Court Opinion

ID: 9715696
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:12:16.218113+00
Date Added: 2024-06-11T18:23:37.244281
License: Public Domain

TEIGEN, Judge
(dissenting in part in Rettig and concurring in Taylor).
I dissent in part in Rettig and concur in Taylor. I construe Section 15-34.2-10, N. D.C.C., as providing that the school board may unilaterally change the route specified in a vehicular transportation contract but may not, upon effecting a change of the route, unilaterally change the compensation specified in the contract. If a change in compensation as provided by the contract is desired by either party, the statute clearly provides the remedy. It states:
“ * * * the failure of the school board and the contract holder to agree on an adjustment of the compensation specified in the contract, the matter shall be submitted to arbitration.” [Emphasis added.]
The onus to comply with the statute is equal upon both parties. In the absence of an agreement, no change in compensation may be compelled by either party without an award of the arbitrators, who “shall adjust the compensation of the contract holder to meet the changed situation.” Thus when the school board, in this case, unilaterally reduced Rettig’s monthly compensation by $96 per month it acted outside the law.
Rettig disagreed with the unilateral action taken by the school board and served notice upon it that he would not agree to the reduced compensation. He advised that he would continue to perform under the contract for a period of four months but if, by then, he had not received the full compensation provided by the contract, he would discontinue driving the route. The school board failed to pay the deficiency and, after four months, Rettig discontinued performance.
Subsequently, Rettig instituted the instant action, seeking recovery of the amount of the reduction for the four-month period that he operated, and damages in the amount of profits he would have earned had the contract been carried out for its full term.
The statute, Section 15-34.2-10, N.D.C. C., does not require that the contract holder must seek arbitration to enforce payment provided by the contract. Arbitration is operable only in the event an adjustment of the compensation specified in the contract is sought by one or the other of the parties to the contract, to which the other party will not agree. This adjustment could be either up or down, depending upon the change in the route. Here, the adjustment was downward and Rettig, the contract holder, was not seeking such an adjustment. It was the school board. Rettig’s claim in this action is based upon the contract as written and not on the basis of an adjustment of the compensation provided in the contract. The action is premised on a breach of contract by the school board. There is no question in my mind but that the school board breached the contract when it adjusted the compensation downward without the benefit of an agreement or an arbitration award. By its unilateral, unlawful action the school board set in motion the series of acts which subsequently occurred. It should not be heard now to complain that Rettig does not have standing to sue for the delinquencies in payment under the contract terms because he failed to demand arbitration before instituting this suit. Furthermore, the court should not entertain jurisdiction to permit the school board to recover for additional expenses incurred in transporting the school children, the necessity of which was brought about by the school board’s unlawful act.
A rider attached to the contract and made a part thereof is referred to in the majority opinion. It states:
“The board reserves the right to alter or change any route to fit the desires of patrons. Compensation or deduction to the *751bidder will be at the rate of $5.00 per stop plus mileage.”
The majority then reason that the Board could change the route and also the compensation, but it could not compel a change in the latter, and that, therefore, Rettig was the aggrieved party and had a duty to demand arbitration.
I do not agree that this is a correct legal statement. It is true that by this contract provision the parties attempted to agree upon some basis for a compensation adjustment in the event of a route change. However, it is only partial. No formula is provided for determining the mileage change nor does the contract provide a specified rate per mile. The contract merely provides for the lump-sum payment of $560 per month for the services to be rendered. It is therefore clear that, although there may have been an attempt to provide by contract for an adjustment of compensation for route changes, either up or down, it is not specific, understandable or computable under the terms of the contract. It only invites disagreement which, if not resolved, would have to be settled by arbitration as provided by the statute. There was a failure of both parties to agree on an adjustment of compensation and a failure of both parties to demand arbitration.
If I were to apply the principle that arbitration must be sought before commencing a lawsuit, I would apply it against the school board in its action against Rettig for damages because it was the actor who brought about the disagreement when it acted unilaterally in reducing the compensation. Had the school board followed the law and taken no action until an arbitration award had been obtained, the problem would not have arisen.
It is my opinion that both judgments should be reversed. I would allow judgment in favor of Rettig against the school district in the amount of $384 ($96 reduction times four months) and leave the parties where they were at the end of the four-month period. Thus I would disallow Rettig’s claim for damages for the period subsequent to his discontinuance of performance, and dismiss the school district’s action against Rettig for damages. This, I believe, is the best and most equitable solution possible under the circumstances.