School district, learning services company must cover own costs from sexual assault case

By Jim Boyle | Jan 20, 2015

PHILADELPHIA - The Philadelphia School District and a third party learning services provider are on the

hook for their own court costs and attorneys fees incurred during the litigation of a tort settlement, a federal judge has ruled.

Judge Anita Brody of the U.S. District Court for the Eastern District of Pennsylvania has granted summary judgment in favor of the Philadelphia School District in a suit filed by Edison Learning, Inc. and against the school district in its counterclaim against Edison.

The two parties were named co-defendants in a 2006 tort suit filed by a former middle school student who claimed that they negligently failed to create safe environment at Stetson Middle School in West Chester, where he was chased and sexually assaulted by another student in 2004.

Edison and the school district agreed to mount a coordinated defense strategy against the claims, but the district would not sign an agreement to indemnify Edison from any settlement costs the litigation might produce.

In January 2008, both parties entered into an agreement that said neither party would pursue cross-claims during the litigation and was without prejudice to the rights of the school district or Edison to seek contribution or indemnification.

Four days later, the school district filed for summary judgment, arguing that it's sovereign immunity rights protected the government entity from tort litigation and that it held no duty to protect students from harm caused by third parties.

The summary judgment was granted and the case against Edison continued until the third day of trial in June 2006, when the plaintiff agreed to a settlement.

In 2011, Edison filed suit against the school district to recoup the expenses from the legal action, claiming that it breached the original 2002 contract between the parties, which stated that the school district shall provide all appropriate safety and police protection to students and employees during school hours.

It also argued that the district entered into an oral agreement to indemnify Edison for the settlement costs. The school district responded with a counterclaim seeking reimbursement for its own expenses under a provision of the contract that agreed to hold the school district harmless from any lawsuits, losses, costs and expenses incurred through the negligence of Edison.

Brody rejected both claims in favor of the school district by ruling the sovereign immunity that protected it in the original action still held true for Edison's suit.

Edison attempted to work around the immunity by arguing the complaint was a breach of contract by the school district, which agreed to provide safety and police protection. According to Brody, however, the cause of the suit against the school district was the original negligence tort filed in 2006.

"By seeking to recover its costs of settlement, Edison Learning attempts to shift the costs of that action back to the School District," Brody wrote in her memorandum.

Conversely, Brody did not support the school district's counterclaim to recover its own expenses, stating that the complaint was based on the settlement agreement between Edison and the plaintiff.

According to Brody's memorandum, the school district improperly attempted to use the settlement as an admission of guilt by Edison.

"At no point in the litigation did the court determine that Edison Learning was negligent," Brody writes. "Even conceding the School District’s argument that summary judgment in its favor meant that the School District was not negligent, it does not follow that Edison Learning was negligent."

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