Handi-Van, Village Car Service, Inc. v. Broward County Florida, Ilene Lieberman

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
AUGUST 24, 2011
No. 10-13294
JOHN LEY
________________________
CLERK
D.C. Docket No. 0:08-cv-62080-FAM
HANDI-VAN INC.,
VILLAGE CAR SERVICE, INC.,
lllllllllllllllllllll Plaintiffs - Appellants,
versus
BROWARD COUNTY FLORIDA,
ILENE LIEBERMAN, individually and in her official capacity,
KRISTIN JACOBS, individually and in her official capacity,
LOIS WEXLER, individually and in her official capacity,
SUE GUNZBURGER, individually and in her official capacity, et al.,
lllllllllllllllllllll Defendants - Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(August 24, 2011)
Before PRYOR and COX, Circuit Judges, and PANNELL,* District Judge.
PER CURIAM:
This appeal is from a judgment against a complaint for retaliation, breach of
contract, and violation of the Contracts Clause, U.S. Const. art. I, § 10, cl. 1,
regarding the administration of public transportation services for disabled
passengers. Handi-Van and Village Carry, both former contractors of Broward
County, Florida, sued the County and several of its officials. None of the
arguments of Handi-Van and Village Carry have any merit. We affirm.
I. BACKGROUND
Handi-Van and Village Carry are companies that formerly contracted with
Broward County, Florida, to provide paratransit services for disabled residents of
the County who are unable to use other public transit services. Handi-Van,
Village Carry, and several other companies in 2001 entered contracts with the
County that were scheduled to terminate at the end of 2006. When the County
solicited new contracts that were scheduled to become effective in 2007, the
County believed that its paratransit program was governed by federal regulations
that provided a contracting goal for disadvantaged business enterprises. Handi-
*
Honorable Charles A. Pannell, Jr., United States District Judge for the Northern District
of Georgia, sitting by designation.
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Van and Village Carry did not qualify as disadvantaged business enterprises or
otherwise comply with the contracting goal.
The County entered new contracts with contractors that had complied with
the contracting goal for disadvantaged business enterprises, but the County
extended its 2001 contracts with Handi-Van and Village Carry while the County
determined whether it was bound by the contracting goal. The County learned in
October 2007 that it was not required to implement the contracting goal, but by
then the County had new disputes with Handi-Van and Village Carry unrelated to
the contracting goal.
Handi-Van and Village Carry sued the County in January 2008 and alleged
that the contracting goal was unconstitutional, but the parties soon reached a
settlement. They agreed to terms of new contracts, and Handi-Van and Village
Carry dismissed their lawsuit.
Before the County executed the new contracts with Handi-Van and Village
Carry, the County Commission received a gloomy financial report at a meeting
held on February 5, 2008. The paratransit program was the largest contractual
expense for the County, and the Commission voted at the meeting to terminate all
paratransit contracts “for convenience” pending negotiation of new contracts even
though the contracts provided a termination date of 2012. The County
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nevertheless executed contracts with Handi-Van and Village Carry on February
26, 2008.
The contracts that Handi-Van and Village Carry entered provided that the
County would receive for each ride provided to a disabled passenger “a rider’s fare
plus the County’s reimbursement portion. Rider’s fare collected is retained by
Contractor.” The contracts also provided that the “County shall determine the
client fare structure for each service trip. County retains the right to implement,
and Contractor shall comply with, any fare adjustments deemed appropriate by
County.” The contract did not address whether any decrease or increase in the
rider’s fare affected the County’s reimbursement portion. On May 1, 2008, the
County raised the rider’s fare by fifty cents and decreased the County’s
reimbursement portion by fifty cents.
The contracts also required that Handi-Van and Village Carry comply with a
living wage ordinance, which required contractors to pay wages higher than the
federal minimum wage and provided that “[t]he living wage . . . shall be annually
indexed to inflation.” Broward County, Fla., Code § 26-102(c) (2008). The
contracts provided that Handi-Van and Village Carry would “receive an annual
rate increase on October 1 of each calendar year to coincide with the annual
increase in the hourly Living Wage as determined by the County.” The County
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did not raise the living wage in 2008, despite a rate of inflation of 5.8 percent, and
the County did not increase its reimbursement rate.
The County solicited bids for new paratransit contracts in 2009 and awarded
the new contracts to the lowest bidders. Handi-Van and Village Carry were among
the highest bidders, and the County did not award them contracts.
Handi-Van and Village Carry filed a complaint against the County and
various county officials, and alleged, among other claims, retaliation and breach of
contract. The district court dismissed a count brought under the Contracts Clause
for failure to state a claim. The district court later granted summary judgment in
favor of the County and against the claim for retaliation and two claims for breach
of contract. The district court dismissed the remaining claim for breach of
contract as to all defendants except the County and remanded that claim to state
court.
II. STANDARDS OF REVIEW
Two standards of review govern this appeal. “‘We review de novo the
district court’s grant of a motion to dismiss under 12(b)(6) for failure to state a
claim, accepting the allegations in the complaint as true and construing them in the
light most favorable to the plaintiff.’” Ironworkers Local Union 68 v.
AstraZeneca Pharm., LP, 634 F.3d 1352, 1359 (11th Cir. 2011) (quoting Am.
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Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1288 (11th Cir. 2010). We also
review a summary judgment de novo. Beach Cmty. Bank v. St. Paul Mercury Ins.
Co., 635 F.3d 1190, 1194 (11th Cir. 2011). We review for abuse of discretion a
decision to decline to exercise supplemental jurisdiction over claims under state
law. Estate of Amergi ex rel. Amergi v. Palestinian Auth., 611 F.3d 1350,
1366–67 (11th Cir. 2010).
III. DISCUSSION
We divide this discussion in five parts. First, we discuss the retaliation
claim. Second, we address the claim that the County breached its contracts with
Handi-Van and Village Carry when it reduced its reimbursement rate to
correspond with an increase in the rider’s fare. Third, we discuss whether the
County breached the contracts when it did not index the reimbursement rate to
inflation. Fourth, we address the claim that Handi-Van and Village Carry raise
under the Contracts Clause. Fifth, we discuss whether the district court abused its
discretion when it remanded the remaining claim to state court.
A. Handi-Van and Village Carry Waived Any Argument of Retaliation Under the
First Amendment.
Handi-Van and Village Carry argue that the district court erred when it
granted summary judgment against a claim that the termination of their contracts
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was retaliatory, but Handi-Van and Village Carry argue on appeal a different legal
basis for this claim than they presented to the district court. The district court
correctly read the complaint to allege a claim for retaliation under Title VI of the
Civil Rights Act of 1964, 42 U.S.C. § 2000d, but Handi-Van and Village Carry
now argue that the alleged retaliation violated the First Amendment of the
Constitution. Although Handi-Van and Village Carry made a passing reference to
Pickering v. Board of Education, 391 U.S. 563, 88 S. Ct. 1731 (1968), at the
hearing on the motion for summary judgment, they did not allege a claim under the
First Amendment. Handi-Van and Village Carry waived any argument of error.
See Smith v. Sec’y, Dep’t of Corr., 572 F.3d 1327, 1352 (11th Cir. 2009).
B. The County Did Not Breach the Contracts When It Reduced Its Reimbursement
Rate to Correspond with an Increase in the Rider’s Fare.
Handi-Van and Village Carry argue that the district court erred when it
relied on extrinsic evidence and concluded that the contracts were ambiguous as to
whether the County could lower its reimbursement portion to correspond with an
increase in rider’s fare, but we disagree. The contracts contained a latent
ambiguity under Florida law because they did not address whether the County or
the contractors would receive the benefit of an increase in rider’s fare. See
Centennial Mortg., Inc. v. SG/SC, Ltd., 772 So. 2d 564, 565 (Fla. Dist. Ct. App.
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2000). Because the contracts contained a latent ambiguity, the district court
correctly examined extrinsic evidence. See id.; see also Hashwani v. Barbar, 822
F.2d 1038, 1040 (11th Cir. 1987). The County presented evidence that the parties
intended for increases in rider’s fare to be offset by decreases in the
reimbursement portion of the County, and Handi-Van and Village Carry failed to
produce any evidence to support a contrary reading of the contract. Handi-Van
and Village Carry instead agreed that “[t]here’s no dispute . . . as to what the
extrinsic evidence would show[.]”
C. Handi-Van and Village Carry Were Not Entitled to an Increase of the
Reimbursement Rate When the Living Wage Ordinance Was Not Increased.
Handi-Van and Village Carry contend that the reimbursement rate paid by
the County automatically increased by operation of the living wage ordinance
even though they did not increase the wages paid to their employees, but we
disagree. The living wage increased in 2007 because the County raised the wage.
The contract provided that increases in the reimbursement rate shall “coincide”
with increases in the living wage, but the County did not require Handi-Van and
Village Carry to increase the wages they paid to employees. The language in the
contract that refers to any increase in the living wage “as determined by the
County” would be unnecessary if the living wage and corresponding
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reimbursement rates to contractors automatically increased.
D. The District Court Correctly Concluded That the Claim That Alleged a
Violation of the Contracts Clause Fails.
Handi-Van and Village Carry contend that the “unilateral termination of the
present contract” by the County and County officials constituted a violation of the
Contracts Clause of the Constitution, U.S. Const. art. I, § 10, cl. 1, but we again
disagree. Handi-Van and Village Carry alleged nothing more than a breach of a
contract, and they make no allegation that the County or County officials have
insulated themselves from paying damages in an action for breach of contract. A
state does not violate the Contracts Clause whenever it breaches a contract.
“[W]hen a state repudiates a contract to which it is a party it is doing nothing
different from what a private party does when the party repudiates a contract; it is
committing a breach of contract.” Horwitz-Matthews, Inc. v. City of Chicago, 78
F.3d 1248, 1250 (7th Cir. 1996) (Posner, J.) “If the duty [to pay damages] is
unimpaired, the obligation of the contract cannot be said to have been impaired.”
Id. at 1251. See also Hays v. Port of Seattle, 251 U.S. 233, 237, 40 S. Ct. 125, 126
(1920); St. Paul Gaslight Co. v. City of St. Paul, 181 U.S. 142, 149, 21 S. Ct. 575,
578 (1901); TM Park Ave. Assocs. v. Pataki, 214 F.3d 344, 348–49 (2d Cir.
2000).
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E. The District Court Did Not Abuse Its Discretion When It Remanded the
Remaining State Law Claim to State Court.
Handi-Van and Village Carry argue that the district court abused its
discretion when it remanded the remaining state law claim to state court following
the dismissal or summary judgment against the complaint on all other claims, but
this argument fails. The statute that governs supplemental jurisdiction authorizes
district courts to “decline to exercise supplemental jurisdiction over a claim . . . if
the district court has dismissed all claims over which it has original jurisdiction.”
28 U.S.C. § 1367(c)(3). “[T]his Court has noted that ‘if the federal claims are
dismissed prior to trial, [United Mine Workers v.] Gibbs[,383 U.S. 715, 726, 86 S.
Ct. 1130, 1139 (1966),] strongly encourages or even requires dismissal of state
claims.” Mergens v. Dreyfoos, 166 F.3d 1114, 1119 (11th Cir. 1999) (quoting
L.A. Draper & Son v. Wheelabrator-Frye, Inc., 735 F.2d 414, 428 (11th Cir.
1984).
IV. CONCLUSION
We AFFIRM the judgment in favor of the County and its officials.
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