A.L. v. Pleasanton Unified School District

Background

A.L., a minor child, sued the Pleasanton Unified School District (PUSD) and the Contra Costa County Office of Education (CCCOE). The opinion states that A.L. has Wolf-Hirschhorn Syndrome and requires highly specialized and individualized support, including at school.

In 2019, A.L.’s father entered into an agreement with PUSD concerning A.L.’s placement at CCCOE’s Mauzy School. An August 2019 Individualized Education Plan stated that A.L. was entitled to services and supports including an individual nurse or aide, speech therapy, physical therapy, vision therapy, and adaptive physical education.

In March 2021, the parties entered into a settlement agreement. The agreement included terms concerning A.L.’s education at Mauzy School, including hiring a backup nurse and a one-to-one aide or licensed vocational nurse, holding meetings with A.L.’s father about her schooling and care, and purchasing equipment. In exchange, the plaintiffs agreed to release claims against PUSD and CCCOE and seek dismissal of pending federal and administrative proceedings.

The plaintiffs alleged that compliance problems began soon afterward. Among other things, they alleged that the one-to-one aide or licensed vocational nurse left and was not promptly replaced, that a backup nurse was not obtained, and that required equipment was not delivered or was delayed.

Claims and Motions

The First Amended Complaint asserted five claims. The motions addressed only three state-law claims: breach of contract, breach of the implied covenant of good faith and fair dealing, and fraud. The defendants moved to dismiss those claims for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not allege enough facts to support a legally recognized claim.

Breach of Contract

The court denied both defendants’ motions to dismiss the breach-of-contract claim.

The defendants argued that California Government Code section 815 made them immune from the contract claim. The court rejected that argument, explaining that the cited immunity provision does not apply to contractual liability and that a settlement agreement is a contract.

The court also found that the plaintiffs adequately alleged the elements of a contract claim: a contract, their own performance by withdrawing legal claims, a breach by the defendants, and resulting damage. The alleged breaches included failure to obtain a backup nurse, failure to replace the licensed vocational nurse, failure to deliver equipment, delays in delivering equipment, failure to include required personnel in a familiarization process, and failure to hold required meetings.

The court concluded that the agreement required both PUSD and CCCOE to implement the 2019 education plan. Accepting the complaint’s factual allegations as true at this stage, the alleged failure to provide the required personnel and equipment was enough to support a reasonable inference that both defendants could be liable for breach of contract.

Breach of Good Faith and Fair Dealing

The court granted the defendants’ motions to dismiss the claim for breach of the implied covenant of good faith and fair dealing, with leave to amend.

The plaintiffs alleged that the defendants breached this duty by inducing their assent to the settlement agreement with false promises and then failing to perform the agreement. The court found that allegations based on the defendants’ failure to perform merely repeated the alleged contract breach and sought the same relief. The plaintiffs also alleged, on information and belief, that the defendants made false promises, but did not explain why those promises were false when made.

Because the plaintiffs did not allege facts showing a conscious and deliberate act beyond the alleged contract breach, the court dismissed this claim. It granted leave to amend because additional facts might support the claim.

Fraud

The court granted the defendants’ motions to dismiss the fraud claim, with leave to amend.

The court determined that the fraud claim was based on the alleged fraudulent breach of the settlement agreement and therefore was not barred by the public-entity immunity provision cited by the defendants. But the claim still had to meet Federal Rule of Civil Procedure 9(b), which requires fraud to be pleaded with particularity, including the who, what, when, where, and how of the alleged misconduct and why an allegedly false statement was false when made.

The plaintiffs alleged that the defendants did not intend to perform their promises and that PUSD had a pattern of entering settlement agreements that it did not intend to perform. The court found these allegations conclusory because they relied primarily on conduct after the agreement was signed and did not identify facts showing why the promises were false at the time they were made. The court therefore dismissed the fraud claim but allowed amendment.

Disposition

The court denied the defendants’ motions to dismiss as to the breach-of-contract claim. It granted both motions to dismiss as to the breach-of-good-faith-and-fair-dealing claim, with leave to amend, and granted both motions to dismiss as to the fraud claim, with leave to amend. The plaintiffs could file an amended complaint within 21 days. The opinion’s ruling addressed these three claims and did not resolve the other claims in the First Amended Complaint.