Handi-Van, Inc. v. Broward Cnty.

• Decision Date: 19 June 2013
• Docket Number: No. 4D12–1549.,4D12–1549.
• Parties: HANDI–VAN, INC., a Florida corporation and Village Car Service, Inc., a Florida corporation, Appellants, v. BROWARD COUNTY, Florida, a political subdivision of the State of Florida, Appellee.
• Court: Florida District Court of Appeals

116 So.3d 530

HANDI–VAN, INC., a Florida corporation and Village Car Service, Inc., a Florida corporation, Appellants,

v.BROWARD COUNTY, Florida, a political subdivision of the State of Florida, Appellee.

No. 4D12–1549.

District Court of Appeal of Florida,

Fourth District.

June 19, 2013.

Keith T. Grumer of Grumer & Macaluso, P.A., Fort Lauderdale, for appellants.

Joni Armstrong Coffee, Broward County Attorney, Andrew J. Meyers, Chief Appellate Counsel, Benjamin R. Salzillo and Rocio Blanco Garcia, Assistant County Attorneys, Fort Lauderdale, for appellee.

GROSS, J.

Between 2008 and 2009, Broward County redesigned a government program to realize over $11 million in savings for taxpayers. For this exercise of fiscal responsibility,the County was sued by the appellants, Handi–Van, Inc., and Village Car Service, Inc., two providers under the scrapped program, whose bids were too high for participation in the revamped program. Every federal and state judge who has ruled on the appellants' various legal claims arising from this case has rejected them. We join these other courts and affirm the final summary judgment of the circuit court.

Under the Americans with Disabilities Act,¹ all local governments that operate fixed-route transportation systems for the general public are required to provide alternative paratransit services for the physically or mentally disabled.² While many governmental entities fulfill this requirement by developing in-house personnel, Broward County outsourced these services by contracting with private entities, including the appellants. Such relationships commenced in December 1996 and continued in December 2001, when in both instances the County entered into five-year contracts with the appellants, with the latter contract set to expire on December 31, 2006. At their peak, Village Car and Handi–Van performed 21% and 19% of the County's paratransit services respectively.

In April 2006, as the last contract neared expiration, Broward County circulated a request for letters of interest to providers of paratransit services. When the procurement process took longer than expected, the County extended all existing paratransit contracts an additional year, through the end of 2007. Eventually, the County contracted with nine paratransit providers, including the appellants, and invited the parties to engage in negotiations.

After negotiations commenced, Broward County halted contracting with the appellants after becoming concerned that their addition might compromise the County's ability to maintain a Disadvantaged Business Enterprise (“DBE”) program, a requirement for recipients of federal funding, since the appellants likely would not fall within the enumerated “good faith” exception.³ As a result, on January 30, 2008, the appellants initiated a lawsuit in the United States District Court for the Southern District of Florida, seeking declaratory and injunctive relief to prevent the County from considering minority character or membership when evaluating its bids.

With the federal suit pending, the County, in June 2007, entered into five-year contracts with the other seven paratransit providers at a higher rate than before. In addition, county commissioners voted to temporarily extend the appellants' “contracts to allow time for the County Attorney to obtain guidance from the U.S. Departmentof Transportation (‘USDOT’) on whether [the appellants] had satisfied the good faith exception.” Handi–Van, Inc. v. Broward Cnty., Fla., 2010 WL 2382909, at *2 (S.D.Fla. June 14, 2010).

Four months later, Broward County received such guidance from the federal government, learning that “the USDOT did not require DBE goals in the paratransit contracts because federal funding was not being used for the paratransit program.” Id. With the hurdles thus removed, the parties once again engaged in negotiations.

The Change in the Economic Climate

In January 2008, while negotiations remained ongoing, Florida voters approved “Amendment One” to the Florida Constitution, which doubled homestead property tax exemptions, allowed homeowners to transfer their “Save Our Homes” benefit, and capped tax increases on commercial and other non-homestead property. The result was a $50 million loss to the County in property taxes, the primary source for the paratransit funding.

Facing an economic crisis, County Commissioners convened on February 5, 2008, to consider scaling back its costly paratransit system. At that point, Broward County maintained an award-winning “rider's choice” paratransit system, which allowed users to select whichever provider they wished regardless of where the person was located or where he or she was heading. While much heralded, the system resulted in massive expenses; the new 2007 contract alone cost the County $28,945,745 in one year, making the paratransit system the county's largest contractual service expense. Recognizing that such financial extravagance could no longer be maintained, the commissioners elected to terminate for convenience the contracts of all of its paratransit providers once a cheaper paratransit system had been developed.

The New Contract

With the decision to terminate the contracts in the future set in stone three weeks prior, the appellants signed a five-year contract with the County to apply retroactively to July 1, 2007, placing the appellants in the same position as the other seven paratransit providers. Much like the previous seven contracts, the appellants' contract contained a termination for convenience provision, which permitted Broward County to terminate the contract for convenience upon ninety (90) days notice and identified consideration for the County's right to so terminate.⁴ Unlike the previous seven contracts, however, the appellants' contract differed in that it contained the following addendum, which memorialized the County Commission's February 5, 2008 decision to terminate the contract once a less-costly paratransit system had been developed:

On February 5, 2008, the Broward County Board of County Commissions directed COUNTY staff to terminate for convenience contracts for paratransit services. No notice of termination has been sent to any provider of paratransit services, but it is expected that such notice will be provided at some point subsequent to the execution of the Agreement and this Addendum. Nothing in this Agreement or any addenda between the parties shall in any way affect the County's right to terminate the Agreement (and the addenda and any subsequent amendments) for convenience, consistent with the terms and conditions of the Agreement.

Particularly when taken in conjunction with the parties' documented correspondences, this provision demonstrates that the appellants entered into their contracts with full understanding of the County's intention to terminate the contracts upon completion of the cost-saving system.

Termination and Development of the “Virtual Fleet”

Over the ensuing fifteen months, the County developed the concept of a “virtual fleet,” which differed from the previous “rider's choice” model in that it functioned much like a taxi cab dispatch, assigning trips based on proximity and efficiency, rather than the users' “choice.” The plan anticipated savings of $400,000 to $500,000 per month.

Once the system had been fine-tuned, the County requested interested paratransit providers to submit sealed bids, stating their cost to perform under the new “virtual fleet.” Twenty-four firms, including the appellants, submitted bids, and the County awarded the paratransit contracts to the five lowest bidders; Village Car and Handi–Van were not selected as they submitted the highest and fourth highest bids respectively. With the new contracts set, the County formally gave all nine paratransit providers 90–days notice of its plan to terminate their current contracts for convenience by the end of 2009.

The Current Case

Unhappy with their lot, the appellants filed another federal suit, this time claiming six grounds of relief, including the assertion that Broward County breached its contract by invoking its ability to terminate for convenience without a change in circumstances. See generally Handi–Van, Inc., 2010 WL 2382909. On appeal, the Eleventh Circuit Court of Appeals affirmed the district court's decision to grant summary judgment in favor of Broward County on five of the claims, but remanded the breach of contract claim to be decided by a Florida court since the issue was one of state law. Handi–Van Inc. v. Broward Cnty., Fla., 445 Fed.Appx. 165, 170 (11th Cir.2011).

On remand, the appellants submitted an amended complaint which sought damages for Broward County's wrongful termination/breach of contract. With the facts largely fleshed out in the federal courts, both parties filed motions for summary judgment.

In support of their motion for partial summary judgment, the appellants relied upon the previously-submitted affidavits of the president of Village Car and an officer of Handi–Van, both of whom alleged that once Broward County decided to terminate the paratransit contracts on February 5, 2008, the County “commenced negotiations with other providers in order to get them to increase their respective ridership.” However, “when these negotiations failed[, the County] commenced renegotiations with the [appellants.]” Thereafter, once the new contracts were agreed upon, Broward County notified the appellants of its decision to terminate, despite relying on “the same grounds for termination (i.e., passage of ‘Amendment 1’) as were approved at its February 5, 2008 meeting more than one year before.”

Broward County, on the other hand, had previously submitted numerous affidavits from individual county commissioners and the minutes and transcripts of the meetings where the issues of this case were detailed. In their affidavits, the commissioners averred that the decision to terminate the appellants' contracts stemmed from the passage of A...