The Groveport Madison Board of Education has alleged its bus transportation provider, Petermann LLC, has breached its contract with the district, a charge the bus company has adamantly denied.
The school board took the initial step toward filing a lawsuit against Petermann at its Nov. 17 meeting when it voted 3-2 to authorize the filing of a declaratory judgment action to determine the board and district’s rights and responsibilities under the current transportation contract with Petermann. The board authorized the expenditure of $10,000 to the law firm of Fusco, Mackey, Mathews and Gill LLP for a retainer for such legal action. Board members John Kershner, Duane Dailey, and Nathan Slonaker supported the action while Dr. Naomi Sealey and Mary Tedrow opposed it.
The action follows the district’s attempt this summer to lease and purchase a fleet of school buses, which could be used instead of buses owned by Petermann. The company is under contract with the district to operate buses until 2011. Purchasing the buses was projected to save the district $96,000 a year.
The board’s allegations
A letter to Petermann dated Sept. 26 from Fusco, Mackey, Mathews, & Gill (the school district’s attorneys) outlined the district’s allegations, which include:
•An anticipatory breach of contract by Petermann’s refusal to allow the board to replace some of the Petermann owned buses with buses the board intends to acquire;
•Petermann’s use of the bus facility to operate a private charter business;
•Petermann’s failure to provide new buses;
•Petermann’s failure to remove to remove the general manager in a timely manner;
•Petermann’s failure to report bus accidents and incidents;
•Petermann’s failure to cooperate with the district in determining bus routes for students;
•Petermann’s failure to deposit in escrow the amount equal to the fair market value of the inventory, tools, equipment, and supplies, owned by the board for the purpose of maintaining school buses; and
•The unauthorized use of the district’s diesel fuel.
The letter further alleges the company breached its lease agreement for the bus facility by operating a charter service there.
In a telephone interview Nov. 20, attorney Jeff Mackey stated the board is not terminating the contract, but is making the declaratory judgement filing "for answers about the rights and responsibilities of Groveport Madison in regards to the contract."
In a letter to the district’s lawyers dated Oct. 24, Petermann’s attorneys Frost, Brown & Todd, strongly denied the allegations.
"The board can buy as many buses as it wants," wrote attorney William Harter. "Petermann will not stand in the way of those purchases and it has never indicated an intent to do so."
He added the only stipulation is that the board has contracted with Petermann for 42 buses for the next three years.
"Petermann expects to get paid for those buses regardless of how many buses the board owns," wrote Harter, who added it is the board who has allegedly anticipated breaching the contract by announcing its intent to replace Petermann buses.
Regarding the operation of the charter service out of the bus facility, Harter stated, "Nothing in the contract prohibits Petermann’s charter bus operation…The board has been aware of Petermann’s charter service for the past four years." The same applies to the lease agreement allegation.
He added Petermann only uses its own buses for the charter service.
Regarding Petermann obtaining new buses, Harter stated the board never asked for new buses in 2007. He said the current contract is an extension of the 2004 contract and a "mutual mistake" was made including the word "new" when the current contract was retyped.
The remaining allegations were addressed in this manner:
•The general manager was removed by Petermann.
•The company is unaware of any unreported accidents and legal correspondence from the district does not identify any accidents.
•Petermann maintains they "consistently worked with the board on the issue of routing."
•Petermann claims the board never provided the company "with any such inventory tools, supplies, and equipment."
•Petermann did "mistakenly use" and "fail to replace" some diesel fuel, but the company states it has "already reimbursed the board for that usage in an amount that more than exceeds the value of the same." Harter notes the board has accepted this reimbursement.
A date before a judge for a hearing of the declaratory judgement has not yet been set.