The Business Litigation Blog

California School District Loses Breach of Contract Case and Gains Millions in Expenses

A small school district in California recently lost a year long breach of contract case in which the jury issued a $12 million judgment against the school district. The school district had entered into a contract with a solar contractor to build and install solar panels on its campuses. The solar contractor sued the district for $18 million in damages, claiming that the district breached its contract by wrongfully terminating the deal in late 2011.

Information is now surfacing that the solar contractor attempted to enter into settlement discussions with the district -- even up until the filing of the suit. Some question whether the school district properly considered the settlement or mediation offers (or if the district's attorney even communicated those offers to the school at all).

One of the partners and the solar contractor's attorney met with the district's attorney before filing the claim to go over the contract and its terms in detail. The solar contractor presented its case to the district, stating that it simply did not abandon the project and that it was willing to settle the matter prior to filing. The district allegedly failed to respond, and the suit commenced. During the trial, the solar contractor submitted a written offer to the district to mediate the case, but the district allegedly failed to respond to this offer, as well.

In addition to the $12 million judgment, the school district has now accumulated over $1 million in expenses related to the litigation, as well as another approximately $1 million in legal expenses. Additionally, it continues to accrue fees in its attempt to reverse the judgment.

Take this as a lesson learned: when facing a breach of contract case, consider your game plan carefully, and be open-minded with regard to the possibility of a settlement. Review the contract or agreement at issue with a lawyer to appropriately determine the liability you may face and the costs associated with any course of action. A thorough pre (or early) lawsuit review of your case and circumstances may help you avoid costly expenses down the line. 

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