enumerated in the program cost sheet for the school year 1991-92 which the Board received after the Agreement was entered. See Office of Administrative Law Decision, EDS 6529-92, December 14, 1992 ("12/14/92 OAL Opinion"), p. 4. As the program cost sheet showed these services were education and basic related services, related residential services, room and board. They included physical therapy, occupational therapy, and speech. Board's Brief, p. 6. In light of the limiting language contained in Paragraph 3, this array of services, and they alone, comprised the 1991-92 rate.
The testimony of D.R.'s father, M.R., at the administrative law hearing bears out this analysis. M.R. testified that the Board's responsibility in 1991-92 was fixed at $ 27,500. Tr. 44-45. This amount did not include certain other costs related to D.R.'s placement, such as transportation costs which M.R. was wholly responsible for. Tr. 45:3-8; Tr. 46:11-16. Accordingly, M.R.'s testimony establishes that the Agreement delineated an array of services which the Board was assuming responsibility for in 1991-92 and another array in which they were not.
The Agreement clearly links the Board's contribution for 1992-93 to the 1991-92 rate. Paragraph 2 refers to the 1991-92 rate. It requires the Board to pay 90% of the increase from the 1991-92 rate for the school year 1992-93. Giving the plain and ordinary language of Paragraph 2 its normal and usual meaning, the Board was obliged to pay 90% for any increase in cost associated with these services, nothing more and nothing less. An aide was not one of the services enumerated in the program cost sheet for 1991-92. The program cost sheet illustrates that it is a new service for 1992-93, outside of the array covered in 1991-92, as it is a separate line item. As the cost for an aide is outside of the array of services covered in 1991-92, plaintiff's reading of the Agreement is an attempt not only to add additional services to the program but also to attach the additional cost to the Board in direct contradiction to the Agreement.
However, plaintiff contends that Paragraph 3's limitations on the Board's responsibilities concerns only the first school year, 1991-92, but not the second, 1992-93. The Court has examined paragraph 3 and finds that it has no such language. In comparing the language of paragraphs 1 and 2 to Paragraph 3, the Court finds that where the parties desired to reflect different obligations for the different school years, they so stated. Since Paragraph 3 does not contain any reference to the school years, it is clear that it was meant to apply to both years. The Court finds that plaintiff's argument is meritless.
For all the above reasons, the Court concludes that the Agreement is clear, unambiguous, and binding. Under the terms of the Agreement, the Board is responsible for paying $ 27,500 for the school year 1991-92 for education and basic related services, related residential services, room and board, including physical therapy, occupational therapy, and speech and 90% of any increase in cost for these services. D.R.'s parents are responsible for paying the remaining 10% of any increase for these services and 100% for any and all other services, including the cost of the aide.
2. Rescission or Reformation of the Agreement
A. Mutual Mistake
Plaintiff next asserts that because the services of a one-to-one aide were not contemplated at the time the Agreement was executed there was no meeting of the minds and it is tantamount to mutual mistake. Plaintiff's Brief at p. 10. Because both parties were mistaken at the time the Agreement was made, plaintiff submits, the Agreement is voidable.
The Court first finds it necessary to differentiate between a meeting of the minds and a mutual mistake. The meeting of the minds required to make a contract requires the parties to mutually agree and assent to the substance and terms of it. Black's Law Dictionary 886 (5th ed. 1979). It is elementary that a contract cannot be made when there has been no common understanding and mutual assent to the terms of a contract. Driscoll v. State, Dept. of Treasury, 265 N.J. Super. 503, 513, 627 A.2d 1167 (1993); Knight v. New England Mutual Life Ins. Co., 220 N.J. Super. 560, 533 A.2d 55 (App. Div. 1987). Mutual mistake presumes that the parties have had a meeting of the minds but that at the time of contract both assumed the same misconception as to a basic assumption. See id. at 920; Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 608-09, 560 A.2d 655 (1989); Lampley v. Davis Machine Corp., 219 N.J. Super. 540, 549-550, 530 A.2d 1254 (App. Div. 1987).
The facts of this case do not illustrate that there was any meeting of the minds on the subject of a one-to-one aide. The facts do not support the conclusion that D.R.'s parents were under the clear impression that the Agreement would require the Board to fund 90% of an aide and that the Board's impression was to the contrary. What they do demonstrate is neither party ever considered or discussed the item at the time the Agreement was entered. See Tr. 46:1-10. Likewise, there is no support for the conclusion that both parties were laboring under a common misconception.
As rescission or reformation of a settlement agreement is an extraordinary remedy which may be considered only upon demonstration by clear and convincing proof that the agreement was the result of inter alia mutual mistake or no meeting of the minds, and as the facts clearly show that this is not a case of mutual mistake or lack of mutual assent, the Court must find that the Agreement can not be voided.
B. Rescission in Light of IDEA
Plaintiff contends that in light of Woods v. N.J. Dept. of Education, 796 F. Supp. 767 (D.N.J. 1992), the Agreement is not binding on the parents. In Woods, as here, the parents of an educationally handicapped child entered into a stipulation of settlement with the local board of education. The settlement was approved by a hearing officer who determined that the settlement resolved all issues in the case. Id. at 770. Under the terms of the settlement, the school board agreed to pay for the educational portion of residential care for nine months, beyond that the board was absolved of such costs, and the parents agreed to make no further demands upon the board for residential services. Id. at 770 n. 1. The parents then pursued funding for the residential care portion of the school through various state agencies. Id. at 770. When this proved unsuccessful, the parents moved to reopen the matter with the school board and the other agencies. Id. at 771.
The school board moved for summary judgment in view of the settlement agreement. In denying the board's motion to dismiss, the district court focused on the board's responsibilities to provide a free and appropriate education. That is, the court apparently examined the settlement agreement in light of the statutory mandates of IDEA. While the Woods court did not delve into the specifics of IDEA and the school board's responsibility, the Court finds that it must supplement the Woods decision by making a brief digression to explain a school board's responsibilities and duties under IDEA.
IDEA provides a comprehensive handicapped educational plan. See generally Board of Education v. Rowley, 458 U.S. 176, 179-84, 102 S. Ct. 3034, 3037-39, 73 L. Ed. 2d 690 ; Oberti v. Board of Education, 995 F.2d 1204, 1213 (3d Cir. 1993). Originally enacted as the Education for All Handicapped Children Act in 1975, its goal is to ensure that disabled children receive appropriate educational services. Oberti, 995 F.2d at 1213 (citation omitted). IDEA provides federal assistance to participating states for the education of such special children. B.G. by F.G. v. Cranford Bd. of Educ., 702 F. Supp. 1140, 1148 (D.N.J. 1988), aff'd, 882 F.2d 510 (3d Cir. 1989).
To receive funds, states must have "in effect a policy that assures all children with disabilities the right to a free appropriate public education." 20 U.S.C.A. § 1412(1).
The Supreme Court has held that a "free appropriate public education" consists of "educational instruction specially designed to meet the unique needs of the handicapped child, supported by such services as are necessary to permit the child 'to benefit' from the instruction." Rowley, 458 U.S. at 188-189, 102 S. Ct. 3042. The interstitial detail of IDEA is reserved for the states, who have the right to exceed the federal minimum standards and provide greater protection and services for handicapped children. B.G., 702 F. Supp. at 1148. New Jersey has chosen to impose a higher standard of special education than the basic floor required by the Act. Lascari, 116 N.J. at 48; Geis v. Board of Education, 774 F.2d 575, 583 (3d Cir. 1985). As a result, in New Jersey, local school boards are required to provide educational services according to how the student can best achieve success in learning. Id. at 583.
Accordingly, the key issue in Woods was whether residential placement was educationally necessary under IDEA. The court concluded that the board of education has a duty under IDEA and state law to provide disabled students with a free appropriate public education, including funding both the education and residential portion of the placement. Woods, 769 F. Supp. at 776. Where it was educationally necessary but the board refused to "pay for the total costs of such placement", the board of education denied the student free and appropriate public education. Id. Because whether residential placement was educationally necessary and thus whether the board abdicated its duty were fact questions, summary judgement was denied. Additionally, and most importantly to the present matter, the court concluded that the existence of a settlement agreement did not bar an action against the school board demanding total funding of residential placement given the board of education's duty. Id. Hence, the Woods court found that notwithstanding a settlement agreement, the board was required to comply with the law.
While both parties contend that the issue here is one of construction of the Agreement -- namely, to determine who is responsible for paying for the one-to-one aide -- the Court believes that there is another issue which should also be addressed: Whether the one-to-one aide is educationally necessary. 769 F. Supp. at 772-774; Woods v. New Jersey Dep't of Education, ("Woods II ") 823 F. Supp. 254, 258 (D.N.J. 1993). D.R.'s educational rights entitle him to a program and services that will permit him to best achieve his educational success. B.G., 702 F. Supp. at 1156. Should it be determined that an aide is necessary in order to meet the standards of a free and appropriate education, a school board cannot discharge its duty by virtue of a settlement agreement. In light of Woods, a settlement agreement does not allow a school board to contract around or out of IDEA.
On the other hand, should it be determined that an aide is unnecessary, and thus that the school board is complying with the law, the Court will not allow parents of disabled students to ignore a settlement agreement with a view to constructing a new and better bargain. The Court concurs with the view espoused by defendants and the Administrative Law Judge: settlement agreements to a lawsuit usually form a contract between parties. Nolan, 120 N.J. at 472. Accordingly, the Court is sensitive to the possibility that a narrow reading of today's holding will tomorrow eliminate settlement agreements in special education cases.
In fact, plaintiff posits this exact argument. D.R. asserts that Woods allows parents of disabled children to virtually have carte blanche in disregarding settlement agreements. Plaintiff submits that Woods stands for the proposition that parents "always maintain a right to seek an appropriate education for their child and the board always has a duty to provide it. Thus the agreement is no obstacle to a hearing on the current needs of the child." Plaintiff's Brief at 11.
The difference between plaintiff's contention and the Court's position is that the Court presumes that at the time the Agreement was entered, the services and/or program agreed to meet the child's educational needs and, therefore, was in compliance with IDEA. Starting with this presumption, parents do not have such an unabridged right. Parents indeed are barred from trying to change or modify a settlement agreement merely because they find the terms unacceptable. But, parents do have the right to question whether a program delineated in a settlement agreement meets the requirements of IDEA if there has been a change in circumstances, such that the child's educational needs are no longer being met. To avoid reducing settlement agreements in special education cases to a nullity while trying to enforce the statutory requirement, the Court finds that the Agreement between D.R.'s parents and the Board is binding and shall not be set aside, unless it is found that the child's circumstances have changed, whereby enforcing the terms of the settlement would violate IDEA.
3. Res Judicata and the ALJ Decision of January 19, 1993
Pursuant to IDEA, failure to raise an issue at the administrative level will result in waiver of that issue on appeal to this Court. Woods, c 796 F. Supp. at 775 (citations omitted). Notwithstanding the above reasoning, if D.R. did not raise the issue that D.R.'s condition had changed since the execution of the Agreement and therefore that the one-to-one aide was educationally necessary below, he is estopped now.
It appears that D.R. did raise the issue of educational necessity in his first Petition for Hearing. See Plaintiff's Brief, Appendix pp. 54-57, P 5, 6, 10. While the first petition did not explicitly state there was a change in circumstances, it did request an order finding inter alia that an aide was necessary. See id. The Court assumes, without deciding, that this was sufficient to constitute a change in circumstances claim. D.R., though, clearly raised the issue of educational necessity. Id. ("D.R. requires the services of a 1 to 1 aide"; "D.R. is in need of the services . . . [of an aide] in order to develop his potential to the fullest").
However, it also appears that D.R. never received the opportunity to be heard on these issues. When plaintiff attempted to raise these issues after the first hearing, he was barred and his petition was dismissed based on the doctrine of res judicata.
The doctrine of res judicata is well established. "A final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in that action." Federated Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S. Ct. 2424, 2428, 69 L. Ed. 2d 103 (1981) (citations omitted). The Court has long recognized that public policy requires that there be an end to litigation, those who have contested an issue shall be bound by the result of the contest, matters once tried shall be considered forever settled as between the parties. Id. at 401, 101 S. Ct. at 2429.
Application of the doctrine of res judicata requires the satisfaction of three elements: a final judgment on the merits in a prior suit, involving the same parties or their privies, and a subsequent suit based on the same claims. Id. at 399, 101 S. Ct. at 2428; United States v. Athlone Indus. Inc., 746 F.2d 977, 983 (3d Cir. 1984). The Court is satisfied that in the case at bar the third element is not established; strict application of the doctrine of res judicata requires that this action be remanded.
The first element required for preclusion under res judicata is a prior final judgment. In the case at bar, plaintiff's prior petition was dismissed on December 17, 1992, and as discussed supra, was a final resolution of the matter.
The second element of res judicata requires identity of parties. In his first petition D.R. named himself as plaintiff and the Board of Education as defendant. The second complaint names the identical plaintiff and defendant. Here, plaintiff has already sued the defendant, thus the prior favorable ruling is available for consideration under the doctrine of res judicata.
The final element for preclusion under the doctrine of res judicata is identity of the cause of action. The Court must consider four factors to determine when suits involve the same cause of action:
(1) whether the acts complained of and the demand for relief are the same (that is, whether the wrong for which redress is sought is the same in both actions); (2) whether the theory of recovery is the same; (3) whether the witnesses and documents necessary at trial are the same (that is, whether the same evidence necessary to maintain the second action would have been sufficient to support the first); and (4) whether the material facts alleged are the same.
Athlone, 746 F.2d at 984 (emphasis in original, citations omitted). Searching the record in this case the Court finds that there is no identity of the causes of action for the theories of recovery are different and the witnesses and documents necessary at the hearing are not the same.
The theory for the first and only hearing concerned the validity of the agreement. The theory for the proposed second hearing was founded on IDEA's requirement for educationally necessity. If plaintiff had the opportunity at the first hearing to raise this second theory but for whatever reasons chose not to, then he would be precluded from raising it now. However, from the record before the Court, it appears that plaintiff pled educational necessity but did not have the opportunity to raise this issue as it was reserved due to the bifurcated approach the ALJ adopted. It would offend the concept of justice to preclude plaintiff from having his promised day in court to litigate this reserved issue.
Moreover, the witnesses and documents necessary at the educational necessity hearing are not the same as those that appeared at the first hearing. Given the procedural requirements for the IDEA as set forth in 20 U.S.C. § 1414 and state and federal regulations promulgated thereunder, see 34 C.F.R. § 300.340-300.349; N.J.A.C. 6.28-2.1-3.9, various experts would testify concerning D.R.'s academic needs with a view to assisting the ALJ in determining what was appropriate and in D.R.'s best interest. As the issue at the first hearing was construction of the Agreement, and not educational necessity, no experts testified concerning these areas.
The Court finds that given the above the ALJ decision of 1/19/93 was erroneous and that D.R. was not barred from obtaining a hearing on the necessity of a one-to-one aide if such a claim was properly raised by D.R. and through no slumbering on his rights was not heard.
Accordingly, the Court remands this matter to the Office of Administrative Law to determine if D.R. properly raised this issue and whether he slumbered on his rights by not asserting this claim. If the Office of Administrative Law finds that D.R. satisfies those two conditions, then the Court directs the agency to hold a hearing on the educational necessity of the aide.
It is clear that the Agreement is binding on the parties. As a matter of law, the Board is responsible for 90% of the increase in costs for the array of services which comprised the 1991-92 rate. As the aide is a new service not contemplated by the parties at the time the Agreement was entered, and as the Agreement explicitly relieves the Board from "any and all other costs" associated with Benedictine, plaintiff is required to bear the entire cost of the aide.
If this was a matter solely involving the construction of the Agreement, the Court would deny D.R.'s motion for summary judgment, but grant the Board's cross-motion. However, this action is also governed by IDEA which imposes upon the Board the obligation and responsibility to provide D.R. with a free appropriate public education.
The Court presumes that at the time it was entered, the Agreement reflected an educational program which met the statutory requirement. D.R. must overcome this presumption to void the Agreement. There must be a change in circumstances such that continued enforcement of the Agreement would violate D.R.'s educational rights.
The Court has no evidence to determine whether D.R.'s educational rights are being violated. Moreover, this is a fact-based inquiry. D.R.'s motion and the Board's cross-motion will be denied.
As the proper forum to adjudicate these issues is the Office of Administrative Law, the Court will administratively terminate the within action and will remand it to the Office of Administrative Law.
An appropriate order is attached.
Dated: November 23, 1993
ALFRED M. WOLIN, U.S.D.J.
It is on this 23rd day of November, 1993
ORDERED that plaintiff's motion for summary judgment is denied; and it is further
ORDERED that defendant's cross-motion for summary judgment is denied; and it is further
ORDERED that this matter be remanded to the Office of Administrative Law for a hearing in conformity with this decision; and it is further
ORDERED that this matter is administratively terminated without prejudice.
ALFRED M. WOLIN, U.S.D.J.