Diversified Educ. Training v. City of Wichita

• Citation: 473 F.Supp.2d 1140
• Decision Date: 09 February 2007
• Docket Number: No. 05-02408-JWL.,05-02408-JWL.
• Parties: DIVERSIFIED EDUCATIONAL TRAINING AND MANUFACTURING COMPANY, INC., a/k/a "DETAMC", Plaintiff, v. The CITY OF WICHITA and its Representatives, Defendant.
• Court: U.S. District Court — District of Kansas

Page 1140

473 F.Supp.2d 1140

DIVERSIFIED EDUCATIONAL TRAINING AND MANUFACTURING COMPANY, INC., a/k/a "DETAMC", Plaintiff, v. The CITY OF WICHITA and its Representatives, Defendant.

No. 05-02408-JWL.

United States District Court, D. Kansas.

February 9, 2007.

Lawrence W. Williamson, Jr., Uzo L. Ohaebosim, Shores, Williamson & Ohaebosim, LLC, Wichita, KS, for Plaintiff.

Jay C. Hinkel, City of Wichita, Kansas — Law Department, Wichita, KS, for Defendant.

MEMORANDUM AND ORDER

LUNGSTRUM, District Judge.

Plaintiff Diversified Educational Training and Manufacturing Company, Inc. ("DETAMC"), a privately owned Kansas corporation which provides manufacturing and educational training services, is owned and operated by Pam and George Johnson, who are both African-American. DETAMC brings this action alleging that defendant City of Wichita ("the City") racially discriminated against it in violation of 42 U.S.C. § 1981, through 42 U.S.C. § 1983. DETAMC also asserts a state breach of contract claim against the City. This matter is currently before the court on the City's motion for summary judgment (doe. 23) and DETAMC's cross motion for partial summary judgment (doe. 31). For the reasons explained below, those motions are denied, except as to plaintiffs claim for damages for humiliation and mental and physical pain and suffering, as to which judgment as a matter of law is granted.¹

I. Statement of Material Facts²

During all times relevant to this case, Sarah Gilbert³ served as the head of the City's Career Development Office (CDO). Cathy Holdeman served as the Assistant City Manager and Chris Cherches served as the City Manager. According to Ms. Gilbert, she reported directly to Ms. Holdeman, who in turn reported to Mr. Cherches, who in turn reported to the Wichita City Council.

The Workforce Investment Act⁴ (WIA) became effective in Kansas on July 1, 2000.⁵ In the summer of 2000, the City entered into a five year local plan pursuant to the WIA for a six county area in south central Kansas, called Service Delivery Area IV (SDA IV).⁶ The operator of that plan was a consortium of the City, the SDA IV office of Kansas Department of Human Resources, (SDA IV), Butler County Community College, and Cowley County Community College. The City was responsible for the disbursement of grant funds for SDA IV.

The City's Career Development Office (CDO) provided guidance and support for educational and training program opportunities for qualifying citizens who sought to enhance their skills. The CDO also managed the state and federal funds allocated to the City pursuant to the local and state plans under the WIA. The City entered into various contracts, called training agreements, with "intensive service providers"⁷ in the greater Wichita area, which were: Butler County Community College (BCCC), Cowley County Community College (CCCC), DETAMC, Kansas School for Effective Learning, Inc. (KANSEL), and Wichita Area Technical College (WATC).⁸ Pursuant to these contracts, the service provider agreed to provide certain educational services to individual students. The City would pay the students' tuition for those services, utilizing funds received pursuant to the local and state WIA plans.

According to Ms. Gilbert, the relationship between the City and the service providers functioned as follows. The City maintained a list of "intensive service providers." An individual would apply to the CDO for career services. After the individual's WIA eligibility was determined, the city employment specialist (a member of the CDO staff) would assess the individual's skills, interests, abilities, occupational goals, family needs, and any barriers to employment. At that point, the specialist and the individual would consult the list of providers and agree on the best plan and provider for the individual's specific needs. Once a provider was chosen, a training agreement was executed between the City and the service provider. Those agreements contained no specific performance standards and only required that the providers "provide the trainee with the job specific skills and competencies necessary to meet local employers' entry-level qualifications . . . or to meet the requirements for a GED, or to meet other training goals as specified . . . ." Ms. Gilbert had authority to execute the training agreements on behalf of the City.

In February of 2002, Ms. Gilbert, Ms. Holdeman, Mr. Johnson, and Mrs. Johnson had a meeting in which DETAMC decided to begin offering a program which would provide GED preparation and training in the basic skills necessary to enter an occupational training program.⁹ After that meeting, DETAMC submitted an outline to the City, describing the curriculum, program, how the program would be operated and the tuition rates. By providing GED and basic skill services, DETAMC became qualified as an intensive service provider under the WIA and thus was placed on the City's list of those providers.

Ms. Gilbert testified in her deposition that at the February 2002 meeting, she informed DETAMC that the individuals provided through the City pursuant to the WIA plan could not be DETAMC's only source of students because the City could not guarantee a specific number of students at any given time. Ms. Gilbert stated that she encouraged DETAMC to investigate other sources of students and marketing methods. Ms. Gilbert explained that she gave this advice to DETAMC out of concern for DETAMC's viability if they only relied on the City for students.

In April of 2002, the first session of training began at DETAMC and seven students were enrolled. Six of those students dropped out shortly after the session began. At this time,, according to Ms. Gilbert, Ms. Johnson expressed her concern over the number and type of students that were coming to DETAMC. In order to remedy this situation, an exception was made for DETAMC to attempt to increase its number of enrollees.¹⁰ DETAMC was permitted to conduct its own recruitment and orientation. Any interested students would be sent to the City to determine whether they met the eligibility requirements of the WIA plan. Once that was determined, the student would be sent back to DETAMC for training. This change was not made regarding the City's relationship with any of the other intensive service providers.

Beginning in late May of 2002, the City requested that DETAMC submit weekly attendance reports. The training agreements provided for monthly attendance reports, not weekly attendance reports. No other service providers were required to provide weekly attendance reports.

In August of 2002, the City decided to honor the training agreements it had with DETAMC regarding existing students recruited by DETAMC, but determined it would not participate in any more DETAMC orientations or take on any new lists of students from DETAMC. According to Ms. Gilbert, this decision was made due to concerns regarding the attendance and drop-out rate of the DETAMC program.¹¹ Ms. Gilbert testified that the drop rate of DETAMC was tracked, but that the drop rates of no other intensive service providers were tracked.¹² Ms. Gilbert was concerned about attendance because if students were not going to class, they were not improving their basic skills or their GED preparation.

Ms. Gilbert testified that her office is accountable for the entire WIA local program and had to ensure that certain performance standards were met. Therefore, Ms. Gilbert stated, she was concerned that the deficiencies of the DETAMC program would affect the overall performance of the local plan as a whole. Ms. Gilbert also testified that the City was not experiencing these problems with any of the other providers. There is no evidence in the record indicating the exact specifications of these performance standards.¹³ Furthermore, there is no evidence indicating how these performance standards apply, if at all, to WIA. There is also no evidence indicating the performance rates of the other intensive service providers.

Ms. Gilbert expressed her concerns to Ms. Holdeman. Ms. Holdeman then advised Ms. Gilbert to seek a review of DETAMC's performance by the City's internal auditor, Karen Walker.¹⁴ Ms. Walker then proceeded to conduct an audit of DETAMC. Ms. Gilbert testified that no other intensive training programs were audited.

In November of 2002, Mr. Cherches sent an email to the Wichita City Council informing him of the City's concerns with the DETAMC program and advising them that he had authorized an audit of DETAMC. Also in November of 2002, Ms. Gilbert sent an email to Ms. Holdeman indicating that she would inform Ms. Johnson that, based on advice from the internal auditor, enrollment in DETAMC programs by the City would be stopped pending a year end review of expenditures.

In mid-December, 2002, Mr. Cherches sent an email to the mayor, Bob Knight, and others indicating that the audit of DETAMC was completed and that DETAMC had not complied with the terms and conditions of the funding provided by the City. The email did not state what those terms and conditions were. On January 17, 2003, Mr. Cherches sent a fax to Kansas State Senator Rip Gooch regarding the status of the City's relationship with DETAMC. He indicated to Senator Gooch that the WIA has an overall performance requirement of 71%.¹⁵ He went on to state that DETAMC's performance was 5% and thus violated the terms and conditions of the contract; however, the training agreements did not include a required performance percentage. Ms. Johnson testified at her deposition that the City stopped paying DETAMC pursuant to existing training agreements in January or February of 2003.

In May of 2003, DETAMC was provided with the final results of the City's audit of DETAMC's contractual performance, which was conducted by Ms. Walker. The audit states that DETAMC failed to meet the training agreement requirements of providing the students with "job readiness, specific skills, or competencies to...