R.P. v. First Student Inc.

• Decision Date: 01 July 2022
• Docket Number: 124,197
• Citation: 515 P.3d 283
• Parties: R.P., as guardian for A.P., and A.P., Appellees, v. FIRST STUDENT INC., d/b/a/ First Student Management, LLC, and Nelda Piper, Appellants.
• Court: Kansas Court of Appeals

515 P.3d 283

R.P., as guardian for A.P., and A.P., Appellees,

v.FIRST STUDENT INC., d/b/a/ First Student Management, LLC, and Nelda Piper, Appellants.

No. 124,197

Court of Appeals of Kansas.

Opinion filed July 1, 2022.

Jeremy K. Schrag and Alan L. Rupe, of Lewis Brisbois Bisgaard & Smith LLP, of Wichita, for appellants.

Michael L. Brooks, pro hac vice, of The Brooks Law Firm, of Oklahoma City, Oklahoma, and Rachel E. Smith, Michael P. Waddell, and Oscar P. Espinoza, of Smith Mohlman Injury Law, LLC, of Kansas City, Missouri, for appellees.

James R. Howell and Jakob Provo, of Prochaska, Howell & Prochaska LLC, of Wichita, for amicus curiae Kansas Trial Lawyers Association.

Andrew Foulston, of McDonald Tinker PA, of Wichita, for amicus curiae The Kansas Association of Defense Counsel.

Before Bruns, P.J., Cline, J., and James L. Burgess, S.J.

Cline, J.:

This case addresses whether a private company that provides bussing services under contract with a school district qualifies as a governmental entity under the Kansas Tort Claims Act (KTCA). We agree with the district court—under the circumstances presented in this case—the private company providing contractual services to the school district is not a governmental entity under the KTCA. Thus, we affirm its summary judgment ruling.

FACTUAL BACKGROUND

First Student, Inc. is a private, for-profit corporation incorporated under the laws of Delaware and headquartered in Ohio. During the 2015-2016 school year, First Student provided bussing services for students in the Shawnee Mission U.S.D. 512 school district under a contract with the district.

The contract identified First Student as an independent contractor and specified that neither First Student nor its employees were to be considered employees or agents of the school district. In line with this designation, the contract required First Student to supply and maintain all school busses and personnel necessary to serve the school district's needs. First Student controlled the hiring and firing of all operations personnel and drivers, subject to the school district's right to request removal of any unsuitable employee. First Student similarly controlled the planning of all stops and schedules, subject to school district approval, as well as the licensing and training of drivers. First Student was also required to maintain its own liability insurance and agreed to indemnify the school district from claims or demands "arising from or caused by any act of neglect, default or omission of" First Student in the performance of the contract.

In April 2016, A.P., a special-needs student in the school district, was sexually assaulted by another student while riding on a bus owned and operated by First Student and driven by Nelda Piper, a First Student employee. A.P. and her father, R.P., filed a negligence claim against First Student and later Piper, alleging that First Student and Piper (Defendants) failed to stop or prevent the assault. A.P. and R.P. (Plaintiffs) later moved to amend their petition to add a claim for punitive damages against First Student based on its failure to employ sufficient staff to monitor activity on the bus, as well as its failure to properly train Piper.

Defendants moved for summary judgment, arguing First Student qualified as a governmental entity under the KTCA because it was an instrumentality of the school district. As such, they contended Plaintiffs' claims should be dismissed for failure to provide pre-suit notice under K.S.A. 2021 Supp. 12-105b. Plaintiffs responded by arguing this notice was not required since First Student was an independent contractor and thus not covered by either the KTCA or K.S.A. 2021 Supp. 12-105b.

The district court denied Defendants' motion, finding it was "highly doubtful the Kansas Legislature intended to call a contracting for-profit Delaware corporation operating from its home base in Ohio, i.e. , a foreign entity that had agreed in [its] contract with a school district that it is an independent contractor, a Kansas ‘municipality’ or any other such governmental entity subject to the KTCA protections and K.S.A. 12-105b notice." At Defendants' request, the district court certified four issues of law for interlocutory appeal under K.S.A. 2021 Supp. 60-2102(c) :

"(1) Whether as a matter of law the Defendants are instrumentalities of the school district as defined by the [KTCA]; (2) If the Defendants are instrumentalities, whether they are entitled to receive a K.S.A. 12-105b pre-suit notice; (3) Whether Defendants received a K.S.A. 12-105b notice; and (4) Whether First Student, if it is an instrumentality of the governmental entity as a matter of law, should be exempt from punitive damages under K.S.A. 75-6105(c)."

This court granted Defendants' application for interlocutory appeal on August 12, 2021. Although the district court certified four issues for appeal, we find that resolving the first issue controls the outcome here. Since we find Defendants are not covered by the KTCA, we need not address the remaining three issues.

ANALYSIS

Standard of review

Resolution of this appeal requires us to interpret both the parties' contract and Kansas statutes. This exercise involves questions of law over which we have unlimited review. Born v. Born , 304 Kan. 542, 554, 374 P.3d 624 (2016).

Rules of statutory and contractual interpretation

The parties' intent governs our interpretation of the contract, and the Legislature's intent governs our interpretation of Kansas statutes. Russell v. Treanor Investments , 311 Kan. 675, 680, 466 P.3d 481 (2020) (contract interpretation); State ex rel. Schmidt v. City of Wichita , 303 Kan. 650, 659, 367 P.3d 282 (2016) (statutory interpretation). We ascertain that intent by examining the plain language used in the contract and statutes, giving common words their ordinary meanings. Nauheim v. City of Topeka , 309 Kan. 145, 149, 432 P.3d 647 (2019). When doing so, we must consider statutory provisions in pari materia with a view of reconciling and bringing them into workable harmony if possible. Southwestern Bell Tel. Co. v. Beachner Constr. Co. , 289 Kan. 1262, 1270, 221 P.3d 588 (2009). Likewise, we cannot isolate a sentence or provision of the parties' contract but must instead construe and consider the entire contract.

Russell , 311 Kan. at 680, 466 P.3d 481. Last, we must avoid unreasonable or absurd results when interpreting both the parties' contract and Kansas statutes. 311 Kan. at 680, 466 P.3d 481 (construing contracts); Northern Natural Gas Co. v. ONEOK Field Services Co. , 296 Kan. 906, 918, 296 P.3d 1106 (2013) (construing statutes).

The Kansas Tort Claims Act

The KTCA applies to tort claims brought against governmental entities and their employees. See, e.g., K.S.A. 75-6103 ; K.S.A. 75-6104. The KTCA defines "governmental entity" as encompassing both the state and municipalities. K.S.A. 75-6102(c). "State" under the KTCA is defined as "the state of Kansas and any department or branch of state government, or any agency, authority, institution or other instrumentality thereof." K.S.A. 75-6102(a). The KTCA defines "municipality" to include "any county, township, city, school district or other political or taxing subdivision of the state, or any agency, authority, institution or other instrumentality thereof." K.S.A. 75-6102(b). The KTCA does not define the term "instrumentality."

The KTCA specifically excludes from its coverage "any independent contractor under contract with a governmental entity except those contractors specifically listed in [the definition of ‘employee’]." K.S.A. 75-6102(d)(2)(B). The KTCA does not provide a definition for "independent contractor," but relies on agency principles to define the term. See Mitzner v. State Dept. of SRS , 257 Kan. 258, 261, 891 P.2d 435 (1995).

Under the KTCA, governmental entities are not liable for punitive damages or prejudgment interest. K.S.A. 75-6105(a), (c). It also caps liability for compensatory damages at $500,000 per occurrence or the amount of the governmental entity's insurance coverage, if greater than $500,000. K.S.A. 75-6105(a) ; K.S.A. 75-6111(a). The KTCA grants governmental entities complete immunity from liability when engaged in certain enumerated activities. This immunity extends to the governmental entity's employees when they act within the scope of their employment. See K.S.A. 75-6104.

K.S.A. 2021 Supp. 12-105b imposes a pre-suit notice requirement for claims against municipalities.

Before suing a municipality or employee of a municipality under the KTCA, a plaintiff must provide the municipality with written notice of its claim, along with certain information about the claim specified by law. K.S.A. 2021 Supp. 12-105b(d). No action can be commenced against the municipality or its employee until after the municipality notifies the plaintiff that it has denied the claim or 120 days has passed after filing the notice of claim. K.S.A. 2021 Supp. 12-105b(d). Plaintiffs admit they did not provide pre-suit notice of their claim to First Student. Our Supreme Court has held the failure to substantially comply with the pre-suit notice statute deprives the court of subject matter jurisdiction over the claim. Sleeth v. Sedan City Hospital , 298 Kan. 853, 871, 317 P.3d 782 (2014).

This case calls us to decide whether Defendants are instrumentalities of the school district as defined by the KTCA.

The dispositive question on appeal is whether First Student qualifies as a governmental entity under the KTCA. If it does, then both First Student (as a governmental entity) and Piper (as an employee of a governmental entity) fall under the Act. See K.S.A. 75-6103. Defendants say First Student qualifies because it is an "instrumentality" of the school district. As noted above, the KTCA defines "governmental entity" to include a "municipality," which is defined as "any county, township, city, school district or other political or taxing subdivision of the state, or any agency, authority,...