Individuals with Disabilities Education Act • Settlement Agreement • Unilateral Mistake

A.S. v. Office for Dispute Resolution, PICS Case No. 14-0170 (Pa. Commw. Jan. 24, 2014) Jubelirer, J. (26 pages).

Where school district’s director of pupil services and counsel neglected to read and review terms of a settlement agreement properly executed by school board president and parents, such neglect constitutes a unilateral mistake for which the agreement cannot be rescinded; moreover, a hearing officer is empowered to determine the existence of a settlement agreement. Reversed.

Parents filed a complaint that school district failed to provide extended school year services to S.S.; parents and the school district entered into settlement negotiations on this issue. School district’s counsel emailed parents’ counsel a settlement agreement for review and signature. Parents instructed their counsel to modify the agreement to add terms they believed were agreed upon and edit and remove other terms that they objected to or believed were not discussed or agreed upon. Parents’ counsel sent parents a revised settlement agreement, that Parents hand-delivered to the school district’s administrative office. Neither the school district’s director of pupil services nor the school district’s counsel reviewed the revised agreement before it was executed by the superintendent and school board president, in customary reliance on counsel’s review.

School district filed a due process complaint with the Office of Dispute Resolution, arguing that no valid settlement agreement existed between the parties. A hearing officer ruled in favor of school district.

Parents argued that the hearing office lacked the authority to rule on whether a valid settlement agreement existed between the parties. The court found that although no express statutory authorization existed in IDEA or Pennsylvania regulations, it observed that prior courts have established the authority of hearing officers to rule on the existence of settlement agreements; furthermore, the administrative process mandated in 20 U.S.C. §1415 and 22 Pa. Code §14.162 states that a complainant must seek relief from educational authorities before seeking relief in court.

The court rejected the hearing officer’s findings that no valid settlement agreement existed between the parties, noting that the officer ignored the fact that the revised agreement was signed by both parties, and that the failure to read an agreement is no defense to its enforcement.

The court rejected school district’s argument that parents failed to communicate that the revised agreement was an offer, finding that an offer exists where there is a willingness to enter into a bargain such that another person understands that his assent to the bargain will conclude it; while a showing of fraud or mutual mistake can invalidate a contract, unilateral mistake is no basis for invalidation if the mistake is the result of the negligence of the mistaken party. The court agreed with the hearing officer’s finding that neither of the parties engaged in fraudulent behavior.

The court found that only unilateral mistake existed on the part of school district. School district contended that since it executed Agreement Two believing it had different terms, there was no meeting of the minds; however, school district’s neglect to review the revised agreement before executing it constituted unilateral mistake, and therefore school district had no basis for which to seek rescission.