Court Opinion

ID: 6329236
Source: CourtListenerOpinion
Date Created: 2022-04-01 20:00:30.655137+00
Date Added: 2024-06-11T09:22:48.958074
License: Public Domain

NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT
                               _____________

                              Nos. 20-2433 & 21-1502
                                  _____________

                              A. W., on behalf of N.W.

                                         v.

         PRINCETON PUBLIC SCHOOLS BOARD OF EDUCATION;
 MICKI CRISAFULLI, individually, and in her official capacity as Director of Student
                                   Services

                               A. W., on behalf of N.W.,
                                      Appellant in No. 20-2433
                                Princeton Public Schools Board, et al
                                       Appellants in No. 21-1502
                                  _____________

                         On Appeal from the District Court
                            for the District of New Jersey
                           (D.C. Civil No. 3:18-cv-13973)
                    District Judge: Honorable Michael A. Shipp
                                   _____________

                            Argued: November 18, 2021
                                 _____________

      Before: CHAGARES, Chief Judge, BIBAS and FUENTES, Circuit Judges

                              (Filed: March 15, 2022)

Jay J. Rice [ARGUED]
Nagel Rice
103 Eisenhower Parkway
Roseland, NJ 07068

Matthew S. Slowinski [ARGUED]
Slowinski Atkins
290 West Mt. Pleasant Avenue
Eisenhower Corporate Campus, Suite 2310
Livingston, NJ 07039

       Counsel for Plaintiff-Appellant/Cross-Appellee

Brett E.J. Gorman [ARGUED]
Emily E. Strawbridge
Parker McCay
9000 Midlantic Drive
Suite 300
Mount Laurel, NJ 08054

       Counsel for Defendants-Appellees/Cross-Appellants

                                      ____________

                                        OPINION *
                                      ____________

CHAGARES, Chief Judge.

       Plaintiff A.W., on behalf of her minor child N.W., filed this action against

defendants Princeton Public Schools Board of Education (“PPS”) and Micki Crisafulli

under federal statutes including the Individuals with Disabilities Education Act

(“IDEA”), 20 U.S.C. §§ 1400, et seq., the Americans with Disabilities Act (“ADA”), 42

U.S.C. §§ 12132, et seq., the Rehabilitation Act of 1973, 29 U.S.C. §§ 794(a), et seq., and

42 U.S.C. § 1983, as well as New Jersey law. Central to the lawsuit are orders of a New

Jersey Administrative Law Judge (“ALJ”) upholding a settlement agreement between

A.W. and PPS and waiver provisions contained therein. A.W. appeals the District

Court’s grant of summary judgment to the defendants and denial of her motion for partial

*
  This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not
constitute binding precedent.
                                             2
summary judgment. The defendants cross-appeal the District Court’s denial of their

sanctions motion under Federal Rule of Civil Procedure 11. For the reasons that follow,

we will affirm both orders of the District Court.

                                              I.

       The procedural history and factual background of this case are well known to the

parties, as set forth in the District Court’s memorandum opinion, and we will not repeat

them here.

       The District Court had jurisdiction pursuant to 20 U.S.C. § 1415(i)(2) and 28

U.S.C. §§ 1331 and 1343. We have jurisdiction over the District Court’s final orders

granting summary judgment for the defendants and denying PPS’s sanctions motion

under 28 U.S.C. § 1291.

       In cases arising under the IDEA, we apply a modified de novo standard of review,

pursuant to which we give due weight to the underlying administrative proceedings. See

D.K. v. Abington Sch. Dist., 696 F.3d 233, 243 (3d Cir. 2012). We treat the factual

findings of the ALJ as “prima facie correct,” S.H. v. State-Operated Sch. Dist. of

Newark, 336 F.3d 260, 270 (3d Cir. 2003), but exercise plenary review over the District

Court’s conclusions of law, see D.S. v. Bayonne Bd. of Educ., 602 F.3d 553, 564 (3d Cir.

2010). We exercise plenary review over the District Court’s grant of summary judgment

as to A.W.’s other claims. See Cranbury Brick Yard, LLC v. United States, 943 F.3d

701, 708 (3d Cir. 2019). Under this standard, we will affirm a grant of summary judgment

only if “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). Finally, we review the denial of a

                                              3
motion for sanctions for abuse of discretion. See Cooter & Gell v. Hartmarx Corp., 496

U.S. 384, 405 (1990). “A district court would necessarily abuse its discretion if it based its

ruling on an erroneous view of the law or on a clearly erroneous assessment of the

evidence.” Id.

                                              II.

                                              A.

       At the outset, the parties dispute which of A.W.’s appeals of decisions of the ALJ

were timely. The IDEA provides that parties have “90 days from the date of the

decision . . . to bring [a civil] action” appealing the decision. 28 U.S.C. 1415(i)(2)(B). We

do not reach whether the September 2017 and February 2018 decisions were timely

appealed because we will not set aside the settlement.

       A.W.’s appeal of the May 2018 decision falls outside the ninety-day limitation.

However, A.W. promptly moved for reconsideration of that decision, and, after that

motion was denied in June 2018, filed this action within ninety days of the

reconsideration denial. As a general principle of federal law, where there is a pending

reconsideration motion that was timely filed, “the statute of limitations for judicial review

is tolled until the agency decides the petition for reconsideration.” V.I. Conservation

Soc., Inc. v. V.I. Bd. of Land Use Appeals, 881 F.2d 28, 31 (3d Cir. 1989). We see no

reason to deviate from this ordinary tolling principle here. We therefore hold that A.W.’s

appeals of the May 2018 and the June 2018 decisions are timely.

                                              4
                                             B.

       As to the enforceability of the settlement agreement, A.W. raises three issues on

appeal: (1) that the settlement agreement is void as contrary to public policy; (2) that the

settlement agreement was obtained through equitable fraud; and (3) that A.W.’s waiver of

N.W.’s rights was not knowing and voluntary. We consider each in turn.

                                             1.

       A.W. maintains that because the settlement agreement prospectively waives

N.W.’s educational rights under federal and state law, it is void as contrary to public

policy. The settlement agreement contains two primary waiver provisions. Paragraph 6

waives “any and all claims [A.W. and N.W.] have or may have accrued” against PPS

“whether known or unknown . . . through June 30, 2019.” Appendix (“App.”) 217.

Paragraph 7 indemnifies PPS for any claims accrued “through the date of the

agreement[.]” App. 218. Two other paragraphs prospectively limit PPS’s obligations to

N.W. Paragraph 2 provides that that PPS’s obligations to N.W. end on June 30, 2019.

Paragraph 4 provides context for this limitation; it requires that N.W. disenroll from the

district during the course of the agreement. If, during the course of the agreement, N.W.

were to reenroll, PPS would provide an Individualized Education Plan (“IEP”), but PPS’s

“sole financial obligations” would be limited to the tuition payments in paragraph 1.

App. 215–16.

       Settlements serve an important public policy in that they “promote the amicable

resolution of disputes and lighten the increasing load of litigation faced by courts.” D.R.

by M.R. v. E. Brunswick Bd. of Educ., 109 F.3d 896, 901 (3d Cir. 1997). This Court has

                                             5
explained that IDEA settlement agreements “may release all claims arising out of the

transaction with which the release was concerned even if they are not yet known; and

broad releases are valid at least when negotiated between sophisticated parties.” Blunt v.

Lower Merion Sch. Dist., 767 F.3d 247, 282 (3d Cir. 2014). In at least one prior case,

this Court has examined the nature of a settlement agreement that included a prospective

waiver of IDEA rights and concluded that the settlement agreement was enforceable. See

D.R., 109 F.3d at 901–02. However, we also recognized in that case “that in other cases

where different facts are at issue, compelling public policy reasons may require a

different conclusion.” Id. at 901 n.2. 1

       After examining the settlement agreement, we hold that, with one exception, the

waivers are not void as contrary to public policy. The plain language of these waiver

provisions is clear. Taken together, the retrospective and prospective waiver provisions

operate to resolve all claims associated with the 2017–18 and 2018–19 academic years,

after which the settlement agreement contemplates that N.W. will no longer have a

relationship with PPS. For that reason, paragraph 2 clarifies that PPS’s obligations to

N.W. end on June 30, 2019. The waivers are broad but serve as an appropriate

mechanism by which the parties attempted to bring years of protracted litigation to a

close. Moreover, the settlement agreement anticipates N.W.’s possible return to PPS

during the course of the agreement and clarifies that PPS would provide an IEP and an in-

1
  A.W. also argues that prospective waivers of minors’ rights are contrary to New Jersey
public policy. The cases A.W.’s cites do not involve waivers of IDEA or civil rights, and
therefore are poor analogs for this case.
                                             6
district placement. PPS simply would not be obligated to provide additional financial

support for other placements.

       However, the prospective waiver of rights under the New Jersey Law Against

Discrimination (“LAD”) in paragraph 6 violates New Jersey public policy. New Jersey

public policy prevents parties from agreeing to shorten the limitations period for

discrimination claims. Rodriguez v. Raymours Furniture Co., 138 A.3d 528, 530 (N.J.

2016). If the parties may not contractually shorten the deadline for bringing claims under

the LAD, it follows that they may not waive their rights under the LAD. See id. at 539

(noting that the public interest underlying the LAD to “root[] out forbidden

discrimination may not be lightly contracted away by private arrangement”); cf. Vitale v.

Schering-Plough Corp., 174 A.3d 973, 986 (N.J. 2017) (applying Rodriguez to conclude

that a waiver of prospective claims under the New Jersey workers’ compensation statutes

is void as contrary to public policy). 2 Similarly, prospective waivers of rights under

federal non-discrimination statutes are unenforceable. See, e.g., Alexander v. Gardner-

Denver Co., 415 U.S. 36, 51–52 (1974) (holding that there can be no prospective waiver

of an employee’s rights under Title VII of the Civil Rights Act of 1964). Yet paragraph 6

does precisely that — it waives prospective state and federal discrimination claims

through June 2019.

2
  Effective March 18, 2019, the LAD explicitly prohibits prospective waivers of rights or
remedies under the statute. N.J. Stat. Ann. § 10:5-12.7(b). This statutory prohibition
“appl[ies] to all contracts and agreements entered into, renewed, modified, or amended
on or after the effective date.” 2019 NJ Sess. Law Serv. Ch. 39 § 6.
                                             7
       The agreement stands because the discrimination waivers are severable. The

settlement contains a severability clause, which is “indicative of the parties’ intent that

the agreement as a whole survives the excision of an unenforceable provision.” Arafa v.

Health Express Corp., 233 A.3d 495, 507 n.2 (N.J. 2020). Moreover, voiding “the illegal

portion does not defeat the central purpose of the contract.” Jacob v. Norris, McLaughlin

& Marcus, 607 A.2d 142, 154 (N.J. 1992). The rest of the waivers are left intact. For

these reasons, only the prospective discrimination waivers in paragraph 6 are void, and

the rest of the settlement is enforceable.

                                              2.

       A.W. next contends that her claim that the settlement was obtained through

equitable fraud should withstand summary judgment. A.W. identifies two alleged

misrepresentations in support of this claim: (1) PPS’s promise that The Lewis School

(“TLS”) would approve a payment plan; and (2) the omission of certain terms to which

the parties orally agreed.

       Unlike legal fraud, equitable fraud does not require scienter. Jewish Ctr. of Sussex

Cnty. v. Whale, 432 A.2d 521, 524 (N.J. 1981). A plaintiff seeking “equitable remedies”

need only show that she relied to her detriment on a material misrepresentation made by

the other party. Id. A settlement obtained through equitable fraud may be reformed or

rescinded. See Bonnco Petrol, Inc. v. Epstein, 560 A.2d 655, 661 (N.J. 1989).

       The District Court properly rejected A.W.’s attempt to set aside the settlement

agreement as the product of equitable fraud. In A.W.’s own words, “[PPS] recommended

that [she] reach out to [TLS] to discuss a payment plan and that in [PPS’s] experience,

                                              8
[PPS has] had many children placed at [TLS] pursuant to payment plans.” App. 223.

There is no suggestion that PPS promised A.W. a payment plan. A.W.’s second

argument, that PPS omitted a clause voiding the waivers if N.W. reenrolled in PPS, also

fails. At the March 2018 hearing, a PPS representative summarized on the record the

settlement terms, which did not include a clause voiding the waivers upon N.W.’s

reenrollment. A.W. also underwent a colloquy with the ALJ, who confirmed twice that

A.W. understood that she was releasing all claims, including future claims. The record

indicates that within three business days of her signing the settlement agreement, A.W.

purported to conditionally void the settlement agreement, subject to inclusion of this

clause. But after PPS refused to modify the language, A.W. did not take explicit steps to

void the agreement as she had done with a prior failed settlement in October 2017. A.W.

did not contact the ALJ, and A.W. even emailed the PPS representative to inquire as to

whether the PPS school board had approved the settlement agreement so that she could

proceed with her tuition reimbursement. Accordingly, the District Court did not err in

holding that the settlement agreement was not the product of equitable fraud.

                                             3.

       A.W. also argues that the District Court improperly applied the test for a knowing

and voluntary waiver of N.W.’s IDEA rights. In cases involving the waiver of IDEA

rights, this Court considers the factors set forth in W.B. v. Matula, 67 F.3d 484 (3d Cir.

1995), abrogated on other grounds by A.W. v. Jersey City Pub. Sch., 486 F.3d 791 (3d

Cir. 2007), to determine whether the waiver was knowing and voluntary. The factors are:

                                             9
       (1) the language of the agreement was clear and specific; (2) the
       consideration given in exchange for the waiver exceeded the relief to which
       the signer was already entitled by law; (3) the signer was represented by
       counsel; (4) the signer received an adequate explanation of the document;
       (5) the signer had time to reflect upon it; and (6) the signer understood its
       nature and scope.

Id. at 497.

       The District Court did not err in holding that A.W.’s execution of the settlement

agreement was knowing and voluntary. The language of the settlement agreement is

clear and unambiguous. A.W. creates a conflict between paragraphs 2 and 6 where none

exists. Paragraph 6 waives all rights through June 30, 2019, the end of the 2018–19

school year, and paragraph 2 provides that PPS shall have no obligations to N.W. after

that date. Those provisions are reconcilable because paragraph 4 contemplates that N.W.

would be disenrolled from the district. Nor is paragraph 4 “absurd.” A.W. Br. 45. Read

in the context of paragraph 1, paragraph 4 entitles N.W. to an IEP at an in-district

placement but not additional financial payments for other placements.

       Nor is paragraph 4 ambiguous as to whether the waivers are void upon

reenrollment. They are not. New Jersey law permits the use of extrinsic evidence of

circumstances surrounding an agreement, even where the agreement is unambiguous.

Conway v. 287 Corp. Ctr. Assocs., 901 A.2d 341, 347 (N.J. 2006). But nothing in the

record renders paragraph 4 ambiguous. As explained, A.W. wrote multiple times to PPS

to ask for a modification of paragraph 4 to include a clause voiding the waivers upon

reenrollment or clarification that PPS understood paragraph 4 this way. PPS refused to

provide either, yet A.W. permitted the board to approve the settlement.

                                             10
       Consideration of the other Matula factors does not raise a genuine dispute of

material fact. A.W. received consideration of full tuition for two years at TLS, and

received an explanation of the terms at the March 2018 hearing. She had three days to

review the terms of the agreement, and, following PPS’s refusal to reform the agreement,

did not contact the ALJ to void the settlement agreement. Although A.W. was pro se, she

was also a practicing attorney. For these reasons, we conclude that the District Court did

not err in holding that A.W.’s assent was knowing and voluntary under Matula.

                                            C.

       The First Amended Complaint also alleges § 1983 and state tort claims. These

claims are barred under the settlement agreement. Paragraph 6 expressly waives “any

and all claims” that “have or may have accrued” against PPS through June 30, 2019.

App. 217. A.W. initiated this action on September 18, 2018. A.W. argues that because

paragraph 7 specifically indemnifies PPS against tort claims, while paragraph 6 does not,

such claims are covered only by paragraph 7, which waives claims accrued only through

the date of the agreement. That reading is inconsistent with the language of paragraph 6.

We therefore will affirm the District Court’s order granting summary judgment to

defendants on these claims.

                                            D.

       Finally, PPS and Crisafulli cross-appeal the District Court’s denial of their Rule 11

sanctions motion, in which they argued that this case and A.W.’s conduct throughout

were frivolous and intended to waste the parties’ and the court’s time.

                                            11
       Rule 11 requires that, when filing any submission with the Court, “an attorney or

unrepresented party certifies that to the best of the person’s knowledge, information, and

belief, formed after an inquiry reasonable under the circumstances,” that: (1) the

submission is not presented for an improper purpose; (2) the legal contentions are

nonfrivolous; and (3) factual contentions and denials of factual contentions have or likely

will have evidentiary support. Fed. R. Civ. P. 11(b).

       The District Court held that A.W. presented colorable arguments for her appeal of

the ALJ’s refusal to equitably reform the settlement agreement, her motion to disqualify

defense counsel, and her motion for reconsideration. Although the District Court

described some of A.W.’s conduct as “troubl[ing]” and cautioned “that in the future, a

repetitive, meritless IDEA action” could trigger sanctions, App. 59, it stopped short of

characterizing the action as frivolous.

       We hold that the District Court did not abuse its discretion by denying defendants’

sanctions motion. With respect to this federal action, the District Court correctly noted

that certain rights under the IDEA are nonwaivable, and accordingly held that A.W.’s

public policy argument was not the type of “hollow platitude” that was found to warrant

sanctions in other cases. App. 55 (quoting Napier v. Thirty or More Unidentified Fed.

Agents, 855 F.2d 1080, 1091 (3d Cir. 1988)). With respect to the disqualification and

reconsideration motions, the District Court reasonably concluded that both motions had

some factual basis. The District Court did not apply an erroneous view of the law or base

any ruling on a clearly erroneous assessment of the evidence.

                                            12
                                     III.

For the foregoing reasons, we will affirm the orders of the District Court.

                                     13