PITTSBURGH – A busing contract negatively impacted by the COVID-19 pandemic has resulted in a Western Pennsylvania school district and a transportation company going to state court to resolve the dispute.
The McKeesport Area School District of McKeesport filed suit in the Allegheny County Court of Common Pleas on Aug. 12 versus Pennsylvania Coach Lines, Inc. also of McKeesport.
“The School District and Defendant are parties to an Agreement commencing on July 1, 2019 and expiries on Aug. 30, 2025. As part of the Transportation Agreement, defendant is to provide transportation services for the School District which entails transportation of students in Grades K thru 12, to and from School District facilities,” according to the lawsuit.
“As consideration for the transportation services, the School District is required to pay to defendant a yearly bulk rate payable in response to 10 equal monthly invoices beginning in the month of September, which is typically the first month of each school year. The yearly bulk rate for the 2019-2020 school year was $2,223,487.67 based on a 180-day school year.”
Per the terms of the Transportation Agreement, the School District would receive invoices for 10 months beginning in September 2019 and ending in June 2019, in the amount of $222,348.77. The District would also owe for any additional charges outside of services covered for the daily rate, and the district calculated that the daily rate based on the 180-day school year to be $12,352.71.
The district received transportation services until March 13, when Gov. Tom Wolf shut down schools and transportation to schools due to the coronavirus pandemic. The passage of Act 13 ensured that school districts would be able to renegotiate school bus transportation services to “ensure contracted personnel and fixed costs, including administrative and equipment, are maintained during a period of school closure.”
In accordance with Act 13, transportation contractors were to submit weekly documentation to the school entity that its complement levels remain at or above the level on March 13, in order to continue being paid.
“The School District contacted the defendant several times to arrange payment under the conditions of Act 13 and requested documentation that defendant was maintaining its complement levels in order to provide payment. Additionally, the Transportation Agreement provides that PDE 1043 and PDE 1049 forms be provided by defendant. Defendant refused to provide the information in accordance with Act 13 after multiple attempts by the School District to negotiate a resolution,” the suit says.
“Upon information and belief, the defendant refused to provide this information because it laid off all of its workers upon the closure of schools by Governor Wolf. Upon further information and belief, defendant now seeks payment in full of the 2019-2020 bulk rate even though it has not been compensating its employees or acting to ensure that its buses and vehicles were maintained during the closed portion of the 2019-2020 school year.”
By letter dated Aug. 4, 2020, counsel for the defendant notified the School District through its Solicitor’s office that it was in breach of contract for failing to pay the 2019-2020 contract price in full – and further explained that should payment not be received, defendant will not provide transportation services for the 2020-2021 school year that is scheduled to begin on or about Aug. 26, 2020.
Due to this circumstance, the School District is unable to provide transportation for its students as required under the Pennsylvania School Code.
“To make matters worse, due to the strict regulations required to open schools for the 2020-2021 school year, the District is unable to contract with another service provider to be operational prior to the start of the school year. Essentially, defendant is asking the School District to violate Act 13 to render payment in full for services that were not provided and employees that were not paid,” the suit states.
For counts of declaratory judgment and injunctive relief, the plaintiff is seeking:
• Judgment declaring that the School District’s actions requiring proof of service levels from defendant prior to payment for services not provided after March 13, 2020, in accordance with Act 13 of 2020, was not in breach of the Transportation Agreement’s terms and conditions;
• Judgment declaring that the defendant in refusing to provide the required documentation as a prerequisite for payment for services not provided after March 13, 2020, is a breach of the terms and conditions of the Transportation Agreement;
• Judgment declaring that the Transportation Agreement is valid and enforceable, and that defendant must provide services during the 2020-2021 school year;
• Injunctive relief in the form of preventing defendant from declaring the contract void due to any perceived breach based on plaintiff’s alleged conduct;
• Any other further relief that this Court deems necessary and appropriate.
The defendant filed a response to the suit on Aug. 18, denying the school district’s claims and counter-claiming that the district committed breach of contract as to the transportation agreement.
“The judgment the District asks this Court to enter is unsupported by both the facts and the law, and is particularly inapposite given the demands it leveled upon PA Coach just after its filing. Specifically, just after filing this action, the District changed the fundamental basis of the contract by now requiring that PA Coach provide double the transportation for the upcoming 2020-2021 school year, in light of purported social distancing requirements,” the defendant’s response said.
“The District refuses to pay more for these services – despite PA Coach’s costs doubling (driver pay, fuel, mechanical services, etc.), despite the $667,046.31 outstanding unpaid balance it owes to PA Coach, and despite the District’s ability to obtain reimbursement from the Commonwealth. If left unabated, the ultimate result of the District’s breaches of the Transportation Agreement will put PA Coach out of business, resulting in the very situation the District purports to seek to prevent: its children not getting to school.”
The plaintiff is represented by Krisha A. DiMascio and Joseph R. Dalfonso of Dodaro, Matta & Cambest, in Canonsburg.
The defendant is represented by Ray F. Middleman of Eckert Seamans Cherin & Mellott, in Pittsburgh.
Allegheny County Court of Common Pleas case GD-20-008633
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com