed a contractual duty on both parties, in which case Defendant also breached that duty by failing to call a meeting, and Defendant's breach would constitute a waiver of the same breach by Plaintiffs. "Consequently, the result that [Defendant] suggest[s] should follow from a breach — the invalidation of the pendent placement provision — does not obtain." Id.
For all of these reasons, the Court must agree with Plaintiffs that the "banter between the parties about ... who had the responsibility to convene a meeting" (R. 49 at 8) ultimately is beside the point insofar as Plaintiffs' breach of contract claim is concerned. It is unfortunate that the parties' relationship deteriorated to the point where they are now making excuses for their respective failures to call a meeting. As Plaintiffs suggest, both sides were playing a "game of chicken," R. 62 at 10, and the Court must now apply contract law principles to determine who is the winner. By playing the game, Defendant assumed the risk that it would lose. Defendant's game strategy was to declare John "disenrolled" from the school district and to then sit back and wait for Plaintiffs to do something about it, in hopes that Plaintiffs would not act and Defendant could thereby avoid its contractual responsibility to pay for either PACE or a replacement program. Regardless of whether that strategy might work under the applicable statutory principles (an issue the Court does not have to decide at this time), Defendant's contractual obligations were separate and distinct from its statutory obligations. And from a contract law perspective, Defendant's strategy violated Plaintiffs' contractual rights.
That having been said, the Court is still faced with the issue of determining Defendant's payment obligations given that the parties never reached an agreement on a program to replace PACE. Here too, however, well established principles of contract law provide the answer. As the Seventh Circuit has explained, "a contract with open terms can be enforced" if "the terms to be agreed upon in the future can be determined independent of a party's mere wish, will, and desire ..., either by virtue of the agreement itself or by
Plaintiffs argue that they are entitled to summary judgment on the issue of whether the ELSA program is no more burdensome on Defendant than the PACE program would have been because Christine Miksis testified that ELSA was a comparable program to PACE and there is no other evidence in the record to dispute that testimony. See R. 49 at 7. While it is true that Defendant has not submitted any evidence to contest Christine's testimony, the Court agrees with Defendant (R. 61 at 19-20) that Plaintiffs have not met their burden on summary judgment because Christine's opinion is not sufficient to establish that ELSA is no more burdensome on Defendant than PACE would have been. Therefore, Defendant's failure to submit contrary evidence does not warrant summary judgment in Plaintiffs' favor on that issue, and a trial will be needed to resolve it.
The Court will now discuss Plaintiffs' claims under the IDEA for denial of a FAPE.
There is no question that Plaintiffs' federal IDEA claims trigger the administrative exhaustion requirement. The issue raised by those claims relates to the special educational services and aides to which John was entitled in the IDEA-eligible period after he completed his senior year of high school, plainly a matter that the IDEA administrative procedures and remedies can redress. Nevertheless, because exhaustion is an affirmative defense, it is subject to waiver and estoppel principles. See Gallegos v. Mt. Sinai Med. Ctr., 210 F.3d 803, 809-10 (7th Cir. 2000) (estoppel may be applied to preclude the assertion of failure to exhaust administrative remedies as a defense); Charlie F., 98 F.3d at 991 ("lack of exhaustion usually is waivable"); see also Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982) (non-jurisdictional prerequisites to suit in federal court are "subject to waiver, estoppel and equitable tolling"). In addition, courts have recognized that the exhaustion doctrine "is
Plaintiffs contend that Defendant has waived its right to assert the administrative exhaustion defense by participating in this litigation. Defendant first raised the administrative exhaustion requirement when it filed an amended answer approximately five months after the lawsuit was filed. R. 25. After more than a year of discovery and Plaintiffs' filing of their summary judgment motion, Defendant finally pressed the exhaustion issue in its own summary judgment filing. Plaintiffs have a valid argument that Defendant "has not exercised due diligence in asserting the defense of failure to exhaust administrative remedies." Stevenson v. Hochberg, 2009 WL 1490828, at *4 (D.N.J. May 26, 2009) (finding defendant waived the right to assert the defense of failure to exhaust administrative remedies where he engaged in nine months of litigation against plaintiff, including motion practice, written discovery and depositions).
Defendant argues in response that exhaustion, as an affirmative defense, cannot be raised any sooner than on summary judgment and that, in any event, it could not "speculate prior to discovery what, if any, issues would implicate IDEA and thus require exhaustion." R. 60 at 5. Defendant's first argument is incorrect. "[W]here, as here, the allegations of the complaint itself set forth everything necessary to satisfy the affirmative defense," the court can rule on the affirmative defense at the pleading stage. United States v. Lewis, 411 F.3d 838, 842 (7th Cir. 2005). The Court also is somewhat skeptical of Defendant's second argument against waiver insofar as Defendant's exhaustion defense primarily relies on a general rule requiring administrative exhaustion of claims based on IDEA settlement agreements. Defendant did not need discovery to put forth this exhaustion argument because the complaint clearly put Defendant on notice that the basis of Plaintiffs' claims was the Settlement Agreement entered into to resolve Plaintiffs' previous IDEA lawsuit.
Nevertheless, the Court already has held that Plaintiffs' claims based on breach of the Settlement Agreement are not subject to the administrative exhaustion requirement so Plaintiffs' waiver theory is irrelevant for those claims. Insofar as Plaintiffs' IDEA claims are concerned, it is difficult for the Court to determine on the current record whether Defendant should have raised the exhaustion defense any earlier in these proceedings because the parties' arguments do not clearly distinguish between a theory of recovery based on the Settlement Agreement and a theory of recovery based on the IDEA. But even if waiver were a valid argument against Defendant's exhaustion defense to Plaintiffs' IDEA claims, it does not seem to be a particularly compelling one in the context of this case because Plaintiffs have not explained how they have been prejudiced by Defendant's delay in raising the exhaustion defense. The time for filing an administrative claim already had passed when Plaintiffs filed suit, so that an earlier ruling on the exhaustion requirement would not have led to Plaintiffs seeking an administrative remedy. At best, had exhaustion been decided at an earlier point in these proceedings, the current summary judgment briefs might have been less complex. Nevertheless, the Court will reserve
"[A]pplication of the exhaustion doctrine is intensely practical," and "[t]he ultimate decision of whether to waive exhaustion should not be made solely by mechanical application of the [applicable] factors, but should also be guided by the policies underlying the exhaustion requirement." Bowen v. City of N.Y., 476 U.S. 467, 484, 106 S.Ct. 2022, 90 L.Ed.2d 462 (1986) (internal quotation marks and citation omitted); see also Payne v. Peninsula Sch. Dist., 653 F.3d 863, 870 (9th Cir. 2011) ("determining what has and what has not been exhausted under the IDEA's procedures may prove an inexact science"; "the exhaustion requirement appears more flexible than a rigid jurisdictional limitation — questions about whether administrative proceedings would be futile, or whether dismissal of a suit would be consistent with the general purposes of exhaustion, are better addressed through a fact-specific assessment of the affirmative defense"), overruled on other grounds by Albino v. Baca, 747 F.3d 1162 (9th Cir. 2014).
This case involves a situation where Plaintiffs already participated in the administrative process once, having exhausted their administrative remedies before filing the first lawsuit. The Settlement Agreement was the final result of those earlier administrative proceedings. Defendant correctly points out that the issues now before this Court were never raised in those administrative proceedings, and, ordinarily, it would not be proper to allow a party to piggy-back on an earlier administrative exhaustion that did not address the claims currently at issue. But Plaintiffs make the equally valid point that this case is merely a continuation of the previous lawsuit in which they seek only to vindicate the rights they believe they obtained from their already exhausted claims, which rights include an agreement voluntarily entered into by Defendant to undertake obligations related to a matter that was not previously explored in the administrative proceedings. While Judge Holderman held in his mootness ruling that those issues needed to be addressed administratively, the first lawsuit did not end at Judge Holderman's mootness ruling. Instead, the parties negotiated further and ultimately reached an agreement whereby John's parents gave up viable claims for compensatory education and attorneys' fees in exchange for Defendant's promise to provide the agreed-to educational program with the specific goal of avoiding the need for further time-consuming and costly administrative and possibly judicial proceedings in the final 26 months of John's secondary school education.
"While a challenge to the contents of an IEP would require exhaustion of
In addition, Plaintiffs argue that whether Defendant validly terminated John's placement because of a non-IDEA attendance policy or practice also presents a question for which administrative exhaustion is not required. Defendant responds that even if it terminated John's IDEA program based on a non-IDEA policy, Plaintiffs had a remedy under the IDEA for that termination, and therefore exhaustion was required.
Finally, Plaintiffs have raised a valid argument that this is one of those unique cases where administrative exhaustion would be futile because of the retrospective nature of Plaintiffs' claims. John's eligibility for special education services has since passed, and therefore his educational injuries "are wholly in the past." Covington v. Knox Cnty. Sch. Sys., 205 F.3d 912, 917 (6th Cir. 2000) (holding that "state's administrative process would be futile and is not required before the plaintiff can file suit in federal court" where "the injured child has already graduated from the special education school").
It is true, as Defendant argues, that the Seventh Circuit has said that "characterizing the claim as one for `retrospective injuries'" is "insufficient" "because the timing for seeking relief is largely up to parents — they cannot sit on claims and later sue for damages." C.T. ex rel. Trevorrow v. Necedah Area Sch. Dist., 39 Fed.Appx. 420, 423 (7th Cir. 2002) (unpublished); see also McCormick v. Waukegan Sch. Dist. No. 60, 374 F.3d 564, 568 n.1 (7th Cir. 2004) ("the need to exhaust should not depend upon the extent of delay in litigation or the choice of a plaintiff to delay litigation until he or she graduates"). But this case does not involve a situation where the parents simply sat on their claims and later sued for damages. Instead, John's parents reasonably believed they had reached an agreement to resolve all of their son's future educational needs without the time, expense, and delay of more administrative proceedings. Indeed, they released Defendant from viable claims for compensatory education and attorneys' fees to secure that result. They continued to believe the agreement they had reached governed the parties' relationship even while disputes over its terms erupted. The Court has held that they did not have to exhaust their claims for breach of the Settlement Agreement. But if it turns out in retrospect that the portion of the Settlement Agreement on which Plaintiffs have been relying is unenforceable because there was no meeting of the minds, then it is now too late for Plaintiffs to go back and exhaust their administrative remedies for a claim under the IDEA based on the terms they thought they had secured by the Settlement Agreement. To protect against this result, Plaintiffs would have had to engage in the very process they had bargained to avoid thereby defeating one of the purposes of entering into the settlement. Plaintiffs' IDEA claims and Plaintiffs' claims based on the Settlement Agreement (which do not have to be exhausted) overlap. Requiring exhaustion for the IDEA claims would not serve any purpose other than to punish Plaintiffs for their good faith belief that they did not need to exhaust their administrative remedies because they had negotiated a settlement agreement to stand in place of exhaustion. Exhaustion should not be used to prevent potentially valid claims from being heard when it only becomes clear that Plaintiffs should have exhausted their administrative remedies at a point in time when administrative remedies are no longer available. In such circumstances, administrative remedies are futile and foreclosing Plaintiffs' claims based on the exhaustion doctrine would serve to encourage school districts to ignore their obligations under settlement agreements in hopes of avoiding those obligations altogether.
The current record also does not lend itself to resolution on summary judgment of Plaintiffs' claims for violation of the IDEA, and, indeed, the Court is not entirely certain, divorced from the Settlement Agreement, what those claims are. It appears that Plaintiffs are raising both procedural
When a parent believes that the state has failed to offer his or her child a FAPE, the parent may unilaterally place the child in a private school and seek reimbursement from the school district. Forest Grove Sch. Dist. v. T.A., 557 U.S. 230, 247, 129 S.Ct. 2484, 174 L.Ed.2d 168 (2009). "The U.S. Supreme Court has established a three-step reimbursement test. Under this Burlington-Carter test, [Defendant] is required to pay for the private school tuition only if: (1) the program recommended by the IEP was inadequate or inappropriate; (2) the alternative placement the Parents chose was appropriate; and (3) the equitable factors weigh in favor of reimbursement." FB v. N.Y. City Dep't of Educ., 132 F.Supp.3d 522, 534-35 (S.D.N.Y. 2015) (citing Florence Cnty. Sch. Dist. Four v. Carter, 510 U.S. 7, 12-16, 114 S.Ct. 361, 126 L.Ed.2d 284 (1993); Sch. Comm. of Burlington v. Dep't of Educ., 471 U.S. 359, 373-74, 105 S.Ct. 1996, 85 L.Ed.2d 385 (1985)); see generally Bd. of Educ. of Evanston-Skokie Cmty. Consol. Sch. Dist. 65 v. Risen, 2013 WL 3224439, at *22 (N.D. Ill. June 25, 2013).
It seems likely that John was denied a FAPE in the 2011-2012 academic year because the record does not show Defendant as having offered any educational program to him in this time period. There also appears to be a serious question whether Plaintiffs' procedural rights were violated by Defendant's termination of John's placement at Orchard without following the proper procedures for making a change to an educational placement. To the
Defendant's final summary judgment argument is that Plaintiffs should be barred from recovering on their claims because of parental noncooperation. Defendants' noncooperation argument is essentially the mirror image of Plaintiffs' argument that equitable principles such as estoppel and unclean hands bar Defendant from raising administrative exhaustion as a defense. The Court already has found that administrative exhaustion is either not required or may be excused in this case. Therefore, the Court will not specifically address Plaintiffs' unclean hands and estoppel arguments, but instead will focus on the noncooperation issue.
First, the Court rejects Defendant's argument that John's parents "`deliberately prevent[ed] the fulfillment of a condition on which [Defendant's] liability under [the Settlement Agreement] depend[ed].'" R. 55 at 18 (quoting Yale Dev. Co. v. Oak Park Trust & Sav. Bank, 26 Ill.App.3d 1015, 325 N.E.2d 418, 422 (1975)). Defendant cites this principle of law to argue that Plaintiffs' enrollment of John in community college classes prevented Defendant from delivering John the agreed-to program at Orchard. This contract law principle, however, has no application to the facts of this case. No provision of the Settlement Agreement prohibits Plaintiffs from enrolling John in community college classes. Moreover, Plaintiffs' claim is that Defendant breached the Settlement Agreement and failed to provide a FAPE because Defendant terminated Orchard's aides and supports for John's Oakton classes. Defendant's ability to provide the Orchard aides and supports for community college classes did not depend on anything Plaintiffs failed to do. Defendant's non-cooperation argument that it could not provide John with other educational services through the Orchard program because of his absences simply is not responsive to Plaintiffs' claim.
Second, Defendant's argument that John's parents are to blame for Defendant's refusal to pay for the ELSA placement because they failed to notify Defendant when John applied to PACE or when John got rejected by PACE, also is without merit. The Settlement Agreement does not contain any provision requiring such notification, and Defendant has not presented any argument for why John's parents' failure to provide notification constitutes a basis for voiding Defendant's contractual obligations under the Agreement. Nor does Defendant explain how the failure to receive the notice in question rendered Defendant "incapable of complying with the Agreement" (R. 55 at 27) regarding the PACE placement. The only
Third, Defendants' noncooperation argument also fails as to Plaintiffs' IDEA claims. Defendant's obligation under the IDEA to provide educational services to John exists independently of John's parents. See 20 U.S.C. § 1412(1) (a FAPE must be made available "to all children with disabilities") (emphasis added); Florence Cnty. Sch. Dist. Four v. Carter, 510 U.S. 7, 15, 114 S.Ct. 361, 126 L.Ed.2d 284 (1993) ("[P]ublic educational authorities who want to avoid reimbursing parents for the private education of a disabled child can do one of two things: give the child a free appropriate public education in a public setting, or place the child in an appropriate private setting of the State's choice. This is the IDEA's mandate, and school officials who conform to it need not worry about reimbursement claims."); see also Moore v. Hamilton Se. Sch. Dist., 2013 WL 4607228, at *17 (S.D. Ind. Aug. 29, 2013) (a school district's "obligation to provide a FAPE to a student is not excused by parental opposition to any particular plan"). Therefore, Defendant cannot defend its decision to terminate John's placement and school enrollment by pointing to the difficulties John's parents caused it in performing its duties. Nor can Defendant defend its failure to offer any educational program to John beginning in the fall of 2011 on parental noncooperation. Regardless of its views about the meet-to-discuss provision of the Settlement Agreement, Defendant had an independent and concurrent obligation under the IDEA to offer John a FAPE in John's final two years of IDEA-eligibility. There is no evidence in the record that it did so.
The case law cited by Defendant is factually distinguishable. In Pedraza v. Alameda Unified School District, 2011 WL 4507111 (N.D. Cal. Sept. 29, 2011), the school district admitted it did not provide the services to which it had agreed. It argued, however, that it attempted to provide those services but was prevented from doing so because the parents "refused to participate in the process and to provide the necessary information so that the services could be provided." Id. at *10. Here, John's parents did not prevent Defendant from providing the disputed services in question, namely the aides and supports for Oakton community college classes. An argument that John's parents' lack of cooperation prevented Defendant from providing other services that Orchard was willing to provide is simply not a defense to the claim Plaintiffs have raised.
Defendant also cites Patricia P. v. Board of Education of Oak Park, 203 F.3d 462 (7th Cir. 2000). But in that case, the parent "unilaterally removed" the child from the school district and, once removed, did not send him back for evaluation. Id. at 469. Here, Defendant unilaterally removed John from the school district by disenrolling him. While there is some testimony by
The Court is particularly skeptical of Defendant's noncooperation argument as applied to the ELSA placement. Defendant argues that it was relieved of its duties under the IDEA for providing John a FAPE beginning in the school year following John's Orchard placement because Defendant disenrolled John from the school district and John's parents failed to cooperate by not seeking reenrollment. But the stated reason for Defendant's disenrollment was John's absences from the Orchard program, and John's absences were the result of John's parents' assertion of their rights under the IDEA to have John attend community college classes as part of that placement. If the Court were to accept that argument, John would be denied a FAPE in the following school years because his parents asserted their rights under the IDEA in the previous school year. Even apart from whether a disabled student can ever be deprived completely of his right to a FAPE based on his parents' advocating on his behalf for specific services to be provided as part of that FAPE, it would be improper for the Court to rely on John's parents' conduct regarding the Orchard placement to justify denial of a FAPE to John in the years following that placement. Under Defendant's theory, Defendant could essentially breach its duty to provide John with a FAPE for his last two years of IDEA eligibility without consequence based on alleged noncooperation by John's parents during the previous school year. "This result would undermine the IDEA's central purpose of ensuring that all children with disabilities receive a FAPE. A child should not lose the IDEA's protections any time a school district might have grounds to second-guess the parents' earlier placement decisions. Otherwise, one mistake years earlier could result in a child forever being left behind." Bd. of Educ. of Evanston-Skokie Cmty. Consol. Sch. Dist. 65, 2013 WL 3224439, at *23 (emphasis in original). These concerns are especially acute in a case like this where the alleged noncooperation of John's parents involved a good faith belief that they had a legal right to insist on enrolling John in community college classes.
Moreover, Defendant ignores the Seventh Circuit's further comment in Patricia P. that "a school district is [] also bound by the IDEA's preference for a cooperative placement process: this Court will look harshly upon any party's failure to reasonably cooperate with another's diligent execution of their rights and obligations under the IDEA." Patricia P., 203
The history of this case reveals that, notwithstanding (or perhaps, as a result of) the parents' filing of a request for a due process hearing and subsequent court litigation, the parties worked hard over the course of John's first four years of high school to maintain the collaborative process required by the IDEA. Their hard work appeared to culminate with the Settlement Agreement. Yet shortly after the Settlement Agreement was signed, the collaborative process broke down and the relationship deteriorated from there. All of the reasons for this may not be apparent from the current record. But it seems to the Court that the problem began when one of the first things Smith did after taking over as Director of Special Education was to direct Orchard Academy to discontinue aides and supports it had been providing to John without engaging in a discussion with the parents first. The Court recognizes that Defendant believes Smith was justified in taking the actions she did because she was only "restoring" John's original agreed-to program after Christine Miksis "unilaterally" enrolled John in community college classes. But this argument ignores the fact that the de facto status quo, for whatever reason, was that John was receiving those supports and services.
From Defendant's perspective, it may have been "restoring" the agreement, but to Plaintiffs, Defendant was changing it; only a compromise or a third party decision could resolve who was right on that issue. Moreover, there is one crucial difference between what Smith did and what John's parents did: Smith knew at the time she took her action that the parents disputed her view of what the agreement was, whereas, at the time Christine Miksis took the complained of actions, she appeared to have a good faith belief that the parties had reached an agreement that supported her actions.
Smith testified that she consulted with her attorney before making the determination that the Settlement Agreement did not cover the aides and supports Orchard was providing. But for the collaborative process to work, she should have consulted not just with her attorney but with the
In the end, Defendant's arguments regarding the parents' noncooperation depend entirely on Defendant's view of the parties' contractual obligations being correct when clearly there was a good faith dispute over what those contractual obligations were. Given that a good faith dispute existed, Defendant could not simply declare what the agreement was without violating John's parents' procedural rights to a collaborative decision-making process. But what is perhaps even more puzzling to the Court is that Defendant disregarded the contractual aspect of the dispute. That is, Plaintiffs had a contractual right to what was promised in the Settlement Agreement independent of their rights under the IDEA. If that were not the case, it would have been pointless for Plaintiffs to have entered into the Settlement Agreement; whatever rights they had under the IDEA for John's education going forward existed before the settlement and would continue to exist after the settlement, making the Settlement Agreement superfluous. Not only that, but they would have gained nothing when they gave up their right to claim damages and attorneys' fees for Defendant's past violations.
This discussion is not to decide the substantive issue of whether Smith had the legal or statutory right to do what she did; it is rather to expose the logical flaw in Defendant's noncooperation argument. All of the conduct that supposedly constituted noncooperation by John's parents can only be viewed as noncooperation if Defendant is correct on the merits issues yet to be decided by the Court. On the one hand, if the Court were to rule in favor of the parents, then their conduct cannot be characterized as "noncooperation"; on the other hand, if the Court were to rule in favor of Defendant, then Defendant would not need a noncooperation defense to Plaintiffs' claims. In short, the parents' cooperation or lack thereof is irrelevant to the issues in this case. But Defendant having raised the issue, it is the Court's view that the facts do not show noncooperation by Plaintiffs. Instead, the record shows that Plaintiffs acted according to a good faith belief, whether right or wrong, as to their contractual and statutory rights, while Defendant disregarded the possibility that Plaintiffs' could be correct about their contractual rights and also disregarded its duty under the IDEA to collaborate with Plaintiffs before making any decisions concerning John's educational placement. See, e.g., Bd. of Educ. of Evanston-Skokie Cmty. Consol. Sch. Dist. 65, 2013 WL 3224439, at *24-25 ("There is considerable evidence in the record to support the hearing officer's conclusion that L.J.'s parents cooperated. Indeed, the District's continued pursuit of this theory borders on the frivolous.... There is no basis to deny reimbursement for lack of cooperation.... If anything, L.J.'s parents exhibited extraordinary
In accordance with the terms and conditions set forth above and as previously ordered, R. 81, Plaintiffs' motion for summary judgment, R. 49, and Defendant's cross-motion for summary judgment, R. 51, are denied. A status hearing is set for February 21, 2017 at 9:00 a.m. Neither party has made a jury demand, so the parties should be prepared to discuss at the status an appropriate date for a bench trial.
R. 52-6 at 12.
